EXHIBIT C
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED 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 ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
WORLDWIDE ENERGY AND MANUFACTURING USA, INC.
Warrant Shares: _______ Initial Exercise Date: January __,
2010
THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that,
for value received, _____________ (the "Holder") is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the date hereof (the "Initial Exercise Date") and on or
prior to the close of business on the five (5) year anniversary of the Initial
Exercise Date (the "Termination Date") but not thereafter, to subscribe for and
purchase from Worldwide Energy and Manufacturing USA, Inc., a Colorado
corporation (the "Company"), up to ______ shares (the "Warrant Shares") of
Common Stock. The purchase price of one share of Common Stock under this
Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the "Purchase Agreement"), dated January 26, 2010, among the Company
and the purchasers signatory thereto.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights
represented by this Warrant may be made, in whole or
in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by
delivery to the Company (or such other office or
agency of the Company as it may designate by notice in
writing to
1
the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly
executed facsimile copy of the Notice of Exercise Form
annexed hereto; and, within three (3) Trading Days of
the date said Notice of Exercise is delivered to the
Company, the Company shall have received payment of
the aggregate Exercise Price of the shares thereby
purchased by wire transfer or cashier's check drawn on
a United States bank or, if available, pursuant to the
cashless exercise procedure specified in Section 2(c)
below. Notwithstanding anything herein to the
contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised
in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within
three (3) Trading Days of the date the final Notice of
Exercise is delivered to the Company. Partial
exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number
of Warrant Shares purchased. The Holder and the
Company shall maintain records showing the number of
Warrant Shares purchased and the date of such
purchases. The Company shall deliver any objection to
any Notice of Exercise Form within 1 Business Day of
receipt of such notice. In the event of any dispute
or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of
manifest error. THE HOLDER AND ANY ASSIGNEE, BY
ACCEPTANCE OF THIS WARRANT, ACKNOWLEDGE AND AGREE
THAT, BY REASON OF THE PROVISIONS OF THIS PARAGRAPH,
FOLLOWING THE PURCHASE OF A PORTION OF THE WARRANT
SHARES HEREUNDER, THE NUMBER OF WARRANT SHARES
AVAILABLE FOR PURCHASE HEREUNDER AT ANY GIVEN TIME MAY
BE LESS THAN THE AMOUNT STATED ON THE FACE HEREOF.
b) Exercise Price. The exercise price per share of the
Common Stock under this Warrant shall be $5.65,
subject to adjustment hereunder (the "Exercise
Price").
c) Cashless Exercise. If at any time after the earlier
of (i) the one year anniversary of the date of the
Purchase Agreement and (ii) the completion of the
then-applicable holding period required by Rule 144,
or any successor provision then in effect,, there is
no effective Registration Statement registering, or no
current prospectus available for, the resale of the
Warrant Shares by the Holder, then this Warrant may
also be exercised, in whole or in part, at such time
by means of a "cashless exercise" in which the Holder
shall be entitled to receive a certificate for the
number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the VWAP on the Trading Day immediately preceding the date on
which Holder elects to exercise this Warrant by means of a
"cashless exercise," as set forth in the applicable Notice of
Exercise;
(B) = the Exercise Price of this Warrant, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon
exercise of this Warrant in accordance with the terms of this
Warrant if such exercise were by means of a cash exercise
rather than a cashless exercise.
2
d) Mechanics of Exercise.
x.Xxxxxxxx of Certificates Upon Exercise. Certificates for
shares purchased hereunder shall be transmitted by the
Transfer Agent to the Holder by crediting the account of the
Holder's prime broker with the Depository Trust Company
through its Deposit Withdrawal Agent Commission ("DWAC")
system if the Company is then a participant in such system
and either (A) there is an effective Registration Statement
permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by the Holder or (B) the shares are
eligible for resale by the Holder without volume or manner-
of-sale limitations pursuant to Rule 144, and otherwise by
physical delivery to the address specified by the Holder in
the Notice of Exercise by the date that is three (3) Trading
Days after the latest of (A) the delivery to the Company of
the Notice of Exercise Form, (B) surrender of this Warrant
(if required), and (C) payment of the aggregate Exercise
Price as set forth above (including by cashless exercise, if
permitted) (such date, the "Warrant Share Delivery Date").
