-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O5Rt+CH4OxCNG3wmF9fPZ2J8L9InVxwT4KRY6s+WykAOucuFe0CllYIwJIkfxUYQ y/0VhHEKVW4oaBKWIw1U9Q== 0001085037-00-000105.txt : 20000501 0001085037-00-000105.hdr.sgml : 20000501 ACCESSION NUMBER: 0001085037-00-000105 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000224 ITEM INFORMATION: FILED AS OF DATE: 20000428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: E FINANCIAL DEPOT COM CENTRAL INDEX KEY: 0001092310 STANDARD INDUSTRIAL CLASSIFICATION: [9995] IRS NUMBER: 330809711 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-26899 FILM NUMBER: 611229 BUSINESS ADDRESS: STREET 1: 1005-750 W PENDER CITY: VANCOUVER BC V6 2TB STATE: A1 ZIP: 90067 BUSINESS PHONE: 6046816186 MAIL ADDRESS: STREET 1: 1875 CENTURY PARK EAST SUITE 150 CITY: CENTURY CITY STATE: CA ZIP: 90067 FORMER COMPANY: FORMER CONFORMED NAME: BALLYNAGEE ACQUISITION CORP DATE OF NAME CHANGE: 19990730 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 OMB APPROVAL OMB Number: 3235-0060 Expires: May 31, 2000 Estimated average burden hours per response 5.00 -------------------------- 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) February 24, 2000 ------------------- efinancial depot.com, Inc. - ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 330809711 - -------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1005 - 750 West Pender Street, Vancouver, British Columbia V6C 2T8 - ------------------------------------------------------------------ -------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (877) 739-3812 --------------- (not applicable) - -------------------------------------------------------------- (Former name or former address, if changed since last report.) ITEM 1. CHANGES IN CONTROL OF REGISTRANT. Not applicable. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. Not applicable. ITEM 3. BANKRUPTCY OR RECEIVERSHIP Not applicable. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT Not applicable. ITEM 5. OTHER EVENTS On January 31, 2000, efinancial depot.com, Inc. (the "Company") entered into a funding agreement (the "Agreement") with Oxford Capital Corporation (the "Purchaser"), which funding was completed on February 24, 2000 (the "Closing Date"). Pursuant to the Agreement, the Company issued to the Purchaser 6% Convertible Debentures (the "Debentures") and a two year warrant to purchase 250,000 shares of common stock in the capital of the Company at US$5.00 per share (the "Warrants"), in exchange for funding in the amount of $2,500,000. The Debentures are due January 31, 2003 and bear interest at the rate of 6% per year, payable upon conversion, redemption or maturity, whichever occurs first. Interest is payable, at the Purchaser's option, in cash or in shares of the Company's common stock (the "Common Stock"). Pursuant to the Agreement, the Debentures are convertible into shares of Common Stock from time to time, in amounts specified by the Purchaser, any time after the Closing Date, as follows: The lower of: (i) 80% (not lower than a floor price of US$3.00) of the average closing bid price of the Common Stock for the five (5) trading days preceding the Conversion Date; or (ii) US$5.00. In addition, the Debentures are subject to a forced conversion into Common Stock when the share price has traded above US$10.00 for 20 consecutive trading days and the liquidity covenants have not been broken. The underlying warrants will be acquired and paid for within 30 trading days after forced conversion. The Debentures are exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to SEC Regulation S. The Company must prepare and file, within 60 days of January 31, 2000, a Registration Statement covering 200% of the shares the Debentures are currently convertible into, and all of the shares underlying the Warrants. The Company will ensure that the Registration Statement is declared effective within 120 days. In the event that the Registration Statement is not filed within 60 days or declared effective within 120 days, the Company will pay damages to the Purchaser of 2% of the principal value of the Debentures outstanding every 30 day period, or a pro rata portion thereof. If at any time following the 120 day period after the Closing Date, the market value of the volume of stock trades less than $100,000 in value for 20 consecutive trading days, the Purchaser has the right to return the unconverted Debentures to the Company at a premium of 30% of the principal outstanding. Pursuant to the Agreement, the Debentures, the Warrants and the Common Stock underlying the Debentures and Warrants have been delivered to Oxford Capital Corporation, Calgary (the "Escrow Holder"). As security for the Debentures, the Company deposited 500,000 shares of restricted common stock with the Escrow Holder, which shares will be released upon conversion of the Debentures or in the event that the Company defaults on the Debentures. In addition and upon funding, the Company paid 10% of the gross amount of the Debentures to Oxford Capital Corporation, Calgary (the "Placement Agent"), and issued a one year warrant to purchase 50,000 shares of Common Stock at US$5.00 per share. ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS Not applicable. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Not applicable. ITEM 8. CHANGE IN FISCAL YEAR Not applicable. ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S Not applicable. ITEM 10. EXHIBITS (10) Material Contracts 10.1 Debenture Purchase Agreement between the Company and Oxford Capital Corp., dated February 2, 2000 10.2 Escrow Agreement between the Company and Oxford Capital Corp., dated February 2, 2000 10.3 Registration Rights Agreement between the Company and Oxford Capital Corp., dated February 2, 2000 (20) Other Documents 20.1 The Company's Form of Placement Agent Warrant Certificate 20.2 Placement Agent's Warrant - Oxford Capital Corp., Holder 20.3 e-financial depot.com, Inc. 6% Convertible Debenture, dated February 2, 2000 SIGNATURES 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. EFINANCIAL DEPOT.COM, INC. Date: April 14, 2000 /s/ John Huguet - ----------------- John Huguet, President and Chief Executive Officer EX-10.1 2 DEBENTURE PURCHASE AGREEMENT DEBENTURE PURCHASE AGREEMENT BETWEEN EFINANCIAL DEPOT.COM, INC. AND OXFORD CAPITAL CORP. FEBRUARY 2, 2000 DEBENTURE PURCHASE AGREEMENT This Debenture Purchase Agreement is made as of February 2, 2000, between Efinancial Deport.Com, Inc. (the "Company"), a Delaware corporation, and Oxford Capital Corp. (the "Purchaser"), a Cayman Island corporation. In consideration of the premises, mutual covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following terms have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa): "Affiliate" means any Person (1) which directly or indirectly controls, or is controlled by, or is under common control with the Company or a Subsidiary; (2) which directly or indirectly beneficially owns or holds five percent (5%) or more of any class of voting stock of the Company or any Subsidiary; or (3) five percent (5%) or more of the voting stock of which is directly or indirectly beneficially owned or held by the Company or a Subsidiary. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. "Agreement" means this Debenture Purchase Agreement, as amended, supplemented, or modified from time to time. "Business Day" means any day other than a Saturday, Sunday, or other day on which commercial banks in the United States are authorized or required to close under the federal laws of the United States of America. "Capital Lease" means all leases which have been or should be capitalized on the books of the lessee in accordance with GAAP. "Closing Date" means February 2, 2000 and any date thereafter that the Purchaser and the Company agree upon in writing. "Code" means the US Internal Revenue Code of 1986, as amended from time to time, and the regulations and published interpretations thereof. "Common Stock means the Company's common stock, $.001 par value. "Commonly Controlled Entity" means an entity, whether or not incorporated, which is under common control with the Company within the meaning of Section 414(b) or 414(c) of the Code. "Company" means EFinancial Depot. Com, Inc. and its subsidiary companies, joint ventures or any other related entities; "Conversion Date" means any date 30 days after the Closing Date. "Debenture" shall have the meaning assigned to it in Section 2.01 "Debenture Shares" means the shares of Common Stock of the Company underlying the Debenture into which the Debenture is convertible. "Debt" means (1) indebtedness or liability for borrowed money; (2) obligations evidenced by bonds, Debenture, notes, or other similar instruments; (3) obligations for the deferred purchase price of property or services (including trade obligations); (4) obligations as lessee under Capital Leases; (5) current liabilities in respect of unfunded vested benefits under Plans covered by ERISA; (6) obligations under letters of credit; (7) obligations under acceptance facilities; (8) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person or entity, or otherwise to assure a creditor against loss; and (9) obligations secured by any Liens, whether or not the obligations have been assumed. "Default" means any of the events specified in Section 8.01, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Escrow Agreement" shall have the meaning assigned to such term in Section 2.10(c). "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations and published interpretations thereof. "Event of Default" means any of the events specified in Section 8.01, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Exchange Act" means the US Securities Exchange Act of 1934, as amended. "GAAP" means generally accepted accounting principles either (i) in the United States, or (ii) in Canada, whichever is applicable, together with accompanying adjustments to reflect generally accepted accounting principles in the United States. "Lien" means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority, or other security agreement or preferential arrangement, charge, or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement or other registration or notification of a debt, obligation or security interest under the law of any jurisdiction to evidence any of the foregoing). "Maturity Date" means the date the principle amount outstanding on the Debenture is due and payable; "Multiemployer Plan" means a Plan described in Section 4001(a)(3) of ERISA. "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Person" means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority, or other entity of whatever nature. "Plan" means any pension plan which is covered by Title IV of ERISA and in respect of which the Company or a Commonly Controlled Entity is an "employer" as defined in Section 3(5) of ERISA "Purchaser" means Oxford Capital Corp., a Cayman Island company. "Principal Office" means 1013-17th Avenue S.W., Calgary, Alberta, T2T 0A7. "Prohibited Transaction" means any transaction set forth in Section 406 of ERISA or Section 4975 of the Code. "Registration Rights Agreement" shall have the meaning assigned to such term in Section 2.01. "Reportable Event" means any of the events set forth in Section 4043 of ERISA. "SEC" means the US Securities and Exchange Commission. "Securities" means the Debenture and the Warrant. "Securities Act" means the US Securities Act of 1933, as amended. "Subsidiary" means, as to the Company, a corporation of which shares of stock having ordinary voting power (other than stock having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by the Company. "Transaction Documents" means this Agreement, the Debenture, the Warrant, the Registration Rights Agreement, and the Escrow Agreement. "Warrant" shall have the meaning assigned to that term in Section 2.01. "Warrant Shares" means the shares Common Stock underlying the Warrant issuable upon the exercise thereof. SECTION 1.02. ACCOUNTING TERMS. All accounting terms not specifically defined herein shall be construed in accordance with GAAP consistent with those applied in the preparation of the financial statements referred to in Section 4.04, and all financial data submitted pursuant to this Agreement shall be prepared in accordance with such principles. ARTICLE II PURCHASE AND SALE OF SECURITIES SECTION 2.01. PURCHASE AND SALE OF SECURITIES. The Company agrees to sell and, subject to the terms and conditions and in reliance on the Company's representations and warranties contained in this Agreement, the Purchaser agrees to purchase, $2,500,000 USD in principal amount of the Company's 6% Convertible Debenture (the "Debenture"), due February 2, 2003, (the "Maturity Date") and a warrant to purchase up 250,000 the Company's Common Stock (the "Warrant") exercisable at a price of $5.00 per share on or before February 2, 2002. The Debenture shall be convertible at a price equal to: (i) the lesser of 80% of the average closing bid price of the Company's common stock for the 5 trading days preceding the Conversion Date and (ii) $ 5.00; in no event shall the conversion price be less than $ 3.00 USD. The Warrant shall be exercisable at a price equal to $5.00 USD per share. The purchase price of the Debenture shall be 100% of its face value. The purchase price of the Warrant shall be $.01. The Debenture shall be in the form of Exhibit A hereto. The Warrant shall be in the form of Exhibit B hereto. All tax returns filed by the Company shall be consistent in all material respects with such allocation (including for purposes of section 1271 et seq. of the Code). Contemporaneously with the execution of this Agreement, the Company shall execute and deliver to the Purchaser a registration rights agreement (the "Registration Rights Agreement") in the form of Exhibit C hereto, covering the Debenture Shares and the Warrant Shares. SECTION 2.02. FORCED CONVERSION. If at any time following the Closing Date, the Common Stock trades on the OTC Bulletin Board or NASDAQ National Board at a price equal to or greater than $10.00 USD, on every day for 20 consecutive trading days, and the provisions of Section 2.06 have never been exercisable by the Purchaser, then, within 30 days of the determination of the application of this provision: (i) the Debenture will be converted into Common Stock in accordance with the provisions of the Debenture; and (ii) the Warrant will be exercised in accordance with its terms. SECTION 2.03. CLOSING. The purchase and sale of the Securities shall take place on the Closing Date, via facsimile, at the Principal Office and the offices of Clark Wilson, Barristers and Solicitors, Vancouver, B.C. SECTION 2.04. PLACEMENT FEE. On the Closing Date, the Company shall pay the Purchaser a placement fee (the "Placement Fee") in an amount equal to 10% of the principal amount of Debenture purchased at such Closing. The Company hereby irrevocably authorizes the Purchaser to deduct the amount of the Placement Fee from the purchase price of the Debenture, together with any reasonable and documented out-of-pocket expenses for which such Purchaser is entitled to reimbursement pursuant to this Section 2.04, including the reasonable and documented fees and expenses of the Purchaser's counsel. If for any reason the Purchaser does not deduct the amount of the Placement Fee and such expenses from the purchase price of Debenture, then promptly upon the Purchaser's request, the Company shall pay and deliver the Placement Fee and such other expenses to the Purchaser or to such other persons as such Purchaser shall direct, by Federal funds bank wire transfer of same day funds. SECTION 2.05. PLAEMENT AGENT WARRANTS. On the Closing Date, the Issuer shall issue the Purchaser, a Placement Agent Warrant to purchase 50,000 shares of the Common Stock at an exercise price of $5.00 per share, exerciseable on or before February 2, 2001. SECTION 2.06. ANTI-DILUTION PROVISIONS. After February 2, 2000, and so long as the Debenture or the Warrant is outstanding and not fully converted or exercised, the Company shall not, without the prior consent of the Holder, issue or sell (i) any Common Stock without consideration or for a consideration per share less than $3.00; or (ii) issue or sell any warrant, Warrant, right, contract, call, or other security or instrument granting the holder thereof the right to acquire Common Stock without consideration or for a consideration per share less than $3.00. SECTION 2.07. LIQUIDITY OF COMMON SHARES. If at any time following 120 days after the Closing Date, the market value of the volume of the Common Stock, as traded on the OTC Bulletin Board, multiplied by the average closing market price of the Common Stock, is less than $100,000, on every day for 20 consecutive trading days, the Purchaser has the right to put any principal amount of the Debenture unconverted back to the Company at a purchase price equal to the principle amount outstanding plus a premium of 30% of the principle amount outstanding. SECTION 2.08. USE OF PROCEEDS. The Company shall use the proceeds from the Debenture solely for working capital to grow and expand its business. SECTION 2.09. EXEMPTION FROM US REGISTRATION. The issuance of the Debenture and the Warrant shall be exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof; and also pursuant to SEC Regulation S. Accordingly, the Company represents and warrants to the Purchaser that it has, and covenants and agrees with the Purchaser that it will, comply in all material respects with the terms and conditions of SEC Regulation S applicable to the issuance and sale of the Debenture and the Warrant. SECTION 2.10. REGISTRATION OF COMMON STOCK; (a) As soon as possible, and in any event on or before March 31, 2000 in accordance with the Registration Rights Agreement, the Company shall file the appropriate registration statement or registration statements (each a "Registration Statement" and collectively "Registration Statements") with the SEC to register 200% of the Debenture Shares and 100% of the Warrant Shares under the Securities Act pursuant to the Registration Rights Agreement. (b) In accordance with the Registration Rights Agreement, the Company shall use its best efforts to ensure that the Registration Statements become effective as soon as possible, and shall cause the Registration Statements to remain effective until the Debenture have been converted or paid, and the Warrant fully exercised or expired. (c) Contemporaneously with the execution of this Agreement the Company shall enter into an escrow agreement (the "Escrow Agreement") with the Purchaser as escrow holder (the "Escrow Holder") in the form of Exhibit D. Promptly after the execution of this Agreement, the Company shall deposit 500,000 common shares of the Common Stock as security for the Debenture (the "Security Shares"). Promptly upon the effectiveness of a Registration Statement, the Corporation shall deliver unrestricted certificates for those shares registered thereunder to the Escrow Agent, in DTC form, in exchange for the Security Shares. ARTICLE III CONDITIONS PRECEDENT SECTION 3.01. CONDITION PRECEDENT TO INITIAL CLOSING. The Purchaser's obligation to purchase the Debenture is subject to the conditions precedent that the Purchaser shall have received on or before the Closing Date each of the following, in form and substance satisfactory to the Purchaser and its counsel: (1) Debenture. The Debenture, duly executed by the Company; --------- (2) Warrant. The Warrant, duly executed by the Company; ------- (3) Placement Agent Warrant. The Placement Agent Warrant, duly executed by the ------------------------ Company; (4) Registration Rights Agreement. The Registration Rights Agreement, duly ------------------------------- executed by the Company; - (5) Escrow Agreement. The Escrow Agreement, duly executed by the Company; ---------------- (6) Evidence of all corporate action by the Company. Certified (as of the ------------------------------------------------ date of this Agreement) copies of all corporate action taken by the Company, including resolutions of its Board of Directors, authorizing the execution, delivery, and performance of the Transaction Documents to which it is a party and each other document to be delivered pursuant to this Agreement; (6) Incumbency and signature certificate of the Company. A certificate (dated as --------------------------------------------------- of the date of this Agreement) of the Secretary of the Company certifying the names and true signatures of the officers of the Company authorized to sign the Transaction Documents to which it is a party and the other documents to be delivered by the Company under this Agreement; (7) Opinion of counsel for the Company. A favorable opinion of Clark --------------------------------------- Wilson, Barristers & Solicitors, Counsel for the Company, in substantially the form of Exhibit E, and as to such other matters as the Purchaser may reasonably request. ARTICLE IV COMPANY'S REPRESENTATIONS AND WARRANTIES The Company represents and warrants to the