exv4w11






EXHIBIT 4.11



Final Form of Warrant



THIS COMMON STOCK PURCHASE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED IN VIOLATION OF
SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS COMMON STOCK PURCHASE
WARRANT.




Number of Shares of Common Stock: [_____]




Warrant No.                     



COMMON STOCK PURCHASE WARRANT



To Purchase Common Stock of

Energy Focus, Inc.



          This Is To Certify That [                    ], or registered assign (the “Holder”), is
entitled, at any time from the Issuance Date (as hereinafter defined) to the Expiration Date (as
hereinafter defined) to purchase from Energy Focus, Inc., a Delaware corporation (the “Company”),
[___(___)] shares of Common Stock (as hereinafter defined and subject to adjustment as
provided herein), in whole or in part, including fractional parts, at a purchase price of equal to
$0.01 (subject to adjustment as provided herein, the “Exercise Price”), all on the terms and
conditions and pursuant to the provisions hereinafter set forth.




          This Warrant is issued pursuant to, and the Holder is entitled to the benefits of, that
certain Warrant Acquisition Agreement dated as of March 30, 2010 by and between the Company and the
investor party thereto (the “Warrant Acquisition Agreement”). Capitalized terms used herein
without definition are used with the definitions assigned thereto in such Warrant Acquisition
Agreement.




          1. DEFINITIONS




          As used in this Common Stock Purchase Warrant (this “Warrant”), the following terms shall have
the respective meanings set forth below:




          “Business Day” shall mean any day that is not a Saturday or Sunday or a day on which banks in
New York City, New York are required or permitted to be closed in the City of New York.




          “Issuance Date” shall mean March 30, 2010.




          “Commission” shall mean the Securities and Exchange Commission or any other federal agency
then administering the Securities Act and other federal securities laws.







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          “Common Stock” shall mean (except where the context otherwise indicates) the Common Stock, par
value $0.0001 per share, of the Company as constituted on the Issuance Date, and any capital stock
into which such Common Stock may thereafter be changed, and shall also include (i) capital stock of
the Company of any other class (regardless of how denominated) issued to the holders of shares of
Common Stock upon any reclassification thereof which is also not preferred as to dividends or
assets over any other class of stock of the Company and which is not subject to redemption and (ii)
shares of common stock of any successor or acquiring Company received by or distributed to the
holders of Common Stock of the Company in the circumstances contemplated by Section 4.5.




          “Convertible Securities” shall mean options, evidences of indebtedness, shares of stock or
other securities which are convertible into or exchangeable, with or without payment of additional
consideration in cash or property, for shares of Common Stock, either immediately or upon the
occurrence of a specified date or a specified event.




          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor
federal statute, and the rules and regulations of the Commission thereunder, all as the same shall
be in effect from time to time.




          “Exercise Period” shall mean the period during which this Warrant is exercisable pursuant to
Section 2.1.




          “Expiration Date” shall mean the fifth anniversary hereof.




          “Fundamental Corporate Change” shall have the meaning set forth in Section 4.5.




          “Holder” shall mean the Person in whose name the Warrant or Warrant Shares set forth herein is
registered on the books of the Company maintained for such purpose.




          “Market Price” shall mean, on any date of determination, (i) the closing price of a share of
Common Stock on such day as reported on the principal Trading Market on which the Common Stock is
listed or traded, or (ii) if the Common Stock is not listed on a Trading Market, the closing bid
price for a share of Common Stock on such day in the over-the-counter market, as reported by the
OTC Bulletin Board, or (iii) if the Common Stock is not then listed or quoted on the OTC Bulletin
Board, the closing bid price for a share of Common Stock on such day in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar organization or agency
succeeding to its functions of reporting prices).




          “Other Property” shall have the meaning set forth in Section 4.5.




          “Person” shall mean any individual, sole proprietorship, partnership, joint venture, trust,
incorporated organization, association, Company, institution, public benefit Company, entity or
government (whether federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof).







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          “Securities Act” shall mean the Securities Act of 1933, as amended, or any successor federal
statute, and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.




          “Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii)
if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is traded in
the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is
not then quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices); provided, that in the
event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then the term “Trading Day” shall mean a Business Day.




          “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange,
the Nasdaq National Market, or the Nasdaq Bulletin Board on which the Common Stock is listed or
quoted for trading on the date in question.




