Contract
Exhibit
10.20
THIS
WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT
AND ANY STATE SECURITIES LAWS WHICH MAY BE APPLICABLE. THE COMPANY MAY REQUIRE
AN OPINION OF COUNSEL BEFORE IT EFFECTS ANY TRANSFER ON ITS BOOKS AND RECORDS OF
THIS WARRANT OR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF.
WARRANT
TO PURCHASE
SHARES
OF COMMON STOCK
OF
Key
Terms/Definitions:
“Company”:
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American
DG Energy Inc., a Delaware corporation
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“Holder”:
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Hayden
IR
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“Common
Stock”:
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Common
Stock, $.001 par value per share of the Company
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Number
of shares of Common Stock issuable on exercise of Warrant
(subject
to adjustment):
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12,000
shares
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Price
paid to purchase Warrant:
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$0.00
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Exercise
Price per share of Common Stock
(subject
to adjustment):
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$2.98
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Vesting
Schedule:
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4,000
Shares vest (i.e., become exercisable) on October 1, 2009;
4,000
Shares vest on February 1, 2010;
4,000
Shares vest on June 1, 2010;
provided that at each
such vesting date the Hayden IR agreement with the Company remains in
effect and the Holder has complied fully with the terms thereof through
the applicable vesting date.
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Expiration
Date:
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May
30,
2013
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THIS IS TO CERTIFY that, for value
received and subject to the provisions hereinafter set forth, that the Holder,
or permitted assigns, is entitled to purchase from the Company at any time on or
after the date hereof and on or before the Expiration Date the number of shares
of Common Stock set forth in the table above, subject to the terms, provisions
and conditions hereinafter set forth, at the Exercise Price per
share.
The
Company shall give the Holder written notice of the pendency of the Expiration
Date at least 10 days, but not more than 60 days, prior to the Expiration Date.
If the Company fails to serve the Expiration Notice upon the Holder within the
required time period, the Expiration Date shall be deemed to have been extended
and this Warrant shall continue to be exercisable by the Holder until 10 days
after the Company delivers a delinquent Expiration Notice to the Holder
referencing the new, extended Expiration Date.
Tender of the price paid to purchase this Warrant shall
be made by delivery of a personal or bank check payable to the Company or by
wire transfer to the Company’s designated bank account, together with one
executed copy of this Warrant.
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SECTION
1. EXERCISE OF
WARRANT
This
Warrant may be exercised in whole or in part at any time by the surrender of
this Warrant (with the subscription form at the end hereof duly completed and
executed) at the principal office of the Company.
For an
exercise for cash, the subscription form shall be accompanied by payment to the
Company of the aggregate Exercise Price for the shares being purchased. Any such
payment shall be by check payable to the order of the Company.
For a
“cashless exercise,” the Holder shall notify the Company in its subscription
form of its election to utilize cashless exercise, in which event the Company
shall issue to the Holder a number of shares of Common Stock determined as
follows:
X = Y
[(A-B)/A]
where:
X = the
number of shares of Common Stock to be issued to the Holder.
Y = the
number of shares of Common Stock with respect to which this Warrant is being
exercised.
A = the
closing price of the Common Stock on its principal trading market on the trading
day immediately prior to the exercise date.
B = the
Exercise Price then in effect.
Notwithstanding
any other provision hereof, if an exercise of any portion of this Warrant is to
be made in connection with a public offering or sale of the Company, the
exercise of any portion of this Warrant may, at the election of the Holder, be
conditioned upon the consummation of the public offering or sale of the Company,
in which case such exercise shall not be deemed to be effective concurrently
with the consummation of such transaction.
If this
Warrant is exercised in respect of less than all of the shares of Common Stock
at the time purchasable hereunder, the Holder shall be entitled to receive a new
Warrant of like tenor to this Warrant covering the number of shares in respect
of which this Warrant shall not have been exercised.
The
Common Stock issuable upon the exercise of this Warrant shall be deemed to have
been issued to the Holder at the time of such exercise, and the Holder shall be
deemed for all purposes to have become the record holder of the Common Stock at
such time. Certificates for shares of the Common Stock purchased upon
exercise or partial exercise of this Warrant shall be delivered by the Company
to Holder within five business days after the date of exercise.
