Document:

ex10-9.htm

Exhibit 10.9

 

ESCROW AGREEMENT

This ESCROW AGREEMENT, dated as of September 30, 2010 (“Agreement”), is made and entered into by and among Rubicon Financial Incorporated, a Delaware corporation (“Rubicon”), Todd Torneo, an individual (“Torneo”), and DeMint Law, PLLC, a Nevada professional limited liability company (the “Escrow Agent”).

WITNESSETH:

WHEREAS, on September 30, 2010, Torneo, Rubicon, Rubicon Financial Insurance Services, Inc., a California corporation and wholly-owned subsidiary of Rubicon (“Rubicon Sub”), and Torneo entered into a Subsidiary Purchase Agreement (the “Purchase Agreement”);

WHEREAS, pursuant to the terms of the Purchase Agreement, the consideration to be paid to Rubicon consists of shares of Rubicon’s common stock, par value $0.001 per share (“Rubicon Stock”);

WHEREAS, pursuant to Section 6.03 of the Purchase Agreement, Rubicon, Rubicon Sub and Torneo have agreed that Torneo shall deposit 100,000 shares of Rubicon Stock in escrow with the Escrow Agent in order to secure the payment of any claims giving rise to indemnification by the Torneo under the Purchase Agreement; and

WHEREAS, capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the promises contained herein, the parties, intending legally to be bound, agree as follows:

SECTION 1

ESCROWED SHARES

1.1      Delivery; Shares. Torneo shall cause to be delivered to and deposited with the Escrow Agent (the “Deposit”) concurrently with the execution hereof 100,000 shares of Rubicon Stock by delivery of a certificate representing such shares of Rubicon Stock registered in the name of Todd Torneo, and fully endorsed for transfer including medallion signature guaranty, for the benefit of Rubicon, (the “Escrowed Shares”). The Escrow Agent shall hold the Escrowed Shares pursuant to the terms of this Agreement.

1.2      Receipt. The Escrow Agent hereby: (i) accepts delivery of the Escrowed Shares and holds, and agrees to hold, the Escrowed Shares in escrow as a fund available to secure the indemnification obligations owed by Torneo to Rubicon pursuant to Section 6.03 of the Purchase Agreement, and (ii) agrees to hold and disburse the Escrowed Shares in accordance with the terms and conditions of this Agreement.

 

  

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1.3      Voting; Investment; Income. The right to vote the Escrowed Shares shall be exercised by or as directed by Torneo, and the Escrow Agent shall have no rights or responsibilities with respect to voting the Escrowed Shares nor any ownership interest therein. The Escrowed Shares shall be held by the Escrow Agent for the benefit of Rubicon subject to the terms and conditions of this Agreement and none of the Escrowed Shares shall be sold during the term of this Agreement. Any dividends or other distributions declared and paid upon the Escrowed Shares (collectively, “Earnings”) shall be paid to the Escrow Agent and shall be held by the Escrow Agent for the benefit of Torneo but shall not constitute Escrowed Shares and shall not be used to satisfy any indemnification claims. Any cash amounts received by the Escrow Agent pursuant to this Section 1.3 shall be deposited in a non-interest bearing account. All Earnings shall be released on the Release Date (as defined in Section 2.2 hereof) to Torneo. Any federal, state or local income taxes imposed upon or asserted against the Earnings shall be the responsibility of and shall be paid by Torneo.

SECTION 2

PROCEDURES FOR DISBURSEMENT OF ESCROWED SHARES

2.1      Claims Procedure For Escrowed Shares. The following procedures shall govern the application of the Escrowed Shares to satisfy any claims by Rubicon which may be brought pursuant to Section 8.2 of the Purchase Agreement:

(a)      Rubicon shall give written notice to Torneo and the Escrow Agent of any claim for indemnity pursuant to the Purchase Agreement that could constitute a claim against the Escrowed Shares (a “Rubicon Claim”). The written notice shall specify (i) the factual basis for such claim, (ii) the amount of claim and the number of Escrowed Shares to be released, based on the valuation set forth below, and (iii) that Rubicon has given a copy of such notice to Torneo. No notice may be given under this Section 2.1(a) after the Release Date (as defined in Section 2.2). The value of each Escrowed Share to be used to satisfy any claim shall be deemed to be equal to the greater of (x) the average closing price of Rubicon Stock as reported by Yahoo Finance for the five (5) trading days ending two (2) business days prior to the date of the Rubicon Claim and (y) $0.33 per share. The Escrow Agent shall have no duty with respect to establishing or confirming any valuation set forth in any such notice.