Purchaser that: SECTION 4.01. INCORPORATION, GOOD STANDING, AND DUE QUALIFICATION. The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own its assets and to transact the business in which it is now engaged or proposed to be engaged in and is duly qualified as a foreign corporation and in good standing under the laws of each other jurisdiction in which such qualification is required. SECTION 4.02 CORPORATE POWER AND AUTHORITY. The execution, delivery, and performance by the Company of the Transaction Documents to which each is a party have been duly authorized by all necessary corporate action and do not and will not (1) require any consent or approval of the stockholders of such corporation; (2) contravene such corporation's charter or bylaws; (3) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination, or award presently in effect having applicability to such corporation; (4) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease, or instrument to which such corporation is a party or by which it or its properties may be bound or affected; (5) result in, or require, the creation or imposition of any Lien, upon or with respect to any of the properties now owned or hereafter acquired by such corporation; and (6) cause such corporation to be in default under any such law, rule, regulation, order, writ, judgment, injunction, decree, determination, or award or any such indenture, agreement, lease, or instrument. SECTION 4.03 LEGALLY ENFORCEABLE AGREEMENT. This Agreement is, and each of the other Transaction Documents when delivered under this Agreement will be, legal, valid, and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, and other similar laws affecting creditors' rights generally. SECTION 4.04. FINANCIAL STATEMENTS. The financial statements of the Company, filed with its Form 10-SB at the Securities Exchange Commission, copies of which have been furnished to the Purchaser, are complete and correct and fairly present the financial condition of the Company, all in accordance with GAAP in the United States consistently applied subject to year-end adjustments. Since the date of the filing of the Form 10-SB, there has been no material adverse change in the condition (financial or otherwise), business, or operations of the Company. There are no liabilities of or claims against the Company, fixed or contingent, which are material but are not reflected in the financial statements or in the notes thereto, other than liabilities arising in the ordinary course of business since the filing of the Form 10-SB or as otherwise disclosed. SECTION 4.05. LABOR DISPUTES AND ACTS OF GOD. The business and the properties of the Company are not affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy, or other casualty (whether or not covered by insurance) materially and adversely affecting such business properties or the operation of the Company. SECTION 4.06. OTHER AGREEMENTS. The Company is not a party to any indenture, loan, or credit agreement, or to any lease or other agreement or instrument, or subject to any charter or corporate restriction which could have a material adverse effect on the business, properties, assets, operations, or conditions, financial or otherwise, of the Company, or the ability of the Company to carry out its obligations under the Transaction Documents other than as disclosed in the Form 10-SB. The Company is not in default in any respect in the performance, observance, or fulfillment of any of the obligations, covenants, or conditions contained in any agreement or instrument material to its business to which it is a party. SECTION 4.07. LITIGATION. There is no pending or threatened action or proceeding against or affecting the Company before any court, governmental agency, or arbitrator which may, in any one case or in the aggregate, materially adversely affect the financial condition, operations, properties, or business of the Company or the ability of the Company to perform its obligation under the Transaction Documents other than as disclosed in the Form 10-SB. SECTION 4.08. NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. There are no unsatisfied judgments outstanding against the Company, and the Company is not in default with respect to any judgment, writ, injunction, decree, rule, or regulation of any court, arbitrator, or federal, state, municipal, or other governmental authority, commission, board, bureau, agency or instrumentality, domestic or foreign. SECTION 4.09. OWNERSHIP AND LIENS. The Company has title to, or valid leasehold interests in, all of their properties and assets, real and personal, including the properties and assets and leasehold interest reflected in the financial statements referred to in Section 4.04 (other than any properties or assets disposed of in the ordinary course of business), and none of the properties and assets owned by the Company and none of its leasehold interests is subject to any Lien, except such as may be permitted pursuant to Section 6.01 of this Agreement. Without limiting the generality of the foregoing, this representation and warrant includes all of the Company's intellectual property (including software and other technology). SECTION 4.10. ERISA AND EMPLOYEE BENEFIT LAWS. The Company is in compliance in all material respects with all applicable provisions of ERISA, and all applicable national and state employee benefit of the United States, and any other applicable jurisdictions. SECTION 4.11. OPERATION OF BUSINESS. The Company possesses all licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, to conduct their respective businesses substantially as now conducted and as presently proposed to be conducted, and the Company and is not in violation of any valid rights of others with respect to any of the foregoing. SECTION 4.12. TAXES. The Company has filed all tax returns (national, federal, provincial, state, and local) required to be filed and has paid all taxes, assessments, and governmental charges and levies thereon to be due, including interest and penalties. SECTION 4.13. ENVIRONMENT. The Company has duly complied with, and their businesses, operations, assets, equipment, property, leaseholds, or other facilities are in compliance with, the provisions of all national, federal, provincial, state, and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations promulgated thereunder. ARTICLE V AFFIRMATIVE COVENANTS So long as the Debenture is outstanding, or the Warrant has not been fully exercised or expired, the Company will: SECTION 5.01. MAINTENANCE OF EXISTENCE. Preserve and maintain, and cause each active Subsidiary to preserve and maintain, its corporate existence and good standing in the jurisdiction of its incorporation, and qualify and remain qualified, and cause each Subsidiary to qualify and remain qualified, as a foreign corporation in each jurisdiction in which such qualification is required. SECTION 5.02. MAINTENANCE OF RECORDS. Keep, and cause each Subsidiary to keep, adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of the Company and its Subsidiaries. SECTION 5.03. MAINTENANCE OF PROPERTIES. Maintain, keep, and preserve, and cause each Subsidiary to maintain, keep, and preserve, all of its properties (tangible and intangible) necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted. SECTION 5.04. CONDUCT OF BUSINESS. Continue, and cause each Subsidiary to continue, to engage in an efficient and economical manner in a business of the same general type as conducted by it on the date of this Agreement. SECTION 5.05. MAINTENANCE OF INSURANCE. Maintain, and cause each Subsidiary to maintain, insurance with financially sound and reputable insurance companies or associations in such amounts and covering such risks as are usually carried by companies engaged in the same or a similar business and similarly situated, which insurance may provide for reasonable deductibility from coverage thereof. SECTION 5.06. COMPLIANCE WITH LAWS. Comply, and cause each Subsidiary to comply, in all respects with all applicable laws, rules, regulations, and orders, such compliance to include, without limitation, paying before the same become delinquent all taxes, assessments, and governmental charges imposed upon it or upon its property. SECTION 5.07. RIGHT OF INSPECTION. At any reasonable time and from time to time, permit the Purchaser or any agent or representative thereof to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Company and any Subsidiary, and to discuss the affairs, finances, and accounts of the Company and any Subsidiary with any of their respective officers and directors and the Company's independent accountants. SECTION 5.08. REPORTING REQUIREMENTS. Furnish to the Purchaser: (1) Quarterly financial statements. As soon as available and in any event ------------------------------- within forty-five (45) days after the end of each of the first three quarters of each fiscal year of the Company, consolidated and consolidating balance sheets of the Company and its Subsidiaries as of the end of such quarter, consolidated and consolidating statements of income and retained earnings of the Company and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, and [consolidated and consolidating] statements of changes in financial position of the Company and its Subsidiaries for the portion of the fiscal year ended with the last day of such quarter, all in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the previous fiscal year and all prepared in accordance with GAAP consistently applied and certified by the chief financial officer of the Company (subject to year-end adjustments); (2) Annual financial statements. As soon as available and in any event ----------------------------- within ninety (90) days after the end of each fiscal year of the Company, [consolidated and consolidating] balance sheets of the Company and its Subsidiaries as of the end of such fiscal year and [consolidated and consolidating] statements of income and retained earnings of the Company and its Subsidiaries for such fiscal year, and [consolidated and consolidating] statements of changes in financial position of the Company and its Subsidiaries for such fiscal year, all in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the prior fiscal year and all prepared in accordance with GAAP consistently applied and as to the consolidated statements accompanied by an opinion thereon acceptable to the Purchaser by Stefanou & Company, LLP, Certified Public Accountants, or other independent accountants selected by the Company and acceptable to the Purchaser; (3) Management letters. Promptly upon receipt thereof, copies of any ------------------- reports submitted to the Company or any Subsidiary by independent certified public accountants in connection with examination of the financial statements of the Company or any Subsidiary made by such accountants; (4) Certificate of no Default. Within forty five (45) days after the end of ------------------------- each of the quarters of each fiscal year of the Company (or earlier upon the delivery of the financial statements required by Sections 5.08(1) or (2), a certificate of the chief financial officer of the Company (a) certifying that to the best of his knowledge no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action which is proposed to be taken with respect thereto, and (b) with computations demonstrating compliance with the covenants contained in Article VII; (5) Accountant's report. Simultaneously with the delivery of the annual -------------------- financial statements referred to in Section 5.08(2), a certificate of the independent public accountants who audited such statements to the effect that, in making the examination necessary for the audit of such statements, they have obtained no knowledge of any condition or event which constitutes a Default or Event of Default, or if such accountants shall have obtained knowledge of any such condition or event, specifying in such certificate each such condition or event of which they have knowledge and the nature and status thereof; (6) Notice of litigation. Promptly after the commencement thereof, notice --------------------- of all actions, suits, and proceedings before any court or governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign, affecting the Company or any Subsidiary, which, if determined adversely to the Company or such Subsidiary, could have a material adverse effect on the financial condition, properties, or operations of the Company or such Subsidiary; (7) Notice of Defaults and Events of Default. As soon as possible and in ------------------------------------------ any event within five (5) days after the occurrence of each Default or Event of Default, a written notice setting forth the details of such Default or Event of Default and the action which is proposed to be taken by the Company with respect thereto; (8) ERISA reports. As soon as possible, and in any event within thirty (30) ------------- days after the Company knows or has reason to know that any circumstances exist that constitute grounds entitling the PBGC to institute proceedings to terminate a Plan subject to ERISA with respect to the Company or any Commonly Controlled Entity, and promptly but in any event within two (2) Business Days of receipt by the Company or any Commonly Controlled Entity of notice that the PBGC intends to terminate a Plan or appoint a trustee to administer the same, and promptly but in any event within five (5) Business Days of the receipt of notice concerning the imposition of withdrawal liability with respect to the Company or any Commonly Controlled Entity, the Company will deliver to the Purchaser a certificate of the chief financial officer of the Company setting forth all relevant details and the action which the Company proposes to take with respect thereto. (9) Reports to other creditors. Promptly after the furnishing thereof, ----------------------------- copies of any statement or report furnished to any other party pursuant to the terms of any indenture, loan, credit, or similar agreement and not otherwise required to be furnished to the Purchaser pursuant to any other clause of this Section 5.08; (10) Proxy statements, etc. Promptly after the sending or filing thereof, ---------------------- copies of all proxy statements, financial statements, and reports which the Company or any Subsidiary sends to its stockholders, and copies of all regular, periodic, and special reports, and all registration statements which the Company or any Subsidiary files with the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or with any national securities exchange; and (11) General information. Such other information respecting the condition -------------------- or operations, financial or otherwise, of the Company or any Subsidiary as the Purchaser may from time to time reasonably request. SECTION 5.09. ENVIRONMENT. Be and remain, and cause each Subsidiary to be and remain, in compliance with the provisions of all national, federal, provincial, state, and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations issued thereunder; notify the Purchaser immediately of any notice of a hazardous discharge or environmental complaint received from any governmental agency or any other party; notify the Purchaser immediately of any hazardous discharge from or affecting its premises; immediately contain and remove the same, in compliance with all applicable laws; promptly pay any fine or penalty assessed in connection therewith; permit the Purchaser to inspect the premises, to conduct tests thereon, and to inspect all books, correspondence, and records pertaining thereto; and at the Purchaser's request, and at the Company's expense, provide a report of a qualified environmental engineer, satisfactory in scope, form, and content to the Purchaser, and such other and further assurances reasonably satisfactory to the Purchaser that the condition has been corrected. SECTION 5.10. Be and remain a "reporting company" as defined by the Exchange Act. ARTICLE VI NEGATIVE COVENANTS So long as the Debenture is outstanding, or the Warrant has not been fully exercised or expired, Company will not without the written consent of the Purchaser: SECTION 6.01. MERGERS, ETC. Wind up, liquidate or dissolve itself, merge with, or consolidate with another organization unless the other organization is a subsidiary, or convey, sell, assign, transfer, lease, or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person, or acquire all or substantially all of the assets or the business of any Person that is not within the mandate and business plan of the Company, or permit any Subsidiary to do so, except that (1) any Subsidiary may merge into or transfer assets to the Company and (2) any Subsidiary may merge into or consolidate with or transfer assets to any other Subsidiary. SECTION 6.02 DIVIDENDS. Declare or pay any dividends; or make any distribution of assets to its stockholders as such whether in cash, assets, or obligations of the Company; or allocate or otherwise set apart any sum for the payment of any dividend or distribution on; or permit any of its Subsidiaries to purchase or otherwise acquire for value any stock of the Company or another Subsidiary. SECTION 6.03.SALE OF ASSETS. Sell, lease, assign, transfer, or otherwise dispose of, or permit any Subsidiary to sell, lease, assign, transfer, or otherwise dispose of, any of its now owned or hereafter acquired assets (including, without limitation, shares of stock and indebtedness of Subsidiaries, receivables, and leasehold interests), except: (1) inventory disposed of in the ordinary course of business; (2) the sale or other disposition of assets no longer used or useful in the conduct of its business; and (3) that any Subsidiary may sell, lease, assign, or otherwise transfer its assets to the Company. SECTION 6.04 TRANSACTIONS WITH AFFILIATES. Enter into any transaction, including, without limitation, the purchase, sale, or exchange of property or the rendering of any service, with any Affiliate, or permit any Subsidiary to enter into any transaction, including, without limitation, the purchase, sale, or exchange of property or the rendering of any service, with any Affiliate, except in the ordinary course of and pursuant to the reasonable requirements of the Company's or such Subsidiary's business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would obtain in a comparable arm's-length transaction with a Person not an Affiliate. ARTICLE VII CORPORATE GOVERNANCE So long as the Debenture is outstanding, or the Warrant has not been fully exercised or expired, Company will ensure that the following are fulfilled: SECTION 7.01. BOARD OF DIRECTORS. The Company will have and maintain a board of directors of not less than two members. The Company's board of directors shall meet not less frequently than quarterly. The Company will appoint and elect a representative of the Purchaser to the Company's Board within 30 days of the Closing Date and to nominate the representative for election to the Company's board of directors annually until the representative delivers to the Company a written resignation from the Company's board of directors. SECTION 7.02. AUDIT COMMITTEE. Within 60 days, the Company's board of directors shall appoint an Audit Committee of not less than three members and no more than one (1) of the members of the Audit Committee shall be an officer or employee of or contractor or consultant to the Company. The Audit Committee shall meet not less frequently than quarterly. The Audit Committee shall review the Company's financial statements for accuracy and completeness at least quarterly and before their release. The Audit Committee shall meet with the Company's independent accountants prior to and immediately following the Company's annual audit, and such other times as the Audit Committee deems necessary to assure that the Company's financial statements are accurate, complete and in accordance with GAAP, and to insure that the Company has adequate financial and reporting policies, procedures, systems and controls in place. ARTICLE VIII EVENTS OF DEFAULT SECTION 8.01. EVENTS OF DEFAULT. If any of the following events shall occur: (1) The Company should fail to pay the principal of, or interest payable pursuant to the Debenture, or any amount of a commitment or other fee, as and when due and payable; (2) Any representation or warranty made or deemed made by the Company in this Agreement or which is contained in any certificate, document, opinion, or financial or other statement furnished at any time under or in connection with any Transaction Document shall prove to have been incorrect, incomplete, or misleading in any material respect on or as of the date made or deemed made; (3) The Company shall fail to perform or observe any term, covenant, or agreement contained in Articles V, VI, or VII hereof; (4) The Company or any of its Subsidiaries shall (a) fail to pay any indebtedness for borrowed money of the Company or such Subsidiary, as the case may be, or any interest or premium