EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of December 2,
2005, by and among CompuPrint, Inc., a North Carolina corporation ("CPPT" or the
"Seller"), the parent holding company of Terra Insight Corporation, a Delaware
corporation ("TIC"), and Belhasa International Co. LLC ("Buyer"). Each of the
Seller and Buyer may be referred to individually herein as a "Party" and,
collectively, as the "Parties".
WHEREAS:
A. The Parties are executing and delivering this Agreement in reliance
upon an exemption from securities registration afforded by the rules and
regulations as promulgated by the United States Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933
Act");
B. Buyer desires to purchase, and the Seller desires to issue and sell,
upon the terms and conditions set forth in this Agreement, securities of the
Seller (the "Securities") for the purchase price of USD $1,000,000, consisting
of (a) 1,000,000 shares of the Seller's common stock, par value $0.0001 per
share (the "Common Stock"), and (b) warrants (i) to purchase 150,000 shares of
Common Stock, exercisable for six months from Closing at $1.25 per share and
exercisable thereafter at $1.50 until their expiration on the one year
anniversary date of Closing, in the form annexed hereto as Exhibit A (the "Class
A Warrants"), and (ii) to purchase up to 2,000,000 shares of Common Stock,
exercisable, for three months from Closing at $1.15 per share and exercisable
thereafter at $1.50 until their expiration on the six month anniversary date of
Closing, in the form annexed hereto as Exhibit B (such warrants collectively,
the "Class B Warrants") (the Class A Warrants and Class B Warrants are
collectively referred to herein as the "Warrants"), provided that the Class B
Warrants may be exercised only if the initial exercise of the Class B Warrants
is for the purchase of at least 1,000,000 shares of Common Stock;
C. Information about the Seller is set forth in the Seller's filings with
the SEC (the "SEC Filings"). The information in the SEC filings relates to the
business and operations of TIC, which has recently been acquired by the Seller.
NOW THEREFORE, the Seller and Buyer hereby agree as follows:
1. PURCHASE AND SALE OF SECURITIES.
a. Purchase of Securities. On the Closing Date (as defined below),
the Seller shall issue and sell to Buyer, and Buyer agrees to purchase from the
Seller, the Securities.
b. Form of Payment. Upon execution of this Agreement, (i) Buyer
shall pay the purchase price of USD$1,000,000 (the "Purchase Price") for the
Securities to be issued and sold to Buyer at the Closing by cash or wire
transfer of immediately available funds. All of such funds shall be paid by wire
transfer to:
Account Name: Law Offices of Xxx Xxxxxxx, Escrow Account
Account No.: 00000000
ABA No.: 000-000-000
Bank: Citibank N.A.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
c. Closing Date. The date and time of the sale of the Securities
pursuant to this Agreement (the "Closing Date") shall be the date of acceptance
by the Seller of Buyer as a purchaser of its securities hereunder, and the
receipt and clearance of the Purchase Price (the "Closing"). If no Closing has
occurred by December 12, 2005, unless extended in a writing signed by the
Seller, this Agreement shall be null and void and deemed without effect.
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2. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants
to the Seller that:
a. Investment Purpose. As of the date hereof, Buyer is purchasing
the Securities for its own account and not with a present view towards the
public sale or distribution thereof, except pursuant to sales registered or
exempted from registration under the 1933 Act; provided, however, that by making
the representations herein, Buyer does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.
b. Accredited Investor Status. Buyer is a sophisticated investor (as
described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as
defined in Rule 501 of Regulation D), and Buyer has such experience in business
and financial matters that it has the capacity to protect its own interests in
connection with this transaction and is capable of evaluating the merits and
risks of an investment in the Securities pursuant to this Agreement. Buyer has
been represented by counsel and advisors of its choice. Buyer acknowledges that
an investment in the Securities pursuant to this Agreement is speculative and
involves a high degree of risk.
c. Reliance on Exemptions. Buyer understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Seller is relying upon the truth and accuracy of, and Buyer's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of Buyer to acquire the
Securities.
d. Information. Buyer has conducted its own independent
investigation of the Seller, and has had an opportunity to review the SEC
filings and all documents, records, books and other information pertaining to
Buyer's investment in the Seller that has been requested by Buyer. Buyer
represents that Buyer has carefully reviewed the information provided.
e. Governmental Review. Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities. There
is no representation that any registration statement will be declared effective.
f. Transfer or Resale. Buyer understands that: (i) except as
provided for herein, the sale or re-sale of the Securities has not been and is
not being registered under the 1933 Act or any applicable state securities laws,
and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the 1933 Act, (b) Buyer
shall have delivered to the Seller an opinion of counsel that shall be in form,
substance and scope customary for opinions of counsel in comparable transactions
to the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration to the reasonable
satisfaction of the Seller, (c) the Securities are sold or transferred to an
"affiliate" (as defined in Rule 144 promulgated under the 1933 Act (or a
successor rule) ("Rule 144")) of Buyer who agrees to sell or otherwise transfer
the Securities only in accordance with this Section 2(f) and who is an
accredited investor, or (d) the Securities are sold pursuant to Rule 144, and
Buyer shall have delivered to the Seller an opinion of counsel that shall be in
form, substance and scope customary for opinions of counsel in corporate
transactions to the reasonable satisfaction of the Seller; (ii) any sale of such
Securities made in reliance on Rule 144 may be made only in accordance with the
terms of said Rule and further, if said Rule is not applicable, any re-sale of
such Securities under circumstances in which the seller (or the person through
whom the sale is made) may be deemed to be an underwriter (as that term is
defined in the 0000 Xxx) may require compliance with some other exemption under
the 1933 Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Seller nor any other person is under any obligation to file to
register such Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder (in each case,
other than pursuant to the provisions herein). Notwithstanding the foregoing or
anything else contained herein to the contrary, the Securities may be pledged as
collateral in connection with a bona fide margin account or other lending
arrangement.
