THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ACT, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, OR
(C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, A SECURITIES PURCHASE AGREEMENT ("PURCHASE AGREEMENT"), DATED THE
DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTIES,
INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE RIGHTS OF THE
HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE COMPANY.
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ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
Number of shares: 8,428,680
Holder: Xxxxxx Partners LP
c/o Xxxxxx Xxxxxx Xxxxxx
Managing Partner
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx XX 00000
tel 000-000-0000
fax 000-000-0000
cell 000-000-0000
xxx@xxxxxxxxxxxxxx.xxx
----------------------
Expiration Date: September 30, 2009
Exercise Price per Share: $0.15
Entech Environmental Technologies, Inc., a company organized and existing under
the laws of the State of Florida (the "COMPANY"), hereby certifies that, for
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value received, Xxxxxx Partners LP, or its registered assigns (the "WARRANT
-------
HOLDER"), is entitled, subject to the terms set forth below, to purchase from
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the Company 8,428,680 of common stock, $0.001 par value (the "COMMON STOCK"), of
------------
the Company (each such share, a "WARRANT
-------
SHARE" and all such shares, the "WARRANT SHARES") in exchange for (a) one (1)
----- --------------
Warrant and (b) $0.15 per share (as adjusted from time to time as provided in
Section 7, per Warrant Share (the "EXERCISE PRICE"), at any time and from time
--------------
to time from and after the date thereof and through and including 5:00 p.m. New
York City time on September 1, 2009 (or eighteen months of effectiveness of a
Registration Statement subsequent to the issuance herein, whichever is longer)
(the "EXPIRATION DATE"), and subject to the following terms and conditions:
----------------
1. REGISTRATION OF WARRANT. The Company shall register this Warrant
-----------------------
upon records to be maintained by the Company for that purpose (the "WARRANT
-------
REGISTER"), in the name of the record Warrant Holder hereof from time to time.
--------
The Company may deem and treat the registered Warrant Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or nay
distribution to the Warrant Holder, and for all other purposes, and the Company
shall not be affected by notice to the contrary.
2. INVESTMENT REPRESENTATION. The Warrant Holder by accepting this
--------------------------
Warrant represents that the Warrant Holder is acquiring this Warrant for its own
account or the account of an affiliate for investment purposes and not with the
view to any offering or distribution and that the Warrant Holder will not sell
or otherwise dispose of this Warrant or the underlying Warrant Shares in
violation of applicable securities laws. The Warrant Holder acknowledges that
the certificates representing any Warrant Shares will bear a legend indicating
that they have not been registered under the United Stales Securities Act of
1933, as amended (the "1933 ACT") and may not be sold by the Warrant Holder
---------
except pursuant to an effective registration statement or pursuant to an
exemption from registration requirements of the 1933 Act and in accordance with
federal and state securities laws. If this Warrant was acquired by the Warrant
Holder pursuant to the exemption from the registration requirements of the 1933
Act afforded by Regulation S thereunder, the Warrant Holder acknowledges and
covenants that this Warrant may not be exercised by or on behalf of a Person
during the one year distribution compliance period (as defined in Regulation S)
following the date hereof. "PERSON" means an individual, partnership, firm,
------
limited liability company, trust, joint venture, association, corporation, or
any other legal entity.
3. VALIDITY OF WARRANT AND ISSUE OF SHARES. The Company represents and
---------------------------------------
warrants that this Warrant has been duly authorized and validly issued and
agrees that all of Common Stock that may be issued upon the exercise of the
rights represented by this Warrant will, when issued upon such exercise, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof. The Company further
warrants and agrees that during the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have authorized
and reserved a sufficient number of Common Stock to provide for the exercise of
the rights represented by this Warrant.
4. REGISTRATION OF TRANSFERS AND EXCHANGE OF WARRANTS.
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a. Subject to compliance with the legend set forth on the face of
this Warrant, the Company shall register the transfer of any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant with the Form of
Assignment attached hereto duly completed and signed, to the Company at the
office specified in or pursuant to Section 9. Upon any such registration or
transfer, a new warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new warrant, a "NEW WARRANT"), evidencing the portion of
-----------
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Warrant Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of a Warrant Holder of a
Warrant.
b. This Warrant is exchangeable, upon the surrender hereof by the
Warrant Holder to the office of the Company specified in or pursuant to Section
9 for one or more New Warrants, evidencing in the aggregate the right to
purchase the number of Warrant Shares which may then be purchased hereunder. Any
such New Warrant will be dated the date of such exchange.
