WARRANT PURCHASE AGREEMENT
EXHIBIT 10.5
April 30, 2010
One
Xxxxxx Plaza
400 Kelby
Street, 0xx Xxxxx
Xxxx Xxx,
XX 00000
Gentlemen:
This
Warrant Purchase Agreement (the “Agreement”) is made as of April 30, 2010 (the
“Closing Date”) by and between PIONEER POWER SOLUTIONS, INC.,
a Delaware corporation with offices at One Xxxxxx Plaza, 400
Kelby Street, 9th Floor, Fort Xxx, NJ 07024 (the “Company”), and XXXXXX XXXXX, an individual
residing at 0000 Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000 (“Purchaser”).
1. Authorization and Purchase
of the Warrant.
(A) Authorization of the
Warrant. The Company’s Board of Directors has authorized the issuance by
the Company, and the sale to Purchaser, of a Warrant to Purchase Common Stock
(the “Warrant”) in respect of One Million (1,000,000) shares of the Company’s
Common Stock, par value $0.001 per share, at an exercise price of $3.25 per
share, all as more fully described and subject to the conditions set forth below
and in the form of Warrant annexed hereto as Schedule A. The
Company’s common stock issuable upon exercise of the Warrant is herein referred
to as the “Warrant Stock,” and the Warrant and the Warrant Stock are hereinafter
sometimes collectively referred to as the “Securities.”
(B) Purchase of Warrant.
Subject to the terms and conditions set forth below and in the Warrant, the
Company shall issue to Purchaser the Warrant in consideration of the payment of
$10,000.00 (the “Warrant Purchase Price”). The parties hereby
acknowledge and agree that this Warrant Purchase Price constitutes fair and
adequate consideration for the Warrant.
2. The Closing. The
closing of the purchase and sale of the Warrant to Purchaser (the “Closing”)
shall be held at the offices of the Company, or at such other location as may be
mutually agreed upon by the parties hereto. On the Closing Date, the Company
shall deliver to Purchaser the Warrant registered in the name of Purchaser as
against payment by Purchaser to the Company of the entire Warrant Purchase Price
in immediately available funds.
3. Representations and
Warranties of the Company. The Company represents and warrants to the
Purchaser that:
(A) Corporate Power;
Authorization. The Company has all requisite corporate power and has
taken all requisite corporate action to execute and deliver each of this
Agreement and the Warrant, to sell and issue the Securities and to carry out and
perform all of its obligations hereunder and thereunder. Each of this
Agreement and the Warrant has been duly authorized, executed and delivered on
behalf of the Company and constitutes the valid and binding agreement of the
Company, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization or similar laws relating to or
affecting the enforcement of creditors’ rights generally and (ii) as
limited by equitable principles generally.
(B) Validity of
Securities. The Warrant, when sold against the consideration therefor as
provided therein, will be validly authorized, issued and fully paid. The
issuance and delivery of the Warrant is not subject to preemptive or any similar
rights of the stockholders of the Company (which have not been duly waived) or
any liens or encumbrances, except for restrictions on transfer provided for
herein or under applicable federal and state securities laws; and when the
Warrant Stock is issued upon exercise and in accordance with the terms of the
Warrant, such Securities will be, at each such issuance, validly issued and
outstanding, fully paid and non-assessable and free of any liens or encumbrances
except for restrictions on transfer provided for herein or therein or otherwise
under applicable Federal and state securities laws.
(C) No Conflict. The
execution and delivery of this Agreement and the Warrant do not, and the
consummation of the transactions contemplated hereby and thereby will not,
materially conflict with, or result in any material violation of, or material
default (with or without notice or lapse of time, or both), or give rise to a
right of termination, cancellation or acceleration of any obligation or to a
loss of a material benefit, under, any provision of its current Certificate of
Incorporation or Bylaws, as amended, or any mortgage, indenture, lease or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company, its properties or assets, the effect of which would have a material
adverse effect on the Company or materially impair or restrict its power to
perform its obligations as contemplated hereby or thereby.
(D) Consents. No consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental authority or other
person or entity is required on the part of the Company in connection with the
execution, delivery and performance of this Agreement and the Warrant or the
offer, issuance, sale and delivery of the Warrant and the Warrant Stock, and
except any notices of sale required to be filed with the Securities and Exchange
Commission under Regulation D of the Securities Act or such post-closing filings
as may be required under applicable state securities laws, all of which will be
filed within applicable periods therefor.
4. Representations and
Warranties of Purchaser. Purchaser hereby represents and warrants to the
Company as follows:
(A) Investment
Experience. Purchaser is an “accredited investor” within the meaning of
Rule 501 under the Securities Act. Purchaser is aware of the
Company’s business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
acquire the Securities. Purchaser has such business and financial experience as
is required to give him the capacity to protect his own interests in connection
with the purchase of the Securities. Purchaser has had the opportunity to ask
questions of the Company concerning the Company’s business prospects and
financial condition.
