EXHIBIT 10.13
G.D.F International
Warrant
WARRANT
THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON
STOCK ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE ACT") AND MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION
UNDER THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY AND ITS COUNSEL, TO THE EFFECT
THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) IN
THE OPINION OF THE COMPANY'S COUNSEL THE SALE OF SUCH SECURITIES WOULD COMPLY
WITH THE REQUIREMENTS OF RULE 144 AND REGULATION S PROMULGATED BY THE SECURITIES
AND EXCHANGE COMMISSION.
WARRANT TO PURCHASE COMMON STOCK OF
HYDROGEN BURNER TECHNOLOGY, INC.
(Subject to Adjustment)
NO. WC-1
THIS CERTIFIES THAT, for value received, G.D.F. International, a French
corporation with registered offices at 2 rue Curnonsky, Paris, France, or its
permitted registered assign(s) ("HOLDER"), is entitled, subject to the terms
and conditions of this Warrant, at any time or from time to time after
July 13, 2000 (the "EFFECTIVE DATE"), and before the Expiration Date (as such
term is defined below), to purchase from Hydrogen Burner Technology, Inc., a
California corporation (the "COMPANY") One Million (1,000,000) shares of
Common Stock of the Company at a price per share of Four Dollars ($4.00) (the
"PURCHASE PRICE"). Both the number of shares of Common Stock that may be
purchased upon exercise of this Warrant and the Purchase Price are subject to
adjustment and change as provided herein. This Warrant is issued under that
certain Common Stock and Warrant Purchase Agreement, dated July 13, 2000 (the
"PURCHASE AGREEMENT"), between the Company and Holder. For the purposes of
this Warrant, Expiration Date means the earliest of: (i) 5:00 p.m. Pacific
Time on July 13, 2002; (ii) the date on which the registration statement
relating to the Company's IPO (defined below) becomes effective; (iii) one
day before the consummation of any merger, consolidation and/or sale of all
or substantially all of the Company's assets (other than transactions solely
involving or with the Company's affiliates); and (iv) ninety (90) days after
the date on which the Company shall have furnished to Holder notice of the
Company's intention to terminate the rights of Holder under the Warrant for
failure of Holder and Gaz de France, a French utility company, to provide
continued support for the Company's research and development programs,
provided that such failure shall not have been cured or corrected within the
above-described time period.
1. CERTAIN DEFINITIONS. As used in this Warrant the following
terms shall have the following respective meanings:
"FAIR MARKET VALUE" of a share of Common Stock as of a particular
date shall mean:
(a) If traded on a securities exchange or the Nasdaq
National Market, the Fair Market Value shall be deemed to be the
average of the closing prices of the Common Stock of the Company on
such exchange or market over the five (5) business days ending
immediately before the applicable date of valuation;
(b) If actively traded over-the-counter, the Fair Market
Value shall be deemed to be the average of the closing bid prices over
the thirty (30) day period ending immediately before the applicable
date of valuation; and
(c) If there is no active public market, the Fair Market
Value shall be the value as determined in good faith by the Company's
Board of Directors upon a review of relevant factors.
"HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.
"IPO" shall mean the Company's first firm commitment underwritten
public offering of the Company's Common Stock pursuant to a registration
statement filed with the Securities and Exchange Commission.
"REGISTERED HOLDER" shall mean any Holder in whose name this Warrant
is registered on the books and records maintained by the Company.
"WARRANT" as used herein, shall include this Warrant and any warrant
delivered in substitution or exchange therefor as provided herein.
"COMMON STOCK" shall mean the Common Stock of the Company and any
other security at any time receivable or issuable upon exercise of this
Warrant.
2. EXERCISE OF WARRANT.
2.1 PAYMENT. Subject to compliance with the terms and
conditions of this Warrant and applicable securities laws, this Warrant may be
exercised, in whole or in part at any time or from time to time, on or before
the Expiration Date by the delivery (including, without limitation, delivery by
facsimile) of the form of Notice of Exercise attached hereto as ATTACHMENT 1
(the "Notice of Exercise"), duly executed by the Holder, at the principal
office of the Company, and as soon as practicable after such date, surrendering
(a) this Warrant at the principal office of the
Company, and
(b) payment, (i) in cash (by check) or by wire transfer,
(ii) by cancellation by the Holder of indebtedness of the Company to
the Holder; or (iii) by a combination of (i) and (ii), of an amount
equal to the product obtained by
multiplying the number of shares of Common Stock being purchased upon
such exercise by the then effective Purchase Price (the "Exercise
Amount"), except that if Holder is subject to HSR Act Restrictions (as
defined in Section 2.5 below), the Exercise Amount shall be paid to the
Company within five (5) business days of the termination of all HSR Act
Restrictions.
