Contract
THIS
SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933
(THE “ACT”) OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED OR SOLD UNLESS
REGISTERED AND QUALIFIED PURSUANT TO THE APPLICABLE PROVISIONS OF FEDERAL AND
STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR
QUALIFICATION APPLIES. THEREFORE, NO SALE OR TRANSFER OF THIS SECURITY SHALL BE
MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE VALID, AND THE ISSUER SHALL NOT BE
REQUIRED TO GIVE ANY EFFECT TO ANY SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION
HAS BEEN DULY REGISTERED UNDER THE ACT AND QUALIFIED OR APPROVED UNDER
APPROPRIATE STATE SECURITIES LAWS, OR (B) THE ISSUER HAS FIRST RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION,
QUALIFICATION OR APPROVAL IS NOT REQUIRED.
WARRANT
For the
Purchase of Shares of Common Stock of
Void
After 5 P.M. on the Five Anniversary of this Warrant
Warrant
to Purchase 6,969,231 Shares of Common Stock
THIS IS TO CERTIFY, that, for
value received, Xxxxx X. Xxxxxxx, a resident of Florida or registered assigns
(the “Holder”),
is entitled, subject to the terms and conditions hereinafter set forth, on or
after the date on which this Warrant (this “Warrant”) is executed
and delivered by each of the parties hereto (the “Exercise Commencement
Date”), and at any time prior to 5 P.M., Eastern Standard Time (“EST”), on the fifth
anniversary of the Exercise Commencement Date, but not thereafter, to purchase
such number of shares of Common Stock, par value $0.000l (“Common Stock” or the
“Shares”), of
EAU Technologies, Inc. (the “Company”) from the
Company as set forth above and upon payment to the Company of an amount per
Share of $0.31 (the “Purchase Price”), if
and to the extent this Warrant is exercised, in whole or in part, during the
period this Warrant remains in force, subject in all cases to adjustment as
provided in Section 2 hereof, and to receive a certificate or certificates
representing the Shares so purchased, upon presentation and surrender to the
Company of this Warrant, with the form of Subscription Agreement attached
hereto, including changes thereto reasonably requested by the Company, duly
executed and accompanied by payment of the Purchase Price of each
Share.
SECTION
1
Terms
of this Warrant
1.1 Time
of Exercise. This Warrant may be exercised at any time and from time to time
after 9:00 A.M. EST on the Exercise Commencement Date, but no later than 5:00
P.M. EST on the fifth anniversary of the Exercise Commencement Date (the “Expiration Time”) at
which time this Warrant shall become void and all rights hereunder shall
cease.
1.2 Manner
of Exercise.
1.2.1 The
Holder may exercise this Warrant, in whole or in part, upon surrender of this
Warrant, with the form of Subscription Agreement attached hereto duly executed,
to the Company at its corporate office in Kennesaw, Georgia, and upon payment to
the Company of the full Purchase Price for each Share to be purchased in lawful
money of the United States, or by certified or cashier’s check, or wired funds,
and upon compliance with and subject to the conditions set forth
herein.
1.2.2 Upon
receipt of this Warrant with the form of Subscription Agreement duly executed
and accompanied by payment of the aggregate Purchase Price for the Shares for
which this Warrant is then being exercised, the Company shall cause to be issued
certificates for the total number of whole Shares for which this Warrant is
being exercised in such denominations as are required for delivery to the
Holder, and the Company shall thereupon deliver such certificates to the Holder
or its nominee.
1.2.3 In
case the Holder shall exercise this Warrant with respect to less than all of the
Shares that may be purchased under this Warrant, the Company shall execute a new
warrant for the balance of the Shares that may be purchased upon exercise of
this Warrant and deliver such new warrant to the Holder.
1.2.4 The
Company covenants and agrees that it will pay when due and payable any and all
taxes which may be payable in respect of the issue of this Warrant, or the issue
of any Shares upon the exercise of this Warrant. The Company shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issuance or delivery of this Warrant or of the Shares in a name
other than that of the Holder at the time of surrender, and until the payment of
such tax the Company shall not be required to issue such Shares.
1.3 [INTENTIONALLY
OMITTED]
1.4 [INTENTIONALLY
OMITTED]
1.5 Exchange
of Warrant. This Warrant may be divided into, combined with or exchanged for
another warrant or warrants of like tenor to purchase a like aggregate number of
Shares. If the Holder desires to divide, combine or exchange this Warrant, he
shall make such request in writing delivered to the Company at its corporate
office and shall surrender this Warrant and any other warrants to be so divided,
combined or exchanged. The Company shall execute and deliver to the person
entitled thereto a warrant or warrants, as the case may be, as so requested. The
Company shall not be required to effect any division, combination or exchange
which will result in the issuance of a warrant entitling the Holder to purchase
upon exercise a fraction of a Share. The Company may require the Holder to pay a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any division, combination or exchange of
warrants.
