STOCK TRANSFER AGREEMENT
THIS
STOCK TRANSFER AGREEMENT
(this
“Agreement”)
is
made and entered into as of the 20th day of February, 2007, by and among
Celsia
Technologies, Inc., a Nevada corporation (the “Company”),
Xxxxx
Xxxxxxxx (“Wretsell”),
Xxxxxxx Xxxxxxxxx (“Karpheden”),
Axiom
Capital Management, Inc. (the “Agent”)
and
each other person or entity listed as a Purchaser on Schedule
1
attached
to this Agreement, as such Schedule I shall be revised from time to time
(the
“Purchasers”).
Wretsell and Karpheden are sometimes collectively referred to herein as the
“Executive
Officers”
and
individually as an “Executive
Officer.”
Recitals
WHEREAS,
the
Company desires to sell and issue Secured Convertible Promissory Notes in
the
aggregate principal amount of not less than Two Hundred Fifty Thousand Dollars
($250,000) and not more than One Million Dollars ($1,000,000) (individually,
a
“Convertible
Note,”
and
collectively, the “Convertible
Notes”);
WHEREAS,
Wretsell
and Karpheden are the duly appointed Chief Executive Officer and Chief Financial
Officer of the Company, respectively, and own certain shares of common stock,
par value $0.001 per share, of the Company (the “Common
Stock”),
and
as such have a material interest in the consummation of the sale of the
Convertible Notes;
WHEREAS,
the
Convertible Notes will be sold in multiple closings to the Purchasers pursuant
to Securities Purchase Agreements between the Company and each Purchaser
(each a
“Purchase
Agreement”
and
collectively the “Purchase
Agreements”);
and
WHEREAS,
the
Purchasers have required as a condition to purchasing the Convertible Notes,
and
as an inducement for the Purchasers to purchase the Convertible Notes, the
Executive Officers have agreed, to transfer certain shares of Common Stock
owned
by the Executive Officers to the Purchasers in the event that a Qualified
Debenture Financing (as defined in the Convertible Notes) does not occur
on or
before June 20, 2007 (the “Trigger
Date”),
all
in accordance with and subject to the terms of this Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual covenants and agreements contained
herein, the parties hereto, intending to be legally bound, agree as
follows:
1. Incorporation
of Recitals.
The
foregoing Recitals are hereby incorporated herein in their entirety by this
reference.
2. Definitions.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Convertible Notes.
3. Transfer
of Securities.
As
further described herein and in accordance with the terms and subject to
the
conditions of this Agreement, in the event a Qualified Debenture Financing
has
not occurred on or before the Trigger Date, Wretsell agrees to transfer 462,588
shares of Common Stock owned by him (the “Wretsell
Stock”)
and
Karpheden agrees to transfer 271,677 shares of Common Stock owned by him
(the
“Karpheden
Stock,”
and,
collectively with the Wretsell Stock, the “Executive
Officer Stock”)
to the
Purchasers, free and clear of any liens or encumbrances (other than restrictive
legends), pro rata among the Purchasers in accordance with the principal
amounts
of the Convertible Notes purchased by the Purchasers pursuant to the Purchase
Agreements.
(a) As
further assurance of the performance of the Executive Officer’s obligations
hereunder, the Executive Officers hereby assign, transfer and grant the
Executive Officer Stock to the Agent to hold for the benefit of the Purchasers.
All certificates representing the Executive Officer Stock have been delivered
to
and are being held by or on behalf of Agent pursuant hereto. All certificates
representing Executive Officer Stock shall be in suitable form for transfer
by
delivery or shall be accompanied by duly executed instruments of transfer
or
assignment in blank, with signature(s) thereon guaranteed by a financial
institution that is a member of a Stock Transfer Association approved medallion
program such as STAMP, SEND or MSP, or, in the case of Wretsell, accompanied
by
a letter from the company guaranteeing Wretsell’s signature, and otherwise in
form and substance satisfactory to Agent and subject to any applicable law
or
regulations. Notwithstanding the above, in the event the Company issues less
than $1 million in aggregate principal amount of Convertible Notes, a number
of
shares of Executive Officer Stock equal to (i) the percentage obtained by
dividing (A) the difference between $1 million and the aggregate principal
amount of Convertible Notes issued by the Company by (B) $1 million, multiplied
by (ii) the number of shares of Executive Officer Stock (the “Excess
Shares”)
shall
be returned to the Executives, pro rata between Wretsell and Karpheden in
accordance with the number of shares of Wretsell Stock and Karpheden Stock.
