Exhibit 10.2

 

FORM OF WARRANT

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

 

lustros, Inc.

 

Warrant To Purchase Common Stock

 

Warrant No.: 2013-A-1

 

Date of Issuance: November __, 2013 (“Issuance Date”)

 

Lustros, Inc., a Utah corporation (the “Company”), hereby certifies that, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, ______, the registered holder hereof or its permitted assigns (the
“Holder”), is entitled, subject to the terms set forth below, to purchase from
the Company, at the Exercise Price (as defined below) then in effect, upon
exercise of this Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement hereof, the
“Warrant”), at any time or times on or after the Issuance Date (the “Initial
Exercisability Date”), but not after 11:59 p.m., New York time, on the
Expiration Date (as defined below), _____1 (subject to adjustment as provided
herein) fully paid and non-assessable shares of Common Stock (as defined below)
(the “Warrant Shares”, and such number of Warrant Shares, the “Warrant Number”).
Except as otherwise defined herein, capitalized terms in this Warrant shall have
the meanings set forth in Section 12. This Warrant is one of the Warrants to
Purchase Common Stock (the “Warrants”) issued pursuant to Section 1 of that
certain Purchase Agreement, dated as of November __, 2013, by and among the
Company and the investors (the “Buyers”) referred to therein, as amended from
time to time (the “Purchase Agreement”).

 

 

___________

1 Warrant per Unit purchased.

 

 

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1.            EXERCISE OF WARRANT.

 

(a)                Mechanics of Exercise. Subject to the terms and conditions
hereof, this Warrant may be exercised by the Holder on any day on or after the
Initial Exercisability Date, in whole or in part, by delivery (whether via
facsimile or otherwise) of a written notice, in the form attached hereto as
Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant. Within one (1) day on which the NYSE is opened for trading for at least
four (4) consecutive hours (“Trading Day”) following an exercise of this Warrant
as aforesaid, the Holder shall deliver payment to the Company of an amount equal
to the Exercise Price in effect on the date of such exercise multiplied by the
number of Warrant Shares as to which this Warrant was so exercised (the
“Aggregate Exercise Price”) in cash or via wire transfer of immediately
available funds. The Holder shall not be required to deliver the original of
this Warrant in order to effect an exercise hereunder. Execution and delivery of
an Exercise Notice with respect to less than all of the Warrant Shares shall
have the same effect as cancellation of the original of this Warrant and
issuance of a new Warrant evidencing the right to purchase the remaining number
of Warrant Shares. Execution and delivery of an Exercise Notice for all of the
then-remaining Warrant Shares shall have the same effect as cancellation of the
original of this Warrant after delivery of the Warrant Shares in accordance with
the terms hereof. On or before the 3rd Trading Day following the date on which
the Company has received an Exercise Notice, the Company shall transmit by
facsimile an acknowledgment of confirmation of receipt of such Exercise Notice,
in the form attached hereto as Exhibit B, to the Holder and the Company’s
transfer agent (the “Transfer Agent”). On or before the 5th Trading Day
following the date on which the Company has received such Exercise Notice, the
Company shall issue and deliver to the Holder or, at the Holder’s instruction
pursuant to the Exercise Notice, the Holder’s agent or designee, in each case,
sent by reputable overnight courier to the address as specified in the
applicable Exercise Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise
Notice, the Holder shall be deemed for all corporate purposes to have become the
holder of record of the Warrant Shares with respect to which this Warrant has
been exercised. If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by
this Warrant submitted for exercise is greater than the number of Warrant Shares
being acquired upon an exercise, then, at the request of the Holder, the Company
shall as soon as practicable and in no event later than five (5) Business Days
after any exercise and at its own expense, issue and deliver to the Holder (or
its designee) a new Warrant (in accordance with Section 5(d)) representing the
right to purchase the number of Warrant Shares purchasable immediately prior to
such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised. No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number. The
Company shall pay any and all taxes and fees which may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant.
Notwithstanding the foregoing, the Company’s failure to deliver Warrant Shares
to the Holder on or prior to the second (2nd) Trading Day after the Company’s
receipt of the Aggregate Exercise Price shall not be deemed to be a breach of
this Warrant.

