EXHIBIT 99.3
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THE SECURITIES REPRESENTED HEREBY ARE RESTRICTED AND MAY NOT BE SOLD,
OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS
REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO THE COMPANY, IS OBTAINED STATING THAT SUCH
DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
December 14, 2007 No. _____
BLUEFIRE ETHANOL FUELS, INC.
(Organized under the laws of the State of Nevada)
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
FOR VALUE RECEIVED, BLUEFIRE ETHANOL FUELS, INC., a corporation organized
under the laws of the State of Nevada (the "Company"), hereby certifies that
______________, its successors and assigns (the "Holder"), is the owner of this
warrant (the "Warrant") which initially entitles the Holder, subject to the
provisions hereof, to purchase from the Company at any time and from time to
time on and after the date hereof (the "Original Issue Date") until 5:00 p.m.
California local time on the Expiration Date (as defined in Section 3 herein),
up to __________ duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock (as defined below) at the Exercise Price (as defined in
Section 2 herein) per share of Common Stock on the terms and conditions
hereinafter set forth. This warrant is issued in connection with a securities
purchase agreement between Holder and the Company dated December 7, 2007 (the
"Purchase Agreement").
The term "Common Stock" means the Common Stock, par value $0.001 per
share, of the Company as constituted on the Original Issue Date. The number of
shares of Common Stock to be received upon the exercise of this Warrant shall be
adjusted from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter referred to as "Warrant Shares." The term "Company" means and
includes the corporation named above as well as any successor corporation. The
term "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized by law to close.
The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein.
1. NUMBER OF WARRANT SHARES. This Warrant Entitles the Holder to
purchase up to _____________ duly authorized, validly issued, fully paid and
nonassessable shares of the Company's Common Stock, as such amount may be
adjusted under Section 9 hereof.
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2. EXERCISE PRICE. The Exercise Price shall be $2.90 per share subject
to adjustment pursuant to Section 9 hereof (originally and as adjusted, the
"Exercise Price").
3. EXERCISE OF WARRANT. This Warrant may be exercised in whole or in
part, at any time, or from time to time during the period commencing on the
Original Issue Date and expiring on December 7, 2012, or if such date is not a
Business Day, then on the next succeeding day which shall be a Business Day (the
"Expiration Date").
4. NOTICE OF EXERCISE. (a) The purchase rights represented by this
Warrant may be exercised by presentation and surrender of this Warrant to the
Company at its principal office, at the office of its stock transfer agent or at
any other warrant agent designated by the Company (the "Warrant Agent") if any,
with the Warrant Exercise Form, a form of which is attached hereto as EXHIBIT A,
duly executed and accompanied by payment of the Exercise Price for the number of
Warrant Shares specified in such form and instruments of transfer, if
appropriate, duly executed by the Holder or its duly authorized attorney.
(b) On or after December 14, 2008, if the fair market value of one
share of the Company's Common Stock is greater than the Exercise Price (at the
date of calculation as set forth below) and (i) any portion of the Warrant
Shares issuable upon exercise of this Warrant are not covered by an effective
registration statement under the Securities Act, and (ii) the sale of any
portion of Warrant Shares are subject to any volume limitations under Rule 144,
then in lieu of exercising this Warrant by payment of cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being exercised) by surrender of this Warrant at the
principal office of the Company or the Warrant Agent together with an executed
Cashless Exercise Form in the Form attached hereto as EXHIBIT B in which event
the Company shall issue to the Holder a number of shares of 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 the
Holder
Y = the number of shares of Common Stock issuable under the
Warrant or, if only a portion of the Warrant Certificate is
being exercised, the portion of the Warrant Certificate being
exercised (at the date of such calculation)
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
For purposes of the above calculation, the fair market value of one share
of Common Stock shall be determined by taking the average of the closing prices
of the sales of any shares of Common Stock on all securities exchanges on which
the Common Stock is listed, or, if there have been no sales on any such exchange
on any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day the Common Stock is not so
listed, the average of the representative bid and asked prices quoted in the OTC
Bulletin Board as of 4:00 p.m., New York time, or, if on any day any Common
Stock is not quoted on the OTC Bulletin Board, the average of the highest bid
and lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau Incorporated, or any similar successor
organization, in each such case averaged over a period of 21 days consisting of
the day as of which the fair market value is being determined and the 20
consecutive Business Days prior to such day. If at any time the Common Stock is
not listed on any securities exchange or quoted in the OTC Bulletin Board or the
over-the-counter market, the fair market value of one share of Common Stock
shall be the amount determined in good faith by the Company's Board of
Directors. Notwithstanding anything contained herein, any "cashless exercise" of
Warrant shall be limited to only those Warrant Shares covered under Sections
4(b)(i) and (ii).
