EXHIBIT 4.3
THIS WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR ANY OTHER SECURITIES
LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR TRANSFERRED OR
OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO SUCH
SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL TO THE ISSUER OF
THESE SECURITIES, SUCH REGISTRATION UNDER THE SECURITIES ACT AND OTHER
APPLICABLE SECURITIES LAWS IS NOT REQUIRED.
Date: December 15, 2006
WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK OF ECOSPHERE TEC HNOLOGIES, INC.
THIS IS TO CERTIFY that, for value received, _____________, their
successors and assigns (collectively, the "Holder"), are entitled to purchase,
subject to the terms and conditions hereinafter set forth, ______________ shares
of Ecosphere Technologies, Inc. , a Delaware corporation (the "Company") common
stock, $0.01 par value per share ("Common Stock"), and to receive certificates
for the Common Stock so purchased. The exercise price of this Warrant is $0.451
on the Exercise Date (as defined below) per share, subject to adjustment as
provided below (the "Exercise Price").
1. EXERCISE PERIOD AND VESTING. This Warrant shall vest and become
exercisable by the Holder beginning upon the date listed above (the "Issuance
Date"), and ending at 5:00 p.m., New York, New York time, December 15, 2009 (the
"Exercise Period"). This Warrant will terminate automatically and immediately
upon the expiration of the Exercise Period.
2. EXERCISE OF WARRANT; CASHLESS EXERCISE. This Warrant may be
exercised, in whole or in part, at any time and from time to time during the
Exercise Period. Such exercise shall be accomplished by tender to the Company of
an amount equal to the Exercise Price multiplied by number of underlying shares
being purchased (the "Purchase Price"), either (a) in cash, by wire transfer or
by certified check or bank cashier's check, payable to the order of the Company,
or (b) by surrendering such number of shares of Common Stock received upon
exercise of this Warrant with an aggregate Fair Market Value (as defined below)
equal to the Purchase Price (as described in the following paragraph (a
"Cashless Exercise"), together with presentation and surrender to the Company of
this Warrant with an executed subscription agreement in substantially the form
attached hereto as Exhibit A (the "Subscription"). Upon receipt of the
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foregoing, the Company will deliver to the Holder, as promptly as possible, a
certificate or certificates representing the shares of Common Stock so
purchased, registered in the name of the Holder or its transferee (as permitted
under Section 3 below). With respect to any exercise of this Warrant, the Holder
will for all purposes be deemed to have become the holder of record of the
number of shares of Common Stock purchased hereunder on the date a properly
executed Subscription and payment of the Purchase Price is received by the
Company (the "Exercise Date"), irrespective of the date of delivery of the
certificate evidencing such shares, except that, if the date of such receipt is
a date on which the stock transfer books of the Company are closed, such person
will be deemed to have become the holder of such shares at the close of business
on the next succeeding date on which the stock transfer books are open.
Fractional shares of Common Stock will not be issued upon the exercise of this
Warrant. In lieu of any fractional shares that would have been issued but for
the immediately preceding sentence, the Holder will be entitled to receive cash
equal to the current market price of such fraction of a share of Common Stock on
the trading day immediately preceding the Exercise Date. In the event this
Warrant is exercised in part, the Company shall issue a new Warrant to the
Holder covering the aggregate number of shares of Common Stock as to which this
Warrant remains exercisable for.
If the Holder elects to conduct a Cashless Exercise, the Company shall
cause to be delivered to the Holder a certificate or certificates representing
the number of shares of Common Stock computed using the following formula:
X = Y (A-B)
---
A
Where:
X = the number of shares of Common Stock to be issued
to Holder;
Y = the portion of the Warrant (in number of shares
of Common Stock) being exercised by Holder (at the
date of such calculation);
A = the Fair Market Value (as defined below) of one
share of Common Stock on the Exercise Date,
calculated by taking the average Fair Market Value
over the last 30 trading days (not including the
Exercise Date); and
B = Warrant Price (as adjusted to the date of such
calculation).
