Contract
EXHIBIT
B
NEITHER
THIS SECURITY NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY 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
SECURED BY SUCH SECURITIES.
WARRANT
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Warrant
No. [1]
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Original
Issue Date: January [___],
2011
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ECOtality,
Inc., a Nevada corporation (the “Company”), hereby certifies
that, for value received, [ABB Technology Ventures Ltd.] or its registered
assigns (the “Holder”),
is entitled to purchase from the Company up to a total of
[_________] shares of Common Stock (each such share, a “Warrant
Share” and all such shares, the “Warrant Shares”), at any time
and from time to time from and after the Original Issue Date and through and
including January [___], 2016 (the “Expiration Date”), and subject
to the following terms and conditions:
1. Definitions. As
used in this Warrant, the following terms shall have the respective definitions
set forth in this Section 1. Capitalized terms that are used and not
defined in this Warrant that are defined in the Purchase Agreement (as defined
below) shall have the respective definitions set forth in the Purchase
Agreement.
“Business Day” means any day
except Saturday, Sunday and any day which is a federal legal holiday or a day on
which banking institutions in the State of New York are authorized or required
by law or other governmental action to close.
“Common Stock” means the
common stock of the Company, par value $0.001 per share, and any securities into
which such common stock may hereafter be reclassified.
“Exercise Price” means $[_.00]
, subject to adjustment in accordance with Section 9.
“Fundamental Transaction”
means any of the following: (1) the Company effects any merger or consolidation
of the Company with or into another Person, (2) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (3) 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 (4) the Company effects any recapitalization, reorganization,
reclassification of the Common Stock or any other transaction pursuant to which
the holders of Common Stock are required to receive either directly or upon
subsequent liquidation), other securities, cash or property with respect to or
in exchange for Common Stock.
“Investor Rights Agreement”
means the Investor Rights Agreement, dated January 10, 2011, to which the
Company and the original Holder are parties.
“New York Courts” means the
courts of the State of New York and the United States District Court for the
Southern District of New York.
“Original Issue Date” means the
Original Issue Date first set forth on the first page of this
Warrant.
“Purchase Agreement” means the
Securities Purchase Agreement, dated January 10, 2011, to which the Company and
the original Holder are parties.
“Trading Day” means (i) a day
on which the Common Stock is traded on a Trading Market, or (ii) if the Common
Stock is not listed or quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported by OTC Pink Sheets
(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)
and (ii) hereof, then Trading Day shall mean a Business Day.
“Trading Market” means
whichever of the New York Stock Exchange, NYSE Amex, the NASDAQ Stock Market
(including the NASDAQ Global Select Market, the NASDAQ Global Market and the
NASDAQ Capital Market) or OTC Bulletin Board on which the Common Stock is listed
or quoted for trading on the date in question.
2. Registration of
Warrant. 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.
3. Registration of
Transfers. The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of this Warrant,
with the Form of Assignment attached hereto duly completed and signed, to the
Company at its address specified herein. Upon any such registration
or transfer, a new Warrant to purchase Common Stock, in substantially the form
of this Warrant (any such new Warrant, a “New Warrant”), evidencing the
portion of this Warrant so transferred shall be issued to the transferee and a
New Warrant evidencing the remaining portion of this Warrant not so transferred,
if any, shall be issued to the transferring Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a
Warrant.
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4. Exercise and Duration of
Warrants. This Warrant shall be exercisable by the registered
Holder at any time and from time to time on or after the Original Issue Date
through and including the Expiration Date. At 6:30 p.m., New York
City time on the Expiration Date, the portion of this Warrant not exercised
prior thereto shall be and become void and of no value.
5. Delivery of Warrant
Shares.
