Document:

Unassociated Document

Exhibit 10.4

 

AMENDMENT, WAIVER AND CONSENT

This Amendment, Waiver and Consent (“Consent”) is made and entered into as of March 31, 2014, by and among Arista Power, Inc., a New York corporation (the “Company”), and the parties identified on the signature page hereto (each a “Purchaser” and collectively, “Purchasers”).  Capitalized terms used but not defined herein will have the meanings assigned to them in the Securities Purchase Agreements (as defined below).

WHEREAS, the Company and Purchasers identified and in the amounts set forth on Schedule A entered into Securities Purchase Agreements (“Securities Purchase Agreements”) and Transaction Documents (“Transaction Documents”) dated as of July 31, 2013 and August 8, 2013; and

WHEREAS, the Company issued to the Purchasers Common Stock and Warrants (the “Warrants”) pursuant to the terms of the Securities Purchase Agreements; and

WHEREAS, the Company intends to sell convertible Preferred Stock and Warrants (collectively with the Common Stock issuable upon conversion of such Preferred Stock and exercise of such Warrants, the “New Securities”) for an aggregate purchase price of at least $750,000 (the “Proposed Offering”) set forth in the Securities Purchase Agreement, dated at or about the date of this Consent, between the Company and the Purchasers thereunder, and the exhibits and schedules attached thereto; and

WHEREAS, in connection with the Proposed Offering, the Purchasers would be entitled to certain dilutive adjustments and anti-dilution protections in connection with their Common Stock and Warrants; and

WHEREAS, in connection with the Proposed Offering, the Company and Purchasers agree to the following modifications to certain of the terms of the Transaction Documents and waivers, which modifications and waivers shall be effective only upon the closing of the Proposed Offering (“Effective Date”).

NOW, THEREFORE, the Company and Purchasers hereby agree as follows:

1.           Solely in connection with Purchasers’ Greenshoe Securities which may be acquired pursuant to Section 8(q) of the Securities Purchase Agreement, Purchasers permanently and irrevocably waive all dilutive adjustments, purchase price resets, anti-dilution and other ratchet protections as described in the Securities Purchase Agreements and Greenshoe Warrants.

2.           Upon the Closing of the Proposed Offering, the Company will reduce the Per Share Purchase Price of the Common Stock and the Warrant Price of the Warrants already issued to the Purchasers pursuant to the Securities Purchase Agreements and outstanding on the initial Closing date of the Proposed Offering, to $0.20 and $0.25, respectively, and the Purchasers hereby consent to such reduction.  Purchasers agree that no further reductions or adjustments of the Per Share Purchase Price or Warrant Price will be made in connection or as a result of any issuances or sales by the Company of Common Stock or Warrants or Common Stock Equivalents or upon any resets or adjustments in connection with any of the New Securities to be issued in the Proposed Offering, including but not limited to future issuances, reset rights, MFN rights and anti-dilution rights, on the terms and conditions contemplated in the transaction documents governing the New Securities as of the initial Closing of the Proposed Offering, except such adjustments that may be made pursuant to Section 3 below.

 

  

  

  

 

3.           In the event the Company issues or sells Common Stock, or any Common Stock Equivalents, other than in connection with the Proposed Offering or as described in Section 2 above, which would be a Dilutive Issuance, or require an adjustment pursuant to Section 4 of the Warrants (a “Warrant Adjustment”), then such Dilutive Issuance or Warrant Adjustment may result in a Dilution Adjustment or Warrant Adjustment, but such Dilution Adjustment or Warrant Adjustment may never be at an effective price or value lower than the higher of the Base Share Price (as defined in the Proposed Offering Securities Purchase Agreement) or Warrant Exercise Price (as defined in the Proposed Offering Securities Purchase Agreement) applicable to the New Securities, in effect at such time.

4.           The effective date of this Consent is immediately upon the closing of the Proposed Offering.

5.           Each of the parties executing this Consent represent to the other signatories herewith that it remains the holder of all of the Securities issued to it by the Company and in the amounts set forth on Schedule A hereto.

6.           The Company represents that Schedule A hereto includes all of the holders as of the Initial Closing Date of the Proposed Offering of any of the securities issued or issuable pursuant to the Securities Purchase Agreements and that the Transaction Documents have never been amended nor any waiver of any term thereof granted by any party thereto other than as set forth in this Consent.

7.           This Consent may be executed in counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same instrument.  This Consent may be signed and delivered by facsimile or electronically and such facsimile or electronically signed and delivered Consent shall be enforceable.