For purposes of the foregoing calculation, Fair Market Value shall
mean: (i) if the principal trading market for such securities is a national
securities exchange, The Nasdaq Stock Market or the Over-the-Counter Bulletin
Board ("OTCBB") (or a similar system then in use), the last reported sales price
on the principal market the trading day immediately prior to such Exercise Date;
or (ii) if (i) is not applicable, and if bid and ask prices for shares of Common
Stock are reported by the principal trading market or the National Quotation
Bureau, the average of the high bid and low ask prices so reported for the
trading day immediately prior to such Exercise Date. Notwithstanding the
foregoing, if there is no last reported sales price or bid and ask prices, as
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the case may be, for the day in question, then Fair Market Value shall be
determined as of the latest day prior to such day for which such last reported
sales price or bid and ask prices, as the case may be, are available, unless
such securities have not been traded on an exchange or in the over-the-counter
market for 30 or more days immediately prior to the day in question, in which
case the Fair Market Price shall be determined in good faith by, and reflected
in a formal resolution of, the board of directors of the Company. The Company
acknowledges and agrees that this Warrant was issued on the Issuance Date.
3. TRANSFERABILITY AND EXCHANGE.
(a) This Warrant, and the Common Stock issuable upon the exercise
hereof, may not be sold, transferred, pledged or hypothecated unless the Company
shall have been provided with an opinion of counsel reasonably satisfactory to
the Company that such transfer is not in violation of the Securities Act, and
any applicable state securities laws. Subject to the satisfaction of the
aforesaid condition, this Warrant and the underlying shares of Common Stock
shall be transferable from time to time by the Holder upon written notice to the
Company. If this Warrant is transferred, in whole or in part, the Company shall,
upon surrender of this Warrant to the Company, deliver to each transferee a
Warrant evidencing the rights of such transferee to purchase the number of
shares of Common Stock that such transferee is entitled to purchase pursuant to
such transfer. The Company may place a legend similar to the legend at the top
of this Warrant on any replacement Warrant and on each certificate representing
shares issuable upon exercise of this Warrant or any replacement Warrants. Only
a registered Holder may enforce the provisions of this Warrant against the
Company. A transferee of the original registered Holder becomes a registered
Holder only upon delivery to the Company of the original Warrant and an original
Assignment, substantially in the form set forth in Exhibit B attached hereto.
(b) This Warrant is exchangeable upon its surrender by the Holder to
the Company for new Warrants of like tenor and date representing in the
aggregate the right to purchase the number of shares purchasable hereunder, each
of such new Warrants to represent the right to purchase such number of shares as
may be designated by the Holder at the time of such surrender (not to exceed the
aggregate number of shares underlying this Warrant).
4. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SHARES SUBJECT TO
WARRANT. The Exercise Price and the number of shares of Common Stock purchasable
upon the exercise of this Warrant are subject to adjustment from time to time
upon the occurrence of any of the events specified in this Section 4. For the
purpose of this Section 4, "Common Stock" means shares now or hereafter
authorized of any class of common stock of the Company, however designated, that
has the right to participate in any distribution of the assets or earnings of
the Company without limit as to per share amount (excluding, and subject to any
prior rights of, any class or series of preferred stock).
(a) In case the Company shall (i) pay a dividend or make a distribution
in shares of Common Stock to holders of shares of 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,
or (iv) issue by reclassification of its shares of Common Stock other securities
of the Company, then the Exercise Price in effect at the time of the record date
for such dividend or on the effective date of such subdivision, combination or
reclassification, and/or the number and kind of securities issuable on such
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date, shall be proportionately adjusted so that the Holder of the Warrant
thereafter exercised shall be entitled to receive the aggregate number and kind
of shares of Common Stock (or such other securities other than Common Stock) of
the Company, at the same aggregate Exercise Price, that, if such Warrant had
been exercised immediately prior to such date, the Holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
distribution, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
surviving corporation) of cash, evidences of indebtedness or assets, or
subscription rights or warrants, the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Fair Market Value per share of Common Stock on such record date,
less the amount of cash so to be distributed or the Fair Market Value (as
determined in good faith by, and reflected in a formal resolution of, the board
of directors of the Company) of the portion of the assets or evidences of
indebtedness so to be distributed, or of such subscription rights or warrants,
applicable to one share of Common Stock, and the denominator of which shall be
the Fair Market Value per share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Exercise Price shall again be adjusted to be
the Exercise Price which would then be in effect if such record date had not
been fixed.
(c) Notwithstanding any provision herein to the contrary, no adjustment
in the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; provided, however,
that any adjustments which by reason of this Section 4 (c) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4 shall be made to the nearest
cent or the nearest one-hundredth of a share, as the case may be.
(d) In the event that at any time, as a result of an adjustment made
pursuant to Section 4(a) above, the Holder of any Warrant thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than shares of Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in this Section
4, and the other provisions of this Warrant shall apply on like terms to any
such other shares.
