UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 10, 2005
Xenomics, Inc.
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(Exact name of registrant as specified in its charter)
Florida 04-3721895
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(State or other jurisdiction IRS Employer
of incorporation or organization) Identification No.)
420 Lexington Avenue, Suite 1701
New York, New York 10170
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(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 297-0808
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communication pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On January 10, 2005, Xenomics, Inc., a Florida corporation (the
"Company") entered into a letter of engagement (the "Agreement") with Trilogy
Capital Partners, Inc. ("Trilogy"). The term of the Agreement is for twelve
months beginning on January 10, 2005 and terminable thereafter by either party
upon 30 days' prior written notice. Pursuant to the Agreement, Trilogy will
provide marketing and financial public relations services to the Company and
will assume the responsibilities of an investor relations officer for the
Company. The Company will pay Trilogy $10,000 per month under the Agreement.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to "Item 1.01 Entry into a Material Definitive
Agreement" of this report, which is incorporated by reference into this item.
Pursuant to the Agreement, the Company issued warrants to purchase
1,000,000 shares of Common Stock of the Company at an exercise price of $2.95
per share (the "Warrants"). The Warrants issued to Trilogy are exercisable upon
issuance and expire on January 10, 2008. In the event the Company proposes to
register any of its Common Stock under the Securities Act of 1933 for sale in
connection with a public offering of Common Stock, the Company will give written
notice to Trilogy and will include in such registration statement any of the
shares of Common Stock underlying the Warrants which Trilogy may request be
included. The offer and sale of these securities was made in reliance on Section
4(2) of the Securities Act of 1933, as amended. The offer and sale of the
Warrants did not involve a public offering.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits.
4.1 Form of Warrant issued to Trilogy Capital Partners,
Inc.
10.1 Letter of Engagement between Trilogy Capital
Partners, Inc. and Xenomics, Inc. dated January 10,
2005.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: January 13, 2005 XENOMICS, INC.
By: /s/ V. Randy White
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V. Randy White, Ph.D.
Chief Executive Officer
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Exhibit 4.1
NEITHER THESE WARRANTS NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER THE ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
1,000,000 Warrants January 10, 2005
XENOMICS, INC.
WARRANTS
Xenomics, Inc., a Florida corporation ("XNOM"), certifies that, for
value received, Trilogy Capital Partners, Inc. ("Trilogy"), or registered
assigns (the "Holder"), is the owner of One Million (1,000,000) Warrants of XNOM
(the "Warrants"). Each Warrant entitles the Holder to purchase from XNOM at any
time prior to the Expiration Date (as defined below) one share of the common
stock of XNOM (the "Common Stock") for $2.95 per share (the "Exercise Price"),
on the terms and conditions hereinafter provided. The Exercise Price and the
number of shares of Common Stock purchasable upon exercise of each Warrant are
subject to adjustment as provided in this Certificate.
1. Vesting; Expiration Date; Exercise
1.1 Vesting. The Warrants shall vest and become exercisable as of the
date of this Certificate.
1.2 Expiration Date. The Warrants shall expire on January 10, 2008 (the
"Expiration Date").
1.3 Manner of Exercise. The Warrants are exercisable by delivery to
XNOM of the following (the "Exercise Documents"): (a) this Certificate (b) a
written notice of election to exercise the Warrants; and (c) payment of the
Exercise Price in cash, by check or by "net" exercise as contemplated by Section
1.4 of this Certificate. Within three business days following receipt of the
foregoing, XNOM shall execute and deliver to the Holder: (a) a certificate or
certificates representing the aggregate number of shares of Common Stock
purchased by the Holder, and (b) if less than all of the Warrants evidenced by
this Certificate are exercised, a new certificate evidencing the Warrants not so
exercised.
1.4 Net Exercise. In lieu of the payment methods set forth in Section
1.3 above and subject to Section 1.5 below, commencing one (1) year from the
date hereof, the Holder may elect to exchange all or some of the Warrant for the
number of shares of Common Stock computed using the following formula:
X = Y (A-B)
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A
Where X = the number of shares of Common Stock to be issued to
Holder.
Y = the number of shares of Common Stock purchasable under the
Warrants being exchanged (as adjusted to the date of such
calculation).
A = the Market Price on the date of receipt by XNOM of the
exercise documents.
B = the Exercise Price of the Warrants being exchanged (as
adjusted in accordance with the terms of Section 2 hereof).