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g. Legends. Buyer understands that until such time as the Securities
have been registered under the 1933 Act or otherwise may be sold pursuant to
Rule 144 without any restriction as to the number of securities as of a
particular date that can then be immediately sold, the Securities may bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
securities may not be sold, transferred or assigned in the absence
of an effective registration statement for the securities under said
Act, or an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, that
registration is not required under said Act or unless sold pursuant
to Rule 144 under said Act."
h. Authorization; Enforcement. This Agreement has been duly
authorized and validly executed and delivered by Buyer and is a valid and
binding agreement of Buyer enforceable against it in accordance with its terms
(i) subject to applicable bankruptcy, insolvency, or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application, (ii) subject to a court's
discretionary authority with respect to the granting of specific performance,
injunctive relief or other equitable remedies and (iii) except to the extent the
indemnification and contribution provisions, if any, contained in any this
Agreement may be limited by applicable federal or state securities laws or
unenforceable as against public policy..
i. Residency. Buyer is a resident of the jurisdiction set forth
immediately below Buyer's name on the signature page hereto.
j. Not an Affiliate. Buyer is not an officer, director or
"affiliate" (as that term is defined in Rule 405 under the 0000 Xxx) of the
Seller.
k. Absence of Conflicts. The execution and delivery of this
Agreement, and the consummation of the transactions contemplated hereby and
thereby, and compliance with the requirements hereof and thereof by Buyer, will
not violate any law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on Buyer or (a) violate any provision of any indenture,
instrument or agreement to which Buyer is a party or is subject, or by which
Buyer or any of its assets is bound; (b) conflict with or constitute a material
default thereunder; (c) result in the creation or imposition of any lien
pursuant to the terms of any such indenture, instrument or agreement, or
constitute a breach of any fiduciary duty owed by Buyer to any third party; or
(d) require the approval of any non-governmental agency third-party (which has
not been obtained) pursuant to any material contract, agreement, instrument,
relationship or legal obligation to which Buyer is subject or to which any of
its assets, operations or management may be subject.
l. Manner of Sale. At no time was Buyer presented with or solicited
by or through any leaflet, public promotional meeting, television advertisement
or any other form of general solicitation or advertising.
m. Broker/Finder. Buyer represents that no broker or finder is
entitled to any commission or fee.
n. Corporate Matters. Buyer has been informed of certain proposals
of the Seller, and Buyer consents to, and approves of, each of the following
proposed actions of the Seller, which may be effected in one or more
transactions: a proposed reincorporation of CPPT under the laws of the State of
Delaware; a proposed parent-subsidiary merger of CPPT and TIC under the laws of
the State of Delaware; a proposed name change of the Seller to "Terra Insight
Corporation" or such other corporate name as is selected by its Board of
Directors; an increase in the authorized common stock of the Seller to
250,000,000 shares; and the reservation and the issuance of up to 5,000,000
shares pursuant to a stock incentive plan (the "Stock Incentive Plan"). Buyer
waives any entitlement to appraisal or dissenter rights in connection with the
foregoing.
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3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents and
warrants to Buyer that:
a. Organization and Qualification. Each of TIC and CPPT is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, organized or formed, with full power
and authority (corporate and other) to own, lease, use and operate its
properties and to carry on its business as and where now owned, leased, used,
operated and conducted. Each of TIC and CPPT is duly qualified or intends to
apply for qualification as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership or use of property or the
nature of the business conducted by it makes such qualification necessary,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect. "Material Adverse Effect" means any material adverse
effect on the business, operations, assets, financial condition or prospects of
the Seller, if any, taken as a whole, or on the transactions contemplated hereby
or by the agreements or instruments to be entered into in connection herewith.
b. Authorization; Enforcement. The Seller has all requisite
corporate power and authority to enter into and perform this Agreement and to
consummate the transactions contemplated hereby and thereby and to issue the
Securities, in accordance with the terms hereof and thereof. The execution and
delivery of this Agreement by the Seller and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by the
Board of Directors of the Seller. This Agreement has been duly executed and
delivered by the Seller by its authorized representative, and such authorized
representative is the true and official representative with authority to sign
this Agreement and the other documents executed in connection herewith and bind
the Seller accordingly. This Agreement constitutes a legal, valid and binding
obligation of the Seller enforceable against the Seller in accordance with its
terms.
c. Capitalization. As of December 1, 2005, the authorized capital
stock of the Seller consists of 100,000,000 shares of Common Stock, of which
41,508,338 shares are issued and outstanding, and 1,000,000 shares of preferred
stock, of which no shares are issued and outstanding. Except as specifically
described in this Section 3(c), as of the date of this Agreement, no shares of
Common Stock or preferred stock are currently reserved for issuance. All of such
outstanding and/or reserved shares of capital stock are, or upon issuance will
be, duly authorized, validly issued, fully paid and nonassessable. No shares of
capital stock of the Seller are subject to preemptive rights or any other
similar rights of the shareholders of the Seller or any liens or encumbrances.
The Seller has outstanding 6% convertible debentures (convertible at $1.00 per
share) in the principal amount of $3 million, due December 31, 2007, with the
right by the holder to purchase an additional $2 million in convertible
debentures on identical terms. As of December 1, 2005, the Seller has stock
options outstanding for the purchase of 3,100,000 shares at $0.32 per share,
250,000 shares at $0.80 per share, 413,333 shares at $0.80 per share, 500,000
shares at $1.00 per share, and 500,000 shares at $0.80 per share. If the Seller
retains its investor relations consultant to continue as its investor relations
consultant, the Seller will issue an additional 325,000 restricted shares to the
consultant at that time. The Seller is negotiating for the employment of a
senior financial officer who is a certified public accountant, or possessed of
other qualifications, and if hired, such financial officer may receive stock
options outside the Stock Incentive Plan for the purchase of up to 375,000
shares, subject to certain vesting provisions. The Seller plans to implement a
Stock Incentive Plan, pursuant to which the Seller will reserve 5,000,000 shares
for future issuance to eligible employees, officers, directors, and consultants.