(b)      Following receipt of a Rubicon Claim in accordance with Section 2.1(a), Torneo shall have 10 days from the date the Escrow Agent receives the Rubicon Claim to make such investigation of the claim as Torneo deem necessary or desirable. For purposes of such investigation, Rubicon shall, upon request, make available to Torneo all the material information relied upon by Rubicon to substantiate the Rubicon Claim. If Torneo disagree with the validity or amount of all or a portion of a Rubicon Claim, Torneo shall deliver to Rubicon and the Escrow Agent a written notice thereof (the “Dispute Notice”), at or prior to the expiration of the 10-day period. If Rubicon and Torneo agree not later than 10 days following the date of Escrow Agent’s receipt of such Dispute Notice (or any mutually agreed upon extension thereof) to the validity and amount of such disputed claim, they shall promptly give the Escrow Agent joint instructions in writing of the amount of the Escrowed Shares agreed upon by Rubicon and Torneo as shall be necessary to satisfy such Rubicon Claim, valued in accordance with Section 2.1(a) above, and the instructions for payment of such Escrowed Shares. If Rubicon and Torneo do not agree prior to the expiration of said 10-day period (or any mutually agreed upon extension thereof), the matter shall be resolved as provided for in Section 3.1 hereof, and, except as provided in Section 3.1 regarding release of any undisputed amounts, the Escrow Agent shall continue to hold the Escrowed Shares until it receives a final and nonappealable order of a court of competent jurisdiction or joint written instructions from Torneo and Rubicon in accordance with Section 3.1. If no Dispute Notice is received by Escrow Agent within the 10-day period described above, the Rubicon Claim shall be deemed approved by Torneo, and the Escrow Agent shall disburse the Escrowed Shares in accordance with subsection (c) below.

 

  

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(c)      Upon resolution of any Rubicon Claim hereunder requiring the delivery of Escrowed Shares to Rubicon, the Escrow Agent shall deliver: (1) Escrowed Shares (based upon the valuation described in Section 2.1(a) hereof) (the “Tendered Escrow Shares”) equal to the amount of the Rubicon Claim, together with corresponding stock powers duly executed in blank, to Rubicon. The Escrow Agent shall concurrently distribute to Torneo any Earnings held by the Escrow Agent with respect to such Tendered Escrow Shares, it being acknowledged that such Earnings shall not be applied towards the satisfaction of a Rubicon Claim.

2.2      Final Release of Escrowed Shares. On the date that is three (3) years after the date of this Agreement (the “Release Date”), if no Rubicon Claim for indemnification has been asserted and is unresolved, the Escrow Agent shall deliver to Torneo all Earnings held by the Escrow Agent related to the Escrowed Shares, by wire transfer of immediately available funds, bank check or certified check or by other means mutually acceptable to Torneo and the Escrow Agent. On the Release Date, if no Rubicon Claim for indemnification has been asserted and is unresolved, the Escrow Agent shall deliver the certificate representing the remaining Escrowed Shares to Torneo. If on the Release Date, a Rubicon Claim for which written notice was previously delivered remains unresolved, the Escrow Agent shall retain from the Escrowed Shares a number of Escrowed Shares (based upon the valuation provided by Rubicon in Section 2.1(a) hereof) equal to the amount of the Rubicon Claim, and shall remit all Earnings to Torneo and shall remit the Escrowed Shares to Torneo. Upon resolution of all outstanding Rubicon Claims after the Release Date, the Escrow Agent shall promptly deliver, upon the instructions of Torneo, the remaining balance of the Escrowed Shares. If necessary in order to effect the foregoing transfer, the Escrow Agent shall deliver to Rubicon the certificate representing the Escrowed Shares in exchange for a new certificate representing the number of Escrowed Shares to be retained in escrow and stock certificates to be issued by Rubicon’s transfer agent to Torneo for the number of Escrowed Shares to be released from escrow.

2.3      Allocation of Escrowed Shares to Satisfy Rubicon Claims. For purposes of this Section 2, each Rubicon Claim shall be satisfied from the Escrowed Shares by taking Escrowed Shares in a value set forth above. The parties hereto acknowledge and agree that the obligation to allocate Escrowed Shares to satisfy Rubicon Claims shall be borne solely by Rubicon and Torneo and that the Escrow Agent shall have no duty to determine such allocation.

