CLASS 2007-B1 WARRANT AGREEMENT
(with Regulation S Investment Representations)
CLASS 2007-B1 WARRANT AGREEMENT ("Agreement"), dated as of January
____, 2007, by and between Energtek Inc., a Nevada corporation (the "Company"),
and ___________________ ("Warrantholder"). Certain capitalized terms used herein
are defined in Section 15 hereof.
In consideration of the mutual terms, conditions, representations,
warranties and agreements herein set forth, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Issuance of Warrants.
The Company hereby issues and grants to Warrantholder ____,000
(____________________________ thousand) stock purchase warrants, which are
hereby designated and shall be known as "Class 2007-B Warrants" (hereinafter
referred to as "Warrants"). Each Warrant shall grant to the holder thereof the
right to purchase one (1) share of common stock of the Company (the "Common
Stock"). Commencing on January 1, 2008 (the "Warrant Commencement Date"), and
terminating on December 31, 2011 (the "Warrant Expiration Date"), the holder
shall have the right, subject to the satisfaction of the conditions to exercise
set forth in Section 7 of this Agreement, to purchase one (1) share of Common
Stock per each Warrant (the shares of Common Stock issuable upon exercise of the
Warrants being collectively referred to herein as the "Warrant Shares") at an
exercise price of $0.05 per Warrant Share (the "Exercise Price"). The number of
Warrant Shares issuable on exercise of each Warrant and the Exercise Price are
all subject to adjustment pursuant to Section 8 of this Agreement.
Section 2. Form of Warrant Certificates.
Promptly after the execution and delivery of this Agreement by the
parties hereto, the Company may, in its sole and absolute discretion, cause to
be executed and delivered to Warrantholder one or more certificates evidencing
the Warrants (the "Warrant Certificates"). Each Warrant Certificate delivered
hereunder shall be substantially in the form set forth in Exhibit 1 - Warrant
Form attached hereto and may have such letters, numbers or other identification
marks and legends, summaries or endorsements printed thereon as the Company may
deem appropriate and that are not inconsistent with the terms of this Agreement
or as may be required by applicable law, rule or regulation. Each Warrant
Certificate shall be dated the date of execution by the Company.
Section 3. Execution of Warrant Certificates.
Each Warrant Certificate delivered hereunder shall be signed on
behalf of the Company by at least one of the following: its Chief Executive
Officer, President, Vice President, Secretary or Assistant Secretary. Each such
signature may be in the form of a facsimile thereof and may be imprinted or
otherwise reproduced on the Warrant Certificates.
If any officer of the Company who signed any Warrant Certificate
ceases to be an officer of the Company before the Warrant Certificate so signed
shall have been delivered by the Company, such Warrant Certificate nevertheless
may be delivered as though such person had not ceased to be such officer of the
Company.
Section 4. Registration of Ownership and Transfer.
Warrant Certificates shall be issued in registered form only. The
Company will keep or cause to be kept books for registration of ownership and
transfer of each Warrant Certificate issued pursuant to this Agreement. Each
Warrant Certificate issued pursuant to this Agreement shall be numbered by the
Company and shall be registered by the Company in the name of the holder thereof
(initially the Warrantholder). The Company may deem and treat the registered
holder of any Warrant Certificate as the absolute owner thereof (notwithstanding
any notation of ownership or other writing thereon made by anyone) for the
purpose of any exercise thereof and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
Section 5. No Transfers.
No Warrant may be sold, pledged, hypothecated, assigned, conveyed,
transferred or otherwise disposed of without the agreement of the Company, which
will not be unreasonably withheld.
Section 6. Mutilated or Missing Warrant Certificates.
If any Warrant Certificate is mutilated, lost, stolen or destroyed,
the Company shall issue, upon surrender and cancellation of any mutilated
Warrant Certificate, or in lieu of and substitution for any lost, stolen or
destroyed Warrant Certificate, a new Warrant Certificate of like tenor and
representing an equal number of Warrants. In the case of a lost, stolen or
destroyed Warrant Certificate, a new Warrant Certificate shall be issued by the
Company only upon the Company's receipt of reasonably satisfactory evidence of
such loss, theft or destruction and, if requested, an indemnity or bond
reasonably satisfactory to the Company.
Section 7. Exercise of Warrants.