          “Transfer” shall mean any disposition of any Warrant or Warrant Shares or of any interest in
either thereof, which would constitute a sale thereof within the meaning of the Securities Act.




          “Warrant Shares” shall mean the shares of Common Stock issued or issuable to the Holder of
this Warrant upon the exercise thereof.




          “Warrants” shall mean this Warrant and all warrants issued upon transfer, division or
combination of, or in substitution for, any thereof. All Warrants shall at all times be identical
as to terms and conditions and date, except as to the number of shares of Common Stock for which
they may be exercised.




          2. EXERCISE OF WARRANT




          2.1 Manner of Exercise




          From the Issuance Date and until 5:00 p.m., Eastern Standard Time, on the Expiration Date, the
Holder may exercise this Warrant, on any Business Day, for all or any part of the number of shares
of Common Stock purchasable hereunder, subject to the further restriction in the next paragraph.




          In order to exercise this Warrant, in whole or in part, the Holder shall surrender this
Warrant to the Company at its principal office at 32000 Aurora Road, Solon, Ohio 44139, or at the
office or agency designated by the Company pursuant to Section 12, together with a written notice
of the Holder’s election to exercise this Warrant, which notice shall specify the number of shares
of Common Stock to be purchased, and shall be accompanied by payment of the Exercise Price in cash
or wire transfer or cashier’s check drawn on a United States bank. Such notice shall be
substantially in the form of the subscription form appearing at the end of this Warrant as Exhibit
A, duly executed by the Holder or his agent or attorney. Upon receipt of the items referred to
above, the Company shall, as promptly as practicable, execute or cause to






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be executed and deliver or cause to be delivered to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share, as hereinafter provided. The stock
certificate or certificates so delivered shall be, to the extent possible, in such denomination or
denominations as the Holder shall request in the notice and shall be registered in the name of the
Holder or, subject to Section 9, such other name as shall be designated in the notice. This
Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed
to have been issued, and the Holder or any other Person so designated to be named therein shall be
deemed to have become the holder of record of such shares for all purposes, as of the date the
notice, together with the cash or check or wire transfer of funds and this Warrant is received by
the Company as described above and all taxes required to be paid by the Holder, if any, pursuant to
Section 2.2 prior to the issuance of such shares have been paid, provided that if the Warrant is
exercised in connection with a merger, reorganization or other Fundamental Corporate Change, such
exercise may be made conditional upon the consummation of such event. If this Warrant shall have
been exercised in part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased shares of Common Stock called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant, or, at the request of the
Holder, appropriate notation may be made on this Warrant and the same returned to the Holder.
Notwithstanding any provision herein to the contrary, the Company shall not be required to register
shares in the name of any Person who acquired this Warrant (or part hereof) or any Warrant Shares
otherwise than in accordance with this Warrant.




          2.2 Payment of Taxes and Charges




          All shares of Common Stock issuable upon the exercise of this Warrant pursuant to the terms
hereof shall be validly issued, fully paid and nonassessable, freely tradable and without any
preemptive rights. The Company shall pay all expenses in connection with, and all taxes and other
governmental charges that may be imposed with respect to, the issuance or delivery thereof, unless
such tax or charge is a tax on income imposed by law upon the Holder in connection with the
issuance of the Common Stock to a person other than the Holder, in which case such taxes or charges
shall be paid by the Holder.




          2.3 Fractional Shares




          The Company shall not be required to issue a fractional share of Common Stock upon exercise of
any Warrant. As to any fraction of a share which the Holder would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash adjustment in respect of such fraction in
an amount equal to the same fraction of the Market Price per share of Common Stock as of the date
of exercise of the Warrant giving rise to such fraction of a share.




