Document:

exv10w11

 

Exhibit 10.11

SECURITY AGREEMENT

     THIS
SECURITY AGREEMENT is made as of this ___ day of July, 2006, by and between A Smart Move
L.L.C., whose address is 5990 Greenwood Plaza Blvd South Roslyn Street, #390, Greenwood Village,
Colorado 80111 (“Borrower”) and each of the persons listed on Schedule 1 to this Agreement (each a
“Secured Party” and collectively the “Secured Parties”).

     For and in consideration of the promises, covenants and agreements herein set forth, the
parties hereto agree as follows:

     1. Debt. Borrower has incurred an indebtedness to each Secured Party and, to evidence
the indebtedness, has executed and delivered to the Secured Parties Promissory Notes in the
aggregate original principal amount of ___ Million Dollars ($___) (each a
“Note” and collectively the “Notes”) of even date herewith, payable to the order of the respective
Secured Parties, providing for payments of principal and interest and maturity as provided for
therein, and containing provisions for payment of attorneys’ fees and acceleration of maturity in
the event of default, as therein set forth. The Notes, this Security Agreement and all other
documents or agreements given in connection therewith are hereafter collectively referred to as the
“Loan Documents”.

     2. Collateral. Borrower hereby grants the Secured Parties a security interest in the
property described on Schedule 2 attached hereto and incorporated herein by reference together with
all similar property now owned or hereafter acquired, additions, substitutions, replacements,
proceeds and products thereof, wherever located. All items in which a security interest is granted
hereby are referred to as the “Collateral.”

     3. Indebtedness Secured. The security interest granted hereby is to secure payment of
the following (the “Indebtedness”):

          (a) The amounts due under the Notes, together with interest, fees and other charged provided
for therein;

          (b) All future advances which any Secured Party may, at its option and for any purpose, make
to Borrower, together with interest thereon;

          (c) All sums which any Secured Party may, at its option, expend or advance for the
maintenance, preservation and protection of the Collateral, including without limitation, payment
of taxes, levies, assessments, insurance premiums and discharge of liens, together with interest
thereon, or in any other property given as security for payment of the Indebtedness;

          (d) All expenses, including reasonable attorneys’ fees, which any Secured Party incurs in
connection with collection of any or all Indebtedness secured hereby or in enforcement or
protection of its rights hereunder, or any other instrument given as security for a Note, or in
changes in form of such Indebtedness which may be made from time to time by agreement between
Borrower and Secured Party, together with interest thereon; and

          (e) All other present or future, direct or indirect, absolute or contingent, liabilities,
obligations and indebtedness of Borrower to Secured Parties pursuant to the Loan Documents, and all
further renewals, extensions, modifications, and restatements of the foregoing, whether or not the
Borrower executes any extension agreement or renewal instruments.

 

 

     4. Warranties and Covenants of Borrower. Borrower expressly warrants and covenants
and agrees that:

          (a) Borrower is and will continue to be the owner of the Collateral free from any lien,
security interest or encumbrance, other than that created by this Security Agreement; Borrower will
defend the Collateral against all claims and demands of all other persons at anytime claiming the
same or any interest therein; and Borrower will not sell the Collateral (except in the ordinary
course of business) without the prior written consent of the Secured Party;

          (b) No effective financing statement covering any of the Collateral or any proceeds thereof is
on file in any public office, and Borrower will not (except as provided herein) execute any
financing statement affecting the Collateral during the term of this Security Agreement without the
prior consent of the Secured Parties;

          (c) Borrower will pay the Indebtedness to Secured Parties as the same becomes due and payable;

          (d) Borrower will from time to time as required by Secured Parties authorize the filing of one
or more financing statements pursuant to the Uniform Commercial Code of Colorado (and any
assignments, extensions or modifications thereof) in form satisfactory to Secured Parties;

          (e) Borrower will pay all costs of filing any financing, continuation, assignment or
termination statements with respect to the security interest created by this Security Agreement and
hereby appoints Secured Parties its attorney-in-fact to do, at Secured Parties’ option and at
Borrower’s expense, all acts and things which Secured Parties may deem necessary to perfect and
continue perfected the security interest created by this Security Agreement;

          (f) Without the prior written consent of Secured Parties, Borrower will not voluntarily or
involuntarily encumber, or agree to encumber any portion of the Collateral (including the
replacement of such Collateral in the ordinary course of business), and in the event Secured
Parties grant written consent for the establishment of another security interest in the Collateral,
and with respect to the security agreements of record, Borrower will perform its obligations under
those security agreements;

          (g) Borrower will pay as they become due all taxes or other liens or claims which may become a
charge against the Collateral;

          (h) Borrower will insure the Collateral with companies and in amounts acceptable to Secured
Parties, such amount being the full replacement value of the Collateral or the maximum amount the
insurer will permit, against risks of theft, vandalism, fire and such other risks as are normally
insured against, including standard extended coverage. All insurance policies shall be written for
the benefit of Borrower and Secured Parties as their interests may appear, and the Secured Parties
shall be named as loss payees on an endorsement to all insurance policies. All policies,
endorsements and certificates evidencing the same shall be furnished to Secured Parties. All
insurance policies shall provide for at least 10 days’ prior written notice of cancellation to
Secured Parties;

          (i) Borrower will maintain the Collateral in good condition and repair, and Secured Parties
may examine and inspect the Collateral at any reasonable time and wherever located;

          (j) Borrower may permit the Collateral to be removed from the State of Colorado in its normal
and customary use, without the prior consent of Secured Parties;

2

 

          (k) Borrower will indemnify and hold the Secured Parties harmless from any and all loss,
damage, injury or other casualty to persons or property caused or occasioned by the maintenance,
operation and use of the Collateral by Borrower, its agents, invitees or employees;

          (l) Borrower will from time to time supply Secured Parties with a current list specifying the
Collateral at the request of Secured Parties;

          (m) With respect to any Collateral to be purchased with monies advanced by Secured Parties to
Borrower, this Security Agreement creates a purchase money security interest;

          (n) Borrower will execute and deliver such other and further instruments and will do such
other and further acts as in the opinion of the Secured Parties may be necessary or desirable to
carry out more effectually the purposes of this instrument, including, without limiting the
generality of the foregoing:

               (i) prompt correction of any defect which may hereafter be discovered in the title to the
Collateral or in the execution and acknowledgment of this Agreement, the Note, or the Loan
Documents; and

               (ii) prompt execution and delivery of all other documents or instruments which in the opinion
of the Secured Parties are needed to transfer effectually the Collateral or the proceeds or the
Collateral to the Secured Parties.

          (o) Borrower is duly organized and validly existing as a limited liability company under the
laws of the State of Colorado and the execution of this Agreement has been duly authorized and
approved by its Managers and, if required, by its Members. Borrower has full power and authority
to carry on its business as now being conducted with full power and authority to enter into this
Agreement and effect the transactions contemplated to be effected by and under the terms of this
Agreement;

          (p) There is no pending or threatened litigation, claim for infringement, proceeding or
investigation by any governmental authority or any other person known to Borrower against or
otherwise affecting Borrower or any of its assets or its officers, partners, directors or agents in
their capacities as such, nor does the Borrower know of any ground for any such litigation,
infringement claims, proceedings or investigations;

          (q) No contract or organizational document prohibits any term or condition of the security
agreement;

          (r) The execution and delivery of this Security Agreement and the Notes will not violate any
law or agreement governing the Borrower or to which the Borrower is a party;

          (s) All information and statements furnished in connection with the Notes, this Security
Agreement and the Loan Documents are true and correct, and contain no false or misleading
statements;

          (t) Borrower acknowledges that Lenders will enter into an Agreement Among Lenders pursuant to
which Lenders may appoint an agent to act on their behalf (the “Agent”). A copy of the Agreement
Among Lenders shall be provided to Borrower. Borrower, upon receiving written notice signed by
Secured Parties who hold a majority of the outstanding principal balance of the Notes that an Agent
has been appointed on their behalf, shall acknowledge and accept the Agent’s authority to act on
behalf of the Secured Parties in accordance with the Agreement Among Lenders; and

3

 

          (u) Borrower will not take any action that has the effect of favoring one Secured Party over
any other Secured Party. Without limitation, Borrower will not make any payment under the Notes or
amend or modify its obligations under the Notes except on a pro rata basis with respect to all
Lenders.

     5. Secured Parties’ Right to Discharge. At their option, Secured Parties may
discharge taxes, liens, assessments, security interest or other encumbrances at any time levied or
placed on the Collateral, may pay for premiums for insurance on the Collateral, costs of
maintenance or preservation of the Collateral, and any other charges or expenses or perform any
obligation imposed upon Borrower hereunder. Borrower agrees to reimburse Secured Parties on demand
for any payment made, or any expense incurred by Secured Parties, pursuant to the foregoing
authorization. Until reimbursed, the amounts so advanced or expenses incurred shall be part of the
Indebtedness to the Note, with interest thereon at the default rate specified in the Note.

