Exhibit 10.18


 


NEITHER THESE
SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THE SECURITIES REPRESENTED HEREBY MAY NOT BE
OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED
UNDER AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
NOTWITHSTANDING THE FOREGOING, THESE SECURITIES AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH
SECURITIES.


 


	
  Date: 

  	
  July 25,
  2005

  	
   

  	
   

  	
  Certificate
  # 

  	
   

  	
   

  



 


WORLDWATER & POWER CORP.


STOCK PURCHASE WARRANT


 


THIS CERTIFIES
THAT, for value received, The Water Fund, LP
or its registered assigns, is entitled to purchase from WORLDWATER & POWER
CORP., a Delaware corporation (the “Company”), at any time or from time to time
during the Exercise Period (as defined in Section 2 hereof), Four Hundred Sixteen Thousand Six Hundred
Sixty-seven (416,667) fully paid and nonassessable shares of the
Company’s common stock, (the “Common Stock”), at an exercise price per share
(the “Exercise Price”) of $0.22
(the “Warrant”).  The number of shares of
Common Stock purchasable hereunder (the “Warrant Shares”) and the Exercise
Price are subject to adjustment as provided in Section 4 hereof.


 


This Warrant
is subject to the following terms, provisions and conditions:


 


1.     (a) Manner of Exercise;
Issuance of Certificates.  Subject to
the provisions hereof, including, without limitation, the limitations contained
in Section 7 hereof, this Warrant may be exercised at any time during the
Exercise Period by the holder hereof, in whole or in part, by delivery of a
completed exercise agreement in the form attached hereto (the “Exercise
Agreement”), to the Company by 5 p.m. New Jersey time on any Business Day
at the Company’s principal executive offices (or such other office or agency of
the Company as it may designate by notice to the holder hereof) and upon
payment to the Company as provided in Section 1(b) below


 


1





















 


of the applicable Exercise Price for the Warrant Shares specified in
the Exercise Agreement.  The Warrant Shares
so purchased shall be deemed to be issued to the holder hereof or such holder’s
designee, as the record owner of such shares, as of the close of business on
the date on which this Warrant shall have been surrendered and the completed
Exercise Agreement shall have been delivered and payment shall have been made
for such shares as set forth above or, if such day is not a Business Day, on
the next succeeding Business Day.  The
Warrant Shares so purchased, representing the aggregate number of shares specified
in the Exercise Agreement, shall be delivered to the holder hereof within a
reasonable time, not exceeding five (5) Business Days, after this Warrant shall
have been so exercised (the “Delivery Period”). 
If the Company’s transfer agent is participating in the Depository Trust
Company (“DTC”) Fast Automated Securities Transfer program, and so long as the
certificates therefore do not require a legend and the holder is not obligated
to return such certificate for the placement of a legend thereon, the Company
shall cause its transfer agent to electronically transmit the Warrant Shares so
purchased to the holder by crediting the account of the holder or its nominee
with DTC through its Deposit Withdrawal Agent Commission system (“DTC Transfer”).  If the aforementioned conditions to a DTC
Transfer are not satisfied, the Company shall deliver to the holder physical
certificates representing the Warrant Shares so purchased.  Further, the holder may instruct the Company
to deliver to the holder physical certificates representing the Warrant Shares
so purchased in lieu of delivering such shares by way of DTC Transfer.  Any certificates so delivered shall be in
such denominations as may be requested by the holder hereof, shall be
registered in the name of such holder or such other name as shall be designated
by such holder and, following the date on which the Warrant Shares may be sold
by the holder pursuant to Rule 144(k) promulgated under the Securities Act
(or a successor rule), shall not bear any restrictive legend.  If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder a
new Warrant representing the number of shares with respect to which this
Warrant shall not then have been exercised.


 


(b)  Payment of Exercise Price.  The holder shall pay the Exercise Price in
immediately available funds.


 


2.     Period of Exercise.  This Warrant may be exercised at any time or
from time to time (an “Exercise Date”) during the four year period (the “Exercise
Period”) beginning on (a) the date hereof and ending (b) at 5:00 p.m., New
Jersey time, August 15, 2009.


