ASSIGNMENT AGREEMENT
Exhibit 10.12
THIS
ASSIGNMENT AGREEMENT
(this "Agreement"),
is made
on November ___, 2007,
(the “Effective
Date”) STARAIM
ENTERPIRSES LTD., a limited liability Company duly incorporated and
validly existing under the laws of the Republic of Cyprus (the "Assignor"),
and XENTENIAL HOLDINGS LTD.,
a
limited liability Company duly incorporated and validly existing under the
laws
of the Republic of Cyprus (the “Assignee”).
WHEREAS,
Assignor is the legal
and beneficial owner of that certain convertible debenture of Smartire Systems,
Inc., a company existing under the laws of the Yukon Territory (the “Company”) held
by the
Assignor in the face amount of $2,000,000 under which there remains an
outstanding principal balance of $1,770,000 plus outstanding and
accrued attached hereto as Exhibit A (the “Debenture”) and that
certain warrant to purchase four million one hundred sixty two thousand five
hundred (4,162,500) shares of the Company attached hereto as Exhibit B (the
“Warrant”),
which was acquired by the Assignor pursuant to the Amended and Restated
Securities Purchase Agreement (“SPA”) between
the
Company and Assignor, dated December 30, 2005;
WHEREAS,
Assignor desires to
assign to Assignee and Assignee desires to accept such assignment from Assignor
of the Debenture and Warrant and its rights as a holder of the Debenture
and the
Warrant as well as all of Assignor’s rights and obligations pursuant to the all
of the transaction documents issued in connection with the SPA and the Debenture
including but not limited to the Amended Registration Rights Agreement between
the Company and Assignor, dated December 30, 2005 (the “RRA”), and
the
Amended and Restated Irrevocable Transfer Agent Instructions between the
Company
and Assignor, dated December 30, 2005 (the “ITAI”) (collectively
the SPA, CD, Warrant, RRA, and ITAI shall be referred to as the “Transaction
Documents”) on the basis of the representations, warranties and
agreements contained in this Agreement, and upon the terms but subject to
the
conditions set forth herein; and
NOW,
THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
1) Assignment. For
the purchase price as set forth on Schedule I attached hereto,
the Assignor hereby absolutely, irrevocably and unconditionally sells, assigns,
conveys, contributes and transfers to the Assignee the Debenture and the
Warrant
as set forth on Schedule
I and all of its rights and benefits thereunder and conferred therein
as
well as all of the Assignor’s rights, obligations and benefits under the SPA,
RRA and ITAI and the Assignee accepts such assignment as of the date
hereof.
This
assignment is made free and clear of any and all claims, liens, demands,
restrictions or encumbrances of any kind whatsoever.
2) Delivery
of Debenture and
Warrant, Closing. The assignment and transfer of the
Debenture and Warrant as herein contemplated and all actions required to
be
completed hereunder shall take place on a date hereof (the “Closing
Date”). On the Closing Date the Assignee shall pay to the
Assignor the full Purchase Price in immediately available funds in US Dollars
and upon receipt of the Purchase Price the Assignor shall deliver to the
Assignee the Debenture and Warrant which are the subject of this Agreement
duly
endorsed for transfer to the Assignor.
3) Additional
Documents. The Assignor and the Company agree to take
such further action and to execute and deliver, or cause to be executed and
delivered, any and all other documents which are, in the opinion of the Assignee
or its counsel, necessary to carry out the terms and conditions of this
Assignment.
4) Effective
Date and
Counterpart Signature. This Agreement shall be
effective as of the Closing Date. This Agreement, and acceptance of
same, may be executed in one or more counterparts, each of which shall be
deemed
an original, but all of which together shall constitute one and the same
instrument. Confirmation of execution by telex or by telecopy or
telefax of a facsimile signature page shall be binding upon that party so
confirming.
5) Representations
and
Warranties of the Assignor.
The
Assignor hereby warrants and represents as follows:
a) Organization;
Authority
The Assignor is an entity duly organized, validly existing and in
good
standing under the laws of the jurisdiction of its organization with full
right,
corporate, partnership or other applicable power and authority to enter into
and
to consummate the transactions contemplated by this Agreement and otherwise
to
carry out its obligations thereunder; and the execution, delivery and
performance by the Assignor of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate, partnership or
similar action on the part of the Assignor. This Agreement, when executed
and
delivered by the Assignor, will constitute a valid and legally binding
obligation of the Assignor, enforceable against the Assignor in accordance
with
its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and any other laws of
general
application affecting enforcement of creditors’ rights generally, (b) as limited
by laws relating to the availability of specific performance, injunctive
relief,
or other equitable remedies, or (c) to the extent the indemnification provisions
contained herein may be limited by federal or state securities
laws.
b) Ownership
of Debenture and
Warrant. Assignor is the sole owner and holder of the
Debenture and Warrant to be transferred hereby. There are no liens,
claims or encumbrances affecting any of the Debenture and Warrant except
with
respect to restrictions on the further transfer of the Debenture and Warrant
as
may be imposed by the Securities Act of 1933, as amended. The
Debenture and Warrant have been held by the Assignor exclusively since their
acquisition and the Assignor has not pledged or created any lien with respect
to
the Debenture and Warrant during the term of its ownership.
c) Consents. No
authorization, consent, approval or other order of, or declaration to or
filing
with, any governmental agency or body or other person is required for the
valid
authorization, execution, delivery and performance by the Assignor of this
Agreement and the consummation of the transactions contemplated
hereby.
