Document:

Exhibit 10.4

NEITHER THIS OPTION NOR THE SECURITIES THAT MAY BE ACQUIRED UPON THE EXERCISE OF THIS OPTION: (A) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS; AND (B) MAY BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

UNLESS OTHERWISE PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY IN OR FROM BRITISH COLUMBIA UNLESS THE CONDITIONS IN SECTION 12(2) OF BC INSTRUMENT 51-509 ISSUERS QUOTED IN THE U.S. OVER-THE-COUNTER MARKET ARE MET.

BITZIO, INC.

OPTION TO PURCHASE COMMON STOCK

THIS CERTIFIES that, for value received, Gordon C. McDougall (the “Holder”), shall be entitled to acquire from BITZIO, INC., a Nevada corporation (the “Company”), subject to the terms and conditions contained herein, at any time during the period from 9:00 a.m. (Pacific Daylight Time) on July 1, 2011 through 5:00 p.m. (Pacific Daylight Time) on June 30, 2016 (the “Exercise Period”), 5,000,000 shares (individually, a “Option Share” and collectively, the “Option Shares”) of “Common Stock” (as hereinafter defined), at a purchase price of $0.25 per share (the “Exercise Price”), subject to adjustment from time to time pursuant to the provisions of Section 2.  For purposes of this Option, the term “Common Stock” shall mean the $0.001 par value common stock of the Company.

	
1.

	
Exercise of Options.

1.1           Method of Exercise.  The Option evidenced hereby may be exercised by the Holder, in whole or in part, by the delivery at the principal office of the Company (or at such other office or agency of the Company as it may designate by notice in writing to the Holder), during normal business hours, of this Option and the Form of Exercise attached hereto as Schedule A, duly completed and executed by the Holder, and payment (by wire transfer of immediately available United States federal funds or by bank certified, treasurer’s or cashier’s check payable to the order of the Company) of the aggregate Exercise Price for the Option Shares covered by such exercise.

  

 

  

1.2           Cashless Exercise.  In lieu of exercising the Option evidenced hereby pursuant to Section 1.1 above, the Holder shall have the right at any time to exercise this Option, in whole or in part, by requiring the Company to convert this Option (the “Conversion Right”), into Option Shares by surrendering this Option to the Company accompanied by the Form of Conversion Notice attached hereto as Schedule B, duly completed and executed by the Holder.  Upon exercise of the Conversion Right, the Company shall deliver to the Holder (without payment by the Holder of any cash in respect of the Exercise Price) that number of Option Shares which is equal to the amount obtained by dividing (x) an amount equal to the difference between (A) the aggregate Market Price for the Option Shares as to which the Conversion Right is then being exercised (the “Conversion Shares”), determined as of the exercise of the Conversion Right, minus (B) the aggregate Exercise Price then applicable to the Conversion Shares (such difference, the “Conversion Amount”), by (y) the Market Price of one share of Common Stock determined as of the exercise of the Conversion Right.  Any references in this Option to the “exercise” of this Option, and the use of the term “exercise” herein, shall be deemed to include, without limitation, any exercise of the Conversion Right.

1.3           Partial Exercise.  In the event this Option is not exercised in full, the total number of Option Shares shall be reduced by the number of Option Shares subject to such partial exercise, and the Company shall promptly issue and deliver to the Holder a new Option of like tenor in the name of the Holder, reflecting such adjusted number of Option Shares.

1.4           Delivery of Certificates.  The certificate for the Option Shares issued upon exercise of this Option by the Holder pursuant to Sections 1.1 or 1.2 shall be delivered to the Holder as soon as practicable after the exercise of this Option.  The certificate evidencing the Option Shares shall bear restrictive legends substantially in the form set forth below:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE: (A) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS; AND (B) MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT (INCLUDING ANY RULES OR REGULATIONS THEREUNDER) AND ANY APPLICABLE STATE SECURITIES LAWS.

