EXECUTION COPY 1WARRANT TO PURCHASE COMMON STOCK
EXHIBIT
4.16
EXECUTION
COPY
THIS
WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY
NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER
SUCH
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
|
Number
of Shares:
|
17,175,971
shares (subject to adjustment)
|
|
Warrant
Price:
|
$0.08
per share
|
|
Issuance
Date:
|
January
14, 2008
|
|
Expiration
Date:
|
January
14, 2018
|
THIS
WARRANT CERTIFIES THAT
for value received, ERP2 Holdings, LLC or its registered assigns (hereinafter
called the “Holder”)
is entitled to purchase from Enterprise Informatics Inc. (hereinafter called
the
“Company”),
the above referenced number of fully paid and nonassessable shares (the “Shares”)
of common stock (the “Common
Stock”), of Company, at the Warrant Price per Share referenced above; the
number of shares purchasable upon exercise of this Warrant and Warrant Price
per
Share referenced above being subject to adjustment from time to time as
described herein. The exercise of this Warrant shall be subject to the
provisions, limitations and restrictions contained herein.
1. Term
and Exercise.
1.1
Term.
This Warrant is exercisable in whole or in part (but not as to any fractional
share of Common Stock), at any time and from time to time after the date hereof
prior to 6:00 p.m. Los Angeles time on the Expiration Date set forth
above.
1.2
Warrant
Price. The Warrant shall be exercisable at the Warrant Price
described above.
1.3
Procedure
for Exercise of Warrant. Holder may exercise this Warrant by
delivering the following to the principal office of the Company in accordance
with Section 6.1 hereof: (i) a duly executed Notice of Exercise in
substantially the form attached as Schedule A, (ii) payment of the
Warrant Price then in effect for each of the Shares being purchased, as
designated in the Notice of Exercise. Payment of the Warrant Price
shall be made by the Holder by (a) delivering to the Company cash,
certified or official bank check payable to the order of the Company, or wire
transfer of funds to the Company’s account (or any combination of any of the
foregoing) in the amount of the Warrant Price for each share being purchased
or
(b) providing a written notice to the Company that the Holder is exercising
this
Warrant on a “cashless exercise” basis by authorizing the Company to withhold
from issuance a number of shares of Common Stock otherwise issuable upon such
exercise of this Warrant which, when multiplied by the Fair Market Value (as
defined below) of the Common Stock on the date of exercise, is equal to the
aggregate Warrant Price (and such withheld shares shall no longer be issuable
under this Warrant).
For purposes of this Warrant, “Fair
Market
Value” means:
(a)
If, on any day, the security is traded on a securities exchange or through
the
NASDAQ Stock Market or the OTC Bulletin Board, the Fair Market Value shall
be
deemed to be the average of the closing prices of the securities on such
exchange or quotation system, or, if there has been no sales on any such
exchange or quotation system on any day, the average of the highest bid and
lowest asked prices on such exchange or quotation system as of 4:00 p.m., New
York time, or, if on any day the security is not traded on an exchange or quoted
in the NASDAQ Stock Market or 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 ten (10)
business days consisting of the business day as of which Fair Market Value
is
being determined and the nine (9) consecutive business days prior to such day;
or
(b)
If at any time such security is not listed on any securities exchange or quoted
in the NASDAQ Stock Market or the OTC Bulletin Board and bid and asked prices
in
the domestic over-the-counter market are not reported by the National Quotation
Bureau, Incorporated or any similar successor organization, the Fair Market
Value shall be the fair value thereof, as determined jointly by the Board of
Directors and the Holder. If such parties are unable to reach agreement within
a
reasonable period of time, such fair value shall be determined by an independent
appraiser experienced in valuing securities jointly selected by the Company’s
Board of Directors and the Holder. The determination of the appraiser
shall be final and binding upon the parties and the Company shall pay the fees
and expenses of such appraiser.
