Contract
EXHIBIT
10.5
THIS
COMMON STOCK PURCHASE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY
NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS
THEREUNDER OR THE PROVISIONS OF THIS COMMON STOCK PURCHASE WARRANT.
Number
of
Shares of Common Stock: __________
Warrant
No. W07-PPW____
To
Purchase Common Stock of
THERMOENERGY
CORPORATION
THIS
IS
TO CERTIFY THAT __________,
or
registered assigns, is entitled, at any time from the Closing Date (as
hereinafter defined) to the Expiration Date (as hereinafter defined), to
purchase from ThermoEnergy Corporation, a Delaware corporation (the “Company”),
_______
shares
of
Common Stock (as hereinafter defined and subject to adjustment as provided
herein), in whole or in part, including fractional parts, at a purchase price
per share as set forth in Section 2.5, subject to adjustment as provided herein
(the “Warrant Price”), all on the terms and conditions and pursuant to the
provisions hereinafter set forth.
1. DEFINITIONS
As
used
in this Common Stock Purchase Warrant (this “Warrant”),
the
following terms shall have the respective meanings set forth below:
“Acceleration
Notice”
shall
have the meaning set forth in Section 2.4.
“Business
Day”
shall
mean any day that is not a Saturday or Sunday or a day on which banks are
required or permitted to be closed in the City of New York.
“Closing
Date”
shall
mean _______, 2007.
“Commission”
shall
mean the Securities and Exchange Commission or any other federal agency then
administering the Securities Act and other federal securities laws.
“Common
Stock”
shall
mean (except where the context otherwise indicates) the Common Stock, par value
$.001 per share, of the Company as constituted on the Closing Date, and any
capital stock into which such Common Stock may thereafter be changed, and shall
also include (i) capital stock of the Company of any other class (regardless
of
how denominated) issued to the holders of shares of Common Stock upon any
reclassification thereof which is also not preferred as to dividends or assets
over any other class of stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation received by or distributed to the holders of Common Stock of the
Company in the circumstances contemplated by Section 4.4.
“Convertible
Securities”
shall
mean evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable, with or without payment of additional
consideration in cash or property, for shares of Common Stock, either
immediately or upon the occurrence of a specified date or a specified event.
“Early
Expiration Date”
shall
have the meaning set forth in Section 2.4.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended, or any successor federal
statute, and the rules and regulations of the Commission thereunder, all as
the
same shall be in effect from time to time.
“Exercise
Period”
shall
mean the period during which this Warrant is exercisable pursuant to Section
2.1.
“Expiration
Date”
shall
mean _________ 2010 or such earlier date as may be determined pursuant to
Section 2.4.
“Fundamental
Corporate Change”
shall
have the meaning set forth in Section 4.4.
“GAAP”
shall
mean generally accepted accounting principles in the United States of America
as
from time to time in effect.
“Holder”
shall
mean the Person in whose name the Warrant or Warrant Stock set forth herein
is
registered on the books of the Company maintained for such purpose.
“Market
Price”
shall
mean, on any date of determination,(i) the closing price of a share of Common
Stock on such day as reported on the principal Trading Market (other than the
OTC Bulletin Board) on which the Common Stock is listed or traded, or (ii)
if
the Common Stock is not listed on a Trading Market (other than the OTC Bulletin
Board), the closing bid price for a share of Common Stock on such day in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if
the
Common Stock is not then listed or quoted on the OTC Bulletin Board, the closing
bid price for a share of Common Stock on such day in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices).
“Other
Property”
shall
have the meaning set forth in Section 4.4.
“Person”
shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
incorporated organization, association, corporation, institution, public benefit
corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
“Restricted
Common Stock”
shall
mean shares of Common Stock which are, or which upon their issuance on their
exercise of this Warrant would be, evidenced by a certificate bearing the
restrictive legend set forth in Section 9.1(a).
“Securities
Act”
shall
mean the Securities Act of 1933, as amended, or any successor federal statute,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
“Securities
Purchase Agreement”
shall
mean that certain Securities Purchase Agreement dated as of the Closing Date
between the Company and the several Investors named therein (including the
initial Holder of this Warrant).
