Document:

ex-10_21.htm

Ohr Pharmaceutical, Inc. 10-Q

 

Exhibit 10.21

 

OHR PHARMACEUTICAL, INC.

 

COMMON STOCK PURCHASE WARRANT

 

 

	Warrant No. [     ]	 [          ] Warrants

 

VOID AFTER 5:00 P.M. NEW YORK CITY TIME

ON [         ]

 

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

 

Ohr Pharmaceutical, Inc., a Delaware corporation (the “Company”), having its principal office as of the date hereof at 489 5th Avenue, 28th Floor, New York, NY 10017, hereby certifies that, for value received, [              ], or registered assigns, is entitled, subject to the terms and conditions set forth below, to purchase from the Company at any time on or from time to time after the Commencement Date (as defined below), and before 5:00 P.M., New York City time, on [           ] (the “Expiration Date”), up to [              ] fully paid and non-assessable shares of Common Stock (as defined below), at the initial Purchase Price per share (as defined below) of [$    ].  The number of such shares of Common Stock and the Purchase Price per share are subject to adjustment as provided in Section 5.

Background.  The Company agreed to issue warrants to purchase an aggregate of up to [           ] shares of Common Stock (subject to adjustment as provided herein) (the “Warrants”), in partial consideration for services rendered in connection with general scientific consulting.

 

1. Definitions.

 

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 

“Aggregate Purchase Price” has the meaning set forth in Section 3.1.

 

“Blue Sky Laws” means any state securities or “blue sky” laws.

 

  

  

  

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

 

 “Company” includes the Company and any corporation which shall succeed to or assume the obligations of the Company hereunder. The term "corporation" shall include an association, joint stock company, business trust, limited liability company or other similar organization.

 

“Common Stock” means the Company’s Common Stock, $.0001 par value per share, authorized as of the date hereof, and any stock of any class or classes (however designated) hereafter authorized upon reclassification thereof, which, if the Board of Directors declares any dividends or distributions, has the right to participate in the distribution of earnings and assets of the Company after the payment of dividends or other distributions on any shares of capital stock of the Company entitled to a preference and in the voting for the election of directors of the Company.

 

“Delivery Date” has the meaning set forth in Section 4.

 

“Exchange Act” means the Securities Exchange Act of 1934 as the same shall be in effect at the time.

 

“Holder” means any record owner of Warrants or Underlying Securities.

 

“Market Price” means, for one share of Common Stock at any date (i) if the principal trading market for the Common Stock is an exchange, the average of the closing sale prices per Share for the last twenty (20) previous trading days in which a sale was reported, as officially reported on any consolidated tape, (ii) if the principal market for such securities is the over-the-counter market, the average of the closing sale prices per Share on the last twenty (20)  previous trading days in which a sale was reported as set forth by Nasdaq or, (iii) if the security is not listed on an exchange or Nasdaq, the average of the closing sale prices per share on the last twenty (20) previous trading days in which a sale was reported as set forth in the National Quotation Bureau sheet listing such securities for such days.  Notwithstanding the foregoing, if there is no reported closing sale price, as the case may be, reported on any of the twenty (20)  trading days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be the average of the high bid and asked prices for the last ten previous trading days in which a sale was reported; and if there is no reported high bid and asked prices, as the case may be, reported on any of the ten trading days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be determined in good faith by resolution of the Board of Directors.  The Market Price of Other Securities, if any, shall be determined in the same manner as Common Stock.

 

“Nasdaq” means the Nasdaq Global Market or Nasdaq Capital Market.

 

“Notice” has the meaning set forth in Section 21.

 

  

  

  

 

“Original Issue Date” means [            ].

 

“Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other Person (corporate or otherwise) which the Holders of the Warrants at any time shall be entitled to receive, or shall have received, upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 5 or 6.

 

"Permitted Transfer" means a transfer by a Holder (i) by gift to his or her spouse or to the siblings, lineal descendants, or parents of such Holder or of his or her spouse or to any entity of which such Person or Persons are the sole beneficiaries; (ii) in the case of any Holder that is a trust, to a successor trustee or trustees of any trust established for one or more of the persons specified in clause (i) above; and (iii) upon the death of a Holder who is a natural person, to such Holder's heirs, executors, administrators, testamentary trustees, legatees or beneficiaries

 

“Person” means any individual, sole proprietorship, partnership, corporation, limited liability company, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity, any university or similar institution, or any government or any agency or instrumentality or political subdivision thereof.

 

“Purchase Price per share” means [$    ] per share, as may be adjusted from time to time in accordance with Section 5 or 6.

 

“Registered” and “Registration” refer to a registration effected by filing a registration statement in compliance with the Securities Act, to permit the disposition of Underlying Securities issued or issuable upon the exercise of Warrants, and any post-effective amendments and supplements filed or required to be filed to permit any such disposition.

 

“Securities Act” means the Securities Act of 1933 as the same shall be in effect at the time.

 

“Underlying Securities” means any Common Stock or Other Securities issued or issuable upon exercise of Warrants.

 

“Warrant” means, as applicable, (i) the Warrants dated as of the date hereof, originally issued by the Company to [            ] of which this Warrant is one, evidencing rights to purchase up to a maximum of [            ] shares of Common Stock, and all Warrants issued upon transfer, division or combination of, or in substitution for, any thereof (all Warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Common Stock for which they may be exercised) or (ii) each right as set forth in this Warrant to purchase one share of Common Stock, as adjusted from time to time in accordance with Section 5 or 6.

 

2. Sale or Exercise Without Registration.  If, at the time of any exercise, transfer or surrender for exchange of a Warrant or of Underlying Securities previously issued upon the exercise of Warrants, such Warrant or Underlying Securities shall not be registered under the Securities Act, the Company may require, as a condition of allowing such exercise, transfer or exchange, that the Holder or transferee of such Warrant or Underlying Securities, as the case may be, furnish to the Company an opinion of counsel, reasonably satisfactory to the Company, to the effect that such exercise, transfer or exchange may be made without registration under the Securities Act and without registration or qualification under any applicable Blue Sky Laws.