The "Market Price" on any trading day shall be deemed to be
the last reported sale price of the Common Stock on such day, or, in
the case no such reported sales take place on such day, the last
reported sale price on the preceding trading day on which there was a
last reported sales price, as officially reported by the principal
securities exchange in which the shares of Common Stock are listed or
admitted to trading or by the Nasdaq Stock Market, or if the Common
Stock is not listed or admitted to trading on any national securities
exchange or the Nasdaq Stock Market, the last sale price, or if there
is no last sale price, the closing bid price, as furnished by the
National Association of Securities Dealers, Inc. (such as through the
OTC Bulletin Board) or a similar organization or if Nasdaq is no longer
reporting such information. If the Market Price cannot be determined
pursuant to the sentence above, the Market Price shall be determined in
good faith (using customary valuation methods) by the Board of
Directors of XNOM based on the information best available to it,
including recent arms-length sales of Common Stock to unaffiliated
persons.
1.5 Restriction on "Net" Exercise. Notwithstanding any other provision
of this Certificate, Holder shall only be permitted to effect a "net" exercise
of the Warrants if on the date of exercise (a) the Holder has not been provided
an opportunity to include the shares of Common Stock issuable upon exercise of
the Warrants in a registration statement pursuant to Section 9.2; or (b) (i) the
Holder has been provided an opportunity to include the shares of Common Stock
issuable upon the exercise of the Warrants in a registration statement pursuant
to Section 9.2, (ii) Holder has notified the Company that it wishes to include
such shares in such registration statement, and (iii) Holder is not then
permitted to sell the shares underlying the Warrants pursuant to such
registration statement.
1.6 Warrant Exercise Limitation. Notwithstanding any other provision of
this Certificate, or the total number of shares of Common Stock otherwise
available for purchase by Holder hereunder, if as of the date of exercise XNOM
has a class of securities registered under Section 12 of the Securities Exchange
Act of 1934, as amended, Holder may not exercise any Warrants under this Section
1 if immediately following such exercise Holder would beneficially own 5% or
more of the outstanding Common Stock of XNOM. For this purpose, a representation
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of the Holder that following such exercise it would not beneficially own 5% or
more of the outstanding Common Stock of XNOM shall be conclusive and binding
upon XNOM.
2. Adjustments of Exercise Price and Number and Kind of Conversion Shares
2.1 In the event that XNOM shall at any time hereafter (a) pay a
dividend in Common Stock or securities convertible into Common Stock; (b)
subdivide or split its outstanding Common Stock; (c) combine its outstanding
Common Stock into a smaller number of shares; then the number of shares to be
issued immediately after the occurrence of any such event shall be adjusted so
that the Holder thereafter may receive the number of shares of Common Stock it
would have owned immediately following such action if it had exercised the
Warrants immediately prior to such action and the Exercise Price shall be
adjusted to reflect such proportionate increases or decreases in the number of
shares.
2.2 In case of any reclassification of the outstanding shares of Common
Stock (other than a change covered by Section 2.1 hereof or a change which
solely affects the par value of such shares) or in the case of any merger or
consolidation or merger in which XNOM is not the continuing corporation and
which results in any reclassification or capital reorganization of the
outstanding shares), the Holder shall have the right thereafter (until the
Expiration Date) to receive upon the exercise hereof, for the same aggregate
Exercise Price payable hereunder immediately prior to such event, the kind and
amount of shares of stock or other securities or property receivable upon such
reclassification, capital reorganization, merger or consolidation, by a Holder
of the number of shares of Common Stock obtainable upon the exercise of the
Warrants immediately prior to such event; and if any reclassification also
results in a change in shares covered by Section 2.1, then such adjustment shall
be made pursuant to both this Section 2.2 and Section 2.1 (without duplication).
The provisions of this Section 2.2 shall similarly apply to successive
reclassifications, capital reorganizations and mergers or consolidations, sales
or other transfers.
3. Reservation of Shares. XNOM shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, such number of shares of
Common Stock as shall from time to time be issuable upon exercise of the
Warrants. If at any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to permit the exercise of the Warrants, XNOM shall
promptly seek such corporate action as may necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
4. Certificate as to Adjustments. In each case of any adjustment in the Exercise
Price, or number or type of shares issuable upon exercise of these Warrants, the
Chief Financial Officer of XNOM shall compute such adjustment in accordance with
the terms of these Warrants and prepare a certificate setting forth such
adjustment and showing in detail the facts upon which such adjustment is based,
including a statement of the adjusted Exercise Price. XNOM shall promptly send
(by facsimile and by either first class mail, postage prepaid or overnight
delivery) a copy of each such certificate to the Holder.
5. Loss or Mutilation. Upon receipt of evidence reasonably satisfactory to XNOM
of the ownership of and the loss, theft, destruction or mutilation of this
Certificate, and of indemnity reasonably satisfactory to it, and (in the case of
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mutilation) upon surrender and cancellation of these Warrants, XNOM will execute
and deliver in lieu thereof a new Certificate of like tenor as the lost, stolen,
destroyed or mutilated Certificate.