thereon, when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise), or (b) fail to perform or observe any term, covenant, or condition on its part to be performed or observed under any agreement or instrument whose value is in excess of Ten Thousand ($10,000) Dollars relating to any such indebtedness, when required to be performed or observed, if the effect of such failure to perform or observe is to accelerate, or to permit the acceleration of, after the giving of notice or passage of time, or both, the maturity of such indebtedness; (5) The Company or any of its Subsidiaries (a) shall generally not pay, or shall be unable to pay, or shall admit in writing its inability to pay its debts as such debts become due; or (b) shall make an assignment for the benefit of creditors, or petition or apply to any tribunal for the appointment of a custodian, receiver, or trustee for it or a substantial part of its assets; or (c) shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or (d) shall have had any such petition or application filed or any such proceeding commenced against it in which an order for relief is entered or an adjudication or appointment is made, and which remains undismissed for a period of thirty (30) days or more; or (e) shall take any corporate action indicating its consent to, approval of, or acquiescence in any such petition, application, proceeding, or order for relief or the appointment of a custodian, receiver, or trustee for all or any substantial part of its properties; or (f) shall suffer any such custodianship, receivership, or trusteeship to continue undischarged for a period of thirty (30) days or more; (6) One or more judgments, decrees, or orders for the payment of money in excess of Twenty five Thousand Dollars ($25,000) in the aggregate shall be rendered against the Company or any of its Subsidiaries and such judgments, decrees, or orders shall continue unsatisfied and in effect for a period of 30 consecutive days without being vacated, discharged, satisfied, or stayed or bonded pending appeal; (8) Any of the following events shall occur or exist with respect to the Company and any Commonly Controlled Entity under ERISA: any Reportable Event shall occur; complete or partial withdrawal from any Multiemployer Plan shall take place; any Prohibited Transaction shall occur; a notice of intent to terminate a Plan shall be filed, or a Plan shall be terminated; or circumstances shall exist which constitute grounds entitling the PBGC to institute proceedings to terminate a Plan, or the PBGC shall institute such proceedings; and in each case above, such event or condition, together with all other events or conditions, if any, could subject the Company to any tax, penalty, or other liability which in the aggregate may exceed Twenty five Thousand Dollars ($25,000); or (9) If the Purchaser receives its first notice of a hazardous discharge or an environmental complaint from a source other than the Company, and the Purchaser does not receive notice (which may be given in oral form, provided same is followed with all due dispatch by written notice given by Certified Mail, Return Receipt Requested) of such hazardous discharge or environmental complaint from the Company within twenty-four (24) hours of the time the Purchaser first receives said notice from a source other than the Company; or if any federal, state, or local agency asserts or creates a Lien upon any or all of the assets, equipment, property, leaseholds, or other facilities of the Company by reason of the occurrence of a hazardous discharge or an environmental complaint; or if any federal, state, or local agency asserts a claim against the Company and/or its assets, equipment, property, leaseholds, or other facilities for damages or cleanup costs relating to a hazardous discharge or an environmental complaint; provided, however, that such claim shall not constitute a default if, within five (5) Business Days of the occurrence giving rise to the claim, (a) the Company can prove to the Purchaser's satisfaction that the Company has commenced and is diligently pursuing either: (i) a cure or correction of the event which constitutes the basis for the claim, and continues diligently to pursue such cure or correction to completion or (ii) proceedings for an injunction, a restraining order, or other appropriate emergent relief preventing such agency or agencies from asserting such claim, which relief is granted within ten (10) Business Days of the occurrence giving rise to the claim and the injunction, order, or emergent relief is not thereafter resolved or reversed on appeal; and (b) in either of the foregoing events, the Company has posted a bond, letter of credit, or other security satisfactory in form, substance, and amount to both the Purchaser and the agency or entity asserting the claim to secure the proper and complete cure or correction of the event which constitutes the basis for the claim; then, and in any such event, the Purchaser may, by notice to the Company, (1) declare its obligation to advance funds pursuant to the Debenture be terminated, whereupon the same shall forthwith terminate, and (2) declare the Debenture, all interest thereon, and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Debenture, all such interest, and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by the Company. (10) The Company shall fail to perform or observe any of the provisions contained in any other section of this Agreement, the Debenture, or any of the Transaction Documents, and such failure shall continue for more than thirty (30) days after the Purchaser has given written notice to the Company. SECTION 8.02. REMEDIES. Upon the occurrence and during the continuance of any Event of Default as set out in Section 8.01, or in the Debenture, then, or at any thereafter, and in each and every case, the Purchaser shall have the rights and remedies as set out in Paragraph 9 of the Debenture. ARTICLE IX PURCHASER'S REPRESENTATIONS & WARRANTIES SECTION 9.01. UNREGISTERED SECURITIES. The Purchaser acknowledges that none of the Debenture, the Warrant, the Placement Warrant, the Debenture Shares, the Warrant Shares, or the Placement Warrant Shares have been registered under the Securities Act and unless so registered may not be offered or sold in the United States or to U.S. persons, as that term is defined in Regulations under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act. SECTION 9.02. U.S NON-RESIDENT. The Purchaser is outside the United States when receiving and executing this Agreement, is not a U.S. person and is not acquiring the Debenture, the Warrant Placement and/or the Warrant for the account of or benefit of, directly or indirectly, a U.S. person. SECTION 9.03. PURCHASER AS PRINCIPAL. The Purchaser is acquiring the Debenture, the Warrant, and the Placement Warrant as principal for its own account for investment purposes only and not with a view to, or for resale, distribution or fractionalization thereof, in whole or in part. SECTION 9.04. LEGENDED SECURITIES. The Purchaser acknowledges that the unless registered under the Securities Act, the Debenture, the Warrant, the Placement Warrant, the Debenture Shares, the Warrant Shares and the Placement Warrant Shares will be restricted from transfer under the Securities Act and the certificate representing such securities may bear a legend with respect to such restriction. SECTION 9.05. CANADIAN RESALE RESTRICTIONS. The Purchaser acknowledges that the Company is not currently a reporting issuer in any jurisdiction in Canada nor does it have any current intention to become one and as a result the Debenture, the Warrant, the Debenture Shares, the Warrant Shares, and the Placement Warrant Shares and may be subject to indefinite resale restrictions. ARTICLE X MISCELLANEOUS SECTION 10.01. AMENDMENTS, ETC. No amendment, modification, termination, or waiver of any provision of any Transaction Document to which the Company is a party, nor consent to any departure by the Company from any Transaction Document to which it is a party, shall in any event be effective unless the same shall be in writing and signed by the Purchaser, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 10.02. NOTICES, ETC. All notices and other communications provided for under this Agreement and under the other Transaction Documents to which the Company is a party shall be in writing (including telegraphic, telex, and facsimile transmissions) and mailed or transmitted or delivered; If to the Company: If to the Purchaser: Efinancial Depot.Com, Inc. Oxford Capital Corp. 150-1875 Century Park East c/o 1013-17th Avenue S.W. Century City California Calgary, Alberta 90067 T2T 0A7 Ph: (403) 508-5055 Fax: (403) 508-5055 With a copy that does not With a copy that does not constitute notice to: constitute notice to: Clark,Wilson, Ian H. Kennedy, Barristers & Solicitors Barrister & Solicitor 800-885 W.Georgia St. 1013 - 17th Avenue Vancouver,Canada Calgary, Alberta V6C 3H1 T2T 0A7 Attention: David Cowan Attn: Ian H. Kennedy Tel: (604) 643-3178 Tel: (403) 508-5055 Fax: (604) 687-6314 Fax: (403) 508-5058 ; or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section 10.02. Except as otherwise provided in this Agreement, all such notices and communications shall be effective when deposited in the mails or delivered to the telegraph company, or sent, answerback received, respectively, addressed as aforesaid, except that notices to the Purchaser pursuant to the provisions of Article II shall not be effective until received by the Purchaser. SECTION 10.03. NO WAIVER. No failure or delay on the part of the Purchaser in exercising any right, power, or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy hereunder. The rights and remedies provided herein are cumulative, and are not exclusive of any other rights, powers, privileges, or remedies, now or hereafter existing, at law or in equity or otherwise. SECTION 10.04. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the Company and the Purchaser and their respective successors and assigns, except that the Company may not assign or transfer any of its rights under any Transaction Document to which the Company is a party without the prior written consent of the Purchaser. SECTION 10.05. COSTS, EXPENSES, AND TAXES. The Company agrees to pay on demand all costs and expenses incurred by the Purchaser in connection with the preparation, execution, delivery, filing, and administration of the Transaction Documents, and of any amendment, modification, or supplement to the Transaction Documents, including, without limitation, the fees and out-of-pocket expenses of counsel for the Purchaser incurred in connection with advising the Purchaser as to its rights and responsibilities hereunder up to $10,000 USD. The Company also agrees to pay all such costs and expenses, including court costs, incurred in connection with enforcement of the Transaction Documents, or any amendment, modification, or supplement thereto, whether by negotiation, legal proceedings, or otherwise. In addition, the Company shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing, and recording of any of the Transaction Documents and the other documents to be delivered under any such Transaction Documents, and agrees to hold the Purchaser harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees. This provision shall survive termination of this Agreement. SECTION 10.06. INTEGRATION. This Agreement and the Transaction Documents contain the entire agreement between the parties relating to the subject matter hereof and supersede all oral statements and prior writings with respect thereto. SECTION 10.07. INDEMNITY. The Company hereby covenants and agrees to protect, indemnify and hold harmless the Purchaser and its directors, officers, employees, solicitors, agents, affiliates, assignees, transferees and successors in interest (individually, an "Indemnified Party" and, collectively, the "Indemnified Parties") from and against all losses, claims, expenses, costs, damages or liabilities, whether joint or several (including the aggregate amount paid in reasonable settlement of any actions, suits, proceedings or claims) which they may suffer or incur caused by or arising directly or indirectly by reason of: (a) any information or statement (except any information or statement relating solely to the Purchaser) contained in the Registration Statements being or being alleged to be a misrepresentation; (b) the omission to state in the Registration Statements, or any amendment to such document a material fact required to be stated therein or necessary to make the statements therein not misleading (except the omission to state a material fact relating solely to the Purchaser); (c) the Company not complying with any requirement of any securities legislation or regulatory requirements of any jurisdiction in which Purchasers reside in connection with the Debenture, the Warrant and the Common Stock underlying the Debenture and the Warrant; (d) any order made or any inquiry, investigation or proceeding commenced or threatened by any regulatory authority based upon an allegation that any untrue statement or alleged omission or any misrepresentation or alleged misrepresentation in the Registration Statements or any amendment to such document exists (except information and statements relating solely to the Purchaser) which prevents or restricts the trading in of the Common Stock under Canadian or US law; (e) the inaccuracy of any of the Company's representations or warranties contained in any of the Transaction Documents; and (e) the Company's failure to comply with any of its obligations contained in any of the Transaction Documents. If any action or claim shall be asserted against an Indemnified Party in respect of which indemnity may be sought from the Company pursuant to the provisions hereof, or if any potential claim contemplated by this section shall come to the knowledge of an Indemnified Party, the Indemnified Party shall promptly notify the Company in writing of the nature of such action or claim (provided that any failure to so notify shall not affect the Company's liability under this paragraph unless such delay has prejudiced the defense to such claim). The Company shall be entitled but not obliged to participate in or assume the defense thereof, provided, however that the defense shall be through legal counsel acceptable to the Indemnified Party, acting reasonably. In addition, the Indemnified Party shall also have the right to employ separate counsel in any such action and participate in the defense thereof, and the fees and expense of such counsel shall be borne by the Indemnified Party unless (i) the employment thereof has been specifically authorized in writing by the Company; (ii) the Indemnified Party has been advised by counsel acceptable to the Company, acting reasonably, that representation of the Company and the Indemnified Party by the same counsel would be inappropriate due to actual or potential differing interests between them; or (iii) the Company has failed within a reasonable time after receipt of such written notice to assume the defense of such action or claim. It is understood and agreed that the Company shall not, in connection with any suit in the same jurisdiction, be liable for the legal fees and expenses of more than one separate legal firm to represent the Indemnified Parties. Neither party shall effect any settlement of any such action or claim or make any admission of liability without the written consent of the other party, such consent not to be unreasonably withheld or delayed. The indemnity hereby provided for shall remain in full force and effect and shall not be limited to or affected by any other indemnity in respect of any matters specified in this section obtained by the Indemnified Party from any other person. To the extent that any Indemnified Party is not a party to this Agreement, the Purchaser shall obtain and hold the right and benefit of this section in trust for and on behalf of such Indemnified Party. The Company hereby waives its right to recover contribution from the Purchaser with respect to any liability of the Company by reason of or arising out of any misrepresentation contained in any Registration Statement or any amendment thereto; provided, however, that such waiver shall not apply in respect of liability caused or incurred by reason of or arising out of any misrepresentation which is based upon or results from information relating solely to the Purchaser contained in such document. The Company hereby consents to personal jurisdiction and service and venue in any court in which any claim which is subject to indemnification hereunder is brought against the Purchaser or any Indemnified Party and to the assignment of the benefit of this section to any Indemnified Party for the purpose of enforcement provided that nothing herein shall limit the Company's right or ability to contest the appropriate jurisdiction or forum for the determination of any such claims. SECTION 10.08 GOVERNING LAW; JURISDICTION. This Agreement and the Debenture shall be governed by, and construed in accordance with, the laws of the State of Delaware. The courts of the State of Delaware, shall have exclusive jurisdiction and venue for the adjudication of any civil action between them arising out of relating to this Agreement, and hereby irrevocably consent to such jurisdiction and venue. SECTION 10.09. SEVERABILITY OF PROVISIONS. Any provision of any Transaction Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of such Transaction Document or affecting the validity or enforceability of such provision in any other jurisdiction. SECTION 10.10. HEADINGS. Article and Section headings in the Transaction Documents are included in such Transaction Documents for the convenience of reference only and shall not constitute a part of the applicable Transaction Documents for any other purpose. SECTION 10.11. CURRENCY. Unless otherwise specifically stated to the contrary, all currency and dollar amounts stated herein is currency of the United States of America. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. THE COMPANY: THE PURCHASER: EFINANCIAL DEPOT.COM, INC. OXFORD CAPITAL CORP. By /s/ John Huguet By /s/ Riaz Mamdani ------------------ ----------------- Chairman and CEO Chief Financial Officer Date signed: January , 2000. Dated signed: January , 2000. Exhibit A - Page 1 EXHIBIT A FORM OF DEBENTURE Exhibit B - Page 1 EXHIBIT B FORM OF WARRANT Exhibit C - Page 1 EXHIBIT C FORM OF REGISTRATION RIGHTS AGREEMENT Exhibit D - Page 1 EXHIBIT D FORM OF ESCROW AGREEMENT Exhibit E - Page 1 EXHIBIT E FORM OF LEGAL OPINION OF COMPANY'S COUNSEL EX-10.2 3 ESCROW AGREEMENT THESE SECURITIES SUBJECT TO THIS ESCROW AGREEMENT HAVE NOT BEEN REGISTERED --------------------------------------------------------------------------- WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES - -------------------------------------------------------------------------------- COMMISSION OF ANY STATE. THE SECURITIES HAVE BEEN OFFERED PURSUANT TO A SAFE - -------------------------------------------------------------------------------- HARBOR FROM REGISTRATION UNDER REGULATION S PROMULGATED UNDER THE SECURITIES ACT - -------------------------------------------------------------------------------- OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE - -------------------------------------------------------------------------------- OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED - -------------------------------------------------------------------------------- IN REGULATION S PROMULGATED UNDER THE ACT) UNLESS THE SECURITIES ARE REGISTERED - -------------------------------------------------------------------------------- UNDER THE ACT, PURSUANT TO REGULATION S OR PURSUANT TO AVAILABLE EXEMPTIONS FROM - -------------------------------------------------------------------------------- THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY IS PROVIDED WITH - -------------------------------------------------------------------------------- OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO - -------------------------------------------------------------------------------- CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE. FURTHER, HEDGING TRANSACTIONS - -------------------------------------------------------------------------------- INVOLVING THE SECURITIES MAY BE MADE ONLY IN COMPLIANCE WITH THE ACT. - -------------------------------------------------------------------------------- ESCROW AGREEMENT This Escrow Agreement is effective the 2nd day of February, 2000 by and among EFINANCIAL DEPOT.COM, INC. (the "Company") and OXFORD CAPITAL CORP. (the "Escrow Agent"). 