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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, WHICH
COUNSEL AND 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.
COMMON STOCK PURCHASE WARRANT
SMART ENERGY SOLUTIONS, INC.
| Warrant Shares: _______ |
Initial Exercise Date: ______ __,
2008
|
THIS
COMMON STOCK PURCHASE WARRANT (the “
Warrant ”)
certifies that, for value received, _____________ (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 the five year
anniversary of the Initial Exercise Date (the “
Termination Date ”)
but not thereafter, to subscribe for and purchase from Smart Energy
Solutions, Inc., a Nevada corporation (the “
Company ”),
up to ______ shares (the “
Warrant Shares ”)
of common stock 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).
Section 1 .
Definitions .
Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Securities Purchase
Agreement (the “
Purchase Agreement ”),
dated April __, 2008, among the Company and the purchasers
signatory thereto.
Section 2 .
Exercise .
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 and 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 along with delivery to the Company of the final Notice
of Exercise. 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.
b)
Exercise Price .
The exercise price per share of the Common Stock under this Warrant
shall be $0.__, subject to adjustment hereunder (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 due exercise of the purchase rights represented
by this Warrant and payment of the applicable Exercise Price to the
Company, 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 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 Agent Commission
(“
DWAC ”)
system if the Company is a participant in such system, and
otherwise by physical delivery to the address specified by the
Holder in 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 and the Warrant
Shares shall be deemed to have been issued on the date all of the
foregoing are accepted by the Company.
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, 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 Section 2(c)(ii) by the Warrant Share Delivery
Date, then the Holder will have the right to rescind such
exercise.
v.
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 at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price or round up to the
next whole share.
vi.
Charges, Taxes and Expenses .
Issuance of certificates for Warrant Shares shall be made without
charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate,
all of which taxes and expenses shall be paid by the Company, 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; and the Company
may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental
thereto.
vii.
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: (A)
pays a stock dividend or otherwise make 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),
(B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares, or (D) 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 after the date hereof, the Company (or any other entity, the
stock or other securities of which are at the time receivable on
the exercise of the Warrants), consolidates with or merges into
another entity or conveys all or substantially all of its assets to
another entity, then, in each such case, Warrantholder, upon any
permitted exercise of a Warrant, at any time after the consummation
of such reorganization, consolidation, merger or conveyance, shall
be entitled to receive, in lieu
of the stock or other securities and property receivable upon the
exercise of the Warrant prior to such consummation, the stock or
other securities or property to which such Warrantholder would have
been entitled upon the consummation of such reorganization,
consolidation, merger or conveyance if such Warrantholder had
exercised the Warrant immediately prior thereto, all subject to
further adjustment as provided in this Section 3. The successor or
purchasing entity in any such reorganization, consolidation, merger
or conveyance (if other than the Company) shall duly execute and
deliver to Warrantholder a written acknowledgment of such
entity’s obligations under the Warrants and this
Agreement.
c)
Calculations .
All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.
d)
Voluntary Adjustment By Company .
The Company may at any time during the term of this Warrant reduce
the then current Exercise Price to any amount and for any period of
time deemed appropriate by the Board of Directors of the
Company.
e)
Notice to Holder .
i.
Adjustment to Exercise Price .
Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a
notice setting forth the Exercise Price after such adjustment and
setting forth a
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