Warrant
Warrant
THIS
WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS. NEITHER THIS WARRANT, SUCH SECURITIES NOR
ANY
INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND
APPLICABLE STATE SECURITIES LAWS.
OPEN
ENERGY CORPORATION
COMMON
STOCK PURCHASE WARRANT
This
document (this “Warrant”)
certifies that, for good and valuable consideration, Open Energy Corporation,
a
Nevada corporation (the “Company”),
grants to Xxxxxx Xxxxxxx (the “Warrantholder”),
the
right to subscribe for and purchase from the Company, on or before the
Expiration Time (as defined below), up to Two Million Two Hundred Thirty-Three
Thousand Four Hundred Thirty-Eight (2,233,438) validly issued, fully paid and
nonassessable shares of Common Stock of the Company (as may be adjusted, the
“Warrant
Shares”)
at the
exercise price per share of $1.50 (the
“Exercise
Price”),
all
subject to the terms, provisions, conditions and adjustments (including
adjustments to number of shares and Exercise Price) herein set forth. This
Warrant is the Warrant issued in connection with and has been issued to Licensor
in consideration of the Technology License granted under the License Agreement.
The Parties understand and agree that this Warrant and the rights granted under
this Warrant shall survive termination of the License Agreement. Capitalized
terms used herein which are not specifically defined in other sections of this
Warrant, shall have the meanings set forth in Section 9.
1. Warrant
Term.
The
purchase rights represented by this Warrant are subject to vesting as set forth
in Exhibit B attached hereto and are exercisable in whole at any time and from
time to time, from and after the date they are vested and on or prior to the
earlier of the fifth (5th)
anniversary of the date hereof. (such date being the “Expiration
Time”).
2. Exercise
of Warrant; Payment of Taxes.
2.1 Exercise
of Warrant.
The
purchase rights represented by this Warrant may be exercised by the
Warrantholder to the extent they have vested as provided in Exhibit B, in whole
and from time to time, by the surrender of this Warrant (with a duly executed
notice of exercise form, the “Exercise Form”, in the form attached hereto as
Attachment
A)
at the
principal office of the Company and by the payment to the Company of an amount
equal to the then applicable Exercise Price per share multiplied by the number
of Warrant Shares then being purchased. The Warrantholder shall be deemed to
have become the holder(s) of record of, and shall be treated for all purposes
as
the record holder(s) of, the Warrant Shares represented thereby (and such
Warrant Shares shall be deemed to have been issued) immediately prior to the
close of business on the date or dates upon which this Warrant is exercised.
-1-
(a)
Nothwithstanding anything to the contrary contained herein or in the License
Agreement, this Warrant shall be automatically cancelled and of no further
force
or effect with respect to all unexercised portions hereof (whether or not
vested) in the event there shall be a material breach by Warrantholder of any
of
his representations, warranties, covenants or obligations under the License
Agreement.
2.2 Net
Exercise.
(a) In
lieu
of payment in cash, the rights represented by this Warrant may also be exercised
at any time by a written notice of exercise in the form of Attachment
A
attached
hereto, providing for the net exercise of this Warrant for the Warrant Shares
equal to the value (as determined below) of this Warrant (or the portion thereof
being exercised), specifying that this net exercise election has been made,
and
the net number of Warrant Shares to be issued after giving effect to such net
exercise. In the event the Warrantholder makes such election, Company shall
issue to the Warrantholder a number of Warrant Shares computed using the
following formula:
X
=
Y(A-B)
A
Where:
X
= the
number of Warrant Shares to be issued to the Warrantholder
Y
= the
number of Warrant Shares purchasable under the Warrant or, if only a portion
of
the Warrant is being exercised, the portion of the Warrant being exercised
(as
of the date of such net exercise)
A
= the
Fair Market Value of one Share of Common Stock (as of the date of such net
exercise)
B
=
Exercise Price of one Share of Common Stock (as adjusted to the date of such
net
exercise)
(b) For
purposes of this Section
2.2,
“Fair
Market Value”
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 the American Stock
Exchange, the New York Stock Exchange, the NASDAQ National Market or the NASDAQ
SmallCap Market (each a “Principal
Market”),
the
daily volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the Principal Market on which the Common Stock is
then listed or quoted as reported by Bloomberg Financial L.P. (based on a
trading day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if
the
Common Stock is not then listed or quoted on a Principal Market and if prices
for the Common Stock are then quoted on the OTC Bulletin Board (or any successor
market), the volume weighted average price of the Common Stock for such date
(or
the nearest preceding date) on the OTC Bulletin Board (or any successor market);
(c) if the Common Stock is not then listed or quoted on the OTC Bulletin Board
(or any successor market) and if prices for the Common Stock are then reported
in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or
a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported;
or
(d) in all other cases, the fair market value of a share of Common Stock as
determined by a nationally recognized-independent appraiser selected in good
faith by the Licensee.