 

  

  

  

 

3. Exercise of Warrant.

 

3.1. Exercise in Full.  Subject to the provisions hereof, this Warrant may be exercised by the Holder hereof by surrender of this Warrant, with the form of subscription at the end hereof duly executed by such Holder, to the Company at its principal office as set forth at the head of this Warrant (or such other location as the Company from time to time may advise the Holder in writing), accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, in the amount obtained (the “Aggregate Purchase Price”) by multiplying (a) the number of shares of Common Stock then  issuable upon exercise of this Warrant by (b) the Purchase Price per share on the date of such exercise.

 

3.2. Partial Exercise.  Subject to the provisions hereof, this Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in Section 3.1 except that the amount payable by the Holder upon any partial exercise shall be the amount obtained by multiplying (a) the number of shares of Common Stock designated by the Holder in the subscription at the end hereof by (b) the Purchase Price per share on the date of such exercise.  Upon any such partial exercise, the Company at its expense shall forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant or Warrants of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes and subject to the provisions of Section 2) may request, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock equal to the number of such shares issuable prior to such partial exercise of this Warrant minus the number of such shares designated by the Holder in the subscription at the end hereof.

 

3.3. Company to Reaffirm Obligations.  The Company shall, at the time of any exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights (including, without limitation, any right to registration of the Underlying Securities, if any) to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant; provided, however, that if the Holder of this Warrant shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford such Holder any such rights.

 

3.4. Certain Exercises.  If an exercise of this Warrant is to be made in connection with a registered public offering or sale of the Company, such exercise may, at the election of the Holder, be conditioned on the consummation of the public offering or sale of the Company, in which case such exercise shall not be deemed effective until the consummation of such transaction.

 

  

  

  

 

4. Delivery of Stock Certificates, etc., on Exercise; Buy-In.

 

4.1. Delivery of Certificates.  As soon as practicable after the exercise of this Warrant in full or in part, and in any event within ten Business Days thereafter (the “Delivery Day”), the Company at its own expense (including the payment by it of any applicable issue taxes) shall cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes and subject to the provisions of Section 2) may direct, a certificate or certificates for the number of fully paid and non-assessable shares of Common Stock or Other Securities to which such Holder shall be entitled upon such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then current Market Price of one full share.

 

4.2. Issuance of Certificates.  If the Company fails to deliver to the Holder a certificate or certificates representing the Underlying Securities by the third (3rd) trading day following the Delivery Date (or such longer or shorter time is then required by the SEC regulations on the settlement of trades), then the Holder will have the right to rescind such exercise. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance or injunctive relief with respect to the Company's failure to timely deliver certificates representing Underlying Securities upon exercise of the Warrant as required pursuant to the terms hereof.

 

5. Adjustment for Stock Splits; Dividends.  The number and kind of securities purchasable upon the exercise of this Warrant and the Purchase Price shall be subject to adjustment from time to time upon the happening of any of the following.  In case the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Underlying Securities purchasable upon exercise of this Warrant immediately prior thereto shall be adjusted so that the Holder shall be entitled to receive the kind and number of Underlying Securities or other securities of the Company which it would have owned or have been entitled to receive had such Warrant been exercised in advance thereof Upon each such adjustment of the kind and number of Underlying Securities or other securities of the Company which are purchasable hereunder, the Holder shall thereafter be entitled to purchase the number of Underlying Securities or other securities resulting from such adjustment at a Purchase Price per share or other security obtained by multiplying the Purchase Price per share in effect immediately prior to such adjustment by the number of Underlying Securities purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Underlying Securities or other securities of the Company resulting from such adjustment.  An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.

 

  

  

  

 

6. Reorganization, Consolidation, Merger, etc.  In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation (“Other Property”), are to be received by or distributed to the holders of Common Stock of the Company, then the Holder shall have the right thereafter to receive upon exercise of this Warrant, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event.  In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to provide for adjustments of Underlying Securities for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 6.  For purposes of this Section 6, “common stock of the successor or acquiring corporation” shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock.  The foregoing provisions of this Section 6 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets.

 

7. Further Assurances; Reports.  The Company shall take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Underlying Securities upon the exercise of all Warrants from time to time outstanding.  For so long as the Holder holds this Warrant, the Company shall deliver to the Holder contemporaneously with delivery to the holders of Common Stock, a copy of each report of the Company delivered to such holders.

 

8. Certificate as to Adjustments.  In each case of any adjustment or readjustment in the Underlying Securities, the Company shall, at its expense, promptly cause its Chief Financial Officer to compute such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, and the number of shares of Common Stock or Other Securities outstanding or deemed to be outstanding.  The Company shall forthwith mail a copy of each such certificate to the Holder.

 

9. Notices of Record Date, etc.  In the event of

 

  

  

  

 

(a) any taking by the Company of a record of its stockholders for the purpose of determining the stockholders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or for the purpose of determining stockholders who are entitled to vote in connection with any proposed capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or consolidation or merger of the Company with or into any other Person, or

 

(b) any voluntary or involuntary dissolution, liquidation or winding-up of the Company,

 

then and in each such event the Company shall mail or cause to be mailed to each Holder of a Warrant a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right and (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any, as of which the Holders of record of Underlying Securities shall be entitled to exchange their shares of Underlying Securities for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up.  Such notice shall be mailed at least 20 days prior to the date therein specified.

 

10. Reservation of Stock, etc., Issuable on Exercise of Warrants.  The Company shall at all times on and after the filing of the Restated Certificate reserve and keep available, solely for issuance and delivery upon the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable upon the exercise of the Warrants.

 

11. Listing on Securities Exchanges; Registration; Issuance of Certain Securities. In furtherance and not in limitation of any other provision of this Warrant, if the Company at any time shall list any Common Stock (or Other Securities) on any national securities exchange or Nasdaq, the Company shall, at its expense, simultaneously list the Underlying Securities from time to time issuable upon the exercise of the Warrants on such exchange or Nasdaq, upon official notice of issuance.

 

12. Exchange of Warrants.  Subject to the provisions of Section 2, upon surrender for exchange of this Warrant, properly endorsed, to the Company, as soon as practicable (and in any event within three Business Days) the Company at its own expense shall issue and deliver to or upon the order of the Holder thereof a new Warrant or Warrants of like tenor, in the name of such Holder or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face of this Warrant so surrendered.

 

  

  

  

 

13. Replacement of Warrants.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

14. Warrant Agent.  The Company may, by written notice to each Holder of a Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) upon the exercise of the Warrants pursuant to Section 3, exchanging Warrants pursuant to Section 13, and replacing Warrants pursuant to Section 14, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

 

15. Remedies.  The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant may not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction that may be sought against a violation of any of the terms hereof or otherwise.

 

16. No Rights as Stockholder.  This Warrant does not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof.

 

17. Negotiability, etc.  Subject to Section 2 above, this Warrant is issued upon the following terms, to all of which each Holder or owner hereof by the taking hereof consents and agrees:

 

(a)   subject to the provisions hereof, title to this Warrant may be transferred by endorsement (by the Holder hereof executing the form of assignment at the end hereof) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery;

 

(b) subject to the foregoing, any person in possession of this Warrant properly endorsed is authorized to represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof for value; each prior taker or owner waives and renounces all of his equities or rights in this Warrant in favor of each such bona fide purchaser and each such bona fide purchaser shall acquire absolute title hereto and to all rights represented hereby; and

 

(c)   until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

  

  

  

 

18. Entire Agreement; Successors and Assigns.  This Warrant constitutes the entire contract between the parties relative to the subject matter hereof.  This Warrant supersedes any previous agreement among the parties with respect to the subject matter hereof.  The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the respective permitted executors, administrators, heirs, successors and assigns of the parties.  Nothing in this Warrant, expressed or implied, is intended to confer upon any party, other than the Holder and the Company, any rights, remedies, obligations or liabilities under or by reason of this Warrant.

 

19. Governing Law; Jurisdiction.  This Warrant shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law.  Each of the Holder and the Company hereby irrevocably consents and submits to the jurisdiction of any New York State or United States Federal Court sitting in the State of New York, County of New York, over any action or proceeding arising out of or relating to this Warrant and irrevocably consents to the service of any and all process in any such action or proceeding in the manner for the giving of notices at its address specified in Section 22.  Each of the Holder and the Company further waives any objection to venue in the State of New York, County of New York and any objection to an action or proceeding in such state and county on the basis of forum non conveniens.  Each of the Holder and the Company also waives any right to trial by jury.

 

20. Headings.  The headings of the sections of this Warrant are for convenience and shall not by themselves determine the interpretation of this Warrant.

 

21. Notices.  Any notice or other communication required or permitted to be given hereunder (each a “Notice”) shall be given in writing and shall be made by personal delivery or sent by courier or certified or registered first-class mail (postage pre-paid), addressed to a party at its address shown below or at such other address as such party may designate by three days’ advance Notice to the other party.

 

Any Notice to the Holder shall be sent to the address for such Holder set forth on books and records of the Company.Any Notice to the Company shall be sent to the address set forth above.  Each Notice shall be deemed given and effective upon receipt (or refusal of receipt).

 

22. Severability.  Whenever possible, each provision of this Warrant shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be deemed prohibited or invalid under such applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, and such prohibition or invalidity shall not invalidate the remainder of such provision or any other provision of this Warrant.

 

23. Amendments and Waivers.  Any provision of this Warrant may be amended and the observance of any provision of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of a majority of the Warrants then outstanding.  Any amendment or waiver effected in accordance with this Section 23 shall be binding upon each Holder of a Warrant.

 

  

  

  

 

24. Construction.  Words (including capitalized terms defined herein) in the singular shall be held to include the plural and vice versa as the context requires.  The words “herein”, “hereinafter”, “hereunder” and words of similar import used in this Warrant shall, unless otherwise stated, refer to this Warrant as a whole and not to any particular provision of this Warrant.  All references to “$” in this Warrant and the other agreements contemplated hereby shall refer to United States dollars (unless otherwise specified expressly).  Any reference to any gender includes the other genders.

 

 

	Dated:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	

OHR PHARMACEUTICAL, INC.

	 
	 	 	 	 	 	 	 
	 	 	 	By:	 	 
	 	 	 	Name:	 	 
	 	 	 	Title:	 	 
	Attest:	 	 	 	 	 	 

 

  

  

  

 

FORM OF SUBSCRIPTION

 

(To be signed only upon exercise of Warrant)

 

To:  OHR PHARMACEUTICAL, INC.

 

 

The undersigned, the Holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder,     *    shares of Common Stock of Ohr Pharmaceutical, Inc., and herewith makes payment of $__________ or, subject to satisfaction of the conditions set forth in Section 3.5 of the Warrant, [by initial here _____] Holder elects to exercise under the Net Issue Exercise provisions of the Warrant, and requests that the certificates for such shares be issued in the name of, and delivered to, ___________________, whose address is _______________________.

 

The undersigned represents that the undersigned is acquiring such securities for its own account for investment and not with a view to or for sale in connection with any distribution thereof (except for any resale pursuant to, and in accordance with a valid registration statement effective under the Securities Act of 1933).

 

Dated:

 

	 	 	 
	 	

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

	 
	 	 	 
	 	 	 
	 	

(Address)

	 

 

*  Insert here the number of shares called for on the face of the Warrant (or, in the case of a partial exercise, the portion thereof as to which the Warrant is being exercised).

 

  

  

  

 

FORM OF ASSIGNMENT

 

(To be signed by the Holder only upon transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns and transfers unto _________________________ the right represented by the within Warrant to purchase _________ shares of Common Stock of Ohr Pharmaceutical, Inc. to which the within Warrant relates, and hereby does irrevocably constitute and appoint ______________________________ Attorney to transfer such right on the books of Ohr Pharmaceutical, Inc. with full power of substitution in the premises.  The Warrant being transferred hereby is one of the Warrants issued by Ohr Pharmaceutical, Inc. as of [            ].