     6. Possession of Collateral. Until default, Borrower may have possession of the
Collateral and use it in any lawful manner not inconsistent with this Agreement and not
inconsistent with any policy of insurance thereon, but upon default Secured Parties shall have the
immediate right to possession and use of the Collateral.

     7. Events of Default. Any one of the following shall constitute a default for
purposes of this Security Agreement:

          (a) If the Borrower uses the Collateral in violation of any statute or ordinance; or

          (b) If Borrower fails to promptly pay when due all taxes and assessments upon the Collateral
or fails to keep the Collateral in good condition and repair and fully insured; or

          (c) If Borrower fails to pay promptly in full the Indebtedness secured hereby when any part of
such Indebtedness becomes due and payable; or

          (d) If Borrower breaches any term, condition, representation or covenant to be performed or
observed by Borrower provided in this Security Agreement or the Loan Documents securing part or all
of the Indebtedness of Borrower to Secured Parties; or

          (e) If any warranty, representation or statement made or furnished to Secured Parties by or on
behalf of Borrower in connection with the Security Agreement proves to have been false in any
respect; or

          (f) If the Collateral, or any part thereof, is levied upon or seized under any levy or
attachment or any other legal process; or

          (g) The insolvency (however evidenced) or the commission of any act of insolvency by Borrower,
or the making of an assignment to or for the benefit of creditors of Borrower, or the appointment
of a receiver, liquidator, conservator or trustee of Borrower, or its property, or the filing of a
voluntary petition or the commencement of any proceeding by Borrower for relief under any
bankruptcy, insolvency, reorganization, arrangement or receivership laws, or any other law relating
to the relief of debtors of any state or of the United States, or the filing of any involuntary
petition (unless and until discharged or dismissed within 30 days after such filing) for the
bankruptcy, insolvency, reorganization, arrangement or receivership or the involuntary commencement
of any similar proceeding under the laws of any state or of the United States relating to the
relief of debtors, against Borrower; or

4

 

          (h) If the Collateral suffers substantial damage or destruction, or if any of the items of
Collateral existing from time to time is lost or stolen, and is not immediately repaired or
replaced.

     In the event of default, the Secured Parties, at their option, may declare the entire unpaid
principal of and the interest accrued on the Indebtedness secured hereby to be forthwith due and
payable, without any notice or demand of any kind, both of which are hereby expressly waived.

     8. Remedies of the Secured Parties in Event of Default. Borrower agrees that upon the
occurrence of any default set forth above, the full amount remaining unpaid on the Indebtedness
secured hereby shall, at the option of Secured Parties and without notice, be and become due and
payable forthwith, and Secured Parties shall then have the rights, options, duties and remedies of
secured parties under, and the Borrower shall have the rights and duties of a debtor under, the
Uniform Commercial Code of Colorado, including without limitation the right in Secured Parties to
take possession of the Collateral and of anything found therein, and the right without legal
process to enter any premises where the Collateral may be found. Borrower further agrees in any
such case to assemble the Collateral and make it available to Secured Parties as directed by
Secured Parties. Secured Parties shall have the right and power to sell, at one or more sales, as
an entirety or in parcels, in public or private sales as they may elect, the Collateral, or any of
it, at such place or places and otherwise in such manner and upon such notice as the Secured
Parties may deem appropriate, in its sole discretion, and to make conveyance to the purchaser or
purchasers; and the Borrower shall warrant title to the Collateral to such purchaser or purchasers.
If the Collateral is to be sold in a public sale, the Secured Parties may postpone the sale of all
or any portion of the Collateral by public announcement at the time and place of such sale, and
from time to time thereafter may further postpone such sale by public announcement made at time of
sale fixed by the preceding postponement. The right of sale hereunder shall not be exhausted by
one or any sale, and the Secured Parties may make other and successive sales until all of the
Collateral is sold. It shall not be necessary for the Secured Parties to be physically present at
any such sale, or to have constructively in their possession, any or all of the personal property
covered by this Security Agreement, and the Borrower shall deliver all of such personal property to
the purchaser at such sale on the date of sale, and if it should be impossible or impractical to
take actual delivery of such property, then the title and the right of possession to such property
shall pass to the purchaser at such sale as completely as if the same had been actually present and
delivered.

          (a) Judicial Proceedings. Upon occurrence of an event of default, the Secured Parties
in lieu of or in addition to exercising the power of sale hereinabove given, may proceed by a suit
or suits in equity or at law, whether for a foreclosure hereunder, or of the sale of the
Collateral, or for the specific performance of any covenant or agreement herein contained or in aid
of the execution of any power herein granted, or for the appointment of a receiver pending any
foreclosure hereunder of the sale of the Collateral, or for the enforcement of any other
appropriate legal or equitable remedy.

          (b) Certain Aspects of a Sale. The Secured Parties shall have the right to become the
purchaser at any sale held by it or by any court, receiver or public officer, and the Secured
Parties shall have the right to credit upon the amount of the bid made therefor, the amount payable
out of the net proceeds of such sale to them. Recitals contained in any covenant made to any
purchaser at any sale made hereunder shall conclusively establish the truth and accuracy of the
matters therein stated, including, without limiting the generality of the foregoing, non-payment of
the unpaid principal sum of, and the interest accrued on, the Indebtedness after the same has
become due and payable, and advertisement and conduct of such sale in the manner provided herein.

          (c) Receipt to Purchaser. Upon any sale, whether made under the power of sale herein
granted and conferred or by judicial proceedings, the receipt of the Secured Parties, or of the
officer making sale under judicial proceedings, shall be sufficient to discharge the purchaser or
purchasers

5

 

at any sale for his or their purchase money, and such purchaser or purchasers, his or their
assigns or personal representatives, shall not, after paying such purchase money and receiving such
receipt of the Secured Parties or of such officer therefor, be obligated to see the application of
such purchase money, or be in any way answerable for any loss, misapplication or non-application
thereof.

          (d) Effect of Sale. Any sale or sales of the Collateral, whether under the power of
sale herein granted and conferred or by virtue of judicial proceedings, shall operate to divest all
right, title, interest, claim and demand whatsoever either at law or in equity, of the Borrower of,
in and to the property sold, and shall be a perpetual bar, both at law and in equity, against the
Borrower, Borrower’s successors or assigns and against any and all persons claiming or who shall
thereafter claim all or any of the property sold from, through or under the Borrower or Borrower’s
successors or assigns; nevertheless, the Borrower, if so requested by the Secured Parties, shall
join in the execution and delivery of all property conveyances, assignments and transfers of the
properties so sold.

          (e) Application of Proceeds. The proceeds of any sale of the Collateral or any part
thereof, whether under and conferred or by virtue of judicial proceedings, shall be applied as
follows:

               (i) To the payment of all expenses incurred by the Secured Parties in any entry or taking of
possession, of any sale, of advertisement thereof, and of conveyances, and court costs,
compensation of agents and employees and attorneys’ fees;

               (ii) To the payment of the Indebtedness with interest to the date of such payment; and

               (iii) Any surplus thereafter remaining shall be paid to the Borrower or Borrower’s successors
or assigns, as their interests shall appear.

          (f) Borrower’s Waiver of Appraisement, Marshaling, Etc., Rights. The Borrower agrees,
to the full extent that the Borrower may lawfully so agree, that the Borrower will not at any time
insist upon or plead or in any manner whatever claim the benefit of any appraisement, valuation,
stay, extension or redemption law now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Security Agreement or the sale of the Collateral or the
possession thereof by any purchaser at any sale made pursuant to any provision hereof; and the
Borrower, for Borrower and all who may claim through or under Borrower now or hereafter, hereby
waives the benefit of all such laws. The Borrower, for the Borrower and all who may claim through
or under Borrower, waives any and all right to have the Collateral marshaled upon any foreclosure
of the lien hereof, or sold in inverse order of alienation, and agrees that the Secured Parties or
any court having jurisdiction to foreclose such lien may sell the Collateral as an entirety.

          (g) Costs and Expenses. All costs and expenses for retaking, holding, storing,
preparing for sale, selling and documenting such transactions (including attorneys’ fees) incurred
by the Secured Parties in protecting and enforcing their rights hereunder, shall constitute a
demand obligation owing by the Borrower to the Secured Parties at the effective rate of interest of
the Note, all of which shall constitute a portion of the Indebtedness.