In each case, except as specifically described in the SEC Filings, there do not
presently, nor shall there as of the Closing Date, exist any outstanding
options, warrants, rights (including, without limitation, rights of first
refusal, anti-dilution, conversion, preemptive or similar rights) or agreements
for the purchase or acquisition from the Seller of any shares of its capital
stock or any securities convertible into or ultimately exchangeable or
exercisable for any shares of its capital stock.
d. Issuance of Securities. The Securities to be issued and sold
hereunder will be (i) duly and validly issued, fully paid and nonassessable,
with no personal liability attaching to the ownership thereof, (ii) free of
restrictions on transfer other than restrictions on transfer under this
Agreement and securities laws, (c) free of any liens, mortgages, claims,
charges, security interests, restrictions or encumbrances of any kind ("Liens")
other than as may be created by Buyer, and (d) not subject to any rights of
first refusal, preemptive or similar rights existing prior to the issuance
thereof.
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e. No Conflicts. The execution, delivery and performance of this
Agreement by it and the consummation by it of the transactions contemplated
hereby and thereby will not (i) conflict with or result in a violation of any
provision of its Certificate of Incorporation or By-laws in effect, (ii) violate
or conflict with, or result in a breach of any provision of, or constitute a
default (or an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, patent, patent
license or instrument to which it is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and regulations of any self-regulatory
organizations to which it or its securities are subject) applicable to it or by
which any of its property or asset is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect). It is not in violation of its Certificate of Incorporation,
By-laws or other organizational documents and it is not in default (and no event
has occurred which with notice or lapse of time or both could put it in default)
under, and it has not taken any action or failed to take any action that would
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which it is a party
or by which any of its property or assets is bound or affected, except for
possible defaults as would not, individually or in the aggregate, have a
Material Adverse Effect. Its businesses are not being conducted, and shall not
be conducted so long as Buyer owns any of the Securities, in violation of any
law, ordinance or regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the 1933 Act and any
applicable state securities laws, it is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency, regulatory agency, self regulatory organization or stock
market in order for it to execute, deliver or perform any of its obligations
under this Agreement in accordance with the terms hereof or thereof; all of such
consents, authorizations, orders, filings or registrations have been made or
obtained or will be made or obtained within the required statutory or regulatory
time periods, if any.
f. Absence of Litigation. There is no action, suit, claim,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to its
knowledge, threatened against or affecting it, or its officers or directors in
their capacity as such that would materially affect it.
g. Intellectual Property. The Seller has the rights (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) and other similar rights and proprietary
knowledge (collectively, "Intangibles") necessary for the conduct of its
business as now being conducted. To its knowledge, it is not infringing upon or
in conflict with any right of any other person with respect to any Intangibles.
No adverse claims have been asserted by any person to the ownership or use of
any Intangibles that would materially adversely affect its use of any
Intangibles.
h. No Materially Adverse Contracts, Etc. The Seller is not subject
to any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation which in its judgment has or is expected in the future
to have a material adverse effect on its operations or proposed operations. It
is not a party to any contract or agreement which in the judgment of its
officers has or is expected to have a material adverse effect on its operations.
i. Information. The Seller represents that, as of the date of this
Agreement, the SEC Filings are materially correct and do not contain an untrue
statement of a material fact or omit a material fact necessary to make the
statements contained therein not misleading. .
4. COVENANTS.
a. Use of Proceeds. SELLER shall use the proceeds from the sale of
the Securities for its working capital.
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b. Registration Statement. Buyer shall be entitled to the benefit of
certain registration rights with respect to the shares of common stock issuable
pursuant to this Agreement. If the Company, at any time from the date of this
Agreement until such time that the shares underlying the Securities paid for or
irrevocably committed for are eligible for resale pursuant to Rule 144, proposes
to file a new registration statement to register any of its common stock under
the Securities Act for sale to the public (including, pursuant to any existing
commitments to register the Company's common stock), whether for its own account
or for the account of other security holders or both (except with respect to
registration statements on Forms X-0, X-0 and any successor forms thereto), each
such time the Company will give written notice to such effect to Buyer at least
10 days prior to such filing. Upon the written request of Buyer, received by the
Company within 10 days after the giving of any such notice by the Company, to
register any of the shares of common stock eligible to be included in such a
registration statement pursuant to the rules, interpretations and/or guidance of
the SEC, the Company will cause, at Company's expenses, such shares of common
stock to be covered by the registration statement proposed to be filed by the
Company, all to the extent requisite to permit the sale or other disposition by
the holder of such shares so registered.
c. Cooperation of Buyer. Buyer shall provide relevant and accurate
information to the Company and shall cooperate with the Company in the
preparation and submission of the registration statement.
5. CONDITIONS TO THE SELLER'S OBLIGATION. The obligation of the Seller
hereunder to issue and sell the Securities to Buyer at the Closing is subject to
the satisfaction, at or before the Closing Date of each of the following
conditions thereto, provided that these conditions are for the Seller's sole
benefit and may be waived by the Seller at any time in its sole discretion:
a. Buyer shall have executed this Agreement, and delivered the same
to the Seller.
b. Buyer shall have delivered and the Purchase Price shall have been
received in accordance with Section 1 and paid at a Closing.
c. The representations and warranties of Buyer shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by Buyer
at or prior to the Closing Date.
d. No undisclosed litigation, statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
6. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE. The obligation of Buyer
to purchase the Securities at the Closing is subject to the satisfaction, at or
before the Closing Date of each of the following conditions, provided that these
conditions are for Buyer's sole benefit and may be waived by Buyer at any time
in their sole discretion:
a. The Seller shall have executed this Agreement.
b. The representations and warranties of the Seller shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at such time (except for representations and
warranties that speak as of a specific date) and the Seller shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Seller at or prior to the Closing Date.
c. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
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d. No material undisclosed event shall have occurred which could
reasonably be expected to have a material adverse effect on the Seller.
7. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE NEW YORK
STATE COURTS LOCATED IN NEW YORK COUNTY IN THE STATE OF NEW YORK WITH RESPECT TO
ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY EXPRESS MAIL SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING.
NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT
IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. The
Parties hereby waive a trial by jury in any action, proceeding or counterclaim
brought by either of the Parties hereto against the other in respect of any
matter arising out or in connection with this Agreement.
b. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement.
c. Headings. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. In the event that any provision of this Agreement
is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.
e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the Parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Seller nor Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. Except as
provided herein, no provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the party to be charged with
enforcement.
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by express mail or delivered personally or
by courier (including a recognized overnight delivery service) and shall be
effective three days after being sent by express mail, or upon receipt, if
delivered personally or by courier (including a recognized overnight delivery
service), in each case addressed to a party. The addresses for such
communications shall be:
If to the Seller:
Attn.: Xxxxx Xxxxxxxxx, Chief Executive Officer
Terra Insight Corporation
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
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With a copy (which shall not constitute notice) to:
Attn.: Xxx Xxxxxxx, Esq.
Law Offices of Xxx Xxxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
If to Buyer:
At the address and facsimile number listed on the signature
page hereof.
Each party shall provide notice to the other party of any change in address.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties and their successors and assigns. Neither
the Seller nor Buyer shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other. Notwithstanding the
foregoing, subject to Section 2(f), any Buyer may assign its rights hereunder to
any person that purchases Securities in a private transaction from Buyer or to
any of its affiliates.
h. Third Party Beneficiaries. This Agreement is intended for the
benefit of the Parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
i. Further Assurances. 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.
j. No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the Parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
k. Survival. The representations, warranties and covenants made by
each of the Seller and Buyer in this Agreement, the annexes, schedules and
exhibits hereto and in each instrument, agreement and certificate entered into
and delivered by them pursuant to this Agreement, shall survive the Closing and
the consummation of the transactions contemplated hereby. In the event of a
breach or violation of any of such representations, warranties or covenants, the
party to whom such representations, warranties or covenants have been made shall
have all rights and remedies for such breach or violation available to it under
the provisions of this Agreement, irrespective of any investigation made by or
on behalf of such party on or prior to the Closing Date.
l. Indemnification.
(a) The Seller hereby agrees to indemnify and hold harmless
Buyer and its officers, directors, partners and members (collectively, the
"Buyer Indemnitees"), from and against any and all damages, and agrees to
reimburse Buyer Indemnitees for all reasonable out-of-pocket fees and expenses
(including the reasonable fees and expenses of legal counsel), in each case
promptly as incurred by the Buyer Indemnitees and to the extent arising out of
or in connection with:
(i) any material misrepresentation, omission of fact or
breach of any of its representations or warranties contained in this Agreement;
or
(ii) any material failure by it to perform in any
material respect any of its covenants, agreements, undertakings or obligations
set forth in this Agreement.
8
(b) Buyer hereby agrees to indemnify and hold harmless the Seller
and its affiliates, and their officers, directors, partners and members
(collectively, the "Company Indemnitees"), from and against any and all damages,
and agrees to reimburse the Company Indemnitees for all reasonable out-of-pocket
fees and expenses (including the reasonable fees and expenses of legal counsel),
in each case promptly as incurred by the Company Indemnitees and to the extent
arising out of or in connection with:
(i) any material misrepresentation, omission of fact or
breach of any of any Buyer's representations or warranties contained in this
Agreement; or
(ii) any material failure by Buyer to perform in any
material respect any of its covenants, agreements, undertakings or obligations
set forth in this Agreement.
(c) Promptly after receipt by either party hereto seeking
indemnification pursuant to this Section 8(m) (an "Indemnified Party") of
written notice of any investigation, claim, proceeding or other action in
respect of which indemnification is being sought (each, a "Claim"), the
Indemnified Party promptly shall notify the party from whom indemnification
pursuant to this Section 8(l) is being sought (the "Indemnifying Party") of the
commencement thereof; but the omission to so notify the Indemnifying Party shall
not relieve it from any liability that it otherwise may have to the Indemnified
Party, except to the extent that the Indemnifying Party is actually prejudiced
by such omission or delay. In connection with any Claim as to which both the
Indemnifying Party and the Indemnified Party are parties, the Indemnifying Party
shall be entitled to assume the defense thereof. Notwithstanding the assumption
of the defense of any Claim by the Indemnifying Party, the Indemnified Party
shall have the right to employ separate legal counsel and to participate in the
defense of such Claim, and the Indemnifying Party shall bear the reasonable
fees, out-of-pocket costs and expenses of such separate legal counsel to the
Indemnified Party if (and only if): (x) the Indemnifying Party shall have agreed
to pay such fees, out-of-pocket costs and expenses, (y) the Indemnified Party
reasonably shall have concluded that representation of the Indemnified Party and
the Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the
Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party, or (z) the Indemnifying Party shall have failed to
employ legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances other than as
described in clauses (x), (y) or (z) above, the fees, costs and expenses of such
legal counsel shall be borne exclusively by the Indemnified Party. Except as
provided above, the Indemnifying Party shall not, in connection with any Claim
in the same jurisdiction, be liable for the fees and expenses of more than one
firm of legal counsel for the Indemnified Party (together with appropriate local
counsel). The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party (which consent shall not unreasonably be withheld), settle
or compromise any Claim or consent to the entry of any judgment that does not
include an unconditional release of the Indemnified Party from all liabilities
with respect to such Claim or judgment.
[signature page follows]
9
IN WITNESS WHEREOF, the undersigned Buyer and the Seller have caused
this Agreement to be duly executed as of the date first above written.
SELLER: COMPUPRINT, INC.
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxx, Chief Executive Officer
TERRA INSIGHT CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxx, Chief Executive Officer
BUYER: BELHASA INTERNATIONAL CO. LLC
By: /s/ Xx. Xxxxx Saif Belhasa
-----------------------------------------
Name: Xx. Xxxxx Saif Belhasa
Title: Chairman
JURISDICTION OF INCORPORATION,
ORGANIZATION OR FORMATION:
Dubai - United Arab Emitrates
ADDRESS: Al - Ittehad Street, Belhasa
Building, X.X. Xxx 0000,
Xxxxx, Xxxxxx Xxxx Xxxxxxxx
TELEPHONE: + 000 (00) 000 00 00
FACSIMILE: + 000 (00) 000 00 00
10
EXHIBIT A
THIS WARRANT, AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS
OTHERWISE SET FORTH HEREIN, OR IN THE SECURITIES PURCHASE AGREEMENT PURSUANT TO
WHICH THIS WARRANT IS ISSUED, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE
SOLD, PLEDGED, TRANSFERRED, ASSIGNED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID
ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR
OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
COMPUPRINT, INC.
