of Common Stock Warrant issued in connection with the KW Securities Corp.
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933 (THE “ACT”) OR APPLICABLE STATE SECURITIES LAWS, AND THE TRANSFER
THEREOF IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
UNDER THE ACT, PURSUANT TO REGISTRATION UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
COMPLIANCE WITH THE ACT
To Purchase ________________ Shares of Common Stock
CERTIFIES that, for value received, ________________, or its assigns (in either
case, the “Holder”) is entitled to purchase, subject to the provisions of this
Warrant, from Itec Environmental Group, Inc., a Delaware corporation (the
“Company”), at the price per share set forth in Section 8 hereof, that number of
shares of the Company’s common stock (the “Common Stock”) set forth in Section 7
hereof. This Warrant is referred to herein as the “Warrant” and the shares of
Common Stock issuable pursuant to the terms hereof are sometimes referred to
herein as “Warrant Shares.”
Exercise of Warrant.
Warrant shall only be exercisable in whole. To exercise this Warrant in whole,
the Holder shall deliver to the Company at its principal office, (a) a written
notice, in substantially the form of the exercise notice attached hereto as
“Exercise Notice”), of the Holder’s election to exercise this Warrant, which
notice shall specify the number of shares of Common Stock to be purchased and
(b) this Warrant. The Company shall as promptly as practicable, and in any
within twenty (20) days after delivery to the Company of (i) the Exercise
Notice, (ii) and this Warrant, execute and deliver or cause to be executed
delivered, in accordance with such notice, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in such
notice, provided this Warrant has vested on or prior to the date such notice
delivered. Each certificate representing Warrant Shares shall bear the legend
legends required by applicable securities laws as well as such other legend(s)
the Company requires to be included on certificates for its Common Stock. The
Company shall pay all expenses and other charges payable in connection with
preparation, issuance and delivery of such stock certificates except that,
case such stock certificates shall be registered in a name or names other than
the name of the Holder, funds sufficient to pay all stock transfer taxes that
are payable upon the issuance of such stock certificate or certificates shall
paid by the Holder at the time of delivering the Exercise Notice. All shares
Common Stock issued upon the exercise of this Warrant shall be validly issued,
fully paid, and nonassessable.
Warrant shall expire on April 15, 2015 (the “Expiration Date”). The Investor may
exercise the warrant at any time prior to the Expiration Date. The Company
no restriction on the sale or transfer of the Warrant or Warrant Shares;
however, the Investor is required to comply with all state and U.S. laws and
regulations relating to security sales and transfers.
Company hereby covenants that at all times during the term of this Warrant
shall be reserved for issuance such number of shares of its Common Stock as
shall be required to be issued upon exercise of this Warrant.
Warrant may be exercised only for a whole number of shares of Common Stock,
no fractional shares or scrip representing fractional shares shall be issuable
upon the exercise of this Warrant.
of Warrant and Warrant Shares.
Holder may sell, pledge, hypothecate, or otherwise transfer this Warrant, in
whole, in accordance with and subject to the terms and conditions set forth
the Subscription Agreement and then only if such sale, pledge, hypothecation,
transfer is made in compliance with the Act or pursuant to an available
exemption from registration under the Act relating to the disposition of
receipt by the Company of evidence satisfactory to it of the loss, theft, or
destruction of this Warrant, and of indemnification satisfactory to it, or
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new warrant of like tenor.
of the Holder.
provision of this Warrant shall be construed as conferring upon the Holder
right to vote, consent, receive dividends or receive notice other than as
expressly provided herein. Prior to exercise, no provision hereof, in the
absence of affirmative action by the Holder to exercise this Warrant, and no
enumeration herein of the rights or privileges of the Holder, shall give rise
any liability of the holder for the purchase price of any warrant shares or
stockholder of the Company, whether such liability is asserted by the Company
by creditors of the Company.
of Warrant Shares.
Warrant shall be exercisable for ________________ shares of the Company’s Common
Stock, as adjusted in accordance with this Agreement.