1. Escrow ------ The Company will be filing a registration statement under the United States Securities Act of 1933, as amended (the "Act") relating to the Company shares of Common Stock issuable in accordance with a Debenture Purchase Agreement (the "Agreement") dated February 2, 2000 between the Company and the Escrow Agent. As security for the $2,500,000 debenture (the "Debenture"), the shares underlying the Warrant to purchase 250,000 common shares in the capital stock of the Company (the "Warrant") issuable by the Company and the shares underlying the Placement Agents Warrant to purchase 50,000 common shares in the capital stock of the Company (the "Agents Warrant") pursuant to the Agreement, the Company hereby agrees to place with the Escrow Agent 500,000 shares in the Capital Stock of the Company. For convenience one total share certificate in the amount of 500,000 shares in the Common Stock of Company have been issued to the Escrow Agent in the name of the Escrow Agent (the "Security Shares"). 2. Release of the Security Shares ---------------------------------- The Escrow Agent shall release the Security Shares from Escrow as follows: (a) Upon any conversion of the Debenture, a copy of the Conversion Notice attached hereto shall be promptly faxed to the Company by the Escrow Agent simultaneously as it is sent by overnight courier service to the Company. Unless the Escrow Agent receives a written objection sent by facsimile within 5 business days of sending the fax to the Company provided for in the immediately preceding sentence and the Company takes the action provided for in Section 6 hereof within five business days, that number of Security Shares equivalent to the number of shares issuable upon conversion of the Debenture as set forth in the Conversion Notice shall be released by the Escrow Agent. (b) Upon any exercise of the Warrants or the Agents Warrant, a copy of the Exercise Form attached hereto and evidence of payment for the Warrants or Agents Warrant being exercised shall be promptly faxed by the Escrow Agent simultaneously as such Exercise Form and payment is sent by overnight courier service to the Company. Unless the Escrow Agent receives a written objection sent by facsimile within forty-eight hours of sending the fax to the Company provided for in the immediately preceding sentence and the Company takes the action provided for in Section 6 hereof within 5 business days, that number of Security Shares equivalent to the number of shares issuable upon exercise of the Warrant as set forth in the Exercise Form shall be released by the Escrow Agent. (c) upon any event of default under the terms of the Agreement or the Debenture then a notice of default shall be sent to the Escrow Agent and the Company. Unless the Escrow Agent receives a written objection sent by facsimile within forty-eight hours of sending the fax to the Company provided for in the immediately preceding sentence and the Company takes the action provided for in Section 6 hereof within 5 business days then all the Security Shares shall be released by the Escrow Agent. (d) If prior to the conversion of a Debenture or the exercise of the Warrants, such securities have been transferred, then: (i) the transferee shall become a party to this Escrow Agreement by executing an amended thereto reasonably acceptable to the Company and the Escrow Agent; (ii) the transfer must comply with the terms of the respective security and with the terms and conditions of the Agreement between the Company and the Escrow Agent, dated February 2, 2000 and further, any exercise of the Warrants must be in strict compliance with their respective terms; and (iii) upon conversion of the Debenture, the Conversion Notice and upon exercise of the Warrants, the Exercise Form and the payment shall be delivered to the Escrow Agent and the Escrow Agent shall then promptly comply with Section 2(a), (b), (c) or (d) as is applicable. 3. Dividends and Other Distributions ------------------------------------ As long as any Security Shares are held in Escrow pursuant to this Agreement, then no dividends or other distributions shall be payable with respect to such Security Shares. However, any shares of Common Stock resulting from a stock split, reverse stock split or stock dividend which would be receivable upon conversion of the Debenture or exercise of the Warrants or Agents Warrants shall be placed in Escrow. 4. Voting Rights -------------- During the term of this Agreement, and so long as any of the Security Shares are in Escrow, no one may vote the Security Shares on any matter. 5. Payment of the Debenture and Expiration of the Warrants --------------------------------------------------------------- Upon the payment in full or conversion of all of the Debenture as evidenced in writing signed by the Company and the then holder of the Debenture, and upon the expiration or exercise in full of the Warrants or Agents Warrants, the Escrow Agent shall release all the remaining Security Shares relating to such Debenture and have the Security Shares transferred into the name of the Company. 6. Objections ---------- (a) If the Company shall notify by fax the Escrow Agent that it has any objections to releasing any of the Security Shares pursuant to Section 2 hereof, the Company shall also within the 5 business days provided for in Sections 2(a), (b) or (c), as the case may be also deliver to the Escrow Agent (i) a Certificate signed by an Officer of the Company setting forth the reasons for the objection, (ii) an opinion from the counsel to the Company, Clark, Wilson, Barristers & Solicitors, that the conversion or the exercise, as the case may be, would violate either the United States Securities Act of 1933, as amended, or the United States Securities Exchange Act of 1934, as amended or some other law applicable to the objection, and an indemnity bond from a person licensed to issue such bonds in the State of Delaware, in an amount equal to the number of Security Shares being objected to being released from Escrow time Two Hundred Percent of the average closing bid price of the Common Stock of the Company on the principal market for such Common Stock for the three (3) trading days immediately preceding the date of the Conversion Notice or the Exercise Form, as the case may, with such bond lasting until the dispute is settled by agreement of the parties thereto or a final action of a court of competent jurisdiction without the right to appeal or the expiration of the right to appeal. (b) If the Escrow Agent does NOT receive within 5 business days all of the originally signed documents and bond provided for in Section 6(a) hereof, it shall at the end of 5 business days, release the Security Shares in question as requested in the respective Conversion Notice or Exercise Form. (c) If the Escrow Agent does receive within 5 business days all of the original signed documents and bond provided for in Section 6(a) hereof, it shall at the end of such 5 business days, if the objection has not be withdrawn or the parties to the Debenture and the Warrants otherwise agree, surrender the Security Shares in question to an appropriate court in the State of Delaware and submit the issue to the court to resolve in the nature of an interpleader action. 7. Escrow Agent ------------- The Escrow Agent, when acting as the Escrow Agent, shall not be liable for any action taken or omitted by it in good faith, and believed by it to be authorized or within the rights or powers conferred upon it by this Escrow Agreement, and may rely and shall be protected in acting or refraining from acting in reliance upon any notice or certificate, instrument, request, paper or other documents believed by it to be genuine and made, sent, signed or presented by the proper party or parties. The Escrow Agent, when acting as Escrow Agent, shall not be liable for anything it does or may not do as Escrow Agent under this Agreement, except for its own gross negligence, willful misconduct. The Escrow Agent shall not be responsible for the validity or sufficiency of any stock certificate or other instru-ment evidencing any security delivered to it pursuant hereto, or for the identity or authority of any person delivering any such certificate or other instrument to it. Until the Escrow Agent shall receive from some person interested in this Agreement written notice of any event upon which the right to receive any release, distribution or payment may depend, it shall incur no liability for actions taken in good faith. The Escrow Agent shall not be obligated to take any action to enforce this Agreement, or to appear in, prose-cute or defend any action or legal proceeding or to file any income or other tax return if any such action, in its opinion, would or might involve cost, expense, loss or liability unless, and as often as required by it, it shall be furnished with security and an indemnity satisfactory to it from the Company against all such cost, expense, loss or liability. The Escrow Agent shall not be responsible for the validity of any provision of this Agreement or for the execution thereof by any other party, or for the truth of any recitals or other statements of fact herein contained. The Escrow Agent shall be considered as a fiduciary under this Agreement and is not required or entitled to act in any capacity hereunder other than as a Escrow Agent. 8. Notices ------- Except as otherwise provided herein, all notices, instructions or other communications required or permitted hereunder shall be in writing and sent by registered mail, postage prepaid, addressed as follows: If to the Company: Efinancial Depot.Com, Inc. If to the Purchaser: 150-1875 Century Park East; Oxford Capital Corp. Century City California C/o 1013-17th Avenue S.W. 90067 Calgary, Alberta T2T 0A7 Attention: John Huguet Ph: (403) 508-5055 Fax: (403) 508-5055 With a copy that does not With a copy that does not constitute notice to: constitute notice to: Clark,Wilson, Barristers & Solicitors Ian H. Kennedy 800-885 W.Georgia St. Barrister & Solicitor Vancouver,Canada 1013 - 17th Avenue S.W. V6C 3H1 Calgary, Alberta Attention: David Cowan T2T OA7 Tel: (604) 643-3178 Tel: (403) 508-5055 Fax: (604) 687-6314 Fax: (403) 508-5058 or such other address, telephone numbers or contact persons as shall be furnished in writing by such party to the other parties hereto. Any such notice, instruction or communication shall be deemed to have been given three (3) business days after the date mailed by registered mail or if sent by fax, upon electronic confirmation or receipt. 9. Deliveries ---------- The Escrow Agent shall make the deliveries of the Security Shares pursuant to this Agreement at the addresses set forth herein, by overnight deliver service with the ability to trace the delivery or through the Depository Trust Company accounts. 10. Successors and Assigns ------------------------ This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 11. Choice of Law and Venue. --------------------------- This Agreement shall be governed by and construed under the laws of the State of Delaware, without regard to choice of laws in force from time to time. Any proceeding arising out of this Agreement shall be brought in the State of Delaware, U.S.A. 12. Counterparts ------------ This Agreement may be executed in two or more counterparts, each of which shall be deemed an original. 13. Attorneys' Fees ---------------- If an action is brought to enforce the terms and provisions of this Agreement, the prevailing party in said action shall be entitled to reasonable attorneys' fees and costs of suit. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. The Company: EFINANCIAL DEPOT.COM, INC. By: /s/ John Huguet ----------------- President and CEO Escrow Agent: OXFORD CAPITAL CORP. By: /s/ Riaz Mamdani ------------------ EX-10.3 4 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement"), is made and entered into as of February 2, 2000 (the "Closing Date"), by and among EFINANCIAL DEPOT.COM, INC. a Delaware corporation (the "Company"), and OXFORD CAPITAL CORP., a Cayman Island corporation, as investor (the "Investor"). Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Debenture Purchase Agreement and the Purchaser Warrants as described below. BACKGROUND The Company has agreed, upon the terms and subject to the conditions of the Debenture Purchase Agreement, to issue and sell to the Investor a 6% convertible debenture in the principle amount of $2,500,000 USD, due February 2, 2003 (the "Debenture"), a warrant (the "Purchaser Warrant") to purchase 250,000 shares in the Common Stock of the Company at a price of $5.00 USD per share, exercisable on or before February 2, 2002, and a placement agents warrant (the "Agents Warrant") to purchase 50,000 shares of the Common Stock at an exercise price of $5.00 per share on the later of (i) February 2, 2001 or (ii) the twelve month anniversary date of the effective registration of the Agent Shares. The Debenture, the Warrant and the Agents Warrant are hereinafter collectively referred to as the "Purchased Securities." The Debenture is convertible into shares of the Company's common stock at a conversion price equal to the the lesser of (i) 80% of the 5 day average closing bid price of the common stock prior to the Conversion Date or (ii) $5.00; in no event shall the conversion price be less than $3.00. The Common Stock issuable upon conversion of the Debenture is hereinafter called the "Debenture Shares," and the Common Stock issuable upon exercise of the Warrant is hereinafter called the "Warrant Shares,"and the Common Stock issuable upon exercise of the Agents Warrant is hereinafter called the "Agent Shares." To induce Investor to purchase Debenture, the Company has agreed to file a Registration Statement covering the Debenture Shares, the Warrant Shares and the Agent Shares under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "1933 Act"), and applicable state securities laws. AGREEMENT For and in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows: SECTION 1. DEFINITIONS. As used in this Agreement, the following capitalized terms are used with the meanings hereinafter described: (a) "INVESTOR" means Oxford Capital Corp. and any transferee or assignee thereof to whom the Investor assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9. (b) "PERSON" means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof, or a governmental agency. (c) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous basis ("Rule 415"), and the declaration or ordering of effectiveness of such Registration Statement(s) by the United States Securities and Exchange Commission (the "SEC"). (d) "REGISTRABLE SECURITIES" means the Debenture, the Warrant, the Agents Warrant and any shares of capital stock issued or issuable with respect to the Debenture Shares, the Warrant Shares, or the Agent Shares including those shares registrable as a result of any stock split, stock dividend, recapitalization, exchange, or similar event. (e) "REGISTRATION STATEMENT" means a registration statement of the Company filed under the 1933 Act. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Debenture Purchase Agreement. SECTION 2. REGISTRATION. (a) MANDATORY REGISTRATION. The Company shall prepare and file with the SEC a Registration Statement or Registration Statements (as are necessary) in such form as is available for such a registration, covering the issuance (and resale, if required by the SEC as a condition of effectiveness) of 200% of the Debenture Shares and 100% of both the Warrant Shares and Agent Shares, by March 31, 2000 (the "Filing Deadline"). The Company shall have the Registration Statement declared effective by the SEC by May 31, 2000 (the "Registration Deadline"). The Company shall permit the registration statement to become effective within five (5) business days after receipt of a "no review" notice from the SEC. Such Registration Statement shall be kept current and effective for a period thirty (30) days following the last to occur of (i) the day on which the all of the Debenture have been fully converted or paid, and (ii) the Warrant expires or becomes fully exercised. If a Registration Statement with respect to the Registrable Securities is not effective on the Registration Deadline date, the Company agrees to and shall pay liquidated damages to the Investor in an amount equal to 2% per every 30 day period of the principal amount of the Debenture until the Registration Statement is effective, or pro rata portion thereof. (b) UNDERWRITTEN OFFERING. If any offering pursuant to a Registration Statement in accordance with Section 2(a), involves an underwritten offering, the Investor shall have the right to select one legal counsel and an investment banker or bankers and manager or managers to administer their interest in the offering, which investment banker or bankers or manager or managers shall be reasonably satisfactory to the Company. (c) PIGGY-BACK REGISTRATIONS. If at any time prior to the expiration of the Registration Deadline (as defined above) the Company proposes to file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the 1933 Act, of any of its securities (other than on Form S-4 or Form S-8 or their then equivalents relating to securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans) the Company shall promptly send to the Investor, who is entitled to registration rights under Section 2(a) written notice of the Company's intention to file a Registration Statement and of the Investor's rights under this Section 2(c) and, if within twenty (20) days after receipt of such notice, the Investor shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities the Investor requests to be registered. No right to registration of Registrable Securities under this Section 2(c) shall be construed to limit any registration required under Section 2(a). The obligations of the Company under this Section 2(c) may be waived by the Investor. If the offering in connection with which the Investor is entitled to registration under this Section 2(c) is an underwritten offering, then the Investor whose Registrable Securities are included in such Registration Statement shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters and, subject to the provisions of this Agreement, on the same terms and conditions as other shares of Common Stock included in such underwritten offering. SECTION 3. RELATED OBLIGATIONS. Whenever the Investor has requested that any Registrable Securities be registered pursuant to Section 2(c), or at such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), the Company will use its best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations: (a) The Company shall promptly prepare and file with the SEC a Registration Statement with respect to the Registrable Securities (on or prior to the Registration Deadline), for the registration of Registrable Securities pursuant to Section 2(a) and use its best efforts to cause such Registration Statement(s) relating to Registrable Securities to become effective as soon as possible after such filing and in any event by the Registration Deadline, and keep the Registration Statement(s) effective pursuant to Rule 415 at all times until the later of (i) the date as of which the Investor may sell all of the Registrable Securities without restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or successor thereto) or (ii) the date on which (A) the Investor shall have sold all the Registrable Securities and (B) none of the Debenture are outstanding (both (A) and (B) together defined as the "Registration Period"), which Registration Statement(s) (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any 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 in which they were made, not misleading. (b) The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement(s) and the prospectus(es) used in connection with the Registration Statement(s), which prospectus(es) are to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep the Registration Statement(s) effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement(s) until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in the Registration Statement(s). In the event the number of shares available under a Registration Statement filed pursuant to this Agreement is insufficient to cover all of the Registrable Securities, the Company shall amend the Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover all of the Registrable Securities, in each case, as soon as practicable, but in any event within fifteen (15) days after the necessity therefor arises (based on the market price of the Common Stock and other relevant factors on which the Company reasonably elects to rely). The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. For purposes of determining the sufficiency of the shares available under a Registration Statement, any restrictions on the convertibility of the Debenture or exercise of the Warrant shall be disregarded and such calculation shall assume that the Debenture are then convertible into shares of Common Stock at the then prevailing Conversion Price (as defined in the Debenture) and that the Warrant are exercised at the then current exercise price. (c) The Company shall furnish to the Investor whose Registrable Securities are included in the Registration Statement(s) and its legal counsel, without charge, (i) promptly after the same is prepared and filed with the SEC