2.2 NET ISSUE EXERCISE. In lieu of the payment methods set forth
in Section 2.1(b) above, the Holder may elect to exchange all or some of the
Warrant for shares of Common Stock equal to the value of the amount of the
Warrant being exchanged on the date of exchange. If Holder elects to exchange
this Warrant as provided in this Section 2.2, Holder shall tender to the
Company the Warrant for the amount being exchanged, along with written notice
of Holder's election to exchange some or all of the Warrant, and the Company
shall issue to Holder the number of shares of the Common Stock computed using
the following formula:
X = Y(A-B)
-----
A
Where X = the number of Shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock that Holder may purchase under
the amount of the Warrant being exchanged (as adjusted to the date of
such calculation).
A = the Fair Market Value of one share of the Company's Common Stock.
B = Purchase Price (as adjusted to the date of such calculation).
All references herein to an "exercise" of the Warrant shall include an
exchange under this Section 2.2. Upon receipt of a written notice of the
Company's intention to raise capital by selling shares of Common Stock in an
IPO (the "IPO NOTICE"), which notice shall be delivered to Holder at least
forty-five (45) but not more than ninety (90) days before the anticipated
date of the filing with the Securities and Exchange Commission of the
registration statement associated with the IPO, the Holder promptly shall
notify the Company whether or not the Holder will exercise this Warrant under
this Section 2.2 before consummation of the IPO. Notwithstanding whether or
not an IPO Notice has been delivered to Holder or any other provision of this
Warrant to the contrary, if Holder decides to exercise this Warrant while a
registration statement is on file with the Securities and Exchange Commission
(the "SEC") in connection with the IPO, this Warrant shall be deemed
exercised on the consummation of the IPO and the Fair Market Value of a share
of Common Stock will be the price at which one share of Common Stock was sold
to the public in the IPO. If Holder elects to exercise this Warrant under
this Section 2.2 while a registration statement is on file with the
Securities and Exchange Commission in connection with an IPO and the IPO is
not consummated, then Holder's exercise of this Warrant shall not be
effective unless Holder confirms in writing Holder's intention to go forward
with the exercise of this Warrant.
2.3 "EASY SALE" EXERCISE. In lieu of the payment methods set
forth in Section 2.1(b) above, when permitted by law and applicable
regulations (including Nasdaq and NASD rules), the Holder may pay the
Exercise Amount through a "same day sale" commitment from the
Holder (and if applicable a broker-dealer that is a member of the National
Association of Securities Dealers (a "NASD DEALER")), whereby the Holder
irrevocably elects to exercise this Warrant and to sell at least that number
of Shares so purchased to pay the Exercise Amount (and up to all of the Shares
so purchased) and the Holder (or, if applicable, the NASD Dealer) commits
upon sale (or, in the case of the NASD Dealer, upon receipt) of such Shares
to forward the Exercise Amount directly to the Company, with all sale
proceeds (if any) in excess of the Exercise Amount being for the benefit of
the Holder.
2.4 STOCK CERTIFICATES; FRACTIONAL SHARES. As soon as practicable
on or after such date, the Company shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates for the
number of whole shares of Common Stock issuable upon such exercise, together
with cash in lieu of any fraction of a share equal to such fraction of the
current Fair Market Value of one whole share of Common Stock as of the date
of exercise of this Warrant. No fractional shares or scrip representing
fractional shares shall be issued upon an exercise of this Warrant.
2.5 HSR ACT. The Company hereby acknowledges that exercise of this
Warrant by Holder may subject the Company and/or the Holder to the filing
requirements of the HSR Act and that Holder may be prevented from exercising
this Warrant until the expiration or early termination of all waiting periods
imposed by the HSR Act ("HSR ACT RESTRICTIONS"). If on or before the
Expiration Date Holder has sent the Notice of Exercise to Company and Holder
has not been able to complete the exercise of this Warrant before the
Expiration Date because of HSR Act Restrictions, the Holder shall be entitled
to complete the process of exercising this Warrant in accordance with the
procedures contained herein notwithstanding the fact that completion of the
exercise of this Warrant would take place after the Expiration Date or the
completion of the IPO.
