Document:

THIS 8% PROMISSORY NOTE (THE “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO AMERICAN SCIENTIFIC RESOURCES, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

FORM OF 8% PROMISSORY NOTE

	
US$________

	
May __, 2011

	  	
(“Issuance Date”)

FOR VALUE RECEIVED, American Scientific Resources, Inc., a Nevada corporation (“Borrower”) with an address at 1112 Weston Rd., Unit 278, Weston, FL 33326, promises to pay to __________________ (together with its registered assigns or successors in interest, “Holder”) with an address at ____________________________, upon the terms set forth below, the sum of _________________________________ United States Dollars (US$__________) (the “Principal Amount”) and the Interest (as defined herein) thereon on November ___, 2011 (the “Maturity Date”), if not sooner paid in accordance with the terms of this Note.

ARTICLE I 

THE NOTE; INTEREST; PREPAYMENT; ACCELERATION

1.1.          The Note.  The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument as it may be amended or supplemented.

1.2.          Interest Rate.  Interest on the unpaid principal balance of this Note (“Interest”) shall accrue at a rate of eight percent (8%) per annum commencing on the Issuance Date.  Interest shall be computed on the basis of a 365-day year and actual days elapsed and be payable on the Maturity Date.

1.3           Security Interest.  As collateral securing Borrower’s obligations hereunder, Borrower hereby grants to Holder a lien and security interest on 8,000 units of the VeraTemp thermometer.

1.4           Accounts Receivables.  Borrower shall pledge that portion of Borrower’s Accounts Receivable that is received as a direct result of the acquisition of inventory using the proceeds of the loan made hereunder until such time as the Principal Amount and Interest is paid in full.  See Schedule A for the accounts pledged. Any balance will be remitted back to the Borrower within three business days.  Holder will also terminate the payment instructions sent to the Borrower’s customers within three business days of this Note being paid in full.

  

  

  

1.5           Prepayment. Borrower has the option, but not the obligation, to pay all or any amount of the Principal Amount and/or Interest in one or a series of transactions at any time before the Maturity Date without prepayment penalty of any kind.

1.6           Acceleration of Maturity Date.  In the event, and only in the event, that Borrower obtains in any one financing transaction, including but not limited to any new debt instrument, equity instrument, joint venture, strategic acquisition, etc., of any kind, proceeds in the amount of two hundred thousand dollars ($200,000) or more, Borrower shall pay to Holder the Principal and Interest in full within three business days of the closing of such financing.

1.7           Restrictive Covenant.  Borrower shall not, without the consent of Holder, which shall not be unreasonably withheld or delayed, engage in any financing that involves a variable rate transaction during the six month term of this Note; provided, however, that this restriction shall not apply in the event that the financing discussed in Section 1.5 hereof has been initiated on or before the two month anniversary of the Issuance Date.  Notwithstanding the foregoing, debt instruments and private sales of equity to accredited investors at a fixed price no lower than $0.15 per share shall be permitted.  If no large financings (those greater than $200,000) occur within the next two months, this clause will become null and void.

ARTICLE II 

EVENTS OF DEFAULT

2.1           The occurrence and continuance of any of the following events shall be an “Event of Default”:

(a)           Failure to Pay Principal or Interest.  Borrower fails to pay on the Maturity Date the Principal Amount and Interest, and such failure shall continue for a period of five (5) business days after the Maturity Date;

(b)           Breach of Covenant.  Borrower breaches a material covenant, term or condition of this Note in any material respect and such breach is not cured by Borrower within thirty (30) days after Borrower receives written notice by Holder of such breach;

(c)           Breach of Representations and Warranties.  Any representation or warranty of Borrower made herein shall be false or misleading in any material respect and such false or misleading statement is not cured by Borrower within thirty (30) days after Borrower receives written notice by Holder of statement;

  

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(d)           Receiver or Trustee.  Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for itself or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed; or

(e)           Bankruptcy.  Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against Borrower.