 

SECTION 3

PROCEDURES FOR DISBURSEMENT OF ESCROWED SHARES

3.1      Dispute. In the event of any disagreement between Rubicon and Torneo with respect to disbursement of any portion of the Escrowed Shares which arises out of any Rubicon Claim, the Escrow Agent shall not comply with any claims or demands of Rubicon or Torneo pertaining to such disagreement as long as such disagreement shall continue, and the Escrow Agent shall not deliver or otherwise dispose of any portion of the Escrowed Shares until it has received either (i) a certified copy of an order of a court of competent jurisdiction resolving such dispute and directing disposition of such property or (ii) joint written instructions signed by Torneo and Rubicon. Notwithstanding the foregoing, if Torneo does not dispute all or portion of a Rubicon Claim pursuant to Section 2.1(b), that portion of the Escrowed Shares equal to the undisputed portion of such Rubicon Claim shall be released to Rubicon.

3.2      Joint Instructions. The Escrow Agent shall disburse all or any portion of the Escrowed Shares in accordance with joint written instructions from Rubicon and Torneo.

 

  

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3.3      Interpleader. Notwithstanding anything to the contrary in this Agreement:

(a)      The Escrow Agent may at any time deposit the Escrowed Shares then held by it, with the clerk of any court of competent jurisdiction upon commencement of an action in the nature of interpleader or in the course of court proceedings relating to the Escrowed Shares.

(b)      If at any time the Escrow Agent receives a final nonappealable order of a court of competent jurisdiction, or joint written instructions signed by Torneo and Rubicon, directing delivery of the Escrowed Shares, the Escrow Agent shall comply with such order or instructions.

3.4      Liability of Torneo. Solely as between the parties hereto other than the Escrow Agent, Section 6.02 of the Purchase Agreement shall be controlling for all purposes of determining any indemnification liability of Torneo to Rubicon. If any such provision of the Purchase Agreement is inconsistent with any provision hereof, the Purchase Agreement shall be controlling as between Torneo and Rubicon.

SECTION 4

ESCROW AGENT

4.1      Appointment. Rubicon and Torneo hereby appoint the Escrow Agent to serve hereunder, and the Escrow Agent hereby accepts such appointment and agrees to perform all duties expressly set forth in this Agreement.

4.2      Compensation. The Escrow Agent shall be paid a fee of $500 in connection with the performance of its services hereunder. The Escrow Agent shall be entitled to reimbursement for any costs and expenses it incurs in performing its services hereunder, and one-half of such compensation shall be paid by Rubicon and one-half of such compensation shall be paid by Torneo.

4.3      Indemnification. Rubicon shall indemnify and save harmless the Escrow Agent and each of its officers, directors, members, agents and employees from and against any and all losses and liabilities, including all expenses reasonably incurred in its defense and all costs and expenses reasonably incurred in enforcing its right to indemnification hereunder, to which the Escrow Agent or such persons shall be subject directly or indirectly by reason of this Agreement or any action taken or omitted to be taken or any investment or disbursement of any part of the Escrowed Shares, except as may result from the Escrow Agent’s fraud, gross negligence, bad faith or willful misconduct. This Section 4.3 shall survive the removal or resignation of the Escrow Agent. As between Rubicon and Torneo, the cost and expenses incurred in satisfying this right of indemnification shall be paid one-half by Rubicon and one-half by Torneo, provided, however, that Torneo’s maximum liability shall be the Escrowed Shares. The parties hereto acknowledge that the foregoing indemnities shall survive the resignation or removal of the Escrow Agent and shall survive the termination of this Agreement.

4.4      Resignation. The Escrow Agent may resign at any time upon giving Rubicon and Torneo thirty (30) days’ prior written notice; provided, however, that no such resignation shall be effective until a successor escrow agent shall have been appointed by Rubicon and Torneo and shall have accepted such appointment in writing. If the Escrow Agent shall not have received such a written instrument of acceptance from a successor Escrow Agent within thirty (30) days of the giving of its notice of resignation, the Escrow Agent shall be entitled, at Rubicon’s and Torneo’s expense shared equally, to petition a court of competent jurisdiction for the appointment of a successor escrow agent or deposit the Escrowed Shares into the registry of a court of competent jurisdiction and thereupon be discharged from all further duties as Escrow Agent hereunder.

