-----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, J2mmL5YH56ygA0EHWz7ziShKkTp3TRFA0aaT/p8P4SrsuL4vsPpJMw52ZpQvhZKb wGlUzvo4MRNanTn0VfPDlg== 0001010412-02-000087.txt : 20020507 0001010412-02-000087.hdr.sgml : 20020507 ACCESSION NUMBER: 0001010412-02-000087 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020311 ITEM INFORMATION: Other events FILED AS OF DATE: 20020507 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SANGUINE CORP CENTRAL INDEX KEY: 0000926287 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 954347608 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-24480 FILM NUMBER: 02636193 BUSINESS ADDRESS: STREET 1: 101 EAST GREEN ST STREET 2: #11 CITY: PASADENA STATE: CA ZIP: 91105 BUSINESS PHONE: 8184050079 MAIL ADDRESS: STREET 1: 101 EAST GREEN ST STREET 2: STE 11 CITY: PASADENA STATE: CA ZIP: 91105 8-K/A 1 ka1.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20509 FORM 8-K-A1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act March 11, 2002 -------------- Date of Report (Date of Earliest Event Reported) SANGUINE CORPORATION -------------------- (Exact Name of Registrant as Specified in its Charter) Nevada 0-24480 95-4347608 ------ ------- ---------- (State or other juris- (Commission File No.) (IRS Employer diction of incorporation) I.D. No.) 101 East Green Street, #11 Pasadena, California 91105 -------------------------- (Address of Principal Executive Offices) (626) 405-0079 -------------- Registrant's Telephone Number Item 5. Other. On February 6, 2002, Sanguine Corporation ("Sanguine" or the "Company") entered into a Letter Agreement for Investment Banking Services (the "Letter Agreement") with Chapman, Spira & Carson, LLC ("CSC"). Under the Letter Agreement, CSC agreed to assist the Company in raising funds through a private placement of debt or equity on an exclusive basis for a period of three months. In exchange for these services, Sanguine agreed to pay CSC 10% of the gross amount of capital raised and to issue to CSC a warrant to purchase up to 300,000 shares of the Company's common stock at a price of $0.125 per share. The warrant is exercisable for a period of five years and has a "cashless exercise" feature. In addition, the warrant contains certain anti-dilution provisions and provides for the registration of the shares underlying the warrants with the Securities and Exchange Commission. These are the material terms and provisions of the CSC Letter Agreement and warrant that are attached hereto and incorporated herein. Further information can be obtained by reviewing the actual instruments that are described below under Item 7. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Businesses Acquired. None; not applicable. (b) Pro Forma Financial Information. None; not applicable. Exhibits. Exhibit Number Description - ------ ----------- 10.1 Exclusive License Agreement* 10.2 Subscription Agreement* Exhibit A-Form of Note Exhibit B-Form of Legal Opinion Exhibit C-Form of Warrant Schedule 2(d)-Additional Issuances Schedule 2(t)-Capitalization 10.3 Funds Escrow Agreement* 10.4 Engagement Letter* 10.5 Letter Agreement for Investment Banking Services 99.1 Warrant of Richard H. Walker* 99.2 Warrant of Mark Bergendahl* 99.3 Warrant of Bradley J. Wilhite* 99.4 Warrant of Leonard W. Burningham, Esq.* 99.5 Press Release dated February 21, 2002* 99.6 Minutes of Special Meeting of the Board of Directors on March 11, 2002, regarding the foregoing* 99.7 Warrant of Chapman Spira & Carson LLC * These documents and related exhibits were filed as exhibits to the Company's Current Report on Form 8-K, dated March 11, 2002, which was filed with the Securities and Exchange Commission on March 25, 2002. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. SANGUINE CORPORATION Date: 5/6/02 By: /s/ Thomas C. Drees ------------- -------------------------------------- Thomas C. Drees, Ph.D. CEO, President and Chairman of the Board of Directors EX-10 3 chapagt.txt Chapman Spira & Carson LLC Investment Banking Consultants February 6, 2002 Re: Letter Agreement for Investment Banking Services This letter (the "Letter Agreement") sets forth the arrangements previously discussed whereby Chapman, Spira, & Carson LLC "CSC" would act as an exclusive investment banker to Sanguine Corporation and its affiliates or successor corporations or partnerships (collectively referred to as "SANGUINE" or the "Company") and endeavor to secure financing to facilitate the Company's growth. This letter Agreement will confirm CSC's engagement by SANGUINE on the following terms and conditions: 1. Services CSC will undertake to secure for the Company financing via a private placement of debt and/or equity securities or for that matter any alternative form of financing that the company shall deem acceptable. 2. Consideration and Term of Engagement A. For the purposes of this letter Agreement, a "Source" shall include any and all investors, agents, investment bankers, brokers/dealers, and similar providers of capital including referrals by SANGUINE, but excluding immediate family members of the Principal, whether or not introduced to the Company directly by CSC or by the Company. All contacts of CSC shall remain CSC'S possession and should any transaction be consummated within 3 years with a CSC source, they shall be paid as discussed below. B. In consideration of the time and effort required on the part of CSC to enter into the due diligence process and advise the Company and the Principal in SANGUINE's corporate and capital structure, and to assist in negotiations with sources, CSC shall have the exclusive right to perform the above described services for the Company and the Principal for a period of three (3) months from the date of the execution of this Agreement, and for such additional period as the Company may be involved in substantive negotiations with one or more Sources procured by CSC. 3. Fees Sanguine shall pay CSC ten percent (10%) of the gross amount of capital raised. Sanguine will issue to CSC a five-year "cashless" warrant (the "Warrant") to purchase 300,000 shares of stock which will be priced at the "median" price determined by the value at the close of market on the day of execution of this contract. The Warrant shall contain the terms set forth in the form of Warrant annexed hereto as Exhibit A. The 300,000 shares issuable upon exercise of the Warrant shall hereinafter be referred to as the "Shares." Of these shares, CSC will receive 100,000 Warrants upon the signing of this document and remainder upon the acceptance of any funds from a CSC source. In spite of the fact that these Warrants will be issued to CSC in two tranches, all of these Warrants will conform with the terms and conditions of Exhibit A. The exercise price of the warrant will be twelve and a half cents per share ($.125) the closing bid price on the day this contract was agreed to, February 6, 2002. 4. Costs and Expenses CSC shall be entitled to be reimbursed for all agreed-upon third-party and out-of-pocket expenses that CSC may incur in the performance of services under this Agreement. Such reimbursement shall be in addition to any fees otherwise earned by CSC hereunder, and shall be paid by the Company within (30) days of CSC's delivery of its statement of costs. Expenses to exceed $500 will be pre-approved by SANGUINE. 5. Payment of Fees In the instance of financings secured for SANGUINE, fees shall be paid concurrently and proportionately as funds are received by SANGUINE. The underlying capital stock to which the Option applies, or which shall be or has been issued pursuant to this or any other subsequent agreement, shall have anti-dilution, demand registration, piggyback registration, take-member-along and preemptive provisions and rights as of the date of this Letter Agreement. The Company will bear the costs of such registrations and rights and cause to make effective in such states as are reasonably requested by CSC. 6. Indemnification The Company hereby agrees that it will indemnify and hold harmless CSC and each director, officer, shareholder, employee or representative from and against any and all loss, claim, damage, liability, costs or expenses arising out of or based upon: (i) any breach or inaccuracy of the representations of SANGUINE contained in the Descriptive Memorandum, (ii) breach or inaccuracies of the representation of SANGUINE contained in this Agreement, and/or the definitive documentation with Sources that results from the Agreement, (iii) any claims made by any finders, brokers, agents, advisors or other similar party claiming compensation for the transactions described herein, and (iv) any SANGUINE stockholder, creditor, option-holder and/or contingent or actual investor claims as against CSC. Not withstanding the foregoing provisions of this paragraph, any amount incurred or paid by SANGUINE which has been determined by a court of competent jurisdiction to have been the direct result of the gross negligence, bad faith, or willful misfeasance of CSC or any of their direct employees will be reimbursed by CSC to SANGUINE immediately. Promptly after receipt of notice by SANGUINE of the commencement of any claim or action made against SANGUINE in which CSC or any of its employees been named, SANGUINE shall notify CSC and SANGUINE shall assume the defense thereof with counsel reasonably satisfactory to CSC. Notwithstanding the foregoing, CSC shall have the exclusive right, if it shall reasonably conclude that there may be one or more defenses available to it which are different or additional to those available to and employed by SANGUINE, to appoint such other and separate legal counsel as CSC deems appropriate and SANGUINE shall pay such legal costs and expenses. SANGUINE further agrees that it will not, without prior written notice, consent to settle, compromise or agree to the entry of any judgment, unless such settlement, compromise or agreement includes an unconditional, irrevocable release of CSC and each director, officer, shareholder, employee or representative, from and against any and all liability arising out of said legal action. 7. No Modifications This agreement shall not be modified without the prior written consent of all parties hereto. 8. Investment Representations A. Access to Information. The Company represents and warrants that, on a timely basis, it will provide CSC access to all information available to the Company concerning its condition, financial and otherwise, its management, its business and its prospects. The Company represents that it will provide CSC with a copy of the Company's most recent Annual Report on Form 10-KSB and any subsequent filings required or filed under the rules and regulations promulgated under the Securities Act or the Securities Exchange Act of 1934 as amended (the "Exchange Act"), if any (the "Disclosure Documents"). The Company represents that it has provided and will continue to provide CSC with any information or documentation necessary to verify the accuracy of the information contained in the Disclosure Documents and will promptly notify CSC upon the filing of any registration statement or other periodic reporting documents filed pursuant to the rules and regulations of the Securities Act or the Exchange Act. B. Issuance of Securities. The Company agrees that during the term of this Agreement, without the prior written consent of CSC, which consent shall not be unreasonably withheld, it will not issue any shares of its common stock or other securities convertible into or exercisable into shares of common stock; provided however, CSC hereby consents to the issuance of not more than 50,000 shares of common stock per quarter to their medical advisory board. C. Current Filings. The Company represents and warrants that it has filed all forms and reports required by the Securities Act or Exchange Act during the past twelve-month period and will continue to do so during the term of this Agreement. 