Document:

f10q0611ex10i_aristapwr.htm

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

Arista Power, Inc.

1999 Mt. Read Boulevard

Rochester, New York 14615

Gentlemen:

1.   Subscription. This Subscription Agreement relates to an offering (the “Offering”) of up to ten units (the “Units”) for a purchase price of $17,500 per Unit, with each Unit consisting of (a) 500,000 shares of common stock, par value $.0001 per share (“Common Stock”), of Arista Power, Inc. (the “Company”) and (b) a warrant to purchase 17,500 shares of Common Stock with a purchase price of $0.50 per share (the “Warrant”).  The Units are being offered pursuant to one or more exemptions from registration under Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Each individual or entity that completes a Subscriber signature page hereto (each a “Subscriber” and collectively, the “Subscribers”), on the date hereof shall purchase the number of Units set forth on such Subscriber’s signature page hereto, on the terms and conditions set forth herein, and the Company hereby accepts each such subscription and, on the date hereof shall issue and sell to each such Subscriber such Units.  The Subscribers understand that the Company will rely on the Subscriber’s representations and warranties herein.  This Subscription Agreement shall become effective upon execution by the parties hereto.

 

2.   Payment of Purchase Price.  Against delivery of the Shares, and in consideration of the other provisions hereof, each Subscriber shall pay to the Company the total purchase price set forth on such Subscriber’s signature page hereto by check made payable to “Arista Power, Inc.” or by wire transfer of immediately available funds to the Company at:

 

Citizen’s Bank

ABA Number:

Account Name: Arista Power, Inc.

Account Number:

FBO:  Add Subscriber’s Name

Promptly after the execution of this Agreement, the Company shall deliver to each Subscriber a stock certificate representing the number of shares of Common Stock comprising the Units set forth next to such Subscriber’s name.

 

3.   Representations and Warranties of the Subscriber.  Each Subscriber represents and warrants as follows:

 

(a) The Subscriber has been given the opportunity to ask questions of, and receive answers from, the Company and the Company’s authorized representative(s) concerning the terms and conditions of the offering.

 

  

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(b) The Subscriber has such knowledge and experience in financial matters and investments that the Subscriber is capable of evaluating the merits and risks of the Subscriber’s investment in the Company and has obtained sufficient information relating to the Company and the Offering to enable the Subscriber to evaluate the merits and risks of such investment.

 

(c) The Subscriber is acquiring the Common Stock and Warrant for the Subscriber’s own account for investment purposes only and not for distribution or resale to others in violation of the Securities Act.  Subscriber is not an “underwriter” of any of the Company’s securities as that term is defined in Section 2(11) of the Securities Act, and Subscriber shall not take or cause to be taken any action that would cause Subscriber to be deemed an underwriter of the Company’s securities.

 

(d) Subscriber understands that the Units, Common Stock, the Warrant and the Common Stock underlying the Warrant, have not been registered under the Securities Act pursuant to the provisions of the securities or other laws of any applicable jurisdictions.  The Subscriber understands that the Company has made no representation that it will register any of the Units, Common Stock, the Warrants and the Common Stock underlying the Warrants sold hereunder.

 

(e) The Subscriber has reviewed or had the opportunity to review all public filings made by the Company with the Securities and Exchange Committee (“SEC”) through the SEC website at www.sec.gov.

 

(f) THE SUBSCRIBER RECOGNIZES THAT AN INVESTMENT IN THE COMPANY INVOLVES SUBSTANTIAL RISKS.  THE SUBSCRIBER UNDERSTANDS THAT INVESTMENT IN THE COMPANY’S SECURITIES IS SPECULATIVE AND THAT THE SUBSCRIBER COULD LOSE THE SUBSCRIBER’S ENTIRE INVESTMENT.  THE SUBSCRIBER REPRESENTS AND WARRANTS THAT SUBSCRIBER CAN SUSTAIN SUCH AN ENTIRE LOSS.

 

(g) The Subscriber’s overall commitment to investments that are not marketable is not disproportionate to the Subscriber’s net worth, and the Subscriber has no need for liquidity in the Subscriber’s investment in the Units, in that the Subscriber has other sources of income or funds to provide for the Subscriber’s current needs and possible contingencies.

 

(h) Subscriber knows of no public solicitation or advertisement of any offer in connection with the proposed issuance and sale of the securities hereunder.  Subscriber is not purchasing the Units as a result of any advertisement, article, notice or other communication regarding the Company or the Units published in any newspaper, magazine, or similar media or broadcast over television or radio or the Internet or presented at any seminar or through any other general solicitation or general advertisement and acknowledges that the Subscriber had a pre-existing business or personal relationship with an officer or director or authorized representative of the Company.

 

(i) If an individual, the Subscriber is a United States citizen whose principal residence is as set forth on the signature page hereto.

 

  

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(j) If a corporation, partnership, limited liability company, trust or other non-individual entity, the Subscriber is authorized and otherwise duly qualified to purchase and hold the Units, the Common Stock and the Warrant and has its principal office as set forth on the signature page hereto.  Further, such non-individual entity was not formed for the specific purpose of making an investment in the Company.

 

(k) With respect to the United States federal, state and foreign tax aspects of Subscriber investment, Subscriber is relying solely upon the advice of Subscriber’s own tax advisors, and/or upon Subscriber’s own knowledge with respect thereto. Subscriber has not relied, and will not rely upon, any information with respect to this offering other than the information contained herein and in the SEC Reports.

 

(l) The answers provided by the Subscriber to the questions contained in Section 5 below, as well as all other information that the Subscriber has provided to the Company, either directly or indirectly, concerning the Subscriber’s financial position and knowledge of financial and business matters, is correct and complete as of the date hereof and as of the date of delivery of this Subscription Agreement to the Company.

 

4.   Representations and Warranties of the Company.  The Company represents and warrants to the Subscriber as follows:

 

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of New York;

 

(b) The Company has the requisite corporate power and authority to execute, deliver and carry out the transactions contemplated by this Agreement, and all other instruments, documents and agreements contemplated or required by the provisions of any of the such documents to be executed, delivered or carried out by the Company hereunder;

 

(c) The execution and delivery of this Agreement, the issuance of the Common Stock, the issuance of the Warrant, the issuance of the Common Stock underlying the Warrant, the execution and delivery of all other instruments, documents and agreements contemplated or required by the provisions hereof or thereof to be executed and delivered by the Company and the consummation by the Company of the transactions herein and therein contemplated to be consummated by the Company have each been duly authorized by all necessary corporate action on the part of the Company.  This Agreement is valid and binding against the Company and enforceable against the Company in accordance with their respective terms;

 

(d) The Common Stock to be issued in connection herewith and upon the exercise of the Warrant is duly and validly issued, fully paid, and non-assessable;

 

(e) As of their respective dates, to the Company’s knowledge, all forms, reports and documents filed by the Company with the SEC (the “SEC Reports”) (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act or the Securities Exchange Act of 1934, as the case may be, and the rules and regulations of the SEC thereunder applicable to such SEC Reports and (ii) did not, at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

  

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(f) Except as disclosed in the SEC Reports, there has been no change or development which would reasonably be expected to have a material adverse effect on the business, prospects or financial condition of the Company; and

 

(g) The Company has not provided any material non-public information regarding the Company to Subscriber.