Price; Adjustment of Warrants.
of Exercise Price.
share purchase price (the “Exercise Price”) for each of the Warrant Shares
purchasable under this Warrant shall be equal to $0.06.
of exercising this Warrant, the Holder may elect to receive Shares equal to
value of this Warrant (or the portion thereof being canceled) by surrender
this Warrant at the principal office of the Company together with notice of
election, in which event the Company shall issue to the Holder a number of
Shares computed using the following formula:
number of the Shares to be issued to the Holder.
number of the Shares purchasable under this Warrant.
fair market value of one Share on the date of determination.
share Exercise Price (as adjusted to the date of such calculation).
purposes of this section, the per share fair market value of the Shares shall
Company's Common Stock is publicly traded, the per share fair market value
the Shares shall be the average of the closing prices of the Common Stock as
quoted on the Nasdaq National Market or the principal exchange on which the
Common Stock is listed, or if not so listed then the fair market value shall
the average of the closing bid prices of the Common Stock as published in The
Wall Street Journal, in each case for the fifteen (15) trading days ending
(5) trading days prior to the date of determination of fair market
Company's Common Stock is not so publicly traded, the per share fair market
value of the Shares shall be such fair market value as is determined in good
faith by the Board of Directors of the Company after taking into consideration
factors it deems appropriate, including, without limitation, recent sale and
offer prices of the capital stock of the Company in private transactions
negotiated at arm's length.
for Mergers or Reorganization, etc.
of any consolidation or merger of the Company with or into another corporation
or the conveyance of all or substantially all of the assets of the Company
another corporation, this Warrant shall be exercisable into the number of shares
of stock or other securities or property to which a holder of the number of
shares of Common Stock of the Company deliverable upon exercise of this Warrant
would have been entitled upon such consolidation, merger or conveyance; and,
any such case, appropriate adjustment (as determined by the Board of Directors
of the Company) shall be made in the application of the provisions herein set
forth with respect to the rights and interest thereafter of the holder of this
Warrant, to the end that the provisions set forth herein shall thereafter be
applicable, as nearly as reasonable may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of this Warrant.
COMPANY WILL NOT, 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
OBSERVED OR PERFORMED HEREUNDER BY THE COMPANY, BUT WILL AT ALL TIMES IN GOOD
FAITH ASSIST IN THE CARRYING OUT OF ALL THE PROVISIONS OF THIS SECTION AND
THE TAKING OF ALL SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO
PROTECT THE EXERCISE RIGHTS OF THE HOLDER OF THIS WARRANT AGAINST IMPAIRMENT.
Company shall pay issue taxes that may be payable in respect of any issue or
delivery of shares of Common Stock on exercise of this Warrant, in whole;
provided, however, that the Company shall not be obligated to pay any transfer
taxes resulting from any transfer requested by any holder in connection with
of Stock Issuable Upon Conversion.
Company shall at all times reserve and keep available out of its authorized
unissued shares of common stock, solely for the purpose of effecting the
exercise of this Warrant, such number of its shares of common stock as shall
from time to time be sufficient to effect the exercise of this Warrant; and
at any time the number of authorized but unissued shares of common stock shall
not be sufficient to effect the exercise of this Warrant, the Company will
all appropriate corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of common stock to
number of shares as shall be sufficient for such purpose.
Exercise Price shall be adjusted downward in the event the Company issues common
stock (or securities exercisable for or convertible into or exchangeable for
common stock) at a price below the Exercise Price, to a price equal to such
the Company shall, at any time, prior to the Expiration Date, declare any
distribution of its assets to holders of its common stock as a partial
liquidation, distribution or by way of return of capital, other than as a
dividend payable out of earnings or any surplus legally available for dividends,
then the Holder shall be entitled, upon the proper exercise of this Warrant
whole prior to the effecting of such declaration, to receive, in addition to
shares of common stock issuable on such exercise, the amount of such assets
at the option of the Company a sum equal to the value thereof at the time of
such distribution to holders of common stock as such value is determined by
Board of Directors of the Company in good faith), which would have been payable
to the Holder had it been a holder of record of such shares of common stock
the record date for the determination of those holders of Common Stock entitled
to such distribution.
