THIS WARRANT AND THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE " ACT "). THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.
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Warrant No. SPN - 1
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October 9, 2008
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EV TRANSPORTATION, INC.
WARRANT TO PURCHASE COMMON STOCK
**** 30,227,500 Shares of Common Stock ****
THIS WARRANT
CERTIFIES THAT, for value received, PLETHORA PARTNERS LLC ,
or registered assigns (the " Holder "), is entitled to
subscribe for and purchase from EV Transportation, Inc., a Nevada
corporation (the " Company "), with its principal offices
located at 5500 West Century Boulevard, Los Angeles, California
90045, up to and including the number of fully paid and
nonassessable shares of common stock, par value $0.001 per share
(the " Common Stock ") of the Company set forth above (the "
Warrant Shares "), at the exercise price of $1.30 per
share (the " Warrant Exercise Price ") (and as adjusted from
time to time pursuant to Section 3 hereof), in accordance with the
exercise procedure set forth in Section 1 hereof and prior to or
upon October 9, 2013 (the " Expiration Date "), subject to
the provisions and upon the terms and conditions hereinafter set
forth.
This Warrant
is issued in connection with a certain Secured Promissory Note and
Warrant Purchase Agreement, dated as of the date hereof (as
amended, modified or supplemented, the " Note Purchase
Agreement "), between Company, Holder and EV Rental Cars,
LLC, a California limited liability company and wholly owned
subsidiary of Company (the " Subsidiary "). Pursuant to the
Note Purchase Agreement, Subsidiary executed a Secured Promissory
Note, dated as of the date hereof (as amended, modified or
supplemented, the " Note "), in favor of Holder in the
principal amount of $300,000, bearing interest at 10% per annum.
Also, pursuant to the Note Purchase Agreement, Subsidiary executed
a Security Agreement, dated as of the date hereof (as amended,
modified or supplemented, the " Security Agreement "),
pursuant to which Subsidiary granted Holder a security interest in
certain Collateral (as such term is defined in the Security
Agreement) to secure its obligations under the Note. Terms used but
not defined in this Warrant shall have the meanings given in the
Note Purchase Agreement, the Note, the Security Agreement or the
Guaranty (together with this Warrant, the " Loan Documents
").
1.
Exercise Procedure; Method of Exercise; Cash Payment; Issuance
of New Warrant .
(a) Permissible Exercise Period . The Warrant shall not be
exercisable by Holder, under any circumstances whatsoever, at any
time prior to December 3, 2008, the Maturity Date of the Note;
provided, however , that if the Maturity Date of the Note is
extended, the Warrant shall not be exercisable by Holder at any
time prior to January 5, 2009, the Extended Maturity Date of the
Note; and provided , further , that if the Extended
Maturity Date is extended, the Warrant shall not be exercisable by
Holder at any time prior to such further extended maturity date.
Subject to the provisions of this Warrant, the purchase right
represented by this Warrant may be exercised by the Holder hereof,
in whole or in part and from time to time, after the
Maturity Date (or, if applicable, the Extended
Maturity Date or any further extended maturity date) of the Note,
at the election of the Holder hereof, if and only if
all of the following conditions have been satisfied:
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(i)
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Holder shall have declared the Company and
Subsidiary in default of its obligations under the Note, the Note
Purchase Agreement or any other Loan Document;
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(ii)
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Holder shall have sent Subsidiary (and provided
Company with a copy of) a written notice of default declaring
Subsidiary in default of the Note and specifying in reasonable
detail the reasons claimed for such default (the " Notice
of Default "), subject to any notice and cure period under
the Note;
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(iii)
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Subsidiary shall have been given a maximum of
sixty (60) calendar days from the date of its receipt of the Notice
of Default to pay Holder all amounts due and owing under the Note
or liquidate the Collateral in order to satisfy its obligations to
Holder under the Note (the " Cure Period ");
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(iv)
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Upon the earlier to occur of:
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(1) the expiration of the Cure
Period; or
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(2) the actual date that the all of
the Collateral has been liquidated by Subsidiary;
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Holder shall have sent Subsidiary (and provided
Company with a copy of) a written demand (the " Demand
Letter ") for all amounts still owing to Holder under the Note
(any such amount, the " Deficiency "); AND
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(v)
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Subsidiary shall have been given a maximum of
thirty (30) calendar days from the date of its receipt of the
Demand Letter to pay any claimed Deficiency (the " Final Cure
Period ").
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Notwithstanding the requirements of Sections (1)(a)(i) through
(1)(a)(v) above, if Subsidiary or Company voluntarily files for
bankruptcy protection, then, at any time after such filing, Holder
may immediately exercise the Warrant without regard to such
requirements. Further, notwithstanding the requirements of Sections
(1)(a)(i) through (1)(a)(v) above, if Company redeems the
Redeemable Warrants in accordance with Section 6 hereof, then, at
any time after the Redemption Date, Holder may exercise the
Remaining Warrants without regard to such requirements.