A. Exercise. Subject to the terms and conditions set forth in this
Section 7, Warrants may be exercised, in whole or in part (but not as to any
fractional part of a Warrant), at any time or from time to time on and after the
Warrant Commencement Date and on or prior to 5:00 p.m., Eastern time, on the
Warrant Expiration Date.
In order to exercise any Warrant, Warrantholder shall deliver to the
Company at its office referred to in Section 16 the following: (i) a written
notice in the form of the Election to Purchase appearing at the end of the form
of Warrant Certificate attached as Exhibit 2 - Form of Election to Purchase
hereto of such Warrantholder's election to exercise the Warrants, which notice
shall specify the number of such Warrantholder's Warrants being exercised; (ii)
the Warrant Certificate or Warrant Certificates, if any, evidencing the Warrants
being exercised; and (iii) payment of the aggregate Exercise Price.
All rights of Warrantholder with respect to any Warrant that has not
been exercised, on or prior to 5:00 p.m., Eastern time, on the Warrant
Expiration Date shall immediately cease and such Warrants shall be automatically
cancelled and void.
B. Payment of Exercise Price. Payment of the Exercise Price with
respect to Warrants being exercised hereunder shall be made by the payment to
the Company, in cash, by check or wire transfer, of an amount equal to the
Exercise Price multiplied by the number of Warrants then being exercised.
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C. Payment of Taxes. The Company shall be responsible for paying any
and all issue, documentary, stamp or other taxes that may be payable in respect
of any issuance or delivery of Warrant Shares on exercise of a Warrant.
Notwithstanding anything contained herein to the contrary, the Warrantholder
shall be responsible for all taxes that may be due and payable by the
Warrantholder as a result of the issuance of this Warrant to the Warrantholder
or as a result of the issuance of the Warrant Shares upon due exercise hereof.
D. Delivery of Warrant Shares. Upon receipt of the items referred to
in Section 7A, the Company shall, as promptly as practicable, execute and
deliver or cause to be executed and delivered, to or upon the written order of
Warrantholder, and in the name of Warrantholder or Warrantholder's designee, a
stock certificate or stock certificates representing the number of Warrant
Shares to be issued on exercise of the Warrant(s). If the Warrant Shares shall
in accordance with the terms thereof have become automatically convertible into
shares of the Company's Common Stock prior to the time a Warrant is exercised,
the Company shall in lieu of issuing shares of Common Stock, issue to the
Warrantholder or its designee on exercise of such Warrant, a stock certificate
or stock certificates representing the number of shares of Common Stock into
which the Warrant Shares issuable on exercise of such Warrant are convertible.
The certificates issued to Warrantholder or its designee shall bear any
restrictive legend required under applicable law, rule or regulation. The stock
certificate or certificates so delivered shall be registered in the name of
Warrantholder or such other name as shall be designated in said notice. A
Warrant shall be deemed to have been exercised and such stock certificate or
stock certificates shall be deemed to have been issued, and such holder or any
other Person so designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date that such
notice, together with payment of the aggregate Exercise Price and the Warrant
Certificate or Warrant Certificates evidencing the Warrants to be exercised, is
received by the Company as aforesaid. If the Warrants evidenced by any Warrant
Certificate are exercised in part, the Company shall, at the time of delivery of
the stock certificates, deliver to the holder thereof a new Warrant Certificate
evidencing the Warrants that were not exercised or surrendered, which shall in
all respects (other than as to the number of Warrants evidenced thereby) be
identical to the Warrant Certificate being exercised. Any Warrant Certificates
surrendered upon exercise of Warrants shall be canceled by the Company.
Section 8. Adjustment of Number of Warrant Shares Issuable Upon Exercise of a
Warrant and Adjustment of Exercise Price.
A. Adjustment for Stock Splits, Stock Dividends, Recapitalizations.
The number of Warrant Shares issuable upon exercise of each Warrant and the
Exercise Price shall each be proportionately adjusted to reflect any stock
dividend, stock split, reverse stock split, recapitalization or the like
affecting the number of outstanding shares of Common Stock that occurs after the
date hereof.
