THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAW. THIS WARRANT
AND SUCH SECURITIES MAY NOT BE SOLD, OR OFFERED FOR SALE IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE
SECURITIES LAWS OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT OR SAID
LAWS.
ZBB ENERGY CORPORATION
Warrant to Purchase Shares of Common Stock
Warrant No: ______ Number of Shares: _______
THIS CERTIFIES THAT, for value received, _______________________
____________, or its registered assigns (the "Holder"), is entitled to purchase
from ZBB Energy Corporation, a Wisconsin corporation (the "Company"), at any
time or from time to time during the period specified in Section 2 hereof, in
whole or in part, that number of fully paid and non-assessable shares of the
Company's common stock, par value $.01 per share (the "Common Stock") as shall
equal (a) $___________[insert principal amount of Holder's 15% convertible
note], divided by (b) 100% of the initial per share offering price in connection
with the Company's "Equity Financing"(as that term is defined in the Note
referred to below).
The per share exercise price shall be 120% of the initial per share offering
price in connection with the Company's "Equity Financing," as such term is
defined in the Note referred to below(the "Exercise Price"). The term "Warrant
Shares," as used herein, refers to the shares of Common Stock purchasable
hereunder. The Warrant Shares and the Initial Exercise Price are subject to
adjustment as provided in Paragraph 4 hereof.
This Warrant is issued pursuant to the 15% Convertible Promissory Note, dated as
of April __, 2006, issued by the Company in favor of the Holder (the "Note").
Each capitalized term used herein, and not otherwise defined, shall have the
meaning ascribed thereto in the Note.
This Warrant is subject to the following terms, provisions, and conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
(a) GENERAL. Subject to the provisions hereof, this Warrant may be
exercised at any time within two years of the date hereof, by the Holder, 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's transfer agent (the "Transfer Agent") during normal business hours
on any business day at the Transfer Agent's principal executive offices (or such
other office or agency of the Transfer Agent as it may designate by notice to
the Holder hereof), together with payment to the Company of the Exercise Price
for the Warrant Shares specified in the Exercise Agreement in cash, by certified
or official bank check or by wire transfer for the account of the Company,
except as otherwise set forth below. 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 Warrant Shares as
set forth above. The Company shall cause certificates for the Warrant Shares so
purchased, representing the aggregate number of Warrant Shares specified in the
Exercise Agreement, to be delivered by the Transfer Agent to the Holder hereof
within a reasonable time, not exceeding three (3) business days after this
Warrant shall have been so exercised, together with cash in lieu of any fraction
of a share, as hereinafter provided. The certificates so delivered shall be in
such denominations as may be requested by the Holder hereof and shall be
registered in the name of such Holder or such other name as shall be designated
by such Holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall cause the Transfer Agent to,
at Company's expense, at the time of delivery of such certificates, deliver to
the Holder a new Warrant representing the number of Warrant Shares with respect
to which this Warrant shall not then have been exercised, which new Warrant
shall in all other respects be identical with this Warrant.
(b) CASHLESS EXERCISE. If, at any time following the expiration of the
Restricted Period (as such term is defined in the Investor Rights Agreement),
the Holder desires to exercise all or any portion of this Warrant and the
Warrant Shares are not the subject of an effective registration statement under
the Securities Act, then, in lieu of payment of the Exercise Price in cash, the
Holder may make such payment, by way of cashless exercise, as follows:
(i) by delivery of shares of Common Stock with an aggregate Market
Price (as defined below) on the date of exercise equal to the Exercise Price,
subject, however, to the provisions of Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"); or
(ii) through the written election of the Holder to have withheld by
the Company from the shares of Common Stock otherwise deliverable upon exercise,
Common Stock having an aggregate Market Price on the date of exercise equal to
the Exercise Price.