(a) To
effect exercises hereunder, the Holder shall not be required to physically
surrender this Warrant unless all of the Warrant Shares represented by this
Warrant are being exercised. Upon delivery of the Exercise Notice (in
the form attached hereto) to the Company (with the attached Warrant Shares
Exercise Log) at its address for notice set forth herein and upon payment of the
Exercise Price multiplied by the number of Warrant Shares that the Holder
intends to purchase hereunder, the Company shall promptly (but in no event later
than three Trading Days after the Date of Exercise (as defined herein)) issue
and deliver to the Holder, a certificate for the Warrant Shares issuable upon
such exercise, which, unless otherwise required by the Purchase Agreement or
applicable law, shall be free of restrictive legends. The Company
shall, upon request of the Holder and subsequent to the date on which a
registration statement covering the resale of the Warrant Shares has been
declared effective by the Securities and Exchange Commission, use its reasonable
best efforts to deliver Warrant Shares hereunder electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions, if available, provided, that, the
Company may, but will not be required to change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through the
Depository Trust Corporation. A “Date of Exercise” means the
date on which the Holder shall have delivered to the Company: (i) the Exercise
Notice (with the Warrant Exercise Log attached to it), appropriately completed
and duly signed and (ii) payment of the Exercise Price as provided in Section 10 (in
immediately available funds or, if permitted, by indicating on the Exercise
Notice Holder’s election to utilize “cashless exercise”) for the number of
Warrant Shares so indicated by the Holder to be purchased.
(b) If
by the third Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required pursuant to Section 5(a), then
the Holder will have the right to rescind such exercise.
(c) If
by the third Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required pursuant to Section 5(a), and if
after such third Trading Day and prior to the receipt of such Warrant Shares,
the Holder purchases (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 by (B) the closing sales price of the
Common Stock on the Date of Exercise 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. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In.
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(d) The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of
law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Xxxxxx’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 Warrant Shares upon exercise
of the Warrant as required pursuant to the terms hereof.
6. Charges, Taxes and
Expenses. Issuance and delivery of Warrant Shares upon
exercise of this Warrant shall be made without charge to the Holder for any
issue or transfer tax, withholding tax, transfer agent fee or other incidental
tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder. The Holder shall
be responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.
7. Replacement of
Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if
requested. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation
of this Warrant, then the Holder shall deliver such mutilated Warrant to the
Company as a condition precedent to the Company’s obligation to issue the New
Warrant.
8. Reservation of Warrant
Shares. The Company hereby represents and warrants that there
have been reserved, and covenants that it will at all times reserve and keep
available, out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
Persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.
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9. Certain
Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section
9.
(a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.
(b) Fundamental
Transactions. If, at any time while this Warrant is
outstanding there is a Fundamental Transaction, then the Holder shall have the
right thereafter to receive, upon exercise of this Warrant, the same amount and
kind of securities, cash or property as it would have been entitled to receive,
in lieu of or addition to (as the case may be) the Warrant Shares, upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the “Alternate
Consideration”). 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. In any such
case, the Company shall make appropriate provision with respect to the Holder’s
rights and interests to insure that the provisions of this Section 9 and
Sections 10 and 11 hereof shall thereafter be applicable to the
Warrant. The Company shall not effect any such consolidation, merger
or sale, unless prior to the consummation thereof, the successor entity (if
other than the Company) resulting from consolidation or merger or the entity
purchasing such assets assumes by written instrument, the obligation to deliver
to the Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to
acquire. Notwithstanding any other provision in this Warrant to the
contrary, the Holder shall have the right, at its election, to sell or exchange
this Warrant (rather sell or exchange the Warrant Shares) in connection with any
Fundamental Transaction that is structured as a sale or exchange of securities
of the Company, and the Company shall use its reasonable best efforts to take
all actions necessary or reasonably requested by the Holder to give effect to
such election.
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(c) Certain
Events. If any event occurs of the type contemplated by the
provisions of this Section 9 but not
expressly provided for by such provisions, then the Company’s Board of Directors
shall make an appropriate adjustment in the number of Warrant Shares obtainable
upon exercise of this Warrant so as to protect the rights of the Holder;
provided that no such adjustment shall decrease the number of Warrant Shares
obtainable as otherwise determined pursuant to this Section
9.