(e) If the Company merges or consolidates into or with another
corporation or entity, or if another corporation or entity merges into or with
the Company (excluding such a merger in which the Company is the surviving or
continuing corporation and which does not result in any reclassification,
conversion, exchange, or cancellation of the outstanding shares of Common
Stock), or if all or substantially all of the assets or business of the Company
are sold or transferred to another corporation, entity, or person, then, as a
condition to such consolidation, merger, or sale (any a "Transaction"), lawful
and adequate provision shall be made whereby the Holder shall have the right
from and after the Transaction to receive, upon exercise of this Warrant and
upon the terms and conditions specified herein and in lieu of the shares of the
Common Stock that would have been issuable if this Warrant had been exercised
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immediately before the Transaction, such shares of stock, securities, or assets
as the Holder would have owned immediately after the Transaction if the Holder
had exercised this Warrant immediately before the effective date of the
Transaction.
(f) In case any event shall occur as to which the other provisions of
this Section 4 are not strictly applicable but the failure to make any
adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles hereof, then, in
each such case, the Company shall effect such adjustment, on a basis consistent
with the essential intent and principles established in this Section 4, as may
be necessary to preserve, without dilution, the purchase rights represented by
this Warrant.
5. REGISTRATION RIGHTS.
(a) No Registration Under the Securities Act. The Warrant has not been
registered under the Securities Act. When exercised, the stock certificates
shall bear the following legend unless two years have elapsed since the date of
issuance of this Warrant and the shares of Common Stock are issued in a cashless
exercise pursuant to Section 2 hereof.
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Securities Act"), and may not
be offered for sale or sold except pursuant to (i) an effective registration
statement under the Securities Act, or (ii) an opinion of counsel, if such
opinion and counsel shall be reasonably satisfactory to counsel to the issuer,
that an exemption from registration under the Securities Act is available".
(b) Piggyback Registration. The Holder is not entitled to any
registration rights.
6. RESERVATION OF SHARES. The Company agrees at all times to reserve
and hold available out of its authorized but unissued shares of Common Stock the
number of shares of Common Stock issuable upon the full exercise of this
Warrant. The Company further covenants and agrees that all shares of Common
Stock that may be delivered upon the exercise of this Warrant will, upon
delivery, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the purchase thereof hereunder.
7. NOTICES TO HOLDER. Upon any adjustment of the Exercise Price (or
number of shares of Common Stock issuable upon the exercise of this Warrant)
pursuant to Section 4, the Company shall promptly thereafter cause to be given
to the Holder written notice of such adjustment. Such notice shall include the
Exercise Price (and/or the number of shares of Common Stock issuable upon the
exercise of this Warrant) after such adjustment, and shall set forth in
reasonable detail the Company's method of calculation and the facts upon which
such calculations were based. Where appropriate, such notice shall be given in
advance and included as a part of any notice required to be given under the
other provisions of this Section 7.
In the event of (a) any fixing by the Company of a record date with
respect to the holders of any class of securities of the Company for the purpose
of determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
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shares of capital stock of any class or any other securities or property, or to
receive any other right, (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or merger of the Company with or into, any other entity or
person, or (c) any voluntary or involuntary dissolution or winding up of the
Company, then and in each such event the Company will give the Holder a written
notice specifying, as the case may be (i) the record date for the purpose of
such dividend, distribution, or right, and stating the amount and character of
such dividend, distribution, or right; or (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, conveyance, dissolution, liquidation, or winding up is to take place and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such capital stock or securities receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock securities) for securities or other property deliverable upon such
event. Any such notice shall be given at least 10 days prior to the earliest
date therein specified.
8. NO RIGHTS AS A STOCKHOLDER. This Warrant does not entitle the Holder
to any voting rights or other rights as a stockholder of the Company, nor to any
other rights whatsoever except the rights herein set forth. Provided, however,
the Company shall not enter into any merger agreement in which it is not the
surviving entity, or sell all or substantially all of its assets unless the
Company shall have first provided the Holder with 20 days prior written notice.
9. ADDITIONAL COVENANTS OF THE COMPANY. For so long as the Common Stock
is listed for trading or trades on any national securities exchange or The
Nasdaq Stock Market, the Company shall, upon issuance of any shares for which
this Warrant is exercisable, at its expense, promptly obtain and maintain the
listing or qualifications for trading of such shares.
The Company shall comply with the reporting requirements of Sections 13
and 15(d) of the Securities Exchange Act of 1934 for so long as and to the
extent that such requirements apply to the Company.