Common Stock Purchase Warrant
Right to Purchase 150,000 Shares of Common Stock
Exercise Price: at $1.25 per Share until the Six Month Anniversary
of the Issue Date, and thereafter, at $1.50
Issue Date: December 12, 2005
Expiration Date: December 12, 2006
CLASS A WARRANT
Warrant No. A-1
THIS CERTIFIES THAT, for value received pursuant to that certain
Securities Purchase Agreement (the "Securities Purchase Agreement") entered into
of even date by CompuPrint, Inc., a North Carolina corporation (the "Company")
and the Holder herein specified, Belhasa International Co. LLC (the "Holder"),
is entitled, upon the terms and subject to the conditions hereinafter set forth,
at any time on or after the above-specified Issue Date (the "Issue Date") and at
or prior to the close of business on December 12, 2006 (the "Expiration Date"),
but not thereafter, to subscribe for and purchase from the Company, up to
150,000 fully paid and nonassessable shares of the Company's Common Stock, par
value $0.0001 per share (the "Common Stock") at the Exercise Price (as defined
herein). The "Exercise Price" per share shall be $1.25 from the Issue Date until
the six month anniversary date of the Issue Date, and thereafter, shall be $1.50
until the Expiration Date. The Exercise Price and the number of shares for which
this Warrant is exercisable shall be subject to adjustment as provided herein.
In the event of any conflict between the terms of this Warrant and the
Securities Purchase Agreement pursuant to which this Warrant is issued, this
Warrant shall control. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth for such terms in the Securities Purchase
Agreement.
1. Title to Warrant. Prior to the Expiration Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto, properly endorsed.
2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, Liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).
3. Exercise of Warrant. Except as provided in Section 4 herein, exercise
of the purchase rights represented by this Warrant may be made at any time or
times on or after the Issue Date, and before the close of business on the
Expiration Date by the surrender of this Warrant and the Notice of Exercise Form
annexed hereto, duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the books of
the Company) and upon payment of the Exercise Price of the shares thereby
purchased by wire transfer or cashier's check drawn on a United States bank, the
holder of this Warrant shall be entitled to receive a certificate for the
11
number of shares of Common Stock so purchased. Certificates for shares purchased
hereunder shall be delivered to the Holder hereof within three (3) Trading Days
after the date on which this Warrant shall have been exercised as aforesaid.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and the Holder or any other
person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the date this Warrant has been
exercised by payment to, and receipt thereof by, the Company of the Exercise
Price and, to the extent applicable in cases of issuances to designees of the
named Holder of this Warrant, any transfer-tax reimbursements provided for under
the proviso in Section 6 hereof. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant, which new warrant shall in all other respects
be identical with this Warrant.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the Exercise Price.
5. Registration Rights. The initial Holder of this Warrant is entitled to
the benefit of certain registration rights as set forth in the Securities
Purchase Agreement with respect to shares of Common Stock as and when actually
issued to and purchased by such Holder pursuant to exercises of this Warrant
duly completed in accordance with the terms and conditions hereof.
6. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Holder of this Warrant, or in such name or names as may be directed by
the holder of this Warrant; provided, however, that in the event certificates
for shares of Common Stock are to be issued in a name other than the name of the
Holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto, duly executed by the Holder
hereof; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.
7. Closing of Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Warrant.
8. Transfer, Division and Combination.
(a) Subject to compliance with any applicable securities laws,
transfer of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company, together with
a written assignment of this Warrant substantially in the form attached hereto
duly executed by Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
warrant or warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. This Warrant, if
properly assigned, may be exercised by a new holder for the purchase of shares
of Common Stock without having a new warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by Holder or its agent or attorney. Subject to compliance
with Section 8(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
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(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 8.
(d) The Company agrees to maintain, at its aforesaid office, books
for the registration, and the registration of transfer, of the Warrants.
9. No Rights as Shareholder until Exercise. This Warrant does not entitle
the Holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price, the Warrant Shares so purchased shall
be deemed issued to such Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or payment.
10. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
12. Adjustments of Exercise Price and Number of Warrant Shares.
(a) Stock Splits, etc. The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In the
event that the Company shall (i) pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock to holders of its outstanding
Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares of Common Stock, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares of Common Stock, (iv) issue any
shares of its capital stock in a reclassification of the Common Stock, or (v)
otherwise transacts a similar adjustment to its class of Common Stock, then the
number of Warrant Shares purchasable upon exercise of this Warrant and the
Exercise Price immediately prior thereto shall be adjusted so that the holder of
this Warrant shall be entitled to receive the kind and number of Warrant Shares
or other securities of the Company which the holder would have owned or have
been entitled to receive had such Warrant been exercised in advance thereof.
Upon each such adjustment of the kind and number of Warrant Shares or other
securities of the Company which are purchasable hereunder, the holder of this
Warrant shall thereafter be entitled to purchase the number of Warrant Shares or
other securities resulting from such adjustment at an Exercise Price per Warrant
Share or other security obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares purchasable
pursuant hereto immediately prior to such adjustment and dividing by the number
of Warrant Shares or other securities of the Company resulting from such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
(b) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other
13
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 12.