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“Trading
Day”
means
(i) a day on which the Common Stock is traded on a Trading Market (other than
the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
Market (other than the OTC Bulletin Board), a day on which the Common Stock
is
traded in the over-the-counter market, as reported by the OTC Bulletin Board,
or
(iii) if the
Common
Stock is not then listed or quoted on the OTC Bulletin Board, a day on which
the
Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.
“Trading
Market”
means
whichever of the New York Stock Exchange, the
American
Stock Exchange, the NASDAQ National Market, the NASDAQ Small Cap Market or
OTC
Bulletin Board on which the Common Stock is listed or quoted for trading on
the
date in question.
“Transfer”
shall
mean any disposition of any Warrant or Warrant Stock or of any interest in
either thereof, which would constitute a sale thereof within the meaning of
the
Securities
Act.
“Transfer
Notice”
shall
have the meaning set forth in Section 9.2.
“Warrant
Stock”
shall
mean the shares of Common Stock purchased by the holders of the Warrants upon
the exercise thereof.
“Warrants”
shall
mean this Warrant and all other warrants issued pursuant to the Securities
Purchase Agreement and all warrants issued upon transfer, division or
combination of, or in substitution for, any thereof. All Warrants shall at
all
times be identical as to terms and conditions and date, except as to the number
of shares of Common Stock for which they may be exercised.
2. EXERCISE
OF WARRANT
2.1 Manner
of Exercise
From
and
after the Closing Date and until 5:00 p.m., New York time, on the Expiration
Date, Holder may exercise this Warrant, on any Business Day, for all or any
part
of the number of shares of Common Stock purchasable hereunder.
In
order
to exercise this Warrant, in whole or in part, Holder shall deliver to the
Company at its principal office at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx
Xxxx, XX 00000, or at the office or agency designated by the Company pursuant
to
Section 12, (i) a written notice of Holder’s election to exercise this Warrant,
which notice shall specify the number of shares of Common Stock to be purchased,
(ii) payment of the Warrant Price in cash or wire transfer or cashier’s check
drawn on a United States bank and (iii) this Warrant. Such notice shall be
substantially in the form of the subscription form appearing at the end of
this
Warrant as Exhibit A, duly executed by the Holder or its agent or attorney.
Upon
receipt of the items referred to in clauses (i), (ii) and (iii) above, the
Company shall, as promptly as practicable, and in any event within five Business
Days thereafter, execute or cause to be executed and deliver or cause to be
delivered to Holder a certificate or certificates representing the aggregate
number of full shares of Common Stock issuable upon such exercise, together
with
cash in lieu of any fraction of a share, as hereinafter provided. The stock
certificate or certificates so delivered shall be, to the extent possible,
in
such denomination or denominations as the Holder shall request in the notice
and
shall be registered in the name of the Holder or, subject to Section 9, such
other name as shall be designated in the notice. This Warrant shall be deemed
to
have been exercised and such certificate or certificates 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 notice, together with the
cash or check or wire transfer of funds and this Warrant, is received by the
Company as described above and all taxes required to be paid by the Holder,
if
any, pursuant to Section 2.2 prior to the issuance of such shares have been
paid. If this Warrant shall have been exercised in part, the Company shall,
at
the time of delivery of the certificate or certificates representing Warrant
Stock, deliver to the Holder a new Warrant evidencing the rights of the Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant,
or, at the request of the Holder, appropriate notation may be made on this
Warrant and the same returned to the Holder. Notwithstanding any provision
herein to the contrary, the Company shall not be required to register shares
in
the name of any Person who acquired this Warrant (or part hereof) or any Warrant
Stock otherwise than in accordance with this Warrant.
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2.2 Payment
of Taxes and Charges
All
shares of Common Stock issuable upon the exercise of this Warrant pursuant
to
the terms hereof shall be validly issued, fully paid and nonassessable, freely
tradable and without any preemptive rights. The Company shall pay all expenses
in connection with, and all taxes and other governmental charges that may be
imposed with respect to, the issuance or delivery thereof, unless such tax
or
charge is imposed by law upon Holder, in which case such taxes or charges shall
be paid by Holder. The Company shall not be required, however, to pay any tax
or
other charge imposed in connection with any transfer involved in the issuance
of
any certificate for shares of Common Stock issuable upon exercise of this
Warrant in any name other than that of Holder, and in such case the Company
shall not be required to issue or deliver any stock certificate until such
tax
or other charge has been paid or it has been established to the satisfaction
of
the Company that no such tax or other charge is due.