(b) Subject to the provisions of this Warrant, if Holder elects to
exercise this Warrant, Holder shall surrender this Warrant (with
the notice of exercise substantially in the form attached hereto as
Exhibit A duly completed and executed) at the
principal executive offices of Company, accompanied by (i) payment
to Company, by: (a) certified or bank check acceptable to Company;
(b) cancellation by Holder of bona fide indebtedness of Company to
Holder, if agreed to in advance in writing by Company in the
Company’s sole and absolute discretion; (c) by wire transfer
to an account designated by Company; or (d) any combination of (a),
(b) and (c), of an amount equal to the then applicable Warrant
Exercise Price multiplied by the number of Warrant Shares then
being purchased, or (ii) notice to the Company that this Warrant is
being exercised pursuant to a Cashless Exercise (as defined in
Section 5(a)).
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(c) The person or persons in whose name(s) any certificate(s)
representing the Warrant Shares 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 shares represented thereby (and such
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. In the event of any exercise of the rights
represented by this Warrant, certificates for the Warrant Shares so
purchased shall be delivered to the Holder hereof as soon as
possible and in any event within five (5) Business Days after such
exercise and, unless this Warrant has been fully exercised or
expired, a new warrant having the same terms as this Warrant and
representing the remaining portion of such shares, if any, with
respect to which this Warrant shall not then have been exercised
shall also be issued to the Holder hereof as soon as possible and
in any event within such five (5) Business Day period. For purposes
of this Warrant, the term " Business Day " means any day
other than Saturday, Sunday or other day on which commercial banks
in Los Angeles, California are authorized or required by law to
remain closed.
2.
Reservation of Shares . During the period within which the
rights represented by this Warrant may be exercised, the Company
will at all times have authorized, and reserved for the purpose of
the issuance upon exercise of the purchase rights evidenced by this
Warrant a sufficient number of shares of its capital stock to
provide for the exercise of the rights represented by this
Warrant.
3.
Adjustment of Warrant Exercise Price and Number of Shares .
The number and kind of securities purchasable upon the exercise of
this Warrant and the Warrant Exercise Price (and the number of
shares subject to this Warrant pursuant to Section 6) shall be
subject to adjustment to the nearest whole share (one-half and
greater being rounded upward) and nearest cent (one-half cent and
greater being rounded upward) from time to time upon the occurrence
of certain events, as follows. Each of the adjustments provided by
the subsections below shall be deemed separate adjustments and any
adjustment of this Warrant pursuant to one subsection of this
Section 3 shall preclude additional adjustments for the same event
or transaction by the remaining subsections.
(a) Reclassification . In 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) into the same or a different number or
class of securities, the Company 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), so that the
Holder of this Warrant shall thereafter be entitled to receive upon
exercise of this Warrant, 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, the kind and amount of
shares of stock, other securities, money and property receivable
upon such reclassification or change by a holder of the number of
shares then purchasable under this Warrant. The Company shall
deliver such new warrant as soon as possible and in any event
within five (5) Business Days after such reclassification or
change. Such new warrant shall provide for adjustments that shall
be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 3. The provisions of this subparagraph
(a) shall similarly apply to successive reclassifications or
changes.
(b) Stock Splits or Combination of Shares . If the Company
at any time while this Warrant remains outstanding and unexpired
shall subdivide (by stock split) or combine (by reverse stock
split) its outstanding shares of capital stock of the class into
which this Warrant is exercisable, the Warrant Exercise Price shall
be proportionately decreased in the case of a subdivision or
increased in the case of a combination, effective at the close of
business on the date the subdivision or combination becomes
effective and the number of shares of Common Stock issuable upon
exercise of this Warrant shall be proportionately
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increased in the case of a subdivision or
decreased in the case of a combination, and in each case to the
nearest whole share, effective at the close of business on the date
the subdivision or combination becomes effective. The provisions of
this subparagraph (b) shall similarly apply to successive
subdivisions or combinations of outstanding shares of capital stock
into which this Warrant is exercisable.
(c) Common Stock Dividends . If the Company at any time
while this Warrant is outstanding and unexpired shall pay a
dividend with respect to Common Stock payable in Common Stock,
then: (i) the Warrant Exercise Price shall be adjusted, from and
after the date of determination of stockholders entitled to receive
such dividend or distribution (the " Record Date "), to that
price determined by multiplying the Warrant Exercise Price in
effect immediately prior to such date of determination by a
fraction (A) the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to such
dividend or distribution, and (B) the denominator of which shall be
the total number of shares of Common Stock outstanding immediately
after such dividend or distribution and (ii) the number of shares
of Common Stock issuable upon exercise of this Warrant shall be
proportionately adjusted, to the nearest whole share, from and
after the Record Date by multiplying the number of shares of Common
Stock purchasable hereunder immediately prior to such Record Date
by a fraction (A) the numerator of which shall be the total number
of shares of Common Stock outstanding immediately after such
dividend or distribution, and (B) the denominator of which shall be
the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution. The provisions of this
subparagraph (c) shall similarly apply to successive Common Stock
dividends by the Company.
