Exhibit 10.1
Amended and Restated Note and Warrant Purchase Agreement
AMENDED AND RESTATED NOTE AND WARRANT PURCHASE AGREEMENT
This AMENDED AND RESTATED NOTE AND WARRANT PURCHASE AGREEMENT, dated as of
January 22, 2008 (this “Agreement”), is entered into by and between SMART MOVE,
INC., a Delaware corporation (the “Company”), and Thomas P. Grainger, an
individual residing in the state of Wyoming (“Purchaser”).
RECITALS

  A.  
The Purchaser and the Company previously executed a Note and Warrant Purchase
Agreement whereby the Company sold to the Purchaser a 7% Unsecured Convertible
Note due September 2, 2010 which was convertible into 300,000 shares of the
Company’s Common Stock $.0001 par value, at a conversion price of $1.80 per
share. Under the terms of the Note and Warrant Purchase Agreement, three
(3) separate warrants each covering 100,000 shares of common stock, $0.0001 par
value, and exercisable until December 5, 2011 were issued, with exercise prices
of $7.50, $7.50, $3.25 and $2.50, respectively.
    B.  
The Company requires additional funding to meet its operating requirements and
proposes to sell to Purchaser a new 12% Unsecured Convertible Note in the form
attached hereto as Exhibit “A,” due January 22, 2009, in the principal amount of
$200,000, having a conversion price equal to the closing price of a share of the
Company’s common stock, par value $0.0001 per share, on the American Stock
Exchange on the date of funding, but not less than $0.75 per share, and with
principal payable at maturity on January 22, 2009, and with interest payable
quarterly in arrears on the first day of April, July, October and at Maturity on
January 22, 2009. As an inducement to Purchaser to make this additional
investment with the Company, the Company proposes to: (i) issue two (2) separate
warrants, each to purchase 285,000 shares of the Company’s common stock, $0.0001
par value, having an exercise price of $1.00 and $1.25, respectively, in the
forms attached as Exhibits “B” and “C” and (ii) to amend, restate and replace
the previously issued 7% Unsecured Convertible Note, substituting the form of
amended note attached hereto as Exhibit “D” which has a conversion price equal
to $0.80 per share (iii) to amend the terms of the three (3) currently existing
Warrants issued to Purchaser in September 2007, each to purchase 100,000 shares
of Common Stock, $0.0001 par value, having original exercise prices of $7.50,
$3.25 and $2.50 respectively, so that the respective Warrants (aggregating a
right to acquire 300,000 shares) shall have revised exercise prices of $1.00,
$1.25 and $1.50 upon amendment of each in the form attached as Exhibit “E”.

In consideration of the foregoing Recitals which form part of this Agreement and
the other mutual promises made herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SECURITIES
1.1 Closing. On and subject to the terms and conditions of this Agreement, the
Purchaser hereby agrees to purchase, and the Company agrees to sell and issue to
Purchaser a new 12% Unsecured Convertible Note and two (2) attached warrants,
each to purchase 285,000 shares of the Company’s common stock at an exercise
price of $1.00 and $1.25, respectively, at an aggregate purchase price for such
Securities of $200,000; and each party agrees that the form of amended note
attached hereto as Exhibit “D.” will be executed and delivered in lieu and in
replacement of the existing 7% Unsecured Convertible Note. The parties also
confirm that three Existing Warrants issued in September 2007 and each covering
100,000 shares will be amended to revise the exercise prices stated therein from
$2.50, $3.25, and $7.50, respectively, to $1.00, $1.25, and $1.50, respectively.

 

 