          2.4 Cashless Exercise During Event




          Notwithstanding any other provision contained herein to the contrary, from and after the
six-month anniversary of the Closing Date, whenever an Event has occurred and is continuing and at
any time after the expiration of the Effectiveness Period, the Holder may elect to receive, without
the payment by the Holder of the aggregate Exercise Price in respect of the






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shares of Common Stock to be acquired, shares of Common Stock of equal value to the value of
this Warrant, or any specified portion hereof, by the surrender of this Warrant (or such portion of
this Warrant being so exercised) together with a subscription form in the form attached hereto as
Exhibit A, with appropriate modification to reflect such cashless exercise, duly executed, to the
Company. Thereupon, the Company shall issue to the Holder such number of fully paid, validly
issued and nonassessable shares of Common Stock as is computed using the following formula:




          




          where




          X = the number of shares of Common Stock to which the Holder is entitled upon such cashless
exercise;




          Y = the total number of shares of Common Stock covered by this Warrant for which the Holder
has surrendered purchase rights at such time for cashless exercise (including both shares to be
issued to the Holder and shares as to which the purchase rights are to be canceled as payment
therefor);




          A = the Market Price of one share of Common Stock as at the date the net issue election is
made; and




          B = the Warrant Price in effect under this Warrant at the time the net issue election is made.




          2.5 Buy-In




          If at any time when a Registration Statement is in effect or required to be in effect with
respect to the Warrant Shares, as provided for by the Securities Purchase Agreement, (a) a
certificate representing the Warrant Shares is not delivered to the Holder within three (3)
Business Days of the due exercise of this Warrant by the Holder and (b) prior to the time such
certificate is received by the Holder, the Holder, or any third party on behalf of the Holder or
for the Holder’s account, purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of shares represented by such certificate
(a “Buy-In”), then the Company shall pay in cash to the Holder (for costs incurred either directly
by such Holder or on behalf of a third party) the amount by which the total purchase price paid for
Common Stock as a result of the Buy-In (including brokerage commissions, if any) exceeds the
proceeds received by such Holder as a result of the sale to which such Buy-In relates. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In.







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          3. TRANSFER, DIVISION AND COMBINATION




          3.1 Transfer




          Subject to compliance with Section 9, transfer of this Warrant and all rights hereunder, in
whole or in part, shall be registered on the books of the Company to be maintained for such
purpose, upon surrender of this Warrant at the principal office of the Company referred to in
Section 2.1 or the office or agency designated by the Company pursuant to Section 12, together with
a written assignment of this Warrant substantially in the form of Exhibit B hereto duly executed by
the Holder or his agent or attorney and funds sufficient to pay any transfer taxes payable upon the
making of such transfer. Upon such surrender and, if required, such payment, the Company shall,
subject to Section 9, execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denomination specified in such instrument of assignment, and shall issue to
the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant
shall promptly be canceled. A Warrant, if properly assigned in compliance with Section 9, may be
exercised by a new Holder for the purchase of shares of Common Stock without having a new warrant
issued.




          3.2 Division and Combination




          Subject to Section 9, this Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office or agency of the Company, together with a written
notice specifying the names and denominations in which new Warrants are to be issued, signed by the
Holder or his agent or attorney. Subject to compliance with Sections 3.1 and 9, as to any transfer
which may be involved in such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.




          3.3 Expenses




          The Company shall prepare, issue and deliver at its own expense (other than transfer taxes)
the new Warrant or Warrants under this Section 3.




          3.4 Maintenance of Books




          The Company agrees to maintain, at its aforesaid office or agency, books for the registration
and the registration of transfers of the Warrants.




          4. ADJUSTMENTS




          The number of shares of Common Stock for which this Warrant is exercisable, or the price at
which such shares may be purchased upon exercise of this Warrant, shall be subject to adjustment
from time to time as set forth in this Section 4. The Company shall give the Holder notice of any
event described below which requires an adjustment pursuant to this Section 4 at the time of such
event.







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          4.1 Stock Dividends, Subdivisions and Combinations




          If at any time the Company shall:




          (a) declare or pay to the holders of its Common Stock a dividend payable in, or other
distribution of, shares of Common Stock or in Convertible Securities;




          (b) subdivide its outstanding shares of Common Stock into a larger number of shares of Common
Stock; or




          (c) combine its outstanding shares of Common Stock into a smaller number of shares of Common
Stock;



then (i) the number of shares of Common Stock for which this Warrant is exercisable immediately
after the occurrence of any such event shall be adjusted to equal the number of shares of Common
Stock which a record holder of the same number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the occurrence of such event would own or be entitled to receive
after the occurrence of such event, and (ii) the then-current Exercise Price shall be adjusted to
equal (A) the then-current Exercise Price multiplied by the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to the adjustment divided by (B) the number of
shares for which this Warrant is exercisable immediately after such adjustment.




