Exhibit 4.4
WARRANT AGREEMENT
This Warrant Agreement (the
“Agreement”), made and entered into as of March 26,
2007, by and between SECURITY WITH ADVANCED TECHNOLOGY, INC. (f/k/a
A4S Security, Inc.), a Colorado corporation (the
“Company”), and CORPORATE STOCK TRANSFER, INC., a
Colorado corporation, as Warrant Agent (the “Warrant
Agent”).
WITNESSETH THAT:
WHEREAS, pursuant to a private
placement of its securities, the Company will offer up to $6.0
million in securities consisting of (i) three warrants to
purchase shares of Common Stock, no par value, of the Company
(“Common Stock”) and (ii) up to $6.0 million of
Convertible Promissory Notes (“ Notes ”).
Included in the three warrants being issued is one warrant to
purchase one share of Common Stock at $9.00 per share (referred to
herein as the “Warrant”).
WHEREAS, the Company desires the
Warrant Agent to act on behalf of the Company, and the Warrant
Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange and redemption of the Warrants,
the issuance of Warrant Certificates, the exercise of the Warrants,
and the rights of the holders thereof.
NOW THEREFORE, in consideration
of the premises and the mutual agreements hereinafter set forth and
for the purposes of defining the terms and provisions of the
Warrants and the certificates representing the Warrants (the
“Warrant Certificates”) and the respective rights and
obligations thereunder of the Company, the Registered Holders and
the Warrant Agent, the parties hereto agree as follows:
SECTION 1.
DEFINITIONS.
As used herein, the following
terms shall have the following meanings, unless the context shall
otherwise require:
1.1.
“Corporate Office” shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its
principal business shall be administered, which office is located
at the date hereof at 3200 Cherry Creek Drive, Suite 430, Denver,
Colorado 80209.
1.2.
“Exercise Date” shall mean the date on which the
Warrant Agent shall have received both (a) the Warrant Certificate
representing a Warrant, with the exercise form thereon duly
executed by the Registered Holder thereof or its attorney duly
authorized in writing, and (b) payment in case, or by official bank
or certified check made payable to the Company, of an amount in
lawful money of the United States of America equal to the
applicable Purchase Price.
1.3.
“Initial Warrant Exercise Date” shall mean the date of
issuance.
1.4.
“Purchase Price” shall mean the purchase price to be
paid upon exercise of each Warrant in accordance with the terms
hereof, which price shall be equal to $9.00 per common share
subject to adjustment from time to time pursuant to the provisions
of Section 8 hereof.
1.5.
“Registered Holder” shall mean the person in whose name
any certificate representing Warrants shall be registered on the
books maintained by the Warrant Agent pursuant to Section
6.
1.6.
“Transfer Agent” shall mean Corporate Stock Transfer,
Inc., as the Company’s transfer agent, or its authorized
successor, as such.
1.7.
“Warrant Expiration Date” shall mean 5:00 p.m., Denver,
Colorado time, on July 18, 2010; provided that if such date shall
in the State of Colorado be a holiday or a day on which banks are
authorized to close, then 5:00 p.m., Denver, Colorado time, on the
next following day which in the State of Colorado is not a holiday
or a day on which banks are authorized to close. Upon notice to the
Registered Holders, the Company shall have the right to extend the
warrant expiration date of the Warrants.
SECTION 2. WARRANTS AND ISSUANCE
OF WARRANT CERTIFICATES.
2.1. A
Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase one share
of Common Stock upon the exercise thereof, in accordance with the
terms hereof; subject to modification and adjustment as provided in
Section 8.
2.2. Upon
execution of this Agreement, the Company shall furnish the Warrant
Agent with a sufficient quantity of blank Warrant Certificates and
from time to time will renew such supply upon the reasonable
request of the Warrant Agent. Such blank Warrant Certificates shall
be properly signed by the Company authorized by law and in
accordance with the Company’s by-laws to sign such Warrant
Certificates. Upon written order of the Company signed by its
President and by another duly authorized officer, the Warrant
Certificates shall be manually countersigned by the Warrant Agent
and shall not be valid for any purpose unless so countersigned,
issued and delivered by the Warrant Agent pursuant to this
Agreement.
2.3. From
time to time, up to the Warrant Expiration Date, the Transfer Agent
shall countersign and deliver stock certificates in required whole
number denominations representing an aggregate of 1,666,666 shares
of Common Stock, subject to adjustment as described herein, upon
the exercise of the Warrants in accordance with this
Agreement.
