ADDITIONAL INVESTMENT RIGHT STATMON TECHNOLOGIES CORP.
EXHIBIT
B
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
ADDITIONAL
INVESTMENT RIGHT
To
Purchase $________ Principal Amount
of
Senior
Secured Convertible Debentures
and
Warrants
Initial
Exercise Date: March 5, 2008
THIS
ADDITIONAL INVESTMENT RIGHT (the “AIR”)
certifies that, for value received, _____________ (the “Holder”)
is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
“Initial
Exercise Date”)
and on
or prior to the close of business on the 270th
day from
the date of the Purchase Agreement (the “Termination
Date”)
but
not thereafter, to subscribe for and purchase from Statmon Technologies Corp.,
a
Nevada corporation (the “Company”),
up to
$_____________ principal amount of Original Issue Discount Senior Secured
Convertible Debentures (the “AIR
Debenture”)
and
warrants to purchase shares of Common Stock of the Company as described herein
at an exercise price of $1.20 per share (the “AIR
Warrant Exercise Price”)
(subject to adjustment hereunder and thereunder) (the “AIR
Warrant”).
Subject to the terms and conditions hereof, upon the purchase hereunder of
an
AIR Debenture, the Holder shall receive a warrant to purchase a number of shares
of Common Stock equal to 100% of the shares of Common Stock issuable upon
conversion of such AIR Debenture based upon the Conversion Price as of the
date
hereof. The initial conversion price of the AIR Debenture shall be equal to
$___1,
subject
to adjustment thereunder and hereunder (“AIR
Debenture Conversion Price”).
The
AIR Debenture and AIR Warrant shall be in the form of the Debenture and Warrants
(with the same rights, privileges and preferences set forth in the Transaction
Documents, including without limitation, the Debenture) issued pursuant to
the
Purchase Agreement, mutatis mutandis. The AIR Debenture and the AIR Warrant
shall be collectively referred to as the “AIR
Securities.”
The
AIR Warrant Exercise Price and the AIR Debenture Conversion Price shall be
collectively referred to herein as the “AIR
Conversion Price.”
The
shares of Common Stock underlying the AIR Debentures and the AIR Warrant shall
be collectively referred to herein as the “AIR
Conversion Shares.”
1
The
lesser of (y) the then Conversion Price of the Debenture and (z)
$0.9824.
Section
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”),
dated
March 5, 2008, among the Company and the purchasers signatory
thereto.
Section
2. Exercise.
a) Exercise
of AIR.
Subject
to the terms and conditions contained herein, exercise of the purchase rights
represented by this AIR may be made at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company
of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto
(or such other office or agency of the Company as it may designate by notice
in
writing to the registered Holder at the address of such Holder appearing on
the
books of the Company) and the payment of the aggregate principal amount of
the
AIR Debentures thereby purchased by wire transfer or cashier’s check drawn on a
United States bank. Subject to the terms and conditions contained herein, upon
exercise of the AIR, the Company shall issue an AIR Debenture with a principal
amount equal to the amount paid by the Holder and the AIR Warrant to purchase
a
number of shares of Common Stock equal to 100% of the shares of Common Stock
issuable upon conversion of such AIR Debenture.
b) Mechanics
of Exercise.
i. Delivery
of Certificates Upon Exercise.
Certificates for the AIR Securities purchased hereunder shall delivered to
the
Holder within three (3) Trading Days from the delivery to the Company of the
Notice of Exercise Form, surrender of this AIR and payment of the principal
amount as set forth above (“AIR
Security Delivery Date”).
This
AIR shall be deemed to have been exercised on the date the payment of the
principal amount is received by the Company. The AIR Securities shall be deemed
to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for
all
purposes, as of the date the AIR has been exercised by payment to the Company
of
the principal amount and all taxes required to be paid by the Holder, if any,
pursuant to Section 2(e)(vi) prior to the issuance of such security, have been
paid.
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ii. Delivery
of New AIRs Upon Exercise.