          4.2 Certain Other Distributions




          If at any time the Company shall declare or pay to the holders of its Common Stock any
dividend or other distribution of:




          (a) cash;




          (b) any evidences of its indebtedness, any shares of its stock or any other securities or
property of any nature whatsoever (other than cash, Convertible Securities or additional shares of
Common Stock); any warrants or other rights to subscribe for or purchase any evidences of its
indebtedness, any shares of its stock or any other securities or property of any nature whatsoever
(other than cash, Convertible Securities or additional shares of Common Stock);




          then, upon exercise of this Warrant, the Holder shall be entitled to receive such dividend or
distribution as if the Holder had exercised this Warrant prior to the date of such dividend or
distribution. A reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of Common Stock and shares
of any other class of stock shall be deemed a distribution by the Company to the holders of its
Common Stock of such shares of such other class of stock within the meaning of this Section 4.2
and, if the outstanding shares of Common Stock shall be changed into a larger or smaller number of
shares of Common Stock as a part of such reclassification, such change shall be deemed a
subdivision or combination, as the case may be, of the outstanding shares of Common Stock within
the meaning of Section 4.1.







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          4.3 Dilutive Issuances




          If at any time after the Issuance Date the Company shall issue or sell shares of Common Stock
or Convertible Securities (other than (i) securities issued or issuable in Excluded Issuances or
(ii) shares of Common Stock issued as a result of a dividend or other distribution on the Common
Stock payable in Common Stock or (iii) a subdivision of outstanding shares of Common Stock),
without consideration or for a consideration per share less than $0.86, the Exercise Price shall be
reduced to a price (calculated to the nearest cent) (i) determined in accordance with the following
formula:




          




          where:





	 	P1 = 	 	 Applicable Exercise Price in effect
immediately prior to such new issue or sale.
	 
	 	Q1 = 	 	 Number of shares of Common Stock outstanding
plus the number of shares of Common Stock issuable upon conversion or
exercise of Convertible Securities outstanding immediately prior to
such new issue or sale.
	 
	 	P2 = 	 	 100% of the weighted average price per share
of Common Stock received or deemed by the Company upon such new issue
or sale.
	 
	 	Q2 = 	 	 Number of shares of Common Stock issued or
sold, or deemed to have been issued, in the subject transaction.





          For purposes of this Section 4.3, upon the sale or issuance of Convertible Securities, the
maximum number of shares of Common Stock issuable upon the exercise, conversion or exchange of such
Convertible Securities (as set forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment of such number) shall be deemed to be
issued as of the time of such issue or sale and the consideration deemed received for such shares
of Common Stock shall be the consideration actually received by the Company for the issue of such
Convertible Securities plus the minimum additional consideration to be received by the Company upon
the full exercise, conversion or exchange of such Convertible Securities. Insofar as any
consideration received, or to be received, by the Company consists of property other than cash,
such consideration shall be computed at the fair value thereof at the time of such issue or sale,
as determined in good faith by the Board.




          4.4 Other Provisions Applicable to Adjustments under this Section




          The following provisions shall be applicable to the making of adjustments of the number of
shares of Common Stock for which this Warrant is exercisable and the current Exercise Price
provided for in this Section 4:




          (a) When Adjustments to be Made. The adjustments required by this Section 4 shall be made
whenever and as often as any specified event requiring an adjustment shall occur. For the purpose
of any adjustment, any specified event shall be deemed to have occurred at the close of business on
the date of its occurrence.







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          (b) Fractional Interests. In computing adjustments under this Section 4, fractional
interests in Common Stock shall be taken into account to the nearest 1/10th of a share.




          (c) When Adjustment not Required. If the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the distribution to the holders
thereof, legally abandon its plan to pay or deliver such dividend, distribution, subscription or
purchase rights, then thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be rescinded and annulled.




