Exhibit 4.1
THIS WARRANT AND THE UNDERLYING SHARES
OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE “SECURITIES ACT”), OR ANY OTHER SECURITIES
LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES
LAWS WITH RESPECT TO SUCH SECURITIES IS THEN IN EFFECT, OR IN THE
OPINION OF COUNSEL TO THE ISSUER OF THESE SECURITIES, SUCH
REGISTRATION UNDER THE SECURITIES ACT AND OTHER APPLICABLE
SECURITIES LAWS IS NOT REQUIRED.
WARRANT FOR THE PURCHASE OF SHARES
OF
COMMON STOCK OF ECOSPHERE TECHNOLOGIES, INC.
THIS IS TO CERTIFY that, for value
received, ______________ (the “Holder”), is entitled to
purchase, subject to the terms and conditions hereinafter set
forth, ________ shares of Ecosphere Technologies, Inc., a Delaware
corporation (the “Company”) common stock, $0.01 par
value per share (“Common Stock”), and to receive
certificates for the Common Stock so purchased. The exercise
price of this Warrant is $0.25 per share, subject to adjustment as
provided below (the “Exercise Price”).
1.
Exercise Period.
This Warrant shall be exercisable
at any time by the Holder beginning on the date listed above (the
“Issuance Date”), and ending at 5:00 p.m., New York,
New York time, five years thereafter (the “Exercise
Period”). This Warrant will terminate automatically and
immediately upon the expiration of the Exercise Period.
2.
Exercise of Warrant; Cashless
Exercise. This Warrant
may be exercised, in whole or in part, at any time and from time to
time during the Exercise Period. Such exercise shall be
accomplished by tender to the Company of an amount equal to the
Exercise Price multiplied by the number of underlying shares being
purchased (the “Purchase Price”), either (a) in cash,
by wire transfer or by certified check or bank cashier’s
check, payable to the order of the Company, or (b) by surrendering
such number of shares of Common Stock received upon exercise of
this Warrant with an aggregate Fair Market Value (as defined below)
equal to the Purchase Price (as described in the following
paragraph (a “Cashless Exercise”), together with
presentation and surrender to the Company of this Warrant with an
executed subscription form in substantially the form attached
hereto as Exhibit A (the “Subscription”). Upon
receipt of the foregoing, the Company will deliver to the Holder,
as promptly as possible, a certificate or
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certificates representing the shares of
Common Stock so purchased, registered in the name of the Holder or
its transferee (as permitted under Section 3 below). With
respect to any exercise of this Warrant, the Holder will for all
purposes be deemed to have become the holder of record of the
number of shares of Common Stock purchased hereunder on the date a
properly executed Subscription and payment of the Purchase Price is
received by the Company (the “Exercise Date”),
irrespective of the date of delivery of the certificate evidencing
such shares, except that, if the date of such receipt is a date on
which the stock transfer books of the Company are closed, such
person will be deemed to have become the holder of such shares at
the close of business on the next succeeding date on which the
stock transfer books are open. Fractional shares of Common
Stock will not be issued upon the exercise of this Warrant.
In lieu of any fractional shares that would have been issued
but for the immediately preceding sentence, the Holder will be
entitled to receive cash equal to the current market price of such
fraction of a share of Common Stock on the trading day immediately
preceding the Exercise Date. In the event this Warrant is
exercised in part, the Company shall issue a new Warrant to the
Holder covering the aggregate number of shares of Common Stock as
to which this Warrant remains exercisable for.
If the Holder elects to conduct a
Cashless Exercise, the Company shall cause to be delivered to the
Holder a certificate or certificates representing the number of
shares of Common Stock computed using the following
formula:
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X =
Y (A-B)
A
Where:
X
=
the number of shares of Common Stock to be issued to Holder;
Y
=
the portion of the Warrant (in number of shares of Common
Stock) being exercised by Holder (at the date of such
calculation);
A
=
the Fair Market Value (as defined below) of one share of
Common Stock on the Exercise Date, calculated by taking the
average Fair Market Value over the last 10 trading days (not
including the Exercise Date); and
B
=
Exercise Price (as adjusted to the date of such calculation).
