Document:

Exhibit 4.1  

WARRANT CONVERSION
AGREEMENT  

        THIS
WARRANT CONVERSION AGREEMENT (this “Agreement”) is made and entered
into as of the ____ day of December, 2007 (the “Effective Date”) by and
between Security With Advanced Technology, Inc., a Colorado corporation (the
“Company”), and the warrant holder(s) set forth on the signature page to
this Agreement (each, a “Warrant Holder”). 

RECITALS  

        WHEREAS,
the Company’s Board of Directors has approved modifications to the terms of the
outstanding (i) “SWATW” Replacement Warrants (the “SWATW-R
Warrants”) issued as replacement warrants for the SWAT Warrants issued by the
Company in private placements in October 2006 and March / April 2007, (ii) “A”
Warrants (the “A” Warrants”) issued by the Company in private
placements in October 2006 and March / April 2007 and (iii) “B” Warrants (the
“B” Warrants”) issued by the Company in a private placement in March
2007 (all of which securities are collectively referred to as the “December
Conversion Warrants”) in order to encourage the exercise of such December
Conversion Warrants and therefore generate needed cash proceeds to the Company (the
“Offering”); 

        WHEREAS,
the modified terms of the December Conversion Warrants are set forth on Exhibit A attached
hereto; 

        WHEREAS,
the Warrant Holders shall have a period of 15 calendar days following the Effective
Date (the “Conversion Period”) to exercise and exchange their December
Conversion Warrants on the terms set forth on Exhibit A attached hereto and any holder of
December Conversion Warrants who does not so exercise his or its December Conversion
Warrants during the Conversion Period shall thereafter no longer have the right to
exercise his or its December Conversion Warrants on the terms set forth on Exhibit A and
the terms of such December Conversion Warrants existing prior to the Effective Date shall
remain unchanged; and 

        WHEREAS,
the Company anticipates the proceeds from this Offering will be used as described on
Exhibit B attached hereto. 

AGREEMENT  

        NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows: 

         1.       
          The Recitals set forth above are hereby incorporated by reference into this
          Agreement and made a part hereof. Further, Exhibits A, B, C and D are hereby
          incorporated by reference into this Agreement and made a part hereof. 

         2.       
          At any time during the Conversion Period, each Warrant Holder may exercise his
          or its December Conversion Warrants in accordance with the terms set forth on
          Exhibit A by (a) delivering to the Company an executed copy of this Agreement,
          and (b) delivering to the Company the amount of cash required to pay the
          exercise price of the December Conversion Warrants so exercised in immediately
          available good funds as instructed by the Company. In addition, the Company will
          execute and deliver to each Warrant Holder that exercises his or its December
          Conversion Warrants, and each Warrant Holder that exercises his or its December
          Conversion Warrants shall execute and deliver to Company, the Registration
          Rights Agreement in the form attached hereto as Exhibit D. 

         3.       
          Each Warrant Holder agrees that to the extent it exercises his or its December
          Conversion Warrants pursuant to this Agreement, all future rights and claims to
          such December Conversion Warrant rights are null and void, regardless of whether
          the original December Conversion Warrant agreement issued to the Warrant Holder
          is surrendered. 

         5.       
          Each Warrant Holder acknowledges and agrees that the shares of Series B
          Preferred Stock (the “Series B Preferred Stock”) to be issued
          in this Offering as well as the shares of Common Stock underlying the Series B
          Preferred Stock are “restricted securities” as defined in Rule 144 of
          the Securities Act of 1933, as amended (the “Securities Act”).
          Accordingly, each Warrant Holder acknowledges and agrees that such securities
          cannot be assigned, sold, transferred or otherwise disposed of by such Warrant
          Holder (or any permitted assignee) without registration under the Securities Act
          or pursuant to an exemption from such registration established satisfactory to
          the Company and its counsel. 

         6.       
          Each Warrant Holder acknowledges and agrees that this Agreement and the
          transactions contemplated hereby constitute a private placement of securities
          under Section 4(2) of the Securities Act and Regulation D promulgated thereunder
          and the Company is relying upon the representations and warranties provided by
          the Warrant Holders in the Securities Purchase Agreement and Subscription
          Agreement (as the case may be) executed and delivered by the Warrant Holders in
          connection with the Company’s October 2006 and March / April 2007 private
          placements and the Warrant Holders therefore acknowledge and agree that such
          representations and warranties are incorporated by reference herein, are remade
          in their entirety in this Agreement and are accurate and complete on the
          Effective Date. 