6) Representations
and
Warranties of the Assignee.
a) Organization;
Authority. The Assignee, if not a natural person, is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate, partnership
or
other applicable power and authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out its
obligations thereunder, and the execution, delivery and performance by the
Assignee of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of the
Assignee. This Agreement, when executed and delivered by the
Assignee, will constitute a valid and legally binding obligation of the
Assignee, enforceable against the Assignee in accordance with its terms,
except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and any other laws of general application affecting
enforcement of creditors’ rights generally, (b) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, or (c) to the extent the indemnification provisions contained herein
may be limited by federal or state securities laws.
b) Investment
Intent. The Assignee is acquiring the Debenture and the
Warrant for investment for his own account, not as a nominee or agent, and
not
with a view to, or for sale in connection with, any distribution, resale
or
public offering of such Warrants or any part thereof in violation of the
United
States Securities and Exchange Act of 1933, as amended (“Securities
Act”). The Assignee does not presently have any contract,
undertaking, agreement or arrangement with any entity, organization or
individual (each a “Person”) to sell,
tansfer or grant participations to any Person with respect to the Debenture
and
the Warrant.
c) General
Solicitation. The Assignee is not accepting such Assignment as
a result of any advertisement, article, notice or other communication regarding
the Warrants published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement.
d) Consents. No
authorization, consent, approval or other order of, or declaration to or
filing
with, any governmental agency or body or other person is required for the
valid
authorization, execution, delivery and performance by the Assignor of this
Agreement and the consummation of the transactions contemplated
hereby.
e) The
Assignee hereby acknowledges that the Debenture and the Warrant, and the
shares
issuable there under, may only be disposed of in compliance with United States
Federal and State Securities Laws. The Assignee further acknowledges
that in connection with any transfer of the Debenture and Warrant subsequent
to
the date hereof and other than pursuant to an effective registration statement,
the Company and/or the Company’s transfer agent may require an opinion of
counsel, the form and substance of which opinion shall be reasonably
satisfactory to the Company and/or the Company’s transfer agent, as
applicable.
f) Stop
Transfer
Notices. The Assignee agrees that, in order to ensure
compliance with the restrictions referred to herein, appropriate “stop transfer”
instructions may be issued to the Company’s transfer agent.
7) Governing
Law; Submission to
Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT
REGARD
TO CONFLICT OF LAW PRINCIPLES. EACH PARTY AGREES THAT ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT SHALL
BE
BROUGHT IN A U.S. FEDERAL OR STATE COURT OF COMPETENT JURISDICTION SITTING
IN
THE XXXXXX COUNTY, IN THE STATE OF NEW JERSEY. EACH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE JURISDICTION OF SUCH COURT
AND
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY DEFENSE OF AN INCONVENIENT
FORUM OR A LACK OF PERSONAL JURISDICTION TO THE MAINTENANCE OF ANY ACTION
OR
PROCEEDING AND ANY RIGHT OF JURISDICTION OR VENUE ON ACCOUNT OF THE PLACE
OF
RESIDENCE OR DOMICILE OF ANY PARTY HERETO. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
8) Amendments. No
provision hereof may be waived or modified other than by an instrument in
writing signed by the party against whom enforcement is sought.
9) Severability. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction
or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
10) Waiver
and
Consent. The Company hereby waives compliance with 2(f)
of the SPA and Section 7 of the Warrant in connection with this Agreement
and
consents to the assignment of the Debenture and Warrant and all rights and
interests that the Assignor has under the Transaction Documents from the
Assignor to the Assignee.
[SIGNATURE
PAGE TO IMMEDIATELY
FOLLOW]
IN
WITNESS WHEREOF, the
parties hereto have executed this Agreement the day and year first above
written.
ASSIGNOR
STARAIM
ENTERPIRSES
LTD.
By: /s/Xxxxx
Xxxxxxx
Name: Xxxxx
Xxxxxxx
Title:
Director
By:
Name:
Title: Director
ASSIGNEE
XENTENIAL
HOLDINGS
LTD.
By: /s/Xxxxx
Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title: Director
By:
Name:
Title: Director
COMPANY
By: /s/Xxxx
Xxxxxxxxxxx
Name: Xxxx
Xxxxxxxxxxx
Title: Chief
Financial Officer
SCHEDULE
I
|
Assignee
Name
|
Company
Name
|
Convertible
Debenture
|
Warrant
|
Purchase
Price
|
|
Xentential
Holdings, Ltd.
|
|
Debenture
No.3
Dated
December 30, 2005
|
Warrant
No. 001
Dated
December 30, 2005
Warrant
Shares 4,162,500
|
$1,770,000
|
|
Exhibit
A
|
||||||||||||||||||||
|
IInterest
on Convertible Debentures
|
||||||||||||||||||||
|
Nov
30, 2007
|
||||||||||||||||||||
|
Interest
|
Number
|
Total
|
||||||||||||||||||
|
Gross
|
rate
per
|
of
days
|
#
of
|
|||||||||||||||||
|
Proceeds
|
Date
|
annum
|
in
the year
|
days
|
TOTAL
|
|||||||||||||||
|
USD
|
From
|
To
|
USD
|
|||||||||||||||||
|
2,000,000
|
June
23 05
|
Sept
19 2007
|
10 | % |
360
|
806
|
447,778
|
|||||||||||||
|
1,885,000
|
Sept
20 07
|
Sept
28 2007
|
10 | % |
360
|
8
|
4,189
|
|||||||||||||
|
1,770,000
|
Sept
28 2007
|
November
30 2007
|
10 | % |
360
|
64
|
31,467
|
|||||||||||||
|
Interest
paid ($1M allocated to $30M)
|
Oct
2005
|
(66,667 | ) | |||||||||||||||||
|
416,767
|
||||||||||||||||||||
Exhibit B
WARRANT
THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL
IN A FORM
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED
UNDER
SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144
UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT.