(c) FAILURE TO DELIVER CERTIFICATES FOR WARRANT SHARES UPON EXERCISE. If
the Company or its Transfer Agent shall fail for any reason or for no reason to
issue to the Holder, within ten (10) days of receipt of the Exercise Agreement
(including payment of the full amount of the Exercise Price for that portion of
this Warrant exercised as specified in such Exercise Agreement, whether in cash
or by way of cashless exercise, if permitted by Section 1(b)), a certificate for
the number of Warrant Shares to which the Holder is entitled or to credit the
Holder's balance account with The Depository Trust Company for such number of
Warrant Shares to which the Holder is entitled upon the Holder's exercise of
this Warrant, the Company shall, in addition to any other remedies under this
Warrant or the Investor Rights Agreement or
2
otherwise available to such Holder, pay as additional damages in cash to such
Holder on each day the issuance of such certificate for Warrant Shares is not
timely effected an amount equal to 0.025% of the product of (A) the sum of the
number of Warrant Shares not issued to the Holder on a timely basis and to which
the Holder is entitled, and (B) the Market Price of the Common Stock for the
trading day immediately preceding the last possible date which the Company could
have issued such Common Stock to the Holder without violating this Section 1.
(d) FAILURE TO DELIVER CERTIFICATES FOR WARRANT SHARES UPON EXERCISE. If
within ten (10) days after the Company's receipt of the Exercise Agreement
(including payment of the full amount of the Exercise Price for that portion of
this Warrant exercised as specified in such Exercise Agreement whether in cash
or by way of cashless exercise, if permitted by Section 1(b)), the Company fails
to deliver a new Warrant to the Holder for the number of Warrant Shares, if any,
to which such Holder remains entitled pursuant to Section 1 hereof, then, in
addition to any other available remedies under this Warrant or the Investor
Rights Agreement, or otherwise available to such Holder, the Company shall pay
as additional damages in cash to such Holder on each day after such tenth (10th)
day that such delivery of such new Warrant is not timely effected in an amount
equal to 0.25% of the product of (A) the number of Warrant Shares represented by
the portion of this Warrant which is not being exercised and (B) the Market
Price of the Common Stock for the trading day immediately preceding the last
possible date which the Company could have issued such Warrant to the Holder
without violating this Section 1(d).
(e) LIMITATION ON EXERCISE. Notwithstanding anything in this Warrant to the
contrary, in no event shall the Holder be entitled to exercise this Warrant for
a number of Warrant Shares (or portions thereof) in excess of that number of
Warrant Shares which, upon giving effect to such exercise, would cause the
aggregate number of shares of Common Stock beneficially owned by the Holder to
exceed 4.99% of the outstanding shares of Common Stock following such exercise,
except within sixty (60) days of the Expiration Date. For purposes of the
foregoing, the aggregate number of shares of Common Stock beneficially owned by
the Holder shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination is being made,
but shall exclude shares of Common Stock which would be issuable upon (i)
exercise of the remaining, unexercised Warrants beneficially owned by the Holder
and (ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by the Holder (including,
without limitation, any convertible notes or preferred stock) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes of this
paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act. For purposes of this Warrant, in determining the
number of outstanding shares of Common Stock the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (1) the Company's most
recent Form 10-QSB or Form 10-KSB, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or its
Transfer Agent setting forth the number of shares of Common Stock outstanding.
Upon the written request of any holder, the Company shall promptly, but in no
event later than one business day following the receipt of such notice, confirm
in writing to the Holder the number of shares of Common Stock then outstanding.
In
3
any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the exercise of this Warrant by the Holder since the date
as of which such number of outstanding shares of Common Stock was reported.
2. PERIOD OF EXERCISE. Subject to the vesting schedule set forth in Section 1
hereof, this Warrant is exercisable at any time or from time to time after the
date hereof until 5:00 p.m. New York City time, on April 30, 2008 (such time and
date, the "Expiration 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
non-assessable and free from all taxes, liens, and charges with respect to the
issue thereof.
