Blue Sphere Corporation 8-K [blsp-8k_122815.htm]

Exhibit 10.3 

 

BLUE SPHERE CORPORATION

 

WARRANT

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT’), OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND MAY ONLY BE ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS
EXERCISE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT OR SUCH
SECURITIES UNDER THE ACT AND QUALIFICATION UNDER APPLICABLE STATE LAW WITHOUT AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER
FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”).

 

WARRANT NUMBER:   W-DEC-2015 -__ ISSUANCE DATE:   December 23, 2015

 

FOR VALUE RECEIVED, BLUE SPHERE CORPORATION, as of December 23, 2015 (the
“Issuance Date”) a Nevada corporation (the “Company”), hereby certifies that
____________, or its registered assigns (the “Warrant Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company ___________
shares (the “Warrant Shares”) of the Company’s common stock, $0.001 par value
per share (the “Common Stock”), exercisable at price per share of [$0.05/$0.075]
per share (the “Exercise Price”). This Warrant may be exercised any time after
issuance through and including the fifth (5th) anniversary of the Issuance Date
(the “Expiration Date”), subject to the following terms and conditions set out
in this Warrant.

 

1.             Registration of Warrant. The Company shall register this Warrant
upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Warrant Holder hereof from time to time.
The Company may deem and treat the registered Warrant Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Warrant Holder, and for all other purposes, and the Company
shall not be affected by notice to the contrary.

 

2.             Investment Representation. The Warrant Holder by accepting this
Warrant represents that the Warrant Holder is acquiring this Warrant for its own
account or the account of an affiliate for investment purposes and not with the
view to any offering or distribution and that the Warrant Holder will not sell
or otherwise dispose of this Warrant or the underlying Warrant Shares in
violation of applicable securities laws. The Warrant Holder acknowledges that
the certificates representing any Warrant Shares will bear a legend indicating
that they have not been registered under the Act and may not be sold by the
Warrant Holder except pursuant to an effective registration statement or
pursuant to an exemption from registration requirements of the Act and in
accordance with federal and state securities laws. If this Warrant was acquired
by the Warrant Holder pursuant to the exemption from the registration
requirements of the Act afforded by Regulation S thereunder, the Warrant Holder
acknowledges and covenants that this Warrant may not be exercised by or on
behalf of a Person during the one year distribution compliance period (as
defined in Regulation S) following the date hereof. “Person” means an
individual, partnership, firm, limited liability company, trust, joint venture,
association, corporation, or any other legal entity.

 

1

 

 

3.            Validity of Warrant and Issue of Shares. The Company represents
and warrants that this Warrant has been duly authorized and validly issued and
warrants and agrees that all of Common Stock that may be issued upon the
exercise of the rights represented by this Warrant will, when issued upon such
exercise, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issue thereof. The
Company further warrants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of Common Stock to
provide for the exercise of the rights represented by this Warrant.

 

4.            Registration of Transfers and Exchange of Warrants.

 

(a)             Subject to compliance with the legend set forth on the face of
this Warrant, the Company shall register the transfer of any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant with the Form of
Assignment attached hereto duly completed and signed, to the Company at the
office specified in or pursuant to Section 10. Upon any such registration or
transfer, a new warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Warrant Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of a Warrant Holder of a
Warrant.

 

(b)             This Warrant is exchangeable, upon the surrender hereof by the
Warrant Holder to the office of the Company specified in or pursuant to Section
10 for one or more New Warrants, evidencing in the aggregate the right to
purchase the number of Warrant Shares which may then be purchased hereunder. Any
such New Warrant will be dated the date of such exchange.

 

5.            Exercise of Warrants.

 

(a)             This Warrant shall be exercisable at any time and from time to
time from and after the Issuance Date and through and including the Expiration
Date, for such number of Warrant Shares as is indicated in the form of Election
to Purchase, which is attached hereto and incorporated herein as Exhibit A. If
less than all of the Warrant Shares which may be purchased under this Warrant
are exercised at any time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares for which no exercise has been evidenced by this Warrant. At 5:00
P.M., New York time on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value.

 

(b)             Exercise of this Warrant shall be made upon surrender of this
Warrant with an Election to Purchase in the form attached hereto (or attached to
such New Warrant), duly completed and signed to the Company, at its address set
forth in Section 10.

