Document:

exv10w2

 

Exhibit 10.2

SECURITY AGREEMENT

     This Security Agreement (“this Agreement”) is made this date by and between A Smart Move
L.L.C. (“Debtor”) and the persons listed on Exhibit A to this Agreement (“Secured Parties”).

     Section 1. Grant of Security Interest

     Debtor, in consideration of the indebtedness described in this Agreement, hereby grants,
conveys, and assigns to Secured Parties for security all of Debtor’s existing and future right,
title and interest in, to, and under the property listed in Section 2 of this Agreement. This
security interest is granted to the Secured Parties to (a) secure the payment of the indebtedness
evidenced by Debtor’s notes payable to Secured Parties dated as set forth in Exhibit A (Notes”) in
the aggregate principal sum of $2,230,000 with interest thereon, and all renewals, extensions, and
modifications of the Notes; (b) the payment, performance and observance of all obligations,
covenants and agreements to be paid, performed or observed by Debtor under those certain Notes of
even date, herewith, between Secured Parties and the Debtor (“Notes”); (c) the payment of all other
sums, with interest thereon, advanced under the terms of this Agreement; and (d) the performance of
the agreements and warranties of Debtor contained in this Agreement, or incorporated in this
Agreement by reference.

     Section 2. Property

     The property subject to the security interest (the Collateral) is all of Debtor’s present and
future right, title, and interest in and to, all benefits of Debtor arising from, and all monies
due or to become due under or in connection with the collateral set forth on Exhibit B.

     Section 3. Covenants of Debtor

     The Debtor agrees and covenants as follows:

     3.1 Payment of Principal and Interest. The Debtor shall promptly pay when due the principal
of and interest on the indebtedness evidenced by the Notes, any prepayment and late charges
provided in the Notes, and all other sums secured by this Agreement.

     3.2 Corporate Existence. The Debtor is a limited liability company duly organized and
existing under the laws of the state of Colorado and is duly qualified in every other state in
which it is doing business.

     3.3 Corporate Authority. The execution, delivery, and performance of this Agreement and the
execution and payment of the Notes are within Debtor’s corporate powers, have been duly authorized,
and are not in contravention of law or the terms of the Debtor’s articles of incorporation and
bylaws, or of any indenture, agreement, or undertaking to which the Debtor is a party or by which
it is bound.

     3.4 Ownership of Collateral. The Debtor is the sole owner of the Collateral and will defend
the Collateral against the claims and demands of all other persons at any time claiming the same or
any interest therein.

     Section 4. Use of Collateral

     Until default, debtor may use the collateral in any lawful manner not inconsistent with this
Agreement or with the terms or conditions of insurance, and may sell the collateral in the ordinary
course

 

 

of business. A sale in the ordinary course of business does not include a transfer in partial or
total satisfaction of a debt.

     Section 5. Perfection of Security Interest

     The Debtor agrees to execute and file financing statements, and do whatever may be necessary
under the applicable Uniform Commercial Code in the state where the Collateral is located, to
perfect and continue the Secured Parties’ interest in the Collateral, all at the Debtor’s expense.
If requested by a Secured Party, Debtor shall deliver into the Secured Parties’ possession any and
all source codes for the Programs.

     Section 6. Taxes and Assessments

     The Debtor will pay or cause to be paid promptly when due all taxes and assessments on the
Collateral, this Agreement, and the Notes. The Debtor may, however, withhold payment of any tax
assessment or claim if a good faith dispute exists as to the obligation to pay.

     Section 7. Insurance

     The Debtor shall have and maintain, or cause to be maintained, insurance at all times with
respect to all Collateral except accounts receivable, against such risks as the Secured Parties may
reasonably require, in such form, for such periods, and written by such companies as may be
satisfactory to the Secured Parties. All policies of insurance shall have endorsed a loss payable
clause acceptable to the Secured Parties and/or such other endorsements as the Secured Parties may
from time to time request, and the Debtor will promptly provide the Secured Parties with the
original policies or certificates of such insurance. The Debtor shall promptly notify the Secured
Parties of any loss or damage that may occur to the Collateral. The Secured Parties are hereby
authorized to make proof of loss if it is not made promptly by the Debtor. All proceeds of any
insurance on the Collateral shall be held by the Secured Parties as a part of the Collateral. Such
proceeds shall be paid out from time to time upon order of the Debtor for the purpose of paying the
reasonable cost of repairing or restoring the property damaged. Any proceeds that have not been so
paid out within 120 days following their receipt by the Secured Parties shall be applied to the
prepayment of principal on the Notes. In the event of failure to provide insurance as herein
provided, the Secured Parties may, at the Secured Parties’ option, provide such insurance at the
Debtor’s expense.

