Form of Warrant
Exhibit
4.4
Form
of Warrant
THIS
WARRANT AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE, OFFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES
LAWS.
COMMON
STOCK PURCHASE WARRANT
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No.
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Void
after April 15, 2010
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THIS
CERTIFIES THAT, for value received, _______________ (the "Holder") is entitled
to subscribe for and purchase ___________ shares (as such number of shares
shall
be adjusted pursuant to Section 3 hereof, thus adjusting the per share Exercise
Price) of the fully paid and nonassessable Common Stock, $0.001 par value (the
"Shares"), of Itec Environmental Group, Inc., a Delaware corporation (the
"Company"), at the exercise price of $.06 per share (the "Exercise Price"),
subject to the provisions and upon the terms and conditions hereinafter set
forth.
1.
Method
of
Exercise; Payment.
(a)
Cash
Exercise. The purchase rights represented by this Warrant may be exercised
by
the Holder, in whole or in part, by the surrender of this Warrant (with the
notice of exercise form attached hereto as Exhibit
A
duly
executed) at the principal office of the Company, and by the payment to the
Company, by certified, cashier's or other check acceptable to the Company or
by
wire transfer to an account designated by the Company, of an amount equal to
the
aggregate Exercise Price of the Shares being purchased.
(b)
Net
Issue
Exercise. In lieu of exercising this Warrant, the Holder may elect to receive
Shares equal to the value of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with notice of such election, in which event the Company shall issue
to
the Holder a number of Shares computed using the following formula:
X
= Y
(A-B)
-------
A
Where
X
=
the
number of the Shares to be issued to the Holder.
Y
=
the
number of the Shares purchasable under this Warrant.
A
=
the
fair market value of one Share on the date of determination.
B
=
the per
share Exercise Price (as adjusted to the date of such
calculation).
(c)
Fair
Market Value. For purposes of this Section 1, the per share fair market value
of
the Shares shall mean:
(i)
If
the
Company's Common Stock is publicly traded, the per share fair market value
of
the Shares shall be the average of the closing prices of the Common Stock as
quoted on the Nasdaq National Market or the principal exchange on which the
Common Stock is listed, or if not so listed then the fair market value shall
be
the average of the closing bid prices of the Common Stock as published in The
Wall Street Journal, in each case for the fifteen (15) trading days ending
five
(5) trading days prior to the date of determination of fair market
value;
(ii)
If
the
Company's Common Stock is not so publicly traded, the per share fair market
value of the Shares shall be such fair market value as is determined in good
faith by the Board of Directors of the Company after taking into consideration
factors it deems appropriate, including, without limitation, recent sale and
offer prices of the capital stock of the Company in private transactions
negotiated at arm's length.
(d)
Stock
Certificates. In the event of any exercise of the rights represented by this
Warrant, certificates for the Shares so purchased shall be delivered to the
Holder within a reasonable time and, unless this Warrant has been fully
exercised or has expired, a new Warrant representing the shares with respect
to
which this Warrant shall not have been exercised shall also be issued to the
Holder within such time.
2.
Stock
Fully Paid; Reservation of Shares. All of the Shares issuable upon the exercise
of the rights represented by this Warrant will, upon issuance and receipt of
the
Exercise Price therefor, be fully paid and nonassessable, and free from all
taxes, liens and charges with respect to the issue thereof. During the period
within which the rights represented by this Warrant may be exercised, the
Company shall at all times have authorized and reserved for issuance sufficient
shares of its Common Stock to provide for the exercise of the rights represented
by this Warrant.
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3.
Adjustments.
Subject to the provisions of Section 11 hereof, the number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price
therefor shall be subject to adjustment from time to time upon the occurrence
of
certain events, as follows:
(a)
Reclassification.
In the case of any reclassification or change of securities of the class
issuable upon exercise of this Warrant (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or in case of any merger of the Company
with or into another corporation (other than a merger with another corporation
in which the Company is the acquiring and the surviving corporation and which
does not result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant), or in case of any sale of all or
substantially all of the assets of the Company, the Company, or such successor
or purchasing corporation, as the case may be, shall duly execute and deliver
to
the holder of this Warrant a new Warrant (in form and substance reasonably
satisfactory to the holder of this Warrant), or the Company shall make
appropriate provision without the issuance of a new Warrant, so that the holder
of this Warrant shall have the right to receive, at a total purchase price
not
to exceed that payable upon the exercise of the unexercised portion of this
Warrant, and in lieu of the shares of Common Stock theretofore issuable upon
exercise of this Warrant, (i) the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification, change,
merger or sale by a holder of the number of shares of Common Stock then
purchasable under this Warrant, or (ii) in the case of such a merger or sale
in
which the consideration paid consists all or in part of assets other than
securities of the successor or purchasing corporation, at the option of the
Holder of this Warrant, the securities of the successor or purchasing
corporation having a value at the time of the transaction equivalent to the
fair
market value of the Common Stock at the time of the transaction. The provisions
of this subparagraph (a) shall similarly apply to successive reclassifications,
changes, mergers and transfers.