B. Adjustments for Reorganization, Consolidation, Merger. If after
the date hereof, the Company (or any other entity, the stock or other securities
of which are at the time receivable on the exercise of the Warrants),
consolidates with or merges into another entity or conveys all or substantially
all of its assets to another entity, then, in each such case, Warrantholder,
upon any permitted exercise of a Warrant (as provided in Section 7), at any time
after the consummation of such reorganization, consolidation, merger or
conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise of the Warrant prior to
such consummation, the stock or other securities or property to which such
Warrantholder would have been entitled upon the consummation of such
reorganization, consolidation, merger or conveyance if such Warrantholder had
exercised the Warrant immediately prior thereto, all subject to further
adjustment as provided in this Section 8. The successor or purchasing entity in
any such reorganization, consolidation, merger or conveyance (if other than the
Company) shall duly execute and deliver to Warrantholder a written
acknowledgment of such entity's obligations under the Warrants and this
Agreement.
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C. Notice of Certain Events.
Upon the occurrence of any event resulting in an adjustment in the
number of Warrant Shares (or other stock or securities or property) receivable
upon the exercise of the Warrants or the Exercise Price, the Company shall
promptly thereafter (i) compute such adjustment in accordance with the terms of
the Warrants, (ii) prepare a certificate setting forth such adjustment and
showing in detail the facts upon which such adjustment is based, and (iii) mail
copies of such certificate to Warrantholder.
Section 9. Reservation of Shares.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock, or its authorized and issued Common Stock held in its treasury, the
aggregate number of the Warrant Shares deliverable upon the exercise of all
outstanding Warrants, for the purpose of enabling it to satisfy any obligation
to issue the Warrant Shares upon the due and punctual exercise of the Warrants,
through 5:00 p.m., Eastern time, on the Warrant Expiration Date.
Section 10. No Impairment.
The Company shall not, by amendment of its certificate of
incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issuance or sale of securities, sale of assets or any other
voluntary action, willfully avoid or seek to avoid the observance or performance
of any of the terms of the Warrants or this Agreement, and shall at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate in order to protect the rights
of Warrantholder under the Warrants and this Agreement against wrongful
impairment. Without limiting the generality of the foregoing, the Company: (i)
shall not set or increase the par value of any Warrant Shares above the amount
payable therefor upon exercise, and (ii) shall take all actions that are
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares upon the exercise of the Warrants.
Section 11. Representations and Warranties of Warrantholder.
Warrantholder represents and warrants to the Company that, on the
date hereof and on the date the Warrantholder exercises the Warrant pursuant to
the terms of this Agreement:
A. Warrantholder understands that the Warrants and the Warrant
Shares have not been registered under the Securities Act and acknowledges that
the Warrants and the Warrant Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration becomes available.
B. Warrantholder is acquiring the Warrants for Warrantholder's own
account for investment and not with a view to, or for sale in connection with,
any distribution thereof.
C. Warrantholder understands that the Warrants and the Warrant
Shares are being offered and sold to him in reliance on an exemption from the
registration requirements of United States federal and state securities laws
under Regulation S promulgated under the Securities Act and that the Company is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of the Warrantholder set forth
herein in order to determine the applicability of such exemptions and the
suitability of the Warrantholder to acquire the Warrants and Warrant Shares. In
this regard, Warrantholder represents, warrants and agrees that:
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(1) Warrantholder is not a U.S. Person (as defined below) and
is not an affiliate (as defined in Rule 501(b) under the Securities Act) of the
Company and is not acquiring the Warrants and Warrant Shares for the account or
benefit of a U.S. Person. A U.S. Person means any one of the following:
(A) any natural person resident in the
United States of America;
(B) any partnership or corporation organized
or incorporated under the
laws of the United States of America;
(C) any estate of which any executor or
administrator is a U.S. person;
(D) any trust of which any trustee is a U.S.
person;
(E) any agency or branch of a foreign entity
located in the United States
of America;
(F) any non-discretionary account or similar
account (other than an estate or trust) held by a dealer or other fiduciary for
the benefit or account of a U.S. person;
(G) any discretionary account or similar
account (other than an estate or trust) held by a dealer or other fiduciary
organized, incorporated or (if an individual) resident in the United States of
America; and
(H) any partnership or corporation if:
(i) organized or incorporated under
the laws of any foreign jurisdiction; and
(ii) formed by a U.S. person
principally for the purpose of investing in securities not registered under the
Securities Act, unless it is organized or incorporated, and owned, by
accredited investors (as defined in Rule 501(a) under the Securities Act) who
are not natural persons, estates or trusts.