          4.5 Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets




          In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or
merge with or into another Person (where the Company is not the survivor or where there is a change
in or distribution with respect to the Common Stock of the Company), or sell, convey, transfer or
otherwise dispose of all or substantially all its property, assets or business to another Person,
or effectuate a transaction or series of related transactions in which more than 50% of the voting
power of the Company is disposed of (each, a “Fundamental Corporate Change”) and, pursuant to the
terms of such Fundamental Corporate Change, shares of common stock of the successor or acquiring
Company, or any cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or in lieu of common
stock of the successor or acquiring Company (“Other Property”), are to be received by or
distributed to the holders of Common Stock, then the Holder shall have the right thereafter to
receive, upon exercise of the Warrant, such number of shares of common stock of the successor or
acquiring Company or of the Company, if it is the surviving Company, and Other Property as is
receivable upon or as a result of such Fundamental Corporate Change by a holder of the number of
shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental
Corporate Change. In case of any such Fundamental Corporate Change, this Warrant shall expire and
be of no further force and effect on the closing date of such Fundamental Corporate Change and, in
lieu of any other rights of the Holder hereunder, the Holder shall have the right to receive, with
within five Business Days of the closing of such Fundamental Corporate Change, cash in an amount
equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date
of such Fundamental Corporate Change. In the event the Company and the Holder are unable to agree
on the Black Scholes Value, the parties shall submit the matter to a mutually agreeable accounting
firm of regional or national stature for the purpose of making a binding determination of the Black
Scholes Value.




          4.6 Other Action Affecting Common Stock




          In case at any time or from time to time the Company shall take any action in respect of its
Common Stock, other than any action described in this Section 4, or any other event occurs, which
would have a materially adverse effect upon the rights of the Holder, the number of shares of
Common Stock and/or the purchase price thereof shall be adjusted in such






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manner as may be equitable in the circumstances, as determined in good faith by the Board of
Directors of the Company.




          4.7 Nasdaq Limitation; Par Value Limitation




          (a) Notwithstanding any other provision in Sections 4.3 or 4.6 to the contrary, if a
reduction in the Exercise Price pursuant to Sections 4.3 or 4.6 would require the Company to obtain
stockholder approval of the transactions contemplated by the Purchase Agreement pursuant to Nasdaq
Rule 5635 and such stockholder approval has not been obtained, (i) the Exercise Price shall be
reduced under Section 4.3, or may be reduced under Section 4.6, to the maximum extent that would
not require stockholder approval under such Rule, and (ii) the Company shall under Section 4.3, or
may under Section 4.6, use its commercially reasonable efforts to obtain such stockholder approval
as soon as reasonably practicable, including by calling a special meeting of stockholders to vote
on such Exercise Price adjustment. This provision shall not restrict the number of shares of
Common Stock which a Warrantholder may receive or beneficially own in order to determine the amount
of securities or other consideration that such Holder may receive in the event of a Fundamental
Corporate Change.




          (b) Notwithstanding anything herein to the contrary, the Company agrees not to enter into
any transaction which, by reason of any adjustment hereunder, would cause the Exercise Price to be
less than the par value per share of Common Stock.




          5. NOTICES TO THE HOLDER




          5.1 Notice of Adjustments




          Whenever the number of shares of Common Stock for which this Warrant is exercisable, or
whenever the price at which a share of such Common Stock may be purchased upon exercise of the
Warrants, shall be adjusted pursuant to Section 4, the Company shall forthwith prepare a
certificate to be executed by the chief financial officer of the Company setting forth, in
reasonable detail, the event requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which the Board of Directors of the Company
determined the fair value of any evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights referred to in Section 4.2),
specifying the number of shares of Common Stock for which this Warrant is exercisable and (if such
adjustment was made pursuant to Section 4.2 or 4.5) describing the number and kind of any other
shares of stock or Other Property for which this Warrant is exercisable, and any change in the
purchase price or prices thereof, after giving effect to such adjustment or change. The Company
shall promptly cause a signed copy of such certificate to be delivered to the Holder in accordance
with Section 14.2. The Company shall keep, along with the transfer register maintained in
accordance with Section 3.4, copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by the Holder or any prospective purchaser
of a Warrant designated by the Holder.




          5.2 Notice of Corporate Action




          If at any time:







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          (a) the Company shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or other distribution, or any right to subscribe for or
purchase any evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right; or




          (b) there shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or merger of the Company
with, or any sale, transfer or other disposition of all or substantially all the property, assets
or business of the Company to, another Company; or




          (c) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the
Company;



then, in any one or more of such cases, the Company shall give to Holder (i) at least 10 days’
prior written notice of the date on which a record date shall be selected for such dividend,
distribution or right or for determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or
winding up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days’ prior written notice of the date when the same shall take place. Such notice in accordance
with the foregoing clause also shall specify (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, the date on which the holders of Common
Stock shall be entitled to any such dividend, distribution or right, and the amount and character
thereof, and (ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other property deliverable upon
such reorganization, reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if
addressed to the Holder at the last address of the Holder appearing on the books of the Company and
delivered in accordance with Section 14.2.