     Section 8. Application of Payments

     Unless applicable law provides otherwise, all payments received by the Secured Parties from
the Debtor under the Notes and/or this Agreement shall be applied by the Secured Parties in the
following order of priority: (i) interest payable on the Notes in the manner provided therein;
(ii) principal of the Notes in the manner provided therein; and (iii) any other sums secured by
this Agreement in such order as the Secured Parties, at the Secured Parties’ option, may determine.

     Section 9. Protection of Secured Parties’ Security

     If the Debtor fails to perform the covenants and agreements contained or incorporated in this
Agreement, or if any action or proceeding is commenced which affects the Collateral or title
thereto or the interest of the Secured Parties therein, including, but not limited to insolvency or
arrangements or proceedings involving a bankrupt or decedent, then the Secured Parties, at the
Secured Parties’ option, may make such appearance, disburse such sums, and take such action as the
Secured Parties deems

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necessary, in their sole discretion, to protect the Secured Parties’ interest, including but not
limited to (i) disbursement of attorneys’ fees, (ii) entry upon the Debtor’s property to make
repairs to the Collateral, and (iii) procurement of satisfactory insurance. Any amounts disbursed
by Secured Parties pursuant to this Section, with interest thereon, shall become additional
indebtedness of the Debtor secured by this Agreement. Unless the Debtor and the Secured Parties
agree to other terms of payment, such amounts shall be immediately due and payable and shall bear
interest from the date of disbursement at the default rate stated in the Notes unless collection
from the Debtor of interest at such rate would be contrary to applicable law, in which event such
amounts shall bear interest at the highest rate which may be collected from the Debtor under
applicable law. Nothing contained in this Section shall require the Secured Parties to incur any
expense or take any action.

     Section 10. Debtor and Lien Not Released

     From time to time, the Secured Parties may, at the Secured Parties’ option, without giving
notice to or obtaining the consent of the Debtor, the Debtor’s successors or assigns or of any
other lienholder or guarantors, without liability on the Secured Parties’ part, and notwithstanding
the Debtor’s breach of any covenant or agreement of the Debtor in this Agreement, extend the time
for payment of said indebtedness or any part thereof, reduce the payments thereon, accept a renewal
note or notes therefor, modify the terms and the time of payment of said indebtedness, release from
the lien of this Agreement any part of the Collateral, take or release other or additional
security, reconvey any part of the Collateral, join in any extension or subordination agreement,
and agree in writing with the Debtor to modify the rate of interest of the Notes. Any actions
taken by the Secured Parties pursuant to the terms of this Section shall not affect the obligation
of the Debtor or the Debtor’s successors or assigns to pay the sums secured by this Agreement and
to observe the covenants of the Debtor contained herein, shall not affect the guaranty of any
person, corporation, partnership, or other entity for payment of the indebtedness secured hereby,
and shall not affect the lien or priority of lien hereof on the Collateral. The Debtor shall pay
the Secured Parties a reasonable service charge, together with such insurance premiums and
attorneys’ fees as may be incurred at the Secured Parties’ option for any such action if taken at
the Debtor’s request.

     Section 11. Forbearance by Secured Parties Not a Waiver

     Any forbearance by the Secured Parties in exercising any right or remedy hereunder, or
otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any
right or remedy. The acceptance by the Secured Parties of payment of any sum secured by this
Agreement after the due date of such payment shall not be a waiver of the Secured Parties’ right to
either require prompt payment when due of all other sums so secured or to declare a default for
failure to make prompt payment. The procurement of insurance or the payment of taxes or other
liens or charges by the Secured Parties shall not be a waiver of the Secured Parties’ right to
accelerate the maturity of the indebtedness secured by this Agreement, nor shall the Secured
Parties’ receipt of any awards, proceeds or damages as provided in this Agreement operate to cure
or waive the Debtor’s default in payment of sums secured by this Agreement.

     Section 12. Uniform Commercial Code Security Agreement

     This Agreement is intended to be a security agreement pursuant to the Uniform Commercial Code
for any of the items specified above as part of the Collateral which, under applicable law, may be
subject to a security interest pursuant to the Uniform Commercial Code, and the Debtor hereby
grants the Secured Parties a security interest in said items. The Debtor agrees that the Secured
Parties may file any appropriate document in the appropriate index as a financing statement for any
of the items specified above as part of the Collateral. In addition, the Debtor agrees to execute
and deliver to the Secured