If this
AIR shall have been exercised in part, the Company shall, at the request of
a
Holder and upon surrender of this AIR certificate, at the time of delivery
of
the certificate or certificates representing AIR Securities, deliver to Holder
a
new AIR evidencing the rights of Holder to purchase the unpurchased AIR
Securities called for by this AIR, which new AIR shall in all other respects
be
identical with this AIR.
iii. Rescission
Rights.
If the
Company fails to cause its transfer agent to transmit to the Holder a
certificate or certificates representing the AIR Securities pursuant to this
Section 2(e)(i) by the AIR Security Delivery Date, then the Holder will have
the
right to rescind such exercise.
iv. No
Fractional Shares or Scrip.
No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this AIR. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall at
its
election, either pay a cash adjustment in respect of such final fraction in
an
amount equal to such fraction multiplied by the AIR Conversion Price or round
up
to the next whole share.
v. Charges,
Taxes and Expenses.
Issuance of certificates for AIR Securities shall be made without charge to
the
Holder for any issue or transfer tax or other incidental expense in respect
of
the issuance of such certificate, all of which taxes and expenses shall be
paid
by the Company, and such certificates shall be issued in the name of the Holder
or in such name or names as may be directed by the Holder; provided,
however,
that in
the event certificates for AIR Securities are to be issued in a name other
than
the name of the Holder, this AIR when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.
vi. Closing
of Books.
The
Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this AIR, pursuant to the terms hereof or the
conversion of the AIR Securities.
Section
3. Certain
Adjustments.
a) Stock
Dividends and Splits.
If the
Company, at any time while this AIR is outstanding: (A) pays a stock dividend
or
otherwise make a distribution or distributions on shares of its Common Stock
or
any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common
Stock issued by the Company pursuant to the AIR Securities), (B) subdivides
outstanding shares of Common Stock into a larger number of shares, (C) combines
(including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (D) issues by reclassification of shares
of
the Common Stock any shares of capital stock of the Company, then in each case
the AIR Conversion Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event and the number of shares issuable upon exercise
of
this AIR shall be proportionately adjusted such that the aggregate AIR
Conversion Price of this AIR shall remain unchanged. Any adjustment made
pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.
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b) Subsequent
Equity Sales.
If the
Company or any Subsidiary thereof, as applicable, at any time while this AIR
is
outstanding, shall sell or grant any option to purchase, or sell or grant any
right to reprice, or otherwise dispose of or issue (or announce any offer,
sale,
grant or any option to purchase or other disposition) any Common Stock or Common
Stock Equivalents entitling any Person to acquire shares of Common Stock, at
an
effective price per share less than the then AIR Conversion Price (such lower
price, the “Base
Share Price”
and
such issuances collectively, a “Dilutive
Issuance”)
(if
the holder of the Common Stock or Common Stock Equivalents so issued shall
at
any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights per share which are issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price
per share which is less than the AIR Conversion Price, such issuance shall
be
deemed to have occurred for less than the AIR Conversion Price on such date
of
the Dilutive Issuance), then the AIR Conversion Price shall be reduced and
only
reduced to equal the Base Share Price and the number of AIR Securities issuable
hereunder shall be increased such that the aggregate AIR Conversion Price
payable hereunder, after taking into account the decrease in the AIR Conversion
Price, shall be equal to the aggregate AIR Conversion Price prior to such
adjustment. Such adjustment shall be made whenever such Common Stock or Common
Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments
shall be made, paid or issued under this Section 3(b) in respect of an Exempt
Issuance. The Company shall notify the Holder in writing, no later than the
Trading Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this Section 3(b), indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price
and
other pricing terms (such notice the “Dilutive
Issuance Notice”).
For
purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
entitled to receive a number of AIR Securities based upon the Base Share Price
regardless of whether the Holder accurately refers to the Base Share Price
in
the Notice of Exercise.
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c) Subsequent
Rights Offerings.
