DEBENTURE AND WARRANT PURCHASE
AGREEMENT
This Debenture and Warrant Purchase Agreement
(this “ Agreement ”), dated as of September __,
2009, is made by and between Innovative Card Technologies, Inc., a
Delaware corporation (the “ Company ”), and the
Purchasers signatory hereto (collectively, the “
Purchasers ”).
For good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1.
Issuance of Debenture and Warrant . The Company
hereby agrees to issue to the Purchasers against payment therefor
as described herein, a debenture of the Company in the aggregate
principal amount of up to $1,000,000 (the “
Subscription Amount ”) and common stock purchase
warrants, which debentures (a “ Debenture ”) and
warrants (the “ Warrants ”) shall be in the form
of the debentures and warrants as restated pursuant to that certain
Waiver, Amendment and Exchange Agreement (“ Amendment
Agreement ”), dated as of the date hereof, by and among
the Company and the Purchaser. Subject to the terms and
conditions hereunder, at the closing, the Company shall deliver to
the Purchaser the Debenture and Warrant, and the Purchaser shall
cancel certain obligation owed by the Company to holder in the
amount of the Subscription Amount.
2.
Documents . The rights, obligations and covenants
of the Purchaser and of the Company with respect to the Debentures
and Warrants and the shares of Common Stock issuable under the
Debenture and Warrants (the “ Underlying Shares
”) shall be identical, as to the Debentures, Warrants and
Underlying Shares, in all respects to the rights, obligations and
covenants of the Purchaser and the Company with respect to the
debentures, warrants and the underlying shares issued pursuant to
those certain Securities Purchase Agreements, dated January 8, 2008
and April 15, 2008 among the Company and the Purchasers signatory
thereto (the “ Purchase Agreements ”), as
amended by the Amendment Agreement. Defined terms not otherwise
defined herein shall have the meanings set forth in the Purchase
Agreements.
3.
Representations and Warranties of the Company
. The Company hereby makes the following representations
and warranties set forth below to the Purchasers as of the date of
its execution of this Agreement:
(a)
Authorization; Enforcement . The Company has the
requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder in accordance with
the terms hereof. The execution and delivery of this
Agreement by the Company and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Company and no further action
is required by the Company, the Board of Directors or the
Company’s stockholders in connection
therewith. This Agreement has been duly executed by the
Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except
(i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.
(b)
No Conflicts . The
execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby, subject to the terms hereof and thereof, do
not and will not: (i) conflict with or violate any provision of the
Company's or any Subsidiary's certificate or articles of
incorporation, bylaws or other organizational or charter documents,
or (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under,
result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound or affected, or
(iii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse
Effect.
(c)
Issuance of the Debentures and Warrants . The
Debentures and Warrants are duly authorized and, upon the execution
of this Agreement by the Purchasers, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided
for in the Debenture and Warrants. The Underlying
Shares, when issued in accordance with the terms of the Debentures
and Warrants, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the
Company. Subject to the receipt of the Authorized Share
Approval, the Company will have reserved from its duly authorized
capital stock a number of shares of Common Stock for issuance of
the Underlying Shares.
(d)
Affirmation of Prior Representations and Warranties
. Except as set forth in this Section and on Schedule
3(d) hereto, the Company hereby represents and warrants to each
Purchaser that the Company’s representations and warranties
listed in Section 3.1 of the Purchase Agreements, as supplemented
by the disclosures set forth in this Section and in the disclosure
schedule to the Purchase Agreements, are true and correct as of the
date hereof.
4.
Representations and Warranties of the Purchaser
. Each Purchaser hereby represents and warrants as of
the date hereof to the Company as follows:
(a)
Authority . The execution,
delivery and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate or similar action on the part of such
Purchaser. This Agreement has been duly executed by such
Purchaser and, when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance
with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
(b)
Own Account . Such Purchaser (i) understands that
the Debentures and Warrants are “restricted securities”
and have not been registered under the Securities Act or any
applicable state securities law, (ii) is acquiring the Debentures
and Warrants as principal for its own account and not with a view
to or for distributing or reselling such Debentures or Warrants or
any part thereof in violation of the Securities Act or any
applicable state securities law, (iii) has no present intention of
distributing any of such securities in violation of the Securities
Act or any applicable state securities law and (iv) has no
arrangement or understanding with any other persons regarding the
distribution of such Debenture and Warrant (this representation and
warranty not limiting such Purchaser’s right to sell the
Underlying Shares pursuant to a registration statement or otherwise
in compliance with applicable federal and state securities laws) in
violation of the Securities Act or any applicable state securities
law. Such Purchaser is acquiring the Debenture and
Warrant hereunder in the ordinary course of its
business.
(c)
Purchaser Status . At the time such Purchaser was
offered the Debentures and Warrants, it was, and as of the date
hereof it is, and on each date on which it converts the Debenture
and exercises the Warrants it will be an “accredited
investor” as defined in Rule 501 under the Securities
Act. Such Purchaser is not req
|
