EXHIBIT C
NEITHER THIS SECURITY NOR THE SECURITIES INTO 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
To Purchase __________ Shares of Common Stock of
ABLE ENERGY, INC.
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 year anniversary of the Initial
Exercise Date (the "TERMINATION DATE") but not thereafter, to subscribe for and
purchase from Able Energy, Inc., a Delaware corporation (the "COMPANY"), up to
______ shares (the "WARRANT SHARES") of Common Stock, par value $0.001 per
share, of the Company (the "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 July 12, 2005, 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 of a duly executed facsimile
copy of the Notice of Exercise Form annexed hereto (or such other office
or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books
of the Company);
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PROVIDED, HOWEVER, within 5 Trading Days of the date said Notice of
Exercise is delivered to the Company, the Holder shall have surrendered
this Warrant to the Company and 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.
b) EXERCISE PRICE. The exercise price of the Common Stock
under this Warrant shall be $7.15, subject to adjustment hereunder (the
"EXERCISE PRICE").
c) CASHLESS EXERCISE. If at any time after one year from
the date of issuance of this Warrant 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 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 of such election;
(B) = the Exercise Price of this Warrant, as adjusted; and
(X) = the number of Warrant Shares issuable upon exercise of
this Warrant in accordance with the terms of this Warrant
by means of a cash exercise rather than a cashless
exercise.
Notwithstanding anything herein to the contrary, on the
Termination Date, this Warrant shall be automatically exercised via
cashless exercise pursuant to this Section 2(c).
d) EXERCISE LIMITATIONS.
i. HOLDER'S RESTRICTIONS. A Holder shall
not have the right to exercise any portion of this
Warrant, pursuant to Section 2(c) or otherwise, to the
extent that after giving effect to such issuance after
exercise, such Holder (together with such Holder's
affiliates), as set forth on the applicable Notice of
Exercise, would beneficially own in excess of 4.99% of
the number of shares of the Common Stock outstanding
immediately after giving effect to such issuance. For
purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by such Holder and
its affiliates shall include the number of shares of
Common Stock issuable upon exercise of this Warrant with
respect to which the determination of such sentence is
being made, but shall exclude the number of shares of
Common Stock which would be issuable upon (A) exercise
of the remaining, nonexercised portion of this Warrant
beneficially owned by such Holder or any of its
affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other
securities of the Company (including, without
limitation, any other Debentures or Warrants) subject to
a limitation on conversion or exercise
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analogous to the limitation contained herein
beneficially owned by such Holder or any of its
affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2(d)(i),
beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act, it being
acknowledged by a Holder that the Company is not
representing to such Holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and
such 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(d) applies, the determination of whether this Warrant
is exercisable (in relation to other securities owned by
such Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of a Holder,
and the submission of a Notice of Exercise shall be
deemed to be each Holder's determination of whether this
Warrant is exercisable (in relation to other securities
owned by such Holder) and of which portion of this
Warrant is exercisable, in each case subject to such
aggregate percentage limitation, and the Company shall
have no obligation to verify or confirm the accuracy of
such determination. For purposes of this Section 2(d),
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 (x)
the Company's most recent Form 10-Q or Form 10-K, as the
case may be, (y) a more recent public announcement by
the Company or (z) any other notice by the Company or
the Company's 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 such
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 such Holder or
its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The
provisions of this Section 2(d) may be waived by such
Xxxxxx, at the election of such Holder, upon not less
than 61 days' prior notice to the Company, and the
provisions of this Section 2(d) shall continue to apply
until such 61st day (or such later date, as determined
by such Holder, as may be specified in such notice of
waiver).