          (h) Operation of Property by the Secured Party. Upon the occurrence of an event of
default and in addition to all other rights herein conferred on the Secured Parties, the Secured
Parties (or any person, firm or corporation designated by the Secured Parties) shall have the right
and power, but shall not be obligated, to enter upon and take possession of any of the Collateral,
and to exclude the Borrower, and the Borrower’s agents or servants, wholly therefrom and to hold,
use, administer, manage and operate the same to the extent that the Borrower shall be at the time
entitled and in its place. The

6

 

Secured Parties, or any person, firm or corporation designated by them, shall have the right
to collect, receive and receipt for all payments with respect to the Collateral or the goods,
services produced and sold from the Collateral, and to exercise every power, right and privilege of
the Borrower with respect to the Collateral.

     9. Notification. Any requirement of the Uniform Commercial Code of reasonable
notification of the time and place of any public sale, or the time after which any private sale or
other disposition is to be made, shall be met by mailing to the Borrower at the address shown at
the beginning of this Agreement, at least ten (10) days’ prior notice of the time and place of any
public sale or the time after which any private sale or any other intended disposition is to be
made. Borrower shall be and remain liable for any deficiency remaining after applying the proceeds
of disposition of the Collateral as provided in this Security Agreement.

     10. No Waiver. The making of this Security Agreement shall not waive or impair any
other security Secured Parties may have or hereafter acquire for the payment of the Indebtedness,
nor shall the taking of any such additional security waive or impair this Security Agreement; but
Secured Parties may resort to any security they may have in the order they may deem proper, and
Secured Parties shall retain their rights to set-off against Borrower, notwithstanding any rights
to the Collateral hereunder.

     11. Advances by the Secured Parties. Each and every covenant herein contained shall
be performed and kept by the Borrower solely at the Borrower’s expense. If the Borrower shall fail
to perform or keep any of the covenants of whatsoever kind or nature contained in this instrument,
the Secured Parties, or any receiver appointed hereunder, may, but shall not be obligated to, make
advances to perform the same on the Borrower’s behalf, and the Borrower hereby agrees to repay such
sums upon demand plus interest as a part of the Indebtedness. No such advance shall be deemed to
relieve the Borrower from any default hereunder.

     12. Defense of Claims. The Borrower will notify the Secured Parties in writing,
promptly of the commencement of any legal proceedings affecting the lien hereof or the Collateral
or any part thereof, and will take such action, employing attorneys acceptable to the Secured
Parties or, as may be necessary to preserve the Borrower’s and the Secured Parties’ rights affected
thereby; and should the Borrower fail or refuse to take any such action, the Secured Parties may,
upon giving prior written notice thereof to the Borrower, take such action on behalf and in the
name of the Borrower and at the Borrower’s expense. The Secured Parties may also take such
independent action in connection therewith as it may, in its discretion, deem proper, the Borrower
hereby agreeing that all sums advanced or all expenses incurred in such actions plus interest,
will, on demand, be reimbursed to the Secured Parties, or any receiver appointed hereunder, and
shall become part of the Indebtedness.

     13. Payment of the Indebtedness. If the Indebtedness shall be fully paid and the
covenants herein contained shall be performed, the entire right, title and interest of the Secured
Parties shall thereupon cease; and the Secured Parties in such case shall, upon the request of the
Borrower and at the Borrower’s cost and expense, deliver to the Borrower proper instruments
acknowledging satisfaction of this Security Agreement.

     14. Renewals, Amendments and Other Security. Renewals and extensions of the
Indebtedness may be given at any time and amendments may be made to agreements relating to any part
of the Indebtedness without notice to or consent of the Borrower. The Secured Parties may resort
first to such other security or any part thereof or first to the security herein given or any part
thereof, or from time to time to either or both, even to the partial or complete abandonment of
either security, and such action shall not be a waiver of any rights conveyed by this Security
Agreement, which shall continue as a lien upon the Collateral not expressly released until the
Indebtedness secured hereby is fully paid.

7

 

     15. Release. No release from the lien of this Security Agreement or any part of the
Collateral by Secured Parties shall in any way alter, vary, or diminish the force, effect or lien
of this Security Agreement on the balance of the Collateral.

     16. Subrogation. This Security Agreement is made with full substitution and
subrogation of Secured Parties in and to all covenants and warranties by another heretofore given
or made in respect of the Collateral or any part thereof.

     17. Governing Law. This Security Agreement shall be governed by the laws of the State
of Colorado.

     18. Instrument and Assignment, Etc. This Security Agreement shall be deemed to be and
may be enforced from time to time as an assignment, chattel mortgage, contract, financing
statement, real estate mortgage or security agreement, and from time to time as any one or more
thereof.

     19. Limitation on Interest. No provision of this Security Agreement or of the
Indebtedness shall require the payment or permit the collection of interest in excess of the
maximum permitted by law or which is otherwise contrary to law. If any excess of interest in such
respect is herein or in the Indebtedness provided for, or shall be adjudicated to be so provided
for herein or in the Indebtedness, the Borrower shall not be obligated to pay such excess.

     20. Unenforceable or Inapplicable Provisions. If any provision hereof or of the
Indebtedness is invalid or unenforceable in any jurisdiction, or with respect to any person or
property, the other provisions hereof or of the Indebtedness in such jurisdiction and the
application thereof to any other person or property, shall remain in full force and effect, and the
remaining provisions hereof shall be liberally construed in favor of the Secured Parties in order
to effectuate the provisions thereof. The invalidity of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of any such provision in any other jurisdiction.

     21. Rights Cumulative. Each and every right, power and remedy herein given to the
Secured Parties shall be cumulative and not exclusive; and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from time to time and so
often and in such order as may be deemed expedient by the Secured Parties, and the exercise, or the
beginning of the exercise, or any such right, power or remedy shall not be deemed a waiver of the
right to exercise, at the same time or thereafter, any other right, power or remedy. No delay or
omission by the Secured Parties in the exercise of any right, power or remedy shall impair any such
right, power or remedy then or thereafter existing.

     22. Waiver by the Secured Parties. Any and all covenants in this Security Agreement
may from time to time by instrument in writing signed by the Secured Parties be waived to such
extent and in such manner as the Secured Parties may desire, but no such waiver shall ever affect
or impair the Secured Parties’ rights or liens hereunder, except to the extent specifically stated
in such written instrument.

     23. Successors and Assigns. This Security Agreement is binding upon the Borrower, the
Borrower’s successors and assigns, and shall inure to the benefit of the Secured Parties, their
successors and assigns.

     24. Section Headings. The section headings in this instrument are inserted for
convenience and shall not be considered a part of this Security Agreement or used in its
interpretation.

8

 

     25. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which shall, for all purposes, be deemed to be an original, and all of which
are identical except that, to facilitate filing and recordation, in any particular counterpart
portions of the Exhibits hereto which describe properties situated in counties other than the
county in which such counterpart is to be recorded may have been omitted. All counterparts shall
together constitute but one and the same instrument.

     26. Special Filing as Financing Statement. This Security Agreement shall be a
Security Agreement and a Financing Statement and Borrower hereby grants to Secured Parties, their
successors and assigns, a security interest in all Collateral described herein and all proceeds
from the sale, lease or other disposition of the Collateral or any part thereof. This Agreement
may be filed for record, among other places, in the real estate records of each county in which the
Collateral, or any part thereof, is situated, and when filed in such counties shall be effective as
a financing statement covering fixtures, minerals, timber or located on properties (and accounts
arising therefrom). This Security Agreement may also be filed as a Financing Statement in the
office of the Secretary of State, as appropriate, in respect of those items of Collateral of a kind
or character defined in or subject to the applicable provisions of the Uniform Commercial Code, as
in effect in the appropriate jurisdiction with respect to each of the properties, rights and
interests.

     27. Notices. Any notice, request, demand or other instrument which may be required or
permitted to be given or served upon the Borrower or the Secured Parties shall be in writing and
shall be validly given or sent by certified mail, return receipt requested; or by telegram, telex
or express courier holding itself out as able to make delivery within 72 hours after receipt, or by
hand-delivery receipted by the addressee, and addressed to the Borrower or Secured Parties, as the
case may be, at its address shown above, or to such different address as shall have been designated
by written notice to the other party hereunder. Notices shall be effective on the date mailed to
the Borrower and on the date received by Secured Parties.

     28. WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND BETWEEN BORROWER AND SECURED
PARTIES THAT THE RESPECTIVE PARTIES WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
BROUGHT BY EITHER PARTY AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS AGREEMENT, THE PROMISSORY NOTE AND ALL OTHER INSTRUMENTS EXECUTED IN
CONNECTION THEREWITH.

     IN WITNESS WHEREOF, the Borrower has executed or caused to be executed this Security
Agreement.

BORROWER:

A SMART MOVE L.L.C.