This Warrant shall be deemed to have been exercised on the
first date on which all of the foregoing have been delivered
to the Company. The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to
be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the
Warrant has been exercised, with payment to the Company of
the Exercise Price (or by cashless exercise, if permitted)
and all taxes required to be paid by the Holder, if any,
pursuant to Section 2(d)(vi) prior to the issuance of such
shares, having been paid. If the Company fails for any
reason to deliver to the Holder certificates evidencing the
Warrant Shares subject to a Notice of Exercise by the
Warrant Share Delivery Date, the Company shall pay to the
Holder, in cash, as liquidated damages and not as a penalty,
for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day
(increasing to $20 per Trading Day on the fifth Trading Day
after such liquidated damages begin to accrue) for each
Trading Day after such Warrant Share Delivery Date until
such certificates are delivered or Holder rescinds such
exercise.
ii. Delivery of New Warrants Upon Exercise. If this
Warrant shall have been exercised in part, the Company
shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the
Transfer Agent to transmit to the Holder a certificate or
the certificates representing the Warrant Shares pursuant to
Section 2(d)(i) by the Warrant Share Delivery Date, then,
the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise. In addition to any other rights
available to the Holder, if the Company fails to cause the
Transfer Agent to transmit to the Holder a certificate or
the certificates representing the Warrant Shares pursuant to
an exercise on or before the Warrant Share Delivery Date,
and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or
the Holder's brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a "Buy-In"), then the Company
shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder's total purchase price (including
brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the
sell order giving rise to such purchase obligation was
executed, and (B) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or
deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For
example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation
of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the
amount of such loss. 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 and/or
injunctive relief with respect to the Company's failure to
timely deliver certificates representing shares of Common
Stock upon exercise of the Warrant as required pursuant to
the terms hereof.
v. No Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share
which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by
the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of certificates
for Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the
Holder or in such name or names as may be directed by the
Holder; provided, however, that in the event certificates
for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the Holder and the Company
may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental
thereto.
vii. Closing of Books. The Company will not close its
stockholder books or records in any manner which prevents
the timely exercise of this Warrant, pursuant to the terms
hereof.
e) Xxxxxx's Exercise Limitations. The Company shall not
effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2
or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of
Exercise, the Holder (together with the Holder's Affiliates, and any
other Persons acting as a group together with the Holder or any of
the Holder's Affiliates), would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For purposes of
the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include
the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which such determination is being made, but
shall exclude the number of shares of Common Stock which would be
issuable upon (i) exercise of the remaining, nonexercised portion of
this Warrant beneficially owned by the Holder or any of its
Affiliates and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company
(including, without limitation, any other Common Stock Equivalents)
subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any
of its Affiliates. Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any
schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of
a Notice of Exercise shall be deemed to be the Holder's
determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates)
and of which portion of this Warrant is exercisable, in each case
subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such
determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the
number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A)
the Company's most recent periodic or annual report filed with the
Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares
of Common Stock outstanding. Upon the written or oral request of a
Holder, the Company shall within two Trading Days confirm orally and
in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this
Warrant, by the Holder or its Affiliates since the date as of which
such number of outstanding shares of Common Stock was reported. The
"Beneficial Ownership Limitation" shall be 4.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon
exercise of this Warrant. The Holder, upon not less than 61 days'
prior notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(e) shall continue to apply. Any such increase or
decrease will not be effective until the 61[st] day after such
notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to
correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while
this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by the
Company upon exercise of this Warrant), (ii) subdivides
outstanding shares of Common Stock into a larger number of
shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of
shares or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each
case the Exercise Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the
number of shares of Common Stock outstanding immediately after
such event, and the number of shares issuable upon exercise of
this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged.
Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date
in the case of a subdivision, combination or re-classification.
b) Subsequent Equity Sales.
