Exhibit 10.5
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WARRANT
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NO.
125
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PURESAFE WATER SYSTEMS,
INC.
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4,000,000 Shares
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WARRANT TO PURCHASE COMMON
STOCK
VOID AFTER 5:30 P.M.,
EASTERN
TIME, ON THE EXPIRATION
DATE
THIS WARRANT
AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED,
DONATED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE
REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND
STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
FOR VALUE RECEIVED, PURESAFE WATER SYSTEMS,
INC., a Delaware corporation (the “Company”), hereby
agrees to sell upon the terms and on the conditions hereinafter set
forth, but no later than 5:30 p.m., Eastern Time, on the Expiration
Date (as hereinafter defined) to Leslie J. Kessler or registered
assigns (the “Holder”), under the terms as hereinafter
set forth, Four million (4,000,000) fully paid
and non-assessable shares of the Company’s Common Stock, par
value $0.001 per share (the “Warrant Stock”), at a
purchase price of 4.1 cents ($ 0.041 ) per share (the
“Warrant Price”), pursuant to this warrant (this
“Warrant”). The number of shares of Warrant
Stock to be so issued and the Warrant Price are subject to
adjustment in certain events as hereinafter set
forth. The term “Common Stock” shall mean,
when used herein, unless the context otherwise requires, the stock
and other securities and property at the time receivable upon the
exercise of this Warrant.
Capitalized terms used and not otherwise defined
herein shall have the respective meanings attributed thereto in
Section 10.
1.
Exercise of Warrant .
a. The
Holder may exercise this Warrant according to its terms by
surrendering this Warrant to the Company at the address set forth
in Section 10, the subscription form attached hereto having then
been duly executed by the Holder, accompanied by cash, certified
check or bank draft in payment of the purchase price, in lawful
money of the United States of America, for the number of shares of
the Warrant Stock specified in the subscription form, or as
otherwise provided in this Warrant, prior to 5:30 p.m., Eastern
Time, on April 16, 2014 (the “Expiration Date )
b. This
Warrant may be exercised in whole or in part so long as any
exercise in part hereof would not involve the issuance of
fractional shares of Warrant Stock. If exercised in
part, the Company shall deliver to the Holder a new Warrant,
identical in form, in the name of the Holder, evidencing the right
to purchase the number of shares of Warrant Stock as to which this
Warrant has not been exercised, which new Warrant shall be signed
by the Chief Executive Officer of the Company. The term
Warrant as used herein shall include any subsequent Warrant issued
as provided herein.
c. No
fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. The Company
shall pay cash in lieu of fractions with respect to the Warrants
based upon the fair market value of such fractional shares of
Common Stock (which shall be the closing price of such shares on
the exchange or market on which the Common Stock is then traded) at
the time of exercise of this Warrant.
d. In
the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the Warrant Stock so
purchased, registered in the name of the Holder, shall be delivered
to the Holder within a reasonable time after such rights shall have
been so exercised. The person or entity in whose name
any certificate for the Warrant Stock is issued upon exercise of
the rights represented by this Warrant shall for all purposes be
deemed to have become the holder of record of such shares
immediately prior to the close of business on the date on which the
Warrant was surrendered and payment of the Warrant Price and any
applicable taxes was made, irrespective of the date of delivery of
such certificate, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of
such shares at the opening of business on the next succeeding date
on which the stock transfer books are open.
2.
Disposition of Warrant Stock and Warrant .
a. The
Holder hereby acknowledges that this Warrant and any Warrant Stock
purchased pursuant hereto are, as of the date hereof, not
registered: (i) under the Act on the ground that the issuance of
this Warrant is exempt from registration under Section 4(2) of the
Act as not involving any public offering or (ii) under any
applicable state securities law because the issuance of this
Warrant does not involve any public offering; and that the
Company’s reliance on the Section 4(2) exemption of the Act
and under applicable state securities laws is predicated in part on
the representations hereby made to the Company by the Holder that
it is acquiring this Warrant and will acquire the Warrant Stock for
investment for its own account, with no present intention of
dividing its participation with others or reselling or otherwise
distributing the same, subject, nevertheless, to any requirement of
law that the disposition of its property shall at all times be
within its control.
The Holder hereby agrees that it will not sell
or transfer all or any part of this Warrant and/or Warrant Stock
unless and until it shall first have given notice to the Company
describing such sale or transfer and furnished to the Company
either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the
Holder and reasonably satisfactory to the Company) to the effect
that the proposed sale or transfer may be made without registration
under the Act and without registration or qualification under any
state law, or (ii) an interpretative letter from the Securities and
Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without
registration under the Act.
b. If,
at the time of issuance of the shares issuable upon exercise of
this Warrant, no registration statement is in effect with respect
to such shares under applicable provisions of the Act, the Company
may at its election require that the Holder provide the Company
with written reconfirmation of the Holder’s investment intent
and that any stock certificate delivered to the Holder of a
surrendered Warrant shall bear legends reading substantially as
follows:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS CERTIFICATE
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”
In addition, so
long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate
“stop transfer” orders with respect to such
certificates and the shares represented thereby on its books and
records and with those to whom it may delegate registrar and
transfer functions.
3.
Reservation of Shares . The Company hereby agrees
that at all times there shall be reserved for issuance upon the
exercise of this Warrant such number of shares of its Common Stock
as shall be required for issuance upon exercise of this
Warrant. The Company further agrees that all shares
which may be issued upon the exercise of the rights represented by
this Warrant will be duly authorized and will, upon issuance and
against payment of the exercise price, be validly issued, fully
paid and non-assessable, free from all taxes, liens, charges and
preemptive rights with respect to the issuance thereof, other than
taxes, if any, in respect of any transfer occurring
contemporaneously with such issuance and other than transfer
restrictions imposed by federal and state securities
laws.
4.
Exchange, Transfer or Assignment of Warrant
. This Warrant is exchangeable, without expense, at the
option of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for
other Warrants of different denominations, entitling the Holder or
Holders thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. Upon
surrender of this Warrant to the Company or at the office of its
stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax,
the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with
other Warrants that carry the same rights upon presentation hereof
at the