-2-
2.3 Warrant
Shares Certificate.
A stock
certificate for the Warrant Shares specified in the Exercise Form shall be
delivered to the Warrantholder within five (5) Business Days after receipt
of
the Exercise Form by the Company and payment by the Warrantholder of the
aggregate Exercise Price (or net exercise in lieu of payment as permitted in
Section 2.2),
along
with a check from the Company in lieu of any fractional shares which the
Warrantholder would be entitled to purchase under this Warrant. If this Warrant
was exercised in part, the Company shall, at the time of delivery of the stock
certificate, deliver to the Warrantholder a new Warrant evidencing the right
to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant.
3. Restrictions
on Transfer; Restrictive Legends.
3.1 Restrictions
on Transfer.
This
Warrant and the Warrant Shares issuable upon exercise of all or part of this
Warrant are unregistered securities that are subject to the restrictions on
transfer imposed by the Securities Act and applicable state securities laws
and
may not be offered, sold, transferred, pledged or otherwise disposed of, in
whole or in part, to any Person other than in accordance with the Securities
Act
and applicable state securities laws.
3.2 Restrictive
Legends.
Until
such time as the restrictions on transfer imposed on this Warrant by the
Securities Act and applicable state securities laws shall no longer be
effective, this Warrant, any Warrant issued to the Warrantholder upon the
partial exercise of this Warrant pursuant to Section 2
shall be
stamped or otherwise imprinted with a legend in substantially the form as set
forth on the cover of this Warrant. Until such time as the restrictions on
transfer imposed on the Warrant Shares by the Securities Act, applicable state
securities laws and the Stockholders’ Agreement shall no longer be effective,
each stock certificate for Warrant Shares and
each
stock certificate issued upon the direct or indirect transfer of any such
Warrant Shares shall be stamped or otherwise imprinted with a legend in a form
generally used by the Company for unregistered issuances of Common
Stock.
4. Reservation
and Registration of Warrant Shares.
The
Company covenants and agrees as follows:
4.1 Validly
Issued and Free of Encumbrances.
All
Warrant Shares issued upon the exercise of all or any part of this Warrant
shall, upon issuance and payment of the Exercise Price therefore (or upon net
exercise as permitted herein), be validly issued, fully paid and nonassessable,
issued in compliance with all applicable federal and state securities laws,
and
free from all taxes, liens and charges with respect to the issue thereof, and
not subject to any preemptive rights.
-3-
4.2 Sufficient
Authorized Shares.
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 the purpose
of
issuance of Common Stock upon any exercise of the purchase rights evidenced
by
this Warrant, and shall keep available free from preemptive rights, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
4.3 Noncontravention.
The
Company shall not, by amendment of its Charter or through any reorganization,
transfer of assets, spin-off, consolidation, merger, dissolution, issue or
sale
of securities or any other action or inaction, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant to be observed
or
performed hereunder, and shall at all times in good faith assist in performing,
carrying out, and giving effect to the terms hereof and in the taking of all
such actions as may be necessary or appropriate in order to protect the rights
of the Warrantholder against dilution or other impairment.
5. Anti-Dilution
Adjustments.
From and
after the date hereof and until the Expiration Date, notwithstanding the fact
that no Warrant Shares shall be issued and outstanding, the Exercise Price,
and
the number and type of Warrant Shares or other securities to be received upon
exercise of this Warrant, shall be subject to adjustment as
follows:
5.1 Issuances
of Common Stock Below Exercise Price.