1.6 Holder
as Owner. Prior to surrender of this Warrant in accordance with Section 1.7 for
registration of assignment, the Company may deem and treat the Holder as the
absolute owner of this Warrant (notwithstanding any notation of ownership or
other writing hereon) for the purpose of any exercise hereof and for all other
purposes, and the Company shall not be affected by any notice to the
contrary.
1.7 Method
of Assignment. Any assignment or transfer of any portion or all of this Warrant
shall be made by surrender of this Warrant to the Company at its principal
office with the form of assignment attached hereto duly executed and accompanied
by: (a) funds sufficient to pay any transfer tax, and (b) an opinion of counsel
reasonably satisfactory to the Company to the effect that the assignment or
transfer has been made in compliance with applicable federal and state
securities laws. In such event, the Company shall, without charge, execute and
deliver a new warrant in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be canceled.
1.8 Rights
of Holder. Nothing contained in this Warrant shall be construed as conferring
upon the Holder the right to vote, consent or receive notice as a shareholder in
respect of any meetings of shareholders for the election of directors or any
other matter, or as having any rights whatsoever as a shareholder of the
Company.
1.9 Lost
Certificates. If this Warrant is lost, stolen, mutilated or destroyed, the
Company shall, on such reasonable terms as to indemnity or otherwise as it may
impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new warrant of like denomination and tenor as, and in
substitution for, this Warrant, which shall thereupon become void. Any such new
warrant shall constitute an additional contractual obligation of the Company,
whether or not this Warrant so lost, stolen, destroyed or mutilated shall be at
any time enforceable by anyone.
1.9.1 At
all times the Company shall reserve and keep available for the exercise of this
Warrant such number of authorized shares of Common Stock as are sufficient to
permit the exercise in full of this Warrant.
1.9.2 The
Company covenants that all Shares when issued upon the exercise of this Warrant
will be validly issued, fully paid, nonassessable and free of preemptive
rights.
SECTION
2
Adjustment
of Purchase Price and Number of Shares Purchasable upon
Exercise
2.1 Stock
Splits. If the Company at any time or from time to time after the issuance date
of this Warrant effects a subdivision of the outstanding Common Stock, the
Purchase Price then in effect immediately before that subdivision shall be
proportionately decreased, and conversely, if the Company at any time or from
time to time after the issuance date of this Warrant combines the outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
subsection 2.1 shall become effective at the close of business on the date the
subdivision or combination becomes effective.
2.2 Dividends
and Distributions. In the event the Company at any time, or from time to time
after the issuance date of this Warrant makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event the Purchase Price then in effect shall be decreased as of the
time of such issuance or, in the event such a record date is fixed, as of the
close of business on such record date, by multiplying the Purchase Price then in
effect by a fraction (i) the numerator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and (ii) the denominator
of which shall be the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution; provided, however, that if such
record date is fixed and such dividend is not fully paid or if such distribution
is not fully made on the date fixed therefor, the Purchase Price shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Purchase Price shall be adjusted pursuant to this subsection 2.2
as of the time of actual payment of such dividends or
distributions.
2.3 Recapitalization
or Reclassification. If the Shares issuable upon the exercise of the Warrant are
changed into the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets, provided for elsewhere in this Section
2), then, and in any such event, the Holder shall thereafter be entitled to
receive upon exercise of this Warrant such number and kind of stock or other
securities or property of the Company to which a holder of Shares deliverable
upon exercise of this Warrant would have been entitled on such reclassification
or other change, subject to further adjustment as provided herein.
2.4 [INTENTIONALLY
OMITTED]
2.5 [INTENTIONALLY
OMITTED]
2.6 No
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price; provided, however,
that any adjustments which by reason of this Section 2.6 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment; and provided, further, that any adjustment required in order to
preserve the tax-free nature of a distribution to the holders of shares of
Common Stock shall be made when so required. All calculations under
this Section 2 shall be made to the nearest cent (with $.005 being rounded
upward). Anything in this Section 2 to the contrary notwithstanding, the Company
shall be entitled, to the extent permitted by law, to make such reductions in
the Purchase Price, in addition to those required by this Section 2, as it in
its discretion shall determine to be advisable in order that any stock
dividends, subdivision or combination of shares, distribution of capital stock
or rights or warrants to purchase stock or securities, distribution of evidences
of indebtedness or assets or any other transaction which could be treated as any
of the foregoing transactions pursuant to Section 305 of the Internal Revenue
Code of 1986, as amended (and any successor provision), hereafter made by the
Company to its shareholders shall not be taxable to such
shareholders.
SECTION 3
Status
Under the Securities Act of 1933
This
Warrant and the Shares issuable upon exercise of this Warrant have not been
registered under the Securities Act of 1933, as amended (the “Act”). Upon exercise,
in whole or in part, of this Warrant, the certificates representing the Shares
shall bear the legend first above written.