 

5.   Accredited Investor Status.  Please mark any box below corresponding to a paragraph in which the Subscriber is accurately described (A SUBSCRIBER MAY ONLY INVEST IN THE OFFERING IF HE OR SHE QUALIFIES UNDER ONE OF THE CATEGORIES SET FORTH BELOW):

 

 ̈           (a)           A director or executive officer of the Company;

 

 ̈           (b)           A natural person whose individual net worth, or joint net worth along with such person’s spouse, as of the date hereof exceeds $1,000,000;

 

 ̈           (c)           A natural person who had individual income in excess of $200,000 in each of the two most recent years or a joint income with such person’s spouse in excess of $300,000 in each of those years, and has a reasonable expectation of achieving the same income level in the current year;

 

 ̈           (d)           A bank (as defined in Section 3(a)(2) of the Securities Act), or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined in Section 2(13) of the Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of the Investment Company Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or if a self-directed plan, with investment decisions made solely by persons that are Accredited Investors;

 

 ̈           (e)           A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

 

 ̈           (f)           Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) promulgated under the Securities Act;

 

  

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 ̈           (g)           An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Common Stock, with total assets in excess of $5,000,000;

 

 ̈           (h)           An entity in which all of the owners are Accredited Investors under any of the above paragraphs of this Section 5.

 

5.1           Definitions.  As used above, the term “net worth” means the excess of total assets over total liabilities.  In computing net worth, the principal residence of the Subscriber must be valued at cost, including cost of improvements, or at recently appraised value by an institutional lender making a secured loan, net of encumbrances.  In determining “income,” the Subscriber should add to adjusted gross income any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or KEOGH retirement plan, alimony payments and any amount by which income from long term capital gains has been reduced in arriving at adjusted gross income.

 

6.   Governing Law.  This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rules or principles that might refer to the governance or construction of this Subscription Agreement by the law of another jurisdiction.  If any provisions of this Subscription Agreement shall be unenforceable or invalid, the same shall not affect the remaining provisions of this Subscription Agreement and, to this end, the provisions of this Subscription Agreement are intended to be and shall be severable.  Any legal action or proceeding arising under this Subscription Agreement shall be brought in the federal courts of the State of New York located in New York County, and the appellate courts thereof, and the parties hereby consent to the personal jurisdiction and venue therein.

 

7.   Legend. Any certificate representing Subscriber’s interest in the Company shall bear the following or a similar legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS  IN WHICH THE TRANSFEROR PROVIDES THE COMPANY WITH AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION IS NOT NECESSSARY.

 

  

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8.   Indemnification.  Subscriber hereby agrees to indemnify and hold harmless the Company and its affiliated persons and entities (other than Subscriber) from any and all damages, losses, costs, and expenses (including reasonable attorneys’ fees) which it may incur by reason of Subscriber’s failure to fulfill any of the terms and conditions of this purchase or by reason of any misrepresentation or breach of any of the warranties contained herein. In this regard, Subscriber agrees to hold the Company and its controlling persons harmless from all expenses, liabilities, and damages deriving from an assignment or disposition of any shares of our Common Stock subscribed for and/or purchased hereby in a manner which violates the Securities Act, or of any applicable state securities law or which may be suffered by the indemnified person by reason of any misrepresentation or breach of any warranty or agreement by Subscriber set forth herein.

 

9.   Additional Information.  Each party agrees to furnish such additional information as the other party reasonably requests.

 

10.   Entire Agreement.  This Subscription Agreement contains the entire agreement between the parties hereto and supersedes all prior and contemporaneous understandings and agreements of the parties whether oral or written, regarding the subject matter hereof.  The provisions of this Subscription Agreement may not be modified or waived except in writing and the representations, warranties and covenants contained herein shall survive the closing of the purchase of the Units by the Subscriber and any investigation at any time made by any person.

 

  

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COMPANY SIGNATURE PAGE

 

IN WITNESS WHEREOF, the Company has hereby executed this Subscription Agreement on __________, 2011.

 

ARISTA POWER, INC.

By:           _____________________________

Name:

Title:

 

  

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SIGNATURE PAGE FOR INDIVIDUAL SUBSCRIBERS

 

IN WITNESS WHEREOF, the Subscriber has hereby executed this Subscription Agreement on ______________, 2011.  When signing as attorney, executor, administrator or guardian, please give title as such. If tenant in common ownership, both tenants must sign (unless husband and wife).