6. Representations and Warranties of XNOM. XNOM hereby represents and warrants
to Holder that:
6.1 Due Authorization. All corporate action on the part of XNOM, its
officers, directors and shareholders necessary for (a) the authorization,
execution and delivery of, and the performance of all obligations of XNOM under,
these Warrants, and (b) the authorization, issuance, reservation for issuance
and delivery of all of the Common Stock issuable upon exercise of these
Warrants, has been duly taken. These Warrants constitute a valid and binding
obligation of XNOM enforceable in accordance with their terms, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors' rights generally and to
general equitable principles.
6.2 Organization. XNOM is a corporation duly organized, validly
existing and in good standing under the laws of the State referenced in the
first paragraph of this Certificate and has all requisite corporate power to
own, lease and operate its property and to carry on its business as now being
conducted and as currently proposed to be conducted.
6.3 Valid Issuance of Stock. Any shares of Common Stock issued upon
exercise of these Warrants will be duly and validly issued, fully paid and
non-assessable.
6.4 Governmental Consents. All consents, approvals, orders,
authorizations or registrations, qualifications, declarations or filings with
any federal or state
governmental authority on the part of XNOM required in connection with the
consummation of the transactions contemplated herein have been obtained.
7. Representations and Warranties of Trilogy. Trilogy hereby represents and
warrants to XNOM that:
7.1 Trilogy is acquiring the Warrants for its own account, for
investment purposes only.
7.2 Trilogy understands that an investment in the Warrants involves a
high degree of risk, and Trilogy has the financial ability to bear the economic
risk of this investment in the Warrants, including a complete loss of such
investment. Trilogy has adequate means for providing for its current financial
needs and has no need for liquidity with respect to this investment.
7.3 Trilogy has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in the Warrants and in protecting its own interest in connection with this
transaction.
7.4 Trilogy understands that the Warrants have not been registered
under the Securities Act of 1933, as amended (the "Securities Act") or under any
state securities laws. Trilogy is familiar with the provisions of the Securities
Act and Rule 144 thereunder and understands that the restrictions on transfer on
the Warrants may result in Trilogy being required to hold the Warrants for an
indefinite period of time.
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7.5 Trilogy agrees not to sell, transfer, assign, gift, create a
security interest in, or otherwise dispose of, with or without consideration
(collectively, "Transfer") any of the Warrants except pursuant to an effective
registration statement under the Securities Act or an exemption from
registration. As a further condition to any such Transfer, except in the event
that such Transfer is made pursuant to an effective registration statement under
the Securities Act, if in the reasonable opinion of counsel to XNOM any Transfer
of the Warrants by the contemplated transferee thereof would not be exempt from
the registration and prospectus delivery requirements of the Securities Act,
XNOM may require the contemplated transferee to furnish XNOM with an investment
letter setting forth such information and agreements as may be reasonably
requested by XNOM to ensure compliance by such transferee with the Securities
Act.
8. Notices of Record Date.
In the event:
8.1 XNOM shall take a record of the holders of its Common Stock (or
other stock or securities at the time receivable upon the exercise of these
Warrants), for the purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities or to receive any other right; or
8.2 of any consolidation or merger of XNOM with or into another
corporation, any capital reorganization of XNOM, any reclassification of the
capital stock of XNOM, or any conveyance of all or substantially all of the
assets of XNOM to another corporation in which holders of XNOM's stock are to
receive stock, securities or property of another corporation; or
8.3 of any voluntary dissolution, liquidation or winding-up of XNOM; or
8.4 of any redemption or conversion of all outstanding Common Stock;
then, and in each such case, XNOM will mail or cause to be mailed to the Holder
a notice specifying, as the case may be, (a) the date on which a record is to be
taken for the purpose of such dividend, distribution or right, or (b) the date
on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation, winding-up, redemption or conversion is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such stock or securities as at the time are
receivable upon the exercise of these Warrants), shall be entitled to exchange
their shares of Common Stock (or such other stock or securities), for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up. XNOM
shall use all reasonable efforts to ensure such notice shall be delivered at
least 15 days prior to the date therein specified.
9. Registration Rights.
9.1 Definitions. For purposes of this Section 9, the following terms
shall have the meanings set forth below:
9.1.1 A "Blackout Event" means any of the following: (a) the
possession by XNOM of material information that is not ripe for
disclosure in a registration statement or prospectus, as determined
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reasonably and in good faith by the Chief Executive Officer or the
Board of Directors of XNOM or that disclosure of such information in
the Registration Statement or the prospectus constituting a part
thereof would be materially detrimental to the business and affairs of
XNOM; or (b) any material engagement or activity by XNOM which would,
in the reasonable and good faith determination of the Chief Executive
Officer or the Board of Directors of XNOM, be materially adversely
affected by disclosure in a registration statement or prospectus at
such time.