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1.2 Deliveries at Closing. At the Closing, the Company will deliver to the
Purchaser: 1) the new 12% Unsecured Convertible Note due January 22, 2009, 2)
the replacement 7% Unsecured Convertible Note due September 2, 2010, 3) the two
warrants attached to the purchase of the 12% Unsecured Convertible Note, each
having a term expiring January 22, 2012 and covering the right to purchase
285,000 shares of common stock at exercise prices of $1.00 and $1.25 per share,
respectively, and 4) three Amendments to Warrant Certificate in the form
attached as Exhibit “E” to revise exercise prices under three (3) existing
warrants to purchase 100,000 shares so that the exercise prices are changed to
$1.00, $1.25 and $1.50, respectively. The Purchaser will deliver to the Company
the $200,000 face amount of the new 12% Unsecured Convertible Note due
January 22, 2009, by wire transfer of immediately available funds to an account
of the Company as the Company shall direct in writing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser as follows:
2.1 Organization, etc. The Company has been duly formed, and is validly existing
as a corporation in good standing under the laws of Delaware and is qualified to
do business as a foreign corporation in each jurisdiction in which the failure
to be so qualified could reasonably be expected to have a material adverse
effect on the assets, liabilities, condition (financial or other), business or
results of operations of the Company and its Subsidiary taken as a whole (a
“Material Adverse Effect”). The Company and its Subsidiary each have the
requisite corporate power and authority to own, lease and operate their
respective properties and to conduct their respective businesses as presently
conducted. The Company has the requisite corporate power and authority to enter
into, execute, deliver and perform all of its duties and obligations under this
Agreement and to consummate the transactions contemplated hereby.
2.2 Authorization. The execution, delivery and performance of this Agreement and
the issuance of the Securities have been duly authorized by all necessary
corporate action on the part of the Company, including, without limitation, the
due authorization by the affirmative votes of a majority of the disinterested
directors of the Company’s Board of Directors.
2.3 Validity; Enforceability. This Agreement and the 12% Unsecured Convertible,
two attached Warrants and the replacement Note issued in lieu of the 7%
Unsecured Convertible Note due September 2, 2010 shall at the Closing have each
been duly executed and delivered by the Company, and constitute the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by, or subject to, any bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and subject to general principles of equity.
2.4 Capitalization. As of the date hereof, the authorized capital stock of the
Company consists of the Company consists of 100,000,000 shares of Common Stock,
$0.0001 par value. The Company will at all times reserve a sufficient number of
shares of its Common Stock for future issuance upon the exercise or conversion
of the Securities covered by this Agreement and all other agreements and
instruments convertible into or exercisable to acquire Common Stock.

 

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2.5 Governmental and Stock Exchange Approvals and Consents. The execution and
delivery by the Company of this Agreement, and the performance by the Company of
the transactions contemplated hereby, do not and will not require the Company to
effectuate or obtain any registration with, consent or approval of, or notice to
any federal, state or other governmental authority or regulatory body, other
than: i) periodic and other filings under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”); and ii) approval of a listing application
and/or notifications to the American Stock Exchange with respect to the issuance
of the Common Stock issuable upon conversion or exercise of the notes and
exercise of the warrants comprising the Securities. The parties hereto agree and
acknowledge that, in making the representations and warranties in the foregoing
sentence of this Section 2.5, the Company is relying on the representations and
warranties made by the Purchaser in Article III. To the best knowledge of the
Company, the issuance and sale of the Securities will not contravene the rules
and regulations of the American Stock Exchange, whose rules and regulations
require under certain circumstances that a listed company obtain shareholder
approval in connection with a transaction (other than a public offering),
involving the potential issuance of shares of common stock (including shares of
common stock issuable upon the conversion or exercise of other securities) equal
to 20% or more of its aggregate shares of common stock, or its aggregate voting
power, outstanding before the transaction for less than the greater of book or
market value of its common stock as of the date of the transaction. Based upon
the new investment and fixed exercise prices applicable under all securities
that will be held by the Purchaser upon the Closing contemplated by this
Agreement, the Company believes that no approval of the shareholders of the
Company will be required for its issuance and delivery of the Securities covered
hereby, but undertakes to use its best efforts to secure any such approval,
ratification or to satisfy any other requirement that may be imposed by the
American Stock Exchange as a condition of its listing of the underlying shares
issuable with respect to the Securities covered by this Agreement.
2.6 No Violation. The execution and delivery of this Agreement and the
performance by the Company of the transactions contemplated hereby will not
(i) conflict with or result in a breach of any provision of the articles of
incorporation or by-laws of the Company, (ii) result in a default or breach of,
or require any consent, approval, authorization or permit of, or filing or
notification to, any person, company or entity under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, loan, factoring
arrangement, license, agreement, lease or other instrument or obligation to
which the Company is a party or by which the Company or its assets may be bound
or (iii) violate any law, judgment, order, writ, injunction, decree, statute,
rule or regulation of any court, administrative agency, bureau, board,
commission, office, authority, department or other governmental entity
applicable to the Company or its subsidiaries, except, in the case of clause
(ii) or (iii) above, any such event that could not reasonably be expected to
have a Material Adverse Effect or materially impair the transactions
contemplated hereby.
2.7 Issuances of Securities. The Securities to be delivered at the Closing shall
be validly issued, and, upon payment therefore, will be fully paid and
non-assessable. The offering, issuance, sale and delivery of the Securities as
contemplated by this Agreement are exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the “Securities
Act”), are being made in compliance with all applicable federal and (except for
any violation or non-compliance that could not reasonably be expected to have a
Material Adverse Effect) state laws and regulations concerning the offer,
issuance and sale of securities, and are not being issued in violation of any
preemptive or other rights of any stockholder of the Company. The parties hereto
agree and acknowledge that, in making the representations and warranties in the
foregoing sentence of this Section 2.7, the Company is relying on the
representations and warranties made by the Investors in Section 3.4.