 

  

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SECTION 5

LIABILITIES OF ESCROW AGENT

5.1      Limitations. The Escrow Agent undertakes to perform only such duties as are expressly set forth in this Agreement. The Escrow Agent shall have no liability except as expressly set forth herein or in connection with the performance of such duties as are expressly set forth herein. The Escrow Agent may consult with legal counsel (of its choice) regarding any of its duties or obligations hereunder. The Escrow Agent shall have no liability with respect to actions taken pursuant to the advice of legal counsel provided in good faith or in accordance with any written instructions received by it in accordance with the terms of this Agreement. The Escrow Agent’s duties hereunder shall be determined only by reference to this Agreement and applicable laws, and the Escrow Agent shall not be charged with any duties or responsibilities pursuant to any other document or agreement and shall have no duty under, or be required to take notice of, another agreement between the parties hereto, including but not limited to the Purchase Agreement.

5.2      Compliance With Court Orders. Subject to Section 3.1 hereof, if any property held by the Escrow Agent hereunder is at any time attached, garnished or levied upon pursuant to any court order, or if the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court or if any court of competent jurisdiction shall enter any judgment or decree affecting such property or any part thereof, the Escrow Agent is hereby authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which the Escrow Agent is advised by legal counsel (of its choice) is binding upon it. If the Escrow Agent complies with any such order, writ, judgment or decree in accordance with the terms hereof, the Escrow Agent shall have no liability to Rubicon or Torneo or to any other person, firm or corporation by reason of such compliance, even if such order, writ, judgment or decree is subsequently reversed, modified, annulled, set aside or vacated.

SECTION 6

TERMINATION

6.1      Termination. This Agreement shall be terminated upon the earliest to occur of (a) disbursement or release of the entire amount of the Escrowed Shares by the Escrow Agent in accordance with the terms hereof, (b) written consent signed by Rubicon and Torneo, or (c) payment of the entire amount of the Escrowed Shares held hereunder into a court of competent jurisdiction in accordance with Section 3.2(a).

 

  

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SECTION 7

OTHER PROVISIONS

7.1      Notices. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing and shall be deemed to have been duly delivered on (i) the date of personal delivery, (ii) the date of the receipt of the appropriate printed confirmation, if sent by facsimile transmission or (iii) upon receipt, if mailed by registered or certified mail, postage prepaid and return receipt requested. Any such notices shall be sent to the following addresses, or to such other address as any party may request in a notice delivered in accordance with this Section 7.1 to the other parties hereto:

(a)    If to Torneo:

Todd Torneo

                                                                                                       

                                                                

Telephone No.:                                                        

 Fax No.:                                                        

 

(b)    If to Rubicon:

Rubicon Financial Incorporated

18872 MacArthur Boulevard

First Floor

Irvine, CA 92612

Telephone No.:  (949) 798-7220

Fax No.: (949) 798-0420

 

  

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(c)    If to the Escrow Agent:

DeMint Law, PLLC

3753 Howard Hughes Pkwy

Second Floor, Suite 314

Las Vegas, NV 89169

Attn:  Anthony N. DeMint, Esq.

Telephone No.: (702) 586-6436

Fax No.: (702) 442-7995

7.2      Benefit and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties; except that if a successor Escrow Agent is appointed pursuant to Section 4.4 hereof, the Escrow Agent shall assign its rights, interests and obligations hereunder to such successor. Any corporation into which the Escrow Agent in its individual capacity may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Escrow Agent in its individual capacity shall be a party, or any corporation to which substantially all the corporate trust business of the Escrow Agent in its individual capacity may be transferred, shall be the Escrow Agent under this Escrow Agreement without further act.

7.3      Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof. This Agreement may be amended only by a written instrument signed by Torneo, Rubicon and the Escrow Agent.

7.4      Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be determined by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof, or the application thereof to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by applicable law.

7.5      Headings. The headings of the sections and subsections of this Agreement are for ease of reference only and do not evidence the intentions of the parties.

 

  

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7.6      Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to its internal conflict of law provisions. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ESCROWED SHARES OR ANY OTHER AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEVADA OR OF APPLICABLE FEDERAL COURTS IN THE STATE OF NEVADA AND HEREBY EXPRESSLY SUBMITS TO THE EXCLUSIVE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 7.1, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.

7.7      Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if the signatures on all counterparts were on the same instrument.

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.)