 

 

	Dated:	 	 	 	 
	 	 	 	 	 
	 	 	 	

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

	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	

(Address)

	 

_______________________________

Medallion signature guaranteed by a bank

or trust company having its

principal office in New York City

or by a Member Firm of the New

York Stock Exchange

or American Stock Exchangeex-10_1.htm

Bonds.com 8-K

Exhibit 10.1

 

MARKETING AGREEMENT

 

This  Marketing  Agreement (this “Agreement”), is dated as of the August 11, 2011 by and between Red Kite Americas LLC (“RKA”) having its principal place of business at 415 Madison Avenue, Suite 2100, 14th Floor, New York, NY 10017 and Bonds.com, Inc. (“Bonds.com”), having its principal place of business at 529 Fifth Avenue, 8th Floor, New York, New York 10017.  Capitalized terms used in this Agreement and not otherwise defined, shall have the meanings given such terms in Section 11.1 of this Agreement.

 

WITNESSETH

 

WHEREAS, RKA, together with its Affiliates, markets third party financial software and trading technology products into the Latin American region.

 

WHEREAS, Bonds.com operates a proprietary electronic trading platform (the “Bonds.com Trading System”) for corporate bonds and certain other types of fixed income securities.

 

WHEREAS, Bonds.com desires to engage RKA through Archers Capital Participacoes e Investimentos S.A. on an exclusive basis to market the Bonds.com Trading System in Latin America to institutional investors that wish to use the Bonds.com Trading System to trade emerging markets bonds and other fixed income instruments, and RKA wishes to provide such marketing services to Bonds.com, all on the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, RKA and Bonds.com, intending to be legally bound, hereby agree as follows:

 

Section 1 – License; Ownership of System

 

	 	
1.1  

	
Grant of License.  Bonds.com hereby grants to RKA a limited, non-transferable exclusive license to market and promote the Bonds.com Trading System and the Bonds.com Materials to qualified institutional investors whose principal places of business are located in Brazil, Mexico or Colombia (the “Clients”), for the purpose of introducing such Clients to access and transact through the Bonds.com Trading System and the Bonds.com Materials (the “License”).  RKA shall have the right to perform its obligations through any subsidiary, affiliate or associated company. Including without limitation Archers Capital Participacoes e Investimentos S.A., Archers Asset Management S.A., and Archers Holdings Limitada. RKA acknowledges that it will be liable for any breaches caused by their affiliates

 

  

  

  

 

1.2           Ownership of System.  As between RKA and Bonds.com, Bonds.com shall retain all right, title and interest, including all intellectual property rights, in and to the Bonds.com Trading System and the Bonds.com Materials, and all improvements, enhancements and derivative works of the foregoing, by whomever and whenever made. RKA shall not modify, adapt copy, translate, distribute, reverse engineer, decompile, enhance, disassemble, or make any derivative works of the Bonds.com Trading System or any of the Bonds.com Materials.

 

1.3           System Modifications, etc.  Bonds.com has the right, in its discretion and without the consent of or any liability to RKA or any other Person, to modify the Bonds.com Trading System, including the format of any data communicated through the Bonds.com Trading System at any time and from time to time.  Bonds.com will use reasonable efforts to provide RKA with prior notice of any material modification it makes to the Bonds.com Trading System.  Bonds.com may at any time without prior notice correct errors, make emergency repairs, upgrade security, and conform the Bonds.com Trading System to regulatory changes or requirements.

 

Section 2 – Marketing and Promotion

 

2.1           RKA’s Obligations.  RKA (a) shall use its best efforts to market and promote the Bonds.com Trading System within Latin America to the Clients whose principal places of business are located in Brazil, Mexico or Colombia (the “Territory”); and (b) shall not market, promote or distribute the Bonds.com Trading System to any Person other than entities meeting the definition of a broker-dealer or institutional investor under the Laws of the applicable regional jurisdictions.  RKA shall provide Bonds.com with the name(s) and contact information for any Clients referred to Bonds.com.

 

2.2           Marketing Materials.  RKA shall develop such marketing, promotional, advertising materials and related materials (“Promotional Materials”) as RKA deems appropriate in connection with the performance of its obligations hereunder; provided, however, that RKA shall not distribute or otherwise use any such Promotional Materials, or use Bonds.com’s name without Bonds.com express prior written approval.  Notwithstanding any other provision of this Agreement to the contrary, an approval e-mailed by an executive officer of Bonds.com to RKA shall be an acceptable form of written communication for the purposes of this Section 2.2.

 

	 	
2.3  

	
Use of Trade Marks.  Subject to Section 2.4 hereof, each party grants the other a non-exclusive, royalty-free license, during the term of this Agreement, to use its name and/or the Trade Marks to identify Bonds.com as the operator of the Bonds.com Trading System and/or RKA as a licensed distribution partner of the Bonds.com Trading System in the Territory in any announcement, advertisement, publication or similar promotional material relating directly or indirectly to the Bonds.com Trading System and/or the services provided by RKA in the Territory. Each party will comply with the standard guidelines for the use of the other party’s name and/or Trade Marks as notified to it from time to time.

 

  

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2.4  

	
Activity Monitor. Bonds will provide RKA management with a real time activity monitor containing information regarding all inquiry and trading activity of all RKA clients..

 

2.5           Approvals.  Any use by one party of the other party’s name and/or Trade Marks under this Agreement must be approved in advance by the other party, such approval not to be unreasonably withheld, within ten (10) days of receipt of any such request.  If no objections are received within such 10-day period, the materials will be deemed approved.  In addition, marketing material that is substantially similar to material previously approved need not be resubmitted for approval.

 

2.6           Goodwill.  All goodwill arising from the marketing and distribution of the Bonds.com Trading System, including, without limitation, all goodwill arising from the use of Bonds.com Trade Marks in connection with the Bonds.com Trading System, shall enure to the benefit of Bonds.com.

 

2.7           Client Documentation, etc.  RKA acknowledges and agrees that each Client that desires to transact on the Bonds.com Trading System will be required to comply with Bonds.com’s established account opening documentation and related client acquisition policies and procedures without limitation. RKA further acknowledges that Bonds.com has the sole right to determine the qualification of each Client that desires to transact on the Bonds.com Trading System and to accept, reject or terminate a Client in its sole discretion.