 

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2.8 Absence of Certain Developments. Since December 31, 2006, except as
disclosed in the Company’s periodic and current reports and other public filings
with the SEC under the Securities Exchange Act of 1934, there has not been any:
(i) material adverse change in the condition, financial or otherwise, of the
Company (taken as a whole) or in the assets, liabilities, properties or business
of the Company and its Subsidiary (taken as a whole); (ii) declaration, setting
aside or payment of any dividend or other distribution with respect to, or any
direct or indirect redemption or acquisition of, any capital stock of the
Company; (iii) waiver of any valuable right of the Company or its Subsidiary or
cancellation of any material debt or claim held by the Company or its
Subsidiary; (iv) material loss, destruction or damage to any property of the
Company or its Subsidiary, whether or not insured; (v) acquisition or
disposition of any material assets (or any contract or arrangement therefore) or
any other material transaction by the Company or its Subsidiary otherwise than
for fair value in the ordinary course of business consistent with past practice;
or (vi) other agreement or understanding, whether in writing or otherwise, for
the Company or its Subsidiary to take any action of the type, or any action that
would result in an event of the type, specified in clauses (i) through (v).
2.9 Commission Filings. The Company has filed all required forms, reports and
other documents with the Securities and Exchange Commission (the “Commission”)
for periods from and after the completion of its initial public offering in
December 2006 (collectively, the Commission Filings”), each of which has
complied in all material respects with all applicable requirements of the
Securities Act and/or the Exchange Act (as applicable). The Company has
heretofore made available to the Investors all of the Commission Filings,
including the Company’s Annual Report on Form 10-KSB for the year ended
December 31, 2006 and the Company’s Quarterly Reports on Form 10-QSB for the
quarterly periods ended March 31, 2007, June 30, 2007 and September 30, 2007. As
of their respective dates, the Commission Filings did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial statements and
unaudited interim consolidated financial statements of the Company included or
incorporated by reference in such Commission Filings have been prepared in
accordance with generally accepted accounting principles, consistently applied
(“GAAP”) (except as may be indicated in the notes thereto or, in the case of the
unaudited consolidated statements, as permitted by Form 10-QSB), complied as of
their respective dates in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto, and fairly present, in all material respects, the financial
position of the Company as of the dates thereof and the results of operations
for the periods then ended (subject, in the case of any unaudited consolidated
interim financial statements, to the absence of footnotes required by GAAP and
normal year-end adjustments).
2.10 Brokers. The Company has employed the brokerage firm of JP Turner &
Company, L.L.C., a member of the National Association of Securities Dealers with
respect to this transaction, and has agreed to pay the Broker a cash fee equal
to 8% of gross invested capital received by the company.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as follows:
3.1 Validity; Enforceability. This Agreement has been duly executed and
delivered by the Purchaser, and constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except as such enforceability may be limited by, or subject to,
any bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and subject to general principles
of equity.

 