2.4. From
time to time, up to the applicable Warrant Expiration Date, the
Warrant Agent shall countersign and deliver Warrant Certificates in
required whole number denominations to the persons entitled thereto
in connection with any transfer or exchange permitted under this
Agreement; provided that no Warrant Certificates shall be issued
except
(a) those
initially issued hereunder;
(b) those
issued on or after the Initial Warrant Exercise Date, upon the
exercise of fewer than all Warrants represented by the respective
Warrant Certificate, to evidence any unexercised Warrants held by
the exercising Registered Holder;
(c) those
issued upon any transfer or exchange pursuant to Section
6;
(d) those
issued in replacement of lost, stolen, destroyed or mutilated
Warrant Certificates pursuant to Section 7; and
(e) at
the option of the Company, in such form as may be approved by its
Board of Directors, to reflect any adjustment or change in the
Purchase Price, or the number of shares of Common Stock purchasable
upon exercise of the Warrants.
SECTION 3. FORM AND EXECUTION OF
WARRANT CERTIFICATES.
3.1. The
Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A (the provisions of which are hereby
incorporated herein) and may have such letters, numbers or other
marks of identification or designation and such legends, summaries
or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether
upon initial issuance, transfer, exchange or in lieu of mutilated,
lost, stolen or destroyed Warrant Certificates) and issued in
registered form. Warrants shall be numbered serially with the
letter W.
3.2.
Warrant Certificates shall be properly signed on behalf of the
Company by officers of the Company authorized by law and in
accordance with the Company’s by-laws to sign such Warrant
Certificates. Warrant Certificates shall be manually countersigned
by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have
signed any of the Warrant Certificates shall cease to be such
officer of the Company before the date of issuance of the Warrant
Certificates or before countersignature by the Warrant Agent, such
Warrant Certificate may be issued and delivered with the same force
and effect as though the person who signed such Warrant
Certificates had not ceased to be such officer of the Company.
After countersignature by the Warrant Agent, Warrant Certificates
shall be delivered by the Warrant Agent to the Registered Holder
without further action by the Company, except as otherwise provided
by Section 4 hereof.
SECTION 4. EXERCISE AND
REDEMPTION
4.1. Each
Warrant may be exercised by the Registered Holder thereof at any
time on or after the Initial Exercise Date, but not after the
Warrant Expiration Date, upon the terms and subject to the
conditions set forth herein and in the Warrant Certificate. A
Warrant shall be deemed to have been exercised immediately prior to
the close of business on the Exercise Date and the person entitled
to receive the Common Stock deliverable upon such exercise shall be
treated for all purposes as the holder upon exercise thereof as of
the close of business on the Exercise Date. As soon as practicable
on or after the Exercise Date, the Warrant Agent shall deposit the
proceeds received from the exercise of a Warrant and shall notify
the Company in writing, by mail or by telecopy of the exercise of
the Warrants. Promptly following, and in any event within three (3)
days after the date of such notice from the Warrant Agent, the
Warrant Agent, on behalf of the Company, shall cause to be issued
and delivered by the Transfer Agent, to the person or persons
entitled to receive the same, a certificate or certificates for the
securities deliverable upon such exercise, (plus a Warrant
Certificate for any remaining unexercised Warrants of the
Registered Holder) unless within 24 hours of the receipt of the
notice, the Company shall instruct the Warrant Agent by telecopy to
refrain from causing such issuance of Warrant Certificates pending
clearance of checks received in payment of the Purchase Price
pursuant to such Warrants. Upon the exercise of any Warrant and
clearance of the funds received, the Warrant Agent shall promptly
remit the payment received for the Warrant to the Company or as the
Company may direct in writing.
4.2. The
Company reserves the right to call the Warrants, at any time after
July 18, 2008 and prior to their exercise, with a notice of call in
writing to the Registered Holders, giving 30 days’ notice of
such call at any time after the Warrant becomes exercisable if the
last sale price of the Common Stock has been at least $13.50 per
share on each of 30 consecutive trading days prior to the date on
which notice of such call is given. The call price of the Warrants
is to be $.10 per Warrant. Any Warrant either not exercised, or
tendered back to the Company by the end of the date specified in
the notice of call, shall be canceled on the books of the Company
and have no further value except for the $.10 call
price.
SECTION 5. RESERVATION OF SHARES;
LISTING; PAYMENT OF TAXES; ETC.
5.1. The
Company’s Articles of Incorporation authorize the issuance of
30,000,000 shares of Common Stock. The Company covenants that it
will at all times reserve and keep available out of its authorized
Common Stock, solely for the purpose of issue upon exercise of
Warrants, such number of shares of Common Stock as shall be
issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of Common Stock which shall be issuable
upon exercise of the Warrants shall, at the time of delivery, be
duly and validly issued, fully paid, nonassessable and free from
all taxes, liens and charges with respect to the issue thereof
(other than those which the Company shall promptly pay or
discharge).
5.2.
Warrants may not be exercised by, or shares of Common Stock issued
to, any Registered Holder in any state in which such exercise would
be unlawful. The Warrant Agent will not have any duty or
responsibility for determining if the registration would be
unlawful.