          6. NO IMPAIRMENT




          The Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issuance or sale of securities or other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the Holder against impairment. Without limiting
the generality of the foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount payable therefor upon
such exercise immediately prior to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (c) use its best
efforts to obtain all such authorizations, exemptions or consents from any






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public regulatory body having jurisdiction thereof as may be necessary to enable the Company
to perform its obligations under this Warrant.




          Upon the request of the Holder, the Company will at any time during the period this Warrant is
outstanding acknowledge in writing, in form satisfactory to the Holder, the continuing validity of
this Warrant and the obligations of the Company hereunder.




          7. RESERVATION AND AUTHORIZATION OF COMMON STOCK




          From and after the Issuance Date, the Company shall at all times reserve and keep available
for issuance upon the exercise of Warrants such number of its authorized but unissued shares of
Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants. All
shares of Common Stock which shall be so issuable, when issued upon exercise of any Warrant and
payment therefor in accordance with the terms of such Warrant, shall be duly and validly issued and
fully paid and nonassessable and not subject to preemptive rights.




          Before taking any action which would cause an adjustment reducing the then-current Exercise
Price below the then par value, if any, of the shares of Common Stock issuable upon exercise of the
Warrants, the Company shall take any corporate action which may be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of such Common Stock at
such adjusted Exercise Price.




          Before taking any action which would result in an adjustment in the number of shares of Common
Stock for which this Warrant is exercisable or in the then-current Exercise Price, the Company
shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.




          8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS




          In the case of all dividends or other distributions by the Company to the holders of its
Common Stock with respect to which any provision of Section 4 refers to the taking of record of
such holders, the Company will in each case take such a record and will take such record as of the
close of business on a Business Day. The Company will not at any time, except upon dissolution,
liquidation or winding up of the Company, close its stock transfer books or Warrant transfer books
so as to result in preventing or delaying the exercise or transfer of any Warrant.




          9. RESTRICTIONS ON TRANSFERABILITY




          The Warrants and the Warrant Shares shall not be transferred, hypothecated or assigned before
satisfaction of the conditions specified in the legend affixed to the first page of this Warrant,
which conditions are intended, in part, to ensure compliance with the provisions of the Securities
Act with respect to the Transfer of any Warrant or any Warrant Shares. The Holder, by acceptance
of this Warrant, agrees to be bound by the provisions of this Section 9.







12









 








          10. LIMITATIONS ON EXERCISE.




          Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that
may be acquired by the Warrantholder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by such Warrantholder
and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be
aggregated with the Warrantholder’s for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), does not exceed 19.9% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This
provision shall not restrict the number of shares of Common Stock which a Warrantholder may receive
or beneficially own in order to determine the amount of securities or other consideration that such
Holder may receive in the event of a Fundamental Corporate Change.




          11. LOSS OR MUTILATION




          Upon receipt by the Company from the Holder of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of this Warrant and indemnity
reasonably satisfactory to it (it being understood that the written agreement of the Holder shall
be sufficient indemnity), and in case of mutilation upon surrender and cancellation hereof, the
Company will execute and deliver in lieu hereof a new Warrant of like tenor to the Holder;
provided, in the case of mutilation no indemnity shall be required if this Warrant in identifiable
form is surrendered to the Company for cancellation.




          12. OFFICE OF THE COMPANY




          As long as any of the Warrants remain outstanding, the Company shall maintain an office or
agency (which may be the principal executive offices of the Company) where the Warrants may be
presented for exercise, registration of transfer, division or combination as provided in this
Warrant.




          13. LIMITATION OF LIABILITY




          No provision hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no enumeration herein of the rights or privileges of the Holder hereof, shall
give rise to any liability of the Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or by creditors of
the Company. Nothing in the foregoing shall be construed in any manner to limit or deny the
liability of a Holder in any other capacity, including, without limitation, as a director of the
Company.







13









 








          14. MISCELLANEOUS




          14.1 Nonwaiver




          No course of dealing or any delay or failure to exercise any right hereunder on the part of
the Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights,
powers or remedies. No waiver by the Holder of any right hereunder on any one occasion shall
operate as a waiver of such right on any other occasion.