(2) At the time of the origination of contact concerning this
Agreement and the date of the execution and delivery of this Agreement,
Warrantholder was outside of the United States.
(3) Warrantholder will not, during the period commencing on
the date of issuance of the Warrants and Warrant Shares and ending on the first
anniversary of such date, or such shorter period as may be permitted by
Regulation S or other applicable securities law (the "Restricted Period"),
offer, sell, pledge or otherwise transfer the Warrants and Warrant Shares in the
United States, or to a U.S. Person for the account or for the benefit of a U.S.
Person, or otherwise in a manner that is not in compliance with Regulation S.
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(4) Warrantholder will, after expiration of the Restricted
Period, offer, sell, pledge or otherwise transfer the Warrants and Warrant
Shares only pursuant to registration under the Securities Act or an available
exemption therefrom and, in accordance with all applicable state and foreign
securities laws and this Agreement.
(5) Warrantholder was not in the United States, engaged in,
and prior to the expiration of the Restricted Period will not engage in, any
short selling of or any hedging transaction with respect to the Warrants and
Warrant Shares, including without limitation, any put, call or other option
transaction, option writing or equity swap.
(6) Neither Warrantholder nor or any person acting on
Warrantholder's behalf has engaged, nor will engage, in any directed selling
efforts to a U.S. Person with respect to the Warrants and Warrant Shares and the
Warrantholder and any person acting on Warrantholder's behalf have complied and
will comply with the "offering restrictions" requirements of Regulation S under
the Securities Act.
(7) The transactions contemplated by this Agreement have not
been pre-arranged with a buyer located in the United States or with a U.S.
Person, and are not part of a plan or scheme to evade the registration
requirements of the Securities Act.
(8) Neither Warrantholder nor any person acting on
Warrantholder's behalf has undertaken or carried out any activity for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States, its territories or possessions,
for any of the Warrants and Warrant Shares. Warrantholder agrees not to cause
any advertisement of the Warrants and Warrant Shares to be published in any
newspaper or periodical or posted in any public place and not to issue any
circular relating to the Warrants and Warrant Shares, except such advertisements
that include the statements required by Regulation S under the Securities Act,
and only offshore and not in the U.S. or its territories, and only in compliance
with any local applicable securities laws.
(9) Each certificate representing the Warrants and Warrant
Shares shall be endorsed with the following legends, in addition to any other
legend required to be placed thereon by applicable federal or state securities
laws:
(A) "THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE
NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("THE SECURITIES ACT")) AND WITHOUT REGISTRATION WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE
UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT."
(B) "TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER
THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION.
HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT."
(10) Warrantholder consents to the Company making a notation
on its records or giving instructions to any transfer agent of the Company in
order to implement the restrictions on transfer of the Warrants and Warrant
Shares set forth in this Section 11.
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Section 12. No Rights or Liabilities as Stockholder.
No holder, as such, of any Warrant Certificate shall be
entitled to vote, receive dividends or be deemed the holder of Common Stock
which may at any time be issuable on the exercise of the Warrants represented
thereby for any purpose whatever, nor shall anything contained herein or in any
Warrant Certificate be construed to confer upon the holder of any Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise), or to receive notice of
meetings or other actions affecting stockholders or to receive dividend or
subscription rights, or otherwise, until such Warrant Certificate shall have
been exercised in accordance with the provisions hereof and the receipt and
collection of the Exercise Price and any other amounts payable upon such
exercise by the Company. No provision hereof, in the absence of affirmative
action by Warrantholder to purchase Warrant Shares shall give rise to any
liability of such holder for the Exercise Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
Section 13. Fractional Interests.
The Company shall not be required to issue fractional shares
of Common Stock upon exercise of the Warrants or to distribute certificates that
evidence fractional shares of Common Stock. If any fraction of a Warrant Share
would, except for the provisions of this Section 13, be issuable on the exercise
of a Warrant, the number of Warrant Shares to be issued by the Company shall be
rounded to the nearest whole number, with one-half or greater being rounded up.
Section 14. Registration Rights.