For purposes of this Section 12, "common stock of the successor or acquiring
corporation" shall include voting stock of such corporation of any class which
is not preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
exercisable into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
(c) Adjustment for Spin Off. If, for any reason, prior to the
exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or a part of its
assets in a transaction (the "Spin Off") in which the Company does not receive
compensation for such business, operations or assets, but causes securities of
another entity (the "Spin Off Securities") to be issued to security holders of
the Company, then
(A) the Company shall cause (i) to be reserved Spin Off
Securities equal to the number thereof which would have been issued to the
Holder had all of the Holder's unexercised Warrants outstanding on the record
date (the "Record Date") for determining the amount and number of Spin Off
Securities to be issued to security holders of the Company (the "Outstanding
Warrants") been exercised as of the close of business on the trading day
immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to
be issued to the Holder on the exercise of all or any of the Outstanding
Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved
Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the
amount of the Outstanding Warrants then being exercised, and (II) the
denominator is the amount of the Outstanding Warrants; and
(B) the Exercise Price on the Outstanding Warrants shall be
adjusted immediately after consummation of the Spin Off by multiplying the
Exercise Price by a fraction (if, but only if, such fraction is less than 1.0),
the numerator of which is the average Closing Bid Price of the Common Stock for
the five (5) trading days immediately following the fifth trading day after the
Record Date, and the denominator of which is the average Closing Bid Price of
the Common Stock on the five (5) trading days immediately preceding the Record
Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price
with respect to the Outstanding Warrants after the Record Date.
(d) The adjustments pursuant to Section 12(a), (b) and (c) shall not
be applicable in connection with the actions or transactions effected in
accordance with Section 2(n) of the Securities Purchase Agreement, provided that
all similar warrants issued by the Company are adjusted in a like manner.
13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly send notice to the holder of this Warrant notice of such adjustment or
adjustments setting forth the number of Warrant Shares (and other securities or
property) purchasable upon the exercise of this Warrant and the Exercise Price
of such Warrant Shares (and other securities or property) after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such
14
adjustment was made. Such notice, in the absence of manifest error, shall be
conclusive evidence of the correctness of such adjustment.
15. Redemption. Prior to the Expiration Date, the Warrant shall be
redeemable, under the circumstances described in this Section, at the discretion
of the Company, for $.10 per warrant (the "Redemption Fee"). The Company's right
to redemption shall be exercisable commencing upon the day following the
twentieth consecutive business day during which the Company's common stock has
traded at prices of, or in excess of, $3.00 per share, subject to adjustment for
stock splits, dividends, subdivisions, reclassification and the like, with
weekly volume of such trading being in excess of the total number of shares
represented by this Warrant. In the event the Company exercises its right to
redeem the Warrants, the Company shall give the Holder written notice of such
decision. In the event that the Holder does not exercise all of the Warrant or
that the Company does not receive the Warrant from the Holder within 30 days
from the date on the notice to the Holder of the Company's intention to redeem
the Warrant, then the Warrant shall be deemed canceled, and the Holder shall not
be entitled to further exercise thereof or to the Redemption Fee.
16. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; then, in any one or more of such
cases, the Company shall give to the Holder (i) at least 30 days' prior written
notice of the date on which a record date shall be selected for such dividend,
distribution or right or for determining rights to vote in respect of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 30 days' prior
written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to the Holder at the last address of the Holder
appearing on the books of the Company and delivered in accordance with Section
18(d).
17. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the OTCBB or other
market upon which the Common Stock may be listed.
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
15
such actions as may be necessary or appropriate to protect the rights of the
Holder against impairment. Without limiting the generality of the foregoing, the
Company will (a) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (b)
use its best efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.
18. Miscellaneous.
(a) Jurisdiction. This Warrant shall be governed by the laws of the
State of New York without regard to its conflict of law principles or rules and
enforced in the city, state or federal courts located in New York County in the
State of New York.
(b) Restrictions. The holder hereof acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws as
referenced in the Securities Purchase Agreement.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Holder shall operate
as a waiver of such right or otherwise prejudice the Holder's rights, powers or
remedies, notwithstanding all rights hereunder terminate on the Expiration Date.
If the Company fails to comply with any provision of this Warrant, the Company
shall pay to the Holder such amounts as shall be sufficient to cover any costs
and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof by the Company shall be
delivered in accordance with the notice provisions of the Securities Purchase
Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of the Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(f) Remedies. The Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant.
(g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of the Holder. The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant and shall
be enforceable by any such Holder or holder of Warrant Shares.
(h) Indemnification. The Company agrees to indemnify and hold
harmless the Holder from and against any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees,
expenses and disbursements of any kind which may be imposed upon, incurred by or
asserted against the Holder in any manner relating to or arising out of any
failure by the Company to perform or observe in any material respect any of its
covenants, agreements, undertakings or obligations set forth in this Warrant;
provided, however, that the Company will not be liable hereunder to the extent
that any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, attorneys' fees, expenses or disbursements are
found in a final non-appealable judgment by a court to have resulted from the
holder's negligence, bad faith or willful misconduct in its capacity as a
stockholder or warrant holder of the Company.
(i) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
16
(j) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.
(k) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
[signature page follows]
17
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: December 12, 2005
COMPUPRINT, INC.
By: /s/ Xxx Xxxxxxx
------------------------------
Xxx Xxxxxxx, Managing Director
18
NOTICE OF EXERCISE
To: CompuPrint, Inc.
The undersigned hereby elects to purchase ________ shares of Common Stock
(the "Common Stock"), at an exercise price of $_____ per share, of CompuPrint,
Inc. pursuant to the terms of the attached Warrant, Warrant No. [____], and
tenders herewith payment of the exercise price in full, in the amount of
$_____________, together with all applicable transfer taxes, if any.
Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
Dated:
---------------------
------------------------------
Signature
19
ASSIGNMENT FORM
(To assign the foregoing warrant, execute this form and supply required
information. Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to______________________________________________ whose
address is _______________________________________. Such assignee has signed an
acknowledgement of the restrictions on transfer and other terms stated in the
related Securities Purchase Agreement, and a copy thereof, to the satisfaction
of the Company has been or will be provided to the Company prior to the
effectiveness of such assignment.
Dated:
---------------------
Holder's Signature:
-----------------------------
Holder's Address:
-----------------------------
-----------------------------
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
20
EXHIBIT B
THIS WARRANT, AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS
OTHERWISE SET FORTH HEREIN, OR IN THE SECURITIES PURCHASE AGREEMENT PURSUANT TO
WHICH THIS WARRANT IS ISSUED, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE
SOLD, PLEDGED, TRANSFERRED, ASSIGNED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID
ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR
OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
COMPUPRINT, INC.