If the
Company, at any time while the AIR is outstanding, shall issue rights, options
or warrants to all holders of Common Stock (and not to Holders) entitling them
to subscribe for or purchase shares of Common Stock at a price per share less
than the VWAP at the record date mentioned below, then the AIR Conversion Price
shall be multiplied by a fraction, of which the denominator shall be the number
of shares of the Common Stock outstanding on the date of issuance of such rights
or warrants plus the number of additional shares of Common Stock offered for
subscription or purchase, and of which the numerator shall be the number of
shares of the Common Stock outstanding on the date of issuance of such rights
or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered (assuming receipt by the Company in full
of
all consideration payable upon exercise of such rights, options or warrants)
would purchase at such VWAP. Such adjustment shall be made whenever such rights
or warrants are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such rights,
options or warrants.
d) Pro
Rata Distributions.
If the
Company, at any time while this AIR is outstanding, shall distribute to all
holders of Common Stock (and not to Holders of the AIRs) evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which
shall be subject to Section 3(b)), then in each such case the AIR Conversion
Price shall be adjusted by multiplying the AIR Conversion Price in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator
shall be the VWAP determined as of the record date mentioned above, and of
which
the numerator shall be such VWAP on such record date less the then per share
fair market value at such record date of the portion of such assets or evidence
of indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith. In either case
the
adjustments shall be described in a statement provided to the Holder of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.
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e) Fundamental
Transaction.
If, at
any time while this AIR is outstanding, (A) the Company effects any merger
or
consolidation of the Company with or into another Person, (B) the Company
effects any sale of all or substantially all of its assets in one or a series
of
related transactions, (C) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (D) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(each “Fundamental
Transaction”),
then,
upon any subsequent exercise of this AIR, the Holder shall have the right to
receive upon conversion or exercise of the AIR Securities, as applicable, for
each AIR Conversion Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, the number
of shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration
(the “Alternate
Consideration”)
receivable as a result of such merger, consolidation or disposition of assets
by
a holder of the number of shares of Common Stock for which the underlying AIR
Securities are convertible immediately prior to such event. For purposes of
any
such conversion, the determination of the AIR Conversion Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
AIR
Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration
it
receives upon any conversion or exercise of the AIR Securities underlying this
AIR following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new
additional investment right consistent with the foregoing provisions and
evidencing the Holder’s right to exercise such additional investment right into
Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section
3(e)
and insuring that this AIR (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
Notwithstanding anything to the contrary, in the event of a Fundamental
Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction”
as defined in Rule 13e-3 under the Securities Exchange Act of 1934, as amended,
or (3) a Fundamental Transaction involving a person or entity not traded on
a
national securities exchange, the Nasdaq Global Select Market, the Nasdaq Global
Market, or the Nasdaq Capital Market, the Company or any successor entity shall
pay at the Holder’s option, exercisable at any time concurrently with or within
thirty (30) days after the consummation of the Fundamental Transaction, an
amount of cash equal to the value of this AIR as determined in accordance with
the Black Scholes Option Pricing Model obtained from the “OV” function on
Bloomberg L.P. using (i) a price per share of Common Stock equal to the VWAP
of
the Common Stock for the Trading Day immediately preceding the date of
consummation of the applicable Fundamental Transaction, (ii) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to
the
remaining term of this AIR as of the date of consummation of the applicable
Fundamental Transaction and (iii) an expected volatility equal to the 100 day
volatility obtained from the “HVT” function on Bloomberg L.P. determined as of
the Trading Day immediately following the public announcement of the applicable
Fundamental Transaction.
f) Calculations.
All
calculations and adjustments to the AIR Conversion Price under this Section
3
shall be made to the nearest cent or the nearest 1/100th of a share, as the
case
may be. For purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the sum of
the
number of shares of Common Stock (excluding treasury shares, if any) issued
and
outstanding.
6
g) Notice
to Holder.
i. Adjustment
to AIR Conversion Price.