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Parties, upon the Secured Parties’ request, any financing statements, as
well as extensions, renewals and
amendments thereof, and reproductions of this Agreement in such form as the Secured Parties may
require to perfect a security interest with respect to said items. The Debtor shall pay all costs
of filing such financing statements and any extensions, renewals, amendments, and releases thereof,
and shall pay all reasonable costs and expenses of any record searches for financing statements the
Secured Parties may reasonably require. Without the prior written consent of the Secured Parties,
the Debtor shall not create or suffer to be created pursuant to the Uniform Commercial Code any
other security interest in the Collateral, including replacements and additions thereto. Upon the
occurrence of an event of default, the Secured Parties shall have the remedies of a secured party
under the Uniform Commercial Code and, at the Secured Parties’ option, may also invoke the other
remedies provided in this Agreement as to such items. In exercising any of said remedies, the
Secured Parties may proceed against the items of personal property specified above as part of the
Collateral separately or together and in any order whatsoever, without in any way affecting the
availability of the Secured Parties’ remedies under the Uniform Commercial Code or of the other
remedies provided in this Agreement.

     Section 13. Events of Default

     The Debtor shall be in default under this Agreement when any of the following events or
conditions occurs:

     14.1 Default Under Notes. The Debtor shall be in default under the Notes.

     14.2 Failure to Comply with Terms of this Agreement. The Debtor fails to comply with any
term, obligation, covenant, or condition contained in this Agreement, within 10 days after receipt
of written notice from the Secured Parties demanding such compliance.

     14.3 False Warranty, Covenant, or Representation. Any warranty, covenant, or representation
made to the Secured Parties by the Debtor under this Agreement, proves to have been false in any
material respect when made or furnished.

     14.4 Levy, Seizure, Attachment, Lien, or Encumbrance on Collateral. Any levy, seizure,
attachment, lien, or encumbrance of or on the Collateral which is not discharged by the Debtor
within 10 days or, any sale, transfer, or disposition of any interest in the Collateral, other than
in the ordinary course of business, without the written consent of the Secured Parties.

     Section 14. Acceleration in Case of Borrower’s Insolvency

     If the Debtor shall voluntarily file a petition under the federal Bankruptcy Act, as such Act
may from time to time be amended, or under any similar or successor federal statute relating to
bankruptcy, insolvency, arrangements or reorganizations, or under any state bankruptcy or
insolvency act, or file an answer in an involuntary proceeding admitting insolvency or inability to
pay debts, or if the Debtor shall be adjudged a bankrupt, or if a trustee or receiver shall be
appointed for the Debtor’s property, or if the Collateral shall become subject to the jurisdiction
of a federal bankruptcy court or similar state court, or if the Debtor shall make an assignment for
the benefit of its creditors, or if there is an attachment, receivership, execution or other
judicial seizure, then the Secured Parties may, at the Secured Parties’ option, declare all of the
sums secured by this Agreement to be immediately due and payable without prior notice to the
Debtor, and the Secured Parties may invoke any remedies permitted by this Agreement. Any
attorneys’ fees and other expenses incurred by the Secured Parties in connection with the Debtor’s
bankruptcy or any of the other events described in this Section shall be additional indebtedness of
the Debtor secured by this Agreement.

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     Section 15. Rights of Secured Parties.

     15.1 Disposition of Collateral. Upon default, the Secured Parties may sell all or any part of
the Collateral as a whole or in parcels either by public auction, private sale, or other method of
disposition. The Secured Parties may bid at any public sale on all or any portion of the
Collateral. The Secured Parties shall give the Debtor reasonable notice of the time and place of
any public sale or of the time after which any private sale or other disposition of the Collateral
is to be made, and notice given at least 10 days before the time of the sale or other disposition
shall be conclusively presumed to be reasonable. A public sale in the following fashion shall be
conclusively presumed to be reasonable:

	 	15.1.1	 	Notice shall be given at least 10 days before the date of sale by publication
once in a newspaper of general circulation published in the county in which the
sale is to be held;
	 
	 	15.1.2	 	The sale shall be held in a county in which the Collateral or any part is
located or in a county in which the Debtor has a place of business;
	 
	 	15.1.3	 	Payment shall be in cash or by certified check immediately following the
close of the sale;
	 
	 	15.1.4	 	The sale shall be by auction, but it need not be by a professional
auctioneer;
	 
	 	15.1.5	 	The Collateral may be sold as is and without any preparation for sale.

     15.2 No Obligation to Dispose of Collateral. Notwithstanding any provision of this Agreement,
the Secured Parties shall be under no obligation to offer to sell the Collateral. In the event the
Secured Parties offers to sell the Collateral, the Secured Parties will be under no obligation to
consummate a sale of the Collateral if, in its reasonable business judgment, none of the offers
received by it reasonably approximates the fair value of the Collateral.

     15.3 Retention of Collateral. In the event the Secured Parties elect not to sell the
Collateral, the Secured Parties may elect to follow the procedures set forth in the Uniform
Commercial Code for retaining the Collateral in satisfaction of the Debtor’s obligation, subject to
the Debtor’s rights under such procedures.