SECTION
4
Other
Matters
4.1 Binding
Effect. All the covenants and provisions of this Warrant by or for the benefit
of the Company shall bind and inure to the benefit of its successors and assigns
hereunder.
4.2 Notices.
Notices or demands pursuant to this Warrant to be given or made by the Holder to
or on the Company shall be sufficiently given or made if sent by certified or
registered mail, return receipt requested, postage prepaid, or facsimile and
addressed, until another address is designated in writing by the Company, as
follows:
0000 Xxxx
Xxxxxxxxxxxxx Xxxx., Xxxxx A
Kennesaw,
GA 30152
Telephone
No.: (000) 000-0000
Attention: Xxxx
X. Xxxxxxx, President
Notices
to the Holder provided for in this Warrant shall be deemed given or made by the
Company if sent by certified or registered mail, return receipt requested,
postage prepaid, and addressed to the Holder at his last known address as it
shall appear on the books of the Company.
4.3 Governing
Law. The validity, interpretation and performance of this Warrant shall be
governed by the laws of the State of Delaware.
4.4 Parties
Bound and Benefited. Nothing in this Warrant expressed and nothing that may be
implied from any of the provisions hereof is intended, or shall be construed, to
confer upon, or give to, any person or corporation other than the Company and
the Holder any right, remedy or claim under any promise or agreement hereof, and
all covenants, conditions, stipulations, promises and agreements contained in
this Warrant shall be for the sole and exclusive benefit of the Company and its
successors and of the Holder, its successors and permitted
assigns.
4.5 Headings.
The Section headings herein are for convenience only and are not part of this
Warrant and shall not affect the interpretation thereof.
(Remainder
of Page Intentionally Left Blank)
IN WITNESS WHEREOF, the
parties hereto, intending to be legally bound, have executed and delivered this
agreement as of the date of the later of the signatures below.
|
EAU
TECHNOLOGIES,
INC.
|
XXXXX
X. XXXXXXX
|
|
|
By:
/s/ Xxxx X. Xxxxxxx
|
By:
/s/ Xxxxx Xxxxxxx
|
|
|
Xxxx
X. Xxxxxxx
|
Xxxxx
Xxxxxxx
|
|
|
Chief
Executive Officer
|
||
|
Date:10/21/2010
|
Date:
10/21/2010
|
ASSIGNMENT
OF WARRANT
FOR VALUE RECEIVED,
___________________________ hereby sells, assigns and transfers unto
________________________ the within Warrant and the rights represented thereby,
and does hereby irrevocably constitute and appoint _______________________
Attorney, to transfer said Warrant on the books of the Company, with full power
of substitution.
|
Dated:
_____________________________
|
|
Signed:
_
___________________________
|
|
Signature
guaranteed:
|
|
__________________________________
|
SUBSCRIPTION
AGREEMENT
FOR
THE EXERCISE OF WARRANTS
The
undersigned hereby irrevocably subscribes for the purchase of _____________
Shares pursuant to and in accordance with the terms and conditions of this
Warrant, which Shares should be delivered to the undersigned at the address
stated below. If said number of Shares are not all of the Shares purchasable
hereunder, a new warrant of like tenor for the balance of the remaining Shares
purchasable hereunder should be delivered to the undersigned at the address
stated below.
The
undersigned elects to pay the aggregate Purchase Price for such Shares in the
following manner:
[ ]
by the enclosed cash
or check made payable to the Company in the amount of $
; or
[ ]
by wire transfer of
United States funds to the account of the Company in the amount of $__________,
which transfer has been made before or simultaneously with the delivery of this
Notice pursuant to the instructions of the Company.
The
undersigned agrees that: (1) the undersigned will not offer, sell, transfer or
otherwise dispose of any Shares unless either (a) a registration statement, or
post-effective amendment thereto, covering the Shares has been filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the “Act”), such sale,
transfer or other disposition is accompanied by a prospectus meeting the
requirements of Section 10 of the Act forming a part of such registration
statement, or post-effective amendment thereto, which is in effect under the Act
covering the Shares to be so sold, transferred or otherwise disposed of, and all
applicable state securities laws have been complied with, or (b) counsel
reasonably satisfactory to EAU Technologies, Inc. has rendered an opinion in
writing and addressed to EAU Technologies, Inc. that such proposed offer, sale,
transfer or other disposition of the Shares is exempt from the provisions of
Section 5 of the Act in view of the circumstances of such proposed offer, sale,
transfer or other disposition; (2) EAU Technologies, Inc. may notify the
transfer agent for the Shares that the certificates for the Shares acquired by
the undersigned are not to be transferred unless the transfer agent receives
advice from EAU Technologies, Inc. that one or both of the conditions referred
to in (1)(a) and (1)(b) above have been satisfied; and (3) EAU Technologies,
Inc. may affix the legend set forth in Section 3 of this Warrant to the
certificates for the Shares hereby subscribed for, if such legend is
applicable.
|
Dated:
____________________________________________
|
Signed:
_________________________________
|
|
Address:
________________________________
|