 

Section 3 – Exclusivity

 

3.1           By RKA.  During the term of this Agreement, RKA will not, either directly or through an arrangement with any other Person, offer or provide to any Person any corporate fixed income trading application. RKA may collaborate with a competitor of Bonds.com in Latin America upon notice to Bonds.com if RKA determines in its sole discretion that Bonds.com has not made substantial reasonable progress building, marketing and branding an emerging markets fixed income product after one year.

 

3.2           By Bonds.com.  During the term of this Agreement, Bonds.com will not either directly or through an arrangement with any other person, offer to provide or collaborate with any competitor of RKA in Brazil, Mexico and Colombia for the purposes of trading fixed income securities, provided however, that this obligation shall not apply in the event of a Bonds.com exclusivity termination, a RKA exclusivity termination or if RKA engages in any competing collaboration.

 

Section 4 – Fees, Equity and Expenses

 

  

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4.1           Occasion Fees.

 

(a)           During the Term of this Agreement, Bonds.com shall pay RKA a flat fee in the amount of one hundred seventy-five dollars ($175.00) (“Occasion Fees”), subject to adjustment as provided in subsection (b) below, for each transaction in fixed income instruments executed through the Bonds.com Trading System by Clients that were referred by RKA to Bonds.com and that have been approved by Bonds.com and have delivered to Bonds.com executed user agreement, in form and substance acceptable to Bonds.com in its sole discretion (each a “Referred Client”).  Referred Clients shall not include any Persons that were existing customers of Bonds.com or a subsidiary or Affiliate of an existing customer of Bonds.com at the time of such referral by RKA.

 

(b)           During the first ninety (90) days of the Term of this Agreement (the “Adjustment Period”), either party may request a review of the Occasion Fee by notice in writing to the other party.  The parties hereto agree that upon receipt of such notice, the parties shall review the Occasion Fee in order to come to a mutual understanding for a fair and equitable Occasion Fee.  In the event that the parties agree to an Occasion Fee that is different from that stated above, the parties agree to execute an amendment to this Agreement with such revised Occasion Fee.  If no party has sent a notice contemplated by this subsection by the end of the Adjustment Period, then the Occasion Fee stated above shall remain in effect.

 

4.2           Delivery of Occasion Fees.     Within ten (10) days following the end of each calendar month during the term of this Agreement, Bonds.com shall submit to RKA a detailed written report of the Occasion Fees payable to RKA for the month   then ended (the “Report”).  Within ten (20) days after delivery of the Report, Bonds.com shall pay to RKA the Occasion Fees listed in the Report.

 

4.3           Initial Equity Grant. As an inducement to RKA entering into this agreement, Bonds.com Group, Inc. (“BDCG”) shall issue RKA a warrant exercisable to purchase 2,857,143 shares of BDCG Common Stock at an exercise price of $.07 per share, such warrant to be in the form of Exhibit A hereto.

 

4.4           Additional Options & Warrants.     During the Term of this Agreement, Bonds.com, BDCG shall, on a quarterly basis, grant RKA additional warrants upon reaching thresholds based on emerging markets performance metrics outlined in Schedule A of this agreement.

 

4.5           Expenses.     Unless otherwise explicitly set forth herein, each party shall be responsible for its own costs and expenses in performing its obligations hereunder.

 

Section 5 – Limitation of Liability

 

  

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5.1           No Consequential Damages.  WITH THE EXCEPTION OF A PARTY'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 7 OF THIS AGREEMENT, OR LIABILITY ARISING OUT OF OR RELATED TO A PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 8, NO PARTY SHALL BE LIABLE TO THE OTHER PARTY, OR TO ANY OTHER PERSON, FOR ANY CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF GOODWILL AND LOST PROFITS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR CLAIM AND REGARDLESS OF WHETHER SUCH DAMAGES COULD HAVE BEEN FORESEEN OR PREVENTED.  THE FOREGOING SHALL NOT LIMIT THE LIABILITY OF ANY PARTY FOR ITS FRAUD OR WILFULL MISCONDUCT.

 

5.2           Force Majeure.  Neither RKA nor Bonds.com will be liable for any failure to perform any obligation (other than payment obligations) hereunder, or for any delay in the performance thereof, due to causes beyond its control, including industrial disputes of any nature, acts of God, acts of a public enemy, acts of government, failure of telecommunications, sabotage, pestilence, terrorism, lightning or electromagnetic disturbances, earthquake, flood, fire or other casualty.

 

5.3           DISCLAIMER.  OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 6 OF THIS AGREEMENT, NO PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER PARTY HERETO OR TO ANY OTHER PERSON WITH RESPECT TO THE BONDS.COM TRADING SYSTEM OR ANY OTHER SUBJECT MATTER OF THIS AGREEMENT. WITHOUT LIMITING THE FOREGOING, EACH PARTY SPECIFICALLY DISCLAIMS ALL EXPRESS WARRANTIES NOT STATED HEREIN (INCLUDING ANY WARRANTIES OF NON-INFRINGEMENT NOT EXPRESSLY SET FORTH HEREIN) AND ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  NO AGENT OR EMPLOYEE OF A PARTY IS AUTHORIZED TO MAKE ANY EXPANSION, MODIFICATION OR ADDITION TO THIS LIMITATION AND EXCLUSION OF WARRANTIES IN THIS AGREEMENT, AND EACH PARTY HEREBY ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY WARRANTY, CONDITION, GUARANTY OR REPRESENTATION MADE BY THE OTHER EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT.

 

Section 6 -- Representations, Warranties and Covenants

 

  

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6.1           RKA represents and warrants to Bonds.com that: (a) RKA has all corporate power, authorizations, permits, consents and approvals required to carry on its business related to its distribution of the Bonds.com Trading System as provided herein, and to perform its obligations hereunder, and will comply with the foregoing throughout the term of this Agreement; and (b) the execution, delivery and performance by RKA of this Agreement do not and will not (i) violate the organizational documents of RKA, (ii) violate any applicable Laws, judgment, injunction, order or decree applicable to RKA or its distribution of the Bonds.com Trading System as provided herein, or (iii) require any notice, consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of RKA or to a loss of any benefit to which RKA is entitled under, any agreement or other instrument binding upon RKA or any license, franchise, permit or other similar authorization held by RKA. RKA further represents and warrants to Bonds.com that (c) it is acquiring the shares warrants reference herein and the underlying shares of BDCG common stock solely for the purpose of investment and not with a view to or for sale in connection with any distribution thereof, (d) it acknowledges that such warrants and share of Common Stock are being sold without registration or qualification under the Securities Act of 1933, as amended, or applicable State securities laws, rules, and regulations pursuant to exemptions there from,(e) understands and agrees that such warrants and shares of Common stock may not be sold, transferred offered for sale, pledged, hypothecated or otherwise disposed of without registration or qualification under such act and such applicable laws, rules, and regulations, except pursuant to an available exemption there under, and (f) it is the “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended.