     15.4 Appointment of Receiver. In addition to the rights under this Agreement and/or the
Sales/Loan Agreement, in the event of a default by the Debtor, the Secured Parties shall be
entitled to the appointment of a receiver for the Collateral as a matter of right whether or not
the apparent value of the Collateral exceeds the outstanding principal amount of the Notes and any
receiver appointed may serve without bond. Employment by the Secured Parties shall not disqualify
a person from serving as receiver.

     Section 16. Waiver of Statute of Limitations

     Debtor hereby waives the right to assert any statute of limitations as a bar to the
enforcement of the lien of this Agreement or to any action brought to enforce the Notes or any
other obligation secured by this Agreement.

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     Section 17. Waiver of Marshalling

     Notwithstanding the existence of any other security interest in the Collateral held by the
Secured Parties or by any other party, the Secured Parties shall have the right to determine the
order in which any or all of the Collateral shall be subjected to the remedies provided by this
Agreement. The Secured Parties shall have the right to determine the order in which any or all
portions of the indebtedness secured by this Agreement are satisfied from the proceeds realized
upon the exercise of the remedies provided in this Agreement. The Debtor, any party who consents
to this Agreement, and any party who now or hereafter acquires a security interest in the
Collateral and who has actual or constructive notice of this Agreement, hereby waives any and all
right to require the marshalling of assets in connection with the exercise of any of the remedies
permitted by applicable law or by this Agreement.

     Section 18. Provisions of Agreement

     In case of a breach by the Debtor of the covenants and conditions of this Agreement, the
Secured Parties at the Secured Parties’ option (i) may invoke any of the rights or remedies
provided in the Agreement, (ii) may accelerate the sums secured by this Agreement and invoke the
remedies provided in this Agreement or, (iii) may do both.

     Section 19. Remedies Cumulative

     Each remedy provided in this Agreement is distinct and cumulative to all other rights or
remedies under this Agreement or afforded by law or equity, and may be exercised concurrently,
independently, or successively, in any order whatsoever.

     Section 20. Notices

     Any notices permitted or required under this Agreement shall be deemed given upon the date of
personal delivery or 48 hours after deposit in the United States mail, postage fully prepaid,
return receipt requested, addressed to Secured Parties at the addresses set forth in Exhibit A; and
addressed to the Debtor at:

     A Smart Move L.L.C.

     5350 S. Roslyn Street, Suite 300

     Greenwood Village, Colorado 80111

     Attn: Manager

or at any other address as any party may, from time to time, designate by notice given in
compliance with this Section.

     Section 21. Law Governing

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Colorado.

     Section 22. Titles and Captions

     All section titles or captions contained in this Agreement are for convenience only and shall
not be deemed part of the context nor effect the interpretation of this Agreement.

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     Section 23. Entire Agreement

     This Agreement and the Notes and other agreements executed contemporaneously hereto contain
the entire understanding between and among the parties and supersede any prior understandings and
agreements among them respecting the subject matter of this Agreement.

     Section 24. Agreement Binding

     This Agreement shall be binding upon the heirs, executors, administrators, successors, and
assigns of the parties hereto.

     Section 25. Computation of Time

     In computing any period of time pursuant to this Agreement, the day of the act, event or
default from which the designated period of time begins to run shall be included, unless it is a
Saturday, Sunday or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday or legal holiday, in which event the period shall run until the end
of the next day thereafter which is not a Saturday, Sunday or legal holiday.

     Section 26. Pronouns and Plurals

     All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the person or persons may require.

     Section 27. Arbitration

     If at any time during the term of this Agreement any dispute, difference, or disagreement
shall arise upon or in respect of the Agreement, and the meaning and construction hereof, every
such dispute, difference, and disagreement shall be referred to a single arbiter agreed upon by the
parties, or if no single arbiter can be agreed upon, an arbiter or arbiters shall be selected in
accordance with the rules of the American Arbitration Association and such dispute, difference, or
disagreement shall be settled by arbitration in accordance with the then prevailing commercial
rules of the American Arbitration Association, and judgment upon the award rendered by the arbiter
may be entered in any court having jurisdiction thereof.

     Section 28. Presumption

     This Agreement or any section thereof shall not be construed against any party due to the fact
that said Agreement or any section thereof was drafted by said party.

     Section 29. Further Action

     The parties hereto shall execute and deliver all documents, provide all information and take
or forbear from all such action as may be necessary or appropriate to achieve the purposes of this
Agreement.

     Section 30. Parties in Interest

     Nothing herein shall be construed to be to the benefit of any third party, nor is it intended
that any provision shall be for the benefit of any third party.