(d) Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise
Price pursuant to this Section 9, the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant
Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment.
(e) Calculations. All
calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.
(f)
Notice of
Adjustments. Upon the occurrence of each adjustment pursuant
to this Section
9, the Company at its expense will promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable), describing the transactions giving
rise to such adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will promptly
deliver a copy of each such certificate to the Holder and to the Company’s
Transfer Agent.
(g) Notice of Corporate
Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then the Company shall mail to the Holder at its address of record on file with
the Company a notice describing the material terms and conditions of such
transaction (but only to the extent such disclosure would not result in the
dissemination of material, non-public information to the Holder) at least 10
calendar days prior to the applicable record or effective date on which a Person
would need to hold Common Stock in order to participate in or vote with respect
to such transaction, and the Company will take all commercially reasonable steps
in order to insure that the Holder is given the practical opportunity to
exercise this Warrant prior to such time so as to participate in or vote with
respect to such transaction; provided, however, that the failure to deliver such
notice or any defect therein shall not affect the validity of the corporate
action required to be described in such notice.
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10. Dividends. If
the Company declares or pays any dividend upon the Common Stock except for a
stock dividend payable in shares of Common Stock (a “Dividend”), then the
Company shall pay to the Holder at the time of payment thereof the Dividend
which would have been paid to such Holder had this Warrant been fully exercised
immediately prior to the date on which a record is taken for such Dividend, or,
if no record is taken, the date as of which the record holders of Common Stock
entitled to such dividends are to be determined.
11. Purchase
Rights. If at any time the Company grants, issues or sells any
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
“Purchase
Rights”), then the Holder shall be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which such
holder could have acquired if such holder had held the number of Warrant Shares
acquirable upon complete exercise of this Warrant immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.
12. Payment of Exercise
Price. The Holder shall pay the Exercise Price in one of the following
manners:
(a) Cash
Exercise. The Holder may deliver immediately available funds;
or
(b) Cashless
Exercise. If at any time on or after six (6) months after the
Original Issue Date, 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 “Y” by surrendering the
right to purchase a number of Warrant Shares equal to “X”, determined as
follows:
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Y
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=
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X
[(A-B)/A]
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A
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=
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the
VWAP on the Trading Day immediately preceding the date of such
election;
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B
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=
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the
Exercise Price of this Warrant, as adjusted;
and
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X
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=
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the
number of Warrant Shares, for which the right to purchase is being
surrendered and cancelled
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“VWAP” means, for any date, the
price determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on a Trading Market, the daily volume
weighted average price of the Common Stock for such date (or if such date is not
a Trading Day, the nearest preceding date that was a Trading Day) on the Trading
Market on which the Common Stock is then listed or quoted; (b) in all other
cases, the Fair Market Value of a share of Common Stock as jointly determined in
good faith by the Holder and the Company’s Board of Directors. If the
Common Stock is not then listed on a Trading Market, then the Board of Directors
of the Company shall respond promptly, in writing, to an inquiry by the Holder
prior to the exercise hereunder as to the Fair Market Value of a share of Common
Stock as determined in good faith by the Board of Directors of the
Company. In the event that the Board of Directors of the Company and
the Holder are unable to agree upon the Fair Market Value in respect of clause
(b) above, the Company and the Holder shall jointly select an appraiser who is
experienced in such matters. The decision of such appraiser shall be
final and conclusive, and the cost of such appraiser shall be borne equally by
the Company and the Holder.