AMENDED
AND
RESTATED
Warrant
to Purchase Common
Stock
Warrant
No.: 001 Number of Shares: 4,162,500
Date
of
Issuance: December _, 2005
Smartire
Systems Inc., a
corporation organized and existing under the laws of the Yukon
Territory (the “Company”), hereby
certifies that, for Ten United States Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Staraim Enterprises Limited (“Staraim”), a corporation organized
under the laws of Cyprus, the registered holder hereof or its permitted
assigns,
is entitled, subject to the terms set forth below, to purchase from the
Company
upon surrender of this Warrant, at any time or times on or after the date
hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as
defined herein) four million one hundred sixty two thousand five hundred
sixty
six (4,162,500) fully paid and nonassessable shares of Common
Stock (as defined herein) of the Company (the “Warrant Shares”) at
the exercise price per share provided in Section 1(b) below or as
subsequently adjusted; provided, however, that in no event shall the holder
be
entitled to exercise this Warrant for a number of Warrant Shares in excess
of
that number of Warrant Shares which, upon giving effect to such exercise,
would
cause the aggregate number of shares of Common Stock beneficially owned
by the
holder and its affiliates to exceed 4.99% of the outstanding shares of
the
Common Stock following such exercise, except within sixty (60) days of
the
Expiration Date. For purposes of the foregoing proviso, the aggregate
number of shares of Common Stock beneficially owned by the holder and its
affiliates shall include the number of shares of Common Stock issuable
upon
exercise of this Warrant with respect to which the determination of such
proviso
is being made, but shall exclude shares of Common Stock which would be
issuable
upon (i) exercise of the remaining, unexercised Warrants beneficially owned
by the holder and its affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
beneficially owned by the holder and its affiliates (including, without
limitation, any convertible notes or preferred stock) subject to a limitation
on
conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes
of this paragraph, beneficial ownership shall be calculated in accordance
with
Section 13(d) of the Securities Exchange Act of 1934, as amended. For
purposes of this Warrant, in determining the number of outstanding shares
of
Common Stock a holder may rely on the number of outstanding shares of Common
Stock as reflected in (1) the Company’s most recent Form 10-QSB or Form 10-KSB,
as the case may be, (2) a more recent public announcement by the Company
or (3)
any other notice by the Company or its transfer agent setting forth the
number
of shares of Common Stock outstanding. Upon the written request of
any holder, the Company shall promptly, but in no event later than one
(1)
Business Day following the receipt of such notice, confirm in writing to
any
such holder the number of shares of Common Stock then outstanding. In
any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the exercise of Warrants (as defined below) by such
holder and its affiliates since the date as of which such number of outstanding
shares of Common Stock was reported.
Section
1.
(a) This
Warrant is the common stock purchase warrant (the “Warrant”) issued
in
connection with an amended and restated convertible debenture dated December
_,
2005 by and between the Company and Staraim (the “Convertible
Debenture”).
(b) Definitions. The
following words and terms as used in this Warrant shall have the following
meanings:
(i) “Approved
Stock Plan”
means any employee benefit plan which has been approved by the Board
of
Directors of the Company, pursuant to which the Company’s securities may be
issued to any employee, officer or director for services provided to the
Company.
(ii) “Business
Day” means
any day other than Saturday, Sunday or other day on which commercial banks
in
the City of New York are authorized or required by law to remain
closed.
(iii) “Closing
Bid Price”
means the closing bid price of Common Stock as quoted on the Principal
Market
(as reported by Bloomberg Financial Markets (“Bloomberg”) through
its “Volume at Price” function).
(iv) “Common
Stock” means
(i) the Company’s common stock, no par value per share, and (ii) any
capital stock into which such Common Stock shall have been changed or any
capital stock resulting from a reclassification of such Common
Stock.
(v) “Excluded
Securities”
means, provided such security is issued at a price which is greater
than or
equal to the arithmetic average of the Closing Bid Prices of the Common
Stock
for the ten (10) consecutive trading days immediately preceding the date
of
issuance, any of the following: (a) any issuance by the Company of securities
in
connection with a strategic partnership or a joint venture (the primary
purpose
of which is not to raise equity capital), (b) any issuance by the Company
of
securities as consideration for a merger or consolidation or the acquisition
of
a business, product, license, or other assets of another person or entity,
(c)
any shares of capital stock or other securities exercisable for or convertible
into shares of capital stock pursuant to a commitment arising on or prior
to the
date hereof and (d) options to purchase shares of Common Stock, provided
(I)
such options are issued after the date of this Warrant to employees of
the
Company within thirty (30) days of such employee’s starting his employment with
the Company, and (II) the exercise price of such options is not less than
the
Closing Bid Price of the Common Stock on the date of issuance of such
option.
(vi) “Expiration
Date”
means June 23, 2010 or, if such date falls on a Saturday, Sunday
or other day on
which banks are required or authorized to be closed in the City of New
York or
the State of New York or on which trading does not take place on the Principal
Exchange or automated quotation system on which the Common Stock is traded
(a
“Holiday”), the
next date that is not a Holiday.
(vii) “Issuance
Date” means
June 23, 2005.
(viii) “Options”
means
any
rights, warrants or options to subscribe for or purchase Common Stock or
Convertible Securities.
(ix) “Other
Securities”
means (i) those options and warrants of the Company issued prior to, and
outstanding on, the Issuance Date of this Warrant, (ii) the shares of Common
Stock issuable on exercise of such options and warrants, provided such
options
and warrants are not amended after the Issuance Date of this Warrant and
(iii) the shares of Common Stock issuable upon exercise of this
Warrant.
(x) “Person”
means
an
individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a government or
any
department or agency thereof.
(xi) “Principal
Market”
means the New York Stock Exchange, the American Stock Exchange,
the Nasdaq
National Market, the Nasdaq SmallCap Market, whichever is at the time the
principal trading exchange or market for such security, or the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg or, if no bid or sale information is reported for such security
by
Bloomberg, then the average of the bid prices of each of the market makers
for
such security as reported in the “pink sheets” by the National Quotation Bureau,
Inc.
(xii) “Registration
Rights”
the shares of the Company’s Common Stock underlying this warrant shall have
“piggy-back” and demand registration rights.
(xiii) “Securities
Act” means
the Securities Act of 1933, as amended.
(xiv) “Warrant”
means
this
Warrant and all Warrants issued in exchange, transfer or replacement
thereof.
(xv) “Warrant
Exercise
Price” shall be Sixteen Cents ($0.16) or as subsequently adjusted as
provided in Section 8 hereof.
(xvi) “Warrant
Shares” means
the shares of Common Stock issuable at any time upon exercise of this
Warrant.
(c) Other
Definitional Provisions.
(i) Except
as
otherwise specified herein, all references herein (A) to the Company shall
be deemed to include the Company’s successors and (B) to any applicable law
defined or referred to herein shall be deemed references to such applicable
law
as the same may have been or may be amended or supplemented from time to
time.
(ii) When
used
in this Warrant, the words “herein”, “hereof”,
and “hereunder”
and words of similar import,
shall refer to this Warrant as a whole and not to any provision of this
Warrant,
and the words “Section”, “Schedule”,
and “Exhibit”
shall
refer
to Sections of, and Schedules and Exhibits to, this Warrant unless otherwise
specified.