 

(b)               Exercise Price. For purposes of this Warrant, “Exercise Price”
means $0.25, subject to adjustment as provided herein.

 

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2.            ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. 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 2. If the Company, at any time on or after the date of the Purchase
Agreement, (i) pays a stock dividend on one or more classes of its then
outstanding shares of Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii)
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its then outstanding shares of Common Stock into a larger
number of shares or (iii) combines (by combination, reverse stock split or
otherwise) one or more classes of its then outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise 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 (i) 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 (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this paragraph occurs
during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.

 

3.            NONCIRCUMVENTION. The Company hereby covenants and agrees that the
Company will not, by amendment of its Certificate of Incorporation (as defined
in the Purchase Agreement), Bylaws (as defined in the Purchase Agreement) or
through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock upon the exercise of this Warrant, and
(iii) shall so long as any of the Warrants are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the exercise of the
Warrants, the maximum number of shares of Common Stock as shall from time to
time be necessary to effect the exercise of the Warrants then outstanding.

 

4.           WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, the Holder, solely in its capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or be deemed
the holder of share capital of the Company for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the Holder, solely in its
capacity as the Holder of this Warrant, any of the rights of a stockholder of
the Company or any right to vote, give or withhold consent to any corporate
action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to
the Holder of the Warrant Shares which it is then entitled to receive upon the
due exercise of this Warrant. In addition, nothing contained in this Warrant
shall be construed as imposing any liabilities on the Holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 4, the Company shall
provide the Holder with copies of the same notices and other information given
to the stockholders of the Company generally, contemporaneously with the giving
thereof to the stockholders.

 

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5.            REISSUANCE OF WARRANTS.

 

(a)                Transfer of Warrant. If this Warrant is to be transferred,
the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in
accordance with Section 5(d) below), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 5(d)) to the Holder representing the right to purchase the number
of Warrant Shares not being transferred.

 

(b)               Lost, Stolen or Mutilated Warrant. Upon receipt by the Company
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (as to which a written certification
and the indemnification contemplated below shall suffice as such evidence), and,
in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant (in accordance with Section 5(d)
below) representing the right to purchase the Warrant Shares then underlying
this Warrant.

 

(c)                Exchangeable for Multiple Warrants. This Warrant is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Warrant or Warrants (in accordance with Section 5(d)
below) representing in the aggregate the right to purchase the number of Warrant
Shares then underlying this Warrant, and each such new Warrant will represent
the right to purchase such portion of such Warrant Shares as is designated by
the Holder at the time of such surrender; provided, however, no warrants for
fractional shares of Common Stock shall be given.

 

(d)               Issuance of New Warrants. Whenever the Company is required to
issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i)
shall be of like tenor with this Warrant, (ii) shall represent, as indicated on
the face of such new Warrant, the right to purchase the Warrant Shares then
underlying this Warrant (or in the case of a new Warrant being issued pursuant
to this Section 5(d), the Warrant Shares designated by the Holder which, when
added to the number of shares of Common Stock underlying the other new Warrants
issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as
indicated on the face of such new Warrant which is the same as the Issuance
Date, and (iv) shall have the same rights and conditions as this Warrant.

 

 

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6.            NOTICES. Whenever notice is required to be given under this
Warrant, unless otherwise provided herein, such notice shall be given in
accordance with Section 9.4 of the Purchase Agreement. The Company shall provide
the Holder with prompt written notice of all actions taken pursuant to this
Warrant, including in reasonable detail a description of such action and the
reason therefor. To the extent that any notice provided hereunder constitutes,
or contains, material, non-public information regarding the Company or any of
its Subsidiaries, the Company shall simultaneously file such notice with the SEC
(as defined in the Purchase Agreement) pursuant to a Current Report on Form 8-K.
It is expressly understood and agreed that the time of execution specified by
the Holder in each Exercise Notice shall be definitive and may not be disputed
or challenged by the Company.