2.3 Fractional
Shares
The
Company shall not be required to issue a fractional share of Common Stock upon
exercise of any 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 the
same
fraction of the Market Price per share of Common Stock as of the Closing Date.
2.4 Early
Expiration
If
at any
time the Market Price for the Common Stock equals or exceeds 125% of the Warrant
Price for a period of thirty (30) consecutive Trading Days, then the Company
may, by notice to the holders of the Warrants (the “Acceleration
Notice”),
accelerate the Expiration Date of all of the Warrants to such date as shall
be
determined by the Company in its sole discretion and set forth in the
Acceleration Notice (the “Early
Expiration Date”),
which
Early Expiration Date shall be not less than sixty (60) days, nor more than
ninety (90) days, after the date of the Acceleration Notice. From and after
the
date of the Acceleration Notice, the term “Expiration
Date”,
wherever used in this Warrant shall mean and refer to the Early Expiration
Date.
2.5 Exercise
Price
The
Exercise Price shall be the daily volume weighted average price (“VWAP”) per
share of the Common Stock for the three hundred and fifty six (356) day period
immediately preceding (but not including) the date on which this Warrant is
exercised, (i) as reported on the principal Trading Market on which the Common
Stock is listed or traded, or (ii) if the Common Stock is not listed on a
Trading Market, the closing bid price for a share of Common Stock on each such
day in the over-the-counter market, as reported by the OTC Bulletin Board,
or
(iii) if the Common Stock is not then
listed or quoted on the OTC Bulletin Board,
the
closing bid price for a share of Common Stock on each such day in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices), provided,
however, that
in
no event shall the Exercise Price be (i) less than $0.75 per share (the “Minimum
Exercise Price”) or (ii) greater than $1.50 per share(the “Maximum Exercise
Price”).
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3. TRANSFER,
DIVISION AND COMBINATION
3.1 Transfer
Subject
to compliance with Section 9, transfer of this Warrant and all rights hereunder,
in whole or in part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the principal
office of the Company referred to in Section 2.1 or the office or agency
designated by the Company pursuant to Section 12, together with a written
assignment of this Warrant substantially in the form of Exhibit B hereto duly
executed by 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, subject to Section 9, execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees
and in the denomination 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 canceled. A Warrant, if properly
assigned in compliance with Section 9, may be exercised by a new Holder for
the
purchase of shares of Common Stock without having a new warrant
issued.
3.2 Division
and Combination
Subject
to Section 9, this Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office or agency of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by Holder or its agent or attorney.
Subject to compliance with Sections 3.1 and 9, 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.
3.3 Expenses
The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrants or Warrants under this Section 3.
3.4 Maintenance
of Books
The
Company agrees to maintain, at its aforesaid office or agency, books for the
registration and the registration of transfer of the Warrants.
4. ADJUSTMENTS
The
number of shares of Common Stock for which this Warrant is exercisable, or
the
price at which such shares may be purchased upon exercise of this Warrant,
shall
be subject to adjustment from time to time as set forth in this Section 4.
The
Company shall give Holder notice of any event described below which requires
an
adjustment pursuant to this Section 4 at the time of such event.
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4.1
Stock Dividends, Subdivisions and Combinations
If
at any
time the Company shall:
(a) take
a
record of the holders of its Common Stock for the purpose of entitling them
to
receive a dividend payable in, or other distribution of, Additional Shares
of
Common
Stock;
(b) subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock; or
(c) combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock; then (i) the number of shares of Common Stock for which this Warrant
is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the
same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled
to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares for
which this Warrant is exercisable immediately after such adjustment.
4.2
Certain Other Distributions
If
at any
time the Company shall take a record of the holders of its Common Stock for
the
purpose of entitling them to receive any dividend or other distribution of:
(a) cash;
(b) any
evidences of its indebtedness, any shares of its stock or any other securities
or property of any nature whatsoever (other than cash, Convertible Securities
or
Additional Shares of Common Stock); or
(c) any
warrants or other rights to subscribe for or purchase any evidences of its
indebtedness, any shares of its stock or any other securities or property of
any
nature whatsoever (other than cash, Convertible Securities or Additional Shares
of Common Stock); then, upon exercise of this Warrant, Holder shall be entitled
to receive such dividend or distribution as if Holder had exercised the Warrant
prior to the date of such dividend or distribution. A reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common Stock and shares
of any other class of stock shall be deemed a distribution by the Company to
the
holders of its Common Stock of such shares of such other class of stock within
the meaning of this Section 4.2 and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common Stock
as a
part of such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 4.1.