(iii) Whenever
the context so requires, the neuter gender includes the masculine or feminine,
and the singular number includes the plural, and vice versa.
Section
2. Exercise
of
Warrant. Subject to the terms and conditions hereof, this
Warrant may be exercised by the holder hereof then registered on the books
of
the Company, pro rata as hereinafter provided, at any time on any Business
Day
on or after the opening of business on such Business Day, commencing with
the
first day after the date hereof, and prior to 11:59 P.M. Eastern Time on
the Expiration Date, by (i) delivery of a written notice, in the form of
the subscription notice attached as Exhibit A hereto
(the
“Exercise
Notice”), of such holder’s election to exercise this Warrant, which
notice shall specify the number of Warrant Shares to be purchased,
(ii) payment to the Company of an amount equal to the Warrant Exercise
Price(s) applicable to the Warrant Shares being purchased, multiplied by
the
number of Warrant Shares (at the applicable Warrant Exercise Price) as to
which this Warrant is being exercised (plus any applicable issue or
transfer taxes) (the “Aggregate Exercise
Price”) in cash or wire transfer of immediately available funds and (iii)
the surrender of this Warrant (or an indemnification undertaking with respect
to
this Warrant in the case of its loss, theft or destruction) to a common
carrier
for overnight delivery to the Company as soon as practicable following
such
date. In the event of any exercise of the rights represented by this
Warrant in compliance with this Section 2(a), the Company shall on the
fifth (5th) Business Day following the date of receipt of the Exercise
Notice, the Aggregate Exercise Price and this Warrant (or an indemnification
undertaking with respect to this Warrant in the case of its loss, theft
or
destruction) and the receipt of the representations of the holder specified
in
Section 6 hereof, if requested by the Company (the “Exercise Delivery
Documents”), and if the Common Stock is DTC eligible credit such
aggregate number of shares of Common Stock to which the holder shall be
entitled
to the holder’s or its designee’s balance account with The Depository Trust
Company; provided, however, if the holder who submitted the Exercise Notice
requested physical delivery of any or all of the Warrant Shares, or, if
the
Common Stock is not DTC eligible then the Company shall, on or before
the fifth (5th)
Business Day
following receipt of the Exercise Delivery Documents, issue and surrender
to a
common carrier for overnight delivery to the address specified in the Exercise
Notice, a certificate, registered in the name of the holder, for the number
of
shares of Common Stock to which the holder shall be entitled pursuant to
such
request. Upon delivery of the Exercise Notice and Aggregate Exercise
Price referred to in clause (ii) above the holder of this Warrant shall be
deemed for all corporate purposes to have become the holder of record of
the
Warrant Shares with respect to which this Warrant has been
exercised. In the case of a dispute as to the determination of the
Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation
of
the Warrant Shares, the Company shall promptly issue to the holder the
number of
Warrant Shares that is not disputed and shall submit the disputed determinations
or arithmetic calculations to the holder via facsimile within one (1) Business
Day of receipt of the holder’s Exercise Notice. If the holder and the
Company are unable to agree upon the determination of the Warrant Exercise
Price
or arithmetic calculation of the Warrant Shares within one (1) day of such
disputed determination or arithmetic calculation being submitted to the
holder,
then the Company shall immediately submit via facsimile (i) the disputed
determination of the Warrant Exercise Price or the Closing Bid Price to
an
independent, reputable investment banking firm or (ii) the disputed arithmetic
calculation of the Warrant Shares to its independent, outside
accountant. The Company shall cause the investment banking firm or
the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the holder of the results no later
than
forty-eight (48) hours from the time it receives the disputed determinations
or
calculations. Such investment banking firm’s or accountant’s
determination or calculation, as the case may be, shall be deemed conclusive
absent manifest error.
(a) Unless
the rights represented by this Warrant shall have expired or shall have
been
fully exercised, the Company shall, as soon as practicable and in no event
later
than five (5) Business Days after any exercise and at its own expense,
issue a
new Warrant identical in all respects to this Warrant exercised except
it shall
represent rights to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant exercised, less the
number
of Warrant Shares with respect to which such Warrant is exercised.
(b) No
fractional Warrant Shares are to be issued upon any pro rata exercise of
this
Warrant, but rather the number of Warrant Shares issued upon such exercise
of
this Warrant shall be rounded up or down to the nearest whole
number.
(c) If
the
Company or its Transfer Agent shall fail for any reason or for no reason
to
issue to the holder within ten (10) days of receipt of the Exercise
Delivery Documents, a certificate for the number of Warrant Shares to which
the
holder is entitled or to credit the holder’s balance account with The Depository
Trust Company for such number of Warrant Shares to which the holder is
entitled
upon the holder’s exercise of this Warrant, the Company shall, in addition to
any other remedies under this Warrant or the Placement Agent Agreement
or
otherwise available to such holder, pay as additional damages in cash to
such
holder on each day the issuance of such certificate for Warrant Shares
is not
timely effected an amount equal to 0.025% of the product of (A) the sum
of the
number of Warrant Shares not issued to the holder on a timely basis and
to which
the holder is entitled, and (B) the Closing Bid Price of the Common Stock
for
the trading day immediately preceding the last possible date which the
Company
could have issued such Common Stock to the holder without violating this
Section 2.
(d) If
within
ten (10) days after the Company’s receipt of the Exercise Delivery Documents,
the Company fails to deliver a new Warrant to the holder for the number
of
Warrant Shares to which such holder is entitled pursuant to Section 2 hereof,
then, in addition to any other available remedies under this Warrant or
the
Placement Agent Agreement, or otherwise available to such holder, the Company
shall pay as additional damages in cash to such holder on each day after
such
tenth (10th)
day that such
delivery of such new Warrant is not timely effected in an amount equal
to 0.25%
of the product of (A) the number of Warrant Shares represented by the
portion of this Warrant which is not being exercised and (B) the Closing
Bid Price of the Common Stock for the trading day immediately preceding
the last
possible date which the Company could have issued such Warrant to the holder
without violating this Section 2.