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(c) Payment of the aggregate Exercise Price shall be made at the
Holder's election (i) by wire transfer in cash or by certified check or
cashier's check, payable to the order of the Company in accordance with the
provisions of Section 4(a), (ii) by "cashless exercise" in accordance with the
provisions of Section 4(b), or (iii) by a combination of the foregoing methods
of exercise selected by the Holder. If this Warrant should be exercised in part
only, the Company shall, within ten (10) Business Days of the surrender of this
Warrant, execute and deliver a new warrant evidencing the rights of the Holder
thereof to purchase the balance of the Warrant Shares issuable hereunder.
(d) Upon receipt by the Company of this Warrant, together with the
Warrant Exercise Form and/or the Cashless Exercise Form, as the case may be, and
the Exercise Price at its office, or by the Warrant Agent at its office, in each
case in the proper form for exercise, the Holder shall immediately be deemed to
be the Holder of record of the shares of Common Stock issuable upon such
exercise, notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to the Holder. The Company shall pay any
and all documentary stamp or similar issue or transfer taxes payable in respect
of the issue or delivery of shares of Common Stock on exercise of this Warrant,
but in no event shall the Company be responsible or liable for income taxes or
transfer taxes upon the issuance or transfer of the Warrant or the Warrant
Shares.
5. RESERVATION OF SHARES. The Company will at all times reserve for
issuance and delivery upon exercise of this Warrant all shares of Common Stock
or other shares of capital stock of the Company (and other securities) from time
to time receivable upon exercise of this Warrant. All such shares (and other
securities) shall be duly authorized and, when issued upon such exercise, shall
be validly issued, fully paid and non-assessable and free of all encumbrances.
6. FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of the Warrant, but the
Company shall pay within ten (10) Business Days the Holder in cash an amount
equal to the fair market value of such fractional share of Common Stock in lieu
of each fraction of a share otherwise called for upon any exercise of the
Warrant, as determined in good faith by the Board of Directors of the Company
(the "Board").
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7. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its Warrant Agent, if
any, for other warrants of different denominations, entitling the Holder to
purchase in the aggregate the same number of shares of Common Stock issusable
hereunder. Upon surrender of this Warrant to the Company or at the office of its
Warrant Agent, if any, with an appropriate form of assignment duly executed and
funds sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be canceled. This
Warrant may be divided or combined with other warrants that carry the same
rights (including registration rights) upon presentation hereof at the office of
the Company or at the office of its Warrant Agent, if any, together with a
written notice specifying the names and denominations in which new warrants are
to be issued and signed by the Holder hereof.
8. RIGHTS OF THE HOLDER. Prior to exercise of the Warrant, the Holder,
in its capacity hereunder, shall not, by virtue hereof, be entitled to any
rights as a shareholder of the Company, either at law or in equity, and the
rights of the Holder, in its capacity hereunder, are limited to those expressed
in this Warrant.
9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.
The number of Warrant Shares issuable upon the exercise of this Warrant
Certificate and the Exercise Price shall be subject to adjustment from time to
time upon the happening of certain events, as follows:
9.1 MERGER. If at any time there shall be a merger or
consolidation of the Company with or into another corporation when the Company
is not the surviving corporation, then, as part of such merger or consolidation,
lawful provision shall be made so that the Holder shall thereafter be entitled
to receive upon exercise of rights herein granted, during the period specified
herein and upon payment of the aggregate Exercise Price, if any, the number of
shares of stock or other securities or property of the successor corporation
resulting from such merger or consolidation, to which a holder of the stock
deliverable upon exercise of the rights granted in this Warrant would have been
entitled in such merger or consolidation if such rights had been exercised
immediately before such merger or consolidation. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the merger or
consolidation. The Company will not effect any such merger or consolidation
unless, prior to the consummation thereof, the successor corporation shall
assume, by written instrument reasonably satisfactory in form and substance to
the Holder, the obligations of the Company under this Warrant.
9.2 RECLASSIFICATION, ETC. If the Company at any time shall, by
combination or reclassification of securities or otherwise, 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 or classes, this Warrant
shall thereafter 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 which were subject to the purchase rights under this Warrant
immediately prior to such combination, reclassification or other change.