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(B) Investment Intent.
Purchaser is purchasing the Warrant for investment for his own account only and
not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act. Purchaser understands that the Warrant
has not been registered under the Securities Act or registered or qualified
under any state securities law in reliance on specific exemptions therefrom,
which exemptions may depend upon, among other matters, the bona fide nature of
Purchaser’s investment intent as expressed herein.
(C) Authorization.
Purchaser has all requisite power and has taken all requisite action to execute
and deliver each of this Agreement and to carry out and perform all of his
obligations hereunder. This Agreement has been duly executed and delivered on
behalf of Purchaser and constitutes the valid and binding agreement of
Purchaser, enforceable in accordance with its terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization or similar laws relating to
or affecting the enforcement of creditors’ rights generally and (ii) as
limited by equitable principles generally.
Restrictions on Transfer of
Securities; Lock-Up Period. The Warrant sets forth certain restrictions
on transfer of the Securities. The Warrant will also provide for a
“Lock-Up Period” for a period of eighteen (18) months following the date of
issuance thereof in respect of the Securities.
Pursuant
to a certain loan agreement between Xxxxxxx Bank, as Lender, and Jefferson
Electric Inc., as Borrower, Purchaser has furnished a personal guaranty to
Lender. As collateral security for such personal guaranty, Purchaser
shall furnish to the Bank a pledge and security interest in the
Warrant. The parties hereby acknowledge and agree that the grant of
such pledge and security interest granted by Purchaser to Lender under such loan
agreement and during the Lock-Up Period hereunder shall not in any manner
whatsoever constitute a violation of any of the provisions of this Agreement
and/or the Warrant relating to a pledge of such Securities or
otherwise.
6. Miscellaneous.
(A) Waivers and
Amendments. This Agreement and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
(B) Governing Law;
Jurisdiction. This agreement shall in all respects be governed by, and
construed in accordance with, the applicable laws of the State of New York,
U.S.A., without giving effect to principles of conflicts of law. Each party
hereto irrevocably and unconditionally consents to submit the exclusive
jurisdiction of the United States District Court for the Southern District of
New York, or if jurisdiction in such court is lacking, any court of the State of
New York of competent jurisdiction sitting in New York City, in connection with
any action, suit or proceeding arising out of or relating to this agreement and
the transactions contemplated hereby, and
agrees that service of process may be made in any manner acceptable for use in
such New York courts.
Each party hereby irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this agreement
and/or the transactions contemplated hereby, in the above New York courts, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum. The parties hereby
expressly waive the right to any jury trial in any action or proceeding
involving this Agreement.
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(C) Successors and
Assigns. The provisions hereof shall inure to the benefit of, and be
binding upon, the successors, permitted assigns, heirs, executors and
administrators of the parties hereto.
(D) Entire Agreement;
Construction. This Agreement and the Warrant constitute the full and
entire understanding and agreement between the parties with regard to the
subject hereof. In the event of any conflict between the terms of this Agreement
and the terms of the Warrant, the terms of the Warrant shall prevail. Any rule
of construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of
this Agreement or the Warrant.
(E) Notices, etc. Any
notice or other communication given under this Agreement shall be sufficient if
in writing and sent by personal service, facsimile, courier service promising
overnight delivery or registered or certified mail, return receipt requested,
postage prepaid, to a party at its address set forth below (or at such other
address as shall be designated for such purpose by such party in a written
notice to the other party hereto):
if to the
Company, to:
One
Xxxxxx Plaza
400 Kelby
Street, 0xx Xxxxx
Xxxx Xxx,
XX 00000
with
copies to:
Xxxxxx
Xxxxxxx, Esq.
Shiboleth
LLP
Xxx Xxxx
Xxxxx, Xxxxx 0000
Xxx Xxxx,
XX 00000
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if to
Purchaser, to:
Xx.
Xxxxxx Xxxxx
0000
Xxxxxxxxx Xxxx
Xxxxxxx,
Xxxxxxxxx 00000
Facsimile:
262.377.
Xxxxxx@Xxxxxxxxxxxxxxxxx.xxx
with
copies to:
Xxxx X.
Xxxxxxxx, Esq.
Law
Office of Xxxx X. Xxxxxxxx, S.C.
00000 X.
Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxxx 00000
Facsimile:
262.787.0606
xxxxxxxxxx@xxx.xxx
or in any
case at such other address as Purchaser or the Company shall have furnished to
the other in writing.
(F) Severability of this
Agreement. If any provision of this Agreement shall be judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(G) Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument.
[Execution
Page to Follow]
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Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
| /s/ Xxxxxx Xxxxx | |||
|
Xxxxxx
Xxxxx
|
|||
AGREED
AND ACCEPTED,
as of the
date first above written:
| By: | /s/ Xxxxxx X. Xxxxxxx | ||||
| Its: | Chief Executive Officer |
Dated:
April 30, 2010
[Signature Page to
Warrant Purchase Agreement]
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