Section
3. Covenants
as to Common
Stock. The Company hereby covenants and agrees as
follows:
(a) This
Warrant is, and any Warrants issued in substitution for or replacement
of this
Warrant will upon issuance be, duly authorized and validly issued.
(b) All
Warrant Shares which may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to
the
issue thereof.
(c) During
the period within which the rights represented by this Warrant may be exercised,
the Company will at all times have authorized and reserved at least one
hundred
percent (100%) of the number of shares of Common Stock needed to provide
for the
exercise of the rights then represented by this Warrant and the par value
of
said shares will at all times be less than or equal to the applicable Warrant
Exercise Price. If at any time the Company does not have a sufficient
number of shares of Common Stock authorized and available, then the Company
shall call and hold a special meeting of its stockholders within thirty
(30)
days of that time for the sole purpose of increasing the number of authorized
shares of Common Stock.
(d) If
at any
time after the date hereof the Company shall file a registration statement,
the
Company shall include the Warrant Shares issuable to the holder, pursuant
to the
terms of this Warrant and shall maintain, so long as any other shares of
Common
Stock shall be so listed, such listing of all Warrant Shares from time
to time
issuable upon the exercise of this Warrant; and the Company shall so list
on
each national securities exchange or automated quotation system, as the
case may
be, and shall maintain such listing of, any other shares of capital stock
of the
Company issuable upon the exercise of this Warrant if and so long as any
shares
of the same class shall be listed on such national securities exchange
or
automated quotation system.
(e) The
Company will not, by amendment of its Articles 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 to be observed or performed
by it
hereunder, but will at all times in good faith assist in the carrying out
of all
the provisions of this Warrant and in the taking of all such action as
may
reasonably be requested by the holder of this Warrant in order to protect
the
exercise privilege of the holder of this Warrant against dilution or other
impairment, consistent with the tenor and purpose of this
Warrant. The Company will not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Warrant
Exercise Price then in effect, and (ii) will take all such actions 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.
(f) This
Warrant will be binding upon any entity succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company’s
assets.
Section
4. Taxes. The
Company shall pay any and all taxes, except any applicable withholding,
which
may be payable with respect to the issuance and delivery of Warrant Shares
upon
exercise of this Warrant.
Section
5. Warrant
Holder Not Deemed a
Stockholder. Except as otherwise specifically provided herein,
no holder, as such, of this Warrant shall be entitled to vote or receive
dividends or be deemed the holder of shares of capital stock of the Company
for
any purpose, nor shall anything contained in this Warrant be construed
to confer
upon the holder hereof, as such, any of the rights of a stockholder of
the
Company or any right to vote, give or withhold consent to any corporate
action
(whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance
to
the holder of this Warrant of the Warrant Shares which he or she is then
entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing
any
liabilities on such holder to purchase any securities (upon exercise of
this
Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 5, the Company will provide the
holder of this Warrant with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with
the
giving thereof to the stockholders.
Section
6. Representations
of
Holder. The holder of this Warrant, by the acceptance hereof,
represents that it is acquiring this Warrant and the Warrant Shares for
its own
account for investment only and not with a view towards, or for resale
in
connection with, the public sale or distribution of this Warrant or the
Warrant
Shares, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, the
holder
does not agree to hold this Warrant or any of the Warrant Shares for any
minimum
or other specific term and reserves the right to dispose of this Warrant
and the
Warrant Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. The holder of
this Warrant further represents, by acceptance hereof, that, as of this
date,
such holder is an “accredited investor” as such term is defined in
Rule 501(a)(1) of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act (an “Accredited
Investor”). Upon exercise of this Warrant the
holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired solely for the holder’s own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale
and
that such holder is an Accredited Investor. If such holder cannot
make such representations because they would be factually incorrect, it
shall be
a condition to such holder’s exercise of this Warrant that the Company receive
such other representations as the Company considers reasonably necessary
to
assure the Company that the issuance of its securities upon exercise of
this
Warrant shall not violate any United States or state securities
laws.
Section
7. Ownership
and
Transfer.
(a) The
Company shall maintain at its principal executive offices (or such other
office
or agency of the Company as it may designate by notice to the holder hereof),
a
register for this Warrant, in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as well
as the
name and address of each transferee. The Company may treat the person
in whose name any Warrant is registered on the register as the owner and
holder
thereof for all purposes, notwithstanding any notice to the contrary, but
in all
events recognizing any transfers made in accordance with the terms of this
Warrant.
Section
8. Adjustment
of Warrant
Exercise Price and Number of Shares. The Warrant Exercise
Price and the number of shares of Common Stock issuable upon exercise of
this
Warrant shall be adjusted from time to time as follows:
(a) Adjustment
of Warrant
Exercise Price and Number of Shares upon Issuance of Common
Stock. If and whenever after the Issuance Date of
this Warrant, the Company issues or sells, or is deemed to have issued
or sold,
any shares of Common Stock (other than (i) Excluded Securities and (ii)
shares of Common Stock which are issued or deemed to have been issued by
the
Company in connection with an Approved Stock Plan or upon exercise or conversion
of the Other Securities) for a consideration per share less than a price
(the
“Applicable
Price”) equal to the Warrant Exercise Price in effect immediately prior
to such issuance or sale, then immediately after such issue or sale the
Warrant
Exercise Price then in effect shall be reduced to an amount equal to such
consideration per share. Upon each such adjustment of the Warrant
Exercise Price hereunder, the number of Warrant Shares issuable upon exercise
of
this Warrant shall be adjusted to the number of shares determined by multiplying
the Warrant Exercise Price in effect immediately prior to such adjustment
by the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such adjustment and dividing the product thereof by the Warrant
Exercise Price resulting from such adjustment.