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9.3 STOCK DIVIDENDS, SPLITS, SUBDIVISIONS OR COMBINATION OF
SHARES. If the Company at any time shall pay a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is
payable in shares of Common Stock, split or subdivide its Common Stock, the
Exercise Price shall be proportionately decreased and the number of Warrant
Shares issuable pursuant to this Warrant shall be proportionately increased. If
the Company at any time shall combine or reverse split its Common Stock, the
Exercise Price shall be proportionately increased and the number of Warrant
Shares issuable pursuant to this Warrant shall be proportionately decreased.
9.4 ANTI-DILUTION PROTECTION. This Warrant is subject to
"full-ratchet" anti-dilution protection in relation to the issuance by the
Company (other than Excluded Issuances) of any additional shares of stock,
options, warrants or any securities exchangeable into any of the foregoing, (the
"ADDITIONAL SHARES"). If the Company issues any Additional Shares in exchange
for consideration in an amount per Additional Share less than the Exercise Price
in effect immediately prior to such issuance or sale of such Additional Share,
then the Exercise Price shall be adjusted to equal the consideration paid per
Additional Share. "EXCLUDED ISSUANCES" shall mean any equity securities (or
options, warrants or securities convertible into equity securities) issued (i)
to employees, officers, directors, contractors, consultants or advisers approved
by the Board, (ii) to parties that are strategic partners investing in
connection with a commercial relationship, or providing the Company with
equipment leases, real property leases, loans, credit lines, guaranties or
similar transactions approved by the Board, (iii) in connection with a merger or
acquisition or in connection with a joint venture or other strategic or
commercial relationship approved by the Board, (iv) upon the exercise of
currently outstanding convertible securities, options and warrants, and (v) in
connection with any public offering.
9.5 OTHER CHANGES. If any other event occurs as to which the other
provisions of this Section 9 are not strictly applicable or if strictly
applicable, would not fairly protect the rights of the Holder in accordance with
such provisions, then the Company shall make an adjustment in the number of and
class of shares available under this Warrant, the Exercise Price or the
application of such provisions, so as to protect such rights as aforesaid. The
adjustment shall be such as will give the Holder upon exercise for the same
aggregate Exercise Price the total number, class and kind of shares as the
Holder would have owned had this Warrant been exercised prior to the event and
had the Holder continued to hold such shares until after the event requiring
adjustment.
9.6 NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price or
number of shares hereunder shall be adjusted, the Company shall issue a
certificate signed by its President, Chief Executive Officer or Chief Financial
Officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was calculated
and the Exercise Price and number of shares hereunder after giving effect to
such adjustment, and shall cause a copy of such certificate to be mailed (by
first class mail, postage prepaid) to the Holder. The Company shall give written
notice to the Holder at least 20 days prior to the date on which the Company
closes its books or takes a record for determining rights to receive any
dividends or distributions.
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9.7 NOTICES OF CORPORATE EVENTS. If the Company (i) shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or other distribution of cash, securities or other property
in respect of its Common Stock, including without limitation granting any rights
or warrants to subscribe for, purchase or otherwise acquire any shares of stock
of any class or any other securities, or to receive any other right; (ii)
authorizes or approves any (a) capital reorganization of the Company, (b) any
reclassification of the capital stock of the Company, (c) any consolidation or
merger of the Company with or into another corporation, (d) any sale of all or
substantially all of its assets in one or a series of related transactions or
(e) any tender offer or exchange offer pursuant to which holders of the Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the Company, then the Company shall mail or cause to be mailed to
each Holder a notice describing the material terms and conditions of such
transaction at least 20 calendar days prior to the applicable record or
effective date on which a person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is given
the practical opportunity to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; PROVIDED, HOWEVER, that
the failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such notice.
10. TRANSFER TO COMPLY WITH THE SECURITIES ACT. The Warrant and any
Warrant Shares may not be sold, transferred, pledged, hypothecated or otherwise
disposed of unless registered under the Securities Act or pursuant to an
available exemption from such registration, provided that the transferor
delivers to the Company an opinion of counsel reasonably satisfactory to the
Company confirming the availability of such exemption.
11. LEGEND. Unless the Warrant Shares have been registered under the
Securities Act, upon exercise of the Warrant and the issuance of any of the
Warrant Shares, all certificates representing such securities shall bear on the
face thereof substantially the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), may not be sold, offered for sale, assigned,
transferred or otherwise disposed of, unless registered
pursuant to the provisions of the Act or unless an opinion of
counsel reasonably acceptable to the Company is obtained
stating that such disposition is in compliance with an
available exemption from such registration."