 

  

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

 

RUBICON:

                                RUBICON FINANCIAL INCORPORATED

                                By: /s/ Joseph Mangiapane, Jr.                                                                                               

 Joseph Mangiapane, Jr., CEO

                                TORNEO:

By: /s/ Todd Torneo                                                                                  

 Todd Torneo

 

 

                                ESCROW AGENT:

                                DEMINT LAW, PLLC

                                By: /s/ Anthony N. DeMint                                                                                                            

                                       Anthony N. DeMint, Managing Member

  

9ex4-1.htm

Exhibit 4.1

 

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK 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 UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO INTERMETRO COMMUNICATIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Right to Purchase up to                          Shares of Common Stock of

InterMetro Communications, Inc. (subject to adjustment as provided herein)

 

COMMON STOCK PURCHASE WARRANT NO.         

 

	  	
Issue Date:   As of September __, 2010

INTERMETRO COMMUNICATIONS, INC., a corporation organized under the laws of the State of Nevada (“InterMetro”), hereby certifies that, for value received, MORIAH CAPITAL, L.P., or assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company (as defined herein) from and after the Issue Date of this Warrant and at any time or from time to time before 5:00 p.m., New York time, on September ___, 2017 (the "Expiration Date"), up to                             fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 par value per share, at the applicable Exercise Price per share (as defined below).  The number and character of such shares of Common Stock and the applicable Exercise Price per share are subject to adjustment as provided herein.

 

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 

(a)           The term "Company" shall include InterMetro and any corporation which shall succeed, or assume the obligations of, InterMetro hereunder.

 

(b)           The term "Common Stock" includes (i) the Company's Common Stock, par value $0.001 per share; and (ii) any other securities into which or for which any of the securities described in the preceding clause (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

 

(c)           The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.

 

(d)           The term “Warrant Shares” shall mean the shares of Common Stock issuable upon exercise of this Warrant.

 

  

  

  

 

(e)           The "Exercise Price" applicable under this Warrant shall be One Cent ($0.01) per share, which Exercise Price shall be subject to adjustment as provided herein.

.

Capitalized terms used but not otherwise defined herein have the meanings given to them in the Loan and Security Agreement, dated April 30, 2008, as amended through the date hereof (the “Loan Agreement”), among Moriah Capital L.P., the Company and the subsidiaries of the Company parties thereto.

 

	
1.  

	
Exercise of Warrant.

 

1.1 Number of Shares Issuable upon Exercise.  From and after the date hereof through and including the Expiration Date but not thereafter, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the form attached hereto as Exhibit A (the "Exercise Notice"), shares of Common Stock of the Company, subject to adjustment pursuant to the terms hereof.

 

1.2 “Current Fair Market Value” when used with respect to the Common Stock as of a specified date means, with respect to a share of Common Stock, the average of the closing prices of the Common Stock sold on all securities exchanges including the Nasdaq Capital Market, the Nasdaq Global Market, the American Stock Exchange or the New York Stock Exchange (each, a “Trading Market”) on which the Common Stock may at the time be listed, or, if there have been no sales on any such exchange on such day, the average of the highest bid and lowest asked prices on all such exchanges at the end of regular trading such day, or, if on such day the Common Stock is not so listed, the average of the highest bid and lowest asked price on such day in the domestic over-the-counter market on the NASD OTCBB, as reported by the Pink Sheets, LLC, or any similar successor organization; in each such case averaged over a period of five (5) Trading Days consisting of the day as of which the Current Fair Market Value of Common Stock is being determined (or if such day is not a Trading Day, the Trading Day next preceding such day) and the four (4) consecutive Trading Days prior to such day.  If on the date for which Current Fair Market Value is to be determined the Common Stock is not listed on any securities exchange or quoted in the over-the-counter market, the Current Fair Market Value of Common Stock shall be the price per share of Common Stock as of the most recent date on which InterMetro has sold shares of Common Stock or Common Stock Equivalents to one or more unaffiliated third parties in a bona fide financing round during the 365 days prior to the date of such determination.  If no such sales were made during the 365 days prior to the date of such determination, the Current Fair Market Value of Common Stock shall be the price per share which InterMetro could then obtain from a willing buyer on an arms’-length basis (not an affiliate, employee or director of InterMetro at the time of determination) for shares of Common Stock sold by InterMetro, from authorized but unissued shares, as determined in by an independent appraiser mutually acceptable to, and unaffiliated with, InterMetro and Holder, whose appraisal costs shall be paid by InterMetro.

