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EV TRANSPORTATION, INC. WARRANT TO PURCHASE COMMON STOCK

Warrant Agreement

EV TRANSPORTATION, INC.

WARRANT TO PURCHASE COMMON STOCK | Document Parties: EV TRANSPORTATION, INC | Holder and EV Rental Cars, LLC | PLETHORA PARTNERS LLC You are currently viewing:
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EV TRANSPORTATION, INC | Holder and EV Rental Cars, LLC | PLETHORA PARTNERS LLC

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Title: EV TRANSPORTATION, INC. WARRANT TO PURCHASE COMMON STOCK
Governing Law: Nevada     Date: 12/22/2008

EV TRANSPORTATION, INC.

WARRANT TO PURCHASE COMMON STOCK, Parties: ev transportation  inc , holder and ev rental cars  llc , plethora partners llc
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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.

Warrant No. SPN - 1

October 9, 2008

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:

 

(i)

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;

 

 

 
 

(ii)

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;

 

 

 
 

(iii)

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 ");

 

 

 

 

(iv)

Upon the earlier to occur of:

 

 

 

 

 

          (1)      the expiration of the Cure Period; or

 

 

 

   

          (2)      the actual date that the all of the Collateral has been liquidated by Subsidiary;

 

 

 

   

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

 

 

 
 

(v)

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 ").

                    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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