5. EXERCISE OF WARRANTS.
-----------------------
a. Upon surrender of this Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Section 9, and upon payment and delivery of the Exercise
Price per Warrant Share multiplied by the number of Warrant Shares that the
Warrant Holder intends to purchase hereunder, in lawful money of the United
States of America, in cash or by certified or official bank check or checks, to
the Company, all as specified by the Warrant Holder in the Form of Election to
Purchase, the Company shall promptly (but in no event later than 7 business days
after the Date of Exercise [as defined herein]) issue or cause to be issued and
cause to be delivered to or upon the written order of the Warrant Holder and in
such name or names as the Warrant Holder may designate (subject to the
restrictions on transfer described in the legend set forth on the face of this
Warrant), a certificate for the Warrant Shares issuable upon such exercise, with
such restrictive legend as required by the 1933 Act. Any person so designated by
the Warrant Holder to receive Warrant Shares shall be deemed to have become
holder of record of such Warrant Shares as of the Date of Exercise of this
Warrant.
b. A "Date of Exercise" means the date on which the Company shall have
received (i) this Warrant (or any New Warrant, as applicable), with the Form of
Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the Warrant Holder to be
purchased.
c. This Warrant shall be exercisable at any time and from time to time
for such number of Warrant Shares as is indicated in the attached Form of
Election To Purchase. If less than all of the Warrant Shares which may be
purchased under this Warrant are exercised at any time, the Company shall issue
or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares for which no exercise has been evidenced by this Warrant.
d. (i) Notwithstanding anything contained herein to the contrary, but
in all events subject to Section 7 herein, the holder of this Warrant may, at
its election exercised in its sole discretion, exercise this Warrant in whole or
in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the "NET NUMBER" of shares of
Common Stock determined according to the following formula (a "CASHLESS
EXERCISE"):
Net Number = (A x (B - C))/B
(ii) For purposes of the foregoing formula:
A= the total number shares with respect to which this Warrant is
then being exercised.
B= the last reported sale price (as reported by Bloomberg) of the
Common Stock on immediately preceding the date of the Exercise
Notice.
C= the Warrant Exercise Price then in effect at the time of such
exercise.
e. The holder of this Warrant agrees not to elect for a period of one
(1) year a Cashless Exercise. The holder of this Warrant also agrees not to
elect a Cashless Exercise so long as there is an effective registration
statement For the shares underlying this Warrant.
6. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The character of
-------------------------------------------------
the shares of stock or other securities at the time issuable upon exercise of
this Warrant and the Exercise Price therefore, are subject to adjustment upon
the occurrence of the following events, and all such adjustments shall be
cumulative:
a. ADJUSTMENT FOR STOCK SPLITS, STOCK DIVIDENDS, RECAPITALIZATIONS,
ETC. The Exercise Price of this Warrant and the number of shares of Common Stock
or other securities at the time issuable upon exercise of this Warrant shall be
appropriately adjusted to reflect any stock dividend, stock split, combination
of shares, reclassification, recapitalization or other similar event affecting
the number of outstanding shares of stock or securities.
b. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case
of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization. in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being hereinafter
referred to as a
"REORGANIZATION"), then, in each case, the holder of this Warrant, on exercise
--------------
hereof at any time after the consummation or effective date of such
Reorganization (the "EFFECTIVE DATE"), shall receive, in lieu of the shares of
--------------
stock or other securities at any time issuable upon the exercise of the Warrant
issuable on such exercise prior to the Effective Date, the stock and other
securities and property (including cash) to which such holder would have been
entitled upon the Effective Date if such holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided in this
Warrant).
c. CERTIFICATE AS TO ADJUSTMENTS. In case of any adjustment or
readjustment in the price or kind of securities issuable on the exercise of this
Warrant, the Company will promptly give written notice thereof to the holder of
this Warrant in the form of a certificate, certified and confirmed by the Board
of Directors of the Company, setting forth such adjustment or readjustment and
showing in reasonable detail the facts upon which such adjustment or
readjustment is based.