By:                                                             

9

 

SCHEDULE 1

Attached to and made a part of Security Agreement

between

A Smart Move L.L.C.

as Borrower,

and

the Secured Parties Named Below

	 	 	 	 	 
	Name	 	Address	 	Principal Amount
	                                        

	 	                                        
	 	$___
	                                        

	 	                                        
	 	$___
	                                        

	 	                                        
	 	$___
	                                        

	 	                                        
	 	$___

 

 

SCHEDULE 2

Attached to and made a part of Security Agreement

between

A Smart Move L.L.C.

as Borrower,

and

the Secured Parties Identified

on Schedule 1

Description of Collateral

     The Collateral consists of all of Borrower’s right, title and interest in and to the following
whether owned now or hereafter arising and whether the Borrower has rights now or hereafter has
rights therein and wherever located:

25 flatbed trailers and 25 forklifts (which are currently unencumbered), containers and other
assets that the note proceeds are used to purchase and the assets currently pledge to Silicon
Valley Bank if the Silicon Valley Bank debt is retied with these note proceeds.

     All Borrower’s Books relating to the foregoing and any and all claims, rights and interests in
any of the above and all substitutions for, additions and accessions to and proceeds thereof.exv10w12

 

exhibit 10.12

A SMART MOVE L.L.C.

TERMS OF WARRANTS

     Section 1. Definitions

     The following terms used in this document shall have the following meanings (unless otherwise
expressly provided herein):

     The “Act.” The Securities Act of 1933, as amended.

     The “Commission.” The Securities and Exchange Commission.

     The “Company.” A Smart Move L.L.C., a Colorado limited liability company. If the Company
merges into another company, “Company” shall also mean that successor company.

     “Shares.” The Shares of the Company representing undivided limited liability company
interests, whether now or hereafter authorized, holders of which have the right to participate in
the distribution of earnings and assets of the Company without limit as to the amount or
percentage. If the Company becomes a corporation, Shares shall mean the shares of common stock of
the corporation.

     “Current Market Price.” The Current Market Price shall be determined as follows:

     (a) if the security at issue is listed on a national securities exchange or admitted to
unlisted trading privileges on such an exchange or quoted on either the Nasdaq National Market or
the Nasdaq Small Cap Market, the Current Market Price shall be the last reported sale price of that
security on such exchange or system on the day immediately before the event; or, if no such sale is
made on such day, the average of the highest closing bid and lowest asked price for such day on
such exchange or system; or

     (b) if the security at issue is not so listed or quoted or admitted to unlisted trading
privileges, the Current Market Price shall be the last reported sale price of that security on the
OTC Bulletin Board on the day immediately before the event; or if no such sale is made on such day,
the average of the last reported highest bid and lowest asked prices quoted on the OTC Bulletin
Board on the last business day prior to the day of the event; or

     (c) if the security at issue is not so listed or quoted or admitted to unlisted trading
privileges and bid and asked prices are not reported, the Current Market Price shall be determined
in such reasonable manner as may be prescribed from time to time by the Board of Directors of the
Company, subject to the objection and arbitration procedure as described in Section 16 below.

     “Exercise Period.” The period commencing on the date that the Warrants are issued and
extending to and through the Expiration Date.

     “Exercise Price.” $10.00 per share, as modified in accordance with Section 9, below.

     “Expiration Date.” 5:00 p.m. Colorado time on July ___, 2011; provided, however, if such
date shall be a holiday or a day on which banks are authorized to close in the State of Colorado,
the Expiration Date shall mean 5:00 p.m. Denver Time on the next following day which in the State
of Colorado is not a holiday or a day on which banks are authorized to close.

     “Holder” or “Warrant Holder.” The person to whom a warrant certificate is issued, and any
valid transferee thereof pursuant to Section 10 below.

 

 

     “IPO.” The Company’s initial offering of its securities to the public made pursuant to a
registration statement filed with the Commission under the Securities Act of 1933, as amended.

     “Nasdaq.” The electronic securities market operated by The Nasdaq Stock Market, Inc.

     “OTC Bulletin Board.” An electronic quotation medium operated by The Nasdaq Stock Market,
Inc.

     “Termination of Business.” Any sale, lease or exchange of all, or substantially all, of the
Company’s assets or business or any dissolution, liquidation or winding up of the Company.

     “Warrants.” The Warrants issued in accordance with the terms of this Agreement and any
Warrants issued in substitution for or replacement of such Warrants, or any Warrants into which
such Warrants may be divided or exchanged.

     “Warrant Shares.” The Shares acquired upon exercise of a Warrant, and the Shares underlying
unexercised portions of a Warrant.

     Section 2. Warrants and Issuance of Warrant Certificates

     2.1 Description of Warrants. Each Warrant shall initially entitle the Warrant Holder to
purchase one Share on exercise thereof, subject to modification and adjustment as hereinafter
provided in Section 9. The Company shall deliver Warrant Certificates in required whole number
denominations to the person entitled thereto in connection with the original issuance of Warrant
Certificates or any transfer or exchange permitted under this Agreement.

     2.2 Warrant Shares. Except as provided in Sections 3.3 and 3.4 hereof, share Certificates
representing the Warrant Shares shall be issued only on or after the Exercise Date upon exercise of
the Warrants or upon transfer or exchange of the Warrant Shares following exercise of the Warrants.

     2.3 Form of Certificates. The Warrant Certificates shall be substantially in the form
attached hereto as Exhibit A and may have such letters, numbers or other marks of identification
and such legends, summaries or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of this Agreement.
The Warrant Certificates shall be dated as of the date of issuance, whether on initial issuance,
transfer, exchange or in lieu of mutilated, lost, stolen or destroyed Warrant Certificates.

     2.4 Execution of Certificates. The Warrant Certificates shall be executed on behalf of the
Company by its President and Secretary, by manual signatures or by facsimile signatures printed
thereon, and shall have imprinted thereon a facsimile of the Company’s seal. If any person whose
facsimile signature has been placed upon any Warrant Certificate as the signature of an officer of
the Company shall have ceased to be such officer before such Warrant Certificate is countersigned,
issued and delivered, such
Warrant Certificate may be countersigned, issued and delivered with the
same effect as if such person had not ceased to be such officer. Any Warrant Certificate may be
signed by, or may bear the facsimile signature of, any person who at the actual date of the
preparation of such Warrant Certificate shall be a proper officer of the Company to sign such
Warrant Certificate even though such person was not such an officer upon the date of this
Agreement.

     2.5 Mutilated, Lost, Stolen, or Destroyed Certificate. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen or destroyed, the Company
shall, at the request of the Warrant Holder, issue and deliver in exchange and substitution for and
upon cancellation of the mutilated certificate or certificates, or in lieu of and substitution for
the certificate or certificates lost,

-2-

 

stolen or destroyed, a new Warrant Certificate or
Certificates of like tenor and representing an equivalent right or interest, but only upon receipt
of evidence satisfactory to the Company of such loss, theft or destruction of such Warrant and a
bond of indemnity, if requested, also satisfactory in form and amount, at the applicant’s cost.
Applicants for such substitute Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.

     2.6 Exchange of Certificate. Any Warrant Certificate may be exchanged for another certificate
or certificates entitling the Warrant Holder to purchase a like aggregate number of Shares as the
certificate or certificates surrendered then entitled such Warrant Holder to purchase. Any Warrant
Holder desiring to exchange a Warrant Certificate shall make such request in writing delivered to
the Company, and shall surrender, properly endorsed, with signatures guaranteed, the certificate
evidencing the Warrant to be so exchanged. Thereupon, the Company shall execute and deliver to the
person entitled thereto a new Warrant Certificate as so requested.

     Section 3. Term of Warrants; Exercise of Warrant

     3.1 Exercise of Warrant. Subject to the terms of this Agreement, the Warrant Holder shall
have the right, at any time during the Exercise Period, to purchase from the Company up to the
number of fully paid and nonassessable Shares to which the Warrant Holder may at the time be
entitled to purchase pursuant to this Agreement, upon surrender to the Company, at its principal
office, of the certificate evidencing the Warrants to be exercised, together with the purchase form
on the reverse thereof, duly filled in and signed, and upon payment to the Company of the Exercise
Price for the number of Shares in respect of which such Warrants are then exercised, but in no
event for less than 100 Shares (unless fewer than an aggregate of 100 shares are then purchasable
under all outstanding Warrants held by a Warrant Holder).

     3.2 Payment of Exercise Price. Payment of the aggregate Exercise Price shall be made in cash
or by check, or any combination thereof.