4.3 Other
Provisions Applicable to Adjustments under this Section
The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and
the
Current Warrant Price provided for in this Section 4:
(a)
When Adjustments to be Made.
The
adjustments required by this Section
4
shall be made whenever and as often as any specified event requiring an
adjustment shall occur. For the purpose of any adjustment, any specified event
shall be deemed to have occurred at the close of business on the date of its
occurrence.
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(b) Fractional
Interests.
In
computing adjustments under this Section 4, fractional interests in Common
Stock
shall be taken into account to the nearest 1/10th of a share.
(c) When
Adjustment not Required.
If the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or distribution or subscription or
purchase rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then thereafter no adjustment
shall be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(d) Challenge
to Good Faith Determination.
Whenever the Board of
Directors
of the Company shall be required to make a determination in good faith of the
fair value of any item under this Section 4, such determination may be
challenged in good faith by the Holder, and any dispute shall be resolved by
an
investment banking firm of recognized national standing selected by the Company
and acceptable to Holder.
4.4 Reorganization,
Reclassification, Merger, Consolidation or Disposition
of Assets
In
case
the Company shall reorganize its capital, reclassify its capital stock,
consolidate or merge with or into another Person (where the Company is not
the
survivor or where there is a change in or distribution with respect to the
Common Stock of the Company), or sell, convey, transfer or otherwise dispose
of
all or substantially all its property, assets or business to another Person,
or
effectuate a transaction or series of related transactions in which more than
50% of the voting power of the Company is disposed of (each, a “Fundamental
Corporate Change”)
and,
pursuant to the terms of such Fundamental Corporate Change, shares of common
stock of the successor or acquiring corporation, or any cash, shares of stock
or
other securities or property of any nature whatsoever (including warrants or
other subscription or purchase rights) in addition to or in lieu of common
stock
of the successor or acquiring corporation (“Other
Property”),
are
to be received by or distributed to the holders of Common Stock of the Company,
then Holder shall have the right thereafter to receive, upon exercise of the
Warrant, such number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property as is receivable upon or as a result of such Fundamental Corporate
Change by a holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such Fundamental Corporate Change.
In case of any such Fundamental Corporate Change, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and condition
of
this Warrant to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board of Directors of the
Company) in order to provide for adjustments of shares of Common Stock for
which
this Warrant is exercisable which shall be as nearly equivalent as practicable
to the adjustments provided for in this Section 4. For purposes of this Section
4.4, “common
stock of the successor or acquiring corporation”
shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into
or
exchangeable for any such stock, either immediately or upon the arrival of
a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions
of
this Section 4.4 shall similarly apply to successive Fundamental Corporate
Change.
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4.5 Other
Action Affecting Common Stock
In
case
at any time or from time to time the Company shall take any action in respect
of
its Common Stock, other than any action described in this Section 4, which
would
have a materially adverse effect upon the rights of Holder, the number of shares
of Common Stock and/or the purchase price thereof shall be adjusted in such
manner as may be equitable in the circumstances, as determined in good faith
by
the Board of Directors of the Company.
4.6 Certain
Limitations
Notwithstanding
anything herein to the contrary, the Company agrees not to enter into any
transaction which, by reason of any adjustment hereunder, would cause the
Current Warrant Price to be less than the par value per share of Common Stock.