(a) If
the
Company shall, at any time or from time to time after the Original
Issuance
Date, issue any shares of Common Stock (or be deemed to have issued shares
of
Common Stock as provided herein), other than Excluded Stock, without
consideration or for a consideration per share less than the Exercise Price
in
effect immediately prior to the issuance of such Common Stock, then the Exercise
Price, as in effect immediately prior to each such issuance, shall forthwith
be
lowered to:
(1) an
amount
equal to the sum of (X) the total number of shares of Common Stock Deemed
Outstanding immediately prior to such issuance, multiplied
by
the
Exercise Price in effect immediately prior to such issuance, and (Y) the
consideration received by the Company upon such issuance; by
(2) the
total
number of shares of Common Stock Deemed Outstanding immediately after the
issuance of such Common Stock.
(a) for
the
purposes of any adjustment of the Exercise Price pursuant to paragraph
(a)
above,
the following provisions shall be applicable:
(1) In
the
case of the issuance of Common Stock for cash in a public offering or private
placement, the consideration shall be deemed to be the amount of cash paid
therefor after deducting therefrom any discounts, commissions or placement
fees
payable by the Company to any underwriter or placement agent in connection
with
the issuance and sale thereof.
(2) In
the
case of the issuance of Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash shall be deemed to be the
fair value per share thereof, as reasonably determined in good faith by the
Board, irrespective of any accounting treatment.
-4-
(3) In
the
case of the issuance of options to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or exchangeable for Common
Stock, or options to purchase or rights to subscribe for such convertible or
exchangeable securities (except for options or rights to acquire or subscribe
for Excluded Stock):
(A) the
aggregate maximum number of shares of Common Stock deliverable upon exercise
of
such options to purchase or rights to subscribe for Common Stock shall be deemed
to have been issued at the time such options or rights were issued and for
a
consideration equal to the consideration (determined in the manner provided
in
Sections 5.1(b)(1)
and
5.1(b)(2)
above),
if any, received by the Company upon the issuance of such options or rights
plus
the minimum purchase price provided in such options or rights for the Common
Stock covered thereby;
(B) the
aggregate maximum number of shares of Common Stock deliverable upon conversion
of or in exchange for any such convertible or exchangeable securities or upon
the exercise of options to purchase or rights to subscribe for such convertible
or exchangeable securities and subsequent conversion or exchange thereof shall
be deemed to have been issued at the time such securities, options or rights
were issued and for a consideration equal to the consideration received by
the
Company for any such securities and related options or rights (excluding any
cash received on account of accrued interest or accrued dividends), plus the
additional consideration, if any, to be received by the Company upon the
conversion or exchange of such securities or the exercise of any related options
or rights (the consideration in each case to be determined in the manner
provided in Sections 5.1(b)(1)
and
5.1(b)(2)
above);
(C) on
any
change in the number of shares or exercise price of Common Stock deliverable
upon exercise of any such options or rights or conversions of or exchanges
for
such securities, other than a change resulting from the antidilution provisions
thereof, the Exercise Price shall forthwith be readjusted to the Exercise Price
as would have been obtained had the adjustment made upon the issuance of such
options, rights or securities not converted prior to such change or options
or
rights related to such securities not converted prior to such change been made
upon the basis of such change; and
(D) on
the
expiration of any such options or rights, the termination of any such rights
to
convert or exchange or the expiration of any options or rights related to such
convertible or exchangeable securities, the Exercise Price shall forthwith
be
readjusted to the Exercise Price as would have been obtained had the adjustment
made upon the issuance of such options, rights, securities or options or rights
related to such securities been made upon the basis of the issuance of only
the
number of shares of Common Stock actually issued upon the exercise of such
options or rights, upon the conversion or exchange of such securities, or upon
the exercise of the options or rights related to such securities and subsequent
conversion or exchange thereof.
(c) Whenever
the Exercise Price is adjusted under this Section 5.1,
the
number of Warrant Shares issuable on exercise hereof shall be multiplied by
a
fraction the numerator of which is the Exercise Price immediately before such
adjustment and the denominator is the Exercise Price as so
adjusted.
