SERIES D WARRANTS EXCHANGE AGREEMENT
SERIES
D WARRANTS EXCHANGE AGREEMENT
THIS
SERIES D WARRANTS EXCHANGE AGREEMENT (this “Agreement”) is dated
as of April___, 2010, by and between Epic Energy Resources, Inc., a Colorado
corporation (the “Corporation”), and
the undersigned individuals (each, a “Holder” and
collectively, the “Holders”). The
Corporation and each Holder are referred to as a “Party” and
collectively as the “Parties”.
WHEREAS, each Holder owns
Series D warrants to purchase common stock of the Corporation with a strike
price of $1.65 (the “Warrants”);
WHEREAS, the Holders each
desire to exchange the number of Warrants set forth on their signature page
hereto for, at the election of the Holder as set forth on the signature page
hereto, common stock of the Corporation, no par value (the “Common Shares”) or
Series A Convertible Preferred Stock (the “Preferred Shares,”
and, together with the Common Shares, the “Shares”),
(collectively, the “Tendered Warrants”);
and
WHEREAS, the Corporation
desires to exchange (the “Exchange”) either (i)
1 newly issued and unregistered Common Share for 1 Tendered Warrant or (ii) 1
newly issued and unregistered Preferred Share for 14 Tendered Warrants (the
Shares received in the Exchange, referred to in this Agreement as the “Exchanged
Securities”).
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Exchange.
(a) Exchange
Ratio. The Corporation and each Holder hereby agree to
exchange at the Closing the Tendered Warrants in the following ratios, at the
election of the Holder: (i) 1 Common Share for 1 Tendered Warrant and
(ii) 1 Preferred Shares for 14 Tendered Warrants.
(b) Exchange. To
effect this Exchange, each Holder will, within 10 business days after the
Closing Date, deliver to the Corporation the Tendered Warrants and the
Corporation will deliver to each Holder a stock certificate representing the
number of shares of Exchanged Securities that reflects the applicable exchange
ratio set forth above within 10 business days after the Closing
Date. Such Exchanged Securities shall be free and clear of any
legends, and, if Common Shares, shall be delivered electronically, pursuant to
DTC instructions provided by such Holder. Each Holder acknowledges
and agrees that upon the issuance and acceptance of the Exchanged Securities
issued pursuant to this Section 1, the original certificates evidencing its
Tendered Warrants will be deemed cancelled.
2. The
Closing.
(a) Closing
Date. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take
place at the offices of ▇▇▇▇▇ ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., Houston time, on April 9, 2010 (“Closing Date”), or at
such other place, date or time as the Corporation may determine in its sole
discretion.
(b) Conditions to Closing of
Holders. The obligation of Holders to consummate the
transactions on the Closing Date as contemplated by this Agreement shall be
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(i) the
Corporation shall have performed and complied in all material respects with all
obligations and agreements required to be performed and complied with by the
Corporation hereunder on or prior to the Closing Date; and
(ii) the
representations and warranties of the Corporation contained in this Agreement
shall be true and correct in all material respects as of the Closing Date as if
made as of such date.