5. NOTICES
TO HOLDER
5.1
Notice of Adjustments
Whenever
the number of shares of Common Stock for which this Warrant is exercisable,
or
whenever the price at which a share of such Common Stock may be purchased upon
exercise of the Warrants, shall be adjusted pursuant to Section 4, the Company
shall forthwith prepare a certificate to be executed by the chief financial
officer of the Company setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated (including
a description of the basis on which the Board of Directors
of the Company determined the fair value of any evidences of indebtedness,
shares of stock, other securities or property or warrants or other subscription
or purchase rights referred to in Section 4.2), specifying the number of shares
of Common Stock for which this Warrant is exercisable and (if such adjustment
was made pursuant to Section 4.4 or 4.5) describing the number and kind of
any
other shares of stock or Other Property for which this Warrant is exercisable,
and any change in the purchase price or prices thereof, after giving effect
to
such adjustment or change. The Company shall promptly cause a signed copy of
such certificate to be delivered to the Holder in accordance with Section 14.2.
The Company shall keep at its office or agency designated pursuant to Section
12
copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by the Holder or any
prospective purchaser of a Warrant designated by Holder.
5.2
Notice of Corporate Action
If
at any
time:
(a) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right
to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock
of any class or any other securities or property, or to receive any other right;
or
(b) there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all
or
substantially all the property, assets or business of the Company to, another
corporation; or
-8-
(c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up
of
the Company; then, in any one or more of such cases, the Company shall give
to
Holder (i) at least 30 days’ prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 30 days’ prior
written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution
or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof,
and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section
14.2.
6. NO
IMPAIRMENT
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, issuance or sale of securities or 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 against impairment.
Without limiting the generality of the foregoing, the Company will (a) not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant 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 shares of Common Stock upon the exercise
of
this Warrant, and (c) use its best 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.
Upon
the
request of Holder, the Company will at any time during the period this Warrant
is outstanding acknowledge in writing, in form satisfactory to Holder, the
continuing validity of this Warrant and the obligations of the Company
hereunder.
7. RESERVATION
AND AUTHORIZATION OF COMMON STOCK
From
and
after the Closing Date, the Company shall at all times reserve and keep
available for issuance upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All shares of Common Stock
which shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of such Warrant, shall be duly and validly
issued and fully paid and nonassessable and not subject to preemptive rights.
Before
taking any action which would cause an adjustment reducing the Current Warrant
Price below the then par value, if any, of the shares of Common Stock issuable
upon exercise of the Warrants, the Company shall take any corporate action
which
may be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of such Common Stock at such adjusted Current
Warrant Price.
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Before
taking any action which would result in an adjustment in the number of shares
of
Common Stock for which this Warrant is exercisable or in the Current Warrant
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.
8. TAKING
OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
In
the
case of all dividends or other distributions by the Company to the holders
of
its Common Stock with respect to which any provision of Section 4 refers to
the
taking of record of such holders, the Company will in each case take such a
record and will take such record as of the close of business on a Business
Day.
The Company will not at any time, except upon dissolution, liquidation or
winding up of the Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of
any
Warrant.
9. RESTRICTIONS
ON TRANSFERABILITY
The
Warrants and the Warrant Stock shall not be transferred, hypothecated or
assigned before satisfaction of the conditions specified in this Section 9,
which conditions are intended to ensure compliance with the provisions of the
Securities Act with respect to the Transfer of any Warrant or any Warrant Stock.
Holder, by acceptance of this Warrant, agrees to be bound by the provisions
of
this Section 9.
9.1 Restrictive
Legend
(a)
Holder, by accepting this Warrant and any Warrant Stock agrees that this Warrant
and the Warrant Stock issuable upon exercise hereof may not be assigned or
otherwise transferred unless and until (i) the Company has received an opinion
of counsel for Holder that such securities may be sold pursuant to an exemption
from registration under the Securities Act or (ii) a registration statement
relating to such securities has been filed by the Company and declared effective
by the Commission. Each certificate for Warrant Stock issuable hereunder shall
bear a legend as follows until such securities have been sold pursuant to an
effective registration statement under the Securities Act:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE,
AND ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OR SUCH OTHER LAWS.”
(b)
Except as otherwise provided in this Section 9, the Warrant shall be stamped
or
otherwise imprinted with a legend in substantially the following form:
“THIS
COMMON STOCK PURCHASE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS
AMENDED, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE
RULES
AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS COMMON STOCK
PURCHASE WARRANT.