UNLESS OTHERWISE PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY IN OR FROM BRITISH COLUMBIA UNLESS THE CONDITIONS IN SECTION 12(2) OF BC INSTRUMENT 51-509 ISSUERS QUOTED IN THE U.S. OVER-THE-COUNTER MARKET ARE MET.”

1.5           No Fractional Shares.  In lieu of issuing any fractional shares of Common Stock, the Company shall pay to the Holder cash in an amount equal to the same fraction of the Market Price of one share of Common Stock determined as of the exercise date of this Option.

2.           Adjustments to Exercise Price and Option Shares. The Exercise Price and the number of Option Shares issuable upon the exercise of the Option are subject to adjustment from time to time upon the occurrence of the events enumerated in this Section 2.

  

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2.1           Adjustment for Change in Capital Stock.  If the Company shall (i) declare a dividend on the Common Stock in shares of its capital stock (whether shares of Common Stock or of capital stock of any other class), (ii) split or subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares or (iv) engage in a recapitalization, reorganization, exchange of shares, spin-off or similar change in capitalization or event, this Option shall entitle the Holder to receive the aggregate number and kind of shares which, if this Option had been exercised immediately prior to such time, the Holder would have owned or have become entitled to receive by virtue of such change in capitalization or event at an Exercise Price adjusted for such change in the number of shares purchasable.  Such adjustment shall be made successively whenever any event listed above shall occur and, if a dividend which is declared is not paid, this Option shall again entitle the Holder to receive the number of shares of Common Stock as would have been the case had such dividend not been declared.  This Section 2.1 shall not apply to any transaction to which Section 2.2 is applicable.

 

2.2           Adjustment for Certain Transactions. If the Company consolidates or merges with or into, or sells, transfers or leases all or substantially all of its assets to, any Person, upon consummation of such transaction this Option shall automatically become exercisable (but only during the Exercise Period) for the kind and amount of securities, cash or other assets which the Holder of a Option would have been entitled to receive in connection with the consolidation, merger, sale, transfer or lease if the Holder had exercised the Option immediately before the effective date of such transaction. Concurrently with the consummation of such transaction, the Person formed by or surviving any such consolidation or merger (if other than the Company), or the Person to which such sale, transfer or lease shall have been made, shall enter into a supplemental Option so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section 2. The successor Person shall send to the Holder a notice describing the supplemental Option. If the issuer of securities deliverable upon exercise of the supplemental Option is an Affiliate (as defined in Section 13 hereof) of the formed, surviving, transferee or lessee Person, that issuer shall join in the supplemental Option.

2.3           Notices to Holder.

(a)           Upon any adjustment of this Option pursuant to this Section 2, the Company shall promptly thereafter (i) cause a certificate to be executed by the Company setting forth the Exercise Price after such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such calculations are based and setting forth the number of Option Shares issuable after such adjustment in the Exercise Price, upon exercise of the Option in full and payment of the adjusted Exercise Price, which certificate shall be conclusive evidence of the correctness of the matters set forth therein, and (ii) notify the Holder of such adjustments by sending it a copy of the certificate referenced in the preceding clause (i).  Where appropriate, such notice may be given in advance.

  

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(b)           The failure to give the notice required by this Section 2.3 or any defect therein shall not affect the legality or validity of the transaction to which it relates.

3.           Payment of Taxes.  The Company shall pay all documentary stamp taxes, if any, attributable to the initial issuance of Option Shares upon exercise of the Option.  The Company shall not, however, be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance and delivery of this Option, or any supplemental or replacement Option, or any certificate for Option Shares or other securities, and the Company shall not be required to issue or deliver any such supplemental or replacement Options or certificates unless and until the Person(s) requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

4.           Certain Covenants.

4.1           The Company shall at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued Common Stock or its authorized and issued Common Stock held in its treasury, for the purpose of enabling it to satisfy any obligation to issue Option Shares upon exercise of this Option, the maximum number of Option Shares which may then be deliverable upon the exercise in full of this Option.