1.4
Delivery
of Certificate and New Warrant. In the event of any exercise of the
rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the Holder or such
other
name or names as may be designated by the Holder, together with any other
securities or other property which the Holder is entitled to receive upon
exercise of this Warrant, shall be delivered to the Holder hereof, at the
Company’s expense, within a reasonable time, not exceeding fifteen (15) calendar
days, after the rights represented by this Warrant shall have been so exercised;
and, unless this Warrant has expired, a new Warrant representing the number
of
Shares (except a remaining fractional share), if any, with respect to which
this
Warrant shall not then have been exercised shall also be issued to the Holder
hereof within such time. The person in whose name any certificate for
shares of Common Stock is issued upon exercise of this Warrant shall for all
purposes be deemed to have become the holder of record of such shares on the
date on which the Warrant was surrendered and payment of the Warrant Price
was
received by the Company, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is on a
date
when the stock transfer books of the Company are closed, such person shall
be
deemed to have become the holder of such Shares at the close of business on
the
next succeeding date on which the stock transfer books are open.
1.5
Restrictive
Legends.
(a)
Legends on
Shares. Except as set forth herein, each certificate for
Shares shall bear a restrictive legend in substantially the form as follows,
together with any additional legend required by (a) any applicable state
securities laws and (b) any securities exchange upon which such Shares may,
at the time of such exercise, be listed:
The
shares of stock evidenced by this certificate have not been registered under
the
U.S. Securities Act of 1933, as amended, and may not be offered, sold, pledged
or otherwise transferred (“transferred”) in the absence of such registration or
an applicable exemption therefrom. In the absence of such
registration, such shares may not be transferred unless, if the Company
requests, the Company has received a written opinion from counsel in form and
substance satisfactory to the Company stating that such registration is not
required.
Any
certificate issued at any time in exchange or substitution for any certificate
bearing such legend shall also bear such legend unless, in the opinion of
counsel for the Holder thereof (which counsel shall be reasonably satisfactory
to the Company), the securities represented thereby are not, at such time,
required by law to bear such legend.
(b)
Removal of
Legends. The restrictions upon transferability of this Warrant and the
Shares issuable upon exercise of this Warrant (together, the “Securities”)
shall cease when (i) such Securities are sold pursuant to a registration
statement covering such Securities that has become effective under the
Securities Act of 1933, as amended (the “Securities
Act”) or (ii) an exemption from registration exists under the Securities
Act and any applicable state securities laws and, if the Company requests,
the
Company has received a written opinion from counsel in form and substance
satisfactory to the Company stating that such registration is not
required. When such restrictions upon transferability terminate, the
Company shall, or shall instruct its transfer agent to, promptly, and without
expense to the Holder or the shareholder, as the case may be, issue replacement
Securities in the name of the Holder and/or the shareholder, as the case may
be,
not bearing the legends set forth herein.
1.6
Fractional
Shares. No fractional Shares shall be issuable upon exercise or
conversion of the Warrant. In the event of a fractional interest, the
number of Shares to be issued shall be rounded down to the nearest whole
Share.
2. Representations,
Warranties and Covenants.
2.1
Representations
and Warranties.
(a)
The
Company is a
corporation duly organized, validly existing and in good standing under the
laws
of its state of incorporation and has all necessary power and authority to
perform its obligations under this Warrant;
(b)
The
execution, delivery
and performance of this Warrant has been duly authorized by all necessary
actions on the part of the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms; and
(c)
This
Warrant does not
violate and is not in conflict with any of the provisions of the Company’s
Articles of Incorporation or Certificate of Determination, Bylaws and any
resolutions of the Company’s Board of Directors or stockholders, or any
agreement of the Company, and no event has occurred and no condition or
circumstance exists that might (with or without notice or lapse of time)
constitute or result directly or indirectly in such a violation or
conflict.