(b) RESERVATION OF SHARES. The Company covenants and agrees that it shall
reserve and set apart and have at all times, free from preemptive rights, the
number of authorized but unissued shares of Common Stock deliverable upon the
exercise in full of this Warrant, and it shall have at all times any other
rights or privileges provided for therein sufficient to enable it at any time to
fulfill all of its obligations hereunder. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit
the exercise in full of this Warrant, the Company will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose, including, without limitation, taking
appropriate board action, recommending such an increase to the holders of Common
Stock, holding stockholders' meetings and soliciting votes and proxies in favor
of such increase to obtain the requisite stockholder approval, and upon such
approval, the Company shall reserve and keep available such additional shares
solely for the purpose of permitting the exercise of this Warrant.
(c) REGISTRATION OF SHARES. The Company shall arrange for the registration
of the Warrant Shares with the Securities and Exchange Commission in accordance
with the Investor Rights Agreement, of even date herewith, by and between the
Holder and the Company.
(d) CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment of its
charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the Holder of this
Warrant in order to protect the exercise privilege of the Holder of this Warrant
against impairment, consistent with the tenor and purpose of this Warrant.
Without limiting the generality of the foregoing, the Company (i) will not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, and (ii) will
take all such actions as may be
4
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this
Warrant.
(e) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon the Company
and any entity succeeding to the Company by merger, consolidation, or
acquisition of all or substantially all the Company's assets or otherwise.
4. ANTIDILUTION PROVISIONS. Until the Expiration Date, 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
shall:
(i) take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend payable in, or other distribution
of, shares of Common Stock,
(ii) subdivide (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) its outstanding shares of
Common Stock into a greater number of shares of Common Stock, or
(iii) combine (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) its outstanding shares of
Common Stock into a smaller number of shares of Common Stock,
then (x) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (y) the Exercise Price shall be
adjusted to equal (A) the Exercise Price multiplied by the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to the
adjustment divided by (B) the number of shares for which this Warrant is
exercisable immediately after such adjustment.
(b) CONSOLIDATION, MERGER OR SALE. In case the Company after the date
hereof shall (i) consolidate with or merge into any other entity and shall not
be the continuing or surviving corporation of such consolidation or merger, or
permit any other entity to consolidate with or
5
merge into the Company and the Company shall be the continuing or surviving
corporation, but, in connection with such consolidation or merger, the Common
Stock shall be changed into or exchanged for stock or other securities of any
other entity or cash or any other property, (ii) sell, convey or otherwise
transfer all or substantially all of its properties or assets to any other
entities in one or more related transactions or (iii) effect a capital
reorganization or reclassification of the Common Stock, then as a condition of
such consolidation, merger or sale or conveyance, the Company shall make or
cause to be made adequate provision whereby the Holder of this Warrant will have
the right to acquire and receive upon exercise of this Warrant in lieu of the
shares of Common Stock immediately theretofore acquirable upon the exercise of
this Warrant, the Holder of this Warrant, upon the exercise hereof at any time
after the consummation of such transaction, shall be entitled to receive (at the
aggregate Exercise Price in effect at the time of such consummation for all
Common Stock issuable upon such exercise immediately prior to such
consummation), in lieu of the Common Stock issuable upon such exercise prior to
such consummation, the amount of securities, cash or other property to which
such Holder would actually have been entitled as a stockholder upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto, subject to adjustments (subsequent to such consummation) as nearly
equivalent as possible to the adjustments provided for in this Paragraph 4. In
any such case, the Company will make appropriate provision to ensure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument this Warrant, including, without limitation, the obligations
under this Paragraph 4 and the obligations to deliver to the Holder of this
Warrant such shares of stock, securities or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to acquire.
(c) DISTRIBUTION OF ASSETS. In case the Company shall declare or make any
distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining stockholders entitled to such
distribution, but prior to the date of distribution, the Holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the Holder had such Holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.