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     Section 31. Savings Clause

     If any provision of this Agreement, or the application of such provision to any person or
circumstance, shall be held invalid, the remainder of this Agreement, or the application of such
provision to persons or circumstances other than those as to which it is held invalid, shall not be
affected thereby.

Dated: 10-6-04 .

	 	 	 	 	 
	 	A SMART MOVE L.L.C

 	 
	 	By:  	/s/ Chris Sapyta	 
	 	 	 	 
	 	 	 	 
	 

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EXHIBIT A

SECURED PARTIES

     NAME                                                                                  DATE                               PRINCIPAL

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EXHIBIT B

DESCRIPTION OF COLLATERAL

	a.	 	Presently existing and hereafter arising accounts, chattel paper, contract rights,
commissions, warehouse receipts, bills of lading, delivery orders, drafts, acceptances, notes,
securities and other instruments; documents; general intangibles; and all other forms of
receivables, and all guaranties and securities therefor,.and all other forms of obligations
owing to Debtor arising out of the rendition of services by Debtor, whether or not earned by
performance, and any and all credit insurance, guaranties, and other security therefor, as
well as all merchandise returned to or reclaimed by Debtor and Debtor’s Books relating to any
of the foregoing (collectively “Accounts”);
	 
	b.	 	Present and future general intangibles and other personal property (including choses or
things in action, goodwill, patents, trade names, trademarks, service marks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension
finds, route lists, monies due under any royalty or licensing agreements, infringement claims,
computer programs, computer discs, computer tapes, literature, reports, catalogs deposit
accounts, insurance premium rebates, tax refunds, and tax refund claims) other than goods and
Accounts, and Debtor’s Books relating to any of the foregoing (collectively “General
Intangibles”);
	 
	c.	 	Present and future letters of credit, notes, drafts, instruments, certificated and
uncertificated securities, documents, leases, and chattel paper, and Debtor’s Books relating
to any of the foregoing (collectively “Negotiable Collateral”);
	 
	d.	 	Present and hereafter acquired shipping crates, machinery, machine tools, motors, equipment,
furniture, furnishings, fixtures, vehicles (including motor vehicles and trailers), tools,
parts, dies, jigs, goods (other than consumer goods or farm products), and any interest in any
of the foregoing, and all attachments, accessions, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing, wherever located (collectively
“Equipment”);
	 
	e.	 	Books and records including: ledgers; records indicating, summarizing, or evidencing Debtor’s
assets or liabilities, or the collateral; all information relating to Debtor’s business
operations or financial condition; and all computer programs, disc or tape files, printouts,
funds or other computer prepared information, and the equipment containing such information
(collectively “Debtor’s Books”);
	 
	f.	 	Substitutions, replacements, additions, accessions, proceeds, products to or of any of the
foregoing, including, but not limited to, proceeds of insurance covering any of the foregoing,
or any portion thereof, and any and all Accounts, General Intangibles, Negotiable Instruments,
Collateral, Inventory, Equipment, money, deposits, accounts, or other tangible or intangible
property resulting from the sale or other disposition of the accounts, general Intangibles,
Negotiable Collateral, Inventory, Equipment, or any portion thereof or interest therein and
the proceeds thereof.
	 
	g.	 	All property of the types described in paragraphs a-f or similar thereto, that at any time
hereafter may be acquired by Debtor, including but not limited to all accessions, parts,
additions, and replacements

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Exhibit 10.3

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND
NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER SUCH
SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (II) THE COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.

A SMART MOVE L.L.C

COMMON STOCK PURCHASE WARRANT

			
	Warrant #
	 	                     shares

Original
Issue Date: October 6, 2004

     THIS CERTIFIES THAT, FOR VALUE
 RECEIVED, _________ or its registered assigns (“Holder”)
is entitled to purchase, on the terms and conditions hereinafter set forth, at any time or from
time to time from the date hereof until 5:00 p.m., Eastern Time, on fifth anniversary of the
Original Issue Date set forth above, or if such date is not a day on which the Company (as
hereinafter defined) is open for business, then the next succeeding day on which the Company is
open for business (such date is the “Expiration Date”), but not thereafter, to purchase up to
______ (___) shares of the Common Stock, $.001 par value (the “Common Stock”), of A Smart
Move L.L.C., a Colorado limited liability corporation (the “Company”), at a purchase price of one
dollar and twenty five cents ($1.25) per share (the “Exercise Price”), such number of shares and
Exercise Price being subject to adjustment upon the occurrence of the contingencies set forth in
this Warrant. Each share of Common Stock as to which this Warrant is exercisable is a “Warrant
Share” and all such shares are collectively referred to as the “Warrant Shares.”

     Section 1. Exercise of Warrant; Conversion of Warrant.