9.1.2 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
9.1.3 "Included Shares" shall mean any Registrable Shares
included in a Registration.
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9.1.4 "Registrable Shares" shall mean the shares of Common
Stock (or such stock or securities as at the time are receivable upon
the exercise of these Warrants) issuable upon exercise of the Warrants
and any other Warrants and or other securities issued to Trilogy in
connection with performing investor relations services for XNOM, and
shares or securities issued as a result of stock split, stock dividend
or reclassification of such shares.
9.1.5 "Registration" shall mean a registration of securities
under the Securities Act pursuant to Section 10.2 or 10.3 of this
Agreement.
9.1.6 "Registration Period" with respect to any Registration
Statement the period commencing the effective date of the Registration
Statement and ending upon withdrawal or termination of the Registration
Statement.
9.1.7 "Registration Statement" shall mean the registration
statement, as amended from time to time, filed with the SEC in
connection with a Registration.
9.1.8 "SEC" shall mean the Securities and Exchange Commission.
9.2 Piggyback Registration. If XNOM shall determine to register any
Common Stock under the Securities Act for sale in connection with a public
offering of Common Stock (other than pursuant to an employee benefit plan or a
merger, acquisition or similar transaction), XNOM will give written notice
thereof to Holder and will include in such Registration Statement any of the
Registrable Shares which Holder may request be included ("Included Shares") by a
writing delivered to XNOM within 15 days after the notice given by XNOM to
Holder; provided, however, that if the offering is to be firmly underwritten,
and the representative of the underwriters of the offering refuse in writing to
include in the offering all of the shares of Common Stock requested by XNOM and
others, the shares to be included shall be allocated first to XNOM and any
shareholder who initiated such Registration and then among the others based on
the respective number of shares of Common Stock held by such persons. If XNOM
decides not to, and does not, file a Registration Statement with respect to such
Registration, or after filing determines to withdraw the same before the
effective date thereof, XNOM will promptly so inform Holder, and XNOM will not
be obligated to complete the registration of the Included Shares included
therein.
9.3 Certain Covenants. In connection with any Registration:
9.3.1 XNOM shall take all lawful action such that the
Registration Statement, any amendment thereto and the prospectus
forming a part thereof does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. Upon becoming
aware of the occurrence of any event or the discovery of any facts
during the Registration Period that make any statement of a material
fact made in the Registration Statement or the related prospectus
untrue in any material respect or which material fact is omitted from
the Registration Statement or related prospectus that requires the
making of any changes in the Registration Statement or related
prospectus so that it will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they are
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made, not misleading (taking into account any prior amendments or
supplements), XNOM shall promptly notify Holder, and, subject to the
provisions of Section 9.5, as soon as reasonably practicable prepare
(but, subject to Section 9.5, in no event more than five business days
in the case of a supplement or seven business days in the case of a
post-effective amendment) and file with the SEC a supplement or
post-effective amendment to the Registration Statement or the related
prospectus or file any other required document so that, as thereafter
delivered to a purchaser of Shares from Holder, such prospectus will
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. XNOM shall
use its reasonable best efforts to keep the Registration Statement
effective at all times during the period continuing until the earliest
of (i) the date that is two (2) years after the last day of the
calendar month following the month in which the Registration Statement
is declared effective, (ii) the date when the Holder may sell all
Registrable Securities under Rule 144 without volume or other
restrictions or limits or (iii) the date the Holder no longer owns any
of the Registrable Securities,
9.3.2 At least three business days prior to the filing with
the SEC of the Registration Statement (or any amendment thereto) or the
prospectus forming a part thereof (or any supplement thereto), XNOM
shall provide draft copies thereof to Holder and shall consider
incorporating into such documents such comments as Holder (and its
counsel) may propose to be incorporated therein. Notwithstanding the
foregoing, no prospectus supplement, the form of which has previously
been provided to Holder, need be delivered in draft form to Holder.
9.3.3 XNOM shall promptly notify Holder upon the occurrence of
any of the following events in respect of the Registration Statement or
the prospectus forming a part thereof: (i) the receipt of any request
for additional information from the SEC or any other federal or state
governmental authority, the response to which would require any
amendments or supplements to the Registration Statement or related
prospectus; (ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for
that purpose; or (iii) the receipt of any notification with respect to
the suspension of the qualification or exemption from qualification of
any of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
9.3.4 XNOM shall furnish to Holder with respect to the
Included Shares registered under the Registration Statement (and to
each underwriter, if any, of such Shares) such number of copies of
prospectuses and such other documents as Holder may reasonably request,
in order to facilitate the public sale or other disposition of all or
any of the Included Shares by Holder pursuant to the Registration
Statement.