ii. TRADING MARKET RESTRICTIONS. If the
Company has not obtained Shareholder Approval (as
defined below) if required by the applicable rules and
regulations of the Trading Market (or any successor
entity), then the Company may not issue upon exercise of
this Warrant a number of shares of Common Stock, which,
when aggregated with any shares of Common Stock issued
(A) upon conversion of or as payment of interest on the
Debentures issued pursuant to the Purchase Agreement and
(B) upon prior exercise of this or any other Warrant
issued pursuant to the Purchase Agreement, would exceed
19.999% of the number of shares of Common Stock
outstanding on the Trading Day immediately preceding the
Closing
3
Date (such number of shares, the "ISSUABLE MAXIMUM"). If
on any attempted exercise of this Warrant, the issuance
of Warrant Shares would exceed the Issuable Maximum and
the Company shall not have previously obtained the vote
of shareholders (the "SHAREHOLDER APPROVAL"), if any, as
may be required by the applicable rules and regulations
of the Nasdaq SmallCap Market (or any successor entity)
to approve the issuance of shares of Common Stock in
excess of the Issuable Maximum pursuant to the terms
hereof, then the Company shall issue to the Holder
requesting a Warrant exercise such number of Warrant
Shares as may be issued below the Issuable Maximum and,
with respect to the remainder of the aggregate number of
Warrant Shares, this Warrant shall not be exercisable
until and unless Shareholder Approval has been obtained.
e) MECHANICS OF EXERCISE.
i. AUTHORIZATION OF WARRANT SHARES. 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, be duly
authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
ii. DELIVERY OF CERTIFICATES UPON EXERCISE.
If required pursuant to Section 4.1 of the Purchase
Agreement, certificates for shares purchased hereunder
shall be transmitted by the transfer agent of the
Company 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 a participant in such system,
and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise within
3 Trading Days from the delivery to the Company of the
Notice of Exercise Form, surrender of this Warrant and
payment of the aggregate Exercise Price as set forth
above ("WARRANT SHARE DELIVERY DATE"). This Warrant
shall be deemed to have been exercised on the date the
Exercise Price is received by 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 by payment to the Company of the
Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(e)(vii) prior to
the issuance of such shares, have been paid.
iii. DELIVERY OF NEW WARRANTS UPON EXERCISE.
If this Warrant shall have been exercised in part, the
Company shall, 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
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purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
iv. RESCISSION RIGHTS. If the Company fails
to cause its transfer agent to transmit to the Holder a
certificate or certificates representing the Warrant
Shares pursuant to this Section 2(e)(iv) by the Warrant
Share Delivery Date, then the Holder will have the right
to rescind such exercise.
v. 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 its transfer agent to transmit to
the Holder a certificate or certificates representing
the Warrant Shares pursuant to an exercise on or before
the second Trading Day following 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) 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
(1) pay in cash to the Holder the amount 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
(A) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the
exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was
executed, and (2) 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 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 (1) 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, together with applicable
confirmations and other evidence reasonably requested by
the Company. 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.
vi. NO FRACTIONAL SHARES OR SCRIP. No
fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this
5
Warrant. As to any fraction of a share which Holder
would otherwise be entitled to purchase upon such
exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price.
vii. 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.
viii. 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.
SECTION 3. CERTAIN ADJUSTMENTS.
a) STOCK DIVIDENDS AND SPLITS. If the Company, at any time
while this Warrant is outstanding: (A) pays a stock dividend or
otherwise make 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 pursuant to this
Warrant), (B) subdivides outstanding shares of Common Stock into a
larger number of shares, (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares, or (D) 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. 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. If the Company or any
Subsidiary thereof, as applicable, at any time while this Warrant is
outstanding, shall offer, sell, grant any option to purchase or offer,
sell or grant any right to reprice its securities, or otherwise dispose
of or issue (or announce any offer, sale, grant or any option to
purchase or other
6
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"), as
adjusted hereunder (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 is issued in connection with such issuance, be
entitled to receive shares of Common Stock at an effective price per
share which 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 by
multiplying the Exercise Price by a fraction, the numerator of which is
the number of shares of Common Stock issued and outstanding immediately
prior to the Dilutive Issuance plus the number of shares of Common Stock
which the offering price for such Dilutive Issuance would purchase at
the then Exercise Price, and the denominator of which shall be the sum
of the number of shares of Common Stock issued and outstanding
immediately prior to the Dilutive Issuance plus the number of shares of
Common Stock so issued or issuable in connection with the Dilutive
Issuance on a fully converted or exercised basis 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) 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, indicating therein the applicable
issuance price, or of 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.
c) PRO RATA DISTRIBUTIONS. If the Company, at any time
prior to the Termination Date, shall distribute to all holders of Common
Stock (and not to Holders of the Warrants) 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 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
7
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.