         7.       
          This Agreement shall be governed by and construed in accordance with the
          domestic laws of the State of Colorado without giving effect to any choice of
          law or conflict of law provision or rule (whether of the State of Colorado or
          any other jurisdiction) that would cause the application of the laws of any
          jurisdiction other than the State of Colorado. This Agreement may be executed in
          two or more counterparts, each of which shall be deemed an original, but all of
          which together shall constitute one and the same instrument. In the event that
          any signature is delivered by facsimile transmission, such signature shall
          create a valid and binding obligation of the party executing (or on whose behalf
          such signature is executed) with the same force and effect as if such facsimile
          signature page were an original thereof. If one or more provisions of this
          Agreement are held to be unenforceable under applicable law, such provision(s)
          shall be excluded from this Agreement and the balance of the Agreement shall be
          interpreted as if such provision(s) were so excluded and shall be enforceable in
          accordance with its terms. This Agreement, together with all exhibits hereto,
          constitutes the entire agreement and understanding of the parties with respect
          to the subject matter hereof and supersedes any and all prior negotiations,
          correspondence, agreements, understandings duties or obligations between the
          parties with respect to the subject matter hereof. From and after the date of
          this Agreement, upon the request of a majority of the Warrant Holders or the
          Company, the Company and the Warrant Holders shall execute and deliver such
          instruments, documents or other writings as may be reasonably necessary or
          desirable to confirm and carry out and to effectuate fully the intent and
          purposes of this Agreement. This Agreement is the result of the joint efforts of
          the Company and the Warrant Holders, and each provision hereof has been subject
          to the mutual consultation, negotiation and agreement of the parties and there
          shall be no construction against any party based on any presumption of that
          party’s involvement in the drafting thereof. 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK] 

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

		
		THE COMPANY:

SECURITY WITH ADVANCED TECHNOLOGY, INC.

By: /s/ Jeffrey G. McGonegal

         Jeffrey G. McGonegal

         Chief Financial Officer

WARRANT HOLDER:

[____________________________________]

By: _________________________________

         Name:

         Title: 

DECEMBER CONVERSION
WARRANTS:  

        	
                    
                    Description

                	
                    
                    Issue date

                	
                    
                    Face Exercise Price $

                	
                    
                    Number

                	
                    
                    Revised Exercise Price $

                	
                    
                    Exercise Proceeds $

                
	
                    
                     

                	
                    
                     

                	
                    
                     

                	
                    
                     

                	
                    
                     

                	
                    
                     

                
	
                    
                    SWATW Replacement Warrants and SWATW Warrants

                	
                    
                    October 2006

                	
                    
                    $8.00 / $9.00

                	
                    
                     

                	
                    
                    $0.50

                	
                    
                     

                
	
                    
                    SWATW Replacement Warrants and SWATW Warrants

                	
                    
                    March 2007 / April 2007

                	
                    
                    $8.00 / $9.00

                	
                    
                     

                	
                    
                    $0.50

                	
                    
                     

                
	
                    
                    A Warrants

                	
                    
                    October 2006

                	
                    
                    $4.75

                	
                    
                     

                	
                    
                    $0.50

                	
                    
                     

                
	
                    
                    A Warrants

                	
                    
                    March 2007 / April 2007

                	
                    
                    $4.75

                	
                    
                     

                	
                    
                    $0.50

                	
                    
                     

                
	
                    
                    B Warrants

                	
                    
                    March 2007 / April 2007

                	
                    
                    $5.00

                	
                    
                     

                	
                    
                    $0.50

                	
                    
                     

                
	
                    
                     Placement Agent / Consultant Warrants

                	
                    
                     October and March / April 2007

                	
                    
                    $4.92 / $5.00

                	
                    
                     

                	
                    
                    

                     

                    
                    $0.50

                	
                    
                     

                
	
                    
                    Total exercise price

                	
                    
                     

                	
                    
                     

                	
                    
                     

                	
                    
                     

                	
                    
                     

                
	
                    
                     

                	
                    
                     

                	
                    