2.6 PARTIAL EXERCISE; EFFECTIVE DATE OF EXERCISE. In case of any
partial exercise of this Warrant, the Company shall cancel this Warrant upon
surrender hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares of Common Stock that Holder may purchase
hereunder. This Warrant shall be deemed to have been exercised immediately
before the close of business on the date of its surrender for exercise as
provided above. However, if Holder is subject to HSR Act filing requirements
this Warrant shall be deemed to have been exercised on the date immediately
following the date of the expiration of all HSR Act Restrictions. The person
entitled to receive the shares of Common Stock issuable upon exercise of this
Warrant shall be treated for all purposes as the holder of record of such
shares as of the close of business on the date the Holder is deemed to have
exercised this Warrant.
3. VALID ISSUANCE: TAXES. All shares of Common Stock issued upon the
exercise of this Warrant shall be issued validly, fully paid and
non-assessable, and the Company shall pay all taxes and other governmental
charges that may be imposed in respect of the issue or delivery thereof. The
Company shall not be required to pay any tax or other charge imposed in
connection with any transfer involved in the issuance of any certificate for
shares of Common Stock in any name other than that of the Registered Holder
of this Warrant, and in such case the Company shall not be required to issue
or deliver any stock certificate or security until such tax
or other charge has been paid, or it has been established to the Company's
reasonable satisfaction that no tax or other charge is due.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of
shares of Common Stock issuable upon exercise of this Warrant (or any share
of stock or other security or property receivable or issuable upon exercise
of this Warrant) and the Purchase Price are subject to adjustment upon
occurrence of the following events:
4.1 ADJUSTMENT FOR STOCK SPLITS, STOCK SUBDIVISIONS OR
COMBINATIONS OF SHARES. The Purchase Price of this Warrant shall be
decreased proportionally and the number of shares of Common Stock issuable
upon exercise of this Warrant (or any shares of stock or other securities at
the time issuable upon exercise of this Warrant) shall be increased
proportionally to reflect any stock split or subdivision of the Company's
Common Stock. The Purchase Price of this Warrant shall be increased
proportionally and the number of shares of Common Stock issuable upon
exercise of this Warrant (or any share of stock or other security at the time
issuable upon exercise of this Warrant) shall be decreased proportionally to
reflect any combination of the Company's Common Stock.
4.2 ADJUSTMENT FOR DIVIDENDS OR DISTRIBUTIONS OF STOCK OR OTHER
SECURITIES OR PROPERTY. In case the Company shall make or issue, or shall
fix a record date for the determination of eligible holders entitled to
receive, a dividend or other distribution with respect to the Common Stock
(or any share of stock or other security at the time issuable upon exercise
of the Warrant) payable in (a) securities of the Company or (b) assets
(excluding cash dividends paid or payable solely out of retained earnings),
then, in each such case, the Holder of this Warrant on exercise hereof at any
time after the consummation, effective date or record date of such dividend
or other distribution, shall receive, in addition to the shares of Common
Stock (or such other stock or securities) issuable on such exercise before
such date, and without the payment of additional consideration therefor, the
securities or such other assets of the Company to which such Holder would
have been entitled on such date if such Holder had exercised this Warrant on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all
other additional stock available by it as aforesaid during such period giving
effect to all adjustments called for by this Section 4.
4.3 RECLASSIFICATION. If the Company, by reclassification of
securities or otherwise, shall change any of the securities as to which
purchase rights under this Warrant exist into the same or a different number
of securities of any other class, this Warrant thereafter shall represent the
right to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately before
such reclassification or other change and the Purchase Price therefore shall
be adjusted appropriately, all subject to further adjustment as provided in
this Section 4. No adjustment shall be made under this Section 4.3 upon any
conversion or redemption of the Common Stock that is the subject of Section
4.5.