 


3.     Certain Agreements of
the Company.  The Company hereby
covenants and agrees as follows:


 


(a)   Shares to be Fully Paid.  All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid and
nonassessable and free from all taxes, liens, claims and encumbrances (except
for restrictions existing under applicable securities laws).


 


(b)   Reservation of Shares.  During the Exercise Period, the Company shall
at all times have authorized, and reserved for the purpose of issuance upon
exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise in full of this Warrant (without giving effect to the
limitations on exercise set forth in Section 7 hereof).


 


2





















 


(c)   Listing.  The Company has secured the listing of the
shares of Common Stock issuable upon exercise of or otherwise pursuant to this
Warrant upon each national securities exchange or automated quotation system,
if any, upon which shares of Common Stock are then listed or become listed
(subject to official notice of issuance upon exercise of this Warrant) and
shall maintain, so long as any other shares of Common Stock shall be so listed,
such listing of all shares of Common Stock from time to time issuable upon the
exercise of or otherwise pursuant to this Warrant; and the Company shall so
list on each national securities exchange or automated quotation system, as the
case may be, and shall maintain such listing of, any other shares of capital
stock of the Company issuable upon the exercise of or otherwise pursuant to
this Warrant if and so long as any shares of the same class shall be listed on
such national securities exchange or automated quotation system.


 


(d)   Certain Actions
Prohibited.  The Company will not, by
amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issuance or sale of
securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed by it
hereunder, but will at all times in good faith assist in the carrying out of
all the provisions of this Warrant. 
Without limiting the generality of the foregoing, without consent of the
holder, the Company will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally authorize and
issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant, not subject to preemptive rights.


 


(e)   Successors and Assigns.  This Warrant shall be binding upon any entity
succeeding to the Company by merger, consolidation, or acquisition of all or
substantially all of the Company’s assets.


 


(f)    Blue Sky Laws.  The Company shall, on or before the date of
issuance of any Warrant Shares, take such actions as the Company shall
reasonably determine are necessary to qualify the Warrant Shares for, or obtain
exemption for the Warrant Shares for, sale to the holder of this Warrant upon
the exercise hereof under applicable securities or “Blue Sky” laws of the states
of the United States, and shall provide evidence of any such action so taken to
the holder of this Warrant prior to such date; provided, however, that the
Company shall not be required to qualify as a foreign corporation or file a
general consent to service of process in any such jurisdiction.


 


4.     Antidilution Provisions.  During the Exercise Period, the Exercise
Price and the number of Warrant Shares issuable upon the exercise of the
Warrants, shall be subject to adjustment from time to time as provided in this
Section 4.


 


In the event
that any adjustment of the Exercise Price as required herein results in a
fraction of a cent, such Exercise Price shall be rounded up or down to the
nearest cent; provided that, in no event shall the Exercise Price per share be
reduced below $0.01.


 


(a)   Subdivision or
Combination of Common Stock.  If the
Company, at any time during the Exercise Period, subdivides (by any stock
split, stock dividend, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a greater number of shares, then,
after the date of record for effecting such subdivision, the Exercise Price in
effect immediately prior to such subdivision will be proportionately
reduced.  If the Company, at any


 


3





















 


time during
the Exercise Period, combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into
a smaller number of shares, then, after the date of record for effecting such
combination, the Exercise Price in effect immediately prior to such combination
will be proportionately increased.


 