(b) Effect
on Warrant Exercise
Price of Certain Events. For purposes of determining the
adjusted Warrant Exercise Price under Section 8(a) above, the following
shall be
applicable:
(i) Issuance
of
Options. Subject to Section (a) above, if after the date
hereof, the Company in any manner grants any Options and the lowest price
per
share for which one share of Common Stock is issuable upon the exercise
of any
such Option or upon conversion or exchange of any convertible securities
issuable upon exercise of any such Option is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding and to
have
been issued and sold by the Company at the time of the granting or sale
of such
Option for such price per share. For purposes of this Section
8(b)(i), the lowest price per share for which one share of Common Stock
is
issuable upon exercise of such Options or upon conversion or exchange of
such
Convertible Securities shall be equal to the sum of the lowest amounts
of
consideration (if any) received or receivable by the Company with respect
to any
one share of Common Stock upon the granting or sale of the Option, upon
exercise
of the Option or upon conversion or exchange of any convertible security
issuable upon exercise of such Option. No further adjustment of the
Warrant Exercise Price shall be made upon the actual issuance of such Common
Stock or of such convertible securities upon the exercise of such Options
or
upon the actual issuance of such Common Stock upon conversion or exchange
of
such convertible securities.
(ii) Issuance
of Convertible
Securities. Subject to Section (a) above, if the Company in
any manner issues or sells any convertible securities and the lowest price
per
share for which one share of Common Stock is issuable upon the conversion
or
exchange thereof is less than the Applicable Price, then such share of
Common
Stock shall be deemed to be outstanding and to have been issued and sold
by the
Company at the time of the issuance or sale of such convertible securities
for
such price per share. For the purposes of this Section 8(b)(ii),
the lowest price per share for which one share of Common Stock is issuable
upon
such conversion or exchange shall be equal to the sum of the lowest amounts
of
consideration (if any) received or receivable by the Company with respect
to one
share of Common Stock upon the issuance or sale of the convertible security
and
upon conversion or exchange of such convertible security. No further
adjustment of the Warrant Exercise Price shall be made upon the actual
issuance
of such Common Stock upon conversion or exchange of such convertible securities,
and if any such issue or sale of such convertible securities is made upon
exercise of any Options for which adjustment of the Warrant Exercise Price
had
been or are to be made pursuant to other provisions of this Section 8(b),
no
further adjustment of the Warrant Exercise Price shall be made by reason
of such
issue or sale.
(iii) Change
in Option Price or
Rate of Conversion. If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the issue,
conversion or exchange of any convertible securities, or the rate at which
any
convertible securities are convertible into or exchangeable for Common
Stock
changes at any time, the Warrant Exercise Price in effect at the time of
such
change shall be adjusted to the Warrant Exercise Price which would have
been in
effect at such time had such Options or convertible securities provided
for such
changed purchase price, additional consideration or changed conversion
rate, as
the case may be, at the time initially granted, issued or sold and the
number of
Warrant Shares issuable upon exercise of this Warrant shall be correspondingly
readjusted. For purposes of this Section 8(b)(iii), if the terms of
any Option or convertible security that was outstanding as of the Issuance
Date
of this Warrant are changed in the manner described in the immediately
preceding
sentence, then such Option or convertible security and the Common Stock
deemed
issuable upon exercise, conversion or exchange thereof shall be deemed
to have
been issued as of the date of such change. No adjustment pursuant to
this Section 8(b) shall be made if such adjustment would result in an
increase of the Warrant Exercise Price then in effect.
(c) Effect
on Warrant Exercise
Price of Certain Events. For purposes of determining the
adjusted Warrant Exercise Price under Sections 8(a) and 8(b), the following
shall be applicable:
(i) Calculation
of Consideration
Received. If any Common Stock, Options or convertible
securities are issued or sold or deemed to have been issued or sold for
cash,
the consideration received therefore will be deemed to be the net amount
received by the Company therefore. If any Common Stock, Options or
convertible securities are issued or sold for a consideration other than
cash,
the amount of such consideration received by the Company will be the fair
value
of such consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the market price of such securities on the date of receipt of such
securities. If any Common Stock, Options or convertible securities
are issued to the owners of the non-surviving entity in connection with
any
merger in which the Company is the surviving entity, the amount of consideration
therefore will be deemed to be the fair value of such portion of the net
assets
and business of the non-surviving entity as is attributable to such Common
Stock, Options or convertible securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
jointly by the Company and the holders of Warrants representing at least
two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
then
outstanding. If such parties are unable to reach agreement within
ten (10) days after the occurrence of an event requiring valuation (the
“Valuation
Event”), the fair value of such consideration will be determined within
five (5) Business Days after the tenth (10th)
day following
the Valuation Event by an independent, reputable appraiser jointly selected
by
the Company and the holders of Warrants representing at least two-thirds
(b) of
the Warrant Shares issuable upon exercise of the Warrants then
outstanding. The determination of such appraiser shall be final and
binding upon all parties and the fees and expenses of such appraiser shall
be
borne jointly by the Company and the holders of Warrants.
(ii) Integrated
Transactions. In case any Option is issued in connection with
the issue or sale of other securities of the Company, together comprising
one
integrated transaction in which no specific consideration is allocated
to such
Options by the parties thereto, the Options will be deemed to have been
issued
for a consideration of $.01.
(iii) Treasury
Shares. The number of shares of Common Stock outstanding at
any given time does not include shares owned or held by or for the account
of
the Company, and the disposition of any shares so owned or held will be
considered an issue or sale of Common Stock.
(iv) Record
Date. If the Company takes a record of the holders of Common
Stock for the purpose of entitling them (1) to receive a dividend or other
distribution payable in Common Stock, Options or in convertible securities
or
(2) to subscribe for or purchase Common Stock, Options or convertible
securities, then such record date will be deemed to be the date of the
issue or
sale of the shares of Common Stock deemed to have been issued or sold upon
the
declaration of such dividend or the making of such other distribution or
the
date of the granting of such right of subscription or purchase, as the
case may
be.