2.2
Issuance
of Shares. The Company covenants and agrees that all shares of
Common Stock that may be issued upon the exercise of the rights represented
by
this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that it will pay
when due and payable any and all federal and state taxes which may be payable
in
respect of the issue of this Warrant or any Common Stock or certificates
therefor issuable upon the exercise of this Warrant. The Company further
covenants and agrees that the Company will at all times have authorized and
reserved, free from preemptive rights, a sufficient number of shares of Common
Stock to provide for the exercise in full of the rights represented by this
Warrant. If at any time the number of authorized but unissued shares of
Common Stock of the Company shall not be sufficient to effect the exercise
of
the Warrant in full, then the Company will take all such corporate action as
may, in the opinion of counsel to the Company, be necessary or advisable to
increase the number of its authorized shares of Common Stock as shall be
sufficient to permit the exercise of the Warrant in full, including without
limitation, using its best efforts to obtain any necessary stockholder approval
of such increase. The Company further covenants and agrees that if any
shares of capital stock to be reserved for the purpose of the issuance of shares
upon the exercise of this Warrant require registration with or approval of
any
governmental authority under any federal or state law before such shares may
be
validly issued or delivered upon exercise, then the Company will in good faith
and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be. If and so long as the Common Stock issuable
upon the exercise of this Warrant is listed on any national securities exchange
or the Nasdaq Stock Market, the Company will, if permitted by the rules of
such
exchange or market, list and keep listed on such exchange or market, upon
official notice of issuance, all shares of such Common Stock issuable upon
exercise of this Warrant.
3. OtherAdjustments.
3.1
Stock
Splits, Subdivisions or Combinations of Shares. If the Company, at
any time while this Warrant is outstanding, (a) pays 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, (b) subdivides outstanding shares
of
Common Stock into a larger number of shares, or (c) combines outstanding shares
of Common Stock into a smaller number of shares, then in each such case the
Warrant Price shall be multiplied by a fraction of which the numerator shall
be
the number of shares of Common Stock outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to clause
(a) of this paragraph shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (b) or (c) of this paragraph
shall become effective immediately after the effective date of such subdivision
or combination.
3.2
Adjustment
for Reclassification, Exchange and Substitution. If at any
time while this Warrant is outstanding, to the extent any outstanding share
of
Common Stock is changed into one or more shares of any class or classes of
stock, this Warrant will thereafter represent the right to acquire (in lieu
of
the Common Stock purchasable and receivable upon the exercise of the rights
represented hereby immediately prior to the consummation of such change) such
shares as may be issued with respect to or in exchange for the number of
outstanding shares of Common Stock which such Holder would have been entitled
to
receive had such Holder exercised this Warrant immediately prior to the
consummation of such change, and the Warrant Price therefor shall be
appropriately adjusted, all subject to further adjustment in this Section
3.
3.3
Adjustments
for Other Dividends and Distributions. In case the Company
shall, by dividend or otherwise, distribute to all holders of Common Stock
shares of any class of capital stock of the Company, debt securities, assets
or
other property of the Company (excluding any dividend or distribution referred
to in Section 3.1) (any of the foregoing hereinafter in this Section 3.3 called
the “Distributed
Assets”), then, in each such case, the Warrant Price shall be decreased
so that the Warrant Price shall be equal to the price determined by multiplying
the Warrant Price in effect on the record date of such distribution with respect
to such dividend or distribution by a fraction,
(a)
the numerator of which shall be (x) the Fair Market Value per share of the
Common Stock on such record date minus (y) the fair market value of the
Distributed Assets applicable to one share of Common Stock, as jointly
determined in good faith by the Board of Directors and the Holder (or in the
event such persons are unable to reach agreement upon such Fair Market Value
within ten (10) days of such record date, the fair market value of the
Distributed Assets shall be determined by an independent third party appraiser
jointly selected by the Company and the Holder, the cost of which shall be
borne
solely by the Company); and
(b)
the denominator of which shall be the Fair Market Value per share of the Common
Stock on such record date,
such
adjustment to become effective immediately prior to the opening of business
on
the day following such record date; provided, however, that in the event the
then fair market value (as so determined) of the portion of the Distributed
Assets so distributed applicable to one share of Common Stock is equal to or
greater than the Fair Market Value per share of the Common Stock on such record
date, in lieu of the foregoing adjustment, adequate provision shall be made
so
that the Holder shall have the right to receive upon exercise of this Warrant
the amount of Distributed Assets the Holder would have received had the Holder
exercised this Warrant on such record date. In the event that such
dividend or distribution is declared but not so paid or made, the number of
shares of Common Stock issuable upon exercise of this Warrant and the Warrant
Price shall again be adjusted to be the number of shares of Common Stock
issuable upon exercise of this Warrant and the Warrant Price that would be
in
effect if such dividend or distribution had not been declared.