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3.2 Investment Representations. The Purchaser understands that the Securities
are being offered and sold pursuant to an exemption from registration pursuant
to Federal Rule 506 of Regulation D under the Securities Act of 1933 and are
based in part upon Purchaser’s representations contained in this Agreement,
including, without limitation, that the Purchaser is an “accredited investor”
within the meaning of Regulation D under the Securities as stated in 3.7 below.
Purchaser confirms that Purchaser has received or has had full access to all the
information Purchaser considers necessary or appropriate to make an informed
investment decision with respect to the Securities to be purchased by it under
this Agreement and the common stock acquired by Purchaser upon the conversion of
the convertible notes and exercise of the warrants, respectively. Purchaser
further confirms that Purchaser has had an opportunity to ask questions and
receive answers from the Company regarding the Company’s business, management
and financial affairs and the terms and conditions of the sale of the Securities
and to obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Purchaser or to which the
Purchaser had access. No oral or written representations have been made or oral
or written information furnished to the Purchaser or the Purchaser’s advisors in
connection with the Securities that were in any way inconsistent with this
Agreement. The Purchaser is not purchasing the securities as a result of or
subsequent to: (1) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television, radio or the internet or (2) any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
3.3 Purchaser Understands Economic Risks. Purchaser acknowledges that Purchaser
can bear the economic risk and complete loss of Purchaser’s investment in the
Securities. Purchaser has substantial experience in evaluating and investing in
private placement transactions of securities in companies similar to the Company
so that it Purchaser is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect his own interests.
Purchaser understands that Purchaser must bear the economic risk of this
investment until the Securities are sold pursuant to: (i) an effective
registration statement under the Securities Act; or (ii) an exemption from
registration is available with respect to such sale.
3.4 Purchaser’s Awareness of Specific Risks Relating to the Company’s Business.
The Purchaser has been given the opportunity to review the merits and risks of
the investment provided for in this Agreement with legal counsel and with an
investment advisor to the extent the Purchaser deemed advisable. Purchaser
acknowledges that purchaser has been advised by the Company carefully to
consider the risks and uncertainties described in the Company’s periodic and
reports filed with the SEC before executing this Agreement. In particular, the
Company had advised Purchaser that the Company anticipates that significant
additional equity or debt funding may be required in addition to Purchaser’s
investment not only to expand the Company’s operations, but also to sustain its
operations and satisfy its contractual obligations until the Company achieves
profitability. There can be no assurance that the Company will achieve cash flow
from operations sufficient to satisfy its working capital requirements, or at
all, or that the additional financing the Company may require will be available
to the Company on commercially reasonable terms, or at all.
3.5 Acquisition For Own Account. The Purchaser is acquiring the Securities for
the Purchaser’s own account for investment only, and not as a nominee or agent
and not with a view towards or for resale in connection with their distribution.
3.6 Purchaser Can Protect His Interest. and has such knowledge and experience in
financial or business matters that
3.7 Accredited Investor. The purchaser represents and warrants to the Company
that Purchaser is an accredited investor within the meaning of Regulation D
under the Securities Act because Purchaser comes within one of the categories of
investors as defined in the certification attached as Exhibit C hereto and herby
confirms that Purchaser has provided a separate signed copy of the certification
to J.P Turner, LLC, on which purchaser has also signed his name next to the
appropriate category(ies) in which Purchaser is included.
3.8 Legends.
(a) The Convertible Note shall bear substantially the following legend:
“THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE,
STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO SMART MOVE, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.”

 

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(b) The shares issued upon conversion of the unsecured convertible notes shall
bear a legend which shall be in substantially the following form until such
shares are covered by an effective registration statement filed with the SEC:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND
APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SMART
MOVE, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”
(c) The Warrants shall bear substantially the following legend:
“THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
WARRANT OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SMART
MOVE, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”
3.9 Filings Required to Update Purchaser’s Schedule 13G. The Company and the
Purchaser acknowledge that the Purchaser has filed and will be required to amend
and supplement a Schedule 13G to reflect the additional securities and
amendments effected upon the Closing contemplated by this Agreement.
3.10 Covenants of the Company. The Company covenants and agrees with the
Purchaser that, so long as the Initial Closing Note and/or Second Closing Note,
or any portion thereof, remain outstanding:
(a) STOP-ORDERS. The Company will advise the Purchaser, promptly after it
receives notice of issuance by the Securities and Exchange Commission (the
“SEC”), any state securities commission or any other regulatory authority of any
stop order or of any order preventing or suspending any offering of any
securities of the Company, or of the suspension of the qualification of the
Common Stock of the Company for offering or sale in any jurisdiction, or the
initiation of any proceeding for any such purpose.
(b) MARKET REGULATIONS. The Company shall notify the SEC, American Stock
Exchange and applicable state authorities, in accordance with their
requirements, to the extent applicable to the Company, of the transactions
contemplated by this Agreement, and shall take all other necessary action and
proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Securities to the Purchaser
and promptly provide copies thereof to the Purchaser.
(c) REPORTING REQUIREMENTS. The Company will timely file with the SEC all
reports required to be filed pursuant to the Exchange Act and refrain from
terminating its status as an issuer required by the Exchange Act to file reports
thereunder even if the Exchange Act or the rules or regulations thereunder would
permit such termination.