(d) Adjustment
of Warrant
Exercise Price upon Subdivision or Combination of Common
Stock. If the Company at any time after the date of issuance
of this Warrant subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its outstanding shares of Common Stock
into
a greater number of shares, any Warrant Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced and the number
of
shares of Common Stock obtainable upon exercise of this Warrant will be
proportionately increased. If the Company at any time after the date
of issuance of this Warrant combines (by combination, reverse stock split
or
otherwise) one or more classes of its outstanding shares of Common Stock
into a
smaller number of shares, any Warrant Exercise Price in effect immediately
prior
to such combination will be proportionately increased and the number of
Warrant
Shares issuable upon exercise of this Warrant will be proportionately
decreased. Any adjustment under this Section 8(d) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(e) Distribution
of
Assets. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders
of
Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property
or
options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at
any time after the issuance of this Warrant, then, in each such
case:
(i) any
Warrant Exercise Price in effect immediately prior to the close of business
on
the record date fixed for the determination of holders of Common Stock
entitled to receive
the
Distribution shall be reduced, effective as of the close of business on
such
record date, to a price determined by multiplying such Warrant Exercise
Price by
a fraction of which (A) the numerator shall be the Closing Sale Price of
the
Common Stock on the trading day immediately preceding such record date
minus the
value of the Distribution (as determined in good faith by the Company’s Board of
Directors) applicable to one share of Common Stock, and (B) the denominator
shall be the Closing Sale Price of the Common Stock on the trading day
immediately preceding such record date; and
(ii) either
(A) the number of Warrant Shares obtainable upon exercise of this Warrant
shall
be increased to a number of shares equal to the number of shares of Common
Stock
obtainable immediately prior to the close of business on the record date
fixed
for the determination of holders of Common Stock entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in
the
immediately preceding clause (i), or (B) in the event that the Distribution
is
of common stock of a company whose common stock is traded on a national
securities exchange or a national automated quotation system, then the
holder of
this Warrant shall receive an additional warrant to purchase Common Stock,
the
terms of which shall be identical to those of this Warrant, except that
such
warrant shall be exercisable into the amount of the assets that would have
been
payable to the holder of this Warrant pursuant to the Distribution had
the
holder exercised this Warrant immediately prior to such record date and
with an
exercise price equal to the amount by which the exercise price of this
Warrant
was decreased with respect to the Distribution pursuant to the terms of
the
immediately preceding clause (i).
(f) Certain
Events. If any event occurs of the type contemplated by the
provisions of this Section 8 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then
the
Company’s Board of Directors will make an appropriate adjustment in the Warrant
Exercise Price and the number of shares of Common Stock obtainable upon
exercise
of this Warrant so as to protect the rights of the holders of the Warrants;
provided, except as set forth in section 8(d),that no such adjustment pursuant
to this Section 8(f) will increase the Warrant Exercise Price or decrease
the
number of shares of Common Stock obtainable as otherwise determined pursuant
to
this Section 8.
(g) Notices.
(i) Immediately
upon any adjustment of the Warrant Exercise Price, the Company will give
written
notice thereof to the holder of this Warrant, setting forth in reasonable
detail, and certifying, the calculation of such adjustment.
(ii) The
Company will give written notice to the holder of this Warrant at least
ten (10)
days prior to the date on which the Company closes its books or takes a
record
(A) with respect to any dividend or distribution upon the Common Stock,
(B) with respect to any pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any Organic
Change (as defined below), dissolution or liquidation, provided that such
information shall be made known to the public prior to or in conjunction
with
such notice being provided to such holder.
(iii) The
Company will also give written notice to the holder of this Warrant at
least ten
(10) days prior to the date on which any Organic Change, dissolution or
liquidation will take place, provided that such information shall be made
known
to the public prior to or in conjunction with such notice being provided
to such
holder.
Section
9. Purchase
Rights;
Reorganization, Reclassification, Consolidation, Merger or
Sale.
(a) In
addition to any adjustments pursuant to Section 8 above, if at any time
the
Company grants, issues or sells any Options, Convertible Securities or
rights to
purchase stock, warrants, securities or other property pro rata to the
record
holders of any class of Common Stock (the “Purchase Rights”),
then the holder of this Warrant will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which
such
holder could have acquired if such holder had held the number of shares
of
Common Stock acquirable upon complete exercise of this Warrant immediately
before the date on which a record is taken for the grant, issuance or sale
of
such Purchase Rights, or, if no such record is taken, the date as of which
the
record holders of Common Stock are to be determined for the grant, issue
or sale
of such Purchase Rights.
(b) Any
recapitalization, reorganization, reclassification, consolidation, merger,
sale
of all or substantially all of the Company’s assets to another Person or other
transaction in each case which is effected in such a way that holders of
Common
Stock are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for Common Stock
is
referred to herein as an “Organic
Change.” Prior to the consummation of any (i) sale of all or
substantially all of the Company’s assets to an acquiring Person or (ii) other
Organic Change following which the Company is not a surviving entity, the
Company will secure from the Person purchasing such assets or the successor
resulting from such Organic Change (in each case, the “Acquiring Entity”) a
written agreement (in form and substance satisfactory to the holders of
Warrants
representing at least two-thirds (iii) of the Warrant Shares issuable upon
exercise of the Warrants then outstanding) to deliver to each holder of
Warrants
in exchange for such Warrants, a security of the Acquiring Entity evidenced
by a
written instrument substantially similar in form and substance to this
Warrant
and satisfactory to the holders of the Warrants (including an adjusted
warrant
exercise price equal to the value for the Common Stock reflected by the
terms of
such consolidation, merger or sale, and exercisable for a corresponding
number
of shares of Common Stock acquirable and receivable upon exercise of the
Warrants without regard to any limitations on exercise, if the value so
reflected is less than any Applicable Warrant Exercise Price immediately
prior
to such consolidation, merger or sale). Prior to the consummation of
any other Organic Change, the Company shall make appropriate provision
(in form
and substance satisfactory to the holders of Warrants representing a
majority of the
Warrant Shares issuable upon exercise of the Warrants then outstanding)
to
insure that each of the holders of the Warrants will thereafter have the
right
to acquire and receive in lieu of or in addition to (as the case may be)
the
Warrant Shares immediately theretofore issuable and receivable upon the
exercise
of such holder’s Warrants (without regard to any limitations on exercise),
such shares of stock, securities or assets that would have been issued
or
payable in such Organic Change with respect to or in exchange for the number
of
Warrant Shares which would have been issuable and receivable upon the exercise
of such holder’s Warrant as of the date of such Organic Change (without taking
into account any limitations or restrictions on the exercisability of this
Warrant).