 

  

  

  

 

1.3 “Common Stock Equivalent” means any warrant, option, subscription or purchase right with respect to shares of Common Stock, any security or property rights convertible into, exchangeable for, or otherwise entitling the holder thereof to acquire, shares of Common Stock or any warrant, option, subscription or purchase right with respect to any such convertible, exchangeable or other security.

 

1.4 “Trading Day” means a day on which the Trading Market on which the Common Stock may be listed, or the over-the counter market, as applicable, is open for general trading of securities.

 

1.5 Company Acknowledgment.  The Company will, at the time of the exercise of the Warrant, upon the request of the Holder acknowledge in writing its continuing obligation to afford to such holder any rights to which the Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to the Holder any such rights.

 

1.6 Trustee for Warrant Holders.  In the event that a bank or trust company shall have been appointed as trustee for the holders of the Warrant pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1.

 

	
2.  

	
Procedure for Exercise.

 

2.1 Delivery of Stock Certificates, Etc., on Exercise.  The Company agrees that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares in accordance herewith.  As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) Business Days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, rounded up to the next full share, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise. In the event that this Warrant is exercised in part, a replacement Warrant certificate shall be issued in the name of the Holder for the balance of the Warrant Shares purchasable hereunder.

 

  

  

  

 

2.2 Exercise.  Payment may be made either (i) in cash or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price, (ii) by delivery of the Warrant, or shares of Common Stock and/or Common Stock receivable upon exercise of the Warrant in accordance with the formula set forth below in this Section 2.2, or (iii) by a combination of any of the foregoing methods, for the number of Common Shares specified in such Exercise Notice (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the Holder per the terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein.  Notwithstanding any provisions herein to the contrary, if the Current Fair Market Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:

 

	
X=Y

	
(A-B)

	  	
A

	
  

	
Where X =

	
the number of shares of Common Stock to be issued to the Holder

 

	
  

	
Y =

	
the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation)

 

	
  

	
A =

	
the Current Fair Market Value of one share of the Company's Common Stock (at the date of such calculation)

 

	
  

	
B =

	
Exercise Price (as adjusted to the date of such calculation)

 

2.3       Exercise Procedure.

 

(a)           As promptly as practicable, but in no event later than three (3) Business Days after an Exercise Notice is given, the Company shall issue and shall deliver to Holder the number of full shares of Common Stock issuable upon such exercise, rounded up to the nearest whole share. In lieu of delivering physical certificates for the shares of Common Stock issuable upon any such exercise, provided the Company's transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, and provided that such shares of Common Stock are properly designated with restrictions on transfer, if any, upon request of Holder, the Company shall use commercially reasonable efforts to cause its transfer agent electronically to transmit such shares of Common Stock issuable upon exercise to Holder (or its designee) by crediting the account of Holder’s (or such designee’s) broker with DTC through its Deposit Withdrawal Agent Commission system (provided that the same time periods herein as for stock certificates shall apply).

(b)           If in any case the Company shall fail to issue and deliver the shares of Common Stock to Holder upon Holder’s exercise of this Warrant within three (3) Business Days after Holder gives the Exercise Notice, in addition to any other liabilities the Company may have hereunder and under applicable law, (A) the Company shall pay or reimburse Holder on demand for all out-of-pocket expenses, including, without limitation, reasonable fees and expenses of legal counsel, incurred by Holder as a result of such failure, (B) if as a result of such failure Holder shall suffer any damages or liabilities (including, without limitation, margin interest and the cost of purchasing securities to cover a sale (whether by Holder or Holder's securities broker) or borrowing of shares of Common Stock by Holder for purposes of settling any trade involving a sale of shares of Common Stock made by Holder, then the Company shall upon demand of Holder pay to Holder an amount equal to the damages and liabilities suffered by Holder by reason thereof which Holder documents to the reasonable satisfaction of the Company, and (C) Holder may by written notice given at any time prior to delivery to Holder of the shares of Common Stock issuable in connection with such exercise, rescind such exercise and the Exercise Notice relating thereto.