8.           This Consent will be governed by and interpreted in accordance with the laws of the State of New York without giving effect to the rules governing the conflicts of law.

9.           This Consent and any term hereof may not be changed, waived, discharged or terminated under an instrument in writing signed by all of the parties including but not limited to the Purchasers to the Proposed Offering.

10.           The invalidity or unenforceability of any provision hereof will in no way affect the validity or enforceability of any other provision.

11.           This Consent shall be included in the definition of Transaction Documents.

12.           All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Company, to: Arista Power, Inc., 1999 Mt. Read Boulevard, Rochester, New York 14615, Attn: William Schmitz, CEO, facsimile: (585) 243-4142, with a copy by fax only to (which shall not constitute notice): Schwell Wimpfheimer & Associates LLP, 1430 Broadway, Suite 1615, New York, NY 10018, Attn: Dov Schwell, Esq., facsimile: (646) 360-5000, and (ii) if to the Purchasers, to: the addresses and fax numbers indicated on Schedule A hereto, with an additional copy by fax only to (which shall not constitute notice): Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

  

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13.           This Consent shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws.  Any action concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state of New York.  The parties hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  The parties executing this Consent and other agreements referred to herein or delivered in connection herewith agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury.

 

14.           The parties acknowledge that this Consent is being entered into for the benefit of the Purchasers to the Proposed Offering and who are hereby made third party beneficiaries of this Consent.  This Consent may be enforced by the Purchasers to the Proposed Offering, and may not be amended without the consent of the Purchasers and the requisite amount of purchasers to the Proposed Offering in the manner described in the Securities Purchase Agreement to the Proposed Offering, which consent may be withheld for any reason.

15.           Except as expressly set forth herein, this Consent shall not be deemed to be a waiver, amendment or modification of any provisions of the Transaction Documents or of any right, power or remedy of the Purchaser, or constitute a waiver of any provision of the Transaction Documents (except to the extent herein set forth), or any other document, instrument and/or agreement executed or delivered in connection therewith and any other agreement to which the Purchaser may be parties to, in each case whether arising before or after the date hereof or as a result of performance hereunder or thereunder.  Except as set forth herein, the Purchaser reserves all rights, remedies, powers, or privileges available under the Transaction Documents and any other agreement to which the Purchaser may be parties to, at law or otherwise.  This Consent shall not constitute a novation or satisfaction and accord of the Transaction Documents or any other document, instrument and/or agreement executed or delivered in connection therewith and any other agreement to which the Purchaser may be a party to.

(Signatures to follow)

 

  

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IN WITNESS WHEREOF, the Company and the undersigned Purchasers have caused this Waiver to be executed as of the date first written above.

 

	 	 
ARISTA POWER, INC.

the “Company”

	 
	 	 	 	 
	
 

	By:	 	 

 

“PURCHASER”

 

Name of Purchaser: ____________________________________________________________________

 

Signature of Authorized Signatory of Purchaser: _____________________________________________

 

Name of Authorized Signatory: ___________________________________________________________

 

Title of Authorized Signatory: ____________________________________________________________

 

 

4Unassociated Document

Exhibit 10.5

 

LOCKUP AGREEMENT

This AGREEMENT (the "Agreement") is made as of the 31st day of March, 2014, by [__________________] ("Holder"), maintaining an address at c/o Arista Power, Inc., 1999 Mt. Read Boulevard, Rochester, New York 14615, facsimile: (585) 243-4142, in connection with his ownership of shares of Arista Power, Inc., a New York corporation (the "Company").

NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of which consideration are hereby acknowledged, Holder agrees as follows:

1.           Background.

a.           Holder is the direct or indirect beneficial owner of the amount of shares of the Common Stock and Common Stock Equivalents as set forth on the signature page hereto and which hereafter may be acquired by Holder (“Restricted Securities”).  “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or securities of a Subsidiary.

b.           Holder acknowledges that the Company has entered into or will enter into at or about the date hereof agreements (each a “Securities Purchase Agreement”) with purchasers (“Purchasers”) of the Company’s Preferred Stock.   Holder understands that, as a condition to proceeding with the Offering, the Purchasers have required, and the Company has agreed to obtain an agreement from the Holder to refrain from selling any Restricted Securities from the date of the Securities Purchase Agreement until one hundred and eighty (180) days after the first day the occurrence of all of the conditions that would permit the Company to exercise its right to give the Purchasers a Mandatory Conversion Notice as defined in Section 8(b) of the Certificate of Designation after the Effective Date (“Restriction Period”), except as described below.

c.           Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement.