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For purposes of this Warrant, Fair Market
Value shall mean: (i) if the principal trading market for
such securities is a national securities exchange (including The
Nasdaq Stock Market) or the Over-the-Counter Bulletin Board (or a
similar system then in use), the last reported sales price on the
principal market the trading day immediately prior to such Exercise
Date; or (ii) if (i) is not applicable, and if bid and
ask prices for shares of Common Stock are reported by the principal
trading market or the Pink OTC Markets, Inc. (or successor), the
average of the high bid and low ask prices so reported for the
trading day immediately prior to such Exercise Date.
Notwithstanding the foregoing, if there is no last reported
sales price or bid and ask prices, as the case may be, for the day
in question, then Fair Market Value shall be determined as of the
latest day prior to such day for which such last reported sales
price or bid and ask prices, as the case may be, are available,
unless such securities have not been traded on an exchange or in
the over-
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the-counter market for 30 or more days
immediately prior to the day in question, in which case the Fair
Market Value shall be determined in good faith by, and reflected in
a formal resolution of, the board of directors of the
Company.
3.
Transferability and
Exchange.
(a)
This Warrant, and the Common Stock
issuable upon the exercise hereof, may not be sold, transferred,
pledged or hypothecated unless the Company shall have been provided
with an opinion of counsel reasonably satisfactory to the Company
that such transfer is not in violation of the Securities Act of
1933 (“Securities Act”), and any applicable state
securities laws. Subject to the satisfaction of the aforesaid
condition, this Warrant and the underlying shares of Common Stock
shall be transferable from time to time by the Holder upon written
notice to the Company. If this Warrant is transferred, in
whole or in part, the Company shall, upon surrender of this Warrant
to the Company, deliver to each transferee a Warrant evidencing the
rights of such transferee to purchase the number of shares of
Common Stock that such transferee is entitled to purchase pursuant
to such transfer. The Company may place a legend similar to
the legend at the top of this Warrant on any replacement Warrant
and on each certificate representing shares issuable upon exercise
of this Warrant or any replacement Warrants. Only registered Holder
may enforce the provisions of this Warrant against the Company.
A transferee of the original registered Holder becomes a
registered Holder only upon delivery to the Company of the original
Warrant and an original Assignment, substantially in the form set
forth in Exhibit B attached hereto.
(b)
This Warrant is exchangeable upon its
surrender by the Holder to the Company for new Warrants of like
tenor and date representing in the aggregate the right to purchase
the number of shares purchasable hereunder, each of such new
Warrants to represent the right to purchase such number of shares
as may be designated by the Holder at the time of such surrender
(not to exceed the aggregate number of shares underlying this
Warrant).
4.
Adjustments to Exercise Price and
Number of Shares Subject to Warrant .
The Exercise Price and the number
of shares of Common Stock purchasable upon the exercise of this
Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4.
For the purpose of this Section 4, “Common Stock”
means shares now or hereafter authorized of any class of common
stock of the Company, however designated, that has the right to
participate in any distribution of the assets or earnings of the
Company without limit as to per share amount (excluding, and
subject to any prior rights of, any class or series of preferred
stock).
(a)
In case the Company shall (i) pay a
dividend or make a distribution in shares of Common Stock to Holder
of shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its shares of Common Stock
other securities of the Company, then the Exercise Price in effect
at the time of the record date for such dividend or on the
effective date of such subdivision, combination or
reclassification, and/or the number and kind of securities issuable
on such date, shall be proportionately adjusted so that the Holder
of the Warrant thereafter exercised shall be entitled to receive
the aggregate number and kind of shares of Common Stock (or such
other securities other than Common Stock) of the Company, at the
same aggregate Exercise Price, that, if such
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Warrant had been exercised immediately
prior to such date, the Holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend,
distribution, subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b)
In case the Company shall fix a record
date for the making of a distribution to all Holder of Common Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving
corporation) of cash, evidences of indebtedness or assets, or
subscription rights or warrants, the Exercise Price to be in effect
after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a
fract