9.3.5 In connection with any registration pursuant to Section
9.2, XNOM shall file or cause to be filed such documents as are
required to be filed by XNOM for normal Blue Sky clearance in states
specified in writing by Holder; provided, however, that XNOM shall not
be required to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or has not so
consented.
9.3.6 XNOM shall bear and pay all expenses incurred by it and
Holder (other than underwriting discounts, brokerage fees and
commissions and fees and expenses of more than one law firm) in
connection with the registration of the Shares pursuant to the
Registration Statement.
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9.3.7 As a condition to including Registrable Shares in a
Registration Statement, Holder must provide to XNOM such information
regarding itself, the Registrable Shares held by it and the intended
method of distribution of such Shares as shall be required to effect
the registration of the Registrable Shares and, if the offering is
being underwritten, Holder must provide such powers of attorney,
indemnities and other documents as may be reasonably requested by the
managing underwriter.
9.3.8 Following the effectiveness of the Registration
Statement, upon receipt from XNOM of a notice that the Registration
Statement contains an untrue statement of material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances under which they were made, Holder will immediately
discontinue disposition of Included Shares pursuant to the Registration
Statement until XNOM notifies Holder that it may resume sales of
Included Shares and, if necessary, provides to Holder copies of the
supplemental or amended prospectus.
9.4 Blackout Event. XNOM shall not be obligated to file a
post-effective amendment or supplement to the Registration Statement or the
prospectus constituting a part thereof during the continuance of a Blackout
Event; provided, however, that no Blackout Event may be deemed to exist for more
than 75 days. Without the express written consent of Holder, if required to
permit the continued sale of Shares by Holder, a post-effective amendment or
supplement to Registration Statement or the prospectus constituting a part
thereof must be filed no later than the 76th day following commencement of a
Blackout Event.
9.5 Rule 144. With a view to making available to Holder the benefits of
Rule 144, XNOM agrees, throughout the Registration Period, to:
9.5.1.1 comply with the provisions of paragraph (c)(1) of Rule
144; and
9.5.1.2 file with the SEC in a timely manner all reports and
other documents required to be filed by XNOM pursuant to Section 13 or
15(d) under the Exchange Act; and, if at any time it is not required to
file such reports but in the past had been required to or did file such
reports, it will, upon the request of a Purchaser, make available other
information as required by, and so long as necessary to permit sales of
its Shares pursuant to, Rule 144.
9.6 XNOM Indemnification. XNOM agrees to indemnify and hold harmless
Holder, and its officers, directors and agents, and each person, if any, who
controls Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities caused by (i) any violation or alleged violation by XNOM
of the Securities Act, Exchange Act, any state securities laws or any rule or
regulation promulgated under the Securities Act, Exchange Act or any state
securities laws, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Included Shares (as amended or supplemented if XNOM shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or (iii)
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to XNOM by Holder or on Holder's behalf
expressly for use therein.
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9.7 Holder Indemnification. Holder agrees to indemnify and hold
harmless XNOM, its officers, directors and agents and each person, if any, who
controls XNOM within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from XNOM to Holder, but only with respect to information furnished in writing
by Holder or on Holder's behalf expressly for use in any registration statement
or prospectus relating to the Registrable Shares, or any amendment or supplement
thereto, or any preliminary prospectus.
9.8 Indemnification Procedures. In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to this Section 9, such person (an
"Indemnified Party") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Party, and shall assume the
payment of all fees and expenses; provided that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent (and only to the extent
that) that the Indemnifying Party is materially prejudiced by such failure to
notify. In any such proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of such Indemnified Party representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties (including in the case of Holder, all of its
officers, directors and controlling persons) and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate firm
for the Indemnified Parties, the Indemnified Parties shall designate such firm
in writing to the Indemnifying Party. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.
9.9 Contribution. To the extent any indemnification by an Indemnifying
Party is prohibited or limited by law, the Indemnifying Party agrees to make the
maximum contribution with respect to any amounts for which, he, she or it would
otherwise be liable under this Section 9.6 to the fullest extent permitted by
law; provided, however, that (i) no contribution shall be made under
circumstances where a party would not have been liable for indemnification under
this Section 9.6 and (ii) no seller of Registrable Securities guilty of
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fraudulent misrepresentation (within the meaning used in the Securities Act)
shall be entitled to contribution from any party who was not guilty of such
fraudulent misrepresentation.
10. Nontransferability. Holder may not sell or transfer any Warrants to any
person other than an affiliate of Holder without the written consent of XNOM.