i.From the Initial Exercise Date until the 18 month anniversary of
the Initial Exercise Date, if the Company or any Subsidiary thereof,
as applicable, at any time while this Warrant is outstanding, shall
sell or grant any option to purchase, or sell or grant any right to
reprice, or otherwise dispose of or issue (or announce any offer,
sale, grant or any option to purchase or other disposition) any
Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock, at an effective price per share less
than the then Exercise Price (such lower price, the "Base Share
Price" and such issuances collectively, a "Dilutive Issuance") (if
the holder of the Common Stock or Common Stock Equivalents so issued
shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights
per share which are issued in connection with such issuance, be
entitled to receive shares of Common Stock at an effective price per
share that is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such
date of the Dilutive Issuance), then, the Exercise Price shall be
reduced and only reduced to equal the Base Share Price and the
number of Warrant Shares issuable hereunder shall be increased such
that the aggregate Exercise Price payable hereunder, after taking
into account the decrease in the Exercise Price, shall be equal to
the aggregate Exercise Price prior to such adjustment. Such
adjustment shall be made whenever such Common Stock or Common Stock
Equivalents are issued. Notwithstanding the foregoing, no
adjustments shall be made, paid or issued under this Section 3(b)(i)
in respect of an Exempt Issuance. The Company shall notify the
Holder, in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalents subject to
this Section 3(b), indicating therein the applicable issuance price,
or applicable reset price, exchange price, conversion price and
other pricing terms (such notice, the "Dilutive Issuance Notice").
For purposes of clarification, whether or not the Company provides a
Dilutive Issuance Notice pursuant to this Section 3(b), upon the
occurrence of any Dilutive Issuance, after the date of such Dilutive
Issuance the Holder is entitled to receive a number of Warrant
Shares based upon the Base Share Price regardless of whether the
Holder accurately refers to the Base Share Price in the Notice of
Exercise.
ii. In addition, in the event that the Company fails to achieve
the 2010 EBITDA Milestone, on the 2010 EBITDA Milestone Date, the
Exercise Price shall be reduced to the lesser of (i) 2010 EBITDA
Milestone Price and (ii) the then effective Exercise Price, and the
number of Warrant Shares issuable hereunder shall be increased such
that the aggregate Exercise Price payable hereunder, after taking
into account the decrease in the Exercise Price, shall be equal to
the aggregate Exercise Price prior to such adjustment. The
Exercise Price shall only be adjusted downward pursuant to this
Section 3(b)(ii). For purposes of clarification, in the event that
the Company fails to achieve the 2010 EBITDA Milestone, after the
date of the 2010 EBITDA Milestone Date, the Holder is entitled to
receive a number of Warrant Shares based upon the calculations in
this Section 3(b)(ii) regardless of whether the Holder accurately
refers to the reduced exercise price calculated pursuant to this
Section in the Notice of Exercise. For purposes herein, "2010
EBITDA Milestone Price" means a price calculated as the Per Share
Purchase Price multiplied by a fraction of which the numerator is
the Adjusted EBITDA for the fiscal year ending December 31, 2010 and
the denominator is $4,000,000. Notwithstanding the foregoing, in
the event that the Company reports an Adjusted EBITDA of $2,000,000
or less for the year ended December 31, 2010 or the Company fails to
file its 2010 10-K with the Commission on or before the last date
that such form is required to be filed (after any permitted
extensions under the Exchange Act), the "2010 EBITDA Milestone
Price" shall equal $2.25.
c) Subsequent Rights Offerings. If the Company, at any time while
the Warrant is outstanding, shall issue rights, options or
warrants to all holders of Common Stock (and not to the Holders)
entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the VWAP on the record date
mentioned below, then, the Exercise Price shall be multiplied by
a fraction, of which the denominator shall be the number of
shares of the Common Stock outstanding on the date of issuance of
such rights, options or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the
Common Stock outstanding on the date of issuance of such rights,
options or warrants plus the number of shares which the aggregate
offering price of the total number of shares so offered (assuming
receipt by the Company in full of all consideration payable upon
exercise of such rights, options or warrants) would purchase at
such VWAP. Such adjustment shall be made whenever such rights,
options or warrants are issued, and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such rights, options or
warrants.
d) Pro Rata Distributions. If the Company, at any time while this
Warrant is outstanding, shall distribute to all holders of Common
Stock (and not to the Holders) evidences of its indebtedness or
assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common
Stock (which shall be subject to Section 3(b)), then in each such
case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date
fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the
VWAP determined as of the record date mentioned above, and of
which the numerator shall be such VWAP on such record date less
the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness or rights or
warrants so distributed applicable to one outstanding share of
the Common Stock as determined by the Board of Directors in good
faith. In either case the adjustments shall be described in a
statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription
rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned
above.