The Company shall not, by amendment of its Certificate of Incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issuance 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. Without limiting the generality of the foregoing, the Company (a) will
at all times reserve and keep available, solely for issuance and delivery upon
exercise of this Warrant, shares of Common Stock issuable from time to time upon
exercise of this Warrant, (b) will not increase the par value of any shares of
Common Stock issuable upon exercise of this Warrant above the amount payable
therefor upon such exercise, and (c) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable stock.
10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Company, the Holder and their respective successors
and permitted assigns.
11. NOTICES. The Company agrees to maintain a ledger of the ownership
of this Warrant (the "Ledger"). Any notice hereunder shall be given by Federal
Express or other overnight delivery service for delivery on the next business
day if to the Company, at its principal executive office and, if to the Holder,
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to its address shown in the Ledger of the Company; provided, however, that
either the Company or the Holder may at any time on three days written notice to
the other designate or substitute another address where notice is to be given.
Notice shall be deemed given and received after a Federal Express or other
overnight delivery service is delivered to the carrier.
12. SEVERABILITY. Every provision of this Warrant is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Warrant.
13. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of choice of laws thereof.
14. ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Warrant, the prevailing party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedies.
15. ENTIRE AGREEMENT. This Warrant (including the Exhibits attached
hereto) constitutes the entire understanding between the Company and the Holder
with respect to the subject matter hereof, and supersedes all prior
negotiations, discussions, agreements and understandings relating to such
subject matter. This Warrant may be evidenced by a warrant certificate.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer as of the date first set forth above.
Ecosphere Technologies, Inc.
By: _______________________
Xxxxx X. Xxxxxxx III
Chief Financial Officer
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Exhibit A
SUBSCRIPTION FORM
(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Warrant)
The undersigned hereby irrevocably subscribes for _______ shares of the
Common Stock (the "Stock") of Ecosphere Technologies, Inc. (the "Company")
pursuant to and in accordance with the terms and conditions of the attached
Warrant (the "Warrant"), and hereby makes payment of $_______ therefor by
[tendering cash, wire transferring or delivering a certified check or bank
cashier's check, payable to the order of the Company] [surrendering _______
shares of Common Stock received upon exercise of the Warrant, which shares have
an aggregate fair market value equal to such payment as required in Section 2 of
the Warrant]. The undersigned requests that a certificate for the Stock be
issued in the name of the undersigned and be delivered to the undersigned at the
address stated below. If the Stock is not all of the shares purchasable pursuant
to the Warrant, the undersigned requests that a new Warrant of like tenor for
the balance of the remaining shares purchasable thereunder be delivered to the
undersigned at the address stated below.
In connection with the issuance of the Stock, I hereby represent to the
Company that I am acquiring the Stock for my own account for investment and not
with a view to, or for resale in connection with, a distribution of the shares
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
I understand that if at this time the Stock has not been registered
under the Securities Act, I must hold such Stock indefinitely unless the Stock
is subsequently registered and qualified under the Securities Act or is exempt
from such registration and qualification. I shall make no transfer or
disposition of the Stock unless (a) such transfer or disposition can be made
without registration under the Securities Act by reason of a specific exemption
from such registration and such qualification, or (b) a registration statement
has been filed pursuant to the Securities Act and has been declared effective
with respect to such disposition. I agree that each certificate representing the
Stock delivered to me shall bear substantially the same as set forth on the
front page of the Warrant.
I further agree that the Company may place stop transfer orders with
its transfer agent same effect as the above legend. The legend and stop transfer
notice referred to above shall be removed only upon my furnishing to the Company
of an opinion of counsel (reasonably satisfactory to the Company) to the effect
that such legend may be removed.
Date:_______________________________ Signed: _____________________________
Print Name:__________________________
Address:_____________________________
Date:_______________________________ Signed: _____________________________
Print Name:__________________________
Address:_____________________________
Exhibit B
ASSIGNMENT
(To be Executed by the Holder to Effect Transfer of the Attached Warrant)
For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Warrant attached hereto and the
rights represented thereby to purchase _________ shares of Common Stock in
accordance with the terms and conditions hereof, and does hereby irrevocably
constitute and appoint ___________________________ as attorney to transfer such
Warrant on the books of the Company with full power of substitution.
Dated:________________________ Signed: ____________________________
Please print or typewrite Please insert Social Security
name and address of or other Tax Identification
assignee: Number of Assignee:
Dated:________________________ Signed: ____________________________
Please print or typewrite Please insert Social Security
name and address of or other Tax Identification
assignee: Number of Assignee:
