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Exhibit 4.11
WARRANT AGREEMENT
This Warrant Agreement (the "Agreement"), made and entered into
as of April 12, 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 Pri
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