9. Arbitration In the event of a dispute, the parties agree that this Agreement shall be resolved by arbitration in accordance with the requirements then obtaining of the American Arbitration Association in New York City, New York, and judgment upon the award rendered may be entered in any court having jurisdiction thereof. 10. Best Efforts and Performance of Duties This Letter Agreement shall not be construed to be a commitment of financing. CSC shall use its best efforts only to secure financing for the Company. CSC shall have the discretion to determine the amount of time necessary to perform the services hereunder. CSC reserves the right to retain the services of a third party in connection with the services to be rendered hereunder. Nothing in this Agreement shall be construed to limit or restrict CSC in conducting such business with respect to others, or in rendering such advice to others. 11. Overdue Payments In the event that any payment due CSC under this Letter Agreement shall not be made when due, interest shall accrue on the unpaid balance of such overdue payments at the rate of 12% per annum until paid. 12. Standard of Care CSC, including any person or entity working for or on behalf of CSC, shall not be liable for any mistakes of fact, errors of judgment, for losses sustained by the Company, or for any acts or omissions of any kind, unless caused by the gross negligence or intentional misconduct of CSC or any person or entity acting for or on behalf of CSC. 13. Acceptance This offer to provide investment banking services shall be null and void if not accepted in writing and returned to Chapman, Spira, & Carson, Inc. by February 15th 2002. If the foregoing correctly sets forth the understanding between SANGUINE, the Principal, and CSC and is the entire agreement between the signatories and shall supersede any and all prior agreements whether verbal or written, please sign in the spaces below, whereupon this Letter Agreement shall constitute a binding agreement. We are very enthusiastic about your Company and look forward to working with you towards your future growth and success. /s/ A. G. Hargreaves - -------------------- Sanguine Corporation READ AND AGREED TO AS OF 2/11, 2002 /s/ Robert A. Spira - ------------------- Chapman Spira and Carson LLC EX-99 4 chapwarr.txt NEITHER THIS WARRANT NOR THE SHARES ISSUABLE ON THE EXERCISE HEREOF HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE AND IS BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. NEITHER THIS WARRANT NOR THE SHARES ISSUABLE ON THE EXERCISE HEREOF MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SUCH SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. COMMON STOCK PURCHASE WARRANT To Purchase 300,000 Shares Of Common Stock Of SANGUINE CORPORATION This is to certify, that FOR VALUE RECEIVED, Chapman Spira and Carson LLC (The "Holder") is entitled to purchase, subject to the provisions of this Warrant from Sanguine Corporation (The "Company"), a Nevada corporation, at any time up to an including the expiration of three years after the effective date of the registration statement referred to in Section 8 ("Expiration Date"), up to an aggregate of three hundred thousand (300,000) shares of the Company's common stock, ("Common Stock") at a purchase price per share of 1/8th of One Dollar (US$0.125) in currency of the United States of America. The number of shares of Common Stock to be received upon the exercise of this Warrant and the price to be paid for a share of Common Stock may be adjusted from time to time as hereinafter set forth. The shares of the Common Stock deliverable upon such exercise, and as adjusted from time to time, are hereinafter sometimes referred to as "Warrant Shares," and the 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." This Warrant represents the Warrants referred to in the Purchaser Representation Letter (the "Purchaser Representation Letter") entered into between the Company and Chapman Spira and Carson LLC effective as of February 6, 2002. 1. Exercise of Warrant. This Warrant may be exercised in whole or in part at any time and from time to time up to an including the Expiration 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 that right shall expire on the next succeeding day that is not such a day. The Holder shall exercise all rights to purchase Common Stock by presenting and surrendering this Warrant to the Company, at _________________________________, with the Purchase Form annexed hereto duly executed and accompanied by payment of the Exercise Price for the number of shares specified in such form. If this Warrant should be exercised in part only, or if the Company should exercise any of its Redemption Rights, 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 Company of this Warrant, in proper form for exercise, with the Purchase Form annexed hereto duly executed and accompanied by payment of the Exercise Price 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. As soon as practicable after each exercise of this Warrant, the Company will deliver the shares issuable upon such exercise to the Holder. 