 

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(d) USE OF FUNDS. The Company agrees that it will use the proceeds of the sale
of the Convertible Notes and the Warrants for general working capital and
general business purposes of the Company and its subsidiaries.
(e) ACCESS TO FACILITIES. Each of the Company and each of his Subsidiaries will
permit any representatives designated by the Purchaser (or any successor of the
Purchaser), upon reasonable notice and during normal business hours, at such
person’s expense and accompanied by a representative of the Company, to:

  (i)  
Visit and inspect any of the properties of the Company or any of its
Subsidiaries;
    (ii)  
examine the corporate and financial records of the Company or any of its
Subsidiaries (unless such examination is not permitted by federal, state or
local law or by contract) and make copies thereof or extracts there from; and
    (iii)  
discuss the affairs, finances and accounts of the Company or any of its
Subsidiaries with the directors, officers and independent accountants of the
Company or any of its subsidiaries.

Notwithstanding the foregoing, neither the Company nor any of its subsidiaries
will provide any material, non-public information to the Purchaser unless the
Purchaser signs a confidentiality agreement and otherwise complies with
Regulation FD, under the federal securities laws.
(f) Taxes. Each of the Company and each of its Subsidiaries will promptly pay
and discharge, or cause to be paid and discharged, when due and payable, all
lawful taxes, assessments and governmental charges or levies imposed upon the
income, profits, property or business of the Company and its Subsidiaries;
provided, however, that any such tax, assessment, charge or levy need not be
paid if the validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company and/or such Subsidiary shall have set
aside on its books adequate reserves with respect thereto, and provided,
further, that the Company and its Subsidiaries will pay all such taxes,
assessments, charges or levies forthwith upon the commencement of proceedings to
foreclose any lien which may have attached as security therefore.
(g) Insurance. Each of the Company and its Subsidiaries will keep its assets
which are of an insurable character insured by financially sound and reputable
insurers against loss or damage by fire, explosion and other risks customarily
insured against by companies in similar business similarly situated as the
Company and its Subsidiaries; and the Company and its Subsidiaries will
maintain, with financially sound and reputable insurers, insurance against other
hazards and risks and liability to persons and property to the extent and in the
manner which the Company reasonably believes is customary for companies in
similar business similarly situated as the Company and its Subsidiaries and to
the extent available on commercially reasonable terms.
(h) Reissuance of Securities. The Company agrees to reissue certificates
representing the Securities without the legends set forth in Section 5.7 above
at such time as:

  (i)  
the holder thereof is permitted to dispose of such Securities pursuant to Rule
144(k) under the Securities Act; or
    (ii)  
upon resale subject to an effective registration statement after such Securities
are registered under the Securities Act.

 

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The Company agrees to cooperate with the Purchaser in connection with all
resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions
necessary to allow such resales provided the Company and its counsel receive
reasonably requested representations from the selling Purchaser and broker, if
any.
3.11 Covenants of the Purchaser. The Purchaser, and each of them, covenant and
agree with the Company as follows:
(a) CONFIDENTIALITY. The Purchaser, agrees that Purchaser will not disclose, and
will not include in any public announcement, the name of the Company, unless
expressly agreed to by the Company or unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of such
requirement.
(b) NON-PUBLIC INFORMATION. The Purchaser agrees not to effect any sales in the
shares of the Company’s Common Stock while in possession of material, non-public
information regarding the Company if such sales would violate applicable
securities law.
3.12 Covenants of the Company and Purchaser Regarding Indemnification.
(a) COMPANY INDEMNIFICATION. The Company agrees to indemnify, hold harmless,
reimburse and defend Purchaser against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature,
incurred by or imposed upon the Purchaser which results, arises out of or is
based upon a third party claim attributable to: (i) any misrepresentation by the
Company in this Agreement, any other schedules attached hereto or thereto; or
(ii) any breach or default in performance by Company of any covenant or
undertaking to be performed by the Company hereunder.
(b) PURCHASER’S INDEMNIFICATION. Purchaser agrees to indemnify, hold harmless,
reimburse and defend the Company and each of the Company’s officers, directors,
agents, affiliates, control persons and principal shareholders, at all times
against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon the
Company which results, arises out of or is based upon: (i) any misrepresentation
by Purchaser or breach of any warranty by Purchaser in this Agreement or any
Related Agreement or in any exhibits or schedules attached hereto; or (ii) any
breach or default in performance by Purchaser of any covenant or undertaking to
be performed by Purchaser hereunder, under any Related Agreement or any other
agreement entered into by the Company and Purchaser relating hereto or thereto.
3.13 Piggyback Registration Rights. Purchaser is hereby granted “piggyback
rights” entitling Purchaser to register and sell Purchaser’s shares of common
stock of the Company may conduct a public offering under the Securities Act of
1933, as amended. Purchaser shall have no right to require or demand that the
Company conduct a public offering, but, rather, shall be allowed to include his
shares in any registration that is initiated by the Company for which the
registration form used permits the registration of securities owned by existing
shareholders of the Company. The expenses of such registration shall be paid by
the Company. Such piggyback rights shall expire on the third anniversary of the
date hereof.
ARTICLE 4
MISCELLANEOUS
4.1 Miscellaneous.
(a) GOVERNING LAW. This agreement and the other related agreements shall be
governed by and construed and enforced in accordance with the laws of the state
of Colorado applicable to contracts made and performed in such state, without
regard to principles of conflicts of laws.