-10-
9.2 Notice
of Proposed Transfers
Prior
to
any Transfer or attempted Transfer of any Warrants or any shares of Restricted
Common Stock, the Holder shall give ten days’ prior written notice (a “Transfer
Notice”) to the Company of Holder’s intention to effect such Transfer,
describing the manner and circumstances of the proposed Transfer, and obtain
from counsel to Holder who shall be reasonably satisfactory to the Company,
an
opinion that the proposed Transfer of such Warrants or such Restricted Common
Stock may be effected without registration under the Securities Act. After
receipt of the Transfer Notice and opinion, the Company shall, within five
days
thereof, notify the Holder as to whether such opinion is reasonably satisfactory
and, if so, such holder shall thereupon be entitled to Transfer such Warrants
or
such Restricted Common Stock, in accordance with the terms of the Transfer
Notice. Each certificate, if any, evidencing such shares of Restricted Common
Stock issued upon such Transfer shall bear the restrictive legend set forth
in
Section 9.1(a), and the Warrant issued upon such Transfer shall bear the
restrictive legend set forth in Section 9.1(b), unless in the opinion of such
counsel such legend is not required in order to ensure compliance with the
Securities Act. Holder shall not be entitled to Transfer
such Warrants or such Restricted Common Stock until receipt of notice from
the
Company under this Section 9.2 that such opinion is reasonably satisfactory.
9.3 Termination
of Restrictions
Notwithstanding
the foregoing provisions of Section 9, the restrictions imposed by this Section
upon the transferability of the Warrants, the Warrant Stock and the Restricted
Common Stock (or Common Stock issuable upon the exercise of the Warrants) and
the legend requirements of Section 9.1 shall terminate as to any particular
Warrant or share of Warrant Stock or Restricted Common Stock (or Common Stock
issuable upon the exercise of the Warrants) (i) when and so long as such
security shall have been effectively registered under the Securities Act and
disposed of pursuant thereto or (ii) when the Company shall have received an
opinion of counsel reasonably satisfactory to it that such shares may be
transferred without registration thereof under the Securities Act. Whenever
the
restrictions imposed by Section 9 shall terminate as to this Warrant, as
hereinabove provided, the Holder hereof shall be entitled to receive from the
Company upon written request of the Holder, at the expense of the Company,
a new
Warrant bearing the following legend in place of the restrictive legend set
forth hereon:
“THE
RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT CONTAINED IN
SECTION 9 HEREOF TERMINATED ON __________, _____, AND ARE OF NO FURTHER
FORCE
AND
EFFECT.”
All
Warrants issued upon registration of transfer, division or combination of,
or in
substitution for, any Warrant or Warrants entitled to bear such legend shall
have a similar legend endorsed thereon. Whenever the restrictions imposed by
this Section shall terminate as to any share of Restricted Common Stock, as
hereinabove provided, the holder thereof shall be entitled to receive from
the
Company, at the Company’s expense, a new certificate representing such Common
Stock not bearing the restrictive legend set forth in Section 9.1(a).
10. SUPPLYING
INFORMATION
The
Company shall cooperate with Holder in supplying such information as may be
reasonably necessary for Holder to complete and file any information reporting
forms presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any Warrant
or Restricted Common Stock.
-11-
11. LOSS
OR MUTILATION
Upon
receipt by the Company from Holder of evidence reasonably satisfactory to it
of
the ownership of and the loss, theft, destruction or mutilation of this Warrant
and indemnity reasonably satisfactory to it (it being understood that the
written agreement of the Holder shall be sufficient indemnity), and in case
of
mutilation upon surrender and cancellation hereof, the Company will execute
and
deliver in lieu hereof a new Warrant of like tenor to Holder; provided, in
the
case of mutilation no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.
12. OFFICE
OF THE COMPANY
As
long
as any of the Warrants remain outstanding, the Company shall maintain an office
or agency (which may be the principal executive offices of the Company) where
the Warrants may be presented for exercise, registration of transfer, division
or combination as provided in this Warrant.
13. LIMITATION
OF LIABILITY
No
provision hereof, in the absence of affirmative action by Holder to purchase
shares of Common Stock, and no enumeration herein of the rights or privileges
of
Holder hereof, 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.
14. MISCELLANEOUS
14.1
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
Holder’s rights, powers or remedies. If the Company fails to make, when due, any
payments provided for hereunder, or fails to comply with any other provision
of
this Warrant, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, without limitation,
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.