     3.3 Delivery of Warrant Certificate. Subject to Section 3.6 and to Section 10, upon receipt
of a Warrant Certificate with the exercise form thereon duly executed, together with payment in
full of the Exercise Price for the Warrant Shares being purchased by such exercise, the Warrant
Agent shall requisition from any transfer agent for the Warrant Shares, and upon receipt shall make
delivery of certificates evidencing the total number of whole Warrant Shares for which Warrants are
then being exercised, together with cash as provided in Section 4.6 hereof in respect of any
fractional Warrant Shares otherwise issuable upon such surrender. The certificates shall be in
such names and denominations as are required for delivery to, or in accordance with the
instructions of the Warrant Holder; provided that if fewer than all Warrant Shares issuable on
exercise of a Warrant Certificate are purchased, the Warrant Agent (if so requested) shall issue
such balance Warrant Certificate for the balance of the Warrant Shares. Such certificates for the
Warrant Shares shall be deemed to be issued, and the person to whom such Warrant Shares are issued
of record shall be deemed to have become a holder of record of such Warrant Shares, as of the date
of the surrender of such Warrant Certificate and payment of the Exercise Price,
whichever shall
last occur; provided further that if the books of the Company with respect to the Warrant Shares
shall be closed as of such date, the certificates for such Warrant Shares shall be deemed to be
issued, and the person to whom such Warrant Shares are issued of record shall be deemed to have
become a record holder of such Warrant Shares as of the date on which such books shall next be open
(whether before, on or after the applicable Expiration Date) but at the Exercise Price and upon the
other conditions in effect upon the date of surrender of the Warrant Certificate and payment of the
Exercise Price, whichever shall have last occurred, to the Company.

     3.4 Cancellation of Certificates. All Warrant Certificates surrendered upon exercise of
Warrants shall be canceled.

-3-

 

     3.5 Fractional Shares. On exercise of the Warrants by the Warrant Holders, the Company shall
not be required to deliver fractions of Shares; provided, however, that the Company shall purchase
such fraction for an amount in cash equal to the Current Market Price of such fraction, computed on
the trading day immediately preceding the day upon which such Warrant Certificate was surrendered
for exercise. By accepting a Warrant Certificate, the holder thereof expressly waives any right to
receive a Warrant Certificate evidencing any fraction of a Warrant or to receive any fractional
share of securities upon exercise of a Warrant, except as expressly provided in this Section.

     3.6 Status as Shareholder. Upon receipt of the Warrant Certificate by the Company as
described in Sections 3.3 above, the Holder shall be deemed to be the holder of record of the
Shares issuable upon such exercise, notwithstanding that the transfer books of the Company may then
be closed or that certificates representing such Shares may not have been prepared or actually
delivered to the Holder.

     Section 4. Reservation of Warrant Shares

     There has been reserved, and the Company shall at all times keep reserved so long as the
Warrants remain outstanding, out of its authorized and unissued Shares, such number of Shares as
shall be subject to purchase under the Warrants. The Company covenants that all Warrant Shares
that may be issued and delivered to a Warrant Holder upon the exercise of a Warrant and payment of
the Exercise Price shall be validly issued, fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issuance thereof. Every transfer agent for the Shares and
other securities of the Company issuable upon the exercise of the Warrants will be irrevocably
authorized and directed at all times to reserve such number of authorized shares and other
securities as shall be requisite for such purpose. The Company will supply every such transfer
agent with duly executed stock and other certificates, as appropriate, for such purpose and will
provide or otherwise make available any cash which may be payable as provided in Section 4.6
hereof.

     Section 5. Registration Rights. The Warrants and the Warrant Shares are subject to the
provisions of a Registration Rights Agreement of even date, which is incorporated by reference
herein.

     Section 6. Payment of Taxes

     The Company will pay all documentary stamp taxes, if any, attributable to the initial issuance
of the Warrants or the securities comprising the Warrant Shares and any tax (except federal or
state income tax) which may be payable in respect of any transfer or exercise of the Warrants or
the securities comprising the Warrant Shares.

     Section 7. Warrant Shares to be Fully Paid

     The Company covenants that all Warrant Shares that may be issued and delivered to a Holder of
this Warrant upon the exercise of this Warrant and payment of the Exercise Price will be, upon such
delivery, validly and duly issued, fully paid and nonassessable.

     Section 8. Registration of Transfer

     8.1. Exchange of Certificate. A Warrant Certificate may be exchanged for another certificate
or certificates entitling the Warrant Holder to purchase a like aggregate number of Shares as the
certificate or certificates surrendered then entitled such Warrant Holder to purchase. Any Warrant
Holder desiring to exchange a Warrant Certificate shall make such request in writing delivered to
the Company, and shall surrender, properly endorsed, with signatures guaranteed, the certificate
evidencing the Warrant

-4-

 

to be so exchanged. Thereupon, the Company shall execute and deliver to the
person entitled thereto a new Warrant Certificate as so requested.

     8.2. Assignment or Transfer. Any assignment or transfer of a Warrant shall be made by the
presentation and surrender of the Warrant Certificate to the Company, accompanied by a duly
executed Assignment Form. Upon the presentation and surrender of these items to the Company, the
Company, at its own expense, shall execute and deliver to the new Holder or Holders a new Warrant
Certificate or Warrant Certificates, in the name of the new Holder or Holders as named in the
Assignment Form, and the Warrant Certificate presented or surrendered shall at that time be
canceled.

     8.3 Ownership Records. The Warrant Agent shall keep books for registration of ownership and
transfer of Warrant Certificates. Such books shall show the names and addresses of the respective
holders of the Warrant Certificates and the number of Warrants evidenced by each such Warrant
Certificate.

     8.4 Ownership Prior to Presentment. Prior to due presentment for registration of transfer
thereof, the Company may treat the Warrant Holder as the absolute owner thereof (notwithstanding
any notations of ownership or writing thereon made by anyone other than the Company) and the
parties hereto shall not be affected by any notice to the contrary.

     Section 9. Adjustment of Exercise Price and Shares

     The number and kind of securities purchasable upon the exercise of the Warrants and the
Warrant Price shall be subject to adjustment from time to time upon the happening of certain
events, as follows:

     9.1 Adjustments. The number of Warrant Shares purchasable upon the exercise of the Warrants
shall be subject to adjustments as follows:

     (a) In case the Company shall (i) pay a dividend in Shares or securities convertible into
Shares or make a distribution to its stockholders in Shares or securities convertible into Shares;
(ii) subdivide its outstanding Shares; (iii) combine its outstanding Shares into a smaller number
of Shares; or (iv) issue by reclassification of its Shares other securities of the Company; then
the number of Warrant Shares purchasable upon exercise of the Warrants immediately prior thereto
shall be adjusted so that the Warrant Holder shall be entitled to receive the kind and number of
Warrant Shares or other securities of the Company which it would have owned or would have been
entitled to receive immediately after the happening of any of the events described above, had such
Warrants been exercised immediately prior to the happening of such event or any record date with
respect thereto. Any adjustment made pursuant to this subsection 9.1(a) shall become effective
immediately after the effective date of such event retroactive to the record date, if any, for such
event.

     (b) If, prior to the expiration of the Warrants by exercise, by their terms, or by redemption,
the Company shall be recapitalized by reclassifying its outstanding Shares into shares with a
different par value, or in the event of any other material change of the capital structure of the
Company or of any successor corporation by reason of any reclassification, recapitalization or
conveyance, prompt, proportionate, equitable, lawful and adequate provision shall be made whereby
any Warrant Holder shall thereafter have the right to purchase, on the basis and the terms and
conditions specified in this Agreement, in lieu of the Warrant Shares theretofore purchasable on
the exercise of any Warrant, such securities or assets as may be issued or payable with respect to
or in exchange for the number of Warrant Shares theretofore purchasable on exercise of the Warrants
had such reclassification, recapitalization or conveyance not taken place; and in any such event,
the rights of any Warrant Holder to any adjustment in the number of Warrant Shares purchasable on
exercise of such Warrant, as set forth above, shall continue to be preserved in respect of any
stock, securities or assets which the Warrant Holder becomes entitled to purchase.

-5-

 

     (c) In case the Company shall issue rights, options, warrants, or convertible securities to
all or substantially all holders of its Shares, without any charge to such holders, entitling them
to subscribe for or purchase Shares at a price per share which is lower at the record date
mentioned below than the then Current Market Price, the number of Shares thereafter purchasable
upon the exercise of each Option shall be determined by multiplying the number of Shares
theretofore purchasable upon exercise of the Options by a fraction, of which the numerator shall be
the number of Shares outstanding immediately prior to the issuance of such rights, options,
warrants or convertible securities plus the number of additional Shares offered for subscription or
purchase, and of which the denominator shall be the number of Shares outstanding immediately prior
to the issuance of such rights, options, warrants, or convertible securities plus the number of
shares which the aggregate offering price of the total number of shares offered would purchase at
such Current Market Price. Such adjustment shall be made whenever such rights, options, warrants,
or convertible securities are issued, and shall become effective immediately and retroactively to
the record date for the determination of shareholders entitled to receive such rights, options,
warrants, or convertible securities.