4.2           The Company shall (i) use its best efforts to comply with the current public information requirements of Rule 144 (“Rule 144”) under the Securities Act and (ii) at all times Rule 144 is available for use by Holder, furnish the Holder upon request with all information within the possession of the Company, required for the preparation and filing of Form 144.

5.           Representations and Warranties.

5.1           The Company hereby represents and warrants to the Holder as follows:

(a)      This Option has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed by a duly authorized officer of the Company and constitutes a valid and binding obligation of the Company.

(b)      Neither the execution and delivery of this Option, nor the consummation of the transactions contemplated hereby, will violate or result in any violation of or be in conflict with or constitute a default under any term of the charter or bylaws of the Company or of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to the Company.

(c)      All Option Shares which may be issued upon the exercise of this Option, when issued in accordance with the terms hereof, shall be duly authorized, validly issued, fully paid and nonassessable.

  

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5.2           The Holder hereby represents and warrants to the Company (which shall be affirmed by the Holder on the date of the exercise of this Option) that (a) this Option and the Option Shares issuable upon exercise of this Option (collectively, the “Bitzio Securities”) are being acquired for the Holder’s own account, for investment purposes only, and not with a view to any distribution or resale thereof; and (b) the Holder is a sophisticated investor with knowledge and experience in financial matters, is capable of evaluating the merits and risks of an investment in the Bitzio Securities, has the capacity to protect its own interests in connection with the transactions contemplated by this Agreement, is able to bear the economic risk of its investment in the Bitzio Securities, is presently able to afford the complete loss of such investment, and is an “accredited investor” (as defined in Rule 501 of Regulation D promulgated under the Securities Act).

 

6.           Holder; No Rights as Shareholder.  The Holder shall be deemed the owner of this Option for all purposes.  The Holder shall not be entitled by virtue of ownership of this Option to any rights whatsoever as a shareholder of the Company with respect to the Common Stock issuable upon exercise of this Option, either at law or in equity, including, without limitation, the right to vote and to receive dividends and other distributions.

7.           Restrictions on Transfer.

7.1           The Holder may not Transfer this Option to any Person other than an Affiliate without the express prior written consent of the Company, and any Transfer in violation of this Section 7 shall be void and of no force or effect.   In the event that the Company consents to any Transfer requested by the Holder to any Person (a “Proposed Transferee”), such Transfer shall be conditioned upon the receipt of an opinion of counsel reasonably satisfactory to the Company that such Transfer to a Proposed Transferee would not result in a violation of the provisions of the Securities Act and applicable state securities laws.

7.2           Each Holder of this Option and any Option Shares issued upon exercise of this Option, by taking or holding the same, consents to and agrees to be bound by the provisions of this Section 7.

8.           Lost Option.  Upon receipt by the Company at its principal office of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Option, and in the case of any such loss, theft, or destruction, upon delivery of indemnity reasonably satisfactory to the Company or, in case of any such mutilation, upon surrender and cancellation of this Option, the Company will issue a new Option of like tenor in lieu of this Option.

9.           Expiration.  This Option, in all events, shall be wholly void and have no effect after 5:00 p.m. (Pacific Daylight Time) on June 30, 2016.

10.         Notices.  All notices, consents or other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered personally, or (b) one business day after being sent by a reputable overnight delivery service, postage or delivery charges prepaid (provided that confirmation of delivery is obtained from such service), to the parties at their respective addresses set forth below:

  

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If to the Company:

	
  

	
Bitzio, Inc.