at least one copy of the Registration Statement and any amendment thereto, including financial statements and schedules, all documents incorporated therein by reference, and all exhibits, the prospectus(es) included in such Registration Statement(s) (including each preliminary prospectus) and all correspondence by or on behalf of the Company to the SEC or the staff of the SEC and all correspondence from the SEC or the staff of the SEC to the Company or its representatives, related to such Registration Statement(s), (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request), and (iii) such other documents, including any preliminary prospectus, as the Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor. (d) The Company shall use reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration Statement(s) under such other securities or "blue sky" laws of such jurisdictions in the United States as any Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; PROVIDED HOWEVER, that the Company shall not be required in connection therewith or as a condition thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d) hereof, (B) subject itself to general taxation in any such jurisdiction, or (C) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose. (e) As promptly as practicable after becoming aware of the above events, the Company shall notify the Investor in writing of the happening of any event, of which the Company has knowledge, as a result of which, the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission 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 were made, not misleading, and promptly prepare a supplement or amendment to the Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to the Investor (or such other number of copies as such Investor may reasonably request). The Company shall also promptly notify the Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to the Investor by facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. (e) The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment, and to notify the Investor who holds Registrable Securities being sold (and, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof, or its receipt of actual notice of the initiation, or threatened initiation of any proceeding for such purpose. (f) The Company shall permit the Investor a single firm of counsel, to review and comment upon the Registration Statement(s) and all amendments and supplements thereto at least seven (7) days prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement(s) or any amendment or supplement thereto without the prior approval of such counsel, which consent shall not be unreasonably withheld. (g) At the request of the Investor, the Company shall furnish, on the date that Registrable Securities are delivered to an underwriter, if any, for sale in connection with the Registration Statement (i) if required by an underwriter, a letter, dated such date, from the Company's independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope, and substance as is customarily given in an underwritten public offering, addressed to the underwriters and the Investor. (h) The Company shall make available for inspection by (i) the Investor, (ii) any underwriter participating in any disposition pursuant to a Registration Statement, (iii) one firm of attorneys and one firm of accountants retained by the Investor, and (iv) one firm of attorneys retained by all such underwriters (collectively, the "Inspectors") all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably deemed necessary by each Inspector to enable each Inspector to exercise its due diligence responsibility, and cause the Company's officers, directors, and employees to supply all information which any Inspector may reasonably request for purposes of such due diligence PROVIDED HOWEVER, that each Inspector shall hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (A) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (B) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (C) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement. The Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. (i) The Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor's expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information. (j) The Company shall use its best efforts either to secure designation and quotation of all the Registrable Securities covered by the Registration Statement on the OTC BULLETIN BOARD, and to arrange for at least two market makers to register with the National Association of Securities Dealers, Inc. ("NASD") as such with respect to such Registrable Securities. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(1). (k) The Company shall cooperate with the Investor and, to the extent applicable, any managing underwriter or underwriters, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the managing underwriter or underwriters, if any, or, if there is no managing underwriter or underwriters, the Investor may reasonably request and registered in such names as the managing underwriter or underwriters, if any, or the Investor may request. Not later than the date on which any Registration Statement registering the resale of Registrable Securities is declared effective, the Company shall deliver to its transfer Investor instructions, accompanied by any reasonably required opinion of counsel, that permit sales of unlegended securities in a timely fashion that complies with then mandated securities settlement procedures for regular way market transactions. (l) The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to a Registration Statement. (m) The Company shall provide a transfer agent and registrar of all such Registrable Securities not later than the effective date of such Registration Statement. (n) If requested by the managing underwriters or the Investor, the Company shall immediately incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriters and the Investor agrees should be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being sold to such underwriters, the purchase price being paid therefor by such underwriters, and with respect to any other terms of the underwritten (or best efforts underwritten) offering of the Registrable Securities to be sold in such offering; make all required filings of such prospectus supplement or post-effective amendment as soon as notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and supplement or make amendments to any Registration Statement if requested by a shareholder or any underwriter of such Registrable Securities. (o) The Company shall use its best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities. (p) The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder. SECTION 4. OBLIGATIONS OF THE INVESTOR. (a) At least seven (7) days prior to the first anticipated filing date of the Registration Statement, the Company shall notify the Investor in writing of the information the Company requires from the Investor if the Investor elects to have any of the Investor's Registrable Securities included in the Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of the Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities, and shall execute such documents in connection with such registration as the Company may reasonably request. (b) The Investor, by such Investor's acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement(s) hereunder, unless such Investor has notified the Company in writing of such Investor's election to exclude all of such Investor's Registrable Securities from the Registration Statement. (c) In the event the Investor is determined to engage the services of an underwriter, the Investor agrees to enter into and perform the Investor's obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, unless such Investor notifies the Company in writing of such Investor's election to exclude all of such Investor's Registrable Securities from the Registration Statement(s). (d) The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d), such Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement(s) covering such Registrable Securities until the Investor's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(e) and, if so directed by the Company, the Investor shall deliver to the Company (at the expense of the Company) or destroy all copies in such Investor's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. (e) The Investor may not participate in any underwritten registration hereunder unless such Investor (i) agrees to sell the Investor's Registrable Securities on the basis provided in any underwriting arrangements (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, and other documents reasonably required under the terms of such underwriting arrangements, and (iii) agrees to pay its pro rata share of all underwriting discounts and commissions. SECTION 5. EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings, or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and printing fees, accounting fees, fees and disbursements of counsel for the Company and $1,000.00 USD of fees and disbursements of one counsel for the Investor, shall be borne by the Company. SECTION 6. INDEMNIFICATION. In the event any Registrable Securities are included in a Registration Statement under this Agreement: (a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless, and defend the Investor who holds such Registrable Securities, the directors, officers, partners, employees, and each Person, if any, who controls the Investor within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), and any underwriter (as defined in the 1933 Act) for the Investor, and the directors and officers of, and each Person, if any, who controls, any such underwriter within the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified Person"), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in settlement or expenses, joint or several (collectively, "Claims") incurred in investigating, preparing, or defending any action, claim, suit, inquiry, proceeding, investigation, or appeal taken from the foregoing by or before any court or governmental, administrative, or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto ("Indemnified Damages"), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other "blue sky" laws of any jurisdiction in which Registrable Securities are offered ("Blue Sky Filing"), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which the statements therein were made, not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, or, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, "Violations"). Subject to the restrictions set forth in Section 6(d) with respect to the number of legal counsel, the Company shall reimburse the Investor and each such underwriter or controlling person, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by any Indemnified Person or underwriter for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(c); (ii) with respect to any preliminary prospectus, shall not inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or mission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 3(c), and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a violation and such Indemnified Person, notwithstanding such advice, used (iii) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, and (iv) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 9. (b) In connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement, each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (collectively and together with an Indemnified Person, an "Indemnified Party"), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act, or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(d), such Investor will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided howEVER, that the indemnity agreement contained in this Section 6(b) and Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld; provided further however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented. (c) The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers, and similar securities industry professionals participating in any distribution, to the same extent as provided above, with respect to information such persons so furnished in writing expressly for inclusion in the Registration Statement. (d) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided howEVER, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Company shall pay reasonable fees for only one separate legal counsel for the Investor, and such legal counsel shall be selected by the Investor holding a majority in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its written consent, provided however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms, or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. (e) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred. (f) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law. SECTION 7. 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 it would otherwise be liable under Section 6 to the fullest extent permitted by law; PROVIDED HOWEVER, that: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (ii) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation, and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities. SECTION 8. REPORTS UNDER THE 1934 ACT. With a view to making available to the Investor the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in Rule 144; (b) file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company's obligations under Section 4.5 of the Debenture Purchase Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and (c) furnish to the Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the 1933 Act, and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration. SECTION 9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to have the Company register Registrable Securities pursuant to this Agreement shall be automatically assignable by the Investor to any transferee of all or any portion of the Debenture, the Warrant, or the Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (A) the name and address of such transferee or assignee, and (B) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer shall have been made in accordance with the applicable requirements of the Debenture Purchase Agreement; (vi) such transferee shall be an "accredited investor" as that term is defined in Rule 501 of Regulation D promulgated under the 1933 Act; and (vii) in the event the assignment occurs subsequent to the date of effectiveness of the Registration Statement required to be filed pursuant to Section 2(a), the transferee agrees to pay all reasonable expenses of amending or supplementing such Registration Statement to reflect such assignment. SECTION 10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon the Investor and the Company. SECTION 11. MISCELLANEOUS. (a) A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities. If the Company receives conflicting instructions, notices, or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice, or election received from the registered owner of such Registrable Securities. (b) Any notices consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile, provided a copy is mailed by U.S. certified mail, return receipt requested; (iii) three (3) days after being sent by U.S. certified mail, return receipt requested, or (iv) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:
if to the Investor: If to the Company:. . . . . . . . . . Oxford Capital Corp. C/o 1013 - 17th Avenue S.W. Efinancial Depot.Com, Inc.. . . . . . Calgary, Alberta, Canada 150-1875 Century Park East; . . . . . T2T OA7 Century City California . . . . . . . Attention: Riaz Mamdani 90067 . . . . . . . . . . . . . . . . Telephone: (403) 508-5055 Facsimile: (403) 508-5058 With a copy that does not constitute notice to:. . . . . . with a copy (which shall not constitute notice) to: Clark,Wilson, Barristers & Solicitors Ian H. Kennedy. 800-885 W.Georgia St. . . . . . . . . Barrister & Solicitor Vancouver,Canada. . . . . . . . . . . 1013-17th Avenue S.W., V6C 3H1 . . . . . . . . . . . . . . . Calgary, Alberta Attention: David Cowan. . . . . . . . T2T 0A7 Tel: (604) 643-3178 . . . . . . . . . Telephone: (403) 244-0621 Fax: (604) 687-6314 . . . . . . . . . Facsimile: (403) 209-6125 - ------------------------------------- ---------------------------------------------------
Each party shall provide five (5) day's prior written notice to the other party of any change in address or facsimile number. (c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. (d) This Agreement shall be governed by and interpreted in accordance with the laws of the State of Florida; The parties agree that the courts of the State of Florida, shall have exclusive jurisdiction and venue for the adjudication of any civil action between them arising out of relating to this Agreement, and hereby irrevocably consent to such jurisdiction and venue. (e) This Agreement and the Debenture Purchase Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties, or undertakings, other than those set forth or referred to herein and therein. This Agreement supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof. (f) Subject to the requirements of Section 9, this Agreement shall inure to the benefit and of and be binding upon the permitted successors and assigns of each of the parties hereto. (g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. (i) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments, and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be duly executed as of day and year first above written. COMPANY: EFINANCIAL DEPOT.COM, INC. By: /s/ John Huguet Name: John Huguet Title: President INVESTOR: OXFORD CAPITAL CORP. By: /s/ Riaz Mamdani Name: Riaz Mamdani Title: Chief Financial Officer EX-20.1 5 FORM OF WARRANT CERTIFICATE Form of Placement Agent Warrant Certificate ------------------------------------------- THE SECURITIES EVIDENCED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE. Void after 2:00 p.m., Los Angeles time, on the later of: (1) first anniversary date of the effectiveness of the Registration Statement (as defined herein), or (2) February 2, 2001 (the "Expiration Date"). Warrant to Purchase Shares of Common Stock EFINANCIAL DEPOT.COM, INC. COMMON STOCK PURCHASE WARRANT CERTIFICATE 50,000 WARRANTS This is to Certify that, FOR VALUE RECEIVED, Oxford Capital Corp., or assigns (the "Holder"), is entitled to purchase, subject to the provisions of this Warrant, from EFINANCIAL DEPOT.COM, INC. ("Company"), 50,000 of the fully paid, validly issued and nonassessable shares of common stock, par value $.001 per share, of the Company ("Common Stock") at any time or from time to time during the period from the date hereof, through and including the later of February 2, 2001 and the 12 month anniversary of the effective time of the registration of the shares underlying this Warrant (the "Expiration Date"), but not later than 2:00 p.m. Los Angeles time, on the applicable Expiration Date ("Exercise Period"). The price to be paid for each share of Common Stock shall be U.S.$5.00 per share (the "Exercise Price"). The shares of Common Stock deliverable upon such exercise, and as adjusted from time to time, are hereinafter sometimes referred to as "Warrant Shares" and the respective exercise price of a share of Common Stock in effect at any time and as adjusted from time to time is hereinafter sometimes referred to as the "Exercise Price." 1. EXERCISE OF WARRANT. The Holder may exercise this Warrant in whole or in part, at any time or from time to time on any Business Day on or prior to the Expiration Date, by delivering to the Company a duly executed notice (a "Notice of Exercise") in the form of Annex A hereto, by payment to the Company of the Exercise Price per Warrant Share in an amount equal to the product of (i) the Exercise Price times (ii) the number of Warrant Shares as to which this Warrant is being exercised. (i) As soon as practicable after the Company shall have received such Notice of Exercise and any required payment, the Company shall execute and deliver or cause to be executed and delivered, in accordance with such Notice of Exercise, to the Holder at the address set forth in such Notice of Exercise a certificate or certificates representing the number of shares of Common Stock specified in such Notice of Exercise. The Warrant shall be deemed to have been exercised and such share certificate or certificates shall be deemed to have been issued, and the Holder shall be deemed for all purposes to have become a holder of record of shares of Common Stock, as of the date that such Notice of Exercise and any required payment shall have been received by the Company. (ii) The Holder shall surrender this Warrant certificate of the Company when it delivers the Notice of Exercise, and in the event of a partial exercise of the Warrant, the Company shall execute and deliver to the Holder, at the time the Company delivers the share certificate or certificates issued pursuant to such Notice of Exercise, a new Warrant certificate for the unexercised portion of the Warrant, but in all other respect identical to this Warrant certificate. (iii) The Company shall not be require to issue fractional shares of Common Stock upon an exercise of the Warrant. If any fraction of a share would, but for this restriction, be issuable upon an exercise of the Warrant, in lieu of delivering such fractional share, the Company shall pay to the Holder, in cash, an amount equal to the same fraction times the Current Market Value (as defined in Sections 3(1), 3(2), and 3(3) below, as applicable) for the Common Stock immediately prior to the date of such exercise. The Company shall pay all expenses, taxes and other charges payable in connection with the preparation, issuance and delivery of certificates for the Warrant Shares and any new Warrant certificates. 