     (d) In case the Company shall distribute to all or substantially all holders of its Shares
evidences of its indebtedness or assets (excluding cash dividends or distributions out of earnings)
or rights, options, warrants, or convertible securities containing the right to subscribe for or
purchase Shares (excluding those referred to in subsection 9.1(b) above), then in each case the
number of Warrant Shares thereafter purchasable upon the exercise of the Warrants shall be
determined by multiplying the number of Warrant Shares theretofore purchasable upon exercise of the
Warrants by a fraction, of which the numerator shall be the then Current Market Price on the date
of such distribution, and of which the denominator shall be such Current Market Price on such date
minus the then fair value (determined as provided in subsection 9.1(g)(y) below) of the portion of
the assets or evidences of indebtedness so distributed or of such subscription rights, options,
warrants, or convertible securities applicable to one share. Such adjustment shall be made
whenever any such distribution is made and shall become effective on the date of distribution
retroactive to the record date for the determination of stockholders entitled to receive such
distribution.

     (e) No adjustment in the number of Warrant Shares purchasable pursuant to the Warrants shall
be required unless such adjustment would require an increase or decrease of at least one percent in
the number of Warrant Shares then purchasable upon the exercise of the Warrants or, if the Warrants
are not then exercisable, the number of Warrant Shares purchasable upon the exercise of the
Warrants on the first date thereafter that the Warrants become exercisable; provided, however, that
any adjustments which by reason of this subsection are not required to be made immediately shall be
carried forward and taken into account in any subsequent adjustment.

     (f) Whenever the number of Warrant Shares purchasable upon the exercise of the Warrant is
adjusted, as herein provided, the Exercise Price payable upon exercise of the Warrant shall be
adjusted by multiplying such Exercise Price immediately prior to such adjustment by a fraction, of
which the numerator shall be the number of Warrant Shares purchasable upon the exercise of the
Warrant immediately prior to such adjustment, and of which the denominator shall be the number of
Warrant Shares so purchasable immediately thereafter.

     (g) For the purpose of this subsection, the term “Shares” shall mean (i) the class of
securities designated as the Shares of the Company at the date of this Agreement, or (ii) any other
class of stock resulting from successive changes or reclassifications of such Shares consisting
solely of changes in par value, or from par value to no par value, or from no par value to par
value. In the event that at any time, as a result of an adjustment made pursuant to this Section,
the Warrant Holder shall become entitled to purchase any securities of the Company other than
Shares, (y) if the Warrant Holder’s right to purchase is on any other basis than that available to
all holders of the Company’s Shares, the Company shall obtain an opinion of an independent
investment banking firm valuing such other securities; and (z) thereafter the number of such other
securities so purchasable upon exercise of the Warrants shall be subject to

-6-

 

adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to
the Warrant Shares contained in this Section.

     (h) Upon the expiration of any rights, options, warrants, or conversion privileges, if such
shall have not been exercised, the number of Shares purchasable upon exercise of the Warrants, to
the extent the Warrants have not then been exercised, shall, upon such expiration, be readjusted
and shall thereafter be such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) on the basis of (i) the fact that the
only Shares so issued were the Shares, if any, actually issued or sold upon the exercise of such
rights, options, warrants, or conversion privileges, and (ii) the fact that such Shares, if any,
were issued or sold for the consideration actually received by the Company upon such exercise plus
the consideration, if any, actually received by the Company for the issuance, sale or grant of all
such rights, options, warrants, or conversion privileges whether or not exercised; provided,
however, that no such readjustment shall have the effect of decreasing the number of Shares
purchasable upon exercise of the Warrants by an amount in excess of the amount of the adjustment
initially made in respect of the issuance, sale, or grant of such rights, options, warrants, or
conversion rights.

     9.2 Adjustment for IPO. If the Company completes the IPO on or before December 31, 2006, and
it fully complies with the terms of the Registration Rights Agreement referred to in section the
Exercise Price shall be adjusted to be 140% of the price of shares in the IPO (or the equivalent
per share price if units are sold in the IPO).

     9.3. No Adjustment for Dividends. Except as provided in subsection 9.1, no adjustment in
respect of any dividends or distributions out of earnings shall be made during the term of the
Warrants or upon the exercise of the Warrants.

     9.4 No Adjustment in Certain Cases. No adjustments shall be made pursuant to this Section in
connection with the grant or exercise of presently authorized or outstanding options to purchase.

     9.5 Preservation of Purchase Rights upon Reclassification, Consolidation, etc. In case of any
consolidation of the Company with or merger of the Company into another corporation, or in case of
any sale or conveyance to another corporation of the property, assets, or business of the Company
as an entirety or substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute an agreement that the Warrant Holder shall have the
right thereafter upon payment of the Exercise Price in effect immediately prior to such action to
purchase, upon exercise of the
Warrants, the kind and amount of shares and other securities and
property which it would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale, or conveyance had the Warrants been exercised immediately prior to
such action. In the event of a merger described in Section 368(a)(2)(E) of the Internal Revenue
Code of 1986, in which the Company is the surviving corporation, the right to purchase Warrant
Shares under the Warrants shall terminate on the date of such merger and thereupon the Warrants
shall become null and void, but only if the controlling corporation shall agree to substitute for
the Warrants, its Warrants which entitle the holder thereof to purchase upon their exercise the
kind and amount of shares and other securities and property which it would have owned or been
entitled to receive had the Warrants been exercised immediately prior to such merger. Any such
agreements referred to in this subsection 9.5 shall provide for adjustments, which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this Section. The
provisions of this subsection shall similarly apply to successive consolidations, mergers, sales,
or conveyances.

     9.6 Par Value of Shares. Before taking any action which would cause an adjustment effectively
reducing the portion of the Exercise Price allocable to each Warrant Share below the par value per
share of the Shares issuable upon exercise of the Warrants, the Company will take any corporate
action which may, in the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Shares upon exercise of the Warrants.

-7-

 

     9.7 Independent Public Accountants. The Company may retain a firm of independent public
accountants of recognized national standing (which may be any such firm regularly employed by the
Company) to make any computation required under this Section, and a certificate signed by such firm
shall be conclusive evidence of the correctness of any computation made under this Section.

     9.8 Statement on Warrant Certificates. Irrespective of any adjustments in the number of
securities issuable upon exercise of the Warrants, Warrant Certificates theretofore or thereafter
issued may continue to express the same number of securities as are stated in the similar Warrant
Certificates initially issuable pursuant to this Agreement. However, the Company may, at any time
in its sole discretion (which shall be conclusive), make any change in the form of Warrant
Certificate that it may deem appropriate and that does not affect the substance thereof; and any
Warrant Certificate thereafter issued, whether upon registration of transfer of, or in exchange or
substitution for, an outstanding Warrant Certificate, may be in the form so changed.

     9.9 Treasury Stock. For purposes of this Section, Shares owned or held at any relevant time
by, or for the account of, the Company, in its treasury or otherwise, shall not be deemed to be
outstanding for purposes of the calculations and adjustments described.

     9.10 Officers’ Certificate. Whenever the Exercise Price or the aggregate number of Warrant
Securities purchasable pursuant to this Warrant shall be adjusted as required by the provisions of
this Section, the Company shall promptly prepare an officers’ certificate executed by the Company’s
President and Secretary or Assistant Secretary, describing the adjustment and setting forth, in
reasonable detail, the facts requiring such adjustment and the basis for and calculation of such
adjustment in accordance with the provisions of this document. Each such officers’ certificate
shall be made available to the Holders for inspection at all reasonable times, and the Company,
after each such adjustment, shall promptly deliver a copy of the officers’ certificate relating to
that adjustment to the Holders. The officers’ certificate described in this subsection shall be
deemed to be conclusive as to the correctness of the adjustment reflected therein if, and only if,
no Holder delivers written notice to the Company of an objection to the adjustment within 30 days
after the officers’ certificate is delivered to the Holders. The Company will make its books and
records available for inspection and copying during normal business hours by the Holder so as to
permit a determination as to the correctness of the adjustment. If written notice of an objection
is delivered by a Holder to the Company and the parties cannot reconcile the dispute, the Holder
and the Company shall submit the dispute to arbitration pursuant to the provisions of Section 16
below. Failure to prepare or provide the officers’ certificate shall not modify the parties’
rights hereunder.