Until such time as the Executive Officer Stock is transferred to the Purchasers
in accordance with the terms hereof, the Executive Officer shall retain all
voting rights relating to the Executive Officer Stock.
(b) In
the
event a Qualified Debenture Financing shall not have occurred on or before
the
Trigger Date, the Agent shall endorse, assign or otherwise transfer the
Executive Officer Stock to the Purchasers pro rata in accordance with the
principal amounts of the Convertible Notes purchased by the Purchasers pursuant
to the Purchase Agreements. In connection therewith, the Agent shall have
the
right at any time to exchange certificates representing or evidencing the
Executive Officer Stock for certificates of smaller or larger
denominations.
(c) Upon
the
occurrence of a Qualified Debenture Financing on or before the Trigger Date
or
the earlier termination of this Agreement (other than a termination resulting
from the transfer of the Executive Officer Stock to the Purchasers pursuant
to
this Agreement), the Agent shall return, assign or otherwise transfer the
Executive Officer Stock to the Executive Officers.
4. Representations
and Warranties.
Wretsell hereby represents and warrants that he
is the
sole legal and beneficial owner of the Wretsell Stock, and Karpheden hereby
represents and warrants that he is the sole legal and beneficial owner of
the
Karpheden Stock, in each case free and clear of any liens or
encumbrances.
5. Covenants
and Agreements.
The
Company hereby acknowledges and agrees to the existence and terms of this
Agreement. In the event that the Company effectuates a stock split with respect
to the Common Stock, or makes a distribution of Common Stock to all holders
of
Common Stock, the additional shares of Common Stock issued with respect to
the
Executive Officer Stock shall constitute additional Executive Officer Stock,
and
the Executive Officers shall take all steps necessary to deliver any stock
certificates relating to such additional Executive Officer Stock to the Agent
in
accordance with the terms hereof. In the event the Company distributes any
of
its assets to all the holders of Common Stock, such assets distributed with
respect to the Executive Officer Stock shall be held by Agent and shall be
transferred together with the Executive Officer Stock in accordance with
the
terms of this Agreement. The parties hereto hereby agree to execute,
acknowledge, deliver and cause to be duly filed all further instruments and
documents and take all such actions as a party hereto may from time to time
reasonably request for effectuating the terms of this Agreement and the rights
created hereby.
2
6. Designation
of Agent; Indemnity.
(a) Until
the
termination of this Agreement, the Purchasers hereby irrevocably designate
Axiom
(and its successors and assigns) as their agent and Axiom hereby accepts
such
designation, in order to execute any and all instruments or other documents
on
behalf of the Purchasers and to do any and all other acts or things on behalf
of
the Purchasers that Axiom (or its successors or assigns) in its sole discretion
deems necessary or advisable or that may be required pursuant to this Agreement
or otherwise, to exercise Purchasers’ rights and remedies under this Agreement.
None of the Purchasers may take any action or exercise any rights under this
Agreement except through Axiom as their agent. Notwithstanding anything to
the
contrary set forth herein, this Agreement may be waived, modified, amended,
terminated or discharged only in accordance with Section 7
hereof.
(b) Axiom,
as
agent, shall have no duties or responsibilities whatsoever with respect to
the
Executive Officer Stock except as are specifically set forth herein. Axiom,
in
its capacity as agent for the Purchasers, shall neither be responsible for
or
under, nor chargeable with knowledge of the terms and conditions of, any
other
agreement, instrument or document in connection herewith. Axiom may conclusively
rely upon, and shall be fully protected from all liability, loss, cost, damage
or expense in acting or omitting to act pursuant to any written notice,
instrument, request, consent, certificate, document, letter, telegram, opinion,
order, resolution or other writing hereunder without being required to determine
the authenticity of such document, the correctness of any fact stated therein,
the propriety of the service thereof or the capacity, identity or authority
of
any party purporting to sign or deliver such document. Axiom shall have no
responsibility for the contents of any such writing contemplated herein and
may
rely without any liability upon the contents thereof.
(c) Axiom,
in
its capacity as agent for the Purchasers, shall not be liable for any action
taken or omitted by it in good faith and reasonably believed by it to be
authorized hereby or with the rights or powers conferred upon it hereunder,
nor
for action taken or omitted by it in good faith, and in accordance with advice
of counsel (which counsel may be of Axiom’s own choosing), and shall not be
liable for any mistake of fact or error of judgment or for any acts or omissions
of any kind except for its own willful misconduct or gross
negligence.