     (a) This Warrant may, at the option of Holder, be exercised in whole or in part from time to
time by delivery to the Company at its principal office, Attention: President, on or before 5:00
p.m., Eastern Time, on the Expiration Date, (i) a written notice of such Holder’s election to
exercise this Warrant (the “Exercise Notice”), which notice may be in the form of the Notice of
Exercise attached hereto, properly executed and completed by Holder or an authorized officer
thereof, (ii) payment for the Warrant Shares (“Payment”), as further described in Section 1(b),
below, and (iii) this Warrant (the items specified in (i), (ii), and (iii) are collectively the
“Exercise Materials”).

     (b) Payment may be made either in (i) a check payable to the order of the Company, in an
amount equal to the product of the Exercise Price multiplied by the number of Warrant Shares
specified in the Exercise Notice, (ii) by delivery of Warrants, Common Stock and/or Common Stock
receivable upon exercise of the Warrants in accordance with Section 1(c) below, or (iii) by a
combination of any of the foregoing methods) for the number of Common Shares specified in such form
(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.

 

 

     (c) Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one
share of Common Stock is greater than the Purchase 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 cancelled) by
surrender of this Warrant at the principal office of the Company together with the properly
endorsed Subscription Form 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 Fair Market Value of one share
of the Company’s Common Stock (at the date of such calculation)
	 
	 	 	 	 	 	 
	 

	 	 	 	B=
	 	Purchase Price (as adjusted to the date of such calculation)

     (d) Anything contained herein to the contrary notwithstanding, the Holder, at his option, may
exercise the Warrants, in whole or in part, during the Exercise Term by delivering to the Company a
confirmation slip issued by a brokerage firm that is a member of the National Association of
Securities Dealers, Inc. with respect to the sale of those number of Warrant Shares for which the
Warrants are being exercised, and, in such case, the Company shall deliver certificates
representing such Warrant Shares on settlement date at the office of the Company’s stock transfer
agent against payment for such Warrant Shares by such brokerage firm or its clearing broker, made
payable to the Company or made payable to the order of the Holder and endorsed by the Holder to the
Company.

     (e) As promptly as practicable, and in any event within two (2) business days after its
receipt of the Exercise Materials, Company shall execute or cause to be executed and delivered to
Holder a certificate or certificates representing the number of Warrant Shares specified in the
Exercise Notice, together with cash in lieu of any fraction of a share, and if this Warrant is
partially exercised, a new warrant on the same terms for the unexercised balance of the Warrant
Shares. The stock certificate or certificates shall be registered in the name of Holder or such
other name or names as shall be designated in the Exercise Notice. The date on which the Warrant
shall be deemed to have been exercised (the “Effective Date”), and the date the person in whose
name any certificate evidencing the Common Stock issued upon the exercise hereof is issued shall be
deemed to have become the holder of record of such shares, shall be the date the Company receives
the Exercise Materials, irrespective of the date of delivery of a certificate or certificates
evidencing the Common Stock issued upon the exercise or conversion hereof, provided, however, that
if the Exercise Materials are received by the Company on a date on which the stock transfer books
of the Company are closed, the Effective Date shall be the next succeeding date on which the stock
transfer books are open. All shares of Common Stock issued upon the exercise or conversion of this
Warrant will, upon issuance, be fully paid and nonassessable and free from all taxes, liens, and
charges with respect thereto.

 

 

        Section 2. Adjustments to Warrant Shares. The number of Warrant Shares issuable upon the
exercise hereof shall be subject to adjustment as follows:

     (a) In the event the Company is a party to a consolidation, share exchange, or merger,
or the sale of all or substantially all of the assets of the Company to, any person, or in
the case of any consolidation or merger of another corporation into the Company in which the
Company is the surviving corporation, and in which there is a reclassification or change of
the shares of Common Stock of the Company, this Warrant shall after such consolidation,
share exchange, merger, or sale be exercisable for the kind and number of securities or
amount and kind of property of the Company or the corporation or other entity resulting from
such share exchange, merger, or consolidation, or to which such sale shall be made, as the
case may be (the “Successor Company”), to which a holder of the number of shares of Common
Stock deliverable upon the exercise (immediately prior to the time of such consolidation,
share exchange, merger, or sale) of this Warrant would have been entitled upon such
consolidation, share exchange, merger, or sale; and in any such case appropriate adjustments
shall be made in the application of the provisions set forth herein with respect to the
rights and interests of Holder, such that the provisions set forth herein shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation to the
number and kind of securities or the type and amount of property thereafter deliverable upon
the exercise of this Warrant. The above provisions shall similarly apply to successive
consolidations, share exchanges, mergers, and sales. Any adjustment required by this
Section 2 (a) because of a consolidation, share exchange, merger, or sale shall be set forth
in an undertaking delivered to Holder and executed by the Successor Company which provides
that Holder shall have the right to exercise this Warrant for the kind and number of
securities or amount and kind of property of the Successor Company or to which the holder of
a number of shares of Common Stock deliverable upon exercise (immediately prior to the time
of such consolidation, share exchange, merger, or sale) of this Warrant would have been
entitled upon such consolidation, share exchange, merger, or sale. Such undertaking shall
also provide for future adjustments to the number of Warrant Shares and the Exercise Price
in accordance with the provisions set forth in Section 2 hereof.