     Section 10. Restrictions on Transfer. The Warrant Holder agrees that prior to making any
disposition of the Warrants or the Warrant Shares, the Warrant Holder shall give written notice to
the Company describing briefly the manner in which any such proposed disposition is to be made; and
no such disposition shall be made if the Company has notified the Warrant Holder that in the
opinion of counsel reasonably satisfactory to the Warrant Holder a registration statement or other
notification or post-effective amendment thereto (hereinafter collectively a “Registration
Statement”) under the Act is required with respect to such disposition and no such Registration
Statement has been filed by the Company with, and declared effective, if necessary, by, the
Commission.

     Section 11. Merger or Consolidation of the Company

     The Company will not merge or consolidate with or into any other corporation or sell all or
substantially all of its property to another corporation, unless the provisions of Section 9.5 are
complied with.

-8-

 

     Section 12. Modification of Agreement.

     The Company may by supplemental agreement make any changes or corrections in this Agreement it
shall deem appropriate to cure any ambiguity or to correct any defective or inconsistent provision
or mistake or error herein contained. Additionally, the Company may make any changes or
corrections deemed necessary which shall not adversely affect the interests of the Warrant Holders,
including lowering the exercise price or extending the Exercise Period of the Warrants; provided,
however, this Agreement shall not otherwise be modified, supplemented or altered in any respect
except with the consent in writing of the Warrant Holders who hold not less than a majority of the
Warrants then outstanding and provided further that no such amendment shall accelerate the Warrant
Expiration Date or increase the Exercise Price without the approval of all the holders of all
outstanding Warrants.

     Section 13. Notices to Warrant Holders

     13.1 Declaration of Dividend; Reorganization; Dissolutions; Etc. If, prior to the expiration
of this Warrant either by its terms or by its exercise in full, any of the following shall occur:

     (i) the Company shall declare a dividend or authorize any other distribution on its Shares; or

     (ii) the Company shall authorize the granting to the stockholders of its Shares of rights to
subscribe for or purchase any securities or any other similar rights; or

     (iii) any reclassification, reorganization or similar change of the Shares, or any
consolidation or merger to which the Company is a party, or the sale, lease, or exchange of any
significant portion of the assets of the Company; or

     (iv) the voluntary or involuntary dissolution, liquidation or winding up of the Company; or

     (v) any purchase, retirement or redemption by the Company of its Shares;

     then, and in any such case, the Company shall deliver to the Holder or Holders written notice
thereof at least 30 days prior to the earliest applicable date specified below with respect to
which notice is to be given, which notice shall state the following:

          (u) the purpose for which a record of stockholders is to be taken;

          (w) the number, amount, price, and nature of the Shares or other stock, securities, or
assets which will be deliverable on Warrant Shares following exercise of the Warrants if such
exercise occurs prior to the record date for such action;

          (x) the date on which a record is to be taken for the purpose of such dividend,
distribution or rights, or, if a record is not to be taken, the date as of which the
stockholders of Shares of record to be entitled to such dividend, distribution or rights are to
be determined;

          (y) the date on which such reclassification, reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up or purchase, retirement or redemption is expected
to become effective, and the date, if any, as of which the Company’s stockholders of Shares of
record shall be entitled to exchange their Shares for securities or other property deliverable
upon such reclassification, reorganization, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up, purchase, retirement or redemption; and

-9-

 

          (z) if any matters referred to in the foregoing clauses (x) and (y) are to be voted upon by
stockholders of Shares, the date as of which those stockholders to be entitled to vote are to be
determined.

     13.2 Failure to Give Notice. Without limiting the obligation of the Company hereunder to
provide notice to each Warrant Holder, it is agreed that failure of the Company to give notice
shall not invalidate corporate action taken by the Company.

     Section 14. No Rights as Shareholder

     Nothing contained in this Agreement or in the Warrants shall be construed as conferring upon
the Warrant Holder or its transferees any rights as a shareholder of the Company, including the
right to vote, receive dividends, consent or receive notices as a shareholder in respect to any
meeting of shareholders for the election of directors of the Company or any other matter. The
Company covenants, however, that for so long as this Warrant is at least partially unexercised, it
will furnish any Holder of this Warrant with copies of all reports and communications furnished to
the shareholders of the Company. In addition, if at any time prior to the expiration of the
Warrants and prior to their exercise, any one or more of the following events shall occur:

     (a) any action which would require an adjustment pursuant to Section 10.1 or 10.4; or

     (b) a dissolution, liquidation, or winding up of the Company (other than in connection with a
consolidation, merger, or sale of its property, assets, and business as an entirety or
substantially as an entirety) shall be proposed:

then the Company shall give notice in writing of such event to the Warrant Holder, as provided in
Section 13 hereof, at least 20 days prior to the date fixed as a record date or the date of closing
the transfer books for the determination of the stockholders entitled to any relevant dividend,
distribution, subscription rights or other rights or for the determination of stockholders entitled
to vote on such proposed dissolution, liquidation, or winding up. Such notice shall specify such
record date or the date of closing the transfer books, as the case may be. Failure to mail or
receive notice or any defect therein shall not affect the validity of any action taken with respect
thereto.

     Section 15. Notices

     15.1 The Company. All notices, demands, claims, elections, opinions, requests or other
communications hereunder (however characterized or described) shall be in writing and shall be
deemed duly given or made if (and then two business days after) sent by registered or certified
mail, return receipt requested, postage prepaid and addressed to, in the case of the Company as
follows:

A Smart Move L.L.C.

5990 Greenwood Plaza Blvd #390

Greenwood Village, CO 80111

Attn: CEO

     15.2 The Warrant Holders. Any distribution, notice or demand required or authorized by this
Agreement to be given or made by the Company to or on the Warrant Holders shall be sufficiently
given or made if sent by mail, first class, certified or registered, postage prepaid, addressed to
the Warrant Holders at their last known addresses as they shall appear on the registration books
for the Warrant Certificates maintained by the Company.

-10-

 

     15.3 Effectiveness of Notice. The Company may send any notice, demand, claim, election,
opinion, request or communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice, demand, claim, election,
opinion, request or other communication shall be deemed to have been duly given or made unless and
until it actually is received by the intended recipient. The Company may change the address to
which notices, demands, claims, elections, opinions, requests and other communications hereunder
are to be delivered by giving the Warrant Holders notice in the manner herein set forth.

     Section 16. Arbitration

     The Company and the Holder, and by receipt of a Warrant Certificate or any Warrant Shares, all
subsequent Holders or holders of Warrant Shares, agree to submit all controversies, claims,
disputes and matters of difference with respect to this Agreement and the Warrant Certificates,
including, without limitation, the application of this Section, to arbitration in Denver, Colorado,
according to the rules and practices of the American Arbitration Association from time to time in
force; provided, however, that if such rules and practices conflict with the applicable procedures
of Colorado courts of general jurisdiction or any other provisions of Colorado law then in force,
those Colorado rules and provisions shall govern. This agreement to arbitrate shall be
specifically enforceable. Arbitration may proceed in the absence of any party if notice of the
proceeding has been given to that party. The parties agree to abide by all awards rendered in any
such proceeding. These awards shall be final and binding on all parties to the extent and in the
manner provided by the rules of civil procedure enacted in Colorado. All awards may be filed, as a
basis of judgment and of the issuance of execution for its collection, with the clerk of one or
more courts, state or federal, having jurisdiction over either the party against whom that award is
rendered or its property. No party shall be considered in default hereunder during the pendency of
arbitration proceedings relating to that default.

     Section 17. Miscellaneous Provisions

     17.1 Persons Benefiting. This Agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns and the Warrant Holders. By
acceptance of a Warrant Certificate, the Holder accepts and agrees to comply with all of the terms
and provisions hereof. Nothing in this Agreement is intended or shall be construed to confer on
any other person any right, remedy or claim or to impose on any other person any duty, liability or
obligation.

     17.2 Severability. If any term contained herein shall be held, declared or pronounced void,
voidable, invalid, unenforceable or inoperative for any reason by any court of competent
jurisdiction, government authority or otherwise, such holding, declaration or pronouncement shall
not affect adversely any other term, which shall otherwise remain in full force and effect, and the
effect of such holding, declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.

     17.3 Termination. This Agreement shall terminate as of the close of business on the
Expiration Date, or such earlier date upon which all Warrants shall have been exercised or
redeemed; except that the exercise of a Warrant in full or the Expiration Date shall not terminate
the provisions of this Agreement as it relates to holders of Warrant Shares.

     17.4 Governing Law. These terms and each Warrant Certificate issued hereunder shall be deemed
to be a contract under the laws of the State of Colorado and for all purposes shall be construed in
accordance with the laws of said state without giving effect to conflicts of laws provisions of
such state.