12. WARRANT AGENT. The Company shall initially serve as Warrant Agent
under this Warrant. Upon 10 days' prior written notice to the Holder, the
Company may appoint a new Warrant Agent. Any corporation into which the Company
or any new Warrant Agent may be merged or any corporation resulting from any
consolidation to which the Company or any new Warrant Agent shall be a party or
any corporation to which the Company or any new Warrant Agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor Warrant Agent under this Warrant without any further act. Any
such successor Warrant Agent shall promptly cause notice of its succession as
Warrant Agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Company's books.
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13. NOTICES. All notices required hereunder shall be in writing and
shall be deemed given when sent by facsimile, delivered personally or within two
days after mailing when mailed by certified or registered mail, return receipt
requested, to the Company at its principal office, or to the Holder at the
address set forth on the record books of the Company, or at such other address
of which the Company or the Holder has been advised by notice hereunder.
14. GENERAL PROVISIONS.
(a) SUCCESSORS AND ASSIGNORS. All the covenants and provisions of
this Warrant shall bind and inure to the benefit of the respective executors,
administrators, successors and assigns of the Holder and the Company.
(b) AMENDMENT. This Warrant may only be modified or amended by a
writing signed by the Company and the Holder.
(c) APPLICABLE LAW. THE WARRANT IS ISSUED UNDER AND SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY, PERFORMANCE, AND
ENFORCEMENT WITHOUT GIVING EFFECT TO THE CHOICE OF LAW RULES THEREOF.
(d) ENTIRE AGREEMENT. Except as provided herein, this Warrant,
including exhibits, contains the entire agreement of the parties, and supersedes
all existing negotiations, representations or agreements and other oral,
written, or other communications between them concerning the subject matter of
this Warrant.
(e) SEVERABILITY. If any provision of this Warrant is
unenforceable, invalid, or violates applicable law, such provision shall be
deemed stricken and shall not affect the enforceability of any other provisions
of this Warrant.
(f) CAPTIONS. The captions in this Warrant are inserted only as a
matter of convenience and for reference and shall not be deemed to define,
limit, enlarge, or describe the scope of this Warrant or the relationship of the
parties, and shall not affect this Warrant or the construction of any provisions
herein.
(g) LOST WARRANT. The Company covenants to the Holder that upon
receipt by the Company of documentation reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new warrant certificate of like tenor and date in lieu of
this Warrant. Any such new warrant certificate executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed or mutilated shall be at
any time enforceable by anyone.
(h) FURTHER ASSURANCES. The Company shall not, by amendment of its
articles of incorporation (or other organizational documents) 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
hereunder by the Company, but shall 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 be necessary or appropriate in order to protect the exercise
rights of the Holder against impairment. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any governmental authority or
any other person, and otherwise fulfilling, or causing the fulfillment of, the
various obligations made herein, as may be reasonably required or desirable to
carry out or to perform the provisions of this Warrant and to consummate and
make effective as promptly as possible the transactions contemplated by this
Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
BLUEFIRE ETHANOL FUELS, INC., a corporation
organized under the laws of the State of
the Nevada
By: _______________________________________
Name:
Title
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EXHIBIT A
WARRANT EXERCISE FORM (To be executed by the Holder to exercise the right to
purchase shares of Common Stock under the foregoing Warrant)
To BlueFire Ethanol Fuels, Inc.:
In accordance with the Warrant enclosed with this Warrant Exercise Form,
the undersigned hereby irrevocably elects to purchase________ shares of Common
Stock, $0.001 par value per share ("Common Stock"), of BlueFire Ethanol Fuels
Inc. and, encloses herewith $__________ in cash, certified or official bank
check or checks or wire transfer, which sum represents the aggregate Exercise
Price (as defined in the Warrant) for the number of shares of Common Stock to
which this Warrant Exercise Form relates, 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:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
_______________________________________
________________________________________________________________________________
(Please print name and address)
If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock that the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests that
a new 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:
________________________________________________________________________________
(Please print name and address)
Dated: _____________________________ ______________________________________
(Print name of holder)
By: __________________________________
Name: ________________________________
Title: _______________________________
(Signature must conform in all
respects to name of Holder as
specified on the face of the Warrant)
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EXHIBIT B
CASHLESS EXERCISE FORM
The undersigned hereby elects, pursuant to the exercise provisions of
Section 4(b) of the Warrant, to exchange the Warrant for such number of Warrant
Shares as set forth on the calculation attached hereto.
Please issue a certificate or certificates for such Warrant Shares in the
name of:
Name: _________________________________________________________________
(Please Print Name, Address and SSN or EIN of Shareholder above)
Address: ________________________________________________________________
________________________________________________________________
SSN or EIN: _____________________________________________________________
Signature: ______________________________________________________________
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