Section
10. Lost,
Stolen, Mutilated or
Destroyed Warrant. If this Warrant is lost, stolen, mutilated
or destroyed, the Company shall promptly, on receipt of an indemnification
undertaking (or, in the case of a mutilated Warrant, the Warrant), issue
a new
Warrant of like denomination and tenor as this Warrant so lost, stolen,
mutilated or destroyed.
Section
11. Notice. Any
notices, consents, waivers or other communications required or permitted
to be
given under the terms of this Warrant must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of receipt is received by the sending party transmission is
mechanically or electronically generated and kept on file by the sending
party);
or (iii) one Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party
to
receive the same. The addresses and facsimile numbers for such
communications shall be:
|
If
to Staraim:
|
Staraim
Enterprises Ltd.
|
|
Athalassas,
47
|
|
|
2nd
Floor,
Flat/Office 202
Xxxxxxxxx,
X.X. 0000, Xxxxxxx, Xxxxxx
|
|
|
Attention:
|
|
|
Telephone:
|
|
|
Facsimile:
|
|
|
With
Copy to:
|
Xxxx
Xxxxx & Xxxxxxx, LLP
|
|
Xxx
Xxxxxxxx Xxxxxx, Xxxxx 0000
|
|
|
Xxxxxxxx,
XX 00000
|
|
|
Attention:Xxxxxxx
X. Xxxxxx III, Esq.
Telephone: (000)
000-0000
|
|
|
Facsimile: (000)
000-0000
|
|
|
If
to the Company, to:
|
|
|
Richmond
Corporate Centre
|
|
|
Xxxxx
000-00000 Xxxxxx Xxxxx
|
|
|
Xxxxxxxx,
Xxxxxxx Xxxxxxxx
|
|
|
Xxxxxx
X0X 0X0
|
|
|
Attention: Xxxx
Xxxxxxxxxxx – Chief Financial Officer
|
|
|
Telephone:
(000) 000-0000
|
|
|
With
a copy to:
|
Facsimile: (000)
000-0000
|
|
Xxxxxxxxx
Traurig, LLP
|
|
|
000
Xxxx Xxxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Attention: Xxxxxxx
X. Xxxxxx, Esq.
|
|
|
Telephone: (000)
000-0000
|
|
|
Facsimile:
(000) 000-0000
|
If
to a
holder of this Warrant, to it at the address and facsimile number set forth
on
Exhibit C
hereto, with copies to such holder’s representatives as set forth on Exhibit C, or
at
such other address and facsimile as shall be delivered to the Company upon
the
issuance or transfer of this Warrant. Each party shall provide five
days’ prior written notice to the other party of any change in address or
facsimile number. Written confirmation of receipt (A) given by
the recipient of such notice, consent, facsimile, waiver or other communication,
(or (B) provided by a nationally recognized overnight delivery service
shall be rebuttable evidence of personal service, receipt by facsimile
or
receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
Section
12. Date. The
date of this Warrant is set forth on page 1 hereof. This Warrant,
in all events, shall be wholly void and of no effect after the close of
business on the Expiration Date, except that notwithstanding any other
provisions hereof, the provisions of Section 8(b) shall continue in full
force and effect after such date as to any Warrant Shares or other securities
issued upon the exercise of this Warrant.
Section
13. Amendment
and
Waiver. Except as otherwise provided herein, the provisions of
the Warrants may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed
by it,
only if the Company has obtained the written consent of the holders of
Warrants
representing at least two-thirds of the Warrant Shares issuable upon exercise
of
the Warrants then outstanding; provided that, except for Section 8(d),
no such
action may increase the Warrant Exercise Price or decrease the number of
shares
or class of stock obtainable upon exercise of any Warrant without the written
consent of the holder of such Warrant.
Section
14. Descriptive
Headings;
Governing Law. The descriptive headings of the several
sections and paragraphs of this Warrant are inserted for convenience only
and do
not constitute a part of this Warrant. The corporate laws of the
State of New Jersey shall govern all issues concerning the relative rights
of
the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement
shall
be governed by the internal laws of the State of New Jersey, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New
Jersey. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Xxxxxx County and
the
United States District Court for the District of New Jersey, for the
adjudication of any dispute hereunder or in connection herewith or therewith,
or
with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any
such
court, that such suit, action or proceeding is brought in an inconvenient
forum
or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve
process
in any manner permitted by law.
Section
15. Waiver
of Jury
Trial. AS A
MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.
IN
WITNESS WHEREOF, the
Company has caused this Warrant to be signed as of the date first set forth
above.
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By: /s/
Xxxx
Xxxxxxxxxxx
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Name:
Xxxx Xxxxxxxxxxx
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Title: Chief
Financial Officer
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EXHIBIT
A TO
WARRANT
EXERCISE
NOTICE
TO
BE EXECUTED
BY
THE REGISTERED HOLDER TO EXERCISE
THIS WARRANT
The
undersigned holder hereby exercises the right to purchase ______________
of the
shares of Common Stock (“Warrant Shares”) of
Smartire Systems Inc., a corporation organized and existing under the laws
of
the Yukon Territory (the “Company”), evidenced
by the attached Warrant (the “Warrant”). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1. Form
of Warrant Exercise
Price. The Holder intends that payment of the Warrant Exercise
Price shall be made as a “Cash Exercise”
with
respect to ______________ Warrant Shares.
2. Payment
of Warrant Exercise
Price. The holder shall pay the sum of $______________ to the Company
in
accordance with the terms of the Warrant.
3. Delivery
of Warrant
Shares. The Company shall deliver to the holder _________
Warrant
Shares in accordance with the terms of the Warrant.
Date:
_______________ __, ______
Name
of
Registered Holder
By:
Name:
Title:
EXHIBIT
B TO
WARRANT
FORM
OF WARRANT
POWER
FOR
VALUE RECEIVED, the
undersigned does hereby assign and transfer to ________________, Federal
Identification No. __________, a warrant to purchase ____________ shares of
the capital stock of Smartire Systems Inc., a corporation organized and
existing
under the laws of the Yukon Territory, represented by warrant certificate
no. _____, standing in the name of the undersigned on the books of said
corporation. The undersigned does hereby irrevocably constitute and
appoint ______________, attorney to transfer the warrants of said corporation,
with full power of substitution in the premises.
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Dated:
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By:
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Name:
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Title:
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