Common Stock Purchase Warrant
Right to Purchase 2,000,000 Shares of Common Stock
Exercise Price: at $1.15 per Share until the Three Month
Anniversary of the Issue Date, and thereafter, at
$1.50
Exercise Condition: The initial exercise of this Warrant must be for at
least 1,000,000 shares
Issue Date: December 12, 2005
Expiration Date: June 12, 2006
CLASS B WARRANT
Warrant No. B-1
THIS CERTIFIES THAT, for value received pursuant to that certain
Securities Purchase Agreement (the "Securities Purchase Agreement") entered into
of even date by CompuPrint, Inc., a North Carolina corporation (the "Company")
and the Holder herein specified, Belhasa International Co. LLC (the "Holder"),
is entitled, upon the terms and subject to the conditions hereinafter set forth,
at any time on or after the above-specified Issue Date (the "Issue Date") and at
or prior to the close of business on June 12, 2006 (the "Expiration Date"), but
not thereafter, to subscribe for and purchase from the Company, up to 2,000,000
fully paid and nonassessable shares of the Company's Common Stock, par value
$0.0001 per share (the "Common Stock") at the Exercise Price (as defined
herein). The "Exercise Price" per share shall be $1.15 from the Issue Date until
the three month anniversary date of the Issue Date, and thereafter, shall be
$1.50 until the Expiration Date. The Exercise Price and the number of shares for
which this Warrant is exercisable shall be subject to adjustment as provided
herein. In the event of any conflict between the terms of this Warrant and the
Securities Purchase Agreement pursuant to which this Warrant is issued, this
Warrant shall control. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth for such terms in the Securities Purchase
Agreement.
1. Title to Warrant. Prior to the Expiration Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto, properly endorsed.
2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, Liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).
3. Exercise of Warrant. Except as provided in Section 4 herein, exercise
of the purchase rights represented by this Warrant may be made at any time or
times on or after the Issue Date, and before the close of business on the
Expiration Date by the surrender of this Warrant and the Notice of Exercise Form
annexed hereto, duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the books of
the
21
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank, the holder of
this Warrant shall be entitled to receive a certificate for the number of shares
of Common Stock so purchased. Certificates for shares purchased hereunder shall
be delivered to the Holder hereof within three (3) Trading Days after the date
on which this Warrant shall have been exercised as aforesaid. This Warrant shall
be deemed to have been exercised and such certificate or certificates shall be
deemed to have been issued, and the Holder or any other person so designated to
be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date this Warrant has been exercised by
payment to, and receipt thereof by, the Company of the Exercise Price and, to
the extent applicable in cases of issuances to designees of the named Holder of
this Warrant, any transfer-tax reimbursements provided for under the proviso in
Section 6 hereof. If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new warrant shall in all other respects be identical with this Warrant.
Notwithstanding anything to the contrary in this Warrant, the
initial exercise of this Warrant must be for the purchase of at least 1,000,000
shares of Common Stock.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the Exercise Price.
5. Registration Rights. The initial Holder of this Warrant is entitled to
the benefit of certain registration rights as set forth in the Securities
Purchase Agreement with respect to shares of Common Stock as and when actually
issued to and purchased by such Holder pursuant to exercises of this Warrant
duly completed in accordance with the terms and conditions hereof.
6. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Holder of this Warrant, or in such name or names as may be directed by
the holder of this Warrant; provided, however, that in the event certificates
for shares of Common Stock are to be issued in a name other than the name of the
Holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto, duly executed by the Holder
hereof; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.
7. Closing of Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Warrant.
8. Transfer, Division and Combination.
(a) Subject to compliance with any applicable securities laws,
transfer of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company, together with
a written assignment of this Warrant substantially in the form attached hereto
duly executed by Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
warrant or warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. This Warrant, if
properly assigned, may be exercised by a new holder for the purchase of shares
of Common Stock without having a new warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by Holder or its agent or attorney. Subject to compliance
with Section
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8(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 8.
(d) The Company agrees to maintain, at its aforesaid office, books
for the registration, and the registration of transfer, of the Warrants.
9. No Rights as Shareholder until Exercise. This Warrant does not entitle
the Holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price, the Warrant Shares so purchased shall
be deemed issued to such Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or payment.
10. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
12. Adjustments of Exercise Price and Number of Warrant Shares.
(a) Stock Splits, etc. The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In the
event that the Company shall (i) pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock to holders of its outstanding
Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares of Common Stock, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares of Common Stock, (iv) issue any
shares of its capital stock in a reclassification of the Common Stock, or (v)
otherwise transacts a similar adjustment to its class of Common Stock, then the
number of Warrant Shares purchasable upon exercise of this Warrant and the
Exercise Price immediately prior thereto shall be adjusted so that the holder of
this Warrant shall be entitled to receive the kind and number of Warrant Shares
or other securities of the Company which the holder would have owned or have
been entitled to receive had such Warrant been exercised in advance thereof.