 

	 	 	 
	Please Print Your Name Above	 	Please Sign Your Name Above
	 	 	 
	 	 	 
	Please Print Your Address 	 	Social Security Number
	 	 	 
	 	 	 
	Please Print Name of Tenant in Common/	 	Signature of Tenant in Common/Joint Tenant
	Joint Tenant (if applicable)	 	(if applicable)
	 	 	 
	 	 	 
	Please Print Tenant in Common’s Address:	 	Social Security Number of Tenant in Common

 

	 	 	Units
	 	 	 
	 	 	Number of shares of Common Stock
	 	 	 
	 	 	Number of shares of Common Stock underlying the Warrant
	 	 	 
	 	 	Total purchase price of Units

 

  

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SIGNATURE PAGE FOR CORPORATIONS, PARTNERSHIPS,

LIMITED LIABILITY COMPANIES AND TRUSTS

 

IN WITNESS WHEREOF, the Subscriber has hereby executed this Subscription Agreement on July ____, 2011.

 

	 	 	 
	Please Print Entity Name Above	 	Please Sign Your Name Above
	 	 	 
	 	 	 
	Please Print Address:	 	Taxpayer Identification Number
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

	 	 	Units
	 	 	 
	 	 	Number of shares of Common Stock
	 	 	 
	 	 	Number of shares of Common Stock underlying the Warrant
	 	 	 
	 	 	Total purchase price of Units

 

 

 

 

9f10q0611ex10ii_aristapwr.htm

Exhibit 10.2

 

WARRANT TO PURCHASE COMMON STOCK

OF

ARISTA POWER, INC.

 

	No. B-	_________, 2011

 

THIS CERTIFIES THAT, ____________, or his permitted registered assigns (the “Holder”), is entitled, subject to the terms and conditions of this Warrant, at any time or from time to time after the issuance date of this Warrant (the “Effective Date”), and before 5:00 p.m. Eastern Time on the tenth anniversary of the Effective Date (the “Expiration Date”), to purchase from ARISTA POWER, INC., a New York  corporation (the “Company”), the vested portion of the Shares (as defined below) at a per-share price equal to the Purchase Price.  Both the number of shares of Common Stock purchasable upon exercise of this Warrant and the Purchase Price are subject to adjustment and change as provided herein.

 

1.   CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have the following respective meanings:

 

1.1 “Common Stock” shall mean the Common Stock of the Company and any other securities at any time receivable or issuable upon exercise of this Warrant.

 

1.2  “Purchase Price” shall mean a price of $0.50 per share.

 

1.3 “Registered Holder” shall mean any holder in whose name this Warrant is registered upon the books and records maintained by the Company.

 

1.4 “Shares” shall mean ______________________ (________) shares of the Company’s Common Stock.

 

1.5 “Warrant” as used herein shall include this Warrant and any warrant delivered in substitution or exchange therefor as provided herein.

 

2.   EXERCISE OF WARRANT.

 

2.1 Payment.  Subject to compliance with the terms and conditions of this Warrant, including without limitation Section 2.4, and applicable securities laws, this Warrant may be exercised, in whole or in part at any time or from time to time, on or before the Expiration Date by the delivery (including, without limitation, delivery by facsimile) of the form of Notice of Exercise attached hereto as Exhibit A (the “Notice of Exercise”), duly executed by the Holder, at the principal office of the Company, and as soon as practicable after such date, surrendering:

 

(a) this Warrant at the principal office of the Company, and

 

(b) payment, (i) in cash (by check) or by wire transfer, (ii) by cancellation by the Holder of indebtedness of the Company to the Holder; or (iii) by a combination of (i) and (ii), of an amount equal to the product obtained by multiplying the number of shares of Common Stock being purchased upon such exercise by the then effective Purchase Price (the “Exercise Amount”).