(b)
Stock
Splits, Dividends and Combinations. In the event that the Company shall at
any
time subdivide the outstanding shares of Common Stock or shall issue a stock
dividend on its outstanding shares of Common Stock the number of Shares issuable
upon exercise of this Warrant immediately prior to such subdivision or to the
issuance of such stock dividend shall be proportionately increased, and the
Exercise Price shall be proportionately decreased, and in the event that the
Company shall at any time combine the outstanding shares of Common Stock the
number of Shares issuable upon exercise of this Warrant immediately prior to
such combination shall be proportionately decreased, and the Exercise Price
shall be proportionately increased, effective at the close of business on the
date of such subdivision, stock dividend or combination, as the case may
be.
4.
Notice
of
Adjustments. Whenever the number of Shares purchasable hereunder or the Exercise
Price thereof shall be adjusted pursuant to Section 3 hereof, the Company shall
provide notice to the Holder setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which
such
adjustment was calculated, and the number and class of shares which may be
purchased thereafter and the Exercise Price therefor after giving effect to
such
adjustment.
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5.
Fractional
Shares. This Warrant may not be exercised for fractional shares. In lieu of
fractional shares the Company shall make a cash payment therefor based upon
the
Exercise Price then in effect and the fair market value of the shares then
obtaining (calculated in accordance with Section 1(c) hereof as if the shares
were the Shares referred to in such Section).
6.
Representations
of the Company. The Company represents that all corporate actions on the part
of
the Company, its officers, directors and shareholders necessary for the sale
and
issuance of the Shares pursuant hereto and the performance of the Company's
obligations hereunder were taken prior to and are effective as of the effective
date of this Warrant.
7.
Representations
and Warranties by the Holder. The Holder represents and warrants to the Company
as follows:
(a)
This
Warrant and the Shares issuable upon exercise thereof are being acquired for
its
own account, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act of 1933, as amended (the "Act"). Upon exercise of this Warrant,
the Holder shall, if so requested by the Company, confirm in writing, in a
form
satisfactory to the Company, that the securities issuable upon exercise of
this
Warrant are being acquired for investment and not with a view toward
distribution or resale.
(b)
The
Holder understands that the Warrant and the Shares have not been registered
under the Act by reason of their issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Act pursuant to Section
4(2) thereof, and that they must be held by the Holder indefinitely, and that
the Holder must therefore bear the economic risk of such investment
indefinitely, unless a subsequent disposition thereof is registered under the
Act or is exempted from such registration. The Holder further understands that
the Shares have not been qualified under the California Securities Law of 1968
(the "California Law") by reason of their issuance in a transaction exempt
from
the qualification requirements of the California Law pursuant to Section
25102(f) thereof, which exemption depends upon, among other things, the bona
fide nature of the Holder's investment intent expressed above.
(c)
The
Holder has such knowledge and experience in financial and business matters
that
it is capable of evaluating the merits and risks of the purchase of this Warrant
and the Shares purchasable pursuant to the terms of this Warrant and of
protecting its interests in connection therewith.
(d)
The
Holder is able to bear the economic risk of the purchase of the Shares pursuant
to the terms of this Warrant.
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8.
Restrictive
Legend.
The
Shares (unless registered under the Act) shall be stamped or imprinted with
a
legend in substantially the following form:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
IT
STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.
9.
Restrictions
Upon Transfer and Removal of Legend.
(a)
The
Company need not register a transfer of this Warrant or Shares bearing the
restrictive legend set forth in Section 8 hereof, unless the conditions
specified in such legend are satisfied. The Company may also instruct its
transfer agent not to register the transfer of the Shares, unless one of the
conditions specified in the legend referred to in Section 8 hereof is
satisfied.
(b)
Notwithstanding
the provisions of paragraph (a) above, no opinion of counsel shall be necessary
for a transfer without consideration by any holder (i) if such holder is a
partnership, to a partner or retired partner of such partnership who retires
after the date hereof or to the estate of any such partner or retired partner,
or (ii) if such holder is a corporation, to a shareholder of such corporation,
or to any other corporation under common control, direct or indirect, with
such
holder.