11. Severability. If any term, provision, covenant or restriction of these
Warrants is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of these Warrants shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
12. Notices. All notices, requests, consents and other communications required
hereunder shall be in writing and shall be effective when delivered or, if
delivered by registered or certified mail, postage prepaid, return receipt
requested, shall be effective on the third day following deposit in United
States mail: to the Holder, at Trilogy Capital Partners, Inc., 1406 1/2 Kenter
Avenue, Los Angeles, CA 90049; and if addressed to XNOM, at Xenomics, Inc., 420
Lexington Avenue, Suite 1701, New York, NY 10170, or such other address as
Holder or XNOM may designate in writing.
13. No Rights as Shareholder. The Holder shall have no rights as a shareholder
of XNOM with respect to the shares issuable upon exercise of the Warrants until
the receipt by XNOM of all of the Exercise Documents.
XENOMICS, INC.
By: _____________________________
Its: _____________________________
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EXHIBIT "A"
NOTICE OF EXERCISE
(To be signed only upon exercise of the Warrants)
To: Xenomics, Inc.
The undersigned hereby elects to purchase shares of Common Stock (the
"Warrant Shares") of Xenomics, Inc. ("XNOM"), pursuant to the terms of the
enclosed warrant certificate (the "Certificate"). The undersigned tenders
herewith payment of the exercise price pursuant to the terms of the Certificate.
The undersigned hereby represents and warrants to, and agrees with,
XNOM as follows:
1. Holder is acquiring the Warrant Shares for its own account, for
investment purposes only.
2. Holder understands that an investment in the Warrant Shares involves
a high degree of risk, and Holder has the financial ability to bear the economic
risk of this investment in the Warrant Shares, including a complete loss of such
investment. Holder has adequate means for providing for its current financial
needs and has no need for liquidity with respect to this investment.
3. Holder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in the Warrant Shares and in protecting its own interest in connection with this
transaction.
4. Holder understands that the Warrant Shares have not been registered
under the Securities Act or under any state securities laws. Holder is familiar
with the provisions of the Securities Act and Rule 144 thereunder and
understands that the restrictions on transfer on the Warrant Shares may result
in Holder being required to hold the Warrant Shares for an indefinite period of
time.
5. Holder agrees not to sell, transfer, assign, gift, create a security
interest in, or otherwise dispose of, with or without consideration
(collectively, "Transfer") any of the Warrant Shares except pursuant to an
effective registration statement under the Securities Act or an exemption from
registration. As a further condition to any such Transfer, except in the event
that such Transfer is made pursuant to an effective registration statement under
the Securities Act, if in the reasonable opinion of counsel to XNOM any Transfer
of the Warrant Shares by the contemplated transferee thereof would not be exempt
from the registration and prospectus delivery requirements of the Securities
Act, XNOM may require the contemplated transferee to furnish XNOM with an
investment letter setting forth such information and agreements as may be
reasonably requested by XNOM to ensure compliance by such transferee with the
Securities Act.
Each certificate evidencing the Warrant Shares will bear the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE EXERCISED, SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
6. Immediately following this exercise of Warrants, if as of the date
of exercise XNOM has a class of securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended, the undersigned will not
beneficially own five percent (5%) or more of the then outstanding Common Stock
of XNOM (based on the number of shares outstanding set forth in the most recent
periodic report filed by XNOM with the Securities and Exchange Commission and
any additional shares which have been issued since that date of which Holder is
aware have been issued).
Number of Warrants Exercised: ______________
Net Exercise ____ Yes ___ No
Dated: ____________________
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Exhibit 10.1
[Trilogy Capital Partners, Inc. Letterhead]
Letter of Engagement
Xenomics, Inc.
January 10, 2005
The following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. ("Trilogy") by Xenomics, Inc. ("XNOM" or the "Company"):
Term and Termination Twelve months, commencing as of the date set forth
above (the "Initial Term"), and terminable thereafter
by either party upon 30 days' prior written notice.
In addition, either party may terminate this
Agreement by written notice for material breach by
the other party of any of its obligations or
agreements under this Agreement or the
Confidentiality Agreement unless such material breach
is cured and corrected within 10 days following
receipt of such notice.
Objective The development and implementation of a proactive
marketing program to increase the awareness of XNOM
and to generate a significant increase in liquidity
and market capitalization. In addition, upon request,
Trilogy will advise XNOM in business development and
strategic advisory services.