This
Warrant and all rights and options hereunder shall expire on the Expiration Date
(as the same may be modified as provided herein), and shall be wholly null and
void to the extent this Warrant is not exercised before it expires.
SECTION
2.
RESERVATION
The
Company will at all times prior to the Expiration Date reserve and keep
available such number of authorized shares of its Common Stock solely for the
purpose of issuance upon the exercise of the rights represented by this Warrant
as herein provided for, as may at any time be issuable upon the exercise of this
Warrant.
SECTION
3. VESTING
The
Holder may exercise this Warrant on or after the date of this Warrant grant for
the number of vested shares of Common Stock set forth on the cover page hereof,
but only in accordance with the Vesting Schedule also set forth on the cover
page. The foregoing rights are cumulative and may be exercised only before the
Expiration Date. If at any time the Hayden IR agreement with the Company
terminates, no additional shares shall vest.
SECTION
4. STOCK DIVIDENDS,
ETC.
The per
share Exercise Price and the number of shares deliverable hereunder shall be
adjusted as hereinafter set forth:
Section
4.1. Stock Dividends,
Subdivisions and Combinations. In case after the date hereof
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, Common Stock,
or
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(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 the
per share Exercise Price shall be adjusted, for the purpose of preserving the
economic value of this Warrant, to the price determined by multiplying the per
share Exercise Price in effect immediately prior to such subdivision or
combination or the taking of a record of holders in respect of such payment or
distribution, as the case may be (each, a “Triggering Event”) by
a fraction (i) the numerator of which shall be the total number of outstanding
shares of Common Stock of the Company immediately prior to such Triggering
Event, and (ii) the denominator of which shall be the total number of
outstanding shares of Common Stock of the Company immediately after such
Triggering Event.
Section
4.2. Adjustment of Number of
Shares Purchasable. Upon each adjustment of the per share
Exercise Price, the number of shares of Common Stock subsequently purchasable
hereunder shall be an amount equal to the quotient derived by dividing the
aggregate Exercise Price in effect immediately before such adjustment by the per
share Exercise Price in effect immediately following such adjustment or
readjustment.
Section
4.3. Notice of
Adjustments. Whenever the per share Exercise Price or number
of shares deliverable upon exercise of this Warrant shall be adjusted pursuant
to this Section 4, the Company shall promptly prepare a certificate signed by
the President or a Vice President and by the Treasurer or an Assistant Treasurer
of the Company setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Board of
Directors of the Company made any determination hereunder), and shall promptly
cause copies of such certificate to be mailed (by first class mail, postage
prepaid) to the Holder.
SECTION
5. MERGERS,
CONSOLIDATIONS, SALES
In the
case of any consolidation or merger of the Company with another entity
(regardless of whether the Company is the surviving entity), or the sale of all
or substantially all of its assets to another entity, or any reorganization or
reclassification of the Common Stock or other equity securities of the Company,
then, as a condition of such consolidation, merger, sale, reorganization or
reclassification, lawful and adequate provision shall be made whereby the Holder
shall thereafter have the right to receive upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore purchasable hereunder, such shares of stock, securities
or assets (including, without limitation, cash), if any, as may (by virtue of
such consolidation, merger, sale, reorganization or reclassification) be issued
or payable with respect to or in exchange for a number of outstanding shares of
Common Stock equal to the number of shares of Common Stock immediately
theretofore so purchasable hereunder had such consolidation, merger, sale,
reorganization or reclassification not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and interests of
the Holder to the end that the provisions hereof shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon exercise of this Warrant. The Company
shall not effect any such consolidation, merger or sale unless (a) the Company
provides the holder hereof with not less than 10 days prior written notice of
such consolidation, merger or sale (provided that the failure to give such
notice shall not affect the validity of such corporate event), and (b) 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 each such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire.