 

6.2           Bonds.com hereby represents and warrants to RKA that: (a) Bonds.com has all corporate power, authorizations, permits, consents and approvals required to carry on its business relating to the operation of the Bonds.com Trading System, and to perform its obligations hereunder, and will comply with the foregoing throughout the term of this Agreement; and (b) the execution, delivery and performance by Bonds.com of this Agreement do not and will not (i) violate the organizational documents of Bonds.com, (ii) violate any applicable Laws, judgment, injunction, order or decree applicable to Bonds.com, or (iii) require any notice, consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of Bonds.com or to a loss of any benefit to which Bonds.com is entitled under, any agreement or other instrument binding upon Bonds.com or any license, franchise, permit or other similar authorization held by Bonds.com. BDCG hereby represents and warrants to RKA that: (a) BDCG has all the corporate power authorizations, permits, consents and approvals required to perform its obligations hereunder, and will comply with the foregoing throughout the term of this Agreement; and (b) the execution, delivery, and performance by BDCG of this Agreement do not and will not (i) violate the organizational documents of BDCG, (ii) violate any applicable laws, judgments, injunction, order of decree applicable to BDCG, or (iii) require any written notice , consent, or other action by any person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of BDCG or to a loss of any benefit to which BDCG is entitled under, any agreement or other instrument binding upon BDCG or any license, franchise, permit or other similar authorization held by BDCG.

 

  

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6.3           Cooperation.

 

	 	
a.  

	
Regulatory Matters.  In the event that a party reasonably determines that a Regulatory Issue has arisen relating to either the operation of the Bonds.com Trading System or such party’s ability to perform its obligations hereunder, the parties agree to take all actions necessary in order to ameliorate such Regulatory Issue, including, but not limited to, amending a party’s obligations under this Agreement, but in each case in a manner reasonably consistent with the purpose and intentions described in this Agreement.

 

	 	
b.  

	
Infringement Matters.  In the event of any claim or suit alleging that any part of the Bonds.com Trading System infringes upon any third party intellectual property right, the parties agree to cooperate and take all actions reasonably practicable in order to ameliorate such infringement, including, but not limited to (i) seeking to obtain the right to use the infringing portion(s) of the Bonds.com Trading System, (ii) modifying the infringing portion(s) of the System so as to render them non-infringing, (iii) replacing the infringing portion(s) of the System with non-infringing items of substantially similar functionality, (iv) amending a party’s obligations under this Agreement or (v) altering the Clients’ participation in the  System, but in each case in a manner reasonably consistent with the purpose and intentions described in this Agreement.

 

	 	
c.  

	
Remedy.  In the event that a Regulatory Issue or an infringement requires that Bonds.com terminate the operation of the Bonds.com Trading System in the manner contemplated herein in order to avoid the applicable Regulatory Issue or infringement, and no reasonable modification of the System and/or the parties’ respective obligations in connection therewith (or other reasonable accommodation) will avoid the Regulatory Issue or infringement, this Agreement shall be deemed to terminate by written agreement  of the parties.  Each party shall bear its own costs associated with discharging its obligations under this section, except those provisions of this Agreement that survive the termination of this Agreement shall survive.

 

Section 7 -- Indemnity

 

7.1           By RKA.  RKA agrees to indemnify and hold harmless Bonds.com, and BDCG, its Affiliates, and their respective directors, officers, employees and agents, from and against all Damages arising out of or related to (a) any breach of any warranty, representation or covenant given by RKA in this Agreement and (b) claims from any third Person in connection with RKA’s performance of the transactions contemplated hereby, in each case whether arising under any statute, at common law or otherwise; provided , however, that (i) RKA’s obligations under the foregoing clause (b) shall be limited to such Damages that result from RKA’s breach of this agreement, violation of applicable law or willful misconduct or gross negligence, and (iii) RKA’s obligation under this Section 7.1 shall in no event exceed the amount equal to the sum of the aggregate Occasion Fees paid to RKA plus the value of all warrants issued to RKA hereunder.

 

  

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7.2           By Bonds.com.  Bonds.com agrees to indemnify and hold harmless RKA, its Affiliates, and their respective directors, officers, employees and agents, from and against all Damages, including claims from any third Person, arising out of or related to (a) any breach of any warranty or representation given by Bonds.com in this Agreement and (b) claims from any third Person that the Bonds.com Trading System, or any portion thereof, infringes the patent, trademark or copyright or other proprietary rights of such third Person; provided, however, that (i) Bonds.com’s obligations under the foregoing clause  (b) shall be limited to such damages that result from Bonds.com breach of this agreement, violation of applicable law or willful misconduct or gross negligence, and (ii) Bonds.com’s obligations under this Section 7.2 shall in no events exceed an amount equal to the sum of the aggregate Occasion fees paid to RKA.

 

Section 8 – Confidentiality; Non-Compete, Non Solicitation

 

8.1           Definition.     "Confidential Information" means: (a) any information regarding the specific business terms of this Agreement; (b) any documentation provided concerning the Bonds.com Trading System, including the Bonds.com Materials; (c) any other software provided by either party; and (d) any other information, in whatever form, designated in writing by the disclosing party (the "Disclosing Party") as confidential, to the receiving party (the "Receiving Party"). Confidential Information will not include information which: (a) at or prior to the time of disclosure by the Disclosing Party was known to the Receiving Party through lawful means; (b) at or after the time of disclosure by the Disclosing Party becomes generally available to the public through no act or omission of the Receiving Party; (c) is developed by the Receiving Party independent of any Confidential Information it receives from the Disclosing Party; or (d) the Receiving Party receives from a third Person who is free to make such disclosure without breach of any legal obligation.