2. RESERVATION OF SHARES. The Company shall at all times reserve for issuance and/or delivery upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance and delivery upon exercise of the Warrants. 3. FRACTIONAL SHARES. No fractional shares or script representing fractional shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a share called for upon any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction multiplied by the Current Market Value of a share, which shall have the following meaning: (1) If the Common Stock is listed on a National Securities Exchange or admitted to unlisted trading privileges on such exchange or included for quotation on the NASDAQ system, the Current Market Value shall be the last reported sale price of the Common Stock on such exchange or automated quotation system on the last business day prior to the date of exercise of this Warrant or if no such sale is made (or reported) on such day, the average closing bid and asked prices for such day on such exchange or system; or (2) If the Common Stock is not so listed or admitted to unlisted trading privileges, the Current Market Value shall be the mean of the last reported bid and asked prices reported by the Electronic Bulletin Board or National Quotation Bureau, Inc. on the last business day prior to the date of the exercise of this Warrant; or (3) If the Common Stock is not so listed or admitted to unlisted trading privileges and bid and asked prices are not so reported, the Current Market Value shall be an amount, not less than book value thereof as at the end of the most recent fiscal year of the Company ending prior to the date of the exercise of the Warrant, determined in such reasonable manner as may be prescribed by the Board of Directors of the Company (the "Board"). 4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company for other warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to the Company at its principal office, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. This Warrant may be divided or combined with other warrants which carry the same rights upon presentation hereof at the principal office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Holder hereof. The term "Warrant" as used herein includes any warrants into which this Warrant may be divided or exchanged. Upon receipt of the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like tenor and date. Any such new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at any time enforceable by anyone. 5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in the Warrant and are not enforceable against the Company except to the extent set forth herein. 6. ANTI-DILUTION PROVISIONS. The respective Exercise Price in effect at any time and the number and kind of securities purchasable upon the exercise of the Warrants shall be subject to adjustment from time to time upon the happening of certain events as follows: (1) In case the Company shall (i) declare a dividend or make a distribution on its outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into a greater number of shares, or (iii) combine or reclassify its outstanding shares of Common Stock into a smaller number of shares, the respective Exercise Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, combination or reclassification shall be adjusted so that it shall equal the price determined by multiplying the respective Exercise Price by a fraction, the denominator of which shall be the number of shares of Common Stock Outstanding (as defined below) after giving effect to such action, and the numerator of which shall be the number of shares of Common Stock Outstanding immediately prior to such action. Such adjustment shall be made successively whenever any event listed above shall occur. (2) In the event that the Company shall distribute to all holders of shares of Common Stock (including any such distribution made to the shareholders of the Company in connection with a consolidation or merger in which the Company is the surviving or continuing corporation) evidences of its indebtedness, cash or assets (other than distributions and dividends payable in Shares of Common Stock), or rights, options or warrants to subscribe for or purchase shares of Common Stock or securities convertible or exchangeable into shares of Common Stock, then, in each case, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date for the determination of shareholders entitled to receive such distribution by a fraction, the numerator of which shall be the Current Market Value of a share of Common Stock for the twenty (20) days ending on the seventh trading day proceeding such distribution on such record date, less the fair market value (as determined by the Board) of the portion of the evidences of indebtedness or assets to be distributed, or of such rights, options or warrants or convertible or exchangeable securities, or the amount of such cash, applicable to one share of Common Stock Outstanding on such record date and the denominator of which shall be such Current Market Value per share. Such adjustment shall become effective at the close of business on such record date. (3) In the event that the Company shall sell or issue at any time after the date hereof shares of Common Stock (other than the Excluded Stock, as defined below) at a consideration per share less than the Current Market Value in effect immediately prior to the time of such sale or issuance, then, upon such sale or issuance, the Exercise Price shall be reduced to an adjusted price (calculated to the nearest cent) determined by dividing (i) the sum of (A) the total number of shares of Common Stock Outstanding (as defined below) immediately prior to such sale or issuance multiplied by the then-existing Exercise Price, plus (B) the aggregate of the amount of all consideration, if any, received by the Company upon such sale or issuance, by (ii) the total number of shares of Common Stock Outstanding immediately after such sale or issuance; provided, however, that the Exercise Price shall not be reduced unless the issuance is at a per share price below the Current Market Value and is also below $3.00; provided, further, however, that if the Exercise Price is reduced pursuant to the foregoing provision, it shall be reduced only to the extent of the difference between the applicable per share amount calculated pursuant to the preceding clauses (i) and (ii) and the applicable issuance price per share. Notwithstanding anything herein to the contrary, the Exercise Price shall not be adjusted pursuant to Section 6(3) by virtue of the issuance and/or sale of "Excluded Stock" which shall mean the following: (i) shares of Common Stock, Options (as defined below), or Convertible Securities (as defined below) to be issued and/or sold to employees, advisors, directors or officers of, or consultants to, the Company or any of its subsidiaries pursuant to a stock grant, stock option plan, restricted stock agreements, stock purchase plan, pension or profit sharing plan or other stock agreement or arrangement, (ii) shares of Common Stock, Options and/or Convertible Securities to be issued pursuant to Options and/or Convertible Securities outstanding as of the date of this Warrant, (iii) shares of Common Stock and/or Options to be issued pursuant to the Debenture Purchase Agreement, and (iv) shares of Common Stock, Options or Convertible Securities to be issued and/or sold in connection with any acquisition by the Company of any assets or capital stock of any other person or entity involved in the e-financial business. For purposes of this Section 6, all shares of Excluded Stock shall be deemed to have been issued for an amount of consideration per share equal to the initial Exercise Price (subject to adjustment in the manner set forth herein. (4) Whenever the respective Exercise Price payable upon exercise of each Warrant is adjusted pursuant to Section 6(1), f(2) or f(3) above, the number of Shares purchasable upon exercise of this Warrant shall be adjusted simultaneously by multiplying the respective number of Shares issuable upon exercise of this Warrant immediately prior thereto by the respective Exercise Price in effect on the date hereof and dividing the product so obtained by the respective Exercise Price, as adjusted. (5) No adjustment in the respective Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 6(5) is not required to be made shall be carried forward and taken into account in any subsequent adjustment required to be made hereunder. All calculations under this Section 6. shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. Anything in this Section 6 to the contrary notwithstanding, the Company shall be entitled, but shall not be required, to make such changes in the respective Exercise Price, in addition to those required by this Section 6, as it shall determine, in its sole discretion, to be advisable in order that any dividend or distribution in shares of Common Stock, or any subdivision, reclassification or combination of Common Stock, hereafter made by the Company shall not result in any Federal Income tax liability to the holders of Common Stock or securities convertible into Common Stock (including the Warrants). (6) In the event that at any time, as a result of an adjustment made pursuant to Section6(1) to 6(3) above, the Holder of this Warrant thereafter shall become entitled to receive any shares of the Company, other than Common Stock, thereafter the number of such other shares so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in Sections 6(1) to 6(3) inclusive above. (7) Irrespective of any adjustments in the respective Exercise Price or the related number or kind of share purchasable upon exercise of this Warrant, Warrants theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the similar Warrants initially issuable pursuant to this Agreement. (8) For purposes of Section 6(3), the following definitions shall apply: (i) "Convertible Securities" shall mean any indebtedness or equity securities convertible into or exchangeable for shares of Common Stock. (ii) "Common Stock Outstanding" shall mean the aggregate of all shares of Common Stock outstanding and all shares issuable upon exercise of all outstanding Options and conversion of all outstanding Convertible Securities. (iii) "Options" shall mean any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities. (9) For purposes of Section 6(3), the following provisions shall also be applicable: (i) Cash Consideration. In the event of the sale or issuance (otherwise ------------------- than conversion or exchange of Convertible Securities) of additional shares of Common Stock, Options or Convertible Securities for cash, the consideration received by the Company therefor shall be deemed to be the amount of cash received by the Company for such securities (or, if such securities are offered by the Company for subscription, the subscription price, or, if such securities are sold to underwriters or dealers for public offering without a subscription offering, the public offering price), without deducting therefrom any compensation or discount paid or allowed to underwriters or dealers or others performing similar services or for any expenses incurred in connection therewith. (ii) Non-Cash Consideration. In the event of the sale or issuance ----------------------- (otherwise than upon conversion or exchange of Convertible Securities) of additional shares of Common Stock, Options or Convertible Securities for consideration other than cash or consideration a part of which shall be other than cash, the fair value of such consideration as determined by the Board in the good faith exercise of its business judgment, irrespective of the accounting treatment thereof, shall be deemed to be the value, for purposes of Section ------- f(3), of the consideration other than cash received by the Company for such securities. (iii) Options and Convertible Securities. In the event the Company shall in ---------------------------------- any manner issue or grant any Options or any Convertible Securities, the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of such Convertible Securities at the time such Convertible Securities first become convertible or exchangeable shall (as of the date of issue or grant of such Options or, in the case of the sale or issue of Convertible Securities (other that where the same are issuable upon the exercise of Options), as of the date of such sale or issue) be deemed to be issued and to be outstanding for the purpose of Section f(3) and to have been issued for the sum of the amount (if any) paid for such Options or Convertible Securities and the amount (if any) payable upon the exercise of such Options or upon conversion or exchange of such Convertible Securities at the time such Convertible Securities first became convertible or exchangeable; provided that, subject to the provisions of Section f(10), no further adjustment of the Exercise Price shall be made upon the actual issuance of any such Shares or Convertible Securities or upon the conversion or exchange of any such Convertible Securities. (10) In the event that the purchase price provided for in any Option referred to in Section 6(9)(iii) or the rate at which any Convertible Securities referred to in Section 6(9)(iii) are convertible into or exchangeable for shares of Common Stock shall change at any time or any additional consideration shall be payable in connection with the exercise of any Option or the conversion or exchange of any Convertible Securities (other than under or by reason of provisions designed to protect against dilution upon the occurrence of events of the type described in this Section 6), then, for purposes of any adjustment required by Section 6(3), the Exercise Price in effect at the time of such event shall forthwith be readjusted to the Exercise Price that would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such changed purchase price, conversion rate or additional consideration, as the case may be, at the time initially granted, issued or sold; provided, that if such readjustment is an increase in the Exercise Price, such readjustment shall not exceed the amount (as adjusted by Section 6(1), 6(2) or 6(3)) by which the Exercise Price was decreased pursuant to Section 6(3) upon the issuance of the Option or Convertible Securities. (11) In the event of the termination or expiration of any right to purchase shares of Common Stock under any Option granted after the date of this Warrant or of any right to convert or exchange Convertible Securities issued after the date of this Warrant, the Exercise Price shall, upon such termination or expiration, be readjusted to the Exercise Price that would have been in effect at the time of such termination or expiration had such Option or Convertible Securities, to the extent outstanding immediately prior to such expiration or termination, never been issued, and the Share issuable thereunder shall no longer be deemed to be Common Stock Outstanding; provided, that if such readjustment is an increase in the Exercise Price, such readjustment shall not exceed the amount (as adjusted by Section 6(1), 6(2) or 6(3)) by which the Exercise Price was decreased pursuant to Section 6(3) upon the issuance of the Option or Convertible Securities. The termination or expiration of any right to purchase shares of Common Stock under any Option granted prior to the date of this Warrant or of any right to convert or exchange Convertible Securities issued prior to the date of this Warrant shall not trigger any adjustment to the Exercise Price, but the shares of Common Stock issuable under such Options or Convertible Securities shall no longer be counted in determining the number of shares of Common Stock Outstanding on the date of issuance of this Warrant for purposes of subsequent calculations under Section 6(3). (12) Whenever there shall be adjustment as provided in this Section 6, the Company shall within 30 days thereafter cause written notice thereof to be sent by registered mail, postage prepaid, to the Holder, at its address as it shall appear in the Warrant Register, which notice shall be accompanied by an officer's certificate setting forth the adjusted number of Warrant Shares issuable hereunder and the exercise price thereof after such adjustment and setting forth a brief statement of the facts requiring such adjustment and the computation thereof, which officer's certificate shall be conclusive evidence of the correctness of any such adjustment absent manifest error. 7. OFFICER'S CERTIFICATE. Whenever the respective Exercise Price shall be adjusted as required by the provisions of the foregoing Section 6, the Company shall forthwith file in the custody of its Secretary or an Assistant Secretary at its principal office, an officer's certificate showing the adjusted respective Exercise Price determined as herein provided, setting forth in reasonable detail the facts requiring such adjustment, including a statement of the number of related additional shares of Common Stock, if any, and such other facts as shall be necessary to show the reason for and the manner of computing such adjustment. Each such officer's certificate shall be made available at all reasonable times for inspection by the holder or any holder of a Warrant executed and delivered pursuant to Section 1 and the Company shall, forthwith after each such adjustment, mail a copy by certified mail of such certificate to the Holder or any such holder. 8. NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be outstanding, (i) if the Company shall pay any dividend or make any distribution upon the Common Stock or (ii) if the Company shall offer to the holders of Common Stock for subscription or purchase by them any share of any class or any other rights or (iii) if the capital reorganization of the Company, reclassification of the capital stock of the Company, consolidation or merger of the Company with or into another corporation, sale, lease or transfer of all or substantially all of the property and assets of the Company to another corporation, or voluntary or involuntary dissolution, liquidation or winding up of the Company shall be effected, then in any such case, the Company shall cause to be mailed by certified mail to the Holder, at least fifteen days prior the date specified in (x) or (y) below, as the case may be, a notice containing a brief description of the proposed action and stating the date on which (x) action is to be taken for the purpose of such dividend, distribution or rights, or (y) such reclassification, reorganization, consolidation, merger, conveyance, lease, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which the holders of Common Stock or other securities shall receive cash or other property deliverable upon such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up. The failure to give such notice shall not otherwise effect the action taken by the Company. 9. RECLASSIFICATION, REORGANIZATION OR MERGER. Incase of any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the Company, or in case of any consolidation or merger of the Company with or into another corporation (other than a merger with a subsidiary in which merger the Company is the continuing corporation and which does not result in any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the class issuable upon exercise of this Warrant) or in case of any sale, lease or conveyance to another corporation of the property of the Company as an entirety, the Company shall, as a condition precedent to such transaction, cause effective provisions to be made so that the Holder shall have the right thereafter by exercising this Warrant at any time prior to the expiration of the Warrant, to purchase the kind and amount of shares of stock and other securities and property receivable upon such reclassification, capital reorganization and other change, consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock which might have been purchased upon exercise of this Warrant immediately prior to such reclassification, change, consolidation, merger, sale or conveyance. Any such provision shall include provision for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Warrant. The foregoing provisions of this Section 9 shall similarly apply to successive reclassifications, capital reorganizations and changes of shares of Common Stock and to successive consolidations, mergers, sales or conveyances. In the event that in connection with any such capital reorganization or reclassification, consolidation, merger, sale or conveyance, additional shares of Common Stock shall be issued in exchange, conversion, substitution or payment, in whole or in part, for a security of the Company other than Common Stock, any such issue shall be treated as an issue of Common Stock covered by the provisions of Subsection(1) of Section 6 hereof. 