3.4
Reorganization,
Reclassification, Consolidation, Merger or Sale. If any
recapitalization, reclassification or reorganization of the share capital of
the
Company (excluding any change referred to in Section 3.2), or any consolidation
or merger of the Company with another corporation, or the sale of all or
substantially all of its shares and/or assets or other transaction (including,
without limitation, a sale of substantially all of its assets followed by a
liquidation) shall be effected in such a way that holders of Common Stock shall
be entitled to receive shares, securities or other assets or property (a “Change”),
then, as a condition of such Change, lawful and adequate provisions shall be
made by the Company whereby the Holder hereof shall thereafter have the right
to
purchase and receive (in lieu of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby) such shares, securities or other assets or property as
may
be issued or payable with respect to or in exchange for the number of
outstanding shares of Common Stock which such Holder would have been entitled
to
receive had such Holder exercised this Warrant immediately prior to the
consummation of such Change. The Company or its successor shall promptly
issue to Holder a new Warrant for such new securities or other property.
The new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to give effect to the adjustments provided
for
in this Section 3 including, without limitation, adjustments to the Warrant
Price and to the number of securities or property issuable upon exercise of
the
new Warrant. The provisions of this Section 3.4 shall similarly apply to
successive Changes.
3.5 Adjustments
to the
Conversion Prices for Certain Dilutive Issuances.
(a) Definitions. For
purposes of this Section 3.5, the following definitions apply:
(1)
“Additional
Shares of Common Stock” shall mean all shares of Common Stock issued (or,
pursuant to Section 3.5(b), deemed to be issued) by the Company after the
original issue date of this Warrant (excluding (a) any shares of Common Stock
issued upon exercise of Options or upon the conversion or exchange of
Convertible Securities, in either case, outstanding on the original issue date
of this Warrant, (b) any shares of Common Stock issued under any Option granted
pursuant to the 2007 Stock Incentive Plan or any other equity incentive plan
approved by the Company’s Board of Directors (and any shares of Common Stock
which, but for this clause (b), would be deemed to be issued pursuant to Section
3.5(b) as a result of the grant of any such Option), and (c) any shares of
Common Stock issued under this Warrant or any of the other warrants to be issued
pursuant to the Summary of Terms between the Company and ERP2 Holdings, LLC
dated January 14, 2008 (and any shares of Common Stock which, but for this
clause (c), would be deemed to be issued pursuant to Section 3.5(b) as a result
of the issuance of any such warrants).
(2)
“Convertible
Securities” shall mean any evidences of indebtedness, shares or other
securities convertible into or exchangeable for Common Stock.
(3)
“Options”
shall mean rights, options or warrants to subscribe for, purchase or otherwise
acquire either Common Stock or Convertible Securities.
(b)
Deemed Issuance
of
Additional Shares of Common Stock. In the event the Company,
at any time or from time to time while this Warrant is outstanding, shall issue
any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities then entitled to receive
any
such Options or Convertible Securities, then the maximum number of shares (as
set forth in the instrument relating thereto without regard to any provisions
contained therein designed to protect against dilution) of Common Stock issuable
upon the exercise of such Options or, in the case of Convertible Securities
and
Options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Common Stock issued as of the time
of
such issuance of such Convertible Securities or Options or, in case such a
record date shall have been fixed, as of the close of business on such record
date; provided, further, that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(1)
no further adjustments to the Warrant Price shall be made upon the subsequent
issue of Convertible Securities or shares of Common Stock upon the exercise
of
such Options or conversion or exchange of such Convertible Securities;
(2)
if such Options or Convertible Securities by their terms provide, with the
passage of time or otherwise, for any increase in the consideration payable
to
the Company, or decrease in the number of shares of Common Stock issuable,
upon
the exercise, conversion or exchange thereof (including without limitation
any
such decrease resulting from the expiration or termination of any such Option
or
the right to convert or exchange any such Convertible Security), the Warrant
Price computed upon the original issue thereof (or upon the occurrence of a
record date with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be recomputed
to
reflect such increase or decrease insofar as it affects such Options or the
rights of conversion or exchange under such Convertible Securities; provided,
that no readjustment pursuant to this clause (B) shall have the effect of
increasing the Warrant Price to an amount which exceeds the Warrant Price on
the
original adjustment date.