The Program Trilogy will structure and implement a marketing
program designed to create extensive financial market
and investor awareness for XNOM to drive long-term
shareholder support. The core drivers of the program
will be to create institutional and retail buying in
the Company's stock through a proactive sales and
marketing program emphasizing technology-driven
communications, coupled with 1-to-1 selling and
leveraging XNOM's image to attract additional long
term investors and to create additional opportunities
in M&A and Business Development. As share price is
affected by various factors, Trilogy can give no
assurance that the marketing program will result in
an increase in XNOM's stock price.
Trilogy understands that during any period in which
the Company is in "registration" for a public
offering of securities under the Securities Act of
1933, and during the distribution of such securities,
the Company's investor relations and marketing
efforts will be severely limited. However, it will be
the responsibility of the Company (with the advice of
its securities counsel) to determine what investor
relations and financial marketing efforts are
permissible and non-permissible during such periods,
and Trilogy will follow the direction of the Company
and its securities counsel. Trilogy agrees that it
will not take any action to influence anyone to
purchase the Company's stock by making an improper or
illegal payment.
Responsibilities In addition to marketing and financial public
relations, Trilogy will assume the responsibilities
of an in-house Investor Relations Officer for XNOM on
a full turnkey basis, including the generation of
corporate and shareholder communications, retail and
institutional investor contact and media. Trilogy
will work in conjunction with the Company's
management, securities counsel, investment bankers
and auditors and under supervision of management. The
content is as follows:
o Campaign Development and Execution
o Press Announcements: drafting, approval and
distribution
o Database Development and Management
o Image Analysis: recommendations and
implementation
o Messaging: institutional and retail
o Online presentations: drafting and
production responsibilities
o Website Overhaul - installation and
maintenance of auto IR program
o Email messaging: targets: Retail and
Institutional/Other databases
o Media including Interactives and PowerPoints
o Direct Mail: shareholder, media, XNOM
relationship universe
o Public Relations
o Capital Conferences
Trilogy will not publish or publicly release any
press release or other document ("IR Documents")
regarding the Company which has not been approved in
writing by the Company. The Company assumes
responsibility for the accuracy and completeness of
all IR Documents and the compliance of such Documents
with applicable laws, rules and regulations. The
Company agrees that Trilogy has no obligation or duty
to verify the accuracy or completeness of the IR
Documents.
Fees $10,000 per month, with first payment due on
execution. Wiring information is set forth below.
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Equity Compensation Concurrently herewith XNOM has issued to Trilogy
Warrants to purchase 1,000,000 shares of its Common
Stock.
Marketing Budget To support the financial marketing program, XNOM
acknowledges that it will incur certain third party
marketing costs. Trilogy will not incur these costs
without the prior written approval of the Company,
which approval may be pursuant to a budget. At
Trilogy's request, the Company will pay these
approved costs directly to the third party.
Indemnification The Company agrees to provide the indemnification set
forth in "Exhibit A" attached hereto.
Corporate Obligations The obligations of Trilogy are solely corporate
obligations, and no officer, director, employee,
agent, shareholder or controlling person of Trilogy
shall be subject to any personal liability whatsoever
to any person, nor will any such claim be asserted by
or on behalf of any other party to this Agreement.
Additional Services If Trilogy is called upon to render services directly
or indirectly relating to the subject matter of this
Agreement, beyond the services contemplated above
(including, but not limited to, production of
documents, answering interrogatories, giving
depositions, giving expert or other testimony,
whether by agreement, subpoena or otherwise), the
Company shall pay to Trilogy a reasonable hourly rate
for the persons involved for the time expended in
rendering such services, including, but not limited
to, time for meetings, conferences, preparation and
travel, and all related costs and expenses and the
reasonable legal fees and expenses of Trilogy's
counsel.
Confidentiality Trilogy agrees to execute the confidentiality
agreement with the Company set forth in "Exhibit B"
attached hereto.
Survival of Certain The Sections entitled "Indemnification" (including
Provisions "Exhibit A"), "Corporate Obligations," "Additional
Services" and "Confidentiality" (including "Exhibit
B") shall survive any termination of this Agreement
and Trilogy's engagement pursuant to this Agreement.
In addition, such termination shall not terminate
Trilogy's right to compensation accrued through the
date of termination and for reimbursement of
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expenses. Any purported termination of this Agreement
by the Company prior to the end of the Initial Term,
or any termination by Trilogy as a result of
non-payment or other material breach by the Company,
shall not terminate Trilogy's right to the monthly
fee through the entire Initial Term (as Trilogy's
time and commitment are expected to be greater in the
first part of its engagement).
Services/Costs The compensation paid to Trilogy under this Agreement
will cover all costs for Trilogy personnel.
Reasonable travel and entertainment costs for Trilogy
personnel, in addition to certain third-party costs,
will be borne by the Company. Trilogy will provide
reasonable documentation to support reimbursement
claims. Trilogy will not incur any particular
reimbursable cost of $500 or more or aggregate costs
of $10,000 or more without the prior written approval
from the Company.