10. Registration Rights and Adjustment to Exercise Price. Pursuant to the terms of the Subscription Agreement, by and between the Company and the holder of this Warrant, the Company has agreed to file a registration statement (the "Registration Statement"), to register, among other things, the Warrant Shares issuable upon exercise of this Warrant. This Warrant shall expire if not exercised on or before the later of (i) the one year anniversary date of the effectiveness of the Registration Agreement, or (ii) February 2, 2001. 11. VENUE. The terms of this Agreement shall be construed in accordance with the laws of the State of New York. The exclusive venue with respect to any claims or disputes under this Agreement shall be the appropriate State or Federal Courts located in Delaware [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested by the Undersigned, each being duly authorized, as of the date below. EFINANCIAL DEPOT.COM, INC. By:/s/ John Huguet ----------------- Its: President and CEO Dated: ATTEST: - ------------------------------ - ------------------, Secretary EXERCISE FORM The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of purchasing Shares of Common Stock of EFINANCIAL DEPOT.COM, INC. at $------ per share (an aggregate of $------). INSTRUCTIONS FOR REGISTRATION OF STOCK Name: --------------------------------------- (Please typewrite or print in block letters) Address ---------------------------------------------------- Social Security of Federal I.D. Number: -------------------------- THE UNDERSIGNED REPRESENTS AND WARRANTS TO EFINANCIAL DEPOT.COM, INC. THAT THE CONDITIONS FOR EXERCISE OF THE WITHIN WARRANT SET FORTH IN THE FIRST SENTENCE OF THE FIRST PARAGRAPH ABOVE HAVE BEEN FULLY COMPLIED WITH. Payment of $----------- enclosed Signature --------------------------------------------- (Sign exactly as your name appears on the first page of this Warrant) ASSIGNMENT FORM FOR VALUE RECEIVED, ------------------------------------------hereby sells, assigns and transfers unto Name ------------------------------- ----------------------- (Please typewrite or print in block letters) Address Social Security of Federal I.D. Number: ------------------------- the right to purchase shares of Common Stock of EFINANCIAL DEPOT.COM, INC. represented by this Warrant as to which such right is exercisable and does hereby irrevocably constitute and appoint - -------------------------------------Attorney, to transfer the same on the books of EFINANCIAL DEPOT.COM, INC. with full power of substitution in the premises. Date: Signature ---------------------------------------- (Sign exactly as your name appears on the first page of this Warrant) EX-20.2 6 PLACEMENT AGENT'S WARRANT THIS WARRANT, AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF, HAVE NOT BEEN FILED OR REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR WITH THE SECURITIES REGULATORY AUTHORITY OF ANY STATE, BUT ARE BEING ISSUED PURSUANT TO CERTAIN EXEMPTIONS THEREUNDER. THIS WARRANT, AND SUCH SHARES OF COMMON STOCK, ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTION THEREFROM. This Warrant Will Be Void On The Expiry Date PLACEMENT AGENT'S WARRANT To Purchase 15,000 of Shares Of Common Stock Of EFINANCIAL DEPOT.COM, INC. This is to certify, That FOR VALUE RECEIVED OXFORD CAPITAL CORP. (the "Holder") is entitled to purchase, subject to the provisions of this Placement Agent's Warrant (the "Warrant") from Efinancial Depot.Com, Inc. (the "Company"), a Delaware Corporation, at any time up to and including the later of (i) the twelve month anniversary of the effective time of the registration of the shares in the capital stock of the Company underlying this Warrant, or (ii) February 2, 2001, (the "Expiry Date"), 15,000 shares of the Company's common stock, (the "Common Stock") at a purchase price equal $5.00 (the "Exercise Price"). The shares of the Common Stock deliverable upon such exercise are hereinafter sometimes referred to as "Warrant Shares." This Warrant is the Placement Agent Warrant referred to in Section 2.05 Debenture Purchase Agreement (the "Purchase Agreement") entered into between the Company and Oxford Capital Corp. effective as February 2, 2000. 1. EXERCISE OF WARRANT. This Warrant may be exercised in whole or in part at any time, and from time to time, up to and including the Expiry Date. If the date on which the Holder's right to purchase Common Stock expires, is a day on which national banks in the United States of America are authorized by law to close, then the right shall expire on the next succeeding business day that is not such a day. The Holder shall have the following rights of relinquishment in respect to the exercise of this Warrant: (i) the Holder, or his or her heirs or other legal representatives to the extent entitled to exercise the Warrant under the terms thereof, in lieu of purchasing the entire number of shares subject to purchase thereunder, shall have the right to relinquish all or any part of the then unexercised portion of the Warrant (to the extent then exercisable) for a number of shares of Common Stock, for an amount of cash or for a combination of Common Stock and cash to be determined in accordance with the following provisions of this clause (i): (A) The written notice of exercise of such right of relinquishment shall state the percentage, if any, of the Appreciated Value (as defined below) that the Holder elects to receive in cash ("Cash Percentage"), such Cash Percentage to be in increments of 10% of such Appreciated Value up to 100% thereof; (B) The number of shares of Common Stock, if any, issuable pursuant to such relinquishment shall be the number of such shares, rounded to the next greater number of full shares, as shall be equal to the quotient obtained by dividing (A) the difference between (I) the Appreciated Value and (II) the result obtained by multiplying the Appreciated Value and the Cash Percentage by (B) the then current market value per share of Common Stock; (C) The amount of cash payable pursuant to such relinquishment shall be an amount equal to the Appreciated Value less the aggregate current market value of the Common Stock issued pursuant to such relinquishment, if any, which cash shall be paid by the Company subject to such conditions as are deemed advisable to permit compliance by the Company with the withholding provisions applicable to employers under the Code and any applicable state income tax laws; (D) For the purpose of this clause (i), "Appreciated Value" means the excess of (x) the aggregate current market value of the shares of Common Stock covered by the Warrant or the portion thereof to be relinquished over (y) the aggregate purchase price for such shares specified in such Warrant; (ii) That such right of relinquishment may be exercised only upon receipt by the Company of a written notice of such relinquishment which shall be dated the date of election to make such relinquishment; and that, for the purposes of this Plan, such date of election shall be deemed to be the date when such notice is sent by registered or certified mail, or when receipt is acknowledged by the Company, if mailed by other than registered or certified mail or if delivered by hand or by any telegraphic communications equipment of the sender or otherwise delivered; provided, that, in the event the method just described for determining such date of election shall not be or remain consistent with the provisions of Section 16(b) of the Exchange Act or the rules and regulations adopted by the Commission thereunder, as presently existing or as may be hereafter amended, which regulations exempt from the operation of Section 16(b) of the Exchange Act in whole or in part any such relinquishment transaction, then such date of election shall be determined by such other method consistent with Section 16(b) of the Exchange Act ; (iii) That the "current market value" of a share of Common Stock on a particular date shall be deemed to be its fair market value on that date as determined in accordance with Paragraph 3; and (iv) That the Warrant, or any portion thereof, may be relinquished only to the extent that (A) it is exercisable on the date written notice of relinquishment is received by the Company, and (B) the holder of such Warrant pays, or makes provision satisfactory to the Company for the payment of, any taxes which the Company is obligated to collect with respect to such relinquishment. (b) Each Holder who is subject to the short-swing profits recapture provisions of Section 16(b) of the Exchange Act ("Covered Holder") shall be entitled to receive payment only in cash when Warrants are relinquished during any window period commencing on the third business day following the Company's release of a quarterly or annual summary statement of sales and earnings and ending on the twelfth business day following such release ("Window Period"); provided, however, that payment shall be so made in cash only in respect of 50% of the Warrants. A Covered Holder shall be entitled to receive payment only in shares of Common Stock upon (a) the relinquishment of Warrants outside a Window Period and (b) the relinquishment of Warrants during a Window Period once such Holder has received payment in cash for the relinquishment of 50% of the Warrants. (c) Warrants hereunder, are exempt from the operation from Section 16(b) of the Exchange Act or will be amended, if necessary, to permit such exemption. If a Warrant is relinquished, such Warrant shall be deemed to have been exercised to the extent of the number of shares of Common Stock covered by the Warrant or part thereof which is relinquished, and no further Warrants may be granted covering such shares of Common Stock. (d) Neither any Warrant nor any right to relinquish the same to the Company as contemplated by this Paragraph 1 shall be assignable or otherwise transferable except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code, as amended, or the rules thereunder. The Holder shall exercise all rights to purchase Common Stock by presenting and surrendering this Warrant to Oxford Capital Corp. (the "Escrow Agent"), at 1013 - 17th Avenue S.W., Calgary, Alberta, T2T 0A7, with the Purchase Form annexed hereto duly executed and accompanied by payment by cash, certified cheque or bank order or relinquishment of Warrants at the Exercise Price for the number of shares specified in such form. If this Warrant should be exercised or relinquished in part only the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the right of the holder to purchase the balance of the shares purchasable hereunder. Upon receipt by the Escrow Agent of this Warrant, in proper form for exercise, with the Purchase Form annexed hereto duly executed for the number of shares specified in such form, the Holder shall be deemed to be the holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding that certificates representing such shares of Common Stock shall not then be actually delivered to the Holder, unless the Company has objected in accordance with the Escrow Agreement. As soon as practicable after each exercise of this Warrant, the Company will deliver the shares issuable upon such exercise to the Holder. 2. ISSUANCE AND DELIVERY OF SHARES. The Company hereby represents, warrants and agrees that at all times there shall be reserved for issuance and delivered to the Escrow Agent the number of shares of Common Stock as shall be required for issuance or delivery upon exercise of this Warrant. 3. FRACTIONAL SHARES. No fractional shares or script representing fractional shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a share called for upon any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction multiplied by the current market value of such fractional share, determined as follows: (a) If the Common Stock is listed on a national securities exchange or admitted to unlisted trading privileges on such exchange, the current value shall be the last reported sales price of the Common Stock on such exchange on the last business day prior to the date of exercise of this Warrant or if no such sale is made on such day, the average of the closing bid and asked prices for such day on such exchange; or (b) If the Common Stock is not so listed or admitted to unlisted trading privileges, the current value shall be the mean of the last reported bid and asked prices reported by the National Association of Securities Dealers Quotation System ("NASDAQ"), or if not so quoted on NASDAQ then by the National Quotation Bureau, Inc., on the last business day prior to the date of the exercise of this Warrant; or (c) If the Common Stock is not so listed or admitted to unlisted trading privileges and bid and asked prices are not so reported, the current value shall be an amount, not less than book value, determined in such reasonable manner as may be prescribed by the Company's board of directors, and supported by the written fairness opinion of an independent, nationally-recognized stock valuation expert. 4. TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. (a) The Holder may assign this Warrant, in whole or in part, or any interest herein. This Warrant and the Warrant Shares have not been filed or registered with the United States Securities and Exchange Commission or with the securities regulatory authority of any state. This Warrant and the Warrant Shares are subject to restrictions imposed by federal and state securities laws and regulations on transferability and resale, and may not be transferred assigned or resold except as permitted under the Securities Act of 1933, as amended (the "Act"), and the applicable state securities laws, pursuant to registration thereunder or exemption therefrom. Upon receipt by the Company of evidence satisfactory to it that this Warrant or any portion hereof, has been legally and validly transferred or assigned, the Company will, at the request of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, exchange this Warrant for one or more Warrants, in such denominations as the Holder shall specify, registered in such name or names as the Holder shall designate. If, at the time of such transfer or assignment, this Warrant has not been registered under the Act, then each such transferee and assignee shall furnish the Company with evidence satisfactory to it that such transferee or assignee is acquiring such Warrant for his, her or its own account, for investment purposes, and not with a view towards a distribution thereof or of the Warrant Shares issuable upon its exercise. The term "Warrant," as used herein, includes any Warrants issued in substitution for or replacement of this Warrant, or into which this Warrant may be divided or exchanged. (c) Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in the case of loss, theft or destruction of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant in the case of mutilation, the Company will execute and deliver a new Warrant of like tenor and date. Any such new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not this Warrant so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone. (d) The Company may cause any legend required under the Act and applicable state securities laws, or advisable in the opinion of its legal counsel, to be set forth on each Warrant. 5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or equity, and the rights of the Holder as the holder of this Warrant are limited to those expressed in this Warrant, the Escrow Agreement and the Purchase Agreement. 6. ANTI-DILUTION PROVISIONS. After February 2, 2000, so long as this Warrant is outstanding and not fully exercised, the Company shall not, without the prior consent of the Holder, issue or sell (i) any Common Stock without consideration or for a consideration per share less than $3.00; or (ii) issue or sell any warrant, Warrant, right, contract, call, or other security or instrument granting the holder thereof the right to acquire Common Stock without consideration or for a consideration per share less than $3.00. 7. OFFICER'S CERTIFICATE. Whenever the Company shall determine the fair market value of the Common Stock pursuant to Section 3 hereof, the Company shall forthwith file in the custody of its Secretary at its principal office, with its stock transfer agent and with the Escrow Agent, an officer's certificate showing the fair market value and the date as of which it was determined, and setting forth in reasonable detail the facts requiring such determination and the facts, assumptions, methodology and calculations employed in determining such value. The Company shall forthwith deliver a copy of each such officer's certificate to the Holder, and the Company shall make all such officer's certificates available at all reasonable times for inspection by and copying by the Holder. 8. NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be outstanding and any portion of it shall be unexercised, (i) if the Company shall pay any dividend or make any distribution upon the Common Stock or (ii) if the Company shall offer to the holders of Common Stock, for subscription or purchase by them, any shares of stock of any class or any other rights or (iii) if any capital reorganization of the Company, reclassification of the Company's capital stock, consolidation or merger of the Company with or into another corporation, sale, lease or transfer of all or substantially all of the Company's property and assets to another corporation, or voluntary or involuntary dissolution, liquidation or winding up of the Company shall be effected, then in any such case, the Company shall cause to be delivered to the Holder, at least ten days prior to the date specified in (x) or (y) below, as the case may be, a notice containing a brief description of the proposed action and stating the date on which (x) a record is to be taken for the purpose of such dividend, distribution or rights, or (y) such reclassification, reorganization, consolidation, merger, conveyance, lease, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up. 9. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the Company (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of an issuance of Common Stock by way of dividend or other distribution or of a subdivision or combination), or in case of any consolidation or merger of the Company with or into another corporation (other than a merger with a subsidiary in which merger the Company is the continuing corporation and which does not result in any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the class issuable upon exercise of this Warrant) or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, the Company shall cause effective provision to be made so that the Holder shall have the right thereafter, by exercising this Warrant, to purchase the kind and amount of shares of stock and other securities and property receivable upon such classification, capital reorganization or other change, consolidation, merger, sale or conveyance. Any such provision shall include provision for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Warrant. The foregoing provisions of this Section 9 shall similarly apply to successive reclassifications, capital reorganizations and changes of shares of Common Stock and to successive consolidations, mergers, sales or conveyances. In the event that in any such capital reorganization or reclassification, consolidation, merger, sale or conveyance, additional shares of Common Stock shall be issued in exchange, conversion, substitution or payment, in whole or in part, for or of a security of the Company other than Common Stock, any such issue shall be treated as an issue of Common Stock covered by the provisions of Section 6 hereof with the amount of the consideration received upon the issue thereof being determined by the Company's board of directors, such determination to be final and binding on the Holder. 10. SPIN-OFFS. In the event the Company spins-off a subsidiary by distributing to the Company's stockholders as a dividend or otherwise the stock of the subsidiary, the Company shall reserve for the life of the Warrant shares of the subsidiary to be delivered to the holders of the Warrants upon exercise to the same extent as if they were owners of record of the Warrant Shares on the record date for payment of the shares of the subsidiary. 