SECTION
6. DISSOLUTION OR
LIQUIDATION
If the
Company declares or pays a dividend upon the Common Stock payable otherwise than
in cash out of earnings or earned surplus (determined in accordance with
generally accepted accounting principles, consistently applied) except for a
stock dividend payable in shares of Common Stock (a “Liquidating
Dividend”), then the Company shall pay to the Holder at the time of
payment thereof the Liquidating Dividend which would have been paid to such
holder on the Common Stock had this Warrant been fully exercised immediately
prior to the date on which a record is taken for such Liquidating 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.
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SECTION
7. NOTICE OF
DIVIDENDS; PAYMENTS
If the
Board of Directors of the Company shall declare any dividend or other
distribution on any class of its Common Stock except by way of a stock dividend
payable in Common Stock on its Common Stock, the Company shall mail notice
thereof to the Holder not less than 10 days prior to the record date fixed for
determining shareholders entitled to participate in such dividend or other
distribution, and the Holder shall be entitled to receive, as a consent fee,
cash or other property from the Company in an amount and of the same type (cash
or property) equal to that which the holder would have been entitled to receive
if the unexercised portion hereof had been exercised as of the record date of
such dividend or distribution.
SECTION
8. NO FRACTIONAL
SHARES
No
fractional shares shall be issued upon the exercise of this Warrant under any
circumstances.
SECTION
9. FULLY PAID
STOCK
The
Company covenants and agrees to take all such actions necessary to ensure that
the shares of stock represented by each and every certificate for its Common
Stock to be delivered on the exercise of the purchase rights herein provided for
shall, at the time of such delivery, be validly issued and outstanding and be
fully paid and nonassessable. In addition, the Company shall take all
such actions as may be necessary to ensure that all such shares of Common Stock
may be so issued without violation of any applicable law or governmental
regulation or any requirements of any trading market or securities exchange upon
which shares of Common Stock may be listed.
SECTION
10. CLOSING OF TRANSFER
BOOKS
The right
to exercise this Warrant shall not be suspended during any period that the stock
transfer books of the Company for its Common Stock may be closed. The
Company shall not be required, however, to deliver certificates of its Common
Stock upon such exercise while such books are duly closed for any purpose, but
the Company may postpone the delivery of the certificates for the Common Stock
until the opening of such books, and they shall, in such case, be delivered
forthwith upon the opening thereof, or as soon as practicable
thereafter.
SECTION
11. RESTRICTIONS
ON TRANSFERABILITY OF WARRANTS AND SHARES; COMPLIANCE WITH
LAWS
Notwithstanding
anything contained in this Warrant to the contrary, the terms and provisions of
this Section 11 of this Warrant remain in full force and effect at all times and
shall survive the Expiration Date.
Section
11.1. In
General. This Warrant and the shares of Common Stock issued
upon the exercise hereof shall not be transferable except upon the conditions
hereinafter referred to, which conditions are intended to ensure compliance with
the provisions of the Securities Act of 1933, as amended (or any similar Federal
statute at the time in effect) (the “Securities Act”), and
any applicable state securities laws in respect of the transfer of this Warrant
or any such shares. Any attempt to transfer such Warrant or such
shares except in accordance with the terms hereof shall, to the extent legally
enforceable, be void.
Section
11.2. Restrictive
Legends. Each Warrant and each certificate for shares of
Common Stock issued upon the exercise of any Warrant shall bear a customary
restrictive legend relating to securities laws compliance until counsel for the
Company determines that such legend is no longer legally
required. This Warrant and any shares of Common Stock issuable upon
exercise hereof may be transferred only in accordance with the provisions of
such legend, including the legend set forth on the first page
hereof.
Section
11.3. Accredited
Investor. The initial Holder of this Warrant represents that
he is an a “accredited investor” as defined in the rules and regulations under
the Securities Act.