 

7.             AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Holder. No
waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.

 

8.             SEVERABILITY. If any provision of this Warrant is prohibited by
law or otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of
this Warrant so long as this Warrant as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

 

9.             GOVERNING LAW. This Warrant shall be governed by and construed
and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. The Company hereby irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York
located in New York County and the United States District Court for the Southern
District of New York, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall
be deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the
Company’s obligations to the Holder or to enforce a judgment or other court
ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR
ANY TRANSACTION CONTEMPLATED HEREBY.

 

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10.          CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly
drafted by the Company and the Holder and shall not be construed against any
Person as the drafter hereof. The headings of this Warrant are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Warrant. Terms used in this Warrant but defined in the other Transaction
Documents (as defined in the Purchase Agreement) shall have the meanings
ascribed to such terms on the Closing Date (as defined in the Purchase
Agreement) in such other Transaction Documents unless otherwise consented to in
writing by the Holder. All dollar amounts herein and in the other documents
executed in conjunction herewith are in U.S. dollars.

 

11.          TRANSFER. This Warrant may be offered for sale, sold, transferred
or assigned without the consent of the Company, except as may otherwise be
required by the Purchase Agreement.

 

12.          CERTAIN DEFINITIONS. For purposes of this Warrant, the following
terms shall have the following meanings:

 

(a)                “Business Day” means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

 

(b)               “Common Stock” means (i) the Company’s shares of common stock,
$0.001 par value per share, and (ii) any capital stock into which such common
stock shall have been changed or any share capital resulting from a
reclassification of such common stock.

 

(c)                “Expiration Date” means the date that is the third (3rd)
anniversary of the Initial Exercisability Date or, if such date falls on a day
other than a Business Day or on which trading does not take place on the
Principal Market (a “Holiday”), the next date that is not a Holiday.

 

(d)               “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity or a government or any department or agency
thereof.

 

13.          REPURCHASE RIGHT. Notwithstanding anything to the foregoing herein,
if at any time the volume weighted average price as reported on Bloomberg, LP on
the OTCQB or other principal market for the Company’s common stock for one share
of the Company’s common stock is more than $.50 (as adjusted for stock splits
and reverse splits) for a period of thirty (30) consecutive calendar days, the
Company, may, upon twenty (20) business days prior written notice, repurchase
this Warrant in whole or in part, whether or not the actual Warrant is tendered
to the Company, at a purchase price of $.001 per share represented by the
portion of the Warrant being repurchased, which payment must be made by the
Company to the Warrantholder no later than 5 PM Pacific standard time on the
15th business day following the date of tender of written notice by the Company
to the Warrant holder to repurchase such Warrant.

 

 

 

 

[signature page follows]

 

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock
to be duly executed as of the Issuance Date set out above.

 

 

  LUSTROS, Inc.                     By: /s/        Name:        Title:         
 

 

 

 

 

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EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK

 

LUSTROS, INC.

 

The undersigned holder hereby exercises the right to purchase _________________
of the shares of Common Stock (“Warrant Shares”) of Lustros, Inc., a Utah
corporation (the “Company”), evidenced by Warrant to Purchase Common Stock
No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

 

1.        Payment of Exercise Price. The Holder shall pay the Aggregate Exercise
Price in the sum of $___________________ to the Company in accordance with the
terms of the Warrant.

 

2.        Delivery of Warrant Shares. The Company shall deliver to Holder, or
its designee or agent as specified below, __________ Warrant Shares in
accordance with the terms of the Warrant. Delivery shall be made to Holder, or
for its benefit, to the following address:

 

                       

 

Date: _____________ __, ___

 

    Name of Registered Holder         By: /s/      Name:      Title:         

 

 

 

 

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EXHIBIT B

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges this Exercise Notice and hereby directs
______________ to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated _________, 20__, from the
Company and acknowledged and agreed to by _______________.

 

 

  LUSTROS, Inc.                     By: /s/        Name:        Title:         
 

 

 

 

 

 

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