 

8.2           Confidentiality.  The Receiving Party acknowledges the confidential and proprietary nature of the Disclosing Party's Confidential Information and agrees that it shall not discuss, reveal, or disclose the Disclosing Party's Confidential Information to any Person other than the parties to this Agreement (and those of its employees who need to know such information), or use any Confidential Information for any purpose other than as contemplated hereby, in each case, without the prior written consent of the Disclosing Party. The Receiving Party agrees to take reasonable precautions to prevent unauthorized disclosure of the Confidential Information of the Disclosing Party.  The Receiving Party may disclose Confidential Information pursuant to any statute, regulation, order, subpoena or document discovery request, or in connection with any regulatory audit, provided, however, that, to the extent permitted by Law, prior written notice of such disclosure is furnished to the Disclosing Party as soon as practicable in order to afford the Disclosing Party an opportunity to seek a protective order (it being agreed that if the Disclosing Party is unable to obtain or does not seek a protective order and the Receiving Party is legally compelled to disclose such information, disclosure of such information may be made without liability).  Upon the written request of a Disclosing Party, the Receiving Party will  (a) promptly return all Confidential Information held or used by the Receiving Party in whatever form, except for any such Confidential Information which the Receiving Party is then entitled to use pursuant to the terms hereof, or (b) promptly destroy all such Confidential Information, including all copies thereof, and those portions of all documents that incorporate such Confidential Information, and certify in writing to the Disclosing Party that such destruction has taken place; provided that a Disclosing Party may retain any information required to be maintained pursuant to Law (subject to the confidentiality provisions of this Agreement).

 

  

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8.3           Non-Competition and Non-Solicitation.  During the period commencing on the date of this Agreement and ending six (6) months after the end of the Term of this Agreement, RKA will not, directly or indirectly:

 

(a)    Compete with Bonds.com by offering access to alternative electronic       fixed income trading platforms. Does not contemplate activity as a market maker on any platform of choice

 

(b)           Entice, solicit or encourage any employee of Bonds.com leave the employ of Bonds.com or any independent contractor engaged by Bonds.com to sever its engagement with Bonds.com, absent prior written consent to do so from Bonds.com;

 

(c)           Entice, solicit or encourage any customer or prospective customer of Bonds.com to cease doing business with Bonds.com, reduce its relationship with Bonds.com or refrain from establishing or expanding a relationship with Bonds.com.

 

Section 9 --Term and Termination

 

9.1           Term.           The term of this Agreement shall commence on the date first above written (the “Effective Date”) and, except as otherwise provided herein, shall continue for a period of three (3) years thereafter (the “Initial Term”). This Agreement shall renew for successive one (1) year terms (each, an “Additional Term”), unless terminated by written notice of either party delivered to the other party not less than ninety (90) days prior to the end of the Initial Term or any such Additional Term.  The Initial Term and each Additional Term shall be collectively referred to herein as the “Term.”

 

  

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9.2           Termination at Conclusion of Initial Term.     In the event that RKA or Bonds.com elects to exercise its right, pursuant to Section 9.1 hereof, to terminate this Agreement as of the end of the Initial Term there will be no further obligation or liability to Bonds.com or RKA.

 

9.3           Performance-related Termination.     In addition to its other termination rights set forth herein, in the event that Bonds.com shall not be able to develop an emerging markets product on or before the date that is one (1) year following the Effective Date, RKA shall have the right, exercisable upon written notice given to Bonds.com not later than thirty (30) days following such date, to elect either to terminate its exclusivity obligation set forth in Section 3.1 of this agreement (an “RKA Exclusivity Termination”) or to terminate this Agreement in its entirety, in either case without any liability to Bonds.com. In addition to its other termination rights set forth herein, in the event that the aggregate Occasion Fees payable to RKA hereunder on or before the date that is one (1) year following the Effective Date do not equal or exceed $100,000, then Bonds.com shall have the right, exercisable upon written notice given to RKA not later than thirty days (30) following such date, to elect either to terminate its exclusivity obligation set forth in Section 3.2 of this Agreement ( a “Bonds.com Exclusivity Termination”) or to terminate this Agreement in its entirety, in either case without any liability to  RKA (other than respect to any (a) breach that occurred, in each case, prior to such termination).

 

9.4           Termination by RKA.  RKA may terminate this Agreement at any time, without any liability to Bonds.com: (a) if Bonds.com has breached any material obligations (including any warranties or representations) under this Agreement, and, if capable of cure, has failed to cure such breach within thirty (30) days' notice of such breach by RKA.

 

9.5           Termination by Bonds.com.  Bonds.com may terminate this Agreement at any time, without any liability to RKA: (a) if RKA has breached any material obligations (including any warranties or representations) under this Agreement and, if capable of cure, has failed to cure such breach within thirty (30) days' notice of such breach by RKA.

 

9.6           Effect of Termination.  Upon termination of this Agreement, regardless of the reason therefore, (i) the limited License granted to RKA in Section 1.1 hereof shall immediately terminate, (ii) RKA shall promptly cease all marketing and promotion of the Bonds.com Trading System and return all Bonds.com Materials then in RKA’s possession to Bonds.com, and (iii) Bonds.com’s payment obligations to RKA shall immediately terminate, except as otherwise specifically stated in Section 10.2.

 

Section 10 – Change of Control

 

10.1           RKA Change of Control.  In the event that RKA experiences a change of control, Bonds.com shall have the right, exercisable upon written notice to RKA given within sixty (60) days following RKA receipt of notice of such change of control event, to terminate this Agreement without liability to RKA.

 

  

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10.2           Bonds.com Change of Control.  In the event that Bonds.com experiences a change of Control, this Agreement shall continue in effect until the end of the Initial Term provided that Bonds.com’s acquirer or successor shall have the right to terminate this Agreement, exercisable upon written notice given to RKA not later than thirty (30) days following the consummation of such change of Control event.  In the event of such a termination, Bonds.com shall make a onetime payment to RKA equal to 50% of the Occasion Fees with respect to Referred Clients prior to such termination for the 12 months period following termination date.