     (b) In the event the Company should at any time, or from time to time after the
Original Issue Date, fix a record date for the effectuation of a stock split or subdivision
of the outstanding shares of Common Stock or the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in additional shares of Common
Stock, or securities or rights convertible into, or entitling the holder thereof to receive
directly or indirectly, additional shares of Common Stock (hereinafter referred to as
“Common Stock Equivalents”) without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents (including the additional
shares of Common Stock issuable upon exercise or exercise thereof), then, as of such record
date (or the date of such dividend, distribution, split, or subdivision if no record date is
fixed), the number of Warrant Shares issuable upon the exercise hereof shall be
proportionately increased and the Exercise Price shall be appropriately decreased by the
same proportion as the increase in the number of outstanding Common Stock Equivalents of the
Company resulting from the dividend, distribution, split, or subdivision. Notwithstanding
the preceding sentence, no adjustment shall be made to decrease the Exercise Price below
$.001 per Share.

     (c) In the event the Company should at any time or from time to time after the Original
Issue Date, fix a record date for the effectuation of a reverse stock split, or a
transaction having a similar effect on the number of outstanding shares of Common Stock of
the Company, then, as of such record date (or the date of such reverse stock split or
similar transaction if no

 

 

record date is fixed), the number of Warrant Shares issuable upon
the exercise hereof shall be proportionately decreased and the Exercise Price shall be
appropriately increased by the same proportion as the decrease of the number of outstanding
Common Stock Equivalents resulting from the reverse stock split or similar transaction.

     (d) In the event the Company should at any time or from time to time after the Original
Issue Date, fix a record date for a reclassification of its Common Stock, then, as of such
record date (or the date of the reclassification if no record date is set), this Warrant
shall thereafter be convertible into such number and kind of securities as would have been
issuable as the result of such reclassification to a holder of a number of shares of Common
Stock equal to the number of Warrant Shares issuable upon exercise of this Warrant
immediately prior to such reclassification, and the Exercise Price shall be unchanged.

     (e) The Company will not, by amendment of its Certificate of Incorporation or through
reorganization, consolidation, merger, dissolution, issue, or sale of securities, sale of
assets or any other voluntary action, void or seek to avoid the observance or performance of
any of the terms of the Warrant, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such actions as may be necessary or
appropriate in order to protect the rights of Holder against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (x) will not create a par
value of any share of stock receivable upon the exercise of the Warrant above the amount
payable therefor upon such exercise, and (y) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and
non-assessable shares upon the exercise of the Warrant.

     (f) When any adjustment is required to be made in the number or kind of shares
purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall
promptly notify Holder of such event and of the number of shares of Common Stock or other
securities or property thereafter purchasable upon exercise of the Warrants and of the
Exercise Price, together with the computation resulting in such adjustment.

     (g) The Company covenants and agrees that all Warrant Shares which may be issued will,
upon issuance, be validly issued, fully paid, and non-assessable. The Company further
covenants and agrees that the Company will at all times have authorized and reserved, free
from preemptive rights, a sufficient number of shares of its Common Stock to provide for the
exercise of the Warrant in full.

     Section 3. No Stockholder Rights. This Warrant shall not entitle Holder hereof to any voting
rights or other rights as a stockholder of the Company.

     Section 4. Transfer of Securities.

     (a) This Warrant and the Warrant Shares and any shares of capital stock received in
respect thereof, whether by reason of a stock split or share reclassification thereof, a
stock dividend
thereon, or otherwise, shall not be transferable except upon compliance with the
provisions of the Securities Act of 1933, as amended (the “Securities Act”) and applicable
state securities laws with respect to the transfer of such securities. The Holder, by
acceptance of this Warrant, agrees to be bound by the provisions of Section 4 hereof and to
indemnify and hold harmless the Company against any loss or liability arising from the
disposition of this Warrant or the Warrant Shares issuable upon exercise hereof or any
interest in either thereof in violation of the provisions of this Warrant.