2. Relinquishment of Options. (a) The Warrant-holder in lieu of purchasing the entire number of shares subject to purchase hereunder, shall have the right to relinquish all or any part of the then unexercised portion of this Warrant (to the extent then exercisable) for a number of shares of Common Stock to be determined in accordance with the following provisions of this clause (a): (i) 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 Appreciated Value by (B) the purchase price per share of Common Stock specified in this Warrant; (ii) For the purpose of this clause (a), "Appreciated Value" means the excess of (x) the aggregate current market value of the shares of Common Stock covered by the option or the portion thereof to be relinquished over (y) the aggregate purchase price for such shares specified in this Warrant; (b) 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 Warrant, 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 or the rules and regulations thereunder as the Company shall in its discretion select and apply; (c) 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 4; and (d) 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, (B) the Holder 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. (e) 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 will be issued covering such shares of Common Stock. 3. 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 Holder the number of shares of Common Stock as shall be required for issuance or delivery upon exercise of this Warrant. 4. Fractional Shares. No fractional shares or script representing fractional shares shall be issued upon the exercise of this Option. 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 Option 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 Automated Quotation System ("NASDAQ"), or if not so quoted on NASDAQ then by the National Quotation Bureau, LLC, New York, New York, 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. 5. 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. (b) 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. (c) 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. 6. 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 and the Purchaser Representation Letter. 7. Anti-Dilution Provisions. 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 its fair market value determined immediately prior to its issuance, or (ii) issue or sell any warrant, option, 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 such Common Stock's fair market value determined immediately prior to its issuance. For the purpose of this Paragraph 7, the Common Stock's fair market value shall be determined as provided in Paragraph 4 hereof, on a fully diluted basis, assuming the exercise of all Options and other outstanding rights to acquire Common Stock. 8. Adjustment to Exercise Price. Of even date herewith, the Company has entered into a Registration Rights Agreement with the Holder whereby the Company is obligated to file a registration statement with the Securities and Exchange Commission under the Securities Act of 1933 covering, among other things, the shares of Common Stock issuable upon exercise of this Warrant. In the event the registration statement is not declared effective by the Securities and Exchange Commission prior to the expiration of 90 days after the date of this Warrant, the Exercise Price will be reduced by $0.01 per month, or pro rata portion thereof, until the registration statement is declared effective. If the registration statement is not declared effective prior to the expiration of 180 days after the date hereof, the Exercise Price of this Warrant shall be reduced by $0.015 per month, or pro rata portion thereof, until the registration statement is declared effective. 9. Officer's Certificate. Whenever the Company shall determine the fair market value of the Common Stock pursuant to Paragraph 4 hereof, the Company shall forthwith file in the custody of its secretary at its principal office, with its stock transfer agent and with the Holder, an officer's certificate showing the such 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. 10. 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. 11. 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 Paragraph 10 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 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. 12. 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. 13. 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 recipient's 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 Holder: Chapman Spira and Carson LLC 30 Broad Street, 34th Floor New York, New York 10004. Attention: Robert A. Spira, Chairman Facsimile No. 212-425-6229 With a copy (that does not constitute Notice) to: Richard Stanton 30 Broad Street, 34th Floor New York, New York 10004 Facsimile No. 212-425-6229 If to the Company: Sanguine Corporation _______________ _______________ _______________ Attention: _______________ Facsimile No. _______________ With a copy (that does not constitute Notice) to: _______________ _______________ _______________ _______________ Attention: _______________ Facsimile No. _______________ 14. This Warrant is binding on and, except for the limitations on transfer and assignment contained in Paragraph 4, shall inure to the benefit of the successors in interest of the Company and the Holder, respectively. 15. This Warrant shall be governed by and interpreted in accordance with the laws of the State of New York and the national laws of the United States. The parties agree that the courts of the State of New York, 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. PURCHASE FORM Date: ____________________ TO: _____________________ c/o ______________________ The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of purchasing ___________ shares of Common Stock, and hereby makes payment of US$_____________ in payment of the Exercise Price thereof. _________________________ INSTRUCTIONS FOR REGISTRATION OF STOCK Name: ___________________________________________________________ Address: _________________________________________________________ City, State, and Zip Code: ______________________________________________ Signature: ________________________________________________________ -----END PRIVACY-ENHANCED MESSAGE-----