7. MAXIMUM EXERCISE. The Holder shall not be entitled to exercise this
Warrant on an exercise date in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this limitation is being made
on an exercise date, which would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock
on such date. For the 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-3 thereunder. Subject to
the foregoing, the Holder shall not be limited to aggregate exercises which
would result in the issuance of more than 4.99%. The restriction described in
this paragraph may be revoked upon sixty-one (61) days prior notice from the
Holder to the Company. The Holder may allocate which of the equity of the
Company deemed beneficially owned by the Subscriber shall be included in the
4.99% amount described above and which shall be allocated to the excess above
4.99%.
8. FRACTIONAL SHARES. The Company shall not be required to issue or
------------------
cause to be issued fractional Warrant Shares on the exercise of this Warrant.
The number of full Warrant Shares that shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrants
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 8, be issuable
on the exercise of this Warrant, the Company shall, at its option, (i) pay an
amount in cash equal to the Exercise Price multiplied by such fraction or (ii)
round the number of Warrant Shares issuable, up to the next whole number.
9. NOTICE OF INTENT TO SELL OR MERGE COMPANY. The Company will give
-------------------------------------------
Investor 90 days notice before entering into a transaction to merge or sell a
controlling interest in the Company.
10. NOTICE. All notices and other communications hereunder shall be in
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writing and shall be deemed to have been given (i) on the date they are
delivered if delivered in person; (ii) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (iii) on the date delivered by an overnight courier service; or
(iv) on the third business day after it is mailed by registered or certified
mail, return receipt requested with postage and other fees prepaid as follows:
If to the Company:
-----------------
Entech Environmental Technologies, Inc.
c/o X.X. Xxxxx, Incorporated
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Tel: 000-000-0000
If to the Warrant Holder:
------------------------
Xxxxxx Xxxxxx Xxxxxx
Managing Partner
Xxxxxx Partners LP
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx XX 00000
Tel: 000-000-0000
11. MISCELLANEOUS.
-------------
a. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. This
Warrant may be amended only in writing and signed by the Company and the Warrant
Holder.
b. Nothing in this Warrant shall be construed to give to any person or
corporation other than the Company and the Warrant Holder any legal or equitable
right, remedy or cause of action under this Warrant; this Warrant shall be for
the sole and exclusive benefit of the Company and the Warrant Holder.
c. This Warrant shall be governed by, construed and enforced in
accordance with the internal laws of the State of New York without regard to the
principles of conflicts of law thereof.
d. The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.
e. In case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonably
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
f. The Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Warrant Holder are limited to those expressed in this
Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by the authorized officer as of the date first above stated.
Entech Environmental Technologies, Inc.
By: /s/ Xxxx Xxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxx
--------------------------
Title: President
-------------------------
FORM OF ELECTION TO PURCHASE
(To be executed by the Warrant Holder to exercise the right to purchase shares
of Common Stock under the foregoing Warrant)
To: ENTECH ENVIRONMENTAL TECHNOLOGIES, INC.:
In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to purchase ___________ shares of
Common Stock ("Common Stock"), $0.001 par value, of Entech Environmental
Technologies, Inc. and encloses one warrant and $0.25 for each Warrant Share
being purchased or an aggregate of $____________ in cash or certified or
official bank check or checks, which sum represents the aggregate Exercise Price
(as defined in the Warrant) together with any applicable taxes payable by the
undersigned pursuant to the Warrant.
The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of:
----------------------------------------------
----------------------------------------------
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(Please print name and address)
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(Please insert Social Security or Tax Identification Number)
If the number of shares of Common Stock issuable upon this exercise shall not be
all of the shares of Common Stock which the undersigned is entitled to purchase
in accordance with the enclosed Warrant, the undersigned requests that a New
Warrant (as defined in the Warrant) evidencing the right to purchase the shares
of Common Stock not issuable pursuant to the exercise evidenced hereby be issued
in the name of and delivered to:
----------------------------------------------
----------------------------------------------
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(Please print name and address)
Dated: Name of Warrant Holder:
-------------------
(Print)
-----------------------------
(By:)
-------------------------------
(Name:)
-----------------------------
(Title:)
----------------------------
Signature must conform in all
respects to name of Warrant Holder
as specified on the face of the
Warrant