(c)
Adjustment of Warrant
Price Upon Issuance of Additional Shares of Common Stock. In
the event the Company, at any time while this Warrant is outstanding, shall
issue Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 3.5(b)) without consideration
or
for consideration per share less than either (i) the Warrant Price then in
effect or (ii) the Fair Market Value per share of the Common Stock on the last
full trading day immediately prior to such issue, then the Warrant Price shall
be reduced, concurrently with such issue, to a price (calculated to the nearest
cent) determined by multiplying the Warrant Price then in effect by the
Applicable Percentage (as defined below). For the purpose of the
above calculation, the number of shares of Common Stock outstanding immediately
prior to such issue shall be calculated on a fully diluted basis, as if all
Convertible Securities had been fully converted into shares of Common Stock
and
any outstanding Options bearing an exercise price which is lower than the price
at which the Additional Shares of Common Stock were issued had been fully
exercised (and the resulting securities fully converted into shares of Common
Stock, if so convertible) as of such date. For purposes of this
Section 3.5(c), “Applicable
Percentage” shall mean the lesser of the following: (a) a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of shares of Common Stock which
the aggregate consideration received by the Company for the total number of
Additional Shares of Common Stock so issued would purchase at the Warrant Price
then in effect, and the denominator of which shall be the number of shares
of
Common Stock outstanding immediately prior to such issue plus the number of
such
Additional Shares of Common Stock so issued or (b) a fraction, the numerator
of
which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of shares of Common Stock which the
aggregate consideration received by the Company for the total number of
Additional Shares of Common Stock so issued would purchase at the Fair Market
Value per share of Common Stock, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issue
plus the number of such Additional Shares of Common Stock so issued
(d)
Determination of
Consideration. For purposes of this Section 3.5, the
consideration received by the Company in connection with the issuance of any
Additional Shares of Common Stock shall be computed as follows:
(1)
Cash and
Property. Such consideration shall:
(A)
insofar as it consists of cash, be computed at the aggregate amount of cash
received by the Company, excluding amounts paid or payable for accrued interest
or accrued dividends;
(B)
insofar as it consists of property other than cash, be computed at the fair
value thereof at the time of such issuance, as determined by the Board of
Directors in good faith; and
(C)
in the event Additional Shares of Common Stock are issued together with other
shares or securities or other assets of the Company for consideration which
may
consist of cash, property or both, be the proportion of such consideration
so
received, computed as provided in clauses (A) and (B) above, that, as determined
by the Board of Directors in good faith, equals the proportion of the total
value of such Additional Shares of Common Stock, other shares or securities
or
other assets of the Company represented by the value of such Additional
Shares.
(2)
Options and
Convertible Securities. The consideration per share received
by the Company for Additional Shares of Common Stock deemed to have been issued
pursuant to Section 3.5(b) relating to Options and Convertible Securities shall
be determined by dividing:
(A)
the total amount, if any, received or receivable by the Company as consideration
for the issuance of such Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained therein designed
to
protect against dilution) payable to the Company upon the exercise of such
Options or the conversion or exchange of such Convertible Securities, or in
the
case of Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible
Securities, by
(B)
the maximum number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein designed
to
protect against the dilution) issuable upon the exercise of such Options or
conversion or exchange of such Convertible Securities, or in the case of Options
for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities.
3.6
Adjustment
in Number of Warrant Shares. Upon each adjustment of the
Warrant Price as a result of the calculations made in this Section 3, the number
of Shares issuable upon exercise of this Warrant shall be adjusted by
multiplying such number of Shares by a fraction, the numerator of which shall
be
the Warrant Price in effect immediately prior to such adjustment and the
denominator of which shall be the Warrant Price in effect after giving effect
to
such adjustment.