Whenever the AIR Conversion Price is adjusted pursuant to any provision of
this
Section 3, the Company shall promptly mail to the Holder a notice setting forth
the AIR Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by ▇▇▇▇▇▇.
If (A)
the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock; (B) the Company shall declare a special nonrecurring
cash dividend on or a redemption of the Common Stock; (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants
to
subscribe for or purchase any shares of capital stock of any class or of any
rights; (D) the approval of any stockholders of the Company shall be required
in
connection with any reclassification of the Common Stock, any consolidation
or
merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or property;
(E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company; then, in each case,
the
Company shall cause to be mailed to the Holder at its last address as it shall
appear upon the AIR Register of the Company, at least twenty (20) calendar
days
prior to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not
to
be taken, the date as of which the holders of the Common Stock of record to
be
entitled to such dividend, distributions, redemption, rights or warrants are
to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this AIR during the period
commencing on the date of such notice to the effective date of the event
triggering such notice.
Section
4. Transfer
of AIR.
a) Transferability.
Subject
to compliance with any applicable federal and state securities laws and the
conditions set forth in Section 4(d) hereof and to the provisions of Section
4.1
of the Purchase Agreement, this AIR and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or in part,
upon
surrender of this AIR at the principal office of the Company or its designated
agent, together with a written assignment of this AIR substantially in the
form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new AIR or AIRs in the name of the assignee or assignees and
in
the denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new AIR evidencing the portion of this AIR
not
so assigned, and this AIR shall promptly be cancelled. An AIR, if properly
assigned, may be exercised by a new holder for the purchase of AIR Securities
without having a new AIR issued.
7
b) New
AIRs.
This
AIR may be divided or combined with other AIRs upon presentation hereof at
the
aforesaid office of the Company, together with a written notice specifying
the
names and denominations in which new AIRs are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 4(a), as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new AIR or AIRs in exchange for the AIR or AIRs
to
be divided or combined in accordance with such notice. All AIRs issued on
transfers or exchanges shall be dated the date hereof and shall be identical
with this AIR except as to the number of AIR Securities issuable pursuant
thereto.
c) AIR
Register.
The
Company shall register this AIR, upon records to be maintained by the Company
for that purpose (the “AIR
Register”),
in
the name of the record Holder hereof from time to time. The Company may deem
and
treat the registered Holder of this AIR as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
d) Transfer
Restrictions.
If,
at the
time
of
the surrender of this AIR in connection with any transfer of this AIR, the
transfer of this AIR shall not be either (i) registered pursuant to an effective
registration
statement under the Securities Act
and
under
applicable state securities or blue sky laws or
(ii)
eligible for resale without volume or manner-of-sale restrictions pursuant
to
Rule 144, the Company may require, as a condition of allowing such transfer,
that the Holder or transferee of this AIR, as the case may be, comply
with the provisions of Section 5.7 of the Purchase Agreement.
Section
5. Miscellaneous.
a) No
Rights as Shareholder Until Exercise.
This
AIR does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof as set forth in Section
2(e)(i).
b) Loss,
Theft, Destruction or Mutilation of AIR.
The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this AIR
or
any stock certificate relating to the AIR Securities, and in case of loss,
theft
or destruction, of indemnity or security reasonably satisfactory to it (which,
in the case of the AIR, shall not include the posting of any bond), and upon
surrender and cancellation of such AIR or stock certificate, if mutilated,
the
Company will make and deliver a new AIR or stock certificate of like tenor
and
dated as of such cancellation, in lieu of such AIR or stock
certificate.
8
c) Saturdays,
Sundays, Holidays, etc.
If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then such action
may be taken or such right may be exercised on the next succeeding Business
Day.
d) Authorized
Shares.
