NEITHER THIS
SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
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 OR OTHER LOAN SECURED BY SUCH
SECURITIES.
Warrant
Certificate No. 1
COMMON STOCK PURCHASE
WARRANT
To Purchase 145,985 Shares of Common
Stock of
PIMI AGRO CLEANTECH,
INC.
THIS COMMON
STOCK PURCHASE WARRANT (the “ Warrant ”)
certifies that, for value received, EARTHBOUND LLC (the “
Holder ”), is entitled, upon the terms and subject to
the limitations on exercise and the conditions hereinafter set
forth, at any time on or after the date hereof (the “
Initial Exercise Date ”) and on or prior to the close
of business on June 15, 2009 (the “ Termination Date
”) but not thereafter, to subscribe for and purchase from
PIMI AGRO CLEANTECH, INC., a Delaware corporation (the “
Company ”), up to 145,985 shares (the “
Warrant Shares ”) of Common Stock, par value $.01 per
share, of the Company (the “ Common Stock
”). The purchase price of one share of Common
Stock under this Warrant shall be equal to the Exercise Price, as
defined in Section 2(b) .
a) On
January 20, 2009 the Company entered into an investment agreement
with Holder, pursuant to which Holder agreed to invest an aggregate
of $300,000.00 in the Company, payable in multiple traunches. As of
the Initial Exercise Date, Holder has invested $60,000 under the
Investment Agreement.
b) The
Company is issuing this Warrant in furtherance of the Investment
Agreement and as further incentive to Holder to increase its
investment in the Company.
a)
Exercise of Warrant . Exercise of the purchase
rights represented by this Warrant may be made, in whole or in
part, at any time or times on or after the Initial Exercise Date
and on or before the Termination Date by delivery to the Company of
a duly executed facsimile copy of the Notice of Exercise form
annexed hereto (or such other office or agency of the Company as it
may designate by notice in writing to the registered Holder at the
address of such Holder appearing on the books of the Company); and,
within three (3) Trading Days of the date said Notice of Exercise
is delivered to the Company, the Company shall have received
payment of the aggregate Exercise Price of the shares thereby
purchased by wire transfer or cashier’s check drawn on a
United States bank. Notwithstanding anything herein to
the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has
purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this
Warrant resulting in purchases of a portion of the total number of
Warrant Shares available hereunder shall have the effect of
lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant
Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and
the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise within two (2) Trading Days
of receipt of such notice. THE HOLDER AND ANY
ASSIGNEE, BY ACCEPTANCE OF THIS WARRANT, ACKNOWLEDGE AND AGREE
THAT, BY REASON OF THE PROVISIONS OF THIS PARAGRAPH, FOLLOWING THE
PURCHASE OF A PORTION OF THE WARRANT SHARES HEREUNDER, THE NUMBER
OF WARRANT SHARES AVAILABLE FOR PURCHASE HEREUNDER AT ANY GIVEN
TIME MAY BE LESS THAN THE AMOUNT STATED ON THE FACE HEREOF
.
b)
Exercise Price . The exercise price per share of
the Common Stock under this Warrant shall be $1.37 (the “
Exercise Price ”).
c)
Mechanics of Exercise .
i.
Authorization of Warrant Shares . The Company
covenants that all Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant will,
upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company
in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
ii.
Delivery of Certificates Upon Exercise
. Certificates for Warrant Shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the
Holder’s prime broker with the Depository
Trust Company through its Deposit/Withdrawal at Custodian (“
DWAC ”) system if the Company is a participant in such
system, and otherwise by delivery to the address specified by the
Holder in the Notice of Exercise, within five (5) Trading Days from
the delivery to the Company of the Notice of Exercise form,
surrender of this Warrant (if required) and payment of the
aggregate Exercise Price as set forth above (“ Warrant
Share Delivery Date ”). This Warrant shall be
deemed to have been exercised on the date the Exercise Price is
received by the Company. The Warrant Shares shall be
deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by the Holder, if
any, have been paid.
iii.
Delivery of New Warrants Upon Exercise . If this
Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant
certificate, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iv.
Rescission Rights . If the Company fails to cause
its transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Shares pursuant to this
Section 2 by the Warrant Share Delivery Date, then the
Holder will have the right to rescind such exercise.
v.
Obligation Absolute . The Corporation’s obligations to
issue and deliver the certificates representing the Warrant Shares
upon exercise of the Warrant 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 Corporation 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 Corporation to the Holder in connection with the issuance of
such certificates representing the Warrant Shares. The
Corporation shall issue the certificates representing the Warrant
Shares upon a properly noticed exercise.
vi.
No Fractional Shares or Scrip . No fractional
shares or scrip representing fractional shares shall be issued upon
the exercise of this
Warrant. As to any fraction of a
share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall round up to the next whole
share.
vii.
Charges, Taxes and Expenses . Issuance of
certificates for Warrant Shares shall be made without charge to the
Holder or other incidental expense in respect of the issuance of
such certificate, and such certificates shall be issued in the name
of the Holder or in such name or names as may be directed by the
Holder; provided , however , that in the event
certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; the assignment shall be subject
to Section 4 below, and the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
viii.
Closing of Books . The Company will not close its
stockholder books or records in any manner which prevents the
timely exercise of this Warrant, pursuant to the terms
hereof.
Section 3 .
Certain Adjustments .
a)
Stock Dividends and Splits . If the Company, at
any time while this Warrant is outstanding: (i) pays a stock
dividend or otherwise makes a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent
securities payable in shares of Common Stock (which, for avoidance
of doubt, shall not include any shares of Common Stock issued by
the Company upon exercise of this Warrant), provided that this
clause (i) subdivides outstanding shares of Common Stock into a
larger number of shares, (ii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller
number of shares, or (iii) issues by reclassification of shares of
the Common Stock any shares of capital stock of the Company, then
in each case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event
and the number of shares issuable upon exercise of this Warrant
shall be proportionately adjusted. Any adjustment made
pursuant to this Section 3(a) shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and
shall become effective immediately after the effective date in the
case of a subdivision, combination or re-classification.
b)
Fundamental Transaction . If, at any time while this Warrant
is outstanding, (i) the Company effects any merger or consolidation
of the Company with or into another Person, (ii) the Company
effects any sale of all or substantially all of its assets in one
or a series of related transactions, (iii) 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 (iv) the Company effects any
reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property
(in any such case, a “ Fundamental Transaction
”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise immediately prior to
the occurrence of