2.2.          Default Interest Rate.  Following the occurrence and during the continuance of an Event of Default, interest on this Note shall automatically change to two percent (2.0%) per month, payable as follows: one percent (1.0%) in immediately available funds and one percent (1%) payable in common stock of Borrower calculated based on the volume weighted average price of the Common Stock on the OTC Bulletin Board on the trading day immediately preceding the Event of Default until such Event of Default is cured or waived.

2.3           Collection Expenses. If Holder shall commence an action or proceeding to enforce this Note, then Borrower shall reimburse Holder for its costs of collection and reasonable attorneys’ fees incurred from the investigation, preparation and prosecution of such action or proceeding; provided that such action does not directly or indirectly arise from Holder’s negligence or misconduct.

ARTICLE III

REPRESENTATIONS OF BORROWER

3.1.          Representations and Warranties of Borrower. Borrower hereby represents and warrants to Holder as follows:

(a) That the information contained in Borrower’s financial statements and all other materials or documents previously or hereafter submitted to Holder in connection with this Note are true, correct and complete in all material respects;

(b) Borrower is the sole owner of and has good, free and unencumbered title to each those enumerated Receivables;

(c) Execution and performance of this Note has been duly authorized by all necessary actions and this Note and all the other documents executed in connection herewith are legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their terms, except in the case of bankruptcy, general rights of creditors or with respect to principles of equity;

(d) Each Receivable pledged is based upon a bona fide sale of goods or services and represents a completed delivery or completed furnishing of property or services in fulfillment of all the terms and provisions of a fully executed and unexpired contract with the account debtor and is a valid and enforceable obligation of the account debtor;

  

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(e) Each account debtor has accepted goods or services covered by the applicable Receivable;

(f) All Receivables are current, are not past due, have not been paid in whole or in part, are outstanding in the amounts reflected in Schedule "A" and are not subject to any dispute or claim as to price, quality, quantity, workmanship, delay in shipment, set off, counterclaim or other defense;

g) No product or service was provided on a guaranteed-sale basis or "buy-back" agreement, and the account debtor has not claimed any defense of any kind or character or object for any reason whatsoever against payment of such Receivable;

(h) Borrower’s chief executive office and the location where all books and records pertaining to each Receivable are kept are at the address shown below for notice to Borrower;

(i) Borrower is solvent, properly licensed and authorized to operate its business under the name designated herein;

(j) Borrower uses no trade name or pseudonym that has not been disclosed to Holder in writing;

(k) No petition in bankruptcy has been filed by or against Borrower nor has Borrower filed any petition seeking an arrangement of its debts or for any other relief under the Bankruptcy Code of the United States;

(l) That no application for appointment of a receiver or trustee for all or a substantial part of Borrower’s property is pending;

(m) Borrower has made no assignment for the benefit of creditors;

(n) Borrower does not own, control or exercise dominion over, in any way whatsoever, the business of any account debtor on any Receivable;

(o) To the best of Borrower’s knowledge, the account debtor is not insolvent or the subject of any bankruptcy or insolvency proceeding and has not made an assignment for the benefit of creditors, suspended normal business operations, dissolved, liquidated, terminated its existence, ceased to pay its debts as they become due, or suffered a receiver or trustee to be appointed for any of its assets or affairs;

(p) All Receivables arise from services rendered or products sold to commercial entities for business purposes and not for personal, family, or household purposes;

  