A. For purposes of this Agreement, "Registrable Securities"
means (i) the Warrant Shares issued or issuable to Warrantholder (a) upon
exercise of the Warrants, or (b) upon any distribution with respect to, any
exchange for or any replacement of such Warrants or (c) upon any conversion,
exercise or exchange of any securities issued in connection with any such
distribution, exchange or replacement; (ii) securities issued or issuable upon
any stock split, stock dividend, recapitalization or similar event with respect
to the foregoing; and (iii) any other security issued as a dividend or other
distribution with respect to, in exchange for, in replacement or redemption of,
or in reduction of the liquidation value of, any of the securities referred to
in the preceding clauses. Notwithstanding the foregoing, Registrable Securities
shall cease to be Registrable Securities when such securities have been sold to
or through a broker or dealer or underwriter in a public distribution or a
public securities transaction or when such securities may be sold without any
restriction pursuant to Rule 144(k) as determined by the counsel to the Company.
B. If at any time after January 1, 2009, the Company
determines to prepare and file with the Securities and Exchange Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities
(other than on Form S-4 or Form S-8 or its then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans), the Company shall include in such registration
statement all Registrable Securities. In the case of an underwritten public
offering, if the managing underwriter(s) or underwriter(s) should reasonably
object to the inclusion of the Registrable Securities in such registration
statement, then if the Company after consultation with the managing underwriter
should reasonably determine that the inclusion of such Registrable Securities,
would materially adversely affect the offering contemplated in such registration
statement, and based on such determination recommends inclusion in such
registration statement of fewer or none of the Registrable Securities of the
Warrantholder, then (x) the number of Registrable Securities of the Holders
included in such registration statement shall be reduced, if the Company after
consultation with the underwriter(s) recommends the inclusion of fewer
Registrable Securities, or (y) none of the Registrable Securities of the
Warrantholder shall be included in such registration statement, if the Company
after consultation with the underwriter(s) recommends the inclusion of none of
such Registrable Securities; provided, however, that if securities are being
offered for the account of other persons or entities as well as the Company,
such reduction shall not represent a greater fraction of the number of
Registrable Securities than the fraction of similar reductions imposed on such
other persons or entities (other than the Company).
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C. All fees and expenses incident to the inclusion of the
Registrable Securities on a registration statement pursuant to this Section 14
shall be borne by the Company whether or not the registration statement is filed
or becomes effective and whether or not any Registrable Securities are sold
pursuant to the registration statement.
Section 15. Definitions.
Unless the context otherwise requires, the terms defined in
this Section 15, whenever used in this Agreement shall have the respective
meanings hereinafter specified and words in the singular or in the plural shall
each include the singular and the plural and the use of any gender shall include
all genders.
"Business Day" shall mean any day on which banking
institutions are generally open for business in Nevada.
"Common Stock" means the common stock of the Company.
"Exercise Price" shall be the price per Warrant Share at which
Warrantholder is entitled to purchase Warrant Shares upon exercise of any
Warrant determined in accordance with Section 7 and subject to adjustment as
provided in Sections 8 and 17 hereof.
"Person" shall mean any corporation, association, partnership,
limited liability company, joint venture, trust, organization, business,
individual, government or political subdivision thereof or governmental body.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute as at the time in effect, and any
reference to a particular section of such Act shall include a reference to the
comparable section, if any, of such successor federal statute.
Section 16. Notices.
All notices, consents, requests, waivers or other
communications required or permitted under this Agreement (each a "Notice")
shall be in writing and shall be sufficiently given (a) if hand delivered, (b)
if sent by nationally recognized overnight courier, or (c) if sent by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
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if to the Company:
Energtek Inc.
26 East Hawthorne Avenue,
Valley Stream, New York 11580
United States of America
if to Warrantholder:
----------------
----------------
----------------
or such other address as shall be furnished by any of the parties hereto in a
Notice. Any Notice shall be deemed given upon receipt.
Section 17. Supplements, Amendments and Waivers.
This Agreement may be supplemented or amended only by a
subsequent writing signed by each of the parties hereto (or their successors or
permitted assigns), and any provision hereof may be waived only by a written
instrument signed by the party charged therewith.
Section 18. Successors and Assigns.
Except as otherwise provided herein, the provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the successors and permitted assigns of the parties hereto. Warrants issued
under this Agreement may be assigned by Warrantholder only to the extent such
assignment satisfies the restrictions on transfer set forth in this Agreement;
any attempted assignment of Warrants in violation of the terms hereof shall be
void ab initio.