14.2
Notice Generally
Except
as
may be otherwise provided herein, any and all notices or other communications
or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile
(provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section 14.2 prior
to
6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that is
not
a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day,
(c) the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party
to
whom such notice is required to be given. The address for such notices and
communications shall be as follows:
If to the Company: | ThermoEnergy Corporation | ||
Attn.: Chairman | |||
000
Xxxx Xxxxxxx Xxxxxx
Xxxxx
000
Xxxxxx
Xxxx, XX 00000
|
|||
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
|
-12-
With a copy to: | Xxxxx Xxxxxxx, LLP | ||
Attn.:
Xxxxxxx X. Xxxxx
000
Xxxxxx Xxxxxx
Xxxxxx,
XX 00000-0000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
|
|||
If to the Holder: | Xxxxxx X. Xxxxx |
or
such
other address as may be designated in writing hereafter, in the same manner,
by
such addressee.
14.3
Indemnification
The
Company agrees to indemnify and hold harmless Holder from and against any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys’ fees, expenses and disbursements of any kind which may
be imposed upon, incurred by or asserted against Holder in any manner relating
to or arising out of any failure by the Company to perform or observe in any
material respect any of its covenants, agreements, undertakings or obligations
set forth in this Warrant; provided, however, that the Company will not be
liable hereunder to the extent that any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, attorneys’ fees,
expenses or disbursements are found in a final nonappealable judgment by a
court
to have resulted from Holder’s gross negligence, bad faith or willful misconduct
in its capacity as a stockholder or warrantholder of the Company.
14.4
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 Section 9 of 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 Section 9 of this Warrant and hereby agrees to waive
the defense in any action for specific performance that a remedy
at
law would be adequate.
14.5
Successors and Assigns
Subject
to the provisions of Sections 3.1 and 9, this Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors of
the
Company and the successors and assigns of the Holder. The provisions of this
Warrant are intended to be for the benefit of all Holders from time to time
of
this Warrant and, with respect to Section 9 hereof, holders of Warrant Stock,
and shall be enforceable by any such Holder or holder of Warrant Stock.
-13-
14.6
Amendment
This
Warrant and all other Warrants may be modified or amended or the provisions
hereof waived with the written consent of the Company and Holder.
14.7
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 only be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Warrant.
14.8
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.
14.9
Governing Law
This
Warrant shall be governed by the laws of the State of Delaware, without regard
to the provisions thereof relating to conflicts of law.
IN
WITNESS WHEREOF,
the
Company has caused this Warrant to be duly executed and its corporate seal
to be
impressed hereon and attested by its Secretary or an Assistant Secretary.
Dated:
_______, 2007
THERMOENERGY CORPORATION | ||
|
|
|
By: | ||
Xxxxxx X. Xxxxxx, |
||
Chairman & CEO |
Attest:
Xxxxxx X. Xxxxxx |
|||
Secretary and Chief Financial Officer |
-14-
EXHIBIT
A
SUBSCRIPTION
FORM
[To
be
executed only upon exercise of Warrant]
The
undersigned registered owner of this Warrant irrevocably exercises this Warrant
for the purchase of __________ shares of Common Stock of ThermoEnergy
Corporation and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered
to
______________________________________________________________________________
whose
address is
______________________________________________________________________________
and,
if
such shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in this Warrant, that a new Warrant of like tenor and
date
for the balance of the shares of Common Stock issuable hereunder be delivered
to
the undersigned.
(Name of Registered Owner) |
|||
(Name of Registered Owner) |
|||
(Street Address)
|
|||
(City) (State) (Zip Code)
|
|||
Notice: The signature on this subscription must correspond With the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatsoever. |
A-1
EXHIBIT
B
ASSIGNMENT
FORM
FOR
VALUE
RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights
of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
No.
of Shares of
|
|
|||
Name
and Address of Assignee
|
|
Common
Stock
|
||
and
does
hereby irrevocably constitute and appoint
_______________________________________________________________________
attorney-in-fact
to register such transfer on the books of ThermoEnergy Corporation maintained
for the purpose, with full power of substitution in the premises.
Dated:
Print Name) |
|||
(Signature) |
|||
(Print Name of Witness)
|
|||
(Witness’s Signature)
|
|||
Notice: The signature on this assignment must correspond with the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatsoever. |
B-1