          14.2 Notice Generally




          Except as may be otherwise provided herein, any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a machine-generated
confirmation of successful transmission) at the facsimile number specified in this Section prior to
6:30 p.m. eastern time on a Business Day, (b) the next Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Business Day or later than 6:30 p.m. eastern time on any
Business Day, (c) the Business Day following the date of transmission, if sent by a nationally
recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and communications shall be the same as
provided in the Warrant Acquisition Agreement; or such other address as may be designated in
writing hereafter, in the same manner, by such addressee.




          14.3 Remedies




          The Holder in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights under Section 2 of this
Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of Section 2 of this Warrant and hereby
agrees to waive the defense in any action for specific performance that a remedy at law would be
adequate.




          14.4 Successors and Assigns




          Subject to the provisions of Sections 3.1 and 9, this Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company and the successors
and assigns of the Holder. The provisions of this Warrant are intended to be for the benefit of
all Holders from time to time of this Warrant and, with respect to Section 9 hereof, the holders of
Warrant Shares, and shall be enforceable by any such holder or the holder of Warrant Shares.




          14.5 Amendment




          This Warrant may be modified or amended or the provisions hereof waived with the written
consent of the Company and the Holder.







14









 








          14.6 Severability




          Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Warrant shall be prohibited
by or invalid under applicable law, such provision shall only be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Warrant.




          14.7 Headings




          The headings used in this Warrant are for the convenience of reference only and shall not, for
any purpose, be deemed a part of this Warrant.




          14.8 Governing Law




          This Warrant shall be governed by the laws of the State of Delaware, without regard to the
provisions thereof relating to conflicts of law.




          14.9 Disputes




          In the case of a dispute as to the determination of the Exercise Price or the arithmetic
calculation of the securities or other property deliverable upon exercise of this Warrant, the
Company shall promptly issue and deliver to the Holder the securities or other properties that are
not in dispute.




          In Witness Whereof, the Company has caused this Warrant to be duly executed by the
undersigned, thereunto duly authorized, as of the date written below.



Dated: March 30, 2010




	 	 	 	 	 
	 	Energy Focus, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	Nicholas G. Berchtold 	 
	 	 	Its: Vice President of Finance and

       Chief Financial Officer 	 
	 



15








 




EXHIBIT A


SUBSCRIPTION FORM


[To be executed only upon exercise of Warrant]


          The undersigned registered owner of this Warrant irrevocably exercises this Warrant for the
purchase of                      shares of Common Stock of Energy Focus, Inc. and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this Warrant and requests
that certificates for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to



 



whose address is



 




and, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as
provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares
of Common Stock issuable hereunder be delivered to the undersigned.



	 	 	 	 	 
	 
	 
	 	 

(Name of Registered Owner)
	 	 
	 
	 	 	 	 
	 
	 
	 	 

(Signature of Registered Owner)	 	 
	 
	 	 	 	 
	 
	 
	 	 

(Street Address)	 	 
	 
	 	 	 	 
	 
	 
	 	 

(City)     (State)      (Zip Code)
	 	 
	 
	 	 	 	 
	 
	 	Notice: The signature on this subscription must
correspond with the name as written upon the face
of the within Warrant in every particular,
without alteration or enlargement or any change
whatsoever.	 	 





A-1








 




EXHIBIT B


ASSIGNMENT FORM


          For Value Received the undersigned registered owner of this Warrant hereby sells,
assigns and transfers unto the Assignee named below all of the rights of the undersigned under this
Warrant, with respect to the number of shares of Common Stock set forth below:



	 	 	 
	 	 	No. of Shares of
	Name and Address of Assignee	 	Common Stock
	 
	 
	 	 





and does hereby irrevocably constitute and appoint



 




attorney-in-fact to register such transfer on the books of Energy Focus, Inc. maintained for the
purpose, with full power of substitution in the premises.


Dated:                     



	 	 	 	 	 
	 
	 	 
	 	 
	 
	 	(Name of Registered Owner)	 	 
	 
	 	 	 	 
	 
	 
	 	 

(Signature of Registered Owner)	 	 
	 
	 	 	 	 
	 
	 	Notice: The signature on this assignment must
correspond with the name as written upon the face
of the within Warrant in every particular,
without alteration or enlargement or any change
whatsoever.	 	 





B-1