Unassociated Document


    
      EXHIBIT 4.1

    

     

    
      WARRANT

       

      
        	
                PIONEER
      POWER SOLUTIONS, INC.

              
	 
      
	
                No.
      4

              	 
      	
                1,000,000
      Shares

              
	
                Date
      of Issuance: April 30, 2010

              	 
      	 
      


      

      


      WARRANT TO PURCHASE COMMON
STOCK

       

      VOID
AFTER 5:30 P.M., EASTERN

       

      TIME, ON
THE EXPIRATION DATE

       

      THIS
WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH
THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

       

      FOR VALUE RECEIVED, PIONEER POWER
SOLUTIONS, INC., a Delaware corporation (the “Company”), hereby
agrees to sell upon the terms and on the conditions hereinafter set forth, but
no later than 5:30 p.m., Eastern Time, on April 30, 2015 (the “Expiration Date”), to
THOMAS KLINK, or his
registered assigns (the “Holder”), under the
terms as hereinafter set forth, up to 1,000,000 fully paid and non-assessable
shares of Common Stock (as defined in Section 9) of the Company (the “Warrant Stock”), at a
purchase price of $3.25 per share (the “Warrant Price”),
pursuant to this warrant (this “Warrant”). The number
of shares of Warrant Stock to be so issued and the Warrant Price are subject to
adjustment in certain events as hereinafter set forth.

       

      1.  
Exercise of
Warrant.

       

      (a) The
Holder hereof may exercise this Warrant, in whole or in part, by the surrender
of this Warrant (with the Notice of Exercise attached hereto duly executed) at
the principal office of the Company, and by the payment to the Company of an
amount of consideration therefor equal to the Warrant Price in effect on the
date of such exercise multiplied by the number of shares of Warrant Stock with
respect to which this Warrant is then being exercised, payable by certified or
official bank check or by wire transfer to an account designated by the
Company.

       

       (b) This
Warrant may be exercised in whole or in part so long as any exercise in part
hereof would not involve the issuance of fractional shares of Warrant
Stock.  If exercised in part, the Company shall deliver to the Holder
a new Warrant, identical in form, in the name of the Holder, evidencing the
right to purchase the number of shares of Warrant Stock as to which this Warrant
has not been exercised, which new Warrant shall be signed by the Chairman, Chief
Executive Officer, President or any Vice President of the
Company.  The term Warrant as used herein shall include any subsequent
Warrant issued as provided herein.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (c) No
fractional shares of Warrant Stock will be issued in connection with any
exercise hereof, but in lieu of such fractional shares, the Company shall round
the number of shares to be issued upon exercise up to the nearest whole number
of shares.

       

      (d) In
the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the Warrant Stock so purchased, registered in
the name of the Holder, shall be delivered to the Holder within a reasonable
time after such rights shall have been so exercised. The person or entity in
whose name any certificate for the Warrant Stock is issued upon exercise of the
rights represented by this Warrant shall for all purposes be deemed to have
become the holder of record of such shares immediately prior to the close of
business on the date on which the Warrant was surrendered and payment of the
Warrant Price and any applicable taxes was made, irrespective of the date of
delivery of such certificate.  The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on exercise of this Warrant; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any issuance and delivery of shares of Warrant Stock to any Person (as defined
in Section 9) other than the Holder or with respect to any income tax due by the
Holder with respect to any shares of Warrant Stock.

       

      2.   Disposition of Warrant Stock
and Warrant.

       

      (a) The
Holder hereby acknowledges that this Warrant and any Warrant Stock purchased
pursuant hereto are, as of the date hereof, not registered: (i) under the
Securities Act on the ground that the issuance of this Warrant is exempt from
registration under Section 4(2) of the Securities Act as not involving any
public offering or (ii) under any applicable state securities law because the
issuance of this Warrant does not involve any public offering; and that the
Company’s reliance on the Section 4(2) exemption of the Securities Act and under
applicable state securities laws is predicated in part on the representations
hereby made to the Company by the Holder that it is acquiring this Warrant and
will acquire the Warrant Stock for investment for its own account, with no
present intention of dividing its participation with others or reselling or
otherwise distributing the same, subject, nevertheless, to any requirement of
law that the disposition of its property shall at all times be within its
control.

       

      The
Holder hereby agrees that it will not sell or transfer all or any part of this
Warrant and/or Warrant Stock, except pursuant to an effective registration
statement under the Securities Act, unless and until it shall first have given
notice to the Company describing such sale or transfer and furnished to the
Company either (i) an opinion of counsel reasonably satisfactory to the Company,
to the effect that the proposed sale or transfer may be made without
registration under the Securities Act and without registration or qualification
under any state law, or (ii) an interpretative letter from the Securities and
Exchange Commission to the effect that no enforcement action will be recommended
if the proposed sale or transfer is made without registration under the
Securities Act.

       

      
        
          
          

        

        
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      (b) If,
at the time of issuance of any Warrant Stock, no registration statement is in
effect with respect to such shares under applicable provisions of the Securities
Act, the Company may at its election require that the Holder provide the Company
with written reconfirmation of the Holder’s investment intent and that any stock
certificate delivered to the Holder of a surrendered Warrant (in connection with
an exercise) shall bear a legend reading substantially as follows:

       

      “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF
THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

       

      In
addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.

      


      (c) As a
material inducement to the Company to issue this Warrant and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Holder hereby agrees that during the period commencing as of the
date of issuance hereof (April 30, 2010) and ending eighteen (18) months
thereafter (i.e., on October 31, 2011) (the “Lock-Up Period”),
Holder shall not, without the prior written consent of the Company: (i) offer,
sell, offer to sell, contract to sell, hedge, pledge, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or sell (or announce any offer, sale, offer of
sale, contract of sale, hedge, pledge, sale of any option or contract to
purchase, purchase of any option or contract of sale, grant of any option, right
or warrant to purchase or other sale or disposition), or otherwise transfer or
dispose of (or enter into any transaction or device that is designed to, or
could be expected to, result in the disposition by any person at any time in the
future), any of the Warrant and/or Warrant Stock, or any securities into or for
which any such Warrant and/or Warrant Stock may be converted, exercised or
exchanged, whether by operation of law or otherwise; or (ii) enter into any swap
or other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of any of the
Warrant and/or Warrant Stock.

       

      
        
          
          

        

        
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      The
foregoing restriction shall preclude Holder from engaging in any hedging or
other transaction which is designed to, or which reasonably could be expected to
or result in a sale or disposition of the Warrant and/or Warrant Stock. Such
prohibited hedging or other transactions would include, without limitation, any
short sale or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any of the Warrant and/or
Warrant Stock, or with respect to any security that includes, relates to or
derives any significant part of its value from such Warrant and/or Warrant
Stock.

      


      3.   Reservation of
Shares.  The Company hereby agrees that at all times there
shall be reserved for issuance upon the exercise of this Warrant such number of
shares of its Common Stock as shall be required for issuance upon exercise of
this Warrant. The Company further agrees that all shares which may be issued
upon the exercise of the rights represented by this Warrant will be duly
authorized and will, upon issuance and against payment of the Warrant Price
therefor, be validly issued, fully paid and non assessable, free from all taxes,
liens, charges and preemptive rights with respect to the issuance thereof, other
than taxes, if any, in respect of any transfer occurring contemporaneously with
such issuance and other than transfer restrictions imposed by federal and state
securities laws.

       

      4.  
Exchange, Transfer or
Assignment of Warrant.  In the event that this Warrant is
transferred following expiration of the Lock-Up Period and otherwise in
accordance with Section 2 and other provisions hereof, then this Warrant may be
transferred on the books of the Company by the Holder hereof in person or by
duly authorized attorney, upon surrender of this Warrant at the principal office
of the Company, properly endorsed (by the Holder executing an assignment in the
form attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is exchangeable at
the principal office of the Company for Warrants to purchase the same aggregate
number of shares of Warrant Stock, each new Warrant to represent the right to
purchase such number of shares of Warrant Stock as the Holder hereof shall
designate at the time of such exchange.

       

      5.   Capital
Adjustments.  This Warrant is subject to the following further
provisions:

       

      (a) If
any recapitalization of the Company or reclassification of its Common Stock or
any merger or consolidation of the Company into or with a Person, or the sale or
transfer of all or substantially all of the Company’s assets or of any successor
corporation’s assets to any Person (any such Person being included within the
meaning of the term “successor corporation”) shall be effected, at any time
while this Warrant remains outstanding and unexpired, then, as a condition of
such recapitalization, reclassification, merger, consolidation, sale or
transfer, lawful and adequate provision shall be made whereby the Holder of this
Warrant thereafter shall have the right to receive upon the exercise hereof as
provided in Section 1 and in lieu of the shares of Common Stock immediately
theretofore issuable upon the exercise of this Warrant, such shares of capital
stock, securities or other property as may be issued or payable with respect to
or in exchange for a number of outstanding shares of Common Stock equal to the
number of shares of Common Stock immediately theretofore issuable upon the
exercise of this Warrant had such recapitalization, reclassification, merger,
consolidation, sale or transfer not taken place, and in each such case, the
terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after such
consummation.

        

      
        
          
          

        

        
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      (b) If
the Company at any time while this Warrant remains outstanding and unexpired
shall subdivide or combine its Common Stock, the number of shares of Warrant
Stock purchasable upon exercise of this Warrant and the Warrant Price shall be
proportionately adjusted.

       

      (c) Whenever
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
is adjusted, as herein provided, the Warrant Price payable upon the exercise of
this Warrant shall be adjusted to that price determined by multiplying the
Warrant Price immediately prior to such adjustment by a fraction (i) the
numerator of which shall be the number of shares of Warrant Stock purchasable
upon exercise of this Warrant immediately prior to such adjustment, and (ii) the
denominator of which shall be the number of shares of Warrant Stock purchasable
upon exercise of this Warrant immediately thereafter.

       

      (d) The
number of shares of Common Stock outstanding at any given time for purposes of
the adjustments set forth in this Section 5 shall exclude any shares then
directly or indirectly held in the treasury of the Company.

       

      (e) The
Company shall not be required to make any adjustment pursuant to this Section 5
if the amount of such adjustment would be less than one percent (1%) of the
Warrant Price in effect immediately before the event that would otherwise have
given rise to such adjustment.  In such case, however, any adjustment
that would otherwise have been required to be made shall be made at the time of
and together with the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to not less than one
percent (1%) of the Warrant Price in effect immediately before the event giving
rise to such next subsequent adjustment.

       

      (f) Following
each computation or readjustment as provided in this Section 5, the new adjusted
Warrant Price and number of shares of Warrant Stock purchasable upon exercise of
this Warrant shall remain in effect until a further computation or readjustment
thereof is required.

       

      6.   Loss, Theft, Destruction or
Mutilation.  Upon receipt by the Company of evidence
satisfactory to it, in the exercise of its reasonable discretion, of the
ownership and the loss, theft, destruction or mutilation of this Warrant and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company and, in the case of mutilation, upon surrender and cancellation
hereof, the Company will execute and deliver in lieu hereof, without expense to
the Holder, a new Warrant of like tenor dated the date hereof.

       

      
        
          
          

        

        
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      7.   Warrant Holder Not a
Stockholder.  The Holder of this Warrant, as such, shall not be
entitled by reason of this Warrant to any rights whatsoever as a stockholder of
the Company. 

      


      8.   Notices.  Any
notice required or contemplated by this Warrant shall be deemed to have been
duly given if transmitted by registered or certified mail, return receipt
requested, postage prepaid, or nationally recognized overnight delivery service,
to the Company at One Parker Plaza, 400
Kelby Street, 9th Floor, Fort Lee, NJ 07024, Attention: Chief Executive
Officer, or to the Holder at the name and address set forth in the Warrant
Register maintained by the Company.

       

      9.   Definitions. For the
purposes of this Warrant, the following terms have the following
meanings:

       

      “Common Stock” means
the common stock of the Company, par value $.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed into.

       

      “Person” shall mean
any natural person, corporation, division of a corporation, partnership, limited
liability company, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision
thereof

       

      “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

        

      10.
 Choice of
Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

       

      11.
 Jurisdiction and
Venue.  The Company and the Holder, by its acceptance hereof,
hereby agree that any dispute which may arise between them arising out of or in
connection with this Warrant shall be adjudicated before a court located in New
York, New York, and they hereby submit to the exclusive jurisdiction of the
federal and state courts of the State of New York located in New York City with
respect to any action or legal proceeding commenced by any party, and
irrevocably waive any objection they now or hereafter may have respecting the
venue of any such action or proceeding brought in such a court or respecting the
fact that such court is an inconvenient forum, relating to or arising out of
this Warrant or any acts or omissions relating to the sale of the securities
hereunder, and consent to the service of process in any such action or legal
proceeding by means of registered or certified mail, return receipt requested,
postage prepaid, in care of the address set forth herein or such other address
as either party shall furnish in writing to the other.

       

      [Signature
Page Follows]

       

      
        
          
          

        

        
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      IN
WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
behalf, in its corporate name and by its duly authorized officer, as of
this 30th day
of April, 2010.

       

      
        
          	 	
                  PIONEER
      POWER SOLUTIONS, INC.

                	 
	 	 	 	 
	 	 	 	 
	
                   

                	
                  By: 

                	/s/ Nathan
      J. Mazurek	 
	 	 	
                  Name: 

                	Nathan
      J. Mazurek	 
	 	 	
                  Title:
      

                	Chief
      Executive Officer	 
	 	 	 	 


        

      

       

      
        
          
          

        

        
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      NOTICE OF
EXERCISE

       

      WARRANT

       

      PIONEER
POWER SOLUTIONS, INC.

       

      The
undersigned ____________________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _______________ shares of Common Stock of
Pioneer Power Solutions, Inc. covered by the within Warrant.

       

       

      
        	
                Dated:  

              	 
      	 
      	
                Signature  

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Address

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      


      

      


      Number of
shares of Common Stock beneficially owned or deemed beneficially owned by the
Holder on the date of Exercise: ______________________

       

      The
undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended.

       

      
        
          
          

        

        
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      ASSIGNMENT

       

      FOR VALUE
RECEIVED, ____________________hereby sells, assigns and transfers unto
______________________ the within Warrant and all rights evidenced thereby and
does irrevocably constitute and appoint __________________________, attorney, to
transfer the said Warrant on the books of the within named
corporation.

       

       

      
        	
                Dated:  

              	 
      	 
      	
                Signature  

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Address

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      


      

       

       

      PARTIAL
ASSIGNMENT

       

           FOR
VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
___________________ the right to purchase _______________________ shares of
Warrant Stock evidenced by the within Warrant together with all rights therein,
and does irrevocably constitute and appoint _____________________, attorney, to
transfer that part of the said Warrant on the books of the within named
corporation.

       

       

      
        	
                Dated:  

              	 
      	 
      	
                Signature  

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Address

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      


      

      
 

      FOR
USE BY THE COMPANY ONLY:

       

      This
Warrant No. _______canceled (or transferred or exchanged) this _____ day of
________________, _____________ shares of Common Stock issued therefor in the
name of _______________, Warrant No. ________ issued for ______________ shares
of Common Stock in the name of ________________________.

    

     

     

    
      9