The
Company covenants that during the period the AIR is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient number of shares
to
provide for the issuance of the shares of Common Stock issuable upon conversion
and exercise, as applicable, of the AIR Securities. The Company further
covenants that its issuance of this AIR shall constitute full authority to
its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the AIR Securities upon the
exercise of the purchase rights under this AIR and certificates upon conversion
and exercise of the AIR Securities. The Company will take all such reasonable
action as may be necessary to assure that such AIR Securities and AIR Conversion
Shares may be issued as provided herein without violation of any applicable
law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed. The Company covenants that all AIR Securities which
may be issued upon the exercise of the purchase rights represented by this
AIR
and the AIR Conversion Shares thereunder will, upon exercise of the purchase
rights represented by this AIR, be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall
not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of
this
AIR or the AIR Securities, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may
be
necessary or appropriate to protect the rights of Holder as set forth in this
AIR or the AIR Securities against impairment. Without limiting the generality
of
the foregoing, the Company will (a) not increase the par value of any AIR
Securities above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue
fully paid and nonassessable AIR Securities upon the exercise of this AIR and
AIR Conversion Shares upon conversion and exercise of the AIR Securities, and
(c) use commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this AIR and the AIR Securities.
9
Before
taking any action which would result in an adjustment in the number of AIR
Securities for which this AIR is exercisable or in the AIR Conversion Price,
the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
e) Jurisdiction.
All
questions concerning the construction, validity, enforcement and interpretation
of this AIR shall be determined in accordance with the provisions of the
Purchase Agreement.
f) Restrictions.
The
Holder acknowledges that the AIR Securities acquired upon the exercise of this
AIR, if not registered, will have restrictions upon resale imposed by state
and
federal securities laws.
g) Nonwaiver
and Expenses.
No
course of dealing or any delay or failure to exercise any right hereunder on
the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this AIR, which results in
any
material damages to the Holder, the Company shall pay to Holder such amounts
as
shall be sufficient to cover any costs and expenses including, but not limited
to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.
i) Limitation
of Liability.
No
provision hereof, in the absence of any affirmative action by Holder to exercise
this AIR to purchase AIR Securities, and no enumeration herein of the rights
or
privileges of Holder, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this AIR. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this AIR and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be
adequate.
k) Successors
and Assigns.
Subject
to applicable securities laws, this AIR and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors of
the
Company and the successors and permitted assigns of Holder. The provisions
of
this AIR are intended to be for the benefit of all Holders from time to time
of
this AIR and shall be enforceable by the Holder or holder of AIR
Securities.
10
l) Amendment.
This
AIR may be modified or amended or the provisions hereof waived with the written
consent of the Company and the Holder.
m) Severability.
Wherever possible, each provision of this AIR shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this AIR shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this AIR.
n) Headings.
The
headings used in this AIR are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this AIR.
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11
IN
WITNESS WHEREOF, the Company has caused this AIR to be executed by its officer
thereunto duly authorized as of the date first above indicated.
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By:
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Name:
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Title:
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12
NOTICE
OF EXERCISE
(1) The
undersigned hereby elects to purchase $________ Principal Amount of AIR
Debenture and Warrants to purchase _____ shares of Common Stock the Company
pursuant to the terms of the attached AIR (only if exercised in full), and
tenders herewith payment of the principal in full, together with all applicable
transfer taxes, if any.
(2) Payment
shall take the form of lawful money of the United States.
(3) Please
issue a certificate or certificates representing said AIR Securities in the
name
of the undersigned or in such other name as is specified below:
_______________________________
The
AIR
Securities shall be delivered to the following:
_______________________________
_______________________________
_______________________________
(4)
Accredited
Investor.
The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of
Investing Entity:
_________________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
___________________________________________________________
Name
of
Authorized Signatory:
_____________________________________________________________________________
Title
of
Authorized Signatory:
______________________________________________________________________________
Date:
_________________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing additional investment right,
execute
this form and supply required information.
Do
not
use this form to exercise the additional investment right.)
FOR
VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing AIR and all rights
evidenced thereby are hereby assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated:
______________, _______
Holder’s
Signature: _____________________________
Holder’s
Address: _____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the AIR, without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank or trust company. Officers of corporations
and
those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing AIR.