4596 Russell Street

Salt Lake City, Utah, 84117

Telephone:       (801) 230-1807

Attention:         Chief Executive Officer

	
  

	
If to the Holder:

Gordon C. McDougall

1183 West 7th Avenue

Vancouver, BC, V6H 1B5, Canada

Telephone:        (604) 730-1130

Notices may also be given by prepaid telegram or facsimile and shall be effective on the date transmitted if confirmed within 24 hours thereafter by a signed original sent in the manner provided above.  Any party may change its address for notice and the address to which copies must be sent by giving notice of the new addresses to the other parties in accordance with this Section 10, except that any such change of address notice shall not be effective unless and until received.

11.        Severability.  In the event that one or more of the provisions of this Option shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Option, but this Option shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

12.        Governing Law.  This Option shall be governed by and construed in accordance with the laws of the State of Nevada applicable to agreements made and to be entirely performed within such State without giving effect to principles of conflicts of laws.

13.         Definitions.  As used in this Agreement:

(a)           “Affiliate” means any Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.  The terms “control,” “controlled by” and “under common control with” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as general partner, as a limited partner with a right to receive fifty percent (50%) or more of the income or assets of a limited partnership, by contract or otherwise.

(b)           “Market Price” means as of the date of determination, the last sale price for the Common Stock on the principal securities market or exchange on which the Common Stock is listed, quoted or admitted to trading averaged over a period of ten (10) consecutive trading days ending on the last trading day prior to the date of the exercise of this Option.  If at any time the Common Stock is not listed or quoted on any market or exchange, the Market Price of the Common Stock shall be deemed to be the higher of (i) the book value thereof, as determined in accordance with generally accepted accounting principles consistent with those then being applied by the Company by any firm of independent certified public accountants (which may be the regular auditors of the Company) of recognized national standing selected by the Board of Directors of the Company, as of the last day of the month ending within thirty-one (31) days preceding the date of the exercise of this Option, and (ii) the fair market value thereof as of a date which is within fifteen (15) days preceding the date of the exercise of this Option, as determined by an independent material brokerage firm selected by the Company and reasonably acceptable to the Holder.

  

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(c)           “Person” means any individual, sole proprietorship, joint venture, partnership, corporation, association, cooperative, trust, estate, governmental body, administrative agency, regulatory authority or other entity of any nature.

(d)           “Transfer” means to dispose of or part with all or any portion of an interest (legal or equitable) by any means, direct or indirect, absolute or conditional, voluntary or involuntary, including, but not limited to, by sale, assignment, disposition, court order, operation of law, dissolution, merger, consolidation, division, spin-off, dividend, distribution, equitable or other distribution after divorce or separation, settlement, exchange, waiver, abandonment, gift, alienation, bequest, pledge, hypothecation, encumbrance or disposal.

14.         Neutral Construction. The parties have negotiated this Option and all of the terms and conditions contained in this Option in good faith and at arms’ length, and each party has been represented by counsel during such negotiations.  No term, condition, or provision contained in this Agreement shall be construed against any party or in favor of any party because such party or such party’s counsel drafted such term, condition, or provision.  Furthermore, all terms, conditions, and provisions contained in this Option shall be construed and interpreted in a manner which is consistent with all other terms, conditions, and provisions contained in this Option.

15.         Counterparts.  This Option may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

IN WITNESS WHEREOF, Bitzio, Inc. and the Holder have caused this Option to be signed by a duly authorized officer and dated as of July 1, 2011.

	  	
BITZIO, INC.

	  	  	  
	  	
By:

	
/s/ Gordon C. McDougall

	  	
Name: 

	
Gordon C. McDougall

	  	
Title:

	
Chief Executive Officer

	  	  	  
	  	
/s/ Gordon C. McDougall

	  	
Gordon C. McDougall

  

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SCHEDULE A

FORM OF EXERCISE

(To be executed by the Holder)

The Holder hereby exercises its rights to subscribe for and purchase ________________ shares of common stock, $0.001 par value, (“Common Stock”), of Bitzio, Inc. evidenced by the attached Option, hereby affirms that the representations and warranties set forth in Section 5.2 of the attached Option are true and correct on the date hereof as if made on and as of the date hereof, and herewith makes payment of the Exercise Price of $ __________________ therefor in full.  Please issue a certificate in the name of the Holder for the Common Stock in accordance with the instructions given below.