(b)   Adjustment for Issuance
of Common Stock at Less Than the Exercise Price.  If and whenever any Additional Common Stock
(as defined below) shall be issued by the Company (the “Common Stock Issue Date”)
for a consideration per share less than the Exercise Price, then in each such
case the Exercise Price shall be reduced to a new Exercise Price in an amount
equal to the price per share for the Additional Common Stock then issued, if
issued in connection with a sale of shares, or the value of the Additional
Common Stock then issued, as determined in accordance with generally accepted
accounting principles, if issued other than for cash, and the number of shares
issuable to the holder of the Warrant upon conversion shall be proportionately
increased; and, in the case of Additional Common Stock issued without
consideration, the Exercise Price shall be reduced in amount and the number of
shares issued upon conversion shall be increased in an amount so as to maintain
for the holder the right to convert the Warrant into Warrant Shares equal in
amount to the same percentage interest in the Common Stock of the Company as
existed for the holder immediately preceding the Common Stock Issue Date.  The term “Additional Common Stock” herein shall mean all shares of Common
Stock or securities convertible or exercisable into shares of Common Stock
hereafter issued by the Company (including Common Stock held in the treasury of
the Company), except (A) Common Stock issued upon the conversion of any of the
Warrants; or (B) Common Stock issuable upon exercise of employee or director
stock options;


 


(c)   Adjustment in Number of
Shares.  Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 4 other than a
Company Reduction as defined in Section 4(l), the number of shares of Common
Stock issuable upon exercise of this Warrant shall be increased or decreased to
equal the quotient obtained by dividing (i) the product of (A) the Exercise
Price in effect immediately prior to such adjustment, multiplied by (B) the
number of shares of Common Stock issuable upon exercise of this Warrant
immediately prior to such adjustment, by (ii) the adjusted Exercise Price.


 


(d)   Consolidation, Merger or
Sale.  In case of any consolidation
of the Company with, or merger of the Company into, any other entity, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company at any time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder of this Warrant will have the right to acquire and receive
upon exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities, cash or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such consolidation,
merger or sale or conveyance not taken place. 
In any such case, the Company will make appropriate provision to cause
the provisions of this Section 4 thereafter to be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant.  The
Company will not effect any consolidation, merger or sale or conveyance of all
or substantially all of its assets unless prior to the consummation thereof,
the successor entity (if other than the Company) assumes


 


4





















 


by written
instrument the obligations under this Warrant and the obligations to deliver to
the holder of this Warrant such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the holder may be entitled to
acquire.


 


(e)   Distribution of Assets.  In case the Company shall declare or make any
distribution of its assets (other than cash) (or rights to acquire its assets
(other than cash)) to all holders of Common Stock as a partial liquidating
dividend, stock repurchase, by way of return of capital or otherwise (including
any dividend or distribution to the Company’s stockholders of shares (or rights
to acquire shares) of capital stock of a subsidiary) (a “Distribution”), at any
time during the Exercise Period, then, upon exercise of this Warrant for the
purchase of any or all of the shares of Common Stock subject hereto, the holder
of this Warrant shall be entitled to receive its pro-rata amount of such assets
(or such rights) as would have been payable to the holder had such holder been
the holder of such shares of Common Stock on the record date for the
determination of stockholders entitled to such Distribution.


 


(f)    Notice of Adjustment.  Upon the occurrence of any event which
requires any adjustment of the Exercise Price then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares issuable upon exercise of this
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. 
Such calculation shall be certified by the chief financial officer of
the Company.


 


(g)   Minimum Adjustment of the
Exercise Price.  No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.


 


(h)   No Fractional Shares.  No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the closing bid price of a share of
Common Stock on the Principal Market on the date of such exercise.


 


(i)    Other Notices.  In case at any time:


 


(i)            the Company shall
declare any dividend upon the Common Stock payable in shares of stock of any
class or make any other distribution (other than dividends or distributions
payable in cash out of retained earnings consistent with the Company’s past
practices with respect to declaring dividends and making distributions) to the
holders of the Common Stock;


 


(ii)           the Company shall
offer for subscription pro rata to the holders of the Common Stock any
additional shares of stock of any class or other rights;


 


(iii)          there shall be any
capital reorganization of the Company, or reclassification of the Common Stock,
or consolidation or merger of the Company with or into, or sale of all or substantially
all of its assets to, another corporation or entity; or


 


5





















 


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


 


then, in each such case, the
Company shall give to the holder of this Warrant (a) notice of the date or
estimated date on which the books of the Company shall close or a record shall
be taken for determining the holders of Common Stock entitled to receive any
such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable estimate thereof by the Company)
when the same shall take place.  Such
notice shall also specify the date on which the holders of Common Stock shall
be entitled to receive such dividend, distribution, or subscription rights or
to exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be.  Such notice shall be given at least fifteen
(15) days prior to the record date or the date on which the Company’s books are
closed in respect thereto.  Failure to
give any such notice or any defect therein shall not affect the validity of the
proceedings referred to in clauses (i), (ii), (iii) and (iv) above.  Notwithstanding the foregoing, the Company
may publicly disclose the substance of any notice delivered hereunder prior to
delivery of such notice to the holder of this Warrant.