e) Fundamental Transaction. If, at any time while this Warrant is
outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of
the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license,
assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related
transactions, (iii) any, direct or indirect, purchase offer,
tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock
are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders
of 50% or more of the outstanding Common Stock, (iv) the Company,
directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to
which the Common Stock is effectively converted into or exchanged
for other securities, cash or property, (v) the Company, directly
or indirectly, in one or more related transactions consummates a
stock or share purchase agreement or other business combination
(including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another
Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons
making or party to, such stock or share purchase agreement or
other business combination) (each a "Fundamental Transaction"),
then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise immediately prior to
the occurrence of such Fundamental Transaction, at the option of
the Holder (without regard to any limitation in Section 2(e) on
the 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 any additional
consideration (the "Alternate Consideration") receivable as a
result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 2(e) on the exercise of this
Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in
such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the
contrary, in the event of a Fundamental Transaction that is (1)
an all cash transaction, (2) a "Rule 13e-3 transaction" as
defined in Rule 13e-3 under the Exchange Act, or (3) a
Fundamental Transaction involving a person or entity not traded
on a national securities exchange, the Company or any Successor
Entity (as defined below) shall, at the Holder's option,
exercisable at any time concurrently with, or within 30 days
after, the consummation of the Fundamental Transaction, purchase
this Warrant from the Holder by paying to the Holder an amount of
cash equal to the Black Scholes Value of the remaining
unexercised portion of this Warrant on the date of the
consummation of such Fundamental Transaction. "Black Scholes
Value" means the value of this Warrant based on the Black and
Scholes Option Pricing Model obtained from the "OV" function on
Bloomberg, L.P. ("Bloomberg") determined as of the day of
consummation of the applicable Fundamental Transaction for
pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the
time between the date of the public announcement of the
applicable Fundamental Transaction and the Termination Date, (B)
an expected volatility equal to the greater of 100% and the 100
day volatility obtained from the HVT function on Bloomberg as of
the Trading Day immediately following the public announcement of
the applicable Fundamental Transaction, (C) the underlying price
per share used in such calculation shall be the sum of the price
per share being offered in cash, if any, plus the value of any
non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time
between the date of the public announcement of the applicable
Fundamental Transaction and the Termination Date. The Company
shall cause any successor entity in a Fundamental Transaction in
which the Company is not the survivor (the "Successor Entity") to
assume in writing all of the obligations of the Company under
this Warrant and the other Transaction Documents in accordance
with the provisions of this Section 3(e) pursuant to written
agreements in form and substance reasonably satisfactory to the
Holder and approved by the Holder (without unreasonable delay)
prior to such Fundamental Transaction and shall, at the option of
the holder of this Warrant, deliver to the Holder in exchange for
this Warrant a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to
this Warrant which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common
Stock pursuant to such Fundamental Transaction and the value of
such shares of capital stock, such number of shares of capital
stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of
this Warrant and the other Transaction Documents referring to the
"Company" shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such
Successor Entity had been named as the Company herein.
f) Calculations. All calculations under this Section 3 shall be made
to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares
of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) issued and outstanding.
g) Notice to Holder.
i.Adjustment to Exercise Price. Whenever the Exercise
Price is adjusted pursuant to any provision of this
Section 3, the Company shall promptly mail to the
Holder a notice setting forth the Exercise Price after
such adjustment and setting forth a brief statement of
the facts requiring such adjustment. If the Company
enters into a Variable Rate Transaction, despite the
prohibition thereon in the Purchase Agreement, the
Company shall be deemed to have issued Common Stock or
Common Stock Equivalents at the lowest possible
conversion or exercise price at which such securities
may be converted or exercised.
ii.Notice to Allow Exercise by Xxxxxx. If (A) the
Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock,
(B) the Company shall declare a special nonrecurring
cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any
stockholders of the Company shall be required in
connection with any reclassification of the Common
Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is
converted into other securities, cash or property, or
(E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of
the affairs of the Company, then, in each case, the
Company shall cause to be mailed to the Holder at its
last address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days
prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date
as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or
(y) the date on which such reclassification,
consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and
the date as of which it is expected that holders of
the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for
securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale,
transfer or share exchange; provided that the failure
to mail such notice or any defect therein or in the
mailing thereof shall not affect the validity of the
corporate action required to be specified in such
notice. To the extent that any notice provided
hereunder constitutes, or contains, material, non-
public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file
such notice with the Commission pursuant to a Current
Report on Form 8-K. The Holder shall remain entitled
to exercise this Warrant during the period commencing
on the date of such notice to the effective date of
the event triggering such notice except as may
otherwise be expressly set forth herein.