 

  

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2.2 Stock Certificates; Fractional Shares.  As soon as practicable on or after the date of any exercise of this Warrant, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of whole shares of Common Stock issuable upon such exercise, together with cash in lieu of any fraction of a share equal to such fraction of the current fair market value of one whole share of Common Stock as of such date of exercise as determined by the Company.  No fractional shares or scrip representing fractional shares shall be issued upon an exercise of this Warrant.

 

2.3 Partial Exercise; Effective Date of Exercise.  In case of any partial exercise of this Warrant, the Company shall cancel this Warrant upon surrender hereof and shall execute and deliver a new Warrant of like tenor and date for the balance of the shares of Common Stock purchasable hereunder. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of delivery of a Notice of Exercise (provided that surrender of this Warrant and payment of the Exercise Amount occur as provided above). The person entitled to receive the shares of Common Stock issuable upon exercise of this Warrant shall be treated for all purposes as the holder of record of such shares as of the close of business on the date the Holder is deemed to have exercised this Warrant.

 

2.4 Vesting and Exercisability.  This Warrant shall vest in full on the second anniversary of the Effective Date.

 

3.   VALID ISSUANCE; TAXES.  All shares of Common Stock issued upon the exercise of this Warrant shall be validly issued, fully paid and non-assessable, and the Company shall pay all taxes and other governmental charges that may be imposed in respect of the issue or delivery thereof.  The Company shall not be required to pay any tax or other charge imposed in connection with any transfer involved in the issuance of any certificate for shares of Common Stock in any name other than that of the Registered Holder of this Warrant.

 

4.   ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.  The number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities or property receivable or issuable upon exercise of this Warrant) and the Purchase Price are subject to adjustment upon occurrence of the following events:

 

4.1 Adjustment for Stock Splits, Stock Subdivisions or Combinations of Shares. The Purchase Price of this Warrant shall be proportionally decreased and the number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities at the time issuable upon exercise of this Warrant) shall be proportionally increased to reflect any stock split or subdivision of shares of Common Stock.  The Purchase Price of this Warrant shall be proportionally increased and the number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities at the time issuable upon exercise of this Warrant) shall be proportionally decreased to reflect any combination or reverse split of shares of Common Stock.

 

4.2 Adjustment for Dividends or Distributions of Stock or Other Securities or Property. In case the Company shall make or issue, or shall fix a record date for the determination of eligible holders entitled to receive, a dividend or other distribution with respect to Common Stock (or any shares of stock or other securities at the time issuable upon exercise of this Warrant) payable in (a) securities of the Company or (b) assets (excluding cash dividends), then, in each such case, the Holder on exercise of this Warrant at any time after the consummation, effective date or record date of such dividend or other distribution, shall receive, in addition to the shares of Common Stock (or such other stock or securities) issuable on such exercise prior to such date, and without the payment of additional consideration therefor, the securities or such other assets of the Company to which the Holder would have been entitled upon such date if the Holder had exercised this Warrant on the date hereof and had thereafter, during the period from the Effective Date to and including the date of such exercise, retained such shares and all such additional securities or other assets distributed with respect to such shares as aforesaid during such period giving effect to all adjustments called for by this Section 4.

 

  

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4.3 Reclassification.  If the Company, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change, and the Purchase Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 4. No adjustment shall be made pursuant to this Section 4.3 upon any conversion or redemption of Common Stock that is the subject of Section 4.5.

 

4.4 Adjustment for Capital Reorganization, Merger or Consolidation.  In case of any capital reorganization of the capital stock of the Company (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), or any merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all the assets of the Company (any such transaction a “Sale of the Company”) then, and in each such case, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Amount then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 4.  The foregoing provisions of this Section 4.4 shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. If the per-share consideration payable to the Holder hereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company’s Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.

 

5.   CERTIFICATE AS TO ADJUSTMENTS.  In each case of any adjustment in the Purchase Price, or number or type of shares issuable upon exercise of this Warrant, the Chief Financial Officer or Controller of the Company shall compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based, including a statement of the adjusted Purchase Price.  The Company shall promptly send (by either first class mail, postage prepaid or overnight delivery) a copy of each such certificate to the Holder.

 

  

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6.   LOSS OR MUTILATION.  Upon receipt of evidence reasonably satisfactory to the Company of the ownership of and the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to the Company, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof a new Warrant of like tenor as the lost, stolen, destroyed or mutilated Warrant.

 

7.   RESERVATION OF COMMON STOCK.  The Company hereby covenants that at all times there shall be reserved for issuance and delivery upon exercise of this Warrant such number of shares of Common Stock or other shares of capital stock of the Company as are from time to time issuable upon exercise of this Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant.  All such shares shall be duly authorized, and when issued upon such exercise, shall be validly issued, fully paid and non-assessable, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights, except encumbrances or restrictions arising under federal or state securities laws. Issuance of this Warrant shall constitute full authority to the Company’s officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the exercise of this Warrant.

 

8.   TRANSFER AND EXCHANGE.  Subject to the terms and conditions of this Warrant, this Warrant and all rights hereunder may be transferred to any Registered Holder’s parent, subsidiary or affiliate, or, if the Registered Holder is a partnership, to any partner of such Registered Holder, in whole or in part, on the books of the Company maintained for such purpose at the principal office of the Company, by the Registered Holder hereof in person, or by duly authorized attorney, upon surrender of this Warrant properly endorsed.  Upon any permitted partial transfer, the Company will issue and deliver to the Registered Holder a new Warrant or Warrants with respect to the shares of Common Stock not so transferred. Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that, when this Warrant shall have been so endorsed, the person in possession of this Warrant may be treated by the Company, and all other persons dealing with this Warrant, as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, any notice to the contrary notwithstanding.

 

9.   COMPLIANCE WITH SECURITIES LAWS.  By acceptance of this Warrant, the Holder hereby represents, warrants and covenants that any shares of stock purchased upon exercise of this Warrant shall be acquired for investment only and not with a view to, or for sale in connection with, any distribution thereof; that the Holder has had such opportunity as the Holder has deemed adequate to obtain from representatives of the Company such information as is necessary to permit the Holder to evaluate the merits and risks of its investment in the Company; that the Holder is able to bear the economic risk of holding such shares as may be acquired pursuant to the exercise of this Warrant for an indefinite period; that the Holder understands that the shares of stock acquired pursuant to the exercise of this Warrant will not be registered under the Securities Act (unless otherwise required pursuant to exercise by the Holder of the registration rights, if any, granted to the Registered Holder) and will be “restricted securities” within the meaning of Rule 144 and that the exemption from registration under Rule 144 will not be available for at least six (6) months from the date of exercise of this Warrant, and even then will not be available unless a public market then exists for the stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and that all stock certificates representing shares of stock issued to the Holder upon exercise of this Warrant or upon conversion of such shares may have affixed thereto a legend substantially in the following form:

 

  

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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

10.   NO RIGHTS OR LIABILITIES AS SHAREHOLDERS.  This Warrant shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company. In the absence of affirmative action by the Holder to purchase Common Stock by exercise of this Warrant or Common Stock upon conversion thereof, no provisions of this Warrant, and no enumeration herein of the rights or privileges of the Holder hereof shall cause any holder of this Warrant  to be a shareholder of the Company for any purpose.

 

11.   NOTICES.  Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Warrant shall be in writing and shall be conclusively deemed to have been duly given (a) when hand-delivered to the other party; (b) when received when sent by facsimile at the address and number set forth below; (c) three business days after deposit in the U.S. mail with first class or certified mail receipt requested postage prepaid and addressed to the other party as set forth below; or (d) the next business day after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider.

 

	
To the Company:

	
To the Holder:

	
Arista Power, Inc.