 


(j)    Certain Events. 
If, at any time during the Exercise Period, any event occurs of the type
contemplated by the adjustment provisions of this Section 4 but not expressly
provided for by such provisions, the Company will give notice of such event as
provided in Section 4(f) hereof, and the Company’s Board of Directors will make
an appropriate adjustment in the Exercise Price and the number of shares of
Common Stock acquirable upon exercise of this Warrant so that the rights of the
holder shall be neither enhanced nor diminished by such event.


 


(k)           Certain
Definitions.


 


(i)            “Business Day”
means any day, other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law,
regulation or executive order to close.


 


(ii)           “Common Stock,” for
purposes of this Section 4, includes the Common Stock and any additional class
of stock of the Company having no preference as to dividends or distributions
on liquidation, provided that the shares purchasable pursuant to this Warrant
shall include only Common Stock in respect of which this Warrant is
exercisable, or shares resulting from any subdivision or combination of such
Common Stock, or in the case of any reorganization, reclassification,
consolidation, merger, or sale of the character referred to in
Section 4(d) hereof, the stock or other securities or property provided
for in such Section.


 


(iii)          “Principal Market” means the Over-the-Counter Bulletin Board or, if the Common Stock is not
traded on the Over-the-Counter Bulletin
Board, then the principal securities exchange or trading market for the
Common Stock.


 


6





















 


5.     Issue Tax.  The issuance of certificates for Warrant
Shares upon the exercise of this Warrant shall be made without charge to the
holder of this Warrant or such shares for any issuance tax or other costs in
respect thereof, provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than the holder of this Warrant.


 


6.     No Rights or Liabilities
as a Stockholder.  This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
stockholder of the Company.  No provision
of this Warrant, in the absence of affirmative action by the holder hereof to
purchase Warrant Shares, and no mere enumeration herein of the rights or
privileges of the holder hereof, shall give rise to any liability of such
holder for the Exercise Price or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.


 


7.     Transfer, Exchange,
Redemption and Replacement of Warrant.


 


(a)   Restriction on Transfer.  This Warrant and the rights granted to the
holder hereof are transferable in whole or in part, at any one time, upon
surrender of this Warrant, together with a properly executed assignment in the
form attached hereto, at the office or agency of the Company referred to in
Section 7(e).  Until due presentment
for registration of transfer on the books of the Company, the Company may treat
the registered holder hereof as the owner and holder hereof for all purposes,
and the Company shall not be affected by any notice to the contrary.


 


(b)   Warrant Exchangeable for
Different Denominations.  This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the
office or agency of the Company referred to in Section 7(e) below, for new
Warrants of like tenor of different denominations representing in the aggregate
the right to purchase the number of shares of Common Stock which may be
purchased hereunder, each of such new Warrant to represent the right to
purchase such number of shares as shall be designated by the holder hereof at
the time of such surrender.


 


(c)   Replacement of Warrant.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.


 


(d)   Cancellation; Payment of
Expenses.  Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided
in this Section 7, this Warrant shall be promptly canceled by the Company.  The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses (other than legal expenses,
if any, incurred by the holder or transferees) and charges payable in
connection with the preparation, execution, and delivery of Warrants pursuant
to this Section 7.


 


(e)   Warrant Register.  The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the


 


7





















 


person in
whose name this Warrant has been issued, as well as the name and address of
each transferee and each prior owner of this Warrant.