	
Dated: 

	  	  	  
	  	  	  	
Signature of Holder

Instructions for registration of shares

Social Security or Employer Identification

	
Number of Holder:  

	
____________________

Address of Holder:

	  	  
	
Street

	  
	  	  
	  	  
	
City, State and Zip Code

	  

  

 

  

SCHEDULE B

FORM OF CONVERSION NOTICE

(To be executed by the Holder)

The Holder hereby exercises its rights, in accordance with Section 1.2 of the Option, to convert the Option represented thereby into _______________ shares of common stock, $0.001 par value, (the “Common Stock”), of Bitzio, Inc. evidenced by the attached Option and hereby affirms that the representations and warranties set forth in Section 5.2 of the attached Option are true and correct on the date hereof as if made on and as of the date hereof.  Please issue a certificate in the name of the Holder for the Common Stock in accordance with the instructions given below.

	
Dated: 

	  	  	  
	  	  	  	
Signature of Holder

Instructions for registration of shares

Social Security or Employer Identification

Number of Holder: ____________________

Address of Holder:

	  	  
	
Street

	  
	  	  
	  	  
	
City, State and Zip CodeExhibit 4.1

 

THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY STATE SECURITIES LAWS WHICH MAY BE APPLICABLE. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL BEFORE IT EFFECTS ANY TRANSFER ON ITS BOOKS AND RECORDS OF THIS WARRANT OR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF.

 

WARRANT TO PURCHASE

 

SHARES OF COMMON STOCK

 

OF

 

EUROSITE POWER INC.

 

Key Terms/Definitions:

	
“Company”:

	  	
EuroSite Power Inc., a Delaware corporation

	
“Holder”:

	  	
Nettlestone Enterprises Limited

	
“Common Stock”:

	  	
Common Stock, $.001 par value per share of the Company

	
Number of shares of Common Stock

	  	
400,000 shares

	
issuable on exercise of Warrant

	  	  
	
 (subject to adjustment):

	  	  
	
Price paid to purchase Warrant:

	  	
$0.00

	
“Exercise Price” per share of Common Stock (subject to adjustment):

	  	
$1.00

	
“Expiration Date”:

	
  

	
July 12, 2012

           THIS IS TO CERTIFY that, for value received and subject to the provisions hereinafter set forth, that the Holder, or permitted assigns, is entitled to purchase from the Company at any time on or after the date hereof and on or before the Expiration Date the number of shares of Common Stock set forth in the table above, subject to the terms, provisions and conditions hereinafter set forth, at the Exercise Price per share.

The Company shall give the Holder written notice of the pendency of the Expiration Date at least 10 days, but not more than 60 days, prior to the Expiration Date. If the Company fails to serve the Expiration Notice upon the Holder within the required time period, the Expiration Date shall be deemed to have been extended and this Warrant shall continue to be exercisable by the Holder until 10 days after the Company delivers a delinquent Expiration Notice to the Holder referencing the new, extended Expiration Date.

Tender of the price paid to purchase this Warrant shall be made by delivery of a personal or bank check payable to the Company or by wire transfer to the Company’s designated bank account, together with one executed copy of this Warrant.

SECTION 1.             EXERCISE OF WARRANT

 

This Warrant may be exercised in whole or in part at any time by the surrender of this Warrant (with the subscription form at the end hereof duly completed and executed) at the principal office of the Company and upon payment to the Company of the aggregate Exercise Price for the shares being purchased.  Any such payment shall be by check or by wire transfer payable to the order of the Company. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or sale of the Company, the exercise of any portion of this Warrant may, at the election of the Holder, be conditioned upon the consummation of the public offering or sale of the Company, in which case such exercise shall not be deemed to be effective concurrently with the consummation of such transaction.