(d) NOTICE OF ADJUSTMENT. Upon the occurrence of any event which requires
any adjustment pursuant to this Paragraph 4, then, and in each such case, the
Company shall give notice thereof to the Holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such Exercise Price
upon exercise, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based. Such calculation shall be
certified by the principal financial officer of the Company.
6
(e) MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of the Exercise
Price shall be made in an amount of less than $0.01, but any such lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which, together with any adjustments so
carried forward, shall amount to not less than $0.01.
(f) NO FRACTIONAL SHARES. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.
(g) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon the Common Stock
payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the holders
of the Common Stock any additional shares of stock of any class or other rights;
(iii) there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all its assets to, another
corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the Holder of
this Warrant (a) notice of the date on which the books of the Company shall
close or a record shall be taken for determining the holders of Common Stock
entitled to receive any such dividend, distribution, or subscription rights or
for determining the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, notice of the date (or, if not then known, a reasonable
approximation thereof by the Company) when the same shall take place. Such
notice shall also specify the date on which the holders of Common Stock shall be
entitled to receive such dividend, distribution, or subscription rights or to
exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, re-classification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least 30 days prior to the record date or the date on which
the Company's books are closed in respect thereto. In furtherance of the
foregoing, the Holder shall be entitled to the same rights to receive notice of
corporate action as any holder of Common Stock.
7
(h) CERTAIN EVENTS. If any event occurs of the type contemplated by the
adjustment provisions of this Paragraph 4 but not expressly provided for by such
provisions, the Company will give notice of such event as provided in Paragraph
4(d) hereof, and the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of shares of Common Stock
acquirable upon exercise of this Warrant so that the rights of the Holder shall
be neither enhanced nor diminished by such event.
(i) CERTAIN DEFINITIONS.
(i) "MARKET PRICE," as of any date, (i) means the average of the last
reported sale prices for the shares of Common Stock on the Over-the-Counter
Bulletin Board (the "OTC Bulletin Board") for the ten (10) trading days
immediately preceding such date as reported by Bloomberg, or (ii) if the OTC
Bulletin Board is not the principal trading market for the shares of Common
Stock, the average of the last reported sale prices on the principal trading
market for shares of Common Stock during the same period as reported by
Bloomberg, or (iii) if market value cannot be calculated as of such date on any
of the foregoing bases, the Market Price shall be the fair market value as
reasonably determined in good faith by (a) the Board of Directors of the Company
or, at the option of a majority-in-interest of the Holders of the outstanding
Warrants by (b) an independent investment bank of nationally recognized standing
in the valuation of businesses similar to the business of the Company. The
manner of determining the Market Price of the shares of Common Stock set forth
in the foregoing definition shall apply with respect to any other security in
respect of which a determination as to market value must be made hereunder.
(ii) "COMMON STOCK" includes the Common Stock, par value $.01 per
share, and any additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include shares of Common Stock, par
value $.01 per share, in respect of which this Warrant is exercisable, or shares
resulting from any subdivision or combination of such Common Stock, or in the
case of any reorganization, reclassification, consolidation, merger, or sale of
the character referred to in Paragraph 4(b) hereof, the stock or other
securities or property provided for in such Paragraph.
(iii) "EXERCISE PRICE" means the Initial Exercise Price, as adjusted
from time to time pursuant to the provisions of this Paragraph 4.
5. ISSUE TAX. The issuance of certificates for Warrant Shares upon the exercise
of this Warrant shall be made without charge to the Holder of this Warrant or
such shares for any issuance tax or other costs in respect thereof, provided
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than the Holder of this Warrant.
8
6. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall not entitle the
Holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the Holder hereof to purchase Warrant Shares, and no mere enumeration herein of
the rights or privileges of the Holder hereof, shall give rise to any liability
of such Holder for the Exercise Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.
7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the rights granted to the
Holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Paragraph 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Paragraph 7(f) hereof and to the applicable
provisions of the Investor Rights Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered Holder hereof as the owner and Holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary.