(c) Conditions to Closing of
Corporation. The obligation of the Corporation to consummate
the transactions on the Closing Date shall be subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:
(i) each
Holder shall have each performed and complied in all material respects with all
obligations and agreements required to be performed and complied with by each
Holder hereunder on or prior to the Closing Date;
(ii) the
representations and warranties of each Holder contained in this Agreement shall
be true and correct in all material respects as of the Closing Date as if made
as of such date;
(iii) there
shall not have occurred or be likely to occur any event materially affecting the
Corporation’s business or financial affairs that would or might reasonably be
expected to prohibit, prevent, restrict or delay the Closing or that might
reasonably be expected to be material to any Holder in deciding whether to
participate in the Exchange;
(iv) there
shall not have been any action taken or threatened, or any statute, rule,
regulation, judgment, order, stay, decree or injunction promulgated, enacted,
entered, enforced or deemed applicable to the Exchange, by or before any court
or governmental regulatory or administrative agency or authority, tribunal,
domestic or foreign, that (a) challenges the making of the Exchange or might
reasonably be expected to, directly or indirectly, prohibit, prevent, restrict
or delay consummation of, or might otherwise reasonably be expected to adversely
affect in any material manner, the Exchange; or (b) could reasonably be expected
to materially adversely affect the Corporation’s business, condition (financial
or otherwise), income, operations, properties, assets, liabilities or prospects,
or materially impair the contemplated benefits of the Exchange, or the
consummation of the Exchange as a whole to the Corporation or that might be
material to Holders in deciding whether to participate in the
Exchange;
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(v) each
Holder shall have delivered to the Corporation all the Tendered Warrants to be
exchanged by each such Holder, or a lost certificate affidavit, in the form
attached hereto as Exhibit
B;
(vi) the
Corporation’s sale of a minimum of 3,500,000 shares of the Corporation’s Series
A Preferred Stock, as contemplated by Corporation’s confidential private
placement memorandum dated as of March 13, 2010, as supplemented on April 8,
2010 (the “Private
Placement Memorandum”);
(vii) the
holders of the Corporation’s Series C Warrants tender, and do not withdraw, 100%
of the Corporation’s outstanding Series C Warrants, as contemplated by the
Private Placement Memorandum;
(viii) holders
of at least 90% of the outstanding principal amount of the Corporation’s 10%
Secured Debentures with a maturity date of December 5, 2012, execute the Waiver
and Amendment to Debentures and the Amendment to Securities Purchase Agreement,
as contemplated by the Private Placement Memorandum; and
(ix) the
exchange by the Corporation and our management and directors of deferred
compensation and board fees for prior periods and a permanent reduction of
management’s 2010 base salaries for 1,200,000 shares of the Corporation’s Series
A Preferred Stock, as contemplated in the Private Placement
Memorandum.
3. Representations and
Warranties of the Corporation. The Corporation represents and
warrants to Holder as follows:
(a) Corporate
Status. The Corporation is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
and is duly licensed or qualified to transact business as a foreign corporation
and is in good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification, except where the failure to be so
licensed or qualified would not reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise) or assets of
the Corporation. The Corporation has full power and authority,
corporate or otherwise, to own and hold its properties and to carry on its
business as now conducted and as proposed to be conducted, to execute, deliver
and perform this Agreement.
(b) Authorization/Enforceability. The
execution and delivery of this Agreement and the performance by the Corporation
of its obligations hereunder, have been duly authorized by all requisite action,
corporate or otherwise, and constitute the valid and legally binding obligation
of the Corporation, enforceable in accordance with its terms and
conditions. The Corporation need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
Governmental Authority in order to consummate the transactions contemplated by
this Agreement.
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(c) Non-Contravention. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, will not violate any provision of law, any
order of any court or other agency of government or the Articles of
Incorporation or Bylaws of the Corporation, as may be amended to date, and do
not and will not result in a material breach of or constitute (with due notice
or lapse of time or both) a material default under any provision of any
indenture, agreement or other instrument to which the Corporation, or any of its
properties or assets, is bound.
(d) Consents/Approvals. No
consent, approval, authorization, order, registration or qualification of or
with any Governmental Authority or other Person or entity is required for the
issuance and sale of the Exchanged Securities by the Corporation to Holder or
the consummation by the Corporation of the transactions contemplated by this
Agreement.
(e) Exchanged Securities
Authorization. The Exchanged Securities have been duly
authorized and, when issued and delivered, will be duly and validly issued and
fully paid and nonassessable. Upon consummation of the transactions
contemplated hereby, good and valid title to the Exchanged Securities, free and
clear of all Claims, will be transferred by the Corporation to
Holder.