  

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If this Warrant is exercised in respect of less than all of the shares of Common Stock at the time purchasable hereunder, the Holder shall be entitled to receive a new Warrant of like tenor to this Warrant covering the number of shares in respect of which this Warrant shall not have been exercised.

The Common Stock issuable upon the exercise of this Warrant shall be deemed to have been issued to the Holder at the time of such exercise, and the Holder shall be deemed for all purposes to have become the record holder of the Common Stock at such time.  Certificates for shares of the Common Stock purchased upon exercise or partial exercise of this Warrant shall be delivered by the Company to Holder within five business days after the date of exercise.

This Warrant and all rights and options hereunder shall expire on the Expiration Date (as the same may be modified as provided herein), and shall be wholly null and void to the extent this Warrant is not exercised before it expires.

SECTION 2.             RESERVATION

 

The Company will at all times prior to the Expiration Date reserve and keep available such number of authorized shares of its Common Stock solely for the purpose of issuance upon the exercise of the rights represented by this Warrant as herein provided for, as may at any time be issuable upon the exercise of this Warrant.

SECTION 3.             STOCK DIVIDENDS, ETC.

 

The per share Exercise Price and the number of shares deliverable hereunder shall be adjusted as hereinafter set forth:

Section 3.1.         Stock Dividends, Subdivisions and Combinations.  In case after the date hereof the Company shall:

(a)           take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, Common Stock, or

(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 the per share Exercise Price shall be adjusted, for the purpose of preserving the economic value of this Warrant, to the price determined by multiplying the per share Exercise Price in effect immediately prior to such subdivision or combination or the taking of a record of holders in respect of such payment or distribution, as the case may be (each, a “Triggering Event”) by a fraction (i) the numerator of which shall be the total number of outstanding shares of Common Stock of the Company immediately prior to such Triggering Event, and (ii) the denominator of which shall be the total number of outstanding shares of Common Stock of the Company immediately after such Triggering Event.

Section 3.2.         Adjustment of Number of Shares Purchasable.  Upon each adjustment of the per share Exercise Price, the number of shares of Common Stock subsequently purchasable hereunder shall be an amount equal to the quotient derived by dividing the aggregate Exercise Price in effect immediately before such adjustment by the per share Exercise Price in effect immediately following such adjustment or readjustment.

 

  

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Section 3.3.         Notice of Adjustments.  Whenever the per share Exercise Price or number of shares deliverable upon exercise of this Warrant shall be adjusted pursuant to this Section 3, the Company shall promptly prepare a certificate signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board of Directors of the Company made any determination hereunder), and shall promptly cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.

 

SECTION 4.             MERGERS, CONSOLIDATIONS, SALES

 

In the case of any consolidation or merger of the Company with another entity (regardless of whether the Company is the surviving entity), or the sale of all or substantially all of its assets to another entity, or any reorganization or reclassification of the Common Stock or other equity securities of the Company, then, as a condition of such consolidation, merger, sale, reorganization or reclassification, lawful and adequate provision shall be made whereby the Holder shall thereafter have the right to receive upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore purchasable hereunder, such shares of stock, securities or assets (including, without limitation, cash), if any, as may (by virtue of such consolidation, merger, sale, reorganization or reclassification) 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 so purchasable hereunder had such consolidation, merger, sale, reorganization or reclassification not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon exercise of this Warrant.  The Company shall not effect any such consolidation, merger or sale unless (a) the Company provides the holder hereof with not less than 10 days prior written notice of such consolidation, merger or sale (provided that the failure to give such notice shall not affect the validity of such corporate event), and (b) prior to the consummation thereof, the successor entity (if other than the Company) resulting from consolidation or merger or the entity purchasing such assets assumes, by written instrument, the obligation to deliver to each such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire.