-5-
5.2 Stock
Dividends and Combinations.
(a) If,
at
any time after the Original Issuance Date, the number of shares of Common Stock
outstanding is increased by a stock dividend payable in shares of Common Stock
or by a subdivision or split-up of shares of Common Stock, then, following
the
record date for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, the Exercise Price shall be
decreased and the number of shares of Common Stock issuable on exercise of
this
Warrant shall be increased in proportion to such increase in outstanding
shares.
(b) If,
at
any time after the Original Issuance Date, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then, following the record date for such combination, the Exercise Price
shall be increased and the number of shares of Common Stock issuable on exercise
of this Warrant shall be decreased in proportion to such decrease in outstanding
shares.
5.3 Recapitalization,
Etc.
In
the
event of any capital reorganization of the Company, any reclassification of
the
stock of the Company (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 stock dividend
or subdivision, split-up or combination of shares), or any consolidation or
merger of the Company, this Warrant shall after such reorganization,
reclassification, consolidation or merger be exercisable for the kind and number
of shares of stock or other securities or property of the Company or of the
company resulting from such consolidation or surviving such merger to which
the
holder of the number of shares of Common Stock deliverable (immediately prior
to
the time of such reorganization, reclassification, consolidation or merger)
upon
exercise of this Warrant would have been entitled upon such reorganization,
reclassification, consolidation or merger. The provisions of this clause shall
similarly apply to successive reorganizations, reclassifications, consolidations
and mergers.
5.4 De
Minimis Adjustments.
No
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least 0.1% in the Exercise Price;
provided,
however
that
any
adjustments not required to be made by virtue of this sentence shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5
shall be
made to the nearest one hundredth (1/100) of a cent or the nearest one tenth
(1/10) of a share, as the case may be.
5.5 Dividends.
Without
duplication of any other adjustment provided for in this Section 5,
at any
time the Company makes or fixes a record date for the determination of holders
of Common Stock entitled to receive a dividend or other distribution payable
in
property or securities of the Company other than shares of Common Stock, then,
and in each such case,
(a) the
Exercise Price then in effect shall be adjusted (and any other appropriate
action shall be taken by the Company) by multiplying the Exercise Price in
effect immediately prior to the date of such dividend or distribution by a
fraction, (i) the numerator of which shall be the Fair Market Value (in all such
cases under Section 5.5,
as
shall be determined pursuant to Section 2.2) of
Common
Stock immediately prior to the date of such dividend or distribution, less
the
Fair Market Value of the portion of the property or securities applicable to
one
share of Common Stock so dividend or distributed, and (ii) the denominator
of
which shall be the Fair Market Value of the Common Stock immediately prior
to
the date of such dividend or distribution (such fraction not to be greater
than
one); and
-6-
(b) the
number of Warrant Shares for which this Warrant is exercisable immediately
prior
to such dividend or distribution shall be adjusted (and any other appropriate
actions shall be taken by the Company) by multiplying the then-current number
of
Warrant Shares in effect immediately prior to the date of such dividend or
distribution by a fraction, (i) the numerator of which shall be the Exercise
Price in effect immediately prior to the date of such dividend or distribution,
and (ii) the denominator of which shall be the adjusted Exercise Price as
determined pursuant to Section 5.5(a)
above
(such fraction not to be less than one).
Such
adjustments shall be made whenever the Company makes or fixes a record date
for
the determination of holders of Common Stock entitled to receive a dividend
or
other distribution payable in property or securities of the Company (other
than
shares of Common Stock) and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such dividend or
distribution.
6. Loss
or Destruction of Warrant.
Subject
to the terms and conditions hereof, upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation
of
this Warrant and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such
mutilation, upon surrender and cancellation of this Warrant, the Company will
execute and deliver to the Warrantholder a new Warrant of like
tenor.
7. Ownership
of Warrant.
The
Company may deem and treat the Person in whose name this Warrant is registered
as the Warrantholder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
8. Amendments.
Any
provision of this Warrant may be amended and the observance thereof waived
only
with the written consent of the Company and the Warrantholder.