Section 19. Termination.
This Agreement (other than Sections 7C, 11, and Sections 16
through 27, inclusive, and all related definitions, all of which shall survive
such termination) shall terminate on the earlier of (i) the Warrant Expiration
Date and (ii) the date on which all Warrants have been exercised by the
Warrantholder or redeemed by the Company.
Section 20. Governing Law; Jurisdiction.
A. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the state of Nevada and the federal laws of the United States applicable
herein.
B. Submission to Jurisdiction. Each party to this Agreement
hereby irrevocably and unconditionally submits, for itself and its property, to
the jurisdiction of the state of Nevada, and any appellate court from any
thereof, in respect of actions brought against it as a defendant, in any action,
suit or proceeding arising out of or relating to this Agreement or the Warrant
Certificates and Warrants to be issued pursuant hereto, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action, suit
or proceeding may be heard and determined in such courts. Each of the parties
hereto agrees that a final judgment in any such action, suit or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
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C. Venue. Each party hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
action, suit or proceeding arising out of or relating to this Agreement, or the
Warrant Certificates and Warrants to be issued pursuant hereto, in any court
referred to in this Subsection B. Each of the parties hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action, suit proceeding in any such court and waives any
other right to which it may be entitled on account of its place of residence or
domicile.
Section 21. Third Party Beneficiaries.
Each party intends that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any Person other than the
parties hereto and their successors and permitted assigns.
Section 22. Headings.
The headings in this Agreement are for convenience only and
shall not affect the construction or interpretation of this Agreement.
Section 23. Entire Agreement.
This Agreement, together with the Warrant Certificates and
Exhibits, and the Subscription Agreement, dated of even date herewith, by and
between the Company and the Warrantholder, constitute the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and shall supersede any prior agreements and understandings between the
parties hereto with respect to such subject matter.
Section 24. Expenses.
Each of the parties hereto shall pay its own expenses and
costs incurred or to be incurred in negotiating, closing and carrying out this
Agreement and in consummating the transactions contemplated herein, except as
otherwise expressly provided for herein.
Section 25. Neutral Construction.
The parties to this Agreement agree that this Agreement was
negotiated fairly between them at arm's length and that the final terms of this
Agreement are the product of the parties' negotiations. Each party represents
and warrants that it has sought and received legal counsel of its own choosing
with regard to the contents of this Agreement and the rights and obligations
affected hereby. The parties agree that this Agreement shall be deemed to have
been jointly and equally drafting by them, and that the provisions of this
Agreement therefore should not be construed against a party or parties on the
grounds that such party or parties drafted or was more responsible for the
drafting of any such provision(s).
Section 26. Representations and Warranties.
The Company hereby represents and warrants to the
Warrantholder that:
(a) the Company has all requisite corporate power and
authority to (i) execute and deliver this Agreement and (ii) issue and sell the
Common Stock upon the conversion thereof and carry out provisions of this
Agreement. All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and
delivery of this Agreement, the performance of all obligations of the Company
hereunder, and the authorization (or reservation for issuance), sale and
issuance of the Common Stock to be sold hereunder has been taken or will be
taken prior to the date hereof;
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(b) this Agreement constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws relating to application affecting enforcement of creditor's rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief of other equitable remedies;
(c) the Common Stock issuable upon the conversion thereof that
is being purchased hereunder, when issued, sold and delivered in accordance with
the terms of this Agreement for the consideration expressed herein, will be duly
and validly issued, fully paid and nonassessable and will be free of
restrictions on transfer, other than restrictions on transfer under applicable
state and federal securities laws;
(d) subject in part to the truth and accuracy of
Warrantholder's representations set forth in Section 11 of this Agreement, the
offer, sale and issuance of the Common Stock issuable upon the conversion
thereof as contemplated by this Agreement are exempt from the registration
requirements of the Securities Act and the qualification or registration
requirements of any state securities or other applicable blue sky laws; and
(e) the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not result in
any such violation, or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such provision
or an event that results in creation of any lien, charge or encumbrance upon any
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonremoval of any material permit, license, authorization or approval applicable
to the Company, its business or operations or any of its assets or properties.
Section 27. Counterparts.
This Agreement may be executed in counterparts and by
facsimile and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
Page 11
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
ENERGTEK, INC.