 

 

      (b) Each certificate for the Warrant Shares and any shares of capital stock received in
respect thereof, whether by reason of a stock split or share reclassification thereof, a stock
dividend thereon or otherwise, and each certificate for any such securities issued to subsequent
transferees of any such certificate shall (unless otherwise permitted by the provisions hereof) be
stamped or otherwise imprinted with a legend in substantially the following form:

“NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAW AND NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED
UNTIL (I) A REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE
STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II) THE
COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.”

            Section 5. Registration.

     All Warrant Shares are subject to the rights and privileges granted to the participants in the
private placement offering pursuant to which this Warrant was issued.

            Section 6. Miscellaneous.

          (a) The terms of this Warrant shall be binding upon and shall inure to the benefit of any
successors or permitted assigns of the Company and Holder.

          (b) Except as otherwise provided herein, this Warrant and all rights hereunder are
transferable by the registered holder hereof in person or by duly authorized attorney on the books
of the Company upon surrender of this Warrant, properly endorsed, to the Company. The Company may
deem and treat the registered holder of this Warrant at any time as the absolute owner hereof for
all purposes and shall not be affected by any notice to the contrary.

          (c) Notwithstanding any provision herein to the contrary, Holder may not exercise, sell,
transfer, or otherwise assign this Warrant unless the Company is provided with an opinion of
counsel satisfactory in form and substance to the Company, to the effect that such exercise, sale,
transfer, or assignment would not violate the Securities Act or applicable state securities laws.

          (d) This Warrant may be divided into separate warrants covering one share of Common Stock or
any whole multiple thereof, for the total number of shares of Common Stock then subject to this
Warrant at any time, or from time to time, upon the request of the registered holder of this
Warrant and the surrender of the same to the Company for such purpose. Such subdivided Warrants
shall be issued promptly by the Company following any such request and shall be of the same form
and tenor as this Warrant, except for any requested change in the name of the registered holder
stated herein.

          (e) Any notices, consents, waivers, or other communications required or permitted to be given
under the terms of this Warrant must be in writing and will be deemed to have been delivered (a)
upon receipt, when delivered personally, (b) upon receipt, when sent by facsimile, provided a copy
is mailed by U.S. certified mail, return receipt requested, (c) three (3) days after being sent by
U.S. certified mail, return receipt requested, or (d) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the party to receive the
same.

 

 

     If to Holder, to the registered address of Holder appearing on the books of the Company. Each
party shall provide five (5) days prior written notice to the other party of any change in address,
which change shall not be effective until actual receipt thereof

          (f) This Warrant shall be construed and enforced in accordance with the laws of the State of
Illinois. The Company and the Holder hereby consent to the jurisdiction of the Courts of the State
of Colorado and the United States District Courts situated therein in connection with any action
concerning the provisions of this Note instituted by the Holder against the Company.

[Signatures on the following page]

 

 

SIGNATURE PAGE

TO

COMPANY

COMMON STOCK PURCHASE WARRANT

     IN WITNESS WHEREOF, the Company, has caused this Warrant to be executed in its name by its
duly authorized officers under seal, and to be dated as of the date first above written.

	 	 	 	 	 
	 	 	A Smart Move L.L.C.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Chris Sapyta
	 

	 	 	 	 
	 

	 	 	 	Name: Chris Sapyta
	 

	 	 	 	Title:   Chief Executive Officer

 

 

ASSIGNMENT

     (To be Executed by the Registered Holder to effect a Transfer of the foregoing Warrant)

     FOR VALUE RECEIVED, the undersigned hereby sells, and assigns and transfers unto
_________ the foregoing Warrant and the rights represented thereto to purchase
shares of Common Stock of A SMART MOVE L.L.C. in accordance with terms and conditions thereof, and
does hereby irrevocably constitute and appoint
_________ Attorney to transfer the said
Warrant on the books of the Company, with full power of substitution.

	 	 	 	 	 	 	 	 	 
	 

	 	Holder:
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Dated:	, 20	 	 	 	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	In the presence of:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

 

 

EXERCISE OR CONVERSION NOTICE

     [To be signed only upon exercise of Warrant]

To: A SMART MOVE L.L.C.

     The undersigned Holder of the attached Warrant hereby irrevocably elects to exercise the
Warrant for, and to purchase thereunder,
_________ shares of Common Stock of A SAMRT MOVE L.L.C, upon
exercise of said Warrant and hereby surrenders said Warrant.

     The undersigned herewith requests that the certificates for such shares be issued in the name
of, and delivered to the undersigned, whose address is _________.

If electronic book entry transfer, complete the following:

Account Number:

 

Transaction
Code Number:
 

Dated:
 

	 	 	 	 	 
	 	 	Holder:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

NOTICE

     The signature above must correspond to the name as written upon the face of the within Warrant
in every particular, without alteration or enlargement or any change whatsoever.

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