Common use of The Warrants Clause in Contracts

The Warrants. (a) At Closing, Vanguard shall deliver to the Escrow Agent an initial Warrant Certificate for the Warrants. Within 30 Business Days after the expiration of each CapEx Year after the Closing Date, up to and including the date which is 30 Business Days after the expiration of the fifth CapEx Year after the Closing, Vanguard may deliver to the Escrow Agent a new Warrant Certificate (in exchange for the return of any Warrant Certificate previously delivered to the Escrow Agent) for warrants issued to DMC to purchase a number of shares of common stock of Vanguard equal to the product of the Warrant Shares and the Remaining CapEx Ratio as of the expiration of the applicable CapEx Year after the Closing (the “Adjusted Warrant Shares”) with an exercise price of $.01 per share. At such time as the amount of the Adjusted Warrant Shares equals zero, Vanguard shall provide notice thereof to Escrow Agent and Escrow Agent shall immediately return to Vanguard any Warrant Certificate previously delivered to the Escrow Agent. Upon DMC’s receipt of the Warrant Certificate, Buyer shall be relieved of its obligations under Sections 12,4(b) through 12.4(f) to the extent of the then value of the shares of common stock then purchasable upon exercise of the Warrant (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock), based on the valuation of Vanguard’s common stock prepared by the Independent Appraiser as of the date of the exercise of the Warrant, which appraisal shall be obtained by Vanguard, at its sole cost and expense, within a reasonable period of time after the date the Warrant is exercised. If such value of the shares of common stock upon exercise of the Warrant is greater than the Remaining CapEx Commitment, DMC shall surrender to Vanguard, after exercise, a number of shares of common stock of Vanguard having an aggregate value equal to the value of the common stock in excess of the Remaining CapEx Commitment (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock). (b) If Buyer shall fail at any time to timely deposit any required CapEx Shortfall amounts with the Escrow Agent (provided that Buyer has not otherwise deposited cash amounts in an escrow account with an escrow agent and pursuant to an escrow agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow account has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), then, after 30 days notice of such default to Vanguard by Seller, and subject to Vanguard’s failure to cure such default during such 30-day period (each a “CapEx Shortfall Default”), DMC shall be entitled to obtain from the Escrow Agent the Warrant Certificate then in the possession of the Escrow Agent and the Warrant Shares or Adjusted Warrant Shares, as applicable, shall be immediately exercisable in accordance with the terms of the Warrant Certificate upon DMC’s receipt of such Warrant Certificate. (c) Provided that Buyer has deposited any required CapEx Shortfall with the Escrow Agent (or Buyer has otherwise deposited cash amounts in an escrow account with an escrow agent and pursuant to an escrow agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), if Vanguard should wish to consummate an initial public offering of its common stock at any time while the Warrant Certificate remains outstanding (whether the Warrant Certificate is then held by Escrow Agent or DMC), in order to provide for the cancellation of the Warrant Certificate to facilitate such initial public offering, then at any time after Vanguard files its S‑1 Registration Statement with the SEC, but prior to its initial public offering of its common stock: (i) Vanguard may, but is not required to, deliver to the Escrow Agent or DMC (in exchange for the Warrant Certificate then in the possession of the Escrow Agent or DMC, which Warrant Certificate shall be immediately cancelled) a subordinated unsecured promissory note in substantially the form of Exhibit B payable to DMC in a principal amount equal to the Remaining CapEx Commitment at such time (the “Note”), and the principal amount of such Note shall be automatically reduced on a continuous basis by the amount of any reduction in the Remaining CapEx Commitment; or (ii) DMC and Vanguard shall enter into such other satisfactory arrangements in respect of cancellation of the Warrant Certificate as shall be agreed to by DMC and Vanguard, in their sole discretion. (d) In the event Vanguard delivers the Note in exchange for the Warrant Certificate as set forth in Section 12.5(c), the Escrow Agent shall release the Note to DMC upon the occurrence of a CapEx Shortfall Default; provided that upon a CapEx Shortfall Default, the Note shall be in default upon delivery thereof to DMC (the “Note Delivery Date”). The Note will accrue interest from and after the date of the CapEx Shortfall Default at a market rate of interest for debt of its kind, with payment terms to be determined on the Note Delivery Date so as not to cause Vanguard to default under its then principal credit agreement or any indenture relating to debt securities that are publicly-held or are traded in the Rule 144A market. Notwithstanding any provision to the contrary contained in this Agreement, upon DMC’s receipt of the Note, Buyer shall have no further obligations under Sections 12.4(b) through 12.4(f). (e) In the event the Warrant Certificate remains outstanding on the date which is 60 Business Days after the expiration of the fifth CapEx Year after the Closing, the Warrant Certificate then in the possession of the Escrow Agent shall be delivered to DMC and shall be immediately exercisable in accordance with the terms of the Warrant Certificate upon DMC’s receipt of such Warrant Certificate; provided, however, in the event Buyer has fully complied with its obligations set forth in Section 12.4(e) and in the first sentence of Section 12.4(d), the Warrant Certificate shall be of no force or effect, shall immediately be returned to Vanguard and immediately cancelled.