 

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(b) DISPUTES. The parties desire that their disputes be resolved by a judge
applying such applicable laws. Therefore, to achieve the best combination of the
benefits of the judicial system and of arbitration, the parties hereto waive all
rights to trial by jury in any action, suit, or proceeding brought to resolve
any dispute, whether arising in contract, tort, or otherwise between the
purchaser and/or the company arising out of, connected with, related or
incidental to the relationship established between them in connection with this
agreement, any other related agreement or the transactions related hereto or
thereto.
(c) SUCCESSORS. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
heirs, executors and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person who shall be a holder of the
Securities from time to time, other than the holders of Common Stock which has
been sold by the Purchaser pursuant to Rule 144 or an effective registration
statement. No Purchaser shall be permitted to assign its rights hereunder or
under any Related Agreement to a competitor of the Company.
(d) ENTIRE AGREEMENT. This Agreement, the Related Agreements, the exhibits and
schedules hereto and thereto and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
(e) SEVERABILITY. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
(f) AMENDMENT AND WAIVER.

  (i)  
This Agreement may be amended or modified only upon the written consent of the
Company and the Purchaser.
    (ii)  
The obligations of the Company and the rights of the Purchaser under this
Agreement may be waived only with the written consent of the Purchaser.
    (iii)  
The obligations of the Purchaser and the rights of the Company under this
Agreement may be waived only with the written consent of the Company.

(g) NOTICES. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given:

  (i)  
upon personal delivery to the party to be notified;

  (ii)  
when sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next business day;

  (iii)  
three (3) business days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or

  (iv)  
one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.

 

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All communications shall be sent as follows:

         
 
  IF TO THE COMPANY, TO:   SMART MOVE, INC.
 
      5990 Greenwood Plaza Blvd, Suite 390 
 
      Greenwood Village, Colorado 80111 
 
      Attention: Chief Executive Officer
 
      Facsimile:     720-488-0199 
 
       
 
  IF TO THE PURCHASER, TO:   Thomas P. Grainger
 
      Post Office Box 7 
 
      Saratoga, WY 82231 
 
      Or courier;
 
      Highway 130 
 
      4 Miles South of Saratoga

or at such other address as the Company or the Purchaser may designate by
written notice to the other party hereto given in accordance herewith.
(h) TITLES AND SUBTITLES. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
(i) FACSIMILE SIGNATURES; COUNTERPARTS. This Agreement may be executed by
facsimile signatures and in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.
(j) BROKER’S FEES. Each party hereto represents and warrants that JP Turner is
the broker for this transaction and that no other agent, broker, investment
banker, person or firm acting on behalf of or under the authority of such party
hereto is or will be entitled to any broker’s or finder’s fee or any other
commission directly or indirectly in connection with the transactions
contemplated herein.
IN WITNESS WHEREOF, the parties hereto have executed the NOTE PURCHASE AGREEMENT
as of the date set forth in the first paragraph hereof.

              COMPANY:
 
            SMART MOVE, INC.
 
       
 
  By:   /s/Chris Sapyta
 
            Name:   Chris Sapyta     Title:   Chief Executive Officer

         
 
            PURCHASER:
 
            /s/ Thomas P Grainger           THOMAS P. GRAINGER
 
  Address:   Post Office Box 7
Saratoga, WY 82231

 

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