3.6
Other
Events. If any event
occurs that would adversely affect the Holder’s rights but not expressly
provided for by this Section 3 (including, without limitation, the granting
of
stock appreciation rights, phantom stock rights or other rights with equity
features), then the Company’s Board of Directors will make an appropriate
adjustment in the Warrant Price and number of Warrant Shares subject to this
Warrant so as to protect the Holder’s rights; provided, however, that no such
adjustment will increase the Warrant Price or decrease the number of Warrant
Shares obtainable as otherwise determined pursuant to this Section 3.
3.7
Notice
of
Adjustments. Upon the
occurrence of each adjustment pursuant to this Section 3, the Company at its
expense will promptly compute such adjustment in accordance with the terms
of
this Warrant and prepare a certificate setting forth such adjustment, including
a statement of the adjusted Warrant Price and adjusted number or type of Warrant
Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based. The
Company will promptly deliver a copy of each such certificate to the Holder
and
to the Company’s transfer agent.
3.8
Notice
of
Corporate Events; Termination. If the Company
(i) declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including without limitation any
granting of rights or warrants to subscribe for or purchase any capital stock
of
the Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating, or solicits, stockholder approval for any merger,
sale
or similar transaction pursuant to which Common Stock is converted or exchanged
for cash, securities or property or (iii) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then the Company shall
deliver to the Holder a notice describing the material terms and conditions
of
such transaction at least 15 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.
4. Ownershipand
Transfer.
4.1
Ownership
of This Warrant. The Company may deem and treat the person in whose
name this Warrant is registered as the holder and owner hereof (notwithstanding
any notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary until presentation of this Warrant for registration of transfer as
provided in this Section 4.
4.2
Transfer
and Replacement. Subject to the terms and conditions of this
Warrant and compliance with all applicable securities laws, and upon prior
written consent of the Company, which consent shall not be unreasonably
withheld, this Warrant and all rights hereunder are transferable in whole or
in
part upon the books of the Company by the Holder hereof in person or by duly
authorized attorney, and a new Warrant or Warrants, of the same tenor as this
Warrant but registered in the name of the transferee
or transferees (and in the name of the Holder, if a partial transfer is
effected) shall be made and delivered by the Company upon surrender of this
Warrant duly endorsed, at the office of the Company in accordance with Sections
6.1 and 6.2 hereof. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft or destruction, and, in such case, of
indemnity or security reasonably satisfactory to it, and upon surrender of
this
Warrant if mutilated, the Company will make and deliver a new Warrant of like
tenor, in lieu of this Warrant; provided that if the Holder hereof is an
instrumentality of a state or local government or an institutional holder or
a
nominee for such an instrumentality or institutional holder an irrevocable
agreement of indemnity by such Holder shall be sufficient for all purposes
of
this Warrant, and no evidence of loss or theft or destruction shall be
necessary. This Warrant shall be promptly cancelled by the Company upon
the surrender hereof in connection with any transfer or replacement.
Except as otherwise provided above, in the case of the loss, theft or
destruction of a Warrant, the Company shall pay all expenses, taxes and other
charges payable in connection with any transfer or replacement of this Warrant,
other than income taxes and stock transfer taxes (if any) payable in connection
with a transfer of this Warrant, which shall be payable by the Holder.
Holder will not transfer this Warrant and the rights hereunder except in
compliance with federal and state securities laws and except after providing
evidence of such compliance reasonably satisfactory to the Company.
5. Compliance
with Securities Laws. By
acceptance of this Warrant, the
Holder hereby represents, warrants and covenants that any shares of stock
purchased upon exercise of this Warrant or acquired upon conversion thereof
shall be acquiredfor
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 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 Act (unless otherwise required pursuant
to exercise by the Holder of the registration rights, ifany,
previously granted to the
registered Holder) and will be “restricted securities”within
the meaning of Rule 144 under the
Securities Act; and that all stock certificates representing shares of stock
issued to the Holder upon exercise of this Warrant or
upon conversion of such shares may
have affixed thereto a legend substantially in the form set forth in Section
1.5
above.