13. Limitations on
Exercise. Notwithstanding anything to the contrary contained
herein, the number of Warrant Shares that may be acquired by the Holder upon the
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Nasdaq Rule 5635, does not
exceed the Beneficial Ownership Limitation. In determining beneficial
ownership for purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and its Affiliates shall include the
number of shares of Common Stock issuable upon the exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which would be issuable upon (A) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by the 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 Common Stock Equivalents) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder and any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Nasdaq Rule
5635. For the avoidance of doubt, (a) the operation of this Section 13 shall not
reduce the number of shares of Common Stock that may be received upon exercise
of this Warrant, but shall only prohibit any issuance of Common Stock to the
Holder (and any other Persons whose beneficial ownership of Common Stock would
be aggregated with the Holder’s for purposes of Nasdaq Rule 5635) that would
cause such Person’s beneficial ownership of Common Stock to exceed the
Beneficial Ownership Limitation, and (b) this Section 13 shall not
restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this
Warrant. The “Beneficial Ownership
Limitation” shall be 19.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The provisions of this
Section 13
shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 13 to correct
this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make
changes or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this Section 13 shall
apply to a successor holder of this Warrant.
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14. Stockholder
Vote. In connection with the first solicitation by the Company
of proxies from the stockholders of the Company following the Issue Date (which
shall be no later than the Company’s 2011 Annual Meeting), the Company shall
submit to a vote of its stockholders a proposal, which shall be subject to the
prior review and consent of the Holder (which shall not be unreasonably
withheld, conditioned or delayed), to approve the issuance of Common Stock
pursuant to this Warrant in excess of the Beneficial Ownership Limitation, in an
amount up to the maximum number of shares of Common Stock for which this Warrant
may be exercised pursuant to the terms hereof. Upon stockholder
approval of such matter, the provisions of Section 13 hereof
shall, automatically and without any further action, terminate and be of no
further force and effect.
15. No Fractional
Shares. No fractional Warrant Shares will be issued in
connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported by the applicable Trading Market on the date of
exercise. At the Company’s election, in lieu of any such cash payment
by the Company, the aggregate Exercise Price otherwise payable by the Holder in
connection with such exercise may be reduced by the amount of such cash
payment.
16. Extension of Expiration
Date. If (a) the Company fails to cause any Registration
Statement covering Registrable Securities (as such term is defined in that
certain Investor Rights Agreement, dated as of the date hereof, by and between
the Company and ABB Technology Ventures Ltd., as amended, supplemented or
otherwise modified from time to time (the “Investor Rights
Agreement”)) to be declared effective prior to the applicable dates set
forth therein, or (b) if any of the events specified in Section 9 of the
Investor Rights Agreement occurs, and the Blackout Period (as such term is
defined in the Investor Rights Agreement) (whether alone, or in combination with
any other Blackout Period) continues for more than thirty days in any twelve
month period, or for more than a total of ninety days, then the Expiration Date
of this Warrant shall be extended one day for each day beyond the thirty day or
ninety day limits, as the case may be, that the Blackout Period
continues.
17. Further
Assurances. 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 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 reasonably required 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) take all such action as may be
necessary or reasonably required in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of
this Warrant, and (b) use all reasonable 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. Before taking any action which would
result in an adjustment in the number of Warrant Shares for which this Warrant
is exercisable, the Company shall use all reasonable best efforts to
obtain all such authorizations or exemptions thereof, or consents thereto, as
may be necessary or reasonably required from any public regulatory body or
bodies having jurisdiction thereof.
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18. Notices. Any
and all notices or other communications or deliveries hereunder (including,
without limitation, any Exercise Notice) shall be in writing and shall be deemed
given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (ii) 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, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i)
if to the Company, to ECOtality, Inc., Four Embarcadero Center, Xxxxx 0000, Xxx
Xxxxxxxxx, XX 00000, Attn: Chief Executive Officer, or to Facsimile No.: (000)
000-0000 (or such other address as the Company shall indicate in writing in
accordance with this Section), or (ii) if to the Holder, to the address or
facsimile number appearing on the Warrant Register or such other address or
facsimile number as the Holder may provide to the Company in accordance with
this Section.