d) FUNDAMENTAL TRANSACTION. If, at any time while this
Warrant is outstanding, (A) the Company effects any merger or
consolidation of the Company with or into another Person, (B) the
Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the
Company effects any reclassification 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 (in any such case, 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, (a) upon exercise of this
Warrant, the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the "ALTERNATE
CONSIDERATION") receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a
Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event or (b) if the Company is
acquired in an all cash transaction, cash equal to the value of this
Warrant as determined in accordance with the Black-Scholes option
pricing formula. 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. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the
Holder a new warrant consistent with the foregoing provisions and
evidencing the Holder's right to exercise such warrant into Alternate
Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this
Section 3(d) and insuring that this Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.
e) 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
8
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.
f) VOLUNTARY ADJUSTMENT BY COMPANY. The Company may at any
time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the
Board of Directors of the Company.
g) NOTICE TO HOLDERS.
i. ADJUSTMENT TO EXERCISE PRICE. Whenever
the Exercise Price is adjusted pursuant to this Section
3, the Company shall promptly mail to each 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 issues a
variable rate security, 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 in
the case of a Variable Rate Transaction (as defined in
the Purchase Agreement).
ii. NOTICE TO ALLOW EXERCISE BY HOLDER. If
(A) the Company shall declare a dividend (or any other
distribution) 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, of any compulsory share exchange whereby
the Common Stock is converted into other securities,
cash or property; (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
9
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. The
Holder is entitled to exercise this Warrant during the
20-day period commencing on the date of such notice to
the effective date of the event triggering such notice.
SECTION 4. TRANSFER OF WARRANT.
a) TRANSFERABILITY. Subject to compliance with any
applicable securities laws and the conditions set forth in Sections 5(a)
and 4(d) hereof and to the provisions of Section 4.1 of the Purchase
Agreement, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant at the principal office
of the Company, 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 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. A Warrant, if properly assigned, 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.
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 registered pursuant to an
effective registration statement under the Securities Act and under
applicable state securities or blue sky laws, the Company may require,
as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a
written opinion of counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions)
to the effect that such transfer may be made without registration under
the Securities Act and under applicable state securities or blue sky
laws, (ii) that the holder or
10
transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the
transferee be an "accredited investor" as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act
or a qualified institutional buyer as defined in Rule 144A(a) under the
Securities Act.
SECTION 5. MISCELLANEOUS.
a) TITLE TO WARRANT. Prior to the Termination Date and
subject to compliance with applicable laws and Section 4 of this
Warrant, this Warrant and all rights hereunder are transferable, in
whole or in part, at the office or agency of the Company by the Holder
in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company.
b) NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant
does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the
surrender of this Warrant and the payment of the aggregate Exercise
Price (or by means of a cashless exercise), the Warrant Shares so
purchased shall be and be deemed to be issued to such Holder as the
record owner of such shares as of the close of business on the later of
the date of such surrender or payment.
c) 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.
d) 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 be a Saturday, Sunday or a legal
holiday, then such action may be taken or such right may be exercised on
the next succeeding day not a Saturday, Sunday or legal holiday.
e) 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
11
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.
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 (a) 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,
(b) 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 (c) 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.
f) 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.
g) RESTRICTIONS. The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal
securities laws.
h) 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.
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i) 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.
j) LIMITATION OF LIABILITY. No provision hereof, in the
absence of any affirmative action by Holder to exercise this Warrant or
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.
k) REMEDIES. 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 the defense in any
action for specific performance that a remedy at law would be adequate.
l) 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 of the
Company and the successors and permitted assigns of Holder. The
provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and shall be enforceable by
any such Holder or holder of Warrant Shares.
m) AMENDMENT. This Warrant may be modified or amended or
the provisions hereof waived with the written consent of the Company and
the Holder.
n) 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.
o) 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.
********************
13
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.
Dated: July 12, 2005
ABLE ENERGY, INC.
By:____________________________________
Name:
Title:
14
NOTICE OF EXERCISE
To: ABLE ENERGY, 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
[ ] 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:
_________________________________
_________________________________
_________________________________
(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, 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.