6. MiscellaneousProvisions.
6.1
Notices.
All notices and other communications given to any party hereto pursuant to
this Agreement shall be in writing and shall be delivered as follows:
(i)
if to Holder, to:
ERP2
Holdings, LLC
c/o
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Board
of Managers
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
with
a
copy to:
Stroock
& Stroock & ▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
(ii)
if
to the Company, to:
▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇.
▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Such
addresses and facsimile numbers may
be changed, from time to time, by means of a notice given in the manner
provided in
this Section 6.1 and Section 6.2
6.2
Deemed
Delivery. All notices,
requests
and approvals required by this Warrant shall be in writing and shall be
conclusively deemed to be given (i) when hand-delivered to the other party,
(ii)
when received if sent by facsimile at the address and number set forth above;
provided that notices given by facsimile shall not be effective, unless either
(a) a duplicate copy of such facsimile notice is promptly given by depositing
the same in the mail, postage prepaid and addressed to the party as set forth
below or (b) the receiving party delivers a written confirmation of receipt
for
such notice by any other method permitted under this paragraph; and further
provided that any notice given by facsimile received after 5:00 p.m.
(recipient’s time) or on a non-business day shall be deemed received on the next
business day; (iii) five (5) business days after deposit in the United States
mail, certified, return receipt requested, postage prepaid, and addressed to
the
party as set forth below; or (iv) the next business day after deposit with
an
international overnight delivery service, postage prepaid, addressed to the
party as set forth below with next business day delivery guaranteed; provided
that the sending party receives confirmation of delivery from the delivery
service provider.
6.3
No
Rights
as Shareholder; Limitation of Liability. This Warrant shall not
entitle the Holder to any of the rights of a shareholder of the Company except
upon exercise in accordance with the terms hereof. No provision hereof, in
the absence of affirmative action by the Holder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the Warrant Price hereunder
or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
6.4
Governing
Law. This Warrant shall be governed by and construed in accordance
with the laws of the State of California as applied to agreements among
California residents made and to be performed entirely within the State of
California, without giving effect to the conflict of law principles
thereof.
6.5
Binding
Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition
of
all or substantially all of the Company’s assets and/or securities. All of
the obligations of the Company relating to the Shares issuable upon the exercise
of this Warrant shall survive the exercise and termination of this
Warrant. All of the covenants and agreements of the Company shall inure to
the benefit of the successors and assigns of the Holder.
6.6
Waiver,
Amendments and Headings. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by both parties (either generally or in a particular instance and
either retroactively or prospectively). The headings in this Warrant are
for purposes of reference only and shall not affect the meaning or construction
of any of the provisions hereof.
6.7
Jurisdiction.
Each of the parties irrevocably agrees that any and all suits or proceedings
based on or arising under this Agreement may be brought only in and shall be
resolved in the federal or state courts located in the City of Los Angeles,
California and consents to the jurisdiction of such courts for such
purpose. Each of the parties irrevocably waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding in any such
court. Each of the parties further agrees that service of process upon
such party mailed by first class mail to the address set forth in Section 6.1
shall be deemed in every respect effective service of process upon such party
in
any such suit or proceeding. Nothing herein shall affect the right of a
Holder to serve process in any other manner permitted by law. Each of the
parties agrees that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
6.8
Expenses.
Except as specifically provided herein, the Company shall pay all reasonable
fees, costs and expenses in connection with, and all taxes (other than income
taxes and stock transfer taxes) and other governmental charges relating to,
the
exercise, issuance, delivery and interpretation of the Warrant and the Shares
issuable upon exercise of the Warrant.
IN
WITNESS WHEREOF, the
Company has caused this Warrant to be signed by its duly authorized officer
this
14th day of January, 2008.
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COMPANY:
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By
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/s/
▇▇▇▇ ▇. Low
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Name: ▇▇▇▇
▇. Low
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Title:
Chief Financial Officer
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