                     

                	
                    
                     

                	
                    
                     

                	
                    
                     

                

        

        

Attachments: 

	 	
Exhibit A: Summary Term Sheet
Exhibit B: Use of Proceeds 
Exhibit C: Amended and Restated
Certificate of Designation of the Preferences, Rights, Limitations, Qualifications and
Restrictions of the Series A and Series B Preferred Stock of the Company 
Exhibit D:
Registration Rights Agreement

Exhibit A: Summary
Term Sheet 

SUMMARY OF THE WARRANT
CONVERSION 

This term sheet is for discussion
purposes only and does not represent an offer or commitment to purchase on the part of the
Warrant Holders referenced herein, or an offer or commitment to sell on the part of
Security With Advanced Technology, Inc. (the “Company”). Any such offer or
commitment will be evidenced only by executed and definitive agreements among the parties.
This term sheet is qualified in its entirety by, and should be read in conjunction with,
the Company’s filings with the Securities and Exchange Commission (“SEC”).
Prospective investors should also carefully review this term sheet, the Warrant Conversion
Agreement and the Company’s Articles of Incorporation, as amended, and may also
request additional information from the Company. Capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Warrant Conversion Agreement. 

	Warrants to
be Converted:  	
"SWATW" Warrants and                  "SWATW" Replacement  Warrants issued as replacement
warrants for the SWAT Warrants issued by the Company in private placements in
October 2006 and March / April 2007 (the "SWATW-R Warrants"), "A" Warrants (the
"A" Warrants") issued by the Company in private placements in October 2006 and
March / April 2007, "B" Warrants (the "B" Warrants") issued by the Company in
a private placement in October 2006
and placement agent and consultant warrants issues in connection with the foregoing private placements
(collectively, the "December Conversion
Warrants"). 

	 Modified Terms
of Conversion \ the Exchange:  	
Upon the surrender of ten December Conversion Warrants and payment of $0.50 for
each such December Conversion Warrant surrendered, the Warrant Holder will be
issued one share of Series B Preferred Stock for an aggregate of up to 825,265
shares of Series B Preferred Stock. The terms of the Series B Preferred Stock
are identical to the terms of the Company's outstanding Series A Preferred
Stock, except that each share of Series B Preferred Stock is convertible into
ten shares of the Company's Common Stock as provided herein for an aggregate of
up to  8,252,654 shares of Common Stock. 

	 Escrow of
Closing Funds:  	                The Company  will submit its  required  NASDAQ
additional shares listing and other associated corporate documentation required
to close this offering. Pending required Nasdaq listing approval and any other
documents required to be completed, the Company shall hold wired funds upon
receipt segregated in its investment account and such funds shall only be
released and Series B Preferred Shares issued upon the completion of such
procedures in the Company's sole discretion. If such completion and closing has
not been completed by fifteen days from receipt of the wired funds, then such
funds shall be returned to the Investors, without interest or offset.

	 Amount of
Offering:  	                      $4,126,327. 

	 Terms of
the Series B Preferred Stock: 	    The Series B Preferred  Stock shall have terms identical
to the Company's Series A Preferred Stock, except that:
     1. Each share of Series
B Preferred Stock shall be convertible into ten shares of the Company's Common
Stock;

     2. The Series B Preferred Stock shall in no event be convertible into
shares of the Company's Common Stock until the later of six months from the date
of the closing of this Offering or the approval by the Company's shareholders
for this Offering; and 

     3. Such conversion shall, in the case of Vision
Opportunity Master Fund, Ltd. ("Vision"), be subject to the existing 9.99%
ownership limitation blocker which, subject to Vision's delivering irrevocable
written notice to the Company that such limitation shall not apply, will serve
to restrict Vision's ability to convert Series B Preferred Stock into Common
Stock. 

	                                         	A copy
     of the Amended and Restated Certificate of Designation of the Preferences,
     Rights, Limitations, Qualifications and Restrictions of the Series A and
     Series B Preferred Stock of the Company is attached hereto as Exhibit C.
     