The Warrants. (a) At ClosingThe Company agrees to issue to Ford Warrants in substantially the form attached to this Agreement as Annex A and incorporated In this Agreement by reference, Vanguard shall deliver to purchase the Escrow Agent an initial Warrant Certificate for the WarrantsAggregate Number of shares of fully paid and non-assessable Common Stock, subject to vesting in accordance with Section 4.2 hereof and adjustment in accordance with Section 4.10 hereof. Within 30 Business Days after the expiration of each CapEx Year after On the Closing Date, up the Company shall issue to Ford Warrants to purchase 82,197 shares of fully paid and including non-assessable Common Stock (such number representing one percent (1%) of the outstanding Common Stock on a Fully Diluted basis as of the Closing Date, or 7.6923% of the Aggregate Number as of the Closing Date), fully Vested and subject to adjustment in accordance with Section 4.10 hereof. On the day after the Class A Warrant Expiration Date, the Company shall issue to Ford Warrants to purchase that number of shares of fully paid and nonassessable Common Stock equal to the Aggregate Number as of the Class A Warrant Expiration Date minus the number of shares of Common Stock with respect to which Warrants had previously been issued to Ford hereunder, and such Warrants shall be subject to vesting in accordance with Section 4.2 and subject to adjustment in accordance with Section 4.10 hereof, provided, that (a) in the event Ford achieves the Base Volume Levels for calendar year 2001 during any of the first three calendar quarters of 2001, the Company shall issue to Ford on the date which is 30 five (5) Business Days after the expiration delivery of the fifth CapEx Year after the Closing, Vanguard may deliver to the Escrow Agent a new Warrant Certificate (in exchange Volume Report indicating achievement of such Base Volume Levels for the return of any Warrant Certificate previously delivered to the Escrow Agent) 2001 additional Warrants for warrants issued to DMC to purchase a that number of shares of common stock fully paid and nonassessable shares of Vanguard Common Stock equal to the product 7.6923% of the Warrant Shares and the Remaining CapEx Ratio Aggregate Number as of the expiration of the applicable CapEx Year after the Closing (the “Adjusted Warrant Shares”) with an exercise price of $.01 per share. At such time as the amount of the Adjusted Warrant Shares equals zero, Vanguard shall provide notice thereof to Escrow Agent and Escrow Agent shall immediately return to Vanguard any Warrant Certificate previously delivered to the Escrow Agent. Upon DMC’s receipt of the Warrant Certificate, Buyer shall be relieved of its obligations under Sections 12,4(b) through 12.4(f) to the extent of the then value of the shares of common stock then purchasable upon exercise of the Warrant date (it being understood and agreed that if Ford achieves the 2001 Base Volume Levels during the fourth quarter of 2001, such determination shall Warrants will be made as issued on the Class A Warrant Expiration Oats