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SECTION
12. PARTIAL EXERCISE AND PARTIAL
ASSIGNMENT
If this
Warrant is exercised in part only, the holder hereof shall be entitled to
receive a new Warrant covering the number of shares in respect of which this
Warrant shall not have been exercised as provided in Section 1. If
this Warrant is partially assigned, this Warrant shall be surrendered at the
principal office of the Company (with the partial assignment form at the end
hereof duly executed), and thereupon a new Warrant shall be issued to the Holder
covering the number of shares not assigned and setting forth the proportionate
aggregate Exercise Price applicable to such shares not assigned. The
assignee of such partial assignment of this Warrant shall also be entitled to
receive a new Warrant of like tenor to this Warrant covering the number of
shares so assigned and setting forth the proportionate aggregate Exercise Price
applicable to such assigned shares. If this Warrant is assigned in full, this
Warrant shall be surrendered at the principal office of the Company (with the
full assignment form at the end hereof duly executed), and thereupon a new
Warrant of like tenor to this Warrant shall be issued to the assignee covering
the number of shares of Common Stock then issuable upon exercise of this
Warrant.
SECTION
13. WARRANT
DENOMINATIONS
Warrants
are issuable or transferable in the denomination of 1,000 shares or any integral
multiple thereof (as nearly as may be practicable and subject to required
adjustments hereunder), and the Warrants of each denomination are
interchangeable upon surrender thereof at the office of the Company for Warrants
of other denominations, but aggregating the same number of shares as the
Warrants so surrendered. All Warrants will be dated the same date as
this Warrant.
SECTION
14. LOST, STOLEN WARRANTS,
ETC.
In case
this Warrant shall be mutilated, lost, stolen or destroyed, the Company may
issue a new Warrant of like date, tenor and denomination and deliver the same in
exchange and substitution for and upon surrender and cancellation of the
mutilated Warrant, or in lieu of the Warrant lost, stolen or destroyed, upon
receipt of evidence satisfactory to the Company of the loss, theft or
destruction of such Warrant, and upon receipt of indemnity satisfactory to the
Company. All warrants hereafter issued in exchange or substitution for this
Warrant shall be substantially in the form hereof.
SECTION
15. WARRANT
HOLDER RIGHTS
This
Warrant does not confer upon the holder hereof any right to vote or to consent
or to receive notice as a shareholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a shareholder, prior
to the exercise hereof as hereinbefore provided.
SECTION
16. SEVERABILITY
Should
any part of this Warrant for any reason be declared invalid, such decision shall
not affect the validity of any remaining portion, which remaining portion shall
remain in force and effect as if this Warrant had been executed with the invalid
portion thereof eliminated, and it is hereby declared the intention of the
parties hereto that they would have executed and accepted the remaining portion
of this Warrant without including therein any such part, parts or portion which
may, for any reason, be hereafter declared invalid.
SECTION
17. GOVERNING
LAW
This
Warrant shall be governed by the laws of the State of Delaware.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed by a duly
authorized officer.
Dated:
October 1, 2009
By:
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Xxxx X. Xxxxxxxxxxx
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Chief Executive
Officer
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The initial Warrant Holder hereby
confirms
the representations and covenants
contained
in Section 11:
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Hayden
IR
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5
SUBSCRIPTION
(1)
The Holder hereby elects to exercise the above-referenced Warrant with respect
to the following number of shares of Common
Stock: __________________.
(2)
The Holder intends that payment of the Exercise Price shall be made as (check
one):
o
Cash exercise
o Cashless
exercise
(3)
If the Holder has elected a cash exercise, the Holder shall pay the sum of
$ ______________ to the Company in accordance with the terms of the
Warrant.
(4)
Pursuant to this subscription, the Company shall deliver to the Holder the
number of shares of Common Stock determined in accordance with the terms of the
Warrant.
Dated:
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HOLDER:
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Print
name ↑
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By:
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Title:
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6
FULL
ASSIGNMENT
FOR VALUE
RECEIVED, ____________________________ hereby sells, assigns and transfers
unto_____________________ the within Warrant and all rights evidenced thereby
and does irrevocably constitute and appoint ___________________________,
attorney, to transfer the said Warrant on the books of the within-named
Company.
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Assignor
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Dated:
________________________
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PARTIAL
ASSIGNMENT
FOR VALUE RECEIVED
_________________________ hereby sells, assigns and transfers unto that portion
of the within Warrant and the rights evidenced thereby which will on the date
hereof entitle the holder to purchase shares of Common Stock of American DG
Energy Inc. and irrevocably constitutes and appoints attorney, to transfer that
part of the said Warrant on the books of the within-named Company.
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Assignor
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Dated_________________________
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