2.           Sale Restriction.

a.           Holder hereby agrees that during the Restriction Period, the Holder will not sell, transfer or otherwise dispose of any Restricted Securities which Holder owns or has a right to acquires or acquire after the date hereof, except in connection with an offer made to all stockholders of the Company in connection with a merger, consolidation or similar transaction involving the Company or as described in Section 2(c) below.  Holder further agrees that the Company is authorized to and the Company agrees to place "stop orders" on its books to prevent any transfer of Restricted Securities in violation of this Agreement.  The Company agrees not to allow to occur any transaction inconsistent with this Agreement.

b.           Any subsequent issuance to and/or acquisition by Holder of Common Stock or Common Stock Equivalents during the Restriction Period will be subject to the provisions of this Agreement.

 

  

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c.            Notwithstanding the foregoing, the Holder (and any transferee of the Holder) may transfer any Restricted Securities: (i) as a bona fide gift or gifts, provided that prior to such transfer the donee or donees thereof agree in writing to be bound by the restrictions set forth herein, (ii) to any trust, partnership, corporation or other entity formed for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that prior to such transfer a duly authorized officer, representative or trustee of such transferee agrees in writing to be bound by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, (iii) to non-profit organizations qualified as charitable organizations under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or (iv) if such transfer occurs by operation of law, such as rules of descent and distribution, statutes governing the effects of a merger or a qualified domestic order, provided that prior to any transfer described in the foregoing Sections (i) through (iv), the transferee executes an agreement stating that the transferee is receiving and holding any Restricted Securities subject to the provisions of this Agreement. For purposes hereof, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.  In addition, the foregoing shall not prohibit privately negotiated transactions, provided the transferees agree, in writing, to be bound to the terms of this Agreement for the balance of the Restriction Period.

3.           Miscellaneous.

a.           At any time, and from time to time, after the signing of this Agreement, Holder will execute such additional instruments and take such action as may be reasonably requested by the Purchasers to carry out the intent and purposes of this Agreement.

b.           This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws.  Any action concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state of New York.  The Holder and Company hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  The parties executing this Agreement and other agreements referred to herein or delivered in connection herewith agree to submit to the in personam jurisdiction of such courts and hereby irrevocably 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 Agreement or any other agreement delivered in connection herewith 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 any agreement.  Notices hereunder shall be given in the same manner as set forth in the Securities Purchase Agreement.  Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  Holder irrevocably appoints the Company its true and lawful agent for service of process upon whom all processes of law and notices may be served and given in the manner described above; and such service and notice shall be deemed valid personal service and notice upon Holder with the same force and validity as if served upon Holder.

c.           The restrictions on transfer described in this Agreement are in addition to and cumulative with any other restrictions on transfer otherwise agreed to by the Holder or to which the Holder is subject to by applicable law.

d.           This Agreement shall be binding upon Holder, its legal representatives, successors and assigns.

 

  

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e.           This Agreement may be signed and delivered by facsimile or electronically and such facsimile or electronically signed and delivered Agreement shall be enforceable.

f.           The Holder and Company acknowledge that this Agreement is being entered into for the benefit of the Purchasers who are parties to the Securities Purchase Agreement and who are hereby made third party beneficiaries of this Agreement.  This Agreement may be enforced by the Purchasers, and their permitted assigns and may not be amended without the consent of the requisite amount of Purchasers, and their permitted assigns in the manner described in the Securities Purchase Agreement, which consent may be withheld for any reason.

IN WITNESS WHEREOF, and intending to be legally bound hereby, Holder has executed this Agreement as of the day and year first above written.

 

	 	

HOLDER:

	 
	 	 	 
	 	 	 
	 	(Signature of Holder)	 
	 	 	 
	 	 	 
	 	

(Print Name of Holder)

	 
	 	 	 

 

Number of Shares of Common Stock directly owned by Holder:                                                                                                                                                      

 

Number of Shares of Common Stock Equivalents directly owned by Holder:                                                                                                                                

Consisting of                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                     

 

Number of Shares of Common Stock beneficially owned by Holder:                                                                                                                                               

Presently held as follows:                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                     

 

Number of Shares of Common Stock Equivalents beneficially owned by Holder:                                                                                                                         

Consisting of                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                             

 

	 	
COMPANY:

	 
	 	 	 
	 	

ARISTA POWER, INC.

	 
	 	 	 	 
	 	
By: 

	 	 

 

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