By:
-----------------------------
Name:
Title:
Warrantholder
-----------------------------
Name:
Title:
Page 12
EXHIBIT 1
WARRANT FORM
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH SUCH ACT AND LAWS. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF, AND MAY ONLY BE TRANSFERRED
IN ACCORDANCE WITH, A CLASS 2007-B1 WARRANT AGREEMENT
BETWEEN ENERGTEK INC. AND THE HOLDER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE. COPIES OF SUCH AGREEMENT
MAY BE OBTAINED UPON WRITTEN REQUEST TO THE COMPANY.
NO. _______ ________ CLASS 2007-B WARRANTS
FORM OF
Class 2007-B Warrant Certificate
ENERGTEK INC.
This Warrant Certificate certifies that __________ (the
"Warrantholder"), is the registered holder of ______ Class 2007-B Warrants (the
"Warrants") to purchase shares (the "Warrant Shares") of Common Stock of
Energtek Inc. (the "Company"). Each Warrant entitles the holder, subject to the
satisfaction of the conditions to exercise set forth in Section 7 of the Warrant
Agreement referred to below, to purchase from the Company one fully paid and
nonassessable Warrant Share at any time or from time to time on and after the
1st of January 2008 (the "Warrant Commencement Date") and terminate on or prior
to 5:00 p.m., Eastern time, on December 31, 2011 (the "Warrant Expiration Date")
one fully paid and nonassessable Warrant Share at the Exercise Price set forth
in the Warrant Agreement. The number of Warrant Shares for which each Warrant is
exercisable and the Exercise Price are subject to adjustment as provided in the
Warrant Agreement.
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants to purchase Warrant Shares and are issued
pursuant to a Class 2007-B1 Warrant Agreement, dated as of January ___, 2007
(the "Warrant Agreement"), between the Company and the Warrantholder, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and
Warrantholder.
Warrantholder may exercise vested Warrants by surrendering
this Warrant Certificate, with the Election to Purchase attached hereto properly
completed and executed, together with payment of the aggregate Exercise Price,
at the offices of the Company specified in Section 16 of the Warrant Agreement.
If upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued to the holder hereof or its assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
This Warrant Certificate, when surrendered at the offices of
the Company specified in Section 16 of the Warrant Agreement, by the registered
holder thereof in person, by legal representative or by attorney duly authorized
in writing, may be exchanged, in the manner and subject to the limitations
provided in the Warrant Agreement, for one or more other Warrant Certificates of
like tenor evidencing in the aggregate a like number of Warrants.
The Company may deem and treat the registered holder hereof as
the absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
WITNESS the signatures of the duly authorized officers of the
Company.
Dated: January ___, 2007
ENERGTEK, INC.
By:
-----------------------------
Name:
Title:
Exhibit 2
Form of Election to Purchase
The undersigned hereby irrevocably elects to exercise
_________ of the Class 2007-B Warrants evidenced by the attached Warrant
Certificate to purchase Warrant Shares, and herewith tenders (or is concurrently
tendering) payment for such Warrant Shares in an amount determined in accordance
with the terms of the Warrant Agreement. The undersigned requests that a
certificate representing such Warrant Shares be registered in the name of ,
whose address is and that such certificate be delivered to , whose address is
- -------------------------------------.
If said number of Warrants is less than the number of Warrants
evidenced by the Warrant Certificate (as calculated pursuant to the Warrant
Agreement), the undersigned requests that a new Warrant Certificate evidencing
the number of Warrants evidenced by this Warrant Certificate that are not being
exercised be registered in the name of , whose address is and that such Warrant
Certificate be delivered to , whose address is --------------------
- --------------------------------------------------- .
Dated: ,
------------------ -------------
Name of holder of Warrant Certificate:
--------------------------------------
--------------------------------------
(Please Print)
Address:
-------------------------------
Federal Tax ID No.:
-------------------
Signature:
----------------------------
Note: The above signature must correspond with
the name as written in the first sentence
of the attached Warrant Certificate in
every particular, without alteration or
enlargement or any change whatever, and if
the certificate evidencing the Warrant
Shares or any Warrant Certificate
representing Warrants not exercised is to
be registered in a name other than that in
which this Warrant Certificate is
registered, the signature above must be
guaranteed.
Dated: ,
------------------------- ----------------