4.4 ADJUSTMENT FOR CAPITAL REORGANIZATION, MERGER OR
CONSOLIDATION. In case of any capital reorganization of the capital stock of
the Company (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or any merger or consolidation of the Company with or into another
corporation, or the sale of all or substantially all the assets of the
Company then, and in each such case, as a part of such reorganization,
merger, consolidation, sale or transfer, lawful provision shall be made so
that the Holder of this Warrant thereafter shall be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon payment
of the Purchase Price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if
this Warrant had been exercised immediately before such reorganization,
merger, consolidation, sale or transfer, all subject to further adjustment as
provided in this Section 4. The foregoing provisions of this Section 4.4
similarly shall apply to successive reorganizations, consolidations, mergers,
sales and transfers and to the stock or securities of any other corporation
that are at the time receivable upon the exercise of the Warrant. If the
per-share consideration payable to the Holder hereof for shares in connection
with any such transaction is in a form other than cash or marketable
securities, then the value of such consideration shall be determined in good
faith by the Company's Board of Directors. In all events, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant with
respect to the rights and interests of the Holder after the transaction, to
the end that the provisions of this Warrant shall be applicable after that
event, as near as reasonably may be, in relation to any share or other
property deliverable after that event upon exercise of this Warrant.
4.5 CONVERSION OF COMMON STOCK. In case all or any portion of the
authorized and outstanding shares of Common Stock of the Company are redeemed
or converted or reclassified into other securities or property pursuant to
the Company's Articles of Incorporation or otherwise, or the Common Stock
otherwise ceases to exist, then, in such case, the Holder of this Warrant,
upon exercise hereof at any time after the date on which the Common Stock is
so redeemed or converted, reclassified or ceases to exit (the "TERMINATION
DATE"), shall receive, in lieu of the number of shares of Common Stock that
would have been issuable upon such exercise immediately before the
Termination Date, the securities or property that would have been received if
this Warrant had been exercised in full and the Common Stock received
thereupon had been converted simultaneously, immediately before the
Termination Date, all subject to further adjustment as provided in this
Warrant. Additionally, the Purchase Price shall be adjusted immediately to
equal the quotient obtained by dividing (x) the aggregate Purchase Price of
the maximum number of shares of Common Stock for which this Warrant was
exercisable immediately before the Termination Date by (y) the number of
shares of Common Stock of the Company for which this Warrant is exercisable
immediately after the Termination Date, all subject to further adjustment as
provided herein.
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in
the Purchase Price, or number or type of shares issuable upon exercise of this
Warrant, the Chief Financial Officer or Controller of the Company shall
compute such adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment and showing in detail the
facts upon which such adjustment is based, including a statement of the
adjusted
Purchase Price. The Company shall send promptly (by facsimile and by either
first class mail, postage prepaid or overnight delivery) a copy of each such
certificate to the Holder.
6. LOSS OR MUTILATION. Upon receipt of evidence reasonably
satisfactory to the Company of the ownership of and the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to it, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor as the lost, stolen, destroyed or
mutilated Warrant.
7. RESERVATION OF COMMON STOCK. The Company hereby covenants that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of shares of Common Stock or other shares of capital
stock of the Company as are from time to time issuable upon exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Articles of Incorporation to provide sufficient reserves of shares of Common
Stock issuable upon exercise of this Warrant (and shares of its Common Stock
for issuance on conversion of such Common Stock). All such shares shall be
duly authorized, and when issued upon such exercise, shall be issued validly,
fully paid and non-assessable, free and clear of all liens, security
interests, charges and other encumbrances or restrictions on sale and free
and clear of all preemptive rights, except encumbrances or restrictions
arising under federal or state securities laws. Issuance of this Warrant
shall constitute full authority to the Company's officers who are charged with
the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock and Common Stock upon the exercise of
this Warrant.
8. TRANSFER AND EXCHANGE. Subject to the terms and conditions of this
Warrant and compliance with all applicable securities laws, this Warrant and
all rights hereunder may be transferred to any Registered Holder's parent,
subsidiary or affiliate, in whole or in part, on the books of the Company
maintained for such purpose at the principal office of the Company referred
to above, by the Registered Holder hereof in person, or by duly authorized
attorney, upon surrender of this Warrant properly endorsed and upon payment of
any necessary transfer tax or other governmental charge imposed on such
transfer. Upon any permitted partial transfer, the Company will issue and
deliver to the Registered Holder a new Warrant or Warrants with respect to
the shares of Common Stock not so transferred. Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that when this
Warrant shall have been so endorsed, the person in possession of this Warrant
may be treated by the Company, and all other persons dealing with this
Warrant, as the absolute owner hereof for any purpose and as the person
entitled to exercise the rights represented hereby, any notice to the
contrary notwithstanding; provided, however that until a transfer of this
Warrant is duly registered on the books of the Company, the Company may treat
the Registered Holder hereof as the owner for all purposes.
9. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees
that, absent an effective registration statement filed with the SEC under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), covering the
disposition or sale of this Warrant or the Common Stock issued or issuable
upon exercise hereof or the Common Stock issuable upon conversion thereof, as
the case may be, and registration or qualification under applicable state
securities laws, such Holder will not sell, transfer, pledge or hypothecate
any or all such Warrant or Common Stock, as the case may be, unless either
(i) the Company receives an opinion of counsel, in form and substance
satisfactory to the Company, to the effect that such registration is not
required in connection with such disposition or (ii) the resale provisions of
SEC rule 144 are available and the proposed sale, transfer, pledge or
hypothecation would comply with the requirements of Rule 144 and Regulation S
under the Securities Act in the opinion of the Company's counsel.
Notwithstanding anything to the contrary in this Warrant, the sale, transfer,
pledge, or hypothecation of any or all of the Warrant or the Common Stock
issuable upon exercise thereof (including, without limitation, any such
transfer under Section 8 of this Warrant) shall be subject to the transfer
and resale restrictions and limitations set forth in the Purchase Agreement.
10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant,
the holder hereby represents, warrants and covenants that any share of stock
purchased upon exercise of this Warrant or acquired upon conversion thereof
shall be acquired for investment only and not with a view to, or for sale in
connection with, any distribution thereof; that the Holder has had such
opportunity as such Holder has deemed adequate to obtain from representatives
of the Company such information as is necessary to permit the Holder to
evaluate the merits and risks of its investment in the Company; that the
Holder is able to bear the economic risk of holding such shares as may be
acquired pursuant to the exercise of this Warrant for an indefinite period;
that the Holder understands that the shares of stock acquired pursuant to the
exercise of this Warrant or acquired upon conversion thereof will not be
registered under the Securities Act (unless otherwise required pursuant to
exercise by the Holder of the registration rights, if any, previously granted
to the registered Holder) and will be "restricted securities" within the
meaning of Rule 144 under the Securities Act and that the exemption from
registration under Rule 144 will not be available for at least one year from
the date of exercise of this Warrant, subject to any special treatment by the
SEC for exercise of this Warrant under Section 2.2, and even then will not be
available unless a public market then exists for the stock, adequate
information concerning the Company is then available to the public, and other
terms and conditions of Rule 144 are complied with; and that all stock
certificates representing shares of stock issued to the Holder upon exercise
of this Warrant or upon conversion of such shares (in addition to all other
required legends and any other legend that may be required under the Purchase
Agreement) may have affixed thereto a legend substantially in the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE BEING OFFERED AND
SOLD ONLY PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH
THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS (IF ANY).
11. NO RIGHTS OR LIABILITIES AS SHAREHOLDERS. This Warrant shall not
entitle the Holder to any voting right or other right as a shareholder of the
Company. In the absence of affirmative action by such Holder to purchase
Common Stock by exercise of this Warrant, no provisions of this Warrant, and
no enumeration herein of the rights or privileges of the Holder hereof shall
cause such Holder hereof to be a shareholder of the Company for any purpose.
12. NOTICES. All notices and other communications from the Company to
the Holder shall be given in accordance with the Purchase Agreement.
13. HEADINGS. The headings in this Warrant are for the purpose of
convenience in reference only, and shall not be deemed to constitute a part
hereof.
14. LAW GOVERNING. This Warrant shall be construed and enforced in
accordance with, and governed by, the laws of the State of California.
15. NO IMPAIRMENT. The Company will not, by amendment of its Articles of
Incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the
Registered Holder of this Warrant against impairment. Without limiting the
generality of the foregoing, the Company (a) will not increase the par value
of any share of stock issuable upon the exercise of this Warrant above the
amount payable therefor upon such exercise, and (b) will take all such action
as may be necessary or appropriate in order that the Company may issue
validly and legally, fully paid and non-assessable shares of Common Stock
upon exercise of this Warrant.