 


(f)    Exercise or Transfer
Without Registration.  If, at the
time of the surrender of this Warrant in connection with any exercise,
transfer, or exchange of this Warrant, this Warrant (or, in the case of any
exercise, the Warrant Shares issuable hereunder), shall not be registered under
the Securities Act and under applicable state securities or Blue Sky laws, the
Company may require, as a condition of allowing such exercise, transfer, or
exchange, (i) that the holder or transferee of this Warrant, as the case may
be, furnish to the Company a written opinion of counsel (which opinion shall be
reasonably acceptable to the Company and shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect
that such exercise, transfer, or exchange may be made without registration
under the Securities Act and under applicable state securities or Blue Sky
laws, (ii) that the holder or transferee execute and deliver to the Company an
investment letter in form and substance reasonably acceptable to the Company
and (iii) that the transferee be an “accredited investor” as defined in Rule
501(a) promulgated under the Securities Act; provided, that no such opinion,
letter, or status as an “accredited investor” shall be required in connection
with a transfer pursuant to Rule 144 under the Securities Act.


 


(g)   Registration Rights.  The initial holder of this Warrant is
entitled to the benefit of certain registration rights in respect of the
Warrant Shares as provided in the Registration Rights Agreement dated as of the
date of this agreement, and any subsequent holder hereof may be entitled to
such rights.


 


8.     Notices.  Any notices required or permitted to be given
under the terms of this Warrant shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier or by
confirmed telecopy, and shall be effective five (5) days after being placed in
the mail, if mailed, or upon receipt or refusal of receipt, if delivered
personally or by courier, or by confirmed telecopy, in each case addressed to a
party.  The addresses for such
communications shall be:


 


	
  If to:

  	
   

  	
  Terrapin
  Partners, LLC

  
	
   

  	
   

  	
  Rockefeller
  Center

  
	
   

  	
   

  	
  620 Fifth
  Avenue

  
	
   

  	
   

  	
  New York, NY
  10020

  
	
   

  	
   

  	
  Attention:
  Robert Plotkin, Director

  
	
   

  	
   

  	
   

  
	
  If to:

  	
   

  	
  WorldWater
  & Power Corp.

  
	
   

  	
   

  	
  Pennington
  Business Park

  
	
   

  	
   

  	
  55 Route 31
  South

  
	
   

  	
   

  	
  Pennington,
  NJ 08534

  
	
   

  	
   

  	
  Facsimile:
  (609) 818-0720

  
	
   

  	
   

  	
  Attention:
  Quentin T. Kelly, Chairman & CEO Officer

  



 


8





















 


If to any
other holder, at such address as such holder shall have provided in writing to
the Company, or at such other address as such holder furnishes by notice given
in accordance with this Section 8.


 


9.     Governing Law; Venue;
Waiver Of Jury Trial.  All questions
concerning the construction, validity, enforcement and interpretation of this
warrant shall be governed by and construed and enforced in accordance with the
laws of the State of New Jersey.  Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting New Jersey, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
transaction documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper.  Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law.  The Company hereby
waives all rights to a trial by jury.


 


10.   Miscellaneous.


 


(a)   Except as provided in
Section 7 hereof, this Warrant and any provision hereof may only be amended by
an instrument in writing signed by the Company and the holder hereof.


 


(b)   The descriptive headings of
the several Sections of this Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of the provisions
hereof.


 


(c)   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 reasonable substitute therefore, and
upon so agreeing, shall incorporate such substitute provision in this Warrant.


 


(d)   Subject to the restrictions
on transfer set forth herein, this Warrant may be assigned by the holder.  This Warrant may not be assigned by the
Company. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns.  Subject to the preceding sentence, nothing in
this Warrant shall be construed to give to any Person other than the Company
and the holder any legal or equitable right, remedy or cause of action under
this Warrant.


 


(e)   The Company will not, by
amendment of its governing documents or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms


 


9





















 


and in the
taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder hereof against impairment.  Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any Warrant
Shares above the amount payable therefore on such exercise, (ii) will take all
such action as may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares on the exercise of this Warrant, and (iii) will not close its
stockholder books or records in any manner which interferes with the timely exercise
of this Warrant.