(d) Certain Issuance of Securities . If the Company shall at
any time or from time to time while this Warrant is outstanding (A)
issue shares of Common Stock, stock or securities (other than
Options) directly or indirectly convertible into or exchangeable or
exercisable for Common Stock (" Convertible
Securities "), or rights, warrants or options to subscribe
for or purchase shares of Common Stock or Convertible Securities
("Options") entitling the recipient thereof to subscribe for or
purchase shares of Common Stock, at a price per share or (B) amend
or otherwise modify the terms of any Convertible Securities or
Options to a price per share (such issuance, subscription or
purchase price or amended or modified price being referred to as
the " New Issue Price "), in either case, less than the
Warrant Exercise Price then in effect, then the Warrant Exercise
Price in effect at the opening of business on the day next
following such issuance shall be adjusted to equal the New Issue
Price. Such adjustment shall become effective immediately upon the
opening of business on the day next following such issuance. In
determining whether any shares of Common Stock are issued or
issuable, or Convertible Securities or Options entitle the holders
of Warrants to subscribe for or purchase shares of Common Stock at
less than such Warrant Exercise Price, there shall be taken into
account any consideration received by the Company upon issuance of
any such securities, the conversion of any such Convertible
Securities and upon exercise of such Options the value of such
consideration, if other than cash, to be determined in good faith
by the Board of Directors of the Company in the exercise of their
fiduciary duty, with the concurrence of the holders of at least a
majority of the Warrants then outstanding. Notwithstanding the
foregoing or any other provision herein to the contrary, no
adjustment to the Warrant Exercise Price will be required as a
result of any (i) shares of Common Stock issued or deemed to have
been issued by the Company pursuant to an employee benefit plan
that has been approved by the Board of Directors and stockholders
of the Company prior to or on the date of the Note Purchase
Agreement, pursuant to which the Company’s securities may be
issued to any consultant, employee, officer or director for
services provided to the Company (an " Approved Stock Plan
"); (ii) shares issued or deemed to have been issued upon the
conversion, exchange or exercise of any Option or Convertible
Security outstanding on the date prior to or on the date of the
Note Purchase Agreement, provided that the terms of such
Option or Convertible Security are not amended or otherwise
modified on or after the date of the Note Purchase Agreement, and
provided that the conversion price, exchange price,
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exercise price or other purchase price is not
reduced, adjusted or otherwise modified and the number of shares of
Common Stock issued or issuable is not increased (whether by
operation of, or in accordance with, the relevant governing
documents or otherwise) on or after the date of the Note Purchase
Agreement; and (ii) shares of the Common Stock issued or deemed to
have been issued by the Company upon exercise of this Warrant (each
such issuance, an " Exempted Issuance ").
(e) Certain Distributions . In case the Company shall at any
time or from time to time while this Warrant is outstanding
distribute to all holders of shares of Common Stock (including any
such distribution made in connection with a merger or consolidation
in which the Company is the resulting or surviving person and the
Common Stock is not changed or exchanged) cash, evidences of
indebtedness of the Company, any subsidiary or another issuer,
securities of the Company (including Convertible Securities), any
subsidiary or another issuer or other assets (excluding dividends
payable in shares of Common Stock for which adjustment is made
under another paragraph of this Section 3 and any distribution in
connection with an Exempted Issuance) or Options to subscribe for
or purchase of any of the foregoing, then , and in each such
case, the Warrant Exercise Price then in effect shall be adjusted
(and any other appropriate actions shall be taken by the Company)
by multiplying the Warrant Exercise Price in effect immediately
prior to the date of such distribution by a fraction (x) the
numerator of which shall be the Weighted Average Price of the
Common Stock for the five (5) consecutive Trading Days immediately
prior to the date of distribution less the then fair market value
(as determined by the Board of Directors in the exercise of their
fiduciary duties with the concurrence of the holders of at least a
majority of the Warrants then outstanding) of the portion of the
cash, evidences of indebtedness, securities or other assets so
distributed or of such Options to subscribe applicable to one share
of Common Stock and (y) the denominator of which shall be the
Weighted Average Price of the Common Stock for the five (5)
consecutive Trading Days immediately prior to the date of
distribution (but such fraction shall not be greater than one).
Such adjustment shall be made whenever any such distribution is
made 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
distribution.
(f) Tender Offer . In the event that the Company shall at
any time or from time to time while this Warrant is outstanding
make a payment of cash or other consideration to the holders of
shares of Common Stock in respect of a tender offer or exchange
offer, other than an odd-lot offer, and the value of the sum of (i)
the aggregate cash and other consideration paid for such shares of
Common Stock, and (ii) any other consent or other fees paid to
holders of shares of Common Stock in respect of such tender offer
or exchange offer, expressed as an amount per share of Common Stock
validly tendered or exchanged pursuant to such tender offer or
exchange offer, exceeds the Weighted Average Price of the Common
Stock on the Trading Day
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