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant is
exchangeable, upon the surrender hereof by the Holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) below, for new Warrants of
like tenor representing in the aggregate, the right to purchase the number of
shares of Common Stock or other securities which may be purchased hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as shall be designated by the Holder hereof at the time of such
surrender.
(c) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this Warrant
in connection with any transfer, exchange, or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the Holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Paragraph 7.
(e) REGISTER. The Company shall maintain, at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the Holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person
9
in whose name this Warrant has been issued, as well as the name and address of
each transferee and each prior owner of this Warrant.
(f) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time of the
surrender of this Warrant in connection with any exercise, transfer, or exchange
of this Warrant, this Warrant (or, in the case of any exercise, the Warrant
Shares issuable hereunder), shall not be registered under the Securities Act and
under applicable state securities or blue sky laws, the Company may require, as
a condition of allowing such exercise, transfer, or exchange, (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel, which opinion and counsel are reasonably
acceptable to the Company, to the effect that such exercise, transfer, or
exchange may be made without registration under the Securities Act and under
applicable state securities or blue sky laws, (ii) that the Holder or transferee
execute and deliver to the Company an investment letter in form and substance
reasonably acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first Holder of this Warrant, by taking and holding the
same, represents to the Company that such Holder is acquiring this Warrant for
investment and not with a view to the distribution hereof.
8. NOTICES. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the Holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such Holder at the address shown for such Holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such Holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 00000 Xxxxxxxx Xxxx.,
Xxxxx 0000, Xxx Xxxxxxx, XX 00000, Attention: Chief Executive Officer, or at
such other address as shall have been furnished to the Holder of this Warrant by
notice from the Company. Any such notice, request, or other communication may be
sent by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 8, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.
9. GOVERNING LAW. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITH SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS.
10
THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED
STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE
ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY
WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY
MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL
AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL
FEES AND EXPENSES, INCLUDING ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY
IN CONNECTION WITH SUCH DISPUTE.
10. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may only be amended
by an instrument in writing signed by the Company and the Holder hereof.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.
(c) REMEDIES. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Warrant will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Warrant, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Warrant and
to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.
ZBB ENERGY CORPORATION
By:
------------------------------------
Name: Xxxxxx Xxxxx
Title: President and Chief Executive
Officer
Dated as of _______________
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FORM OF EXERCISE AGREEMENT
Dated: ________ __, 20___
To: ZBB ENERGY CORPORATION
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the Exercise Price
provided by such Warrant as follows:
CHECK ONE:
__________ PAYMENT CASH (payment made in cash or by certified or official bank
check in the amount of $_____________;
__________ CASHLESS EXERCISE:
[_] payment made by surrender of shares of Common Stock having a Market
Price equal to $______________.
[_] election of Holder to have withheld by the Company from the shares of
Common Stock otherwise deliverable upon exercise, Common Stock having
a Market Price equal to $______________.
Capitalized terms used and not defined herein have the meaning set forth in the
within Warrant.
Please issue a certificate or certificates for such shares of Common Stock in
the name of and pay any cash for any fractional share to:
Name:
-----------------------------------
Signature:
------------------------------
Address:
--------------------------------
--------------------------------
Note: The above signature should
correspond exactly with the name
on the face of the within Warrant,
if applicable.
and if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:
Name of Assignee Address No of Shares
---------------- ------- ------------
_____, _____ and _____ hereby irrevocably constitutes and appoints
___________________________________ as agent and attorney-in-fact to transfer
said Warrant on the books of the within named corporation, with full power of
substitution in the premises.
Dated: ______________, 200__
In the presence of:
----------------------------------------
Name:
----------------------------------------
Signature:
----------------------------------------
Title of Signing Officer or Agent (if
any):
----------------------------------------
Address:
----------------------------------------
----------------------------------------
----------------------------------------
Note: The above signature should
correspond exactly with the name on the
face of the within Warrant, if
applicable.
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