	Redemption Right: 	
In the event the shareholders of the Company have not approved the conversion of
the Series B Preferred Stock to Common Stock on or before the first anniversary
of the closing date of the Offering, at any time thereafter upon written notice
to the Company each holder of Series B Preferred Stock shall have the right, at
such holder's option, to require the Company to redeem all or a portion of such
holder's shares of Series B Preferred Stock in cash at a price per share of
Series B Preferred Stock equal to $5.00 plus simple interest on such price per
share at the rate of 6% per annum. 

	Registration Rights: 	
The Company has agreed to provide the Investors with one demand and one
piggyback registration right covering the shares of Common Stock underlying the
Series B Preferred Stock, commencing six months after the date of the closing of
this Offering, for so long as such shares cannot be sold without volume
limitations under the provisions of Rule 144 of the Securities Act. The demand
registration right may be triggered by the holders of a majority of the shares
of Common Stock underlying the Series B Preferred Stock (on an as-converted
basis). The terms of the registration rights are set forth in the Registration
Rights Agreement in the form attached hereto as Exhibit D. 

	Common Stock
Outstanding(1):  	       Before Offering:  9,753,000 shares

After Offering: 18,005,654 shares 

	Conversion Period: 	
Commencing on December 17, 2007 and expiring 15 calendar days thereafter (the
"Conversion Period"). Any December Conversion Warrants not so converted during
the Conversion Period shall revert to their original terms at the expiration of
the Conversion Period. 

	Use of
Proceeds:  	 Proceeds from the Offering will be used for offering expenses, sales
and marketing, inventory related requirements, tooling costs and working
capital. See Exhibit B attached hereto. 

	Risk Factors: 	
This Offering represents a significant level of risk. 

	                                            	 Investors should
carefully review the Risk Factors set forth in the Company's Form S-3
registration statement filed with the SEC on August 27, 2007, the Company's Form
10-KSB for the period ended December 31, 2006 and the Company's other recent SEC
filings. 

	                                          	
Additionally, Investors acknowledge that they have been made aware of, had the
opportunity (to the extent in their sole discretion deemed adequate) to discuss
with the Company's management and been afforded the opportunity to review
information concerning the Company's current operations and recent developments
that have not necessarily been made available to the public. This includes, but
is not necessarily limited to the following: 

	 	                                           1.  	The
resignation of Scott Sutton and claims made by Mr. Sutton that he believes he is
entitled to certain severance and earn-out payments under his agreements with
the Company. The Company is disputing these claims based upon the Company's
position that Mr. Sutton resigned without "good reason" (as defined in Mr.
Sutton's employment agreement). 

	 	                                           2.  	

Delays in product launch including deficiencies in the Avurt IM-5 product that raise substantial
questions about the Company's ability to launch, market and sell this product.  The Company's has
expended and expects to continue to expend significant sums of capital to launch this product, unless a
decision is made to discontinue this product, which the Company is considering.

 

	 	                                           3.  	

The status of the Company’s litigation with PepperBall and negotiations to acquire or merge with
PepperBall. 

	 	                                           4.  	The
Company's revenues continue to be well below the level necessary to achieve
break even operations and if additional revenues are not achieved shortly
additional funding will be necessary. 

	 	                                           5.  	The
Company's current business strategy is to focus on opportunities that are
believed by management to be reasonable for near term revenues and certain
product development opportunities have been deferred or curtailed. 

	Restrictions on
Transfer:  	               The Series B Preferred  Stock and the Common Stock  underlying
the Series B Preferred Stock are "restricted securities" as defined in Rule 144
of the Securities Act of 1933, as amended (the "Securities Act"). Accordingly,
such securities cannot be sold or transferred by an investor without
registration under the Securities Act or pursuant to an exemption from such
registration established satisfactory to the Company and its counsel.

	Subscription Procedure: 	
To subscribe for the Offering, Investors must fully and accurately complete,
sign and return the Warrant Conversion Agreement to the Company. Investors
should also return payment for the conversion by wire transfer to the Company's
funding account as instructed below: 

[Confidential Treatment Requested]

	Stock symbol: 	
                             NASDAQ: SWAT 

     (1)    
          The amounts outstanding before and after the Offering assume complete conversion
          of the approximate 3,006,000 shares of Common Stock underlying outstanding
          Series A Preferred Stock but do not give effect to any shares issuable upon
          exercise of outstanding warrants and options. 

Exhibit B: Use of
Proceeds 

USE OF PROCEEDS 

        The
proceeds from this Offering will be approximately $4,126,327 (if fully subscribed). This
assumes a net cash exchange exercise price of $0.50 per December Conversion Warrant. We do
not expect to pay any placement agent fees or expenses in connection with this Offering,
except minimal legal fees in connection with the closing of the Offering. We intend to use
these net proceeds to fund our overhead expenses, and to provide working capital
(including inventory and certain product development costs). Due to the current level of
our revenues a significant portion of the Offering may be used to cover our monthly
operating expenses. Depending upon developments and decisions made regarding the
Company’s litigation with PepperBall, we may also use funds in connection with that
litigation or other claims and settlements that may arise (such as potential litigation
with the Company’s former President and Chief Executive Officer, Scott Sutton). 

        Funds
from this Offering, in combination with our current cash and working capital, are expected
to meet our capital and operating requirements for a period of approximately nine to
twelve months. We will retain broad discretion in the allocation and use of the net
proceeds designated as working capital. 

        The
foregoing represents our best estimate of the allocation of the net proceeds of this
Offering based on the current status of our business, our planned future growth and
operations and our litigation with PepperBall. This estimate is based on multiple
assumptions, some of which are quite speculative. If one of more of these assumptions
proves materially incorrect, we may find it necessary to reallocate a portion of the net
proceeds within the above categories or even use substantial proceeds for other purposes,
including repayment of additional debt. Our estimates may prove to be inaccurate, we may
undertake activities that will require material additional expenditures, or unforeseen
material expenses may occur. 

        Pending
the application of these net proceeds, we intend to invest them in short-term
interest-bearing securities which possess investment-grade status. 

        While
we intend to apply the proceeds as indicated, the Company’s board of directors may
vary the use of proceeds as good business judgment dictates. 

SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS 

        Certain
statements in these documents are forward-looking statements within the meaning of the
Securities Litigation Reform Act of 1995. Such statements are based on current
expectations, estimates and projections about the Company’s business based, in part,
on assumptions made by management. These statements are not guarantees of future
performance and involve risks and uncertainties that are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expressed or forecasted in
such forward-looking statements due to numerous factors discussed herein and in the
Company’s recent filings with the Securities and Exchange Commission, including the
Company’s Annual Report on Form 10-KSB for the period ended December 31, 2006 and the
Company’s Registration Statement on Form S-3 filed with the Securities and Exchange
Commission on August 27, 2007. All forward-looking statements attributable to us or any
persons acting on our behalf are expressly qualified in their entirety by these cautionary
statements.  All guidance and forward-looking statements in these documents are
made as of the date hereof and we do not undertake any obligation to update any forecast
or forward-looking statements, except as may be required by law.  Investors are
also directed to other risks discussed in documents filed by the Company with the
Securities and Exchange Commission. 

Exhibit C: Amended and
Restated Certificate of Designation 

See attached. 

Exhibit D:
Registration Rights Agreement 

See attached.Exhibit
10.2

 

BIDZ.COM,
INC.

 

AMENDMENT NO. 1

TO

2006 STOCK AWARD PLAN

 

THIS
AMENDMENT NO. 1 TO 2006 STOCK AWARD PLAN of BIDZ.com, Inc., a
Delaware corporation (the “Company”), is
entered into effective as of June 5, 2008, subject to approval by the
stockholders of the Company;

 

WHEREAS, the Board
established the 2006 Stock Award Plan (the “Plan”) to facilitate equity
compensation and other incentive awards to selected directors, officers,
employees, and consultants; and

 

WHEREAS, the Board
desires to amend the Plan to increase the number of shares available for awards
under the Plan by a total of 500,000 shares;

 

WHEREAS, the Board has
approved this Amendment No. 1 effective as of the date hereof, subject to
approval by the stockholders of the Company;

 

WHEREAS, capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to them
in the Plan;

 

NOW,
THEREFORE, the Plan is hereby amended as follows:

 

1.             Section 4(a) of the Plan is amended
in the first sentence thereof by replacing the phrase “1,000,000 Shares” with
the phrase “1,500,000 Shares.”

 

2.             Except as expressly
modified and amended by the terms of this Amendment No. 1, all of the
other terms and conditions of the Plan remain in full force and effect.

 

 

	
   

  	
  BIDZ.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  Title:

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