 

  

  

  

2.4 .           Notices of Certain Company Actions. In case on or after the Issue Date of this Warrant:

(a)           the Company shall declare a dividend (or any other distribution) on its Common Stock; or

(b)           the Company shall authorize the granting to the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants;

the Company shall give Holder, as promptly as possible but in any event at least ten (10) Business Days prior to the applicable date hereinafter specified, a notice stating the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined. Such notice shall not include any information which would be material non-public information for purposes of the Securities Exchange Act of 1934, as amended. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. In the case of any such action of which the Company gives such notice to Holder or is required to give such notice to Holder, Holder shall be entitled to give an Exercise Notice which is contingent on the completion of such action.

        2.5           [RESERVED]

 

2.6.           4.99% and 9.99% Limitations.

 

(1)           Notwithstanding anything contained herein to the contrary, Holder shall not be entitled to purchase pursuant to the terms hereof a number of shares of Common Stock that would exceed the difference between 4.99% of the issued and outstanding shares of Common Stock and the number of shares of Common Stock beneficially owned by Holder (the “4.99% Limitation”).  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Holder may void the 4.99% Limitation upon 75 days prior notice to the Company.

 

(2)           In the event that Holder voids the 4.99% Limitation, Holder shall not be entitled to purchase pursuant to the hereof an amount that would be convertible into that number of shares of Common Stock that would exceed the difference between 9.99% of the issued and outstanding shares of Common Stock and the number of shares of Common Stock beneficially owned by Holder (the “9.99% Limitation”).  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Holder may void the 9.99% Limitation upon 75 days prior notice to the Company.

 

  

  

  

 

	
3.  

	
Effect of Reorganization, Etc.; Adjustment of Exercise Price.

 

3.1 Reorganization, Consolidation, Merger, Etc.  In case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided herein.

 

3.2 Dissolution.  In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, concurrently with any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be delivered to the Holder the stock and other securities and property (including cash, where applicable) receivable by the Holder of the Warrant pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to a bank or trust company specified by the Holder and having its principal office in New York, NY as trustee for the Holder of the Warrant (the “Trustee”).

 

3.3 Continuation of Terms.  Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4.  In the event this Warrant does not continue in full force and effect after the consummation of the transactions described in this Section 3, then the Company's securities and property (including cash, where applicable) receivable by the Holders of the Warrant will be delivered to Holder or the Trustee as contemplated by Section 3.2.

 

4. Extraordinary Events Regarding Common Stock.  In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein.  The number of shares of Common Stock that the holder of this Warrant shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Exercise Price in effect on the date of such exercise.

 

  

  

  

 

5. Reservation of Stock, Etc., Issuable on Exercise of Warrant.  The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant.

 

6. Assignment; Exchange of Warrant.  Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a "Transferor") in whole or in part.  On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the "Transferor Endorsement Form") and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, the provision of a legal opinion from the Transferor's counsel (at the Company’s expense) that such transfer is exempt from the registration requirements of applicable securities laws, and with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

 

7. Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

8. Certificate as to Adjustments.  In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant.  The Company will forthwith mail a copy of each such certificate to the holder of the Warrant and any Warrant agent of the Company (appointed pursuant to Section 9 hereof).

 

9. Warrant Agent.  The Company may, by written notice to the each Holder of the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 10, and replacing this Warrant pursuant to Section 11, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

 

10. Transfer on the Company's Books.  Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

  

  

  

 

11. Notices, Etc.  All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder of this Warrant who has so furnished an address to the Company.

 

12. Miscellaneous.  This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be governed by and construed in accordance with the laws of State of New York without regard to principles of conflicts of laws.  Any action brought concerning the transactions contemplated by this Warrant shall be brought only in the state courts of New York or in the federal courts located in the state of New York; provided, however, that the Holder may choose to waive this provision and bring an action outside the state of New York.  The individuals executing this Warrant on behalf of the Company agree to submit to the jurisdiction of such courts and waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant.  The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision hereof.  The Company acknowledges that legal counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party.

 

14. Registration Rights Agreement. The shares of Common Stock underlying this Warrant are “Registrable Securities” under the terms of the Registration Rights Agreement, dated as of April 30, 2008, as amended through the date hereof and as amended from time to time, between the Company and Moriah Capital, L.P., and the Holder is entitled to the benefits thereof.

 

 

IN WITNESS WHEREOF, the Company has executed this Warrant No.       as of the date first written above.

 

	  	
INTERMETRO COMMUNICATIONS, INC., a Nevada corporation

	  	  
	  	  
	  	
By:

	                                                                                                                                                                                         
	  	
Name:

	                                                                                                                                                                                      
	  	
Title:

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