	
 

	
1999 Mt. Read Boulevard

	
 

	
Rochester, NY  14615

	  
	
Phone

	  
	
Fax

	  
	
Attention: Chief Executive Officer

	  

 

Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication.  A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 11 by giving the other party written notice of the new address in the manner set forth above.

 

12.   HEADINGS.  The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof.

 

  

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13.   GOVERNING LAW.  This Warrant shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of law principles.  With respect to any matters that may be heard before a court of competent jurisdiction, the Holder and the Company consent to the jurisdiction and venue of the state and federal courts located in Monroe County, New York.

 

14.   NO IMPAIRMENT.  The Company will not, by amendment of its Certificate of Incorporation or bylaws, or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this 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 action as may be necessary or appropriate in order to protect the rights of the Registered Holder of this Warrant against impairment.  Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of stock issuable upon the exercise of this Warrant above the amount payable therefor upon such exercise, and (b) 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 of Common Stock upon exercise of this Warrant.

 

15.   SEVERABILITY.  If any term, provision, covenant or restriction of this Warrant is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Warrant shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

16.   COUNTERPARTS.  For the convenience of the parties, any number of counterparts of this Warrant may be executed by the parties hereto and each such executed counterpart shall be, and shall be deemed to be, an original instrument.

 

17.   SATURDAYS, SUNDAYS AND HOLIDAYS.  If the Expiration Date falls on a Saturday, Sunday or legal holiday, the Expiration Date shall automatically be extended until 5:00 p.m., Eastern Time, the next business day.

 

18.   ENTIRE AGREEMENT.  This Warrant, together with all the exhibits attached hereto, contains the sole and entire agreement and understanding of the parties with respect to the entire subject matter of this Warrant, and any and all prior discussions, negotiations, commitments and understandings, whether oral or otherwise, related to the subject matter of this Warrant are hereby merged herein.

 

[Signature Page Follows]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the Effective Date.

 

	 	 	 	ARISTA POWER, INC.	 
	 	 	 	 	 	 
	By:	 	 	
By: 

	/s/ 	 
	 	 	 	 	Name:	 
	 	 	 	 	Title:	 
	Printed Name:	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 

  

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EXHIBIT A

 

NOTICE OF EXERCISE

 

(To be executed upon exercise of Warrant)

 

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate for, and to purchase thereunder, the securities of Arista Power, Inc., a New York corporation, as provided for therein, and tenders herewith payment of the exercise price in full in the form of cash or check in same-day funds in the amount of $________________ for ____________ shares of such securities.

 

Please issue a certificate or certificates for such securities in the name of, and pay any cash for any fractional share to (please print name, address and social security/taxpayer identification number):

 

	
Name:

	  
	 	 
	
Address:

	  
	 	 
	
Social Security/ Taxpayer Identification Number

	  
	 	 
	
Signature:

	  

 

Note:  The above signature should correspond exactly with the name on the first page of this Warrant Certificate or with the name of the assignee appearing in the assignment form below.

 

If said number of shares shall not be all the shares purchasable under the within Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the shares purchasable thereunder rounded up to the next higher whole number of shares.

 

  

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ASSIGNMENT

 

(To be executed only upon assignment of Warrant Certificate)

 

For value received, the undersigned hereby sells, assigns and transfers unto _________________ the within Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________________ attorney, to transfer said Warrant Certificate on the books of the within-named Company with respect to the number of Shares set forth below, with full power of substitution in the premises:

 

	
Name(s) of Assignee(s)

	
Address

	
# of Shares

	  	  	  
	  	  	  
	  	  	  

 

And if said number of Shares shall not be all the Shares subject to the Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the Shares subject to the Warrant Certificate.

 

	
Dated:

	  
	
Signature:

	  

 

Note:  The signature to the foregoing Assignment must correspond to the name as written upon the face of this security in every particular, without alteration or any change whatsoever.

 

 

 

 

 

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