11. REGISTRATION UNDER THE SECURITIES ACT OF 1933. On or before March 31, 2000, the Company shall file a registration statement to be effective no later than May 31, 2000, to register the issuance of the Warrant Shares under the Securities Act of 1933, as amended, in accordance with the terms of the Registration Rights Agreement between the Company and the Holder, dated February 2, 2000. 12. MISCELLANEOUS. All notices given under this Warrant shall be in writing, addressed to the parties as set forth below, and shall be effective on the earliest of (i) the date received, or (ii) if given by facsimile transmittal on the date given if transmitted before 5:00 p.m. the recipients time, otherwise it is effective the next day, or (iii) on the second business day after delivery to a major international air delivery or air courier service (such as Federal Express or Network Couriers): If to the Purchaser: If to the Company: Oxford Capital Corp. Efinancial Depot.Com, Inc. C/o 1013-17th Avenue S.W. 150-1875 Century Park East; Calgary, Alberta Century City California T2T 0A7 90067 Ph: (403) 508-5055 Fax: (403) 508-5055 With a copy that does not With a copy that does not constitute notice to: constitute notice to: Ian H. Kennedy, Clark,Wilson, Barristers & Solicitors Barrister & Solicitor 800-885 W.Georgia St. 1013 - 17th Avenue Vancouver,Canada Calgary, Alberta V6C 3H1 T2T 0A7 Attention: David Cowan Attn: Ian H. Kennedy Tel: (604) 643-3178 Tel: (403) 508-5055 Fax: (604) 687-6314 Fax: (403) 508-5058 (a) This Warrant is binding on and, except for the limitations on transfer and assignment contained in Section 4, shall enure to the benefit of the successors in interest of the Company and the Holder, respectively. (b) This Warrant shall be governed by, and construed in accordance with the laws of the State of Delaware. (c) This Warrant shall be governed by and interpreted in accordance with the laws of the State of Delaware and the federal laws of the United States of America; The parties agree that the courts of the State of Delaware, shall have exclusive jurisdiction and venue for the adjudication of any civil action between them arising out of relating to this Agreement, and hereby irrevocably consent to such jurisdiction and venue. EFINANCIAL DEPOT.COM, INC. By /s/ John Huguet ----------------- President Dated as of day of April, 2000. By ----------------- Secretary PURCHASE/ RELINQUISH FORM Date: TO: EFinancial Depot.Com, Inc. . The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of purchasing/relinquishing shares of Common Stock. OXFORD CAPITAL CORP. INSTRUCTIONS FOR REGISTRATION OF STOCK Name: ----------------------------------------------------------- Address: --------------------------------------------------------- City, State, Zip Code: ______________________________________________ Signature: --------------------------------------------------------- ASSIGNMENT FORM --------------- To assign this Warrant, fill in the form below: I or we assign and transfer this Security to (insert assignee's social security or tax I.D. no.) (print or type other person's name, address and zip code) and irrevocably appoint agent to transfer this Warrant on the books of EFinancial Depot.Com, Inc. The agent may substitute another to act for him. Date:, Your Signature: (Sign exactly as your name appears on the face of this Debenture) Signature Guarantee: NOTE: This Warrant and the Common Stock issuable upon conversion or as interest under this Debenture were issued under Regulation S under the Securities Act of 1933, as amended, and may be transferred only as provided for in the Debenture Purchase Agreement and in accordance with Rule 904 of Regulation S and by the execution of the above the Assignor represents that this assignment is being made in accordance with Rule 904 of Regulation S. EX-20.3 7 CONVERTIBLE DEBENTURE EXHIBIT A THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S PROMULGATED UNDER THE ACT) UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION S OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY IS PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE. FURTHER, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY BE MADE ONLY IN COMPLIANCE WITH THE ACT. EFINANCIAL DEPOT.COM, INC. 6% CONVERTIBLE DEBENTURE $2,500,000 USD February 2, 2000 EFINANCIAL DEPOT.COM, INC., a Delaware corporation (the "Company"), for the value received, hereby unconditionally and absolutely promises to pay to the order of OXFORD CAPITAL CORP., or holder (collectively, the "Holder"), upon presentation and surrender of this Debenture to the Company at its office at 150-1875 Century Park East, Century City California, 90067, or such other place as the Company may designate from time to time, the Principal Sum due under this Debenture, on February 2, 2003, or if such day is not a regular business day, then on the next business day thereafter or (the "Maturity Date"), plus interest at the simple rate of six percent (6%) per annum with all accrued and unpaid interest due and payable on the Maturity Date or on the date this Debenture is converted into shares of the common stock pursuant to Section 1. All dollar amounts set forth in this Debenture are United States Dollars. A regular business day is a day on which banks in the State of New York and the Province of Alberta are open for business and a trading day is a day in which the New York Stock Exchange is open for trading. 1. PRINCIPAL SUM. The Principal Sum outstanding at any time shall be Two Million Five Hundred Thousand ($2,500,000) Dollars less any Principal Sum prepaid through the date of the calculation and less any Principal Sum which had been converted into Common Stock as provided for in Section 2 hereof through the date of the calculation. 2. CONVERSION. (a) The Holder of this Debenture shall have the right, at its option, beginning on the thirtieth (30th) day after the Closing Date through 5:00 p.m. Alberta, Canada time on the last regular business day immediately prior to the Maturity Date to convert, subject to the terms and provisions of this Section 2, any or all of the outstanding Principal Sum of this Debenture. Conversions made pursuant to this Section 2 shall be made at a price (the "Conversion Price") per share equal to the lesser of: (i) eighty percent (80%) of the average closing bid price of the Common Stock of the Company on the principal market for such Common Stock for 5 days preceding the date a conversion notice is provided to the Company (the "Conversion Date") or (ii) five ($5.00) dollars; in no event shall the Conversion Price be lower than $3.00. To effect conversion of all or any part of the Principal Sum secured by this Debenture, the Holder shall present the Company with a written Notice of Conversion by either registered mail or facsimile on the date of Conversion. In either case, prior to issuance of previously unissued shares in the Common Stock of the Company to the Holder, this Debenture must be surrendered at the principal office of the Company, accompanied by the original Notice of Conversion duly executed, and, accompanied by a written instrument or instruments of transfer in form satisfactory to the Company duly executed by the Holder or its attorney duly authorized in writing to specify whether the Holder desires interest on the amount of the Principal Sum being converted to be paid in cash by Company check, or in shares of Common Stock of the Company. (b) As promptly as practicable after the surrender, as herein provided, of this Debenture for conversion and the completed and executed Notice of Conversion, the Company shall deliver or cause to be delivered, to or upon the written order of the Holder of this Debenture so surrendered: (i) certificates representing the largest number of fully paid and nonassessable full shares of Common Stock into which this Debenture may be converted in accordance with the provisions of this Section 2; (ii) a check in payment for fractional shares, based on amount in cash equal to such fraction multiplied by the current "Market Price" as defined in Section 4 hereof; (iii) cash or additional shares of Common Stock of the Company for the accrued but unpaid interest due on the Principal Sum being converted through the date of the Notice of Conversion; and (iv) a replacement Debenture identical to this Debenture, except as to the issue date and as adjusted to reflect the Principal Amount actually outstanding after the conversion, if less than the then outstanding Principal Sum is being converted. Such conversion shall be deemed to have been made at the close of business on the date that this Debenture shall have been received by the Company for conversion, with a Notice of Conversion duly executed, in satisfactory form for conversion, so that the rights of the Holder of this Debenture as a Debenture holder as to the Principal Sum being converted shall cease at such time and, subject to the provisions of this Section 2(b), the person or persons entitled to receive the shares of Common Stock upon conversion of this Debenture shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock (including any Common Stock issued for interest) at such time and such conversion shall be at the Conversion Price in effect at such time. (c) After the registration of the Common Stock underlying this Debenture, and after the shares of the Common Stock have traded above $10.00 on each day for 20 consecutive trading days, if there has been no Event of Default under this Debenture, the principal amount of the Debenture will be converted in accordance with the conversion terms of Section 2(a) above. 3. INTEREST At the Holder's election, accrued but unpaid interest must be paid in Common Stock of the Company in an amount of shares equal to the interest to be paid in Common Stock divided by the Conversion Price applicable to the Principal hereunder. Not earlier than the sixtieth (60th ) day and not later than the thirtieth (30th) day prior to the Maturity Date, the Holder shall notify the Company if it desires to have the accrued but unpaid interest due on the Maturity Date paid in shares of Common Stock of the Company. If the Holder does not give any such notice in a timely manner, the interest at Maturity shall be paid in cash by Company check. 4. ANTI-DILUTION PROVISIONS. After February 2, 2000, and so long as this Debenture is outstanding and not fully exercised, the Company shall not, without the prior consent of the Holder, issue or sell (i) any Common Stock without consideration or for a consideration per share less than $3.00; or (ii) issue or sell any warrant, right, contract, call, or other security or instrument granting the holder thereof the right to acquire Common Stock without consideration or for a consideration per share less than $3.00. 5. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the Company, or in case of any consolidation or merger of the Company with or into another corporation (other than a merger with a subsidiary in which merger the Company is the continuing corporation and which does not result in any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the class issuable upon conversion of this Debenture) or in case of any sale, lease or conveyance to another corporation of the property of the Company as an entirety, the Company shall, as a condition precedent to such transaction, cause effective provisions to be made so that the Holder shall have the right thereafter by converting this Debenture at any time prior to the payment in full of the Debenture, to acquire the kind and amount of shares of stock and other securities and property receivable upon such reclassification, capital reorganization and other change, consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock which might have been acquired upon conversion of this Debenture immediately prior to such reclassification, change consolidation, merger, sale or conveyance. Any such provision shall include provision for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Debenture. The foregoing provisions of this Section 5 shall similarly apply to successive reclassifications, capital reorganizations and changes of shares of Common Stock and to successive consolidations, mergers, sales or conveyances. In the event that in connection with any such capital reorganization or reclassification, consolidation, merger, sale or conveyance, additional shares of Common Stock shall be issued in exchange, conversion, substitution or payment, in whole or in part, for a security of the Company other than Common Stock, any such issue shall be treated as an issue of Common Stock covered by the provisions of this Section 5 hereof. 6. REGISTRATION UNDER THE SECURITIES ACT OF 1933. The Company shall register the shares of the Common Stock which may be issued upon the conversion of the principal sum of the Debenture and for the interest payable thereunder as provided for in Exhibit C to the Debenture Purchase Agreement, the Registration Rights Agreement. 7. REGULATION S. This Debenture and the Common Stock issuable upon conversion or as interest under this Debenture were issued under Regulation S under the Securities Act of 1933, as amended, and may be transferred only as provided for in the Debenture Purchase Agreement. 8. EVENTS OF DEFAULT. If any of one or more of the following described events, or the events as described in the Debenture Purchase Agreement, occur (each an "Event of Default") then: (a) The Company shall fail to pay the principal of, or interest on, this Debenture within five (5) days after the Holder has given written notice to the Company that the same has become due; or (b) The Company shall fail to perform or observe any of the provisions contained in any other Section of this Debenture or the Debenture Purchase Agreement and such failure shall continue for more than thirty (30) days after the Holder has given written notice to the Company; or (c) Any material representation or warranty made in writing by or on behalf of the Company in this Debenture shall prove to have been false or incorrect in any material respect, or omits to state a material fact required to be stated therein in order to make the statements contained therein, in the light of the circumstances under which made, not misleading, on the date as of which made, and the Company shall have failed to cure such false or incorrect statement within thirty (30) days after the Holder has given written notice to Borrower; or (d) The Company shall be adjudicated a bankrupt or insolvent, or admit in writing its inability to pay its debts as they mature, or make an assignment for the benefit of creditors; or the Company shall apply for or consent to the appointment of a receiver, trustee, or similar officer for it or for all or any substantial part of its property; or such receiver, trustee or similar officer shall be appointed without the application or consent of the Company and such appointment shall continue undischarged for a period of thirty (30) days; or the Company shall institute (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding relating to it under the laws of any jurisdiction; or any such proceeding shall be instituted (by petition, application or otherwise) against the Company and shall remain undismissed for a period of thirty (30) days; or any judgment, writ, warrant of attachment or execution or similar process shall be issued or levied against a substantial part of the property of the Company and such judgment, writ, or similar process shall not be released, vacated or fully bonded within thirty (30) days after its issue or levy; or (e) A final judgment for money in excess of Twenty-Five Thousand ($25,000) Dollars not covered by insurance shall be rendered against the Company and if, within thirty (30) days after entry thereof, such judgment shall not have been discharged, satisfied or execution thereof stayed pending appeal, or if, within thirty (30) days after the expiration of any such stay, such judgment shall not have been discharged or satisfied; or (f) The Company shall be enjoined, restrained or in any way prevented by a court order from continuing to conduct all or any material part of its business affairs; THEN, or at any time thereafter, and in each and every case: (1) Where the Company is in default under the provisions of Section 8(d) hereof, the entire unpaid principal amount of the Debenture, all interest accrued and unpaid thereon, and all other amounts payable to the Holder hereunder shall automatically become and be forthwith due and payable without offset or counterclaim of any kind and without presentment, demand, protest or notice of any kind, and without regard to the running of the statute of limitations, all of which are hereby expressly waived by the Company; and (2) In any other case referred to in this Section 8, the Holder may, by written notice to the Company, declare the entire unpaid principal amount of this Debenture, all interest accrued and unpaid hereon, and all other amounts payable hereunder to be forthwith due and payable, whereupon the same shall become immediately due and payable, without offset or counterclaim of any kind and without presentment, demand, protest or further notice of any kind, and without regard to the running of any statutes of limitation, all of which are hereby expressly waived by the Company. Any declaration made pursuant to Section 8(2) hereof is subject to the condition that, if at any time after the principal of this Debenture shall have become due and payable, and before any judgment or decree for the payment of the moneys so due, or any thereof, shall have been entered, all arrears of interest upon this Debenture (except that Principal Sum of this Debenture which by such declaration shall have become payable) shall have been duly paid, and every Event of Default shall have been made good, waived or cured, then and in every such case the Holder shall be deemed to have rescinded and annulled such declaration and its consequences; but no such rescission or annulment shall extend to or affect any subsequent Event of Default or impair any right consequent thereon. 9. CORPORATE OBLIGATION. It is expressly understood that this Debenture is solely a corporate obligation of the Company and that any and all personal liability, either at common law or in equity, or by constitution or statute, of, and any and all rights and claims against, every stockholder, officer, or director, as such, past, present or future, are expressly waived and released by the Holder as a part of the consideration for the issuance hereof. 10. TRANSFER. Subject to the appropriate provisions of the Act and of Section 7 hereof, this Debenture or any portion of the principal amount hereof in One Hundred Thousand Dollars ($100,000) increments, or multiples thereof (unless the entire Principal Sum is being transferred), is transferable on the records of the Company upon presentation of this Debenture, properly endorsed, at its principal office; upon such presentation and transfer a new Debenture or Debentures will be issued; provided, however, no transfer shall be made to any competitors of the Company. For the purposes of payment and all other purposes, the Company shall deem and treat the person in whose name this Debenture is registered as the absolute owner hereof and the Company shall not be affected by any notice to the contrary. 11. MISCELLANEOUS. (a) Notwithstanding the foregoing, the Company promises to pay interest after maturity (whether by acceleration or otherwise, and before as well as after judgment) at the same rate as above provided prior to maturity on balances, if any, then outstanding. (b) Interest under this Debenture shall be computed on the basis of a thirty (30) day month and a year of 360 days for the actual number of days elapsed. (c) In case at any time any Common Stock shall be listed on any stock exchange or NASDAQ, the Company will list on such exchange or NASDAQ, and all other exchanges where such stock or other stock, warrants, and securities at the time issuable upon the conversion of this Debenture may be listed, and keep listed thereon subject to listing requirements of such exchange or exchanges, an official notice of issuance upon the conversion of this Debenture, all shares of common stock and other stock and securities from time to time issuable upon such conversion. (d) Unless otherwise specifically proved herein, any notice required by this Agreement is effective and deemed delivered when faxed to the numbers set forth herein and receipt of such fax is electronically confirmed. Any such notice shall also be sent on the day such fax is sent (or if such day is not a business day, the next business day by overnight courier), properly addressed. Notices will be sent to the fax numbers and addresses set forth in this Agreement, unless either party notifies the other of an fax and/or address change in writing. IN WITNESS WHEREOF, the Company has caused this Debenture to be executed in Vancouver, British Columbia as of the day and year first above written. EFINANCIAL DEPOT.COM, INC. By: /s/ John Huguet ----------------- Its: President --------- OXFORD CAPITAL CORP. By: /s/ Riaz Mamdani ------------------ -----END PRIVACY-ENHANCED MESSAGE-----