THIS
WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A
SUBSCRIPTION AGREEMENT DATED AS OF MAY __, 2008, NEITHER THIS
WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL,
IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF
COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
REGULATION S UNDER SUCH ACT.
|
Right
to Purchase ________ Shares of Common Stock, par value $.001
per share
|
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT ,
for value received, _________ or its registered assigns, is
entitled to purchase from
EMVELCO CORP., a
Delaware corporation (the “Company”), at any time or
from time to time during the period specified in Paragraph 2
hereof, ____________ fully paid and nonassessable shares of the
Company’s Common Stock, par value $.001 per share (the
“Common Stock”), at an exercise price per share equal
to $1.00 (the
“Exercise Price”). The term “Warrant
Shares,” as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Exercise Price
are subject to adjustment as provided in Paragraph 4 hereof. The
term “Warrants” means this Warrant and the other
warrants issued pursuant to that certain Subscription Agreement,
dated May __, 2008, by and among the Company and the Buyers listed
on the execution page thereof (the “Subscription
Agreement”).
This
Warrant is subject to the following terms, provisions, and
conditions:
1.
Manner of Exercise; Issuance of Certificates; Payment for
Shares. Subject
to there being 30,000,000 of the Company issued and outstanding, ,
this Warrant may be exercised by the holder hereof, in whole or in
part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the “Exercise
Agreement”), to the Company during normal business hours on
any business day at the Company’s principal executive offices
(or such other office or agency of the Company as it may designate
by notice to the holder hereof), and upon payment to the Company in
cash, by certified or official bank check or by wire transfer for
the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so
purchased shall be deemed to be issued to the holder hereof or such
holder’s designee, as the record owner of such shares, as of
the close of business on the date on which this Warrant shall have
been surrendered, the completed Exercise Agreement shall have been
delivered, and payment shall have been made for such shares as set
forth above. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the
Exercise Agreement, shall be delivered to the holder hereof within
a reasonable time, not exceeding three (3) business days, after
this Warrant shall have been so exercised. If this Warrant shall
have been exercised only in part, then, unless this Warrant has
expired, the Company shall, at its expense, at the time of delivery
of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this
Warrant shall not then have been exercised.
Notwithstanding
anything in this Warrant to the contrary, in no event shall
the holder of this Warrant be entitled to exercise a number of
Warrants (or portions thereof) in excess of the number of
Warrants (or portions thereof) upon exercise of which the sum
of (i) the number of shares of Common Stock beneficially owned
by the holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the
ownership of the unexercised Warrants and the unexercised or
unconverted portion of any other securities of the Company
(including the Notes (as defined in the Subscription
Agreement)) subject to a limitation on conversion or exercise
analogous to the limitation contained herein) and (ii) the
number of shares of Common Stock issuable upon exercise of the
Warrants (or portions thereof) with respect to which the
determination described herein is being made, would result in
beneficial ownership by the holder and its affiliates of more
than 4.9% of the outstanding shares of Common Stock. For
purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended, and
Regulation 13D-G thereunder, except as otherwise provided in
clause (i) of the preceding sentence. Notwithstanding anything
to the contrary contained herein, the limitation on exercise
of this Warrant set forth herein may not be amended without
(i) the written consent of the holder hereof and the Company
and (ii) the approval of a majority of shareholders of the
Company.
2.
Period of Exercise .
This
Warrant is exercisable at any time or from time to time on or after
the date on which this Warrant is issued and delivered pursuant to
the terms of the Subscription Agreement and before 6:00 p.m., New
York, New York time on the second (2 nd )
anniversary
of the date of issuance (the “Exercise Period”).
Notwithstanding the foregoing, on any given date, the maximum
number of Warrant Shares issuable upon exercise of this Warrant on
such date shall equal (i) half of such number of shares of common
stock issued on or prior to such date upon conversion of the
Convertible Note issued to the holder pursuant to the Subscription
Agreement, less (ii) such number of Warrant Shares exercised
hereunder prior to such date.
3.
Certain Agreements of the Company .
The
Company hereby covenants and agrees as follows:
(a)
Shares to be Fully Paid
. All
Warrant Shares will, upon issuance in accordance with the terms of
this Warrant, be validly issued, fully paid, and nonassessable and
free from all taxes, liens, and charges with respect to the issue
thereof.
(b)
Reservation of Shares
. During
the Exercise Period, the Company shall at all times have
authorized, and reserved for the purpose of issuance upon exercise
of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(c)
Successors and Assigns
. This
Warrant will be binding upon any entity succeeding to the Company
by merger, consolidation, or acquisition of all or substantially
all the Company’s assets.
4.
Antidilution Provisions . During
the Exercise Period, the Exercise Price and the number of Warrant
Shares shall be subject to adjustment from time to time as provided
in this Paragraph 4.
In
the event that any adjustment of the Exercise Price as
required herein results in a fraction of a cent, such Exercise
Price shall be rounded up to the nearest cent.
(a)
Subdivision or Combination of Common Stock
. If
the Company at any time subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or
otherwise) the shares of Common Stock acquirable hereunder into a
greater number of shares, then, after the date of record for
effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately
reduced. If the Company at any time combines (by reverse stock
split, recapitalization, reorganization, reclassification or
otherwise) the shares of Common Stock acquirable hereunder into a
smaller number of shares, then, after the date of record for
effecting such combination, the Exercise Price in effect
immediately prior to such combination will be proportionately
increased.
(b)
Adjustment in Number of Shares
. Upon
each adjustment of the Exercise Price pursuant to the provisions of
this Paragraph 4, the number of shares of Common Stock issuable
upon exercise of this Warrant shall be adjusted by multiplying a
number equal to the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issuable
upon exercise of this Warrant immediately prior to such adjustment
and dividing the product so obtained by the adjusted Exercise
Price. Further, if the number of shares issuable upon conversion of
the Convertible Note (the “Note”) issued to the holder
as of the date hereof is adjusted as a result of an adjustment to
the Conversion Price, as defined in the Note, in accordance with
Section 1.2 of the Note, then the number of Warrant Shares issuable
upon exercise of this Warrant shall be adjusted to equal the number
of shares issuable upon conversion of the Note multiplied by
.5.
(c)
Consolidation, Merger or Sale
. In
case of any consolidation of the Company with, or merger of the
Company into any other corporation, or in cas
|