 

SECTION 5.             DISSOLUTION OR LIQUIDATION

If the Company declares or pays a dividend upon the Common Stock payable otherwise than in cash out of earnings or earned surplus (determined in accordance with generally accepted accounting principles, consistently applied) except for a stock dividend payable in shares of Common Stock (a “Liquidating Dividend”), then the Company shall pay to the Holder at the time of payment thereof the Liquidating Dividend which would have been paid to such holder on the Common Stock had this Warrant been fully exercised immediately prior to the date on which a record is taken for such Liquidating Dividend, or, if no record is taken, the date as of which the record holders of Common Stock entitled to such dividends are to be determined.

 

SECTION 6.             NOTICE OF DIVIDENDS; PAYMENTS

 

If the Board of Directors of the Company shall declare any dividend or other distribution on any class of its Common Stock except by way of a stock dividend payable in Common Stock on its Common Stock, the Company shall mail notice thereof to the Holder not less than 10 days prior to the record date fixed for determining shareholders entitled to participate in such dividend or other distribution, and the Holder shall be entitled to receive, as a consent fee, cash or other property from the Company in an amount and of the same type (cash or property) equal to that which the holder would have been entitled to receive if the unexercised portion hereof had been exercised as of the record date of such dividend or distribution.

 

SECTION 7.             NO FRACTIONAL SHARES

 

No fractional shares shall be issued upon the exercise of this Warrant under any circumstances.

 

  

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SECTION 8.             FULLY PAID STOCK

 

The Company covenants and agrees to take all such actions necessary to ensure that the shares of stock represented by each and every certificate for its Common Stock to be delivered on the exercise of the purchase rights herein provided for shall, at the time of such delivery, be validly issued and outstanding and be fully paid and nonassessable.  In addition, the Company shall take all such actions as may be necessary to ensure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any trading market or securities exchange upon which shares of Common Stock may be listed.

 

SECTION 9.             CLOSING OF TRANSFER BOOKS

 

The right to exercise this Warrant shall not be suspended during any period that the stock transfer books of the Company for its Common Stock may be closed.  The Company shall not be required, however, to deliver certificates of its Common Stock upon such exercise while such books are duly closed for any purpose, but the Company may postpone the delivery of the certificates for the Common Stock until the opening of such books, and they shall, in such case, be delivered forthwith upon the opening thereof, or as soon as practicable thereafter.

 

SECTION 10.           RESTRICTIONS ON TRANSFERABILITY OF WARRANTS AND SHARES;

 COMPLIANCE WITH LAWS

 

Notwithstanding anything contained in this Warrant to the contrary, the terms and provisions of this Section 10 of this Warrant remain in full force and effect at all times and shall survive the Expiration Date.

 

Section 10.1.       In General.  This Warrant and the shares of Common Stock issued upon the exercise hereof shall not be transferable except upon the conditions hereinafter referred to, which conditions are intended to ensure compliance with the provisions of the Securities Act of 1933, as amended (or any similar Federal statute at the time in effect) (the “Securities Act”), and any applicable state securities laws in respect of the transfer of this Warrant or any such shares.  Any attempt to transfer such Warrant or such shares except in accordance with the terms hereof shall, to the extent legally enforceable, be void.

 

Section 10.2.       Restrictive Legends.  Each Warrant and each certificate for shares of Common Stock issued upon the exercise of any Warrant shall bear a customary restrictive legend relating to securities laws compliance until counsel for the Company determines that such legend is no longer legally required.  This Warrant and any shares of Common Stock issuable upon exercise hereof may be transferred only in accordance with the provisions of such legend, including the legend set forth on the first page hereof.

 

Section 10.3.       Accredited Investor.  The initial Holder of this Warrant represents that he is an a “accredited investor” as defined in the rules and regulations under the Securities Act.