 

Section 11 – General

 

11.1           Certain Definitions.     In addition to the terms elsewhere defined herein, as used in this Agreement, the following terms shall have the meanings described below:

 

“Affiliate" shall mean, with respect to any given Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person.

 

"Control" over a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other equity interest, representation on its board of directors or body performing similar functions, by contract or otherwise. The terms "Controlling" and "Controlled" will have corollary meanings.

 

"Damages" shall mean liabilities, damages, awards, settlements, losses, claims and expenses, including reasonable attorneys' fees and expenses and costs of investigation.

 

"Laws" shall mean applicable laws, regulations, rules or orders of any government, administrative or regulatory or self-regulatory authority or court.

 

"Bonds.com Materials" shall mean all documentation, technical information, software, and other materials provided to RKA in written or electronic form for use in connection with the System.

 

“Bonds.com Trading System” shall mean that proprietary trading system, developed and licensed by Bonds.com.

 

"Person" shall mean any individual, corporation, limited-liability company, partnership, firm, joint venture, association, joint-stock company, trust, or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

  

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“Regulatory Issue” means any set of facts or circumstances under which either party’s access to, provision of, or use of, the System results in a violation of any Law or gives rise to regulatory action, or a reasonable belief by a party to this Agreement that such a violation or regulatory action is likely to occur.

 

“Trade Marks” means a party’s registered and/or unregistered trade and/or service marks.

 

11.2           Entire Agreement. This Agreement and any and all schedules and annexes attached hereto represent the entire agreement of the parties regarding the subject matter hereof. There are no other oral or written collateral representations, agreements, or understandings regarding the subject matter hereof.

 

11.3           Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York.  The parties hereby consent to the jurisdiction of the courts of the State of New York and the United States Federal District Court for the Southern District of New York for the purpose of any action or proceeding brought by either of them in connection with this Agreement.

 

11.4           Notices. All notices, requests, reports and other communications to any party hereunder will be in writing and shall be hand delivered, sent by registered mail return receipt requested or transmitted by facsimile to such party at its address or facsimile number set forth on the signature page hereof or at such other address or facsimile number as such party may hereafter specify for such purposes. Each such notice, request, report or other communication will be effective (i) on the delivery date if hand delivered, (ii) on the delivery date specified on the return receipt if sent by registered mail, or (iii) if given by facsimile, when such facsimile is transmitted and confirmation of receipt is obtained.

 

11.5           Assignments. This Agreement will be binding upon and inure to the benefit of the parties, their respective heirs, personal representatives, successors and assigns. No party may assign any of its rights or delegate any of its duties under this Agreement, except to an Affiliate or a Person acquiring all, or substantially all, of the assets or business of such party, without the prior written consent of the other. Any purported assignment without required consent shall be void.

 

11.6           Independent Parties.  This Agreement does not constitute or create any joint venture, partnership or fiduciary relationship between the parties.  No party shall have the power or authority to bind the other party.

 

11.7           Amendments; Waivers. This Agreement may not be amended, modified or superseded, unless expressly agreed to in writing by all parties. No provision of this Agreement may be waived except by an instrument in writing executed by the party against whom the waiver is to be effective. The failure of any party at any time or times to require full performance of any provision hereof will in no way affect the right of such party at a later time to enforce the same.

 

  

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11.8           Severability. If any provision or term of this Agreement, not being of a fundamental nature, is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of this Agreement will not be affected.

 

11.9           Injunctions.  In view of the difficulties of placing a monetary value on a breach of this Agreement, each party may be entitled to a preliminary and final injunction without the necessity of posting any bond or undertaking in connection therewith to prevent any breach of this Agreement. This remedy is in addition to any other remedies the parties may have at law or in equity.

 

11.10           Publicity.   No press releases or other publicity relating to the existence or substance of the matters contained herein will be made without the prior approval of both parties except to the extent required by applicable law, including, but not limited to, required SEC disclosures.

 

11.11           Survival. The provisions of Sections 1.2, 5.1, 5.3, 6, 7, 8, 9 and this Section 11, and any and all disclaimers and indemnities contained herein or in any Schedules to this Agreement, will survive the termination of this Agreement.

 

11.12           Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same Agreement.

 

[Remainder of page intentionally left blank]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.

 

RED KITE AMERICAS LLC

 

 

	By:	 /s/ Dennis Rodrigues	Name:	  Dennis Rodrigues	Title:	 Managing Member	 

 

BONDS.COM

 

	By:	 /s/ Michael O. Sanderson	Name:	 Michael O. Sanderson	Title:	 CEO	 

BONDS.COM GROUP, INC.

 

	By:	 /s/ Michael O. Sanderson	Name:	 Michael O. Sanderson	Title:	 CEO	 

 

  

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Schedule A

In the event that net revenues generated for Bonds.com by Referred Clients exceed $100,000 in a Measurement Period during the Term of the Agreement, Bonds.com Group, Inc. will issue to RKA additional warrants to purchase shares of Bonds.com Group, Inc. common stock.  The number of shares issuable upon exercise of such warrants shall be equal to (a) five percent (5%) of all such net revenues in excess of $100,000 during the applicable Measurement Period, divided by (b) the Fair Market Value Per Share of Bonds.com Group, Inc. common stock.

For purposes hereof:

“Measurement Period” means (a) the 12-month period from the Effective Date through the first anniversary of the Effective Date, and (b) thereafter, each successive 12-month period running from one anniversary of the Effective Date through the next anniversary of the Effective Date.

“Fair Market Value Per Share” means, with respect to a share of Bonds.com Group, Inc. common stock on any date: (a) if the shares are listed or admitted for trading on any national securities exchange, the 20-day weighted average closing price as reported on such exchange as of the end of the Measurement Period; (b) if the shares are not listed or admitted for trading on any national securities exchange, the 20-day weighted average closing price quotation for the shares as quoted on the OTC Bulletin Board as of the end of the Measurement Period; and (c) in the absence of any available public quotations for the Common Stock, the fair value of a share of Common Stock as determined in good faith by the Company’s Board of Directors (including by reference to any reasonably recent valuation of the Common Stock for purposes of any option or similar equity award granted to officers, directors or employees of the Company).

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