9. Definitions.
As used
herein, unless the context otherwise requires, the following terms have the
following respective meanings:
“Affiliate”
means,
(1) with respect to any Person, any of (a) a director, officer or stockholder
holding 5% or more of the capital stock (on a fully diluted basis) of such
Person, (b) a spouse, parent, sibling or descendant of such Person (or a spouse,
parent, sibling or descendant of any director or officer of such Person) and
(c)
any other Person that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
another Person or (2) in any event, any Person meeting the definition of
“Affiliate” set forth in Rule 405 under the Securities Act. The term “control”
includes, without limitation, the possession, directly or indirectly, of the
power to direct the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
-7-
“Board
of Directors”
or
“Board”
means
the Board of Directors of the Company.
“Business
Day”
means
any day other than a Saturday, Sunday or a day on which national banks are
authorized by law to close in the State of Nevada.
“Charter”
means
the Articles of Incorporation of the Company, as amended from time to
time.
“Common
Stock”
means
the Company’s presently authorized Common Stock, $.001 par value, and any stock
into or for which such Common Stock may hereafter be converted or exchanged
pursuant to the Charter of the Company as amended from time to time as provided
by law and in such Charter.
“Common
Stock Deemed Outstanding” means,
at
any given time, the sum of (i) the number of shares of Common Stock actually
outstanding at such time, (ii) the number of shares of Common Stock issuable
upon conversion of the Preferred Stock, and (iii) the number of shares of Common
Stock issuable upon the exercise in full of all Convertible Securities whether
or not the Convertible Securities are convertible into Common Stock at such
time, but shall exclude any shares of Common Stock or Convertible Securities
in
the treasury of the Company or held for the account of the Company or any of
its
subsidiaries.
“Convertible
Securities”
means
securities or obligations that are exercisable for, convertible into or
exchangeable for shares of Common Stock. The term includes options, warrants
or
other rights to subscribe for or purchase Common Stock or to subscribe for
or
purchase other securities that are convertible into, directly or indirectly,
or
exchangeable for Common Stock.
“Excluded
Stock” means
(i) all shares (as adjusted equitably for stock dividends, stock splits,
combinations and the like) of Common Stock issuable upon exercise of stock
options granted to directors, officers, consultants, advisors, employees or
former employees of the Company or its subsidiaries or Affiliates,
(ii) shares of Common Stock issued upon conversion of shares of Preferred
Stock, (iii) shares of Common Stock or securities convertible into or
exercisable for Common Stock issued in connection with any recapitalization,
reclassification, subdivision, stock split, stock dividend or combination of
shares of Preferred Stock or Common Stock, (iv) shares of Common Stock or
securities convertible into or exercisable for Common Stock issued in connection
with debt financing transactions, strategic transactions, mergers or
acquisitions approved in advance by a majority of the Board, (v) securities
offered to the public pursuant to a registered public offering, (vi) shares
of
Common Stock (as adjusted equitably for stock dividends, stock splits,
combinations and the like) issuable upon exercise of stock purchase warrants
outstanding on the Original Issuance Date, and (vii) shares of Common Stock
issued upon exercise, conversion or exchange of any Convertible Securities
not
previously described above.
-8-
“Original
Issuance Date” means
the
date and time that the first Warrant is issued by the Company.
“Person”
means
any individual, firm, corporation, partnership, limited liability company,
trust, incorporated or unincorporated association, joint venture, joint stock
company, governmental authority or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.
“Preferred
Stock” means
any
Preferred Stock of the Company.
“License
Agreement”
means
the Amended and Restated Technology License Agreement of even date herewith
between the Warrantholder and the Company, and to which this Warrant is Exhibit
A.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of the
United States Securities and Exchange Commission thereunder.
10. Miscellaneous
Provisions.
10.1 Entire
Agreement.
This
Warrant and the License Agreement constitute the entire agreement between the
Company and the Warrantholder with respect to this Warrant.
10.2 Binding
Effect; Benefits.