(d) Each
of
the Purchasers (each, an “Indemnifying
Parties”)
agrees
to indemnify Axiom, in its capacity as agent for the Purchasers, and its
employees, directors, officers and agents and hold each harmless against
any and
all liabilities incurred by it hereunder as a consequence of such party's
action, and each Indemnifying Party agrees to indemnify Axiom, in its capacity
as agent for the Purchasers, and hold it harmless against any claims, costs,
payments, and expenses (including the reasonable fees and expenses of counsel)
and all liabilities incurred by it in connection with the performance of
its
duties hereunder, except in the case for claims, costs, payments, and expenses
(including the reasonable fees and expenses of counsel) and liabilities incurred
by Axiom resulting from its own willful misconduct or gross
negligence.
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7. Miscellaneous.
This
Agreement can be waived, modified, amended, terminated or discharged only
explicitly in a writing signed by the Company, Executive Officers and the
Required Majority; provided, however, that (i) Schedule
1
hereto
shall be revised by the Company from time to time to reflect additional
Purchasers as parties to this Agreement without the written consent of any
other
party to this Agreement and (ii) unless earlier terminated by the parties
in
accordance with this Section 7, this Agreement shall terminate upon the transfer
of the Executive Officer Stock pursuant to Section 3(b) or 3(c) hereof. A
waiver
shall be effective only in the specific instance and for the specific purpose
given. Mere delay or failure to act shall not preclude the exercise or
enforcement of any rights or remedies. This Agreement shall be binding upon
and
inure to the benefit of the parties hereto and their respective participants,
successors, and permitted assigns and shall take effect when signed by Company,
Agent, Executive Officers and a Purchaser. Purchasers’ rights hereunder may not
be transferred or assigned to any third party without the prior written consent
of the Executive Officers. This Agreement shall be governed by the internal
law
of the State of New York without regard to conflicts of law provisions. Any
legal action or proceeding with respect to this Agreement shall be brought
exclusively in the courts of the State of New York or of the United States
of
America sitting in New York County, and, by execution and delivery of this
Agreement, the parties hereto hereby accept for itself and in respect of
its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. If any provision or application of this Agreement is held unlawful
or
unenforceable in any respect, such illegality or unenforceability shall not
affect other provisions or applications which can be given effect and this
Agreement shall be construed as if the unlawful or unenforceable provision
or
application had never been contained herein or prescribed hereby.
8. Waiver
of Jury Trial:
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT COMPANY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR
SECURED PARTY ENTERING INTO THIS AGREEMENT.
9. Notices.
Any
notices, consents, waivers, or other communications required or permitted
to be
given under the terms of this Agreement (“Notices”)
shall
be given in accordance with Section 5.7 of the Purchase Agreements; provided,
however, that all Notices to Wretsell or Karpheden shall be sent to the
addresses set forth on the signature page hereto with a copy to the Company
and
Agent shall be copied on all notices at Axiom Capital Management, Inc., 000
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attn: Xxxxxxx Xxxxxxx,
facsimile (000) 000-0000.
4
IN
WITNESS WHEREOF,
the
parties have duly executed and delivered this Stock Transfer Agreement as
of the
date and year first written above.
| XXXXX XXXXXXXX: |
AGENT:
AXIOM
CAPITAL MANAGEMENT, INC.
|
|||
| /s/ Xxxxx Xxxxxxxx | By: | /s/ Xxxx X. Xxxxxxx | ||
|
Xxxxx Xxxxxxxx |
Name:
Xxxx X. Xxxxxxx
Title:
President
|
|||
|
Address:
___________________________
______________________
______________________
Facsimile:
______________________
|
||||
| XXXXXXX XXXXXXXXX: | ||||
| /s/ Xxxxxxx Xxxxxxxxx | By: | /s/ Xxxxxxx Xxxxxxxxx | ||
|
Xxxxxxx Xxxxxxxxx |
Name:
Xxxxxxx Xxxxxxxxx
Title:
Chief Financial Officer
|
|||
|
Address:
________________________
____________________
______________________
Facsimile:
______________________
|
||||
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COUNTERPART
SIGNATURE PAGE
DATED
FEBRUARY 20, 2007
The
undersigned hereby executes and delivers the Stock Transfer Agreement to
which
this Signature Page is attached, which, together with all counterparts of
the
Stock Transfer Agreement and Signature Pages of the Company, Agent, Executive
Officers and other “Purchasers” under the Stock Transfer Agreement, shall
constitute one and the same document in accordance with the terms of the
Stock
Transfer Agreement.
|
PURCHASER:___________________________*
|
||||
| By: | ||||
|
Name:_______________________________
Title:________________________________
|
*
Executed by each Purchaser
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