Blue Sphere Corporation 8-K [blsp-8k_070716.htm]

Exhibit 10.2

 

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-JUL-2016-[XXX] ISSUANCE DATE: July __, 2016

 

 

FOR VALUE RECEIVED, BLUE SPHERE CORPORATION, as of July __, 2016 (the “Issuance
Date”) a Nevada corporation (the “Company”), hereby certifies that the entity
defined in the signature block hereto under “Warrant Holder”, or their
registered assigns (the “Warrant Holder”), is entitled, subject to the terms set
forth below, to purchase from the Company such number of shares (the “Warrant
Shares”) of the Company’s common stock, $0.001 par value per share (“Common
Stock”) as defined in the signature block, exercisable at [eleven cents US (USD
$0.11)] per share (the “Exercise Price”), subject to adjustment hereunder. This
Warrant may be exercised any time after issuance through and including the five
(5) year 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.

 

  

 

 

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 shares 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 five
(5) 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. If no such
restrictive legend is applicable, upon request of the Warrant Holder, the
Warrant Shares will be recorded by book entry with the Company’s transfer agent.
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 after six (6) months following the Issuance
Date and 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 price of 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.

 

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.

 

 3 

 

 

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 any rights
or warrants to acquire, or any securities, convertible or exchangeable for
shares of Common Stock for a consideration per share less than the Exercise
Price then, forthwith upon such issue, 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 in full of such warrants, if applicable) 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. This Section 8 shall not apply to the issuance of any rights,
options or Common Stock made by the Company to an employee, officer, director or
consultant to the Company, whether under a plan of equity compensation or
otherwise.

 

9.              Adjustment for Certain Events. The number, class, and price of
Warrant Shares for which this Warrant may be exercised are subject to adjustment
from time to time upon the happening of certain events as follows:

 

(a)                Subdivisions, Combinations and Other Issuances. If the
outstanding shares of Common Stock are divided into a greater number of shares,
by forward stock split or otherwise, or a dividend in stock is paid on the
Common Stock, then the number of shares of Warrant Shares for which the Warrant
is then exercisable will be proportionately increased and the Exercise Price
will be proportionately reduced. Conversely, if the outstanding shares of Common
Stock are combined into a smaller number of shares of Common Stock, by reverse
stock split or otherwise, then the number of Warrant Shares for which the
Warrant is then exercisable will be proportionately reduced and the Exercise
Price will be proportionately increased. The increases and reductions provided
for in this Section 9(a) will be made with the intent and, as nearly as
practicable, the effect that neither the percentage of the total equity of the
Company obtainable on exercise of the Warrants nor the price payable for such
percentage upon such exercise will be affected by any event described in this
Section 9(a).

(b)               Merger, Consolidation, Reclassification, Reorganization, Etc.
In case of any change in Common Stock through merger, consolidation,
reclassification, reorganization, partial or complete liquidation, purchase of
all or substantially all the assets of the Company, or other change in the
capital structure of the Company, then, as a condition of such change, lawful
and adequate provision will be made so that the Warrant Holder will have the
right thereafter to receive upon the exercise of the Warrant the kind and amount
of shares of stock or other securities or property to which the Warrant Holder
would have been entitled if, immediately prior to such event, the Warrant Holder
had held the number of Warrant Shares obtainable upon the exercise of the
Warrant. In any such case, appropriate adjustment will be made in the
application of the provisions set forth herein with respect to the rights and
interest thereafter of the Warrant Holder, to the end that the provisions set
forth herein will thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock deliverable upon the exercise of the Warrant.
The Company will not permit any change in its capital structure to occur unless
the issuer of the shares of stock or other securities to be received by the
Warrant Holder agrees to comply with the provisions of this Warrant.

 4 

 

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 email transmission if such transmission is confirmed, 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:

 

____________________

____________________

____________________

 

with a copy to:

 

____________________

____________________

____________________

 

 

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

 

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)                 Without the prior written consent of the Company, this
Warrant, or any of the rights granted hereunder, shall not be transferred,
assigned, pledged, hypothecated or otherwise disposed of (whether by operation
of law or otherwise) by the Warrant Holder, and shall not be subject to
execution, attachment or similar process, unless (i) an effective registration
statement is on file with the SEC covering the resale of the Warrant Shares by
the Warrant Holder, or (ii) the Warrant Shares are otherwise exempt from the
registration requirements under the Securities Act. Any such attempted transfer
or 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.

 

 5 

 

 

(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]

 

 6 

 

 

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:         By:
    Name:     Title:           Number of Warrants:          

 

[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 original Exercise Price of [USD $0.___]
per share, subject to adjustment under the terms and conditions of the Warrant,
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)

 

  

 

 

NOTICE OF CASHLESS EXERCISE

 

 

 

  

TO: Blue Sphere Corporation

[Address]

Attn:  Secretary

 

 

The undersigned hereby elects to purchase ______________ shares (the “Shares”)
of the Common Stock of Blue Sphere Corporation, at an original Exercise Price of
[USD $0.___] per share, pursuant to the cashless exercise provision of Section 6
of the attached Warrant.

 

Please issue a certificate or certificates representing the Shares in the name
of the undersigned or in such other name as is specified below:

 

  Name:       Taxpayer ID:       Address:    

 

 

The undersigned represents that the undersigned is an “accredited investor,” and
that the Shares are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares.

 

HOLDER:

 

Name:                       By:       Title:       Dated:   ,