Section 4. Transfer of Warrant.
a) Transferability. Subject to compliance with any applicable
securities laws and the conditions set forth in Section 4(d)
hereof and to the provisions of Section 4.1 of the Purchase
Agreement, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in
whole or in part, upon surrender of this Warrant at the principal
office of the Company or its designated agent, together with a
written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or
attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a
new Warrant or Warrants in the name of the assignee or assignees,
as applicable, and in the denomination or denominations specified
in such instrument of assignment, and shall issue to the assignor
a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. The
Warrant, if properly assigned in accordance herewith, may be
exercised by a new holder for the purchase of Warrant Shares
without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with
Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a
new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All
Warrants issued on transfers or exchanges shall be dated the
Initial Exercise Date and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant
thereto.
c) Warrant Register. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the
"Warrant Register"), in the name of the record Holder hereof from
time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
d) Transfer Restrictions. If, at the time of the surrender of this
Warrant in connection with any transfer of this Warrant, the
transfer of this Warrant shall not be either (i) registered
pursuant to an effective registration statement under the
Securities Act and under applicable state securities or blue sky
laws or (ii) eligible for resale without volume or manner-of-sale
restrictions or current public information requirements pursuant
to Rule 144, the Company may require, as a condition of allowing
such transfer, that the Holder or transferee of this Warrant, as
the case may be, comply with the provisions of Section 5.7 of the
Purchase Agreement.
e) Representation by the Holder. The Holder, by the acceptance
hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares
issuable upon such exercise, for its own account and not with a
view to or for distributing or reselling such Warrant Shares or
any part thereof in violation of the Securities Act or any
applicable state securities law, except pursuant to sales
registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise. This Warrant does not
entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the exercise
hereof as set forth in Section 2(d)(i).
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or
stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then,
such action may be taken or such right may be exercised on the
next succeeding Business Day.
d) Authorized Shares.
The Company covenants that, during the period the
Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for
the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant and payment for such
Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens
and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring
contemporaneously with such issue).
Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such
increase in par value, (ii) take all such action as may be necessary
or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant and (iii) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under
this Warrant.
Before taking any action which would result in an adjustment
in the number of Warrant Shares for which this Warrant is
exercisable or in the Exercise Price, the Company shall obtain all
such authorizations or exemptions thereof, or consents thereto, as
may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be
determined in accordance with the provisions of the Purchase
Agreement.
f) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered and
the Holder does not utilize cashless exercise, will have
restrictions upon resale imposed by state and federal securities
laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice
Xxxxxx's rights, powers or remedies, notwithstanding the fact
that all rights hereunder terminate on the Termination Date. If
the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages
to the Holder, the Company shall pay to Holder such amounts as
shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys' fees, including those
of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.
h) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of
the Purchase Agreement.
i) Limitation of Liability. No provision hereof, in the absence of
any affirmative action by Holder to exercise this Warrant to
purchase Warrant Shares, and no enumeration herein of the rights
or privileges of Holder, shall give rise to any liability of
Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this
Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to
waive and not to assert the defense in any action for specific
performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors
and permitted assigns of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of any Holder from time to time of
this Warrant and shall be enforceable by the Holder or holder of
Warrant Shares.
l) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company
and the Holder.
m) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall
be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.
********************
(Signature Pages Follow)
3
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized as of the date first above
indicated.
WORLDWIDE ENERGY AND MANUFACTURING USA, INC.
By:__________________________________________
Name:
Title:
4
NOTICE OF EXERCISE
TO: WORLDWIDE ENERGY AND MANUFACTURING USA, INC.
(1)The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.
(2)Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] [if permitted] the cancellation of such number of Warrant
Shares as is necessary, in accordance with the formula set forth
in subsection 2(c), to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).
(3)Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity:____________________________
Signature of Authorized Signatory of Investing Entity:____________
Name of Authorized Signatory:__________________________________
Title of Authorized Signatory:______________________________
Date:____________________________________________
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, [____] all of or [_______]
shares of the foregoing Warrant and all rights evidenced thereby are
hereby assigned to
____________________________________ whose address is
__________________________________________________.
_______________________________________________________
Dated: ______________, _______
Holder's Signature:_____________________________
Holder's Address:_____________________________
_____________________________
Signature Guaranteed: _____________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