 


(f)           In addition to any
other rights available to a holder hereof, if the Company fails to deliver to
the holder hereof a certificate representing Warrant Shares by the fifth
Business Day after the date on which delivery of such certificate is required
by this Warrant, and if after such fifth Business Day the holder hereof
purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the holder hereof of the Warrant Shares
that the holder hereof anticipated receiving from the Company (a “Buy-In”),
then the Company shall, within three (3) Trading Days after the holder hereof
requests and in the discretion of the holder hereof, either (i) pay cash to the
holder hereof in an amount equal to the holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s obligation to
deliver such certificate (and to issue such Common Stock) shall terminate, or
(ii) promptly honor its obligation to deliver to the holder hereof a
certificate or certificates representing such Common Stock and pay cash to the
holder hereof in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock, times (B) the
Closing Price on the date of the event giving rise to the Company’s obligation
to deliver such certificate. 
Notwithstanding anything to the contrary, this Section 10(f) shall not
apply if the Company fails to timely perform due to the Transfer Agent’s
failure to timely deliver the certificates or otherwise effect the issuance in
accordance with the instructions from the Company.


 


(g)          The Company’s
obligations to issue and deliver Warrant Shares in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction
by the holder hereof to enforce the same, any waiver or consent with respect to
any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the holder hereof or any
other Person of any obligation to the Company or any violation or alleged
violation of law by the holder hereof or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the holder hereof in connection with the issuance of Warrant
Shares.  Nothing herein shall limit a
right of the holder hereof to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.


 


10





















 


IN WITNESS
WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.


 


	
   

  	
  WORLDWATER
  & POWER CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ QUENTIN T. KELLY

  	
   

  
	
   

  	
  Name:
  Quentin T. Kelly

  
	
   

  	
  Title:
  Chairman & CEO Officer

  



 


11





















 


FORM OF EXERCISE AGREEMENT


 


(To be Executed by the holder in order to Exercise the Warrant)


 


To:          WorldWater
& Power Corp.


Pennington
Business Park


55 Route 31
South


Pennington,
New Jersey 08534


Telecopier:   609-818-0720


Attn:  Secretary


 


The undersigned hereby
irrevocably exercises the right to purchase                        
shares of the Common Stock of WORLDWATER & POWER CORP., a corporation
organized under the laws of the State of Delaware (the “Company”), and tenders
herewith payment of the Exercise Price in full, in the amount of $                   ,
in cash, by certified bank check or by wire transfer for the account of the
Company or exercises this Warrant pursuant to the “cashless exercise”
provisions thereof; and


 


The
undersigned agrees not to offer, sell, transfer or otherwise dispose of any
Common Stock obtained on exercise of the Warrant, except under circumstances
that will not result in a violation of the Securities Act of 1933, as amended,
or any state securities laws.


 


The undersigned hereby requests that the
Company cause its transfer agent to issue and deliver to the undersigned
physical certificates representing such shares of Common Stock.  The physical certificates should be in the
name of:                                .  This Tax Identification Number                    
should be provided to the transfer agent.


 


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The undersigned requests that a Warrant
representing any unexercised portion hereof be issued, pursuant to the Warrant,
in the name of the Holder and delivered to the undersigned at the address set
forth below:


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature of
  Holder

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of
  Holder (Print)

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Phone:

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
  Email:

  	
   

  	
   

  
							



 


13





















 


FORM OF ASSIGNMENT


 


FOR VALUE
RECEIVED, the undersigned hereby sells, assigns, and transfers all the rights
of the undersigned under the attached Warrant, with respect to the number of
shares of Common Stock covered thereby issuable pursuant to the attached
Warrant set forth herein below, to:


 


	
  Name of Assignee

  	
   

  	
  Address

  	
   

  	
  No of
  Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


and hereby irrevocably
constitutes and appoints                                           
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.


 


 


	
  Dated:                
             ,
           

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In the
  presence of

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  Title of
  Signing Officer or Agent (if any):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Note:

  	
  The above
  signature should correspond exactly with the name on the face of the within
  Warrant.

  
								



 


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