10.
Rights
of
Shareholders. No holder of this Warrant shall be entitled, as a Warrant holder,
to vote or receive dividends or be deemed the holder of any Shares or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the holder of this Warrant, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or
upon any matter submitted to shareholders at any meeting thereof, or to give
or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until
the
Warrant shall have been exercised and the Shares purchasable upon the exercise
hereof shall have become deliverable, as provided herein. The holder of this
Warrant will not be entitled to share in the assets of the Company in the event
of a liquidation, dissolution or the winding up of the Company.
11.
Notices.
All notices and other communications required or permitted hereunder shall
be in
writing, shall be effective when given, and shall in any event be deemed to
be
given upon receipt or, if earlier, (a) five (5) days after deposit with the
U.S.
Postal Service or other applicable postal service, if delivered by first class
mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business
day after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid or (d) one business day after the business day of
facsimile transmission, if delivered by facsimile transmission with copy by
first class mail, postage prepaid, and shall be addressed (i) if to the Holder,
at the Holder's address as set forth on the books of the Company, and (ii)
if to
the Company, at the address of its principal corporate offices (attention:
Xxxx
De Laurentiis, President and CEO), with a copy to Xxxxx X. Xxxx, The Xxxx Law
Group, PLLC, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 or at such other
address as a party may designate by ten (10) days advance written notice to
the
other party pursuant to the provisions above.
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12.
Independent
Legal Advice. Each of the parties
hereto represents and warrants (a) that it, she or he
has read
and understands each of the provisions set forth herein, that he, she or it
has
had the opportunity to consult with counsel of his, her or its own choice in
connection with this Agreement and to have each of the provisions set forth
herein fully explained by such counsel, and that this Agreement is entered
into
freely, voluntarily, and without any duress or undue influence of any nature
by,
or on behalf of, any person or entity and (b) that each of the Parties, together
with its, his or her attorneys, has made such investigation of the facts
pertaining to this settlement and this release, and of all the matters
pertaining thereto, as it, she or he deems necessary.
13. Piggy
Back Registration of the Shares. If the Company proposes to register any of
its
securities under the Securities Act (other than pursuant to a Form X-0, Xxxx
X-0
or any other successor form of limited purpose), it will give written notice
by
registered mail at least thirty (30) business days prior to the filing of each
such registration statement to the Holder of its intention to do so. If the
Holder notifies the Company within twenty (20) business days after receipt
of
any such notice of its desire to include any of the Shares in such proposed
registration statement, the Company shall afford the Holder the opportunity
to
have any such amount of the Shares registered under such registration
statement.
14. Governing
Law. This Warrant and all actions arising out of or in connection with this
Agreement shall be governed by and construed in accordance with the laws of
the
State of California, without regard to the conflicts of law provisions of the
State of California or of any other state.
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ITEC
ENVIRONMENTAL GROUP, INC.
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Name:
Xxxx De Laurentiis
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Title:
Chief Executive Officer
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6
EXHIBIT
A
NOTICE
OF EXERCISE
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TO:
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Itec
Environmental Group, Inc.
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X.X.
Xxx 000
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Xxxxxxxxx,
Xx. 00000
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Attention:
President
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1.
The
undersigned hereby elects to purchase __________ Shares of Itec Environmental
Group, Inc. pursuant to the terms of the attached Warrant.
2.
Method
of Exercise (Please initial the applicable blank):
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___
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The
undersigned elects to exercise the attached Warrant by means of a
cash
payment, and tenders herewith or by concurrent wire transfer payment
in
full for the purchase price of the shares being purchased, together
with
all applicable transfer taxes, if
any.
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___
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The
undersigned elects to exercise the attached Warrant by means of the
net
exercise provisions of Section 1(b) of the
Warrant.
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3.
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Please
issue a certificate or certificates representing said Shares in the
name
of the undersigned or in such other name as is specified
below:
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_________________________________
(Name)
_________________________________
_________________________________
(Address)
4.
The
undersigned hereby represents and warrants that the aforesaid Shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale, in connection with the distribution thereof, and that the
undersigned has no present intention of distributing or reselling such shares
and all representations and warranties of the undersigned set forth in Section
7
of the attached Warrant are true and correct as of the date hereof.
_________________________________
(Signature)
Title:
_____________________________
_________________________________
(Date)
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