Attorneys' Fees If any action or proceeding is brought to enforce or
interpret any provision of this Agreement, the
prevailing party shall be entitled to recover as an
element of its costs, and not its damages, reasonable
attorneys' fees to be fixed by the court. Governing
Law
California, without giving effect to the principles of conflicts of law
thereof.
Agreed and Accepted:
Xenomics, Inc. Trilogy Capital Partners, Inc.
By /s/ V. Randy White By /s/ A.J. Cervantes
---------------------------- --------------------------
V. Randy White, A.J. Cervantes, President
Chief Executive Officer
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Wiring:
Trilogy Capital Partners, Inc.
Signature Bank New York
Private Client Group
New York, NY 10016
Account: 1500375287
ABA: 026013576
-5-
EXHIBIT A
Indemnification Provisions
Xenomics, Inc., (the "Company"), unconditionally, absolutely and irrevocably
agrees to and shall defend, indemnify and hold harmless Trilogy Capital
Partners, Inc. ("Trilogy") and its past, present and future directors, officers,
affiliates, counsel, shareholders, employees, agents, representatives,
contractors, successors and assigns (Trilogy and such persons are collectively
referred to as the "Indemnified Persons") from and against any and all losses,
claims, costs, expenses, liabilities and damages (or actions in respect thereof)
arising out of or related to this Agreement, and any actions taken or omitted to
be taken by an Indemnified Person in connection with this Agreement
("Indemnified Claim"). Without limiting the generality of the foregoing, such
indemnification shall cover losses, claims, costs, expenses, liabilities and
damages imposed on or incurred by the Indemnified Persons, directly or
indirectly, relating to, resulting from, or arising out of any misstatement of
fact or omission of fact, or any inaccuracy in any information provided or
approved by the Company in connection with the engagement, including information
in any SEC filing, press release, website, marketing material or other document,
whether or not the Indemnified Persons relied thereon or had knowledge thereof.
In addition, the Company agrees to reimburse the Indemnified Persons for legal
or other expenses reasonably incurred by them in respect of each Indemnified
Claim at the time such expenses are incurred. Notwithstanding the foregoing, the
Company shall not be obligated under the foregoing for any loss, claim,
liability or damage which is finally determined to have resulted primarily from
the willful misconduct, bad faith or gross negligence of the Indemnified Person
or from the failure of the Indemnified Person to be registered or licensed as a
broker or dealer under the Securities Exchange Act of 1934 or applicable state
securities laws or as an investment advisor under the Investment Advisors Act of
1940 or applicable state laws.
If any proceeding shall be brought or asserted under these provisions against an
Indemnified Person in respect of which indemnity may be sought under these
provisions from the Company, the Indemnified Person shall give prompt written
notice of such proceeding to the Company who shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Person (or if more than one, Trilogy), and the payment of all reasonable
expenses; provided that any delay or failure to notify the Company shall relieve
the Company of its obligations hereunder only to the extent, if at all, that it
is materially prejudiced by reason of such delay or failure. In no event shall
any Indemnified Person be required to make any expenditure or bring any cause of
action to enforce the Company's obligations and liability under and pursuant to
the indemnifications set forth in these provisions. The Indemnified Person shall
have the right to employ separate counsel in any of the foregoing proceedings
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Person unless: (i) the
Company has agreed to pay such fees and expenses; or (ii) the Indemnified Person
shall in good faith determine that there exists actual or potential conflicts of
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interest which make representation by the same counsel inappropriate and the
Company refuses to provide separate counsel. In the event that the Company,
within five days after notice of any such proceeding, fails to assume the
defense thereof, the Indemnified Person shall have the right to undertake the
defense, compromise or settlement of such proceeding, for the account of the
Company, subject to the right of the Company to assume the defense of such
proceeding with counsel reasonably satisfactory to the Indemnified Person at any
time prior to the settlement, compromise or final determination thereof by
reimbursing the Indemnified Person for all fees and costs incurred to date.
Anything in these provisions to the contrary notwithstanding, the Company shall
not, without the prior written consent of Trilogy (if Trilogy is an Indemnified
Person) or the Indemnified Person if Trilogy is not an Indemnified Person,
settle or compromise any proceeding or consent to the entry of any judgment with
respect to any proceeding; provided, however, that the Company may, without the
Indemnified Person's prior written consent, settle or compromise any such
proceeding or consent to entry of any judgment with respect to any such
proceeding that requires solely the payment of money damages by the Indemnified
Person and that includes as an unconditional term thereof, the release by the
claimant or the plaintiff of the Indemnified Person from all liability in
respect of such proceeding.
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