Upon each such adjustment of the kind and number of Warrant Shares or other
securities of the Company which are purchasable hereunder, the holder of this
Warrant shall thereafter be entitled to purchase the number of Warrant Shares or
other securities resulting from such adjustment at an Exercise Price per Warrant
Share or other security obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares purchasable
pursuant hereto immediately prior to such adjustment and dividing by the number
of Warrant Shares or other securities of the Company resulting from such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
(b) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other
23
subscription or purchase rights) in addition to or in lieu of common stock of
the successor or acquiring corporation ("Other Property"), are to be received by
or distributed to the holders of Common Stock of the Company, then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
number of shares of common stock of the successor or acquiring corporation or of
the Company, if it is the surviving corporation, and Other Property receivable
upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation
(if other than the Company) shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of this
Warrant to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for adjustments of shares of Common Stock
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include voting stock of such corporation of any class which is not preferred as
to dividends or assets over any other class of stock of such corporation and
which is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are exercisable into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
(c) Adjustment for Spin Off. If, for any reason, prior to the
exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or a part of its
assets in a transaction (the "Spin Off") in which the Company does not receive
compensation for such business, operations or assets, but causes securities of
another entity (the "Spin Off Securities") to be issued to security holders of
the Company, then
(A) the Company shall cause (i) to be reserved Spin Off
Securities equal to the number thereof which would have been issued to the
Holder had all of the Holder's unexercised Warrants outstanding on the record
date (the "Record Date") for determining the amount and number of Spin Off
Securities to be issued to security holders of the Company (the "Outstanding
Warrants") been exercised as of the close of business on the trading day
immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to
be issued to the Holder on the exercise of all or any of the Outstanding
Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved
Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the
amount of the Outstanding Warrants then being exercised, and (II) the
denominator is the amount of the Outstanding Warrants; and
(B) the Exercise Price on the Outstanding Warrants shall be
adjusted immediately after consummation of the Spin Off by multiplying the
Exercise Price by a fraction (if, but only if, such fraction is less than 1.0),
the numerator of which is the average Closing Bid Price of the Common Stock for
the five (5) trading days immediately following the fifth trading day after the
Record Date, and the denominator of which is the average Closing Bid Price of
the Common Stock on the five (5) trading days immediately preceding the Record
Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price
with respect to the Outstanding Warrants after the Record Date.
(d) The adjustments pursuant to Section 12(a), (b) and (c) shall not
be applicable in connection with the actions or transactions effected in
accordance with Section 2(n) of the Securities Purchase Agreement, provided that
all similar warrants issued by the Company are adjusted in a like manner.
13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly send notice to the holder of this Warrant notice of such adjustment or
adjustments
24
setting forth the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares (and other securities or property) after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. Such notice, in the absence
of manifest error, shall be conclusive evidence of the correctness of such
adjustment.
15. Redemption. Prior to the Expiration Date, the Warrant shall be
redeemable, under the circumstances described in this Section, at the discretion
of the Company, for $.10 per warrant (the "Redemption Fee"). The Company's right
to redemption shall be exercisable commencing upon the day following the
twentieth consecutive business day during which the Company's common stock has
traded at prices of, or in excess of, $3.00 per share, subject to adjustment for
stock splits, dividends, subdivisions, reclassification and the like, with
weekly volume of such trading being in excess of the total number of shares
represented by this Warrant. In the event the Company exercises its right to
redeem the Warrants, the Company shall give the Holder written notice of such
decision. In the event that the Holder does not exercise all of the Warrant or
that the Company does not receive the Warrant from the Holder within 30 days
from the date on the notice to the Holder of the Company's intention to redeem
the Warrant, then the Warrant shall be deemed canceled, and the Holder shall not
be entitled to further exercise thereof or to the Redemption Fee.
16. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; then, in any one or more of such
cases, the Company shall give to the Holder (i) at least 30 days' prior written
notice of the date on which a record date shall be selected for such dividend,
distribution or right or for determining rights to vote in respect of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 30 days' prior
written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to the Holder at the last address of the Holder
appearing on the books of the Company and delivered in accordance with Section
18(d).
17. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the OTCBB or other
market upon which the Common Stock may be listed.
25
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of the
Holder against impairment. Without limiting the generality of the foregoing, the
Company will (a) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (b)
use its best efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.
18. Miscellaneous.
(a) Jurisdiction. This Warrant shall be governed by the laws of the
State of New York without regard to its conflict of law principles or rules and
enforced in the city, state or federal courts located in New York County in the
State of New York.
(b) Restrictions. The holder hereof acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws as
referenced in the Securities Purchase Agreement.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Holder shall operate
as a waiver of such right or otherwise prejudice the Holder's rights, powers or
remedies, notwithstanding all rights hereunder terminate on the Expiration Date.
If the Company fails to comply with any provision of this Warrant, the Company
shall pay to the Holder such amounts as shall be sufficient to cover any costs
and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof by the Company shall be
delivered in accordance with the notice provisions of the Securities Purchase
Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of the Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(f) Remedies. The Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant.
(g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of the Holder. The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant and shall
be enforceable by any such Holder or holder of Warrant Shares.
(h) Indemnification. The Company agrees to indemnify and hold
harmless the Holder from and against any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees,
expenses and disbursements of any kind which may be imposed upon, incurred by or
asserted against the Holder in any manner relating to or arising out of any
failure by the Company to perform or observe in any material respect any of its
covenants, agreements, undertakings or obligations set forth in this Warrant;
provided, however, that the Company will not be liable hereunder to the extent
that any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, attorneys' fees, expenses or disbursements are
found in a final non-appealable judgment by a court to have resulted from the
holder's negligence, bad faith or willful misconduct in its capacity as a
stockholder or warrant holder of the Company.
26
(i) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
(j) Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.
(k) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
[signature page follows]
27
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.
Dated: December 12, 2005
COMPUPRINT, INC.
By: /s/ Xxx Xxxxxxx
------------------------------
Xxx Xxxxxxx, Managing Director
28
NOTICE OF EXERCISE
To: CompuPrint, Inc.
The undersigned hereby elects to purchase ________ shares of Common Stock
(the "Common Stock"), at an exercise price of $_____ per share, of CompuPrint,
Inc. pursuant to the terms of the attached Warrant, Warrant No. [____], and
tenders herewith payment of the exercise price in full, in the amount of
$_____________, together with all applicable transfer taxes, if any.
Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
Dated:
---------------------
------------------------------
Signature
29
ASSIGNMENT FORM
(To assign the foregoing warrant, execute this form and supply required
information. Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to________________________________________ whose address is
__________________________________. Such assignee has signed an acknowledgement
of the restrictions on transfer and other terms stated in the related Securities
Purchase Agreement, and a copy thereof, to the satisfaction of the Company has
been or will be provided to the Company prior to the effectiveness of such
assignment.
Dated:
---------------------
Holder's Signature:
-----------------------------
Holder's Address:
-----------------------------
-----------------------------
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
30