16. NOTICES OF RECORD DATE. In case:
(a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the
exercise of this Warrant), for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe for or
purchase any share of stock of any class or any other security or to
receive any other right; or
(b) of any consolidation or merger of the Company with or into
another corporation, any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any conveyance of
all or substantially all of the assets of the Company to another
corporation in which holders of the Company's stock are to receive stock,
securities or property of another corporation; or
(c) of any voluntary dissolution, liquidation or winding-up of the
Company; or
(d) of any redemption or conversion of all outstanding Common Stock;
then, and in each such case, the Company will mail or cause to be mailed to
the Registered Holder of this Warrant a notice specifying, as the case may
be, (i) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation, winding-up, redemption or conversion is to take
place, and the time, if any is to be fixed, as of which the holders of record
of Common Stock or (such stock or securities as at the time are receivable
upon the exercise of this Warrant), shall be entitled to exchange their
shares of Common Stock (or such other stock or securities), for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up.
Such notice shall be delivered at least thirty (30) days before the date
therein specified.
17. SEVERABILITY. If any term, provision, covenant or restriction of
this Warrant is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
18. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Warrant may be executed by the parties hereto and each
such executed counterpart shall be, and shall be deemed to be, an original
instrument.
19. NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Warrant enter into any agreement with respect to its
securities, which is inconsistent with the rights granted to the Holders of
this Warrant or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to holders of the Company's securities
under any other agreement, except any right that has been waived.
20. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall be extended
automatically until 5:00 p.m. the next business day.
IN WITNESS WHEREOF, this Warrant is effective as of the Effective Date.
"COMPANY"
Hydrogen Burner Technology, Inc.,
a California corporation
By: /s/ David Moard
-----------------------------
David Moard
Its: President
"HOLDER"
G.D.F. International,
a French corporation
/s/ Jacques Deyirmendjian
By: Jacques Deyirmendjian
Its: CHIEF EXECUTIVE OFFICER
[SIGNATURE PAGE TO WARRANT]
ATTACHMENT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
HYDROGEN BURNER TECHNOLOGY, INC. WARRANT NO. ______
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, the securities of Hydrogen Burner Technology, Inc., as provided
for therein, and (check the applicable box):
/ / Tenders herewith payment of the exercise price in full in the form of
cash or a certified or official bank check in same-day funds in the
amount of $_____________ for ____________ such securities.
/ / Elects the Net Issue Exercise option under Section 2.2 of the
Warrant, and accordingly requests delivery of a net of ____________
of such securities, according to the following calculation:
X = Y (A-B) ( ) = ( ) [( ) - ( )]
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A (___)
Where X = the number of shares of Common Stock to be issued to
Holder.
Y = the number of shares of Common stock that the Holder may
purchase under the amount of the Warrant being exchanged (as
adjusted to the date of such calculation).
A = the Fair Market Value of one share of the Company's Common
Stock.
B = Purchase Price (as adjusted to the date of such
calculation).
/ / Elects the Easy Sale Exercise option under Section 2.3 of the Warrant,
and accordingly, requests delivery of a net of ____________ of such
securities.
Please issue a certificate or certificates for such securities in the name
of, and pay any cash for any fractional share to (please print name, address
and social security number):
Name: ________________________________
Address: _____________________________
Signature: ___________________________
ATTACHMENT 1
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-1-
Note: The above signature should correspond exactly with the name on the first
page of this Warrant Certificate or with the name of the assignee appearing in
the assignment form below.
If said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher whole number of shares.
-2-
ATTACHMENT 2
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate) WARRANT NO. WC-1
For value received, hereby sells, assigns and transfers unto ______________ the
within Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint _______________
attorney, to transfer said Warrant Certificate on the books of the within-named
Company with respect to the number of Warrants set forth below, with full power
of substitution in the premises:
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Name(s) of Assignee(s) Address # of Warrants
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants registered by said
Warrant Certificate.
Dated: 200_
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Signature:
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Notice: The signature to the foregoing Assignment must correspond to the name
as written upon the face of this security in every particular, without
alteration or any change whatsoever; signature(s) must be guaranteed by an
eligible guarantor institution (banks, stock brokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Securities and Exchange Commission
Rule 17Ad-15.