WARRANT CLARIFICATION AGREEMENT
This
Warrant Clarification Agreement (this “Agreement”), dated as of __________,
2008, to the Restated Warrant Agreement, made as of August 14, 2007 (the
“Warrant Agreement”) is made and entered into by and between NeoStem, Inc., a
Delaware corporation with offices at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (“Company”) and Continental Stock Transfer & Trust Company, a New York
corporation, with offices at 00 Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
(“Warrant Agent”).
WHEREAS,
Section
3.3.2 of the Warrant Agreement provides that Company shall not be obligated
to
deliver any securities pursuant to the exercise of a Warrant unless a
registration statement under the Securities Act of 1933, as amended
(‘‘Securities Act’’), with respect to the Common Stock is
effective.
WHEREAS,
the
Warrant Agreement does not contain any provisions granting registered holders
of
Warrants the right to receive any cash or other consideration or otherwise
“net
cash settle” the Warrants in the event securities cannot be issued upon exercise
of the Warrants.
WHEREAS,
in
furtherance of the foregoing, the Company’s final prospectus, dated July 16,
2007, indicated that (i) for a warrant holder to be able to exercise their
warrant, the shares of common stock underlying the warrant must be covered
by an
effective and current registration statement and qualify or be exempt under
the
securities laws of the state or other jurisdiction in which the holder lives,
(ii) the Company cannot assure prospective warrant holders that it will continue
to maintain a current registration statement relating to the shares of common
stock underlying the warrants or that an exemption from registration or
qualification will be available throughout their term, and (iii) this may have
an adverse effect on demand for the warrants and the prices that could be
obtained from reselling them.
WHEREAS,
as a
result of certain questions that have arisen regarding the accounting treatment
applicable to the warrants, the parties hereto deem it necessary and desirable
to amend the Warrant Agreement to clarify and confirm that the registered
holders do not have the right to receive a net cash settlement in the event
the
Company does not maintain a current prospectus relating to the common stock
issuable upon exercise of the warrants at the time such warrants are
exercisable.
NOW,
THEREFORE,
in
consideration of the mutual agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree
to amend the Warrant Agreement as set forth herein.
1. Warrant
Agreement.
The
Warrant Agreement is hereby amended by adding the following sentence as the
penultimate sentence of Section 3.3.2:
‘‘Furthermore,
if the Company is unable to deliver any securities pursuant to the exercise
of a
Warrant as a result of the foregoing situation, the Company will have no
obligation to pay such registered holder any cash or other consideration or
otherwise ‘‘net cash-settle’’ the Warrant.’’
2. Miscellaneous.
(a) Governing
Law.
The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction. The Company hereby
agrees that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement shall be brought and enforced in the
courts of the State of New York or the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any such process or summons to be served upon the Company may be served
by transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
9.2 of the Warrant Agreement. Such mailing shall be deemed personal service
and
shall be legal and binding upon the Company in any action, proceeding or
claim.
(b) Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and to their respective successors and assigns.
(c) Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding between the parties
as to the subject matter thereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among them.
Except as set forth in this Agreement, provisions of the Warrant Agreement
which
are not inconsistent with this Agreement shall remain in full force and effect.
This Agreement may be executed in counterparts.
(d) Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability
of any term or provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof. Furthermore, in
lieu
of any such invalid or unenforceable term or provision, the parties hereto
intend that there shall be added as part of this Agreement a provision as
similar in terms to such invalid or unenforceable provision as may be possible
and be valid and enforceable.
IN
WITNESS WHEREOF, the parties hereto have executed this Warrant Clarification
Agreement as of the date first written above.
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By:
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Xxxxx
X. Xxxxx, Chief Executive Officer
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CONTINENTAL
STOCK TRANSFER &
TRUST
COMPANY
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By:
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