 

(c)             A “Date of Exercise” means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with an
Election to Purchase in the form attached hereto (or attached to such New
Warrant), appropriately completed and duly signed, and (ii) payment of the
Exercise Price for the number of Warrant Shares so indicated by the Warrant
Holder to be purchased, as set forth herein.

 

2

 

 

(d)             Payment upon exercise may be made at the written option of the
Warrant Holder either by cashless exercise, as set forth in Section 6, or in
cash, wire transfer or by certified or official bank check payable to the order
of the Company equal to the applicable aggregate purchase price, for the number
of Warrant Shares specified in the Election to Purchase (as such exercise number
shall be adjusted to reflect any adjustment in the total number of Warrant
Shares issuable to the Warrant Holder per the terms of this Warrant) and the
Warrant Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable Warrant Shares
determined as provided herein.

 

(e)             The Company shall promptly, but in no event later than ten (10)
business days after the Date of Exercise as defined herein, issue or cause to be
issued and cause to be delivered to or upon the written order of the Warrant
Holder and in such name or names as the Warrant Holder may designate (subject to
the restrictions on transfer described in the legend set forth on the face of
this Warrant), a certificate for the Warrant Shares issuable upon such exercise,
with such restrictive legend as required by the Act, as applicable. Any person
so designated by the Warrant Holder to receive Warrant Shares shall be deemed to
have become holder of record of such Warrant Shares as of the Date of Exercise
of this Warrant.

 

6.            Cashless Exercise.

 

(a)             If at any time prior to the Expiration Date there is not an
effective registration statement on file with the SEC covering the resale of the
Warrant Shares by the Warrant Holder, then at such time this Warrant may also be
exercised by means of a cashless exercise. In such event, the Holder shall
surrender this Warrant to the Company, together with a notice of cashless
exercise, and the Company shall issue to the Holder the number of Warrant Shares
determined as follows:

 

X = Y (A-B)/A       where:  

  X = The number of Warrant Shares to be issued to the Holder.         Y = The
number of Warrant Shares with respect to which this Warrant is being exercised.
        A = The average closing bid price of the Common Stock for the five (5)
trading days immediately prior to the Date of Exercise.         B = The Exercise
Price.

 

(b)            For purposes of Rule 144 of the Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Warrant Holder, and the
holding period for the Warrant Shares shall be deemed to have been commenced, on
the issue date. Notwithstanding anything in this Warrant to the contrary, the
Warrant Holder is limited in the amount of this Warrant it may exercise.

 

3

 

 

7.            Fractional Shares. The Company shall not be required to issue or
cause to be issued fractional Warrant Shares on the exercise of this Warrant.
The number of full Warrant Shares that shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrants
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 7, be issuable
on the exercise of this Warrant, the Company shall, at its option, (i) pay an
amount in cash equal to the Exercise Price multiplied by such fraction or (ii)
round the number of Warrant Shares issuable, up to the next whole number.

 

8.            Exercise Price Adjustments. The Exercise Price and number of
Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 8. If, at any time while this
Warrant is outstanding, the Company shall issue or cause to be issued rights or
warrants to acquire or otherwise sell or distribute shares of Common Stock for a
consideration per share less than the Exercise Price then, forthwith upon such
issue or sale, the Exercise Price shall be reduced to the price (calculated to
the nearest one hundredth of a cent) determined by multiplying the Exercise
Price in effect immediately prior thereto by a fraction, the numerator of which
shall be the sum of (i) the number of shares of Common Stock outstanding
immediately prior to such issuance, and (ii) the number of shares of Common
Stock which the aggregate consideration received (or to be received, assuming
exercise or conversion in full of such rights, warrants and convertible
securities) for the issuance of such additional shares of Common Stock would
purchase at such Exercise Price, and the denominator of which shall be the sum
of the number of shares of Common Stock outstanding immediately after the
issuance of such additional shares.

 

9.            No Registration; Compliance with Reporting Requirements. The
Company shall take all actions, including timely filing all reports and other
documents with the SEC, necessary for the Warrant Holder to, and will refrain
from taking any actions which would prevent the Warrant Holder from being able
to, sell or transfer the Warrant Shares (a) obtained by means of a cashless
exercise pursuant to Section 6 within six (6) months following the Issuance Date
or (b) otherwise obtained by exercise of this Warrant within six (6) months
following the Date of Exercise.