4. Representations and
Warranties of Holder. Each Holder represents and warrants,
severally and not jointly, to the Corporation as follows:
(a) Legal
Capacity. Each Holder has full legal right, power and capacity
to execute and deliver this Agreement and to perform his, her or its obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of Holder, enforceable in accordance with its terms and
conditions. Holder need not give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any third party or
Governmental Authority in order to consummate the transactions contemplated by
this Agreement. Except as set forth on the signature page hereto, no
Person has any community property rights by virtue of marriage or otherwise in
any of the Warrants owned by such Holder. Any such Person with
community property rights has duly executed and delivered to the Corporation at
or prior to the Closing a copy of the consent attached hereto as Exhibit
A. If such Holder is not a natural person, it has been duly
organized, and is validly existing and in good standing, under the laws of its
jurisdiction of formation, and it has properly taken all corporate, limited
liability, partnership or other action required to be taken by such Holder with
respect to the execution and delivery of this Agreement and consummate the
transactions contemplated by this Agreement.
(b) Title to the Tendered
Warrants. Holder is the lawful record and beneficial owner of
the Tendered Warrants that will be transferred pursuant to Section 1 of
this Agreement with good and marketable title thereto, and the Holder has the
right to sell, assign, convey, transfer and deliver the Tendered Warrants and
any and all rights and benefits incident to the ownership thereof (including,
without limitation, any registration or other rights pertaining to the Tendered
Warrants and the shares of common stock underlying such securities), all of
which rights and benefits are transferable by the Holder to the Corporation
pursuant to this Agreement, free and clear of all Claims. The
exchange of the securities as contemplated herein will (i) pass good and
marketable title to all the Tendered Warrants transferred pursuant to Section 1 of
this Agreement to the Corporation, free and clear of all Claims, and
(ii) convey, free and clear of all Claims, any and all rights and benefits
incident to the ownership of such securities (including, without limitation, any
registration or other rights pertaining to the securities and the shares of
common stock underlying such securities).
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(c) Non-Contravention. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, will not violate any provision of law, any
order of any court or other agency of government or the organizational documents
of the Holder, as may be applicable and as amended to date, and do not and will
not result in a material breach of or constitute (with due notice or lapse of
time or both) a material default under any provision of any indenture, agreement
or other instrument to which the Holder, or any of its properties or assets, is
bound.
(d) Consents/Approvals. No
consent, approval, authorization, order, registration or qualification of or
with any Governmental Authority or other entity or Person is required for the
Exchange or the consummation by Holder of the transactions contemplated by this
Agreement.
(e) Investment
Representations.
(i) Holder
qualifies as an “accredited investor” (as defined in Rule 501(a) of Regulation D
under the Securities Act of 1933, as amended (the “Securities Act”)) and
is acquiring the Exchanged Securities hereunder for its own account and with no
intention of distributing or selling the Exchanged Securities except pursuant to
a registration or an available exemption under applicable law. Holder
understands that the Exchanged Securities have not been (and are not being)
registered under the Securities Act by reason of their contemplated issuance in
transaction(s) exempt from the registration and prospectus delivery requirements
of the Securities Act pursuant to Section 4(2) thereof (including the rules
and regulations promulgated thereunder), and that the reliance of the
Corporation on such exemption from registration may be predicated in part on the
representations and warranties of Holder hereunder.
(ii) Holder
agrees that it will not sell or otherwise dispose of any of the Exchanged
Securities unless such sale or other disposition has been registered or is
exempt from registration under the Securities Act and has been registered or
qualified or is exempt from registration or qualification under applicable
securities laws of any state.
(iii) Holder
represents that it is not an Affiliate of the Corporation and will covenant and
agree that if it becomes an Affiliate, it will promptly provide notice to the
Corporation of such status and comply with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ laws and policies and
the applicable “control securities” provisions of Rule 144 in addition to any
other obligations set forth in this Agreement.
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(iv) Each
Holder has such knowledge and experience in financial and business matters so as
to be capable of evaluating the merits and risk of an investment in the
Exchanged Securities. Each Holder acknowledges that it has had access
to all information concerning the Corporation and its respective businesses,
assets, liabilities, financial statements, and obligations which have been
requested and has been provided the opportunity to ask questions of and receive
answers from the Corporation to fully and effectively evaluate the Exchange and
the transactions contemplated herein. Each Holder acknowledges and
represents that it has received and reviewed the Private Placement
Memorandum.