This
Warrant shall inure to the benefit of and shall be binding upon the Company
and
the Warrantholder and their respective permitted successors and assigns. Nothing
in this Warrant, expressed or implied, is intended to or shall confer on any
person other than the Company and the Warrantholder, or their respective
permitted successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Warrant.
10.3 Section
and Other Headings.
The
section and other headings contained in this Warrant are for reference purposes
only and shall not be deemed to be a part of this Warrant or to affect the
meaning or interpretation of this Warrant.
10.4 Notices.
All
notices, demands and other communications provided for or permitted hereunder
shall be made in writing and shall be by registered or certified first-class
mail, return receipt requested, telecopier, courier service, overnight mail
or
personal delivery:
If
to
the Company:
Open
Energy Corporation
0000
Xxx
xx xx Xxxxx
Suite
200
Solana
Beach, CA 92075
Telephone:
(000)
000-0000
Facsimile:
Attention:
Chief
Financial Officer
-9-
with
a
copy (which
shall not constitute notice) to:
Xxxxxxx
Xxxxxx Xxxxxx & Dodge LLP
000
Xxxxxxxxx Xxxxxx
New
York,
NY 00000-0000
Telephone:
(000)
000-0000
Facsimile:
(000)
000-0000
Attention:
Xxxxxx
X.
Xxxxx, Esq.
If
to
the Warrantholder:
to
the
addressees reflected on the Warrant
register
maintained by the Company
All
such
notices and communications shall be deemed to have been duly given when
delivered by hand, if personally delivered; when delivered by courier or
overnight mail, if delivered by commercial courier service or overnight mail;
five (5) Business Days after being deposited in the mail, postage prepaid,
if
mailed; and when receipt is mechanically acknowledged, if telecopied. Any party
may, by notice given in accordance with this Section 11.4,
designate another address or Person for receipt of notices
hereunder.
10.5 Issuance
Tax, Attorneys’ Fees, Notices, Successors
10.6 Severability.
Any term
or provision of this Warrant which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the terms and provisions of this Warrant or affecting the validity or
enforceability of any of the terms or provisions of this Warrant in any other
jurisdiction.
10.7 Governing
Law.
All
issues concerning this Warrant shall be governed by and construed in accordance
with the law of the State of Nevada, without regard to the conflicts of law
principles thereof.
10.8 Rights
as Shareholders.
No
Warrantholder, as such, shall be entitled to vote or receive dividends or be
deemed the holder of Common Stock or otherwise be entitled to any voting or
other rights as a shareholder of the Company, until this Warrant shall have
been
exercised and the Warrant Shares purchasable upon the exercise shall have become
deliverable, as provided herein.
11. Disposition
of Warrant or Shares of Common Stock.
This
Warrant may not be sold, transferred or subdivided by the Warrantholder except
in case of his death to his heirs and legatees. With respect to any offer,
sale
or other transfer or disposition of any Warrant Shares acquired pursuant to
the
exercise of this Warrant, the Warrantholder hereof agrees to give written notice
to the Company prior thereto, describing briefly the manner thereof, together
with a written opinion of such holder’s counsel (if reasonably requested by the
Company and reasonably satisfactory to the Company) to the effect that (i)
such
offer, sale or other transfer or disposition may be effected without
registration or qualification of this Warrant or such shares of Common Stock
under the Securities Act as then in effect, and (ii) indicating whether or
not
under the Securities Act this Warrant or the certificates representing such
shares of Common Stock to be sold or otherwise transferred or disposed of
require any restrictive legend thereon in order to ensure compliance with the
Securities Act; provided,
however,
that a
written opinion of holder’s counsel shall not be required in connection with any
sale pursuant to Rule 144. This Warrant or the certificates representing the
shares of Common Stock thus transferred (except a transfer pursuant to Rule
144)
shall bear a legend as to the applicable restrictions on transferability in
order to insure compliance with the Securities Act, unless in the aforesaid
opinion of counsel for the holder, such legend is not required in order to
insure compliance with the Securities Act. The Company may issue stop transfer
instructions to its transfer agent in connection with the foregoing
restrictions.
-10-
12. Warrantholder’s
Representations.