19. Warrant
Agent. The Company shall serve as warrant agent under this
Warrant. Upon 10 days’ notice to the Holder, the Company may appoint
a new warrant agent. Any corporation into which the Company or any
new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or
any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or stockholders services business shall
be a successor warrant agent under this Warrant without any further
act. Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed (by first class mail, postage
prepaid) to the Holder at the Holder’s last address as shown on the Warrant
Register.
20. Registration
Rights. The initial Holder is entitled to the benefit of
certain registration rights with respect to the shares of Common Stock issuable
upon the exercise of this Warrant as provided in the Investor Rights Agreement,
and any subsequent Holder may be entitled to such rights in accordance with the
terms of the Investor Rights Agreement.
21. Miscellaneous.
(a) This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Subject to the preceding
sentence, nothing in this Warrant shall be construed to give to any Person other
than the Company and the Holder any legal or equitable right, remedy or cause of
action under this Warrant. This Warrant may be amended only in
writing signed by the Company and the Holder and their successors and
assigns.
10
(b) All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York (except for matters governed by
corporate law in the State of Nevada), without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of this
Warrant and the transactions herein contemplated (“Proceedings”) (whether brought
against a party hereto or its respective Affiliates, employees or agents) shall
be commenced exclusively in the New York Courts. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by
law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. If either party shall commence a Proceeding to
enforce any provisions of this Warrant, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
(c) The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(d) In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
(e) Prior
to exercise of this Warrant, the Holder hereof shall not, by reason of being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant
Shares.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE
PAGE FOLLOWS]
11
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.
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By:
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Name:
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Title:
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12
EXERCISE
NOTICE
WARRANT
DATED JANUARY [___], 2011
The
undersigned Holder hereby irrevocably elects to purchase _____________ shares of
Common Stock pursuant to the above referenced Warrant. Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.
(1) The
undersigned Holder hereby exercises its right to purchase _________________
Warrant Shares pursuant to the Warrant.
(2) Payment
of the Exercise Price shall be made as follows (check one):
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[ ]
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Cash
Exercise. Payment of $_______________, the aggregate
Exercise Price for the number of Warrant Shares indicated in paragraph 1
above, in lawful money of the United
States.
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[ ]
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Cashless
Exercise. The cancellation of such number of Warrant
Shares as is necessary, in accordance with the formula set forth in Section 10(b),
to purchase the number of Warrant Shares indicated in paragraph 1 above
pursuant to the cashless exercise provisions set forth in Section 10(b)
of the Warrant.
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(3) Pursuant
to this Exercise Notice, the Company shall deliver to the holder _______________
Warrant Shares in accordance with the terms of the Warrant.
(4) By
its delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby the Holder
will not beneficially own in excess of the number of shares of Common Stock
(determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended) permitted to be owned under Section 11. of this
Warrant to which this notice relates.
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Dated:
________________, ____
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Name
of Xxxxxx:
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(Print)
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By:
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Name:
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Title:
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(Signature
must conform in all respects to
name
of holder as specified on the face
of the
Warrant)
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13
Warrant Shares Exercise
Log
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Date
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Number of Warrant
Shares Available
to be Exercised
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Number of
Warrant Shares
Exercised
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Number of
Warrant Shares
Remaining to be Exercised
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14
WARRANT
ORIGINALLY ISSUED JANUARY [___], 2011
WARRANT
NO. [_____]
FORM OF
ASSIGNMENT
[To be
completed and signed only upon transfer of Warrant]
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the above-captioned
Warrant to purchase ____________ shares of Common Stock to which such
Warrant relates and appoints ________________ attorney to transfer said right on
the books of the Company with full power of substitution in the
premises.
Dated: _______________,
____
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(Signature
must conform in all respects to name of holder as specified on the face of
the Warrant)
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Address
of Transferee
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In
the presence of:
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15
