EXHIBIT 10.2
FORM OF WARRANT
The
securities represented by this Warrant and issuable upon exercise
hereof have not been registered under the Securities Act of 1933,
as amended (the “Act”), or under the provisions of any
applicable state securities laws, but have been acquired by the
registered holder hereof for purposes of investment and in reliance
on statutory exemptions under the Act, and under any applicable
state securities laws. These securities and the
securities issued upon exercise hereof may not be sold, pledged,
transferred or assigned, nor may this Warrant be exercised, except
in a transaction which is exempt under the provisions of the Act
and any applicable state securities laws or pursuant to an
effective registration statement.
ENERGY COMPOSITES
CORPORATION
A Nevada
Corporation
COMMON STOCK PURCHASE
WARRANT
Date of
Issuance: ____________ 2008
Certificate No. W-__
For value received, Energy Composites
Corporation, a Nevada corporation (the “ Company
”), hereby grants to ____________________ or its transferees
and assigns (“ Registered Holder ”), the right
to purchase from the Company a total of ______________ shares
(“ Warrant Shares ”) of the Company’s
common stock, par value $0.001 per share (“ Common
Stock ”), at a price per share equal to $5.00 (the
“ Initial Exercise Price ”). The
exercise price and number of Warrant Shares (and the amount and
kind of other securities) for which this Warrant is exercisable
shall be subject to adjustment as provided in Section 2
hereof. This Warrant is being issued in connection with
the Subscription Agreement between Registered Holder and the
Company dated ___________, 2008 (the “ Subscription
Agreement ”). This Warrant is subject to the
following provisions:
SECTION 1.
Exercise of Warrant .
(a) Terms of
Warrants; Exercise Period . Subject to the terms of
this Agreement, the Registered Holder shall have the right,
commencing on the date hereof and expiring on the 3-year
anniversary hereof (the “ Expiration Date ”), to
exercise this Warrant, in whole or in part, and receive from the
Company the number of Warrant Shares which the Registered Holder
may at the time be entitled to receive on exercise of this Warrant
and payment of the Exercise Price then in effect for the Warrant
Shares. To the extent not exercised prior to the
Expiration Date, this Warrant shall become void and all rights
thereunder and all rights in respect thereof under this Agreement
shall cease as of such time.
(i) This Warrant shall
be deemed to have been exercised on the date specified in a
written notice from the Registered Holder to the Company (the
“ Exercise Time ”) and within three business
days following the Exercise Time, the Registered Holder shall
deliver the following to the Company:
(A) a completed Exercise Agreement,
as described in Section 1(c) below;
(C) if this
Warrant is not registered in the name of the Registered Holder, an
Assignment or Assignments in the form set forth in Exhibit
II hereto evidencing the assignment of this Warrant to the
Registered Holder, in which case the Registered Holder shall have
complied with the provisions set forth in Section 4
hereof; and
(D) wire
transfer or a check payable to the Company in an amount equal to
the product of the Exercise Price (as such term is defined in
Section 2) multiplied by the number of Warrant Shares being
purchased upon such exercise (the “ Aggregate Exercise
Price ”).
(ii) Certificates for
Warrant Shares purchased upon exercise of this Warrant shall be
delivered by the Company to the Registered Holder within 5 business
days after the date of the Exercise Time. Unless this
Warrant has expired or all of the purchase rights represented
hereby have been exercised, the Company shall prepare a new
Warrant, substantially identical hereto, representing the rights
formerly represented by this Warrant that have not expired or been
exercised and shall, within such 5-day period, deliver such new
Warrant to the Person designated for delivery in the Exercise
Agreement.
(iii) The Warrant Shares
issuable upon the exercise of this Warrant shall be deemed to have
been issued to the Registered Holder at the Exercise Time, and the
Registered Holder shall be deemed for all purposes to have become
the record holder of such Warrant Shares at the Exercise
Time.
(iv) The Company shall not
close its books against the transfer of this Warrant or of any
Warrant Shares issued or issuable upon the exercise of this Warrant
in any manner which interferes with the timely exercise of this
Warrant.
(v) The Company shall
assist and cooperate with the Registered Holder or any Registered
Holder required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any
exercise of this Warrant.
(vi) The Company shall at all
times reserve and keep available out of its authorized but unissued
capital stock, solely for the purpose of issuance upon the exercise
of this Warrant, the maximum number of Warrant Shares issuable upon
the exercise of this Warrant. All Warrant Shares which
are so issuable shall, when issued and upon the payment of the
Exercise Price therefor, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and
charges. The Company shall take all such actions
as may be necessary to assure that all such Warrant Shares may be
so issued without violation by the Company of any applicable
law or governmental regulation or any requirements of any
domestic securities exchange upon which securities of the Company
may be listed (except for official notice of issuance which shall
be immediately delivered by the Company upon each such
issuance).
(c) Exercise
Agreement . Upon any exercise of this Warrant, the
Registered Holder shall deliver an Exercise Agreement in the form
set forth in Exhibit I hereto, except that if the
Warrant Shares are not to be issued in the name of the Person in
whose name this Warrant is registered, the Exercise Agreement shall
also state the name of the Person to whom the certificates for the
Warrant Shares are to be issued, and if the number of Warrant
Shares to be issued does not
include all the Warrant Shares purchasable
hereunder, it shall also state the name of the Person to whom
a new Warrant for the unexercised portion of the rights
hereunder is to be issued. Such Exercise Agreement shall
be dated the actual date of execution thereof.
(d) Mandatory
Exercise . The Company may force the exercise of
this Warrant if all of the following conditions have been
met:
(i) The Company’s
common stock, $0.001 par value (the “ Common Stock
”) has traded above the Exercise Price for at least 20
consecutive trading days immediately preceding the Mandatory
Exercise Notice (defined below);
(ii) The average trading
volume shall be at least 100,000 shares per day during such
20-consecutive day trading period; and
(iii) The shares of Common
Stock issuable upon exercise of this Warrant shall be eligible for
resale pursuant to Rule 144 under the Securities Act of 1933 or
there shall be an effective registration statement covering the
resale of the Warrant Shares.
The Company may exercise its right to force the
exercise this Warrant by giving notice thereof (the “
Mandatory Exercise Notice ”) to the holder of this
Warrant as it appears on the books of the Company, which notice
shall specify the number of Warrant Sh