The
Warrantholder acknowledges that it has had access to all material information
concerning the Company which it has requested. The Warrantholder also
acknowledges that it has had the opportunity to, and has to its satisfaction,
questioned the officers of the Company with respect to its investment hereunder.
The Warrantholder represents that it understands that the Warrant and the Common
Stock are speculative investments, that it is aware of the Company’s business
affairs and financial condition and that it has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire
the
Warrant. The Warrantholder is purchasing the Warrant and any Common Stock issued
upon exercise thereof for investment for its own account only and not with
a
view to, or for resale in connection with, any “distribution” thereof in
violation of the Securities Act or applicable state securities laws. The
Warrantholder further represents that it understands that the Warrant and Common
Stock have not been registered under the Securities Act or applicable state
securities laws by reason of specific exemptions therefrom, which exemptions
depend upon, among other things, the bona fide nature of the Warrantholder’s
investment intent as expressed herein. The Warrantholder is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act.
13. Company’s
Representations.
As
a
material inducement to the Warrantholder to purchase this Warrant, the Company
hereby represents and warrants that:
(a) The
Company has made all filings under applicable federal and state securities
laws
necessary to consummate the issuance of this Warrant pursuant to this Agreement
in compliance with such laws, except for such filings as may be made properly
after the date hereof.
(b) The
execution, delivery and performance of this Warrant have been duly authorized
by
the Company. This Warrant constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms. The execution and delivery
by
the Company of this Warrant, the issuance of the Common Stock upon exercise
of
the Warrant, and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, or (ii) constitute
a default under, the charter or bylaws of the Company or any agreement,
instrument, order, judgment or decree to which the Company is subject, except
for any such filings required under applicable “blue sky” or state securities
laws or under the Securities Act.
-11-
IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer as of the 10th
day of
July 2006.
|
Issued
By:
|
Accepted
By:
|
|
OPEN
ENERGY CORPORATION
By:
/s/ Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
President
& CEO
|
/s/
Xxxxxx Xxxxxxx
Xxxxxx
Xxxxxxx
Dated:
July 10, 2006
|
-12-
Attachment
A:
Exercise Form
(To
be
executed upon exercise of this Warrant)
| To: |
Open
Energy Corporation
|
0000
Xxx
Xx Xx Xxxxx, Xxxxx 000, Xxxxxx Xxxxx, XX 00000
Attention:
Chief Financial Officer
[1.
The
undersigned hereby elects to purchase __________________________ shares of
Common Stock of Company pursuant to the terms of the attached Warrants, and
tenders herewith payment of the purchase price of such shares in
full.]
[1.
The
undersigned hereby elects to purchase __________________________ shares of
Common Stock of Company pursuant
to a net exercise of the Warrant as provided in Section 2
of the
Warrant.]
1.
Check
here if applicable: ___ The undersigned confirms that this exercise is made
in
connec-tion with the occurrence of a public offering, sale or merger of the
Company, and the undersigned further elects to condition this exercise of the
Warrant upon the consummation of said public offering, sale or merger of the
Company. This exercise shall not be deemed to be effective until the
consummation of such transaction. In the event that transaction is not
consummated within 45 days of the targeted date of the transaction, the
undersigned will advise Company whether or not this exercise should be deemed
rescinded.
2.
Please
issue a certificate or certificates representing said shares in the name of
the
undersigned or in such other name or names as are specified below:
[name]
[address]
3.
The
undersigned represents 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 such shares.
[name]
|
By:______________________________
(Signature)
Its:______________________________
|
Date:
_________________
-13-
Exhibit
B
Vesting
Schedule of Warrant
The
Warrant shall become exercisable only with respect to the following number
of
shares of Common Stock as follows:
|
Distribution
Number
|
Date
|
Number
of Underlying
Shares
Becoming
Exercisable
|
|
1
|
9/30/2006
|
300,000
|
|
2
|
12/31/2006
|
300,000
|
|
3
|
3/31/2007
|
300,000
|
|
4
|
6/30/2007
|
300,000
|
|
5
|
9/30/2007
|
300,000
|
|
6
|
12/31/2007
|
300,000
|
|
7
|
3/31/2008
|
300,000
|
|
8
|
6/30/2008
|
133,438
|
-14-