 

SECTION 11.           PARTIAL EXERCISE AND PARTIAL ASSIGNMENT

 

If this Warrant is exercised in part only, the holder hereof shall be entitled to receive a new Warrant covering the number of shares in respect of which this Warrant shall not have been exercised as provided in Section 1.  If this Warrant is partially assigned, this Warrant shall be surrendered at the principal office of the Company (with the partial assignment form at the end hereof duly executed), and thereupon a new Warrant shall be issued to the Holder covering the number of shares not assigned and setting forth the proportionate aggregate Exercise Price applicable to such shares not assigned.  The assignee of such partial assignment of this Warrant shall also be entitled to receive a new Warrant of like tenor to this Warrant covering the number of shares so assigned and setting forth the proportionate aggregate Exercise Price applicable to such assigned shares. If this Warrant is assigned in full, this Warrant shall be surrendered at the principal office of the Company (with the full assignment form at the end hereof duly executed), and thereupon a new Warrant of like tenor to this Warrant shall be issued to the assignee covering the number of shares of Common Stock then issuable upon exercise of this Warrant.

 

  

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SECTION 12.           WARRANT DENOMINATIONS

 

Warrants are issuable or transferable in the denomination of 1,000 shares or any integral multiple thereof (as nearly as may be practicable and subject to required adjustments hereunder), and the Warrants of each denomination are interchangeable upon surrender thereof at the office of the Company for Warrants of other denominations, but aggregating the same number of shares as the Warrants so surrendered.  All Warrants will be dated the same date as this Warrant.

 

SECTION 13.           LOST, STOLEN WARRANTS, ETC.

 

In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company may issue a new Warrant of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of the mutilated Warrant, or in lieu of the Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft or destruction of such Warrant, and upon receipt of indemnity satisfactory to the Company. All warrants hereafter issued in exchange or substitution for this Warrant shall be substantially in the form hereof.

 

SECTION 14.           WARRANT HOLDER RIGHTS

 

This Warrant does not confer upon the holder hereof any right to vote or to consent or to receive notice as a shareholder of the Company, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the exercise hereof as hereinbefore provided.

 

SECTION 15.           SEVERABILITY

 

Should any part of this Warrant for any reason be declared invalid, such decision shall not affect the validity of any remaining portion, which remaining portion shall remain in force and effect as if this Warrant had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties hereto that they would have executed and accepted the remaining portion of this Warrant without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid.

 

SECTION 16.           GOVERNING LAW

 

This Warrant shall be governed by the laws of of the State of Delaware.

 

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

 

	
Dated: July 12, 2010

	  
	
EUROSITE POWER INC.

	  
	
By:

	
/s/ John N. Htasopoulos

	
John N. Hatsopoulos

	
Chairman of the Board

 

The initial Warrant Holder hereby confirms

the representations and covenants contained

in Section 10:

	
/s/ Michael Hayworth

	  
	
Director for and on behalf of

	  
	
Netttlestone Enterprises Limited

	  

  

5

  

SUBSCRIPTION

EUROSITE POWER INC.

 

           The undersigned,____________________________, pursuant to the provisions of the within Warrant, hereby elects to exercise said Warrant for ___________ shares of Common Stock of EuroSite Power Inc. covered by the within Warrant.

 

	
Printed Name of Holder:

	  
	  
	  
	
Signature:

	  
	  
	
Title (if signing on behalf of the Holder):

	  
	  
	  
	
Address:

	  
	  
	  
	  
	  
	  
	
Dated:

	  

  

6

  

FULL 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 Company.

 

	  
	
Assignor

	  
	
Dated:

	  

 

PARTIAL ASSIGNMENT

 

           FOR VALUE RECEIVED _________________________ hereby sells, assigns and transfers unto that portion of the within Warrant and the rights evidenced thereby which will on the date hereof entitle the holder to purchase shares of Common Stock of EuroSite Power Inc. and irrevocably constitutes and appoints attorney, to transfer that part of the said Warrant on the books of the within-named Company.

 

	  
	
Assignor

	  
	
Dated

	  

 

  

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