the Company shall, at any time prior to the Expiration Date, dissolve, liquidate
or wind up its affairs, the Holder shall be entitled, upon the proper exercise
of this Warrant in whole and prior to any distribution associated with such
dissolution, liquidation, or winding up, to receive on such exercise, in lieu
the shares of Common Stock to which the Holder would have been entitled, the
same kind and amount of assets as would have been distributed or paid to the
Holder upon any such dissolution, liquidation or winding up, with respect to
such shares of Common Stock had the Holder been a holder of record of such
of Common Stock on the record date for the determination of those holders of
Common Stock entitled to receive any such dissolution, liquidation, or winding
of any reclassification, capital reorganization or other change of outstanding
shares of common stock of the Company (other than a change in par value, or
par value to no par value, or from no par value to par value, or as a result
an issuance of common stock by way of dividend or other distribution or of
subdivision or combination), the Company shall cause effective provision to
made so that the Holder shall have the right thereafter by exercising this
Warrant, to purchase the kind and amount of shares of stock and other securities
and PROPERTY RECEIVABLE UPON SUCH RECLASSIFICATION, CAPITAL REORGANIZATION
OTHER CHANGE, BY A HOLDER OF THE NUMBER OF SHARES OF COMMON STOCK WHICH MIGHT
HAVE BEEN PURCHASED UPON EXERCISE OF THIS WARRANT IMMEDIATELY PRIOR TO SUCH
RECLASSIFICATION OR CHANGE. ANY SUCH PROVISION SHALL INCLUDE PROVISION FOR
ADJUSTMENTS WHICH SHALL BE AS NEARLY EQUIVALENT AS MAY BE PRACTICABLE TO THE
ADJUSTMENTS PROVIDED FOR IN THIS WARRANT. THE FOREGOING PROVISIONS OF THIS
SECTION 12 SHALL SIMILARLY APPLY TO SUCCESSIVE RECLASSIFICATIONS, CAPITAL
REORGANIZATIONS AND CHANGES OF SHARES OF COMMON STOCK. IN THE EVENT THAT IN
SUCH CAPITAL REORGANIZATION, RECLASSIFICATION, OR OTHER CHANGE, ADDITIONAL
SHARES OF COMMON STOCK SHALL BE ISSUED IN EXCHANGE, CONVERSION, SUBSTITUTION
PAYMENT, IN WHOLE, FOR OR OF A SECURITY OF THE COMPANY OTHER THAN COMMON STOCK,
ANY AMOUNT OF THE CONSIDERATION RECEIVED UPON THE ISSUE THEREOF BEING DETERMINED
BY THE BOARD OF DIRECTORS OF THE COMPANY SHALL BE FINAL AND BINDING ON THE
terms and conditions of this Agreement shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the parties, except
the extent otherwise provided herein. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto
their respective successors and assigns, any rights, remedies, obligations
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
Agreement shall be governed by and construed in accordance with the laws of
State of California without regard to the principles of conflict of laws
Delivery by Facsimile.
Agreement may be executed in one or more counterparts, each of which shall
deemed an original, but all of which together shall constitute one and the
instrument. Delivery of this Agreement may be effected by facsimile.
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.
otherwise provided, any notice required or permitted hereunder shall be given
personal service upon the party to be notified by certified mail, return receipt
requested and: (i) if to the Company, addressed to Itec Environmental Group,
Inc., 5300 Claus Road, Riverbank, California 95367, or at such other address
the Company may designate by notice to each of the Investors in accordance
the provisions of this Section; and (ii) if to the Warrant holder, at the
address indicated on the signature page hereof, or at such other addresses
such Holder may designate by notice to the Company in accordance with the
provisions of this Section.
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
prospectively or retroactively), only with the written consent of the Company
and a majority in interest of the Holders.
Agreement, the Memorandum (including the appendices and schedules thereto)
and between the Company and the Holder, constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties hereto.
WITNESS WHEREOF, the undersigned hereby sets is hand and seal this ___ day
signed only upon exercise of the Warrant)
undersigned, hereby irrevocably elects to exercise the purchase rights
represented by the Warrant granted to the undersigned on ______________ and
purchase thereunder __________* shares of Common Stock of Itec Environmental
Group, Inc. (the “Company”).
must conform in all respects to name
holder as specified on the face of the Warrant)
here the number of shares being exercised, without making any adjustment for
additional Common Stock of the Company, other securities or property which,
pursuant to the adjustment provisions of the Warrant, may be deliverable upon