 

10.          Notice. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses (or to such other
addresses which such party shall subsequently designate in writing to the other
party):

 

      (a)             If to the Company:

 

________________________

________________________

________________________

 

(b)            If to the Warrant Holder, to the address set forth for notice in
the Subscription Agreement, dated as of the date hereof, between the Warrant
Holder and the Company.

 

4

 

  

11.          Miscellaneous.

 

(a)             This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. This
Warrant may be amended only in writing and signed by the Company and the Warrant
Holder.

 

(b)             Nothing in this Warrant shall be construed to give to any person
or corporation other than the Company and the Warrant Holder any legal or
equitable right, remedy or cause of action under this Warrant; this Warrant
shall be for the sole and exclusive benefit of the Company and the Warrant
Holder.

 

(c)             This Warrant shall not be transferable by the Warrant Holder and
shall be exercisable only by the Warrant Holder. Without the prior written
consent of the Company, the Warrant shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of the Warrant or of any
rights granted hereunder contrary to the provisions of this section, or the levy
of any attachment or similar process upon the Warrant or such rights, shall be
null and void.

 

(d)             The headings herein are for convenience only, do not constitute
a part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

 

(e)             In case any one or more of the provisions of this Warrant shall
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonably
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

 

(f)             The Warrant Holder shall not, by virtue hereof, be entitled to
any voting or other rights of a shareholder of the Company, either at law or
equity, and the rights of the Warrant Holder are limited to those expressed in
this Warrant.

 

(g)             This Warrant shall be governed by and construed in accordance
with the laws of the State of Nevada without regard to principles of conflicts
of laws.

 

(h)             The Company and the Warrant Holder shall submit all disputes
arising under this Warrant to arbitration in New York, New York before a single
arbitrator of the American Arbitration Association (the “AAA”). The arbitrator
shall be selected by application of the rules of the AAA, or by mutual agreement
of the parties, except that such arbitrator shall be an attorney admitted to
practice law in the State of New York. No party hereto will challenge the
jurisdiction or venue provisions as provided in this section. Nothing in this
section shall limit the Warrant Holder’s right to obtain an injunction for a
breach of this Agreement from a court of law. Any injunction obtained shall
remain in full force and effect until the arbitrator fully adjudicates the
dispute.

  

[Signature Page Follows]

 

5

 

 

IN WITNESS WHEREOF, the Company and Holder have caused this Warrant to be duly
executed by the authorized officer as of the date first above stated.

 

  THE COMPANY:           blue sphere corporation  

 

  By:     Name: Shlomi Palas     Title: Chief Executive Officer  

 

  WARRANT HOLDER:                 (entity name, if applicable}  

 

  By:       Name:       Title:    

  

[Signature Page to Warrant]

 

 

 

 

FORM OF ELECTION TO PURCHASE

(To be executed by the Warrant Holder to exercise the right to

purchase shares of Common Stock under the foregoing Warrant)

 

Blue Sphere Corporation

 

 

Re: Election to Purchase Shares of Common Stock Under the Warrant

 

Gentlemen:

 

In accordance with the Warrant enclosed with this Election to Purchase, the
undersigned hereby irrevocably elects to purchase _____________ shares of Common
Stock of Blue Sphere Corporation at an Exercise Price of [$0.05/$0.075], and
encloses herewith $____________ in cash, certified or official bank check(s),
which sum represents the aggregate price for the number of shares of Common
Stock to which this Election to Purchase relates, together with any applicable
taxes payable by the undersigned pursuant to the Warrant. Any capitalized terms
used but not defined in this Election to Purchase shall have the meaning
ascribed to them in the accompanying Warrant.

 

The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of:

 

  Name:               Taxpayer ID:               Address:                    

 

If the number of shares of Common Stock issuable upon this exercise shall not be
all of the shares of Common Stock which the undersigned is entitled to purchase
in accordance with the enclosed Warrant, the undersigned requests that a New
Warrant 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:

 

  Name:               Address:                    

 

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the “Securities Act”), or pursuant to an exemption from
registration under the Securities Act.

 

HOLDER:    

 

Name:                 By:           Title:    

      Dated: ,     

  

(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)