     17.5 Agreement Available to Warrant Holders. A copy of these terms shall be available at all
reasonable times at the office of the Warrant Agent for inspection by any Warrant Holder. As a
condition

-11-

 

of such inspection, the Company may require any Warrant Holder to submit a Warrant
Certificate held of record for inspection.

     17.6 Counterparts. This Agreement may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed to be an original and all such counterparts shall
together constitute but one and the same instrument.

     17.7 Failure to Perform. If the Company fails to perform any of its obligations hereunder, it
shall be liable to the Warrant Holder for all damages, costs and expenses resulting from the
failure, including, but not limited to, all reasonable attorney’s fees and disbursements.

     17.8 Paragraph Headings. Paragraph headings used in this Warrant are for convenience only and
shall not be taken or construed to define or limit any of the terms or provisions of this Warrant.
Unless otherwise provided, or unless the context shall otherwise require, the use of the singular
shall include the plural and the use of any gender shall include all genders.

-12-

 

ATTACHMENT 1

[FORM OF WARRANT CERTIFICATE]

The Warrant and the underlying Shares represented by this Certificate have not been registered
under the Securities Act of 1933 (the “Act”), and are “restricted securities” as that term is
defined in Rule144 under the Act. The securities may not be offered for sale, sold or otherwise
transferred except pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act, the availability of which is to be established to the
satisfaction of the Company. Additionally, Warrants are only exercisable when such exercise, and
the issuance of the underlying Shares, can be affected in compliance with applicable state Blue Sky
laws. The Warrants are subject to redemption and may not be exercised after the redemption date

2006-                    

WARRANT CERTIFICATE

A SMART MOVE L.L.C.

                    Warrants

     This Warrant Certificate certifies that                                          or registered assigns (the “Warrant Holder”), is the
registered owner of the above-indicated number of Warrants (“Warrants”) expiring at 5:00 p.m.,
Denver, Colorado, local time, on June ___, 2011 (the “Expiration Date”). Each Warrant entitles
the Warrant Holder to purchase from A Smart Move L.L.C. (the “Company”), a Colorado limited
liability company, at any time commencing on the date it is issued but before the Expiration Date,
one fully paid and non-assessable share of Shares of the Company at a purchase price of $10.00 per
Share (the “Exercise Price”) upon surrender of this Warrant Certificate, with the exercise form
hereon duly completed and executed, with payment of the Exercise Price, at the principal office of
the Company, but only subject to the conditions set forth herein and in the Terms of Warrants
(“Warrant Terms”). The Exercise Price, the number of Shares purchasable upon exercise of each
Warrant, the number of Warrants outstanding and the Expiration Date are subject to adjustments upon
the occurrence of certain events set forth in the Warrant Terms. Reference is hereby made to the
other provisions of this Warrant Certificate and the provisions of the Warrant Terms, all of which
are hereby incorporated by reference herein and made a part of this Warrant Certificate and which
shall for all purposes have the same effect as though fully set forth at this place.

     Upon due presentment for registration of transfer of this Warrant Certificate at the office of
the Company a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants, subject to any adjustments made in accordance with the Warrant
Terms, shall be issued to the transferee in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Terms.

     The Warrant Holder evidenced by this Warrant Certificate may exercise or convert all or any
whole number of such Warrants in the manner stated hereon and in the Warrant Terms. The Exercise
Price shall be payable in lawful money of the United States of America in cash or by certified or
cashier’s check or bank draft payable to the order of the Company. Upon any exercise or conversion
of any Warrants evidenced by this Warrant Certificate in an amount less than the number

 

 

of Warrants
so evidenced, there shall be issued to the Warrant Holder a new Warrant Certificate evidencing the
number of Warrants not so exercised or converted. No adjustment shall be made for any dividends on
any shares issued upon exercise or conversion of this Warrant.

     No Warrant may be exercised or converted after 5:00 p.m., Colorado time, on the Expiration
Date, and any Warrant not exercised or converted by such time shall become void.

     COPIES OF THE WARRANT TERMS, WHICH DEFINES THE RIGHTS, RESPONSIBILITIES AND OBLIGATIONS OF THE
COMPANY AND THE WARRANT HOLDERS, ARE ON FILE WITH THE COMPANY. ANY WARRANT HOLDER MAY OBTAIN A
COPY OF THE WARRANT TERMS, FREE OF CHARGE, BY A REQUEST TO THE PRINCIPAL OFFICE OF THE WARRANT
AGENT.

     This Warrant Certificate, when surrendered to the Company, in person or by attorney duly
authorized in writing, may be exchanged, in the manner and subject to the limitations provided in
the Warrant Terms, without payment of a charge, except for any tax or other governmental charge
imposed in connection with such exchange, for another Warrant Certificate or Warrant Certificates
of like tenor and evidencing a like number of Warrants, subject to any adjustment made in
accordance with the Warrant Terms.

     The Company may deem and treat the registered holder hereof as the absolute owner of this
Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by
anyone) for all purposes and the Company shall not be affected by any notice to the contrary. No
Warrant Holder, as such, shall have the rights of a stockholder of the Company, either at law or in
equity, and the rights of the Warrant Holder, as such, are limited to those rights expressly
provided in the Warrant Terms and in the Warrant Certificates.

     The Company shall not be required to issue fractions of Warrants upon any such adjustment or
to issue fractions of shares upon the exercise of any Warrants after any such adjustment, but the
Company, in lieu of issuing any such fractional interest, shall pay an amount in cash equal to such
fraction times the current market value of one Warrant or one share, as the case may be, determined
in accordance with the Warrant Terms.

     Unless the amendment is able to be effected by the Company in accordance with the Warrant
Terms, the Warrant Terms are subject to amendment only upon the approval of holders of not less
than a majority of the outstanding Warrants, except that no such amendment shall accelerate the
Expiration Date or increase the Exercise Price without the approval of all the holders of all
outstanding Warrants.

     IMPORTANT: The Warrants represented by this Certificate may not be exercised or
converted by a Warrant Holder unless at the time of exercise or conversion the underlying Shares
are qualified for sale, by registration or otherwise, in the state where the Warrant Holder resides
or unless the issuance of the Shares would be exempt under the applicable state securities laws.
Further, a registration statement under the Securities Act of 1933, as amended, covering the
exercise or conversion of the Warrants must be in effect and current at the time of exercise or
conversion unless the issuance of Shares upon any exercise or conversion is exempt from the
registration requirements of the Securities Act of 1933, as amended. Notwithstanding the
provisions hereof, unless such registration statement and qualification are in effect and current
at the time of exercise or conversion, or unless exemptions are available, the Company may decline
to permit the exercise or conversion of the Warrants and the holder hereof would then only have the
choice of either attempting to sell the Warrants, if a market existed therefor, or letting the
Warrants expire.

     IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be signed by its
President and by its Secretary, each by a facsimile of said officers’ signatures, and has caused a
facsimile of its corporate seal to be imprinted hereon.

-2-

 

	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	A SMART MOVE L.L.C.	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	a Colorado limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	          Secretary
	 	 	 	          CEO	 	 

-3-

 

ASSIGNMENT

(Form of Assignment to be Executed if the Warrant Holder

Desires to Transfer Warrants Evidenced Hereby)

     FOR VALUE RECEIVED,                                                              hereby sells, assigns
 and transfers to
                                                                            
                                                                     
                                                                     
     .

(Please print name and address including zip code)

	 	 	 	 	 
	 

	 	Please insert social security, federal

tax ID number or other identifying number:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 

                                                             Warrants represented by this Warrant Certificate
and does hereby irrevocably constitute and
appoint                                         , Attorney, to transfer said Warrants on the books of the Company with full power
of substitution.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	          Signature
	 	 
	 

	 	 	 	(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant Certificate.)	 	 

			
	Note:	 	Any transfer or assignment of this Warrant Certificate is subject to compliance with
the restrictions on transfer imposed under the Warrant Terms.

-4-

 

EXERCISE

(Form of Exercise to be Executed if the Warrant Holder

Desires to Exercise Warrants Evidenced Hereby)

TO THE COMPANY:

     The undersigned hereby irrevocably elects to exercise                      Warrants represented by this Warrant
Certificate and to purchase thereunder the full number of Shares issuable upon exercise of said
Warrants and enclose $      as the purchase price therefor, and requests that
certificates for such shares shall be issued in the name of, and cash for any fractional shares
shall be paid to,

	 	 	 	 	 
	 

	 	Please insert Social Security Number or other

identifying number:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 

 

(Please print name and address, including zip code)

and, if said number of Warrants shall not be all the Warrants evidenced by this Warrant
Certificate, that a new Warrant Certificate for the unexercised number of Warrants may be assigned
under the form of Assignment appearing hereon.

	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	Signature:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant Certificate)
	 	 

-5-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]