5.3. The
Company shall pay all documentary, stamp or similar taxes and other
governmental charges that may be imposed with respect to the
issuance of Warrants, or the issuance, or delivery of any shares
upon exercise of the Warrants; provided, however, that if the
shares of Common Stock are to be delivered in a name other than the
name of the Registered Holder of the Warrant Certificate
representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the
Warrant Agent the amount of transfer taxes or charges incident
thereto, if any.
5.4. The
Warrant Agent is hereby irrevocably authorized to requisition the
Company’s Transfer Agent from time to time for certificates
representing shares of Common Stock required upon exercise of the
Warrants, and the Company will authorize the Transfer Agent to
comply with all such proper requisitions. The Company will file
with the Warrant Agent a statement setting forth the name and
address of the Transfer Agent of the Company for shares of Common
Stock issuable upon exercise of the Warrants.
SECTION 6. EXCHANGE AND
REGISTRATION OF TRANSFER.
6.1.
Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants of
the same class or may be transferred in whole or in part. Warrant
Certificates to be exchanged shall be surrendered to the Warrant
Agent at the Corporate Office, and upon satisfaction of the terms
and provisions hereof, the Company shall execute and the Warrant
Agent shall countersign, issue and deliver in exchange therefore
the Warrant Certificate or Certificates which the Registered Holder
making the exchange shall be entitled to receive.
6.2. The
Warrant Agent shall keep at the Corporate Office books in which,
subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and the transfer thereof in
accordance with its regular practice. Upon due presentment for
registration or transfer of any Warrant Certificate at such office,
the Company shall execute and the Warrant Agent shall issue and
deliver to the transferee or transferees a new Warrant Certificate
or Certificates representing an equal aggregate number of Warrants
of the same class.
6.3. With
respect to all Warrant Certificates presented for registration or
transfer, or for exchange or exercise, the Warrant Agent shall from
time to time register the transfer, exchange or exercise of any
outstanding Warrant Certificate upon records maintained by the
Warrant Agent for such purpose upon surrender of such Warrant
Certificate to the Warrant Agent, accompanied by appropriate
instruments of transfer in form satisfactory to the Company and the
Warrant Agent and duly executed by the Registered Holder or a duly
authorized attorney.
6.4. A
service charge may be imposed by the Warrant Agent for registration
or transfer or for exchange of Warrant Certificates. In addition,
the Company may require payment by such holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in connection therewith.
6.5. All
Warrant Certificates surrendered for exercise or for exchange in
case of mutilated Warrant Certificates shall be promptly canceled
by the Warrant Agent and thereafter retained by the Warrant Agent
until termination of this Agreement or resignation as Warrant
Agent, or, disposed of or destroyed, at the direction of the
Company, within the retention guidelines prescribed by any Federal,
State or banking regulatory authority.
6.6.
Prior to due presentment for registration or transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered
Holder of any Warrant Certificate as the absolute owner thereof and
of each Warrant represented thereby (notwithstanding any notations
of ownership or writing thereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the
contrary.
SECTION 7. LOSS OR
MUTILATION.
7.1. Upon
receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership of and loss, theft,
destruction or mutilation of any Warrant Certificate and (in case
of loss, theft or destruction) of indemnity satisfactory to them,
and (in the case of mutilation) upon surrender and cancellation
thereof the Company shall execute and the Warrant Agent shall (in
the absence of notice to the Company and/or Warrant Agent that the
Warrant Certificate has been acquired by a bona fide purchaser)
countersign and deliver to the Registered Holder in lieu thereof a
new Warrant Certificate of like tenor representing an equal
aggregate number of Warrants of that same class. Applicants for a
substitute Warrant Certificate shall comply with such other
reasonable regulations and pay such other reasonable charges as the
Warrant Agent may prescribe.
SECTION 8. ADJUSTMENT OF EXERCISE
PRICE AND NUMBER OF SHARES OF COMMON STOCK OR WARRANTS.
8.1. The
Company may elect, upon any adjustment of the Purchase Price
hereunder, to adjust the number of Warrants of each or any class
outstanding, in lieu of the adjustment in the number of shares of
Common Stock purchasable upon the exercise of each Warrant as
hereinabove provided, so that each Warrant outstanding after such
adjustment shall represent the right to purchase one share of
Common Stock. Each Warrant held of record prior to such adjustment
of the number of Warrants of each or any class shall become that
number of Warrants (calculated to the nearest tenth) determined by
multiplying the number one by a fraction, the numerator of which
shall be the Purchase Price in effect immediately prior to stock
adjustment and the denominator of which shall be the Purchase Price
in effect immediately after such adjustment. Upon each adjustment
of the number of Warrants pursuant to this Section 8.1, the Company
shall, as promptly as