5. Withdrawal. Any
Holder as to itself only (but not with respect to the other Holders) may
withdraw all of such Holder’s Tendered Warrants from the Exchange on or prior to
April 9, 2010.
6. Certain
Definitions.
(a) “Affiliate” (and, with
a correlative meaning, “affiliated”) means,
with respect to any Person, any direct or indirect subsidiary of such Person,
and any other Person that directly, or through one or more intermediaries,
Controls or is Controlled by or is under common Control with such first
Person. As used in this definition, “Control” (and, with
correlative meanings, “Controlled by” and
“under common Control
with”) means the possession, directly or indirectly, of the power to
direct the management or policies of a Person (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
(b) “Claims” shall mean
the following of any nature whatsoever: security interests, liens, deeds of
trust, hypothecations, pledges, claims (pending or threatened), charges,
escrows, encumbrances, lock-up arrangements, options, rights of first offer or
refusal, community property rights, mortgages, indentures, security agreements
or other agreements, arrangements, contracts, commitments, understandings or
obligations, whether written or oral and whether or not relating in any way to
credit or the borrowing of money.
(c) “Commission” means the
United States Securities and Exchange Commission.
(d) “Governmental
Authority” means any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, including
any governmental authority, independent or autonomous official authority,
agency, department, board, commission or instrumentality of the United States or
any other country, or any political subdivision thereof, whether federal, state
or local, and any tribunal, court or arbitrator(s) of competent
jurisdiction.
(e) “Person(s)” means and
includes any natural persons, sole proprietorships, corporations, limited
partnerships, limited liability companies, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, all Governmental Authorities and all other
entities.
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(f) “Trading Day” means a
day on which the principal Trading Market is open for trading.
(g) “Trading Market” means
any of the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board (or any successors to any of the
foregoing).
(h) “Transfer Agent” shall
mean TranShare Corporation at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, in its capacity as transfer agent to the Corporation, or any successor
transfer agent to the Corporation.
7. Miscellaneous.
(a) Holding Period Under Rule
144.
(i) Pursuant
to Rule 144(d)(3)(ii), the holding period of the Exchanged Securities shall tack
back to the original issue date of the Tendered Warrants and as such the
Exchanged Securities shall be issued without restrictive legend thereon and
shall otherwise have no restrictions on resale by the Holders. The
Corporation agrees not to take a position contrary to this Section
7(a)(i). The Corporation agrees to take all actions, including,
without limitation, the issuance by its legal counsel of any necessary legal
opinions (which may be satisfied pursuant to Section 7(b)(ii)) necessary to
issue to the Exchanged Securities without restriction and not containing any
restrictive legend without the need for any action by the Holder. The
Corporation is not currently subject to Rule 144(i).
(ii) The
Corporation hereby agrees to cause its legal counsel to issue a legal opinion to
the undersigned Holders and the Transfer Agent, in form and substance reasonably
satisfactory to the Holders, to the extent required by the Corporation’s
transfer agent to issue the Exchanged Securities without any restrictive
legends.
(b) Material Nonpublic
Information. Each Holder acknowledges and agrees that it has
received material nonpublic information in connection with the Exchange and that
it will not sell or otherwise dispose of any of the Exchanged Securities unless
such material nonpublic information has been publicly disclosed or no longer
constitutes material nonpublic information. The Company shall, within
4 Trading Day of the date hereof, issue a Current Report on Form 8-K disclosing
the material terms of the transactions contemplated hereby, and shall attach
this Agreement and all other related agreements thereto (the “8-K
Filing”). From and after the filing of the 8-K Filing with the
Commission, the Holder shall not be in possession of any material, nonpublic
information received from the Company or any of its officers, directors,
employees or agents, that is not disclosed in the 8-K Filing. The
Company shall consult with the Holders in issuing any other press releases with
respect to the transactions contemplated hereby.
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(c) Mechanics of Conversion of
Exchanged Securities.
(i) The
date of receipt of a Holder’s certificates representing Exchanged Securities
that are Preferred Shares (for purposes of this Section 7(c) (“Series A Preferred
Stock”)), together with a notice by the Holder of its election of
conversion, by the Transfer Agent or the Corporation will be the date of
conversion (the “Conversion
Date”). Not later than three (3) Trading Days after each
Conversion Date (the “Share Delivery
Date”), the Corporation shall deliver, or cause to be delivered, to the
converting Holder a certificate or certificates representing the number of
shares of Common Stock to which such Holder is entitled, which shall be free of
restrictive legends and trading restrictions (other than those which may then be
required by the agreement pursuant to which the Holder acquired the Series A
Preferred Stock). The Corporation shall use its best efforts to
deliver any certificate or certificates required to be delivered by the
Corporation under this Section 7(c) electronically through the Depository Trust
Corporation or another established clearing Corporation performing similar
functions.
(ii) If
such certificate or certificates are not delivered to or as directed by the
applicable Holder by the Share Delivery Date, the Holder shall be entitled to
elect by written notice to the Corporation at any time on or before its receipt
of such certificate or certificates to rescind such conversion, in which event
the Corporation shall promptly return to the Holder any
original Series A Preferred Stock certificate delivered to the
Corporation. If such Holder receives Common Stock certificates
because such certificates were mailed to the Holder before the Corporation
received notice of the Holder’s rescission, the Holder shall promptly return to
the Corporation the Common Stock certificates.
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(iii) Subject
to amending the Corporation’s Articles of Incorporation to increase the number
of authorized shares of Common Stock, the Corporation’s obligation to issue and
deliver the Common Stock upon conversion of Series A Preferred Stock in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by a Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by such
Holder or any other person of any obligation to the Corporation or any violation
or alleged violation of law by such Holder or any other person, and irrespective
of any other circumstance which might otherwise limit such obligation of the
Corporation to such Holder in connection with the issuance of such Common Stock;
provided, however, that such
delivery shall not operate as a waiver by the Corporation of any such action
that the Corporation may have against such Holder. In the event a
Holder shall elect to convert any or all of its Series A Preferred Stock, the
Corporation may not refuse conversion based on any claim that such Holder or any
one associated or affiliated with such Holder has been engaged in any violation
of law, agreement or for any other reason, unless an injunction from a court, on
notice to Holder, restraining and/or enjoining conversion of all or part of the
Series A Preferred Stock of such Holder shall have been sought and obtained, and
the Corporation posts a surety bond for the benefit of such Holder in the amount
of $1.00 per share of Series A Preferred Stock that is subject to the
injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the underlying dispute and the proceeds of which shall
be payable to such Holder to the extent it obtains judgment. In the
absence of such injunction, the Corporation shall issue Common Stock and, if
applicable, cash, upon a properly noticed conversion. If the Corporation fails
to deliver to a Holder such certificate or certificates pursuant to Section
7(c)(ii) on the second Trading Day after the Share Delivery Date applicable to
such conversion, the Corporation shall pay to such Holder, in cash, as
liquidated damages and not as a penalty, for each $5,000 of Stated Value of the
Series A Preferred Stock being converted, $50 per Trading Day (increasing to
$100 per Trading Day on the third Trading Day and increasing to $200 per Trading
Day on the sixth Trading Day after such damages begin to accrue) for each
Trading Day after such second Trading Day after the Share Delivery Date until
such certificates are delivered or Holder rescinds such
conversion. Nothing herein shall limit a Holder’s right to pursue
actual damages for the Corporation’s failure to deliver Common Stock within the
period specified herein and such Holder shall have the right to pursue all
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit a Holder
from seeking to enforce damages pursuant to any other Section hereof or under
applicable law.
(iv)
In addition to any other rights available to the Holder, if the
Corporation fails for any reason to deliver to a Holder the applicable
certificate or certificates by the Share Delivery Date pursuant to Section
7(c)(ii), and if after such Share Delivery Date such Holder is required by its
brokerage firm to purchase (in an open market transaction or otherwise), or the
Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver
in satisfaction of a sale by such Holder of the Common Stock which such Holder
was entitled to receive upon the conversion relating to such Share Delivery Date
(a “Buy-In”),
then the Corporation shall (A) pay in cash to such Holder (in addition to any
other remedies available to or elected by such Holder) the amount, if any, by
which (x) such Holder’s total purchase price (including any brokerage
commissions) for the Common Stock so purchased exceeds (y) the product of (1)
the aggregate number of shares of Common Stock that such Holder was entitled to
receive from the conversion at issue multiplied by (2) the actual sale price at
which the sell order giving rise to such purchase obligation was executed
(including any brokerage commissions) and (B) at the option of such Holder,
either reissue the shares of Series A Preferred Stock equal to the number of
shares of Series A Preferred Stock submitted for conversion (in which case, such
conversion shall be deemed rescinded) or deliver to such Holder the number of
shares of Common Stock that would have been issued if the Corporation had timely
complied with its delivery requirements under Section 7(c)(ii). For example, if
a Holder purchases shares of Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted conversion of shares of
Series A Preferred Stock with respect to which the actual sale price of the
Common Stock (including any brokerage commissions) giving rise to such purchase
obligation was a total of $10,000 under clause (A) of the immediately preceding
sentence, the Corporation shall be required to pay such Holder $1,000. The
Holder shall provide the Corporation written notice indicating the amounts
payable to such Holder in respect of the Buy-In and, upon request of the
Corporation, evidence of the amount of such loss. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Corporation’s failure to timely deliver
certificates representing shares of Common Stock upon conversion of the shares
of Series A Preferred Stock as required pursuant to the terms
hereof.
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(d) Equitable
Remedy. Each Party shall agree that in addition to any other
remedy that may be available to such Party hereunder, the Party shall be
entitled to specific performance. Notwithstanding anything to the
contrary in this Agreement, each Party shall be responsible for paying its own
expenses, including legal fees, incurred in enforcing this
Agreement.
(e) Notices. All
notices, claims, demands and other communications hereunder shall be in writing
and shall be deemed given upon (i) confirmation of receipt of a facsimile
transmission, (ii) confirmation of delivery when delivered by a standard
overnight carrier or (iii) the expiration of five (5) business days
after the day when mailed by registered or certified mail (postage prepaid,
return receipt requested), addressed to the respective Parties at the following
addresses (or such other address for a Party as shall be specified by like
notice):
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If to the Corporation, to:
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▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
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If
to any Holder, to:
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At
the Holder’s address, phone
or
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fax
number appearing on the signature
page
hereto.
(f) No Third-Party
Beneficiaries. Unless otherwise specifically set forth herein,
this Agreement shall not confer any rights or remedies upon any Person other
than the Parties hereto and their respective successors and
assigns.
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(g) Entire
Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the parties hereto and supersedes
any prior understandings, agreements, or representations by or among the
parties, written or oral, to the extent they relate in any way to the subject
matter hereof.
(h) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument.
(i) Headings. The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(j) Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each Party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and (whether
brought against a Party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each Party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith 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 improper or is an inconvenient venue for such
proceeding. 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 via registered or certified mail or overnight delivery
(with evidence of delivery) to such Party at the address in effect for 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 other
manner permitted by law. If either Party shall commence an action or proceeding
to enforce any provisions of this Agreement, then the prevailing Party in such
action or proceeding shall be reimbursed by the other Party for its reasonable
attorneys' fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
(k) Amendments and
Waivers. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by the Corporation and
each Holder.
(l) Gender. All
pronouns and any variation thereof shall be deemed to refer to the masculine,
feminine, neuter, singular, or plural as the identity of the person or entity or
the context may require.
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(m) Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.
(n) No Presumption Against
Drafter. Each of the Parties has jointly participated in the
negotiation and drafting of this Agreement. In the event of any
ambiguity or a question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by each of the Parties and no presumptions or
burdens of proof shall arise favoring any Party by virtue of the authorship of
any of the provisions of this Agreement.
(o) Successors and
Assigns. Except as otherwise specifically provided herein,
this Agreement shall be binding upon, and inure to the benefit of, the Parties
hereto and their respective successors and permitted assigns.
(p) Survival. All
covenants, agreements, representations and warranties made herein shall survive
the Closing and the consummation of the exchange of the Warrants.
[SIGNATURE
PAGE FOLLOWS]
12
signature
page
IN
WITNESS WHEREOF, the undersigned has executed this signature page evidencing its
tender of the Series D Warrants identified below in exchange for Shares in the
Corporation.
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Number
of Series D Warrants tendered:
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____________
Warrants
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Signature:
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Consideration
Election:
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Print
Name:
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___ Common
Stock
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___ Series
A Preferred Stock
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If
applicable, Community Property Interest
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In
the Series D Warrants
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Signature:
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Print
Name:
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NOTE: PLEASE
DO NOT DATE THIS AGREEMENT AS IT WILL BE DATED IF AND WHEN ACCEPTED BY THE
CORPORATION.
IN
WITNESS WHEREOF, the Corporation has agreed to and accepted this Series D
Warrant Exchange Agreement subject to the terms and conditions hereof as of the
day and year set forth below.
Date: ___________________,
2010:
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By:
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Name:
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Title:
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Exhibit
A
FORM
OF
COMMUNITY
PROPERTY WAIVER
The
undersigned spouse of _____________________ hereby acknowledges that she has
read, understands and consents to the terms and provisions of the Series D
Exchange Agreement (the “Agreement”), executed
as of _____________, 2010, consents to the execution of the Agreement and any
amendments, modifications and supplements thereto by _____________________ and
agrees that the undersigned’s interest in the Series D Warrants shall be subject
to and bound by the Agreement. The undersigned’s obligations
hereunder shall not be affected by any amendment or other modification of the
Agreement or any document related thereto, which may be amended or modified at
any time and from time to time, without the consent of or notice to the
undersigned.
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Name
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Exhibit
B
AFFIDAVIT OF LOST
WARRANT
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THE
STATE OF _________________
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§
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§
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COUNTY
OF ___________________
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§
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BEFORE ME, a notary public in and for
the State of _______________, County of _________________, came before me,
_______________________________ (hereinafter called "Affiants") who after being
sworn, stated as follows:
1. Affiant
is an individual, citizen of the United States and resides in the State of
_____________________.
2. Affiant
is entitled to the possession and is the legal and beneficial owner of
______________ warrant shares issued by the Company to purchase shares of common
stock of the Company (hereinafter called the “Original Warrant”).
3. The
Original Warrant was acquired on or about the _____ day of ___________________,
and was discovered to have been lost, stolen or destroyed during
____________________.
4. The
Original Warrant was not endorsed.
5. Affiant
has made or caused to be made a diligent search for the Original Warrant and has
been unable to find or recover the same. Affiant has not sold,
assigned, pledged, transferred, deposited under any agreement, or hypothecated
the Original Warrant or any interest therein, or signed any power of attorney or
any other power or authorization respecting the same, or otherwise disposed of
the same; no person, firm, corporation or other entity other than Affiant has or
have asserted any right, title, claim, equity or interest in, to or respecting
the Original Warrant or the proceeds thereof.
6. Affiant
hereby request, and this Affidavit is made for the purpose of same, to refuse to
recognize any person other than Affiant as the owner of the Original Certificate
and to refuse to take any other action pursuant to the request or demand of any
person other than Affiant, and to issue in exchange shares of Common Stock or
Preferred Stock of the Company pursuant to the Company’s confidential private
placement memorandum dated March 12, 2010, as supplemented on April 8, 2010
without the surrender thereof for cancellation.
7. Affiant
agrees that if Affiants should find or recover the Original Warrant, Affiant
will immediately surrender the same to the Company for cancellation without
requiring any consideration therefor.
EXECUTED this
day of ________________, 2010.
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By:
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BEFORE ME, the undersigned authority,
personally appeared ___________________, known to me to be the person whose name
is subscribed to the foregoing instrument, and acknowledged to me that he
executed the same for the purposes and consideration therein
expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE
this, the
day of ____________________, 2010.
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NOTARY
PUBLIC
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