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ARTICLE IV

MISCELLANEOUS

4.1           Failure or Indulgence Not Waiver; Cumulative Remedies.  No failure or delay on the part of Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial waiver of such power, right or privilege apply as a waiver of future powers, rights or privileges.  All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2           Notices.  Except as otherwise specified herein to the contrary, all notices, requests, demands and other communications required or desired to be given hereunder shall only be effective if given in writing by certified or registered U.S. mail with return receipt requested and postage prepaid; by private overnight delivery service (e.g. Federal Express); by facsimile transmission (if no original documents or instruments must accompany the notice); or by personal delivery.  Any such notice shall be deemed to have been given (a) on the business day immediately following the mailing thereof, if mailed by certified or registered U.S. mail as specified above; (b) on the business day immediately following deposit with a private overnight delivery service if sent by said service; (c) upon receipt of confirmation of transmission if sent by facsimile transmission; or (d) upon personal delivery of the notice.  All such notices shall be sent to the addresses set forth in the preamble to this Note (or to such other address or addresses as a party may have advised the other in the manner provided in this Section 4.2):

4.3           Assignability.  This Note shall be binding upon Borrower and its successors and assigns, and shall inure to the benefit of Holder and its successors and assigns, and may be assigned by Holder; provided that Holder provides Borrower of such assignment at least ten days prior to the effective date of such assignment.

4.4           Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof.  Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Courts situated therein for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Note and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS NOTE AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

  

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4.5           Maximum Payments.  Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by Borrower to Holder or promptly refunded to Borrower in the event that no amounts are owed by Borrower to Holder.

4.6           Construction.  Each party hereto acknowledges that its legal counsel participated in the preparation of this Note 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 Note to favor any party against the other.

4.7           Headings.  The headings of various sections of this Note have been inserted for reference only and shall not affect the meaning or construction of any of the provisions hereof.

4.8           Severability. If any provision of this Note is held to be unenforceable under applicable law, such provision shall be excluded from this Note, and the balance hereof shall be interpreted as if such provision were so excluded.

4.9           Modification and Waiver.  This Note and any provision hereof may be amended, waived, discharged or terminated only by an instrument in writing signed by Borrower and Holder.

[Balance of page intentionally left blank; signature page follows.]

  

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IN WITNESS WHEREOF, Borrower has caused this 8% Promissory Note to be signed in its name effective as of this _____th day of May 2011.

	  	
By:

	  
	  	
Name: Christopher F. Tirotta, MD, MBA

	  	
Title: CEO/Chairman

  

7NEITHER THIS SECURITY NOR ANY SECURITIES WHICH MAY BE ISSUED UPON EXERCISE OF THIS SECURITY HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY U.S. STATE OR OTHER JURISDICTION OR ANY EXCHANGE OR SELF-REGULATORY ORGANIZATION, IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND SUCH OTHER LAWS AND REQUIREMENTS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR LISTING OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION AND/OR LISTING REQUIREMENTS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH WILL BE REASONABLY ACCEPTABLE TO AMERICAN SCIENTIFIC RESOURCES, INC.

 

AMERICAN SCIENTIFIC RESOURCES, INC.

 

FORM OF COMMON STOCK PURCHASE WARRANT

 

	
No. ________

	
May ___, 2011

	  	
(“Issuance Date”)

American Scientific Resources, Inc., a Nevada corporation (the “Company”), hereby certifies that ________________________ its permissible transferees, designees, successors and assigns (collectively, “Holder”), for value received, is entitled to purchase from the Company at any time and from time to time commencing on the date first appearing above (the “Issuance Date”), up to and through 12:01a.m. (EST) on the date that is seven (7) years from the Issuance Date (the “Termination Date”) up to ________ shares (each, a “Share” and collectively, the “Shares”) of the Company’s common stock (“Common Stock”), at an exercise price per Share equal to $0.0001 (the “Exercise Price”).  The number of Shares purchasable hereunder and the Exercise Price are subject to adjustment as provided in Section 4 hereof.

 

This Common Stock Purchase Warrant (the “Warrant”) is being issued in connection with the issuance of an 8% Promissory Note to _________________ in the principal amount of $___________.

 

1.           Method of Exercise; Payment.

 

(a)           Cash Exercise.  The purchase rights represented by this Warrant may be exercised by Holder, in whole or in part, at any time, or from time to time, by the surrender of this Warrant (with the notice of exercise form (the “Notice of Exercise”) attached hereto as Exhibit A duly executed) to the Company at its principal office, and by payment to the Company of an amount equal to the Exercise Price multiplied by the number of Shares being purchased, which amount may be paid by wire transfer or certified check payable to the order of the Company. The person or persons in whose name(s) any certificate(s) representing Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised.

  

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(b)             Cashless Exercise.

(i)           This Warrant may also be exercised at such time by means of a “cashless exercise” in which Holder shall be entitled to receive a stock certificate for the number of Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) =      the VWAP on the trading day immediately preceding the date of such election;

 (B) =      the Exercise Price of this Warrant, as may be adjusted pursuant to this Warrant; and

	
  

	
(X) =

	
the number of Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

“VWAP” means, for any date, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board.

(c)           Stock Certificates.  In the event of any exercise of the rights represented by this Warrant, as promptly as practicable after the Notice of Exercise is delivered to the Company (the “Warrant Share Delivery Date”), the Company at its expense shall deliver the physical certificate to the address specified by Holder in the Notice of Exercise.  The Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised.  In the event this Warrant is exercised in part and requested by Holder, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the number of Shares for which this Warrant may then be exercised if requested by Holder.  Notwithstanding anything herein to the contrary, Holder shall not be required to physically surrender this Warrant to the Company until Holder has purchased all of the Shares available hereunder and the Warrant has been exercised in full, in which case, Holder shall surrender this Warrant to the Company for cancellation within three (3) business days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Shares available hereunder shall have the effect of lowering the outstanding number of Shares purchasable hereunder in an amount equal to the applicable number of Shares purchased.   Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Shares hereunder, the number of Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

  

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(d)           Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 hereof or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, Holder (together with Holder’s affiliates and any other individual, corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof (“Person”) or any other entity acting as a group together with Holder or any of Holder’s affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock of the Company (the “Common Shares”) beneficially owned by Holder and its affiliates shall include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially owned by Holder or any of its affiliates and (ii) exercise or conversion of the unexercised or non-converted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by Holder or any of its affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 1(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder, it being acknowledged by Holder that the Company is not representing to Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 1(d) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of Holder.   Holder shall certify in all Notices of Exercise delivered pursuant to Section 1(a) hereof the aggregate number of shares of Common Stock beneficially owned by Holder and Holder's affiliates other than pursuant to this Warrant (excluding shares of Common Stock which would be issuable upon exercise or conversion of the unexercised or unconverted portion of any securities of the Company beneficially owned by Holder and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein).  In connection with any exercise of this Warrant, the Company shall be entitled to rely upon such certification by Holder.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 1(d), in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company’s transfer agent (the “Transfer Agent”) setting forth the number of Common Shares outstanding.  Upon the written or oral request of Holder, the Company shall within two business days confirm orally and in writing to Holder the number of Common Shares then outstanding.  In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by Holder or its affiliates since the date as of which such number of outstanding Common Shares was reported.  The “Beneficial Ownership Limitation” shall be 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon exercise of this Warrant.  By written notice to the Company, Holder may from time to time increase or decrease the Beneficial Ownership Limitation to any other percentage not in excess of 9.99% specified in such notice; provided that any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

  

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(e)           Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to Holder the Shares by the Warrant Share Delivery Date, then Holder will have the right to rescind such exercise.

2.           Warrant.

 

(a)          Exchange, Transfer and Replacement.  At any time prior to the exercise hereof, this Warrant may be exchanged upon presentation and surrender to the Company, alone or with other warrants of like tenor of different denominations registered in the name of the same Holder, for another warrant or warrants of like tenor in the name of such Holder exercisable for the aggregate number of Shares as the warrant or warrants surrendered.

 

(b)          Replacement of Warrant.  Upon 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, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof, a new Warrant of like tenor.

 

(c)           Cancellation; Payment of Expenses.  Upon the surrender of this Warrant in connection with any transfer, exchange or replacement as provided in this Section 2, this Warrant shall be promptly canceled by the Company.  Holder shall pay all taxes and all other expenses (including legal expenses, if any, incurred by Holder or transferees) and charges payable in connection with the preparation, execution and delivery of Warrants pursuant to this Section 2.

  

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(d)   Warrant Register.  The Company shall maintain, at its principal executive offices (or at the offices of the transfer agent for the Warrant or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant (the “Warrant Register”), in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.

 

3.           Rights and Obligations of Holders of this Warrant.  Holder of this Warrant shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or in equity; provided, however, that in the event any certificate representing shares of Common Stock or other securities is issued to the holder hereof upon exercise of this Warrant, such holder shall, for all purposes, be deemed to have become the holder of record of such Common Stock on the date on which this Warrant, together with a duly executed Notice of Exercise, was surrendered and payment of the aggregate Exercise Price was made, irrespective of the date of delivery of such Common Stock certificate.

 

4.           Adjustments.

 

(a)           Stock Dividends, Reclassifications, Recapitalizations, Etc.  While this Warrant is outstanding, in the event the Company:  (i) pays a dividend in Common Stock or makes a distribution in Common Stock, (ii) subdivides its outstanding Common Stock into a greater number of shares, (iii) combines its outstanding Common Stock into a smaller number of shares or (iv) increases or decreases the number of shares of Common Stock outstanding by reclassification of its Common Stock (including a recapitalization in connection with a consolidation or merger in which the Company is the continuing corporation), then (1) the Exercise Price on the record date of such division or distribution or the effective date of such action shall be adjusted by multiplying such Exercise Price by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately before such event and the denominator of which is the number of shares of Common Stock outstanding immediately after such event, and (2) the number of shares of Common Stock for which this Warrant may be exercised immediately before such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the Exercise Price immediately before such event and the denominator of which is the Exercise Price immediately after such event.

 

5.           Fractional Shares.  In lieu of issuance of a fractional share upon any exercise hereunder, the Company will issue an additional whole share in lieu of that fractional share, calculated on the basis of the Exercise Price.

 

6.           Legends.  Prior to issuance of the Shares, all such certificates representing such Shares shall bear a restrictive legend to the effect that the Shares represented by such certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and that the Shares may not be sold or transferred in the absence of such registration or an exemption therefrom, such legend to be substantially in the form of the bold-face language appearing at the top of this Warrant.

  

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7.           Disposition of Warrants or Shares.  Holder of this Warrant, each transferee hereof and any holder and transferee of any Shares, by his or its acceptance thereof, agrees that no public distribution of Warrants or Shares will be made in violation of the provisions of the Securities Act.  Furthermore, it shall be a condition to the transfer of this Warrant that any transferee thereof deliver to the Company his or its written agreement to accept and be bound by all of the terms and conditions contained in this Warrant.

 

8.           Except as otherwise specified herein to the contrary, all notices, requests, demands and other communications required or desired to be given hereunder shall only be effective if given in writing by certified or registered U.S. mail with return receipt requested and postage prepaid; by private overnight delivery service (e.g. Federal Express); by facsimile transmission (if no original documents or instruments must accompany the notice); or by personal delivery.  Any such notice shall be deemed to have been given (a) on the business day immediately following the mailing thereof, if mailed by certified or registered U.S. mail as specified above; (b) on the business day immediately following deposit with a private overnight delivery service if sent by said service; (c) upon receipt of confirmation of transmission if sent by facsimile transmission; or (d) upon personal delivery of the notice.  All such notices shall be sent to the following addresses (or to such other address or addresses as a party may have advised the other in the manner provided in this Section 8):

 

	
if to the Company:

	
American Scientific Resources, Inc.

	  	
1112 Weston Road, Unit 278

	  	
Weston, Florida 33326

	  	
Attention: Christopher F. Tirotta, MD, MBA

	  	
CEO

	  	
Facsimile: (954) 665-2820

Notwithstanding the time of effectiveness of notices set forth in this Section 8, a Notice of Exercise shall not be deemed effectively given until it has been duly completed and submitted to the Company together with this original Warrant and payment of the Exercise Price in a manner set forth in Section 1 hereof.

 

9.           Governing Law and Jurisdiction.  This Warrant shall be governed by and construed solely and exclusively in accordance with and pursuant to the internal laws of the State of New York. Any action brought concerning the transactions contemplated by this Warrant shall be brought only in the civil or state courts of New York or in the federal courts located in the State of New York.

 

10.           Successors and Assigns.  This Warrant shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

  

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11.           Headings.  The headings of various sections of this Warrant have been inserted for reference only and shall not affect the meaning or construction of any of the provisions hereof.

 

12.           Severability. If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant, and the balance hereof shall be interpreted as if such provision were so excluded.

 

13.           Modification and Waiver.  This Warrant and any provision hereof may be amended, waived, discharged or terminated only by an instrument in writing signed by the Company and Holder.

 

14.           Assignment.  This Warrant may be transferred or assigned, in whole or in part, at any time and from time to time by the then Holder by submitting this Warrant to the Company together with a duly executed Assignment in substantially the form and substance of the Form of Assignment which accompanies this Warrant as Exhibit B hereto, and, upon the Company’s receipt thereof, and in any event, within five (5) business days thereafter, the Company shall issue a Warrant to Holder to evidence that portion of this Warrant, if any as shall not have been so transferred or assigned.

 

15.           Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

(Signature Page Immediately Follows)

  

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, manually or by facsimile, by one of its officers thereunto duly authorized.

 

	  	
AMERICAN SCIENTIFIC RESOURCES, INC.

	  	  
	
Date: May ____, 2011

	
By:

	  
	  	
Name: Christopher F. Tirotta, MD, MBA

	  	
Title: CEO/Chairman

  

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EXHIBIT A

TO

WARRANT

 

NOTICE OF EXERCISE

 

To Be Executed by Holder

in Order to Exercise the Warrant

 

The undersigned Holder hereby elects to purchase _______ Shares pursuant to the attached Warrant, and requests that certificates for securities be issued in the name of:

 

(Please type or print name and address)

 

 

 

(Social Security or Tax Identification Number)

 

and delivered

to:___________________________________________________________________________

 

_____________________________________________________________________________.

 

(Please type or print name and address if different from above)

 

If such number of Shares being purchased hereby shall not be all the Shares that may be purchased pursuant to the attached Warrant, a new Warrant for the balance of such Shares shall be registered in the name of, and delivered to, Holder at the address set forth below.

 

In full payment of the purchase price with respect to the Shares purchased and transfer taxes, if any, the undersigned hereby tenders payment of $__________ by check, money order or wire transfer payable in United States currency to the order of [________________].

 

	  	
HOLDER:

	  	  
	  	
By:

	  
	  	  	
Name:

	  	  	
Title:

	  	  	
Address:

	  	  
	
Dated:

	  	  	  

  

-9-

  

EXHIBIT B

TO

WARRANT

 

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns, and transfers unto _____________ the right represented by the within Warrant to purchase ______ shares of Common Stock of American Scientific Resources, Inc., a Nevada corporation, to which the within Warrant relates, and appoints ____________________ Attorney to transfer such right on the books of American Scientific Resources, Inc., a Nevada corporation, with full power of substitution of premises.

 

	
Dated:

	
By:

	  
	  	  	
Name:

	  	  	
Title:

	  	  	
(signature must conform to name

	  	  	
of holder as specified on the fact 

of the Warrant)

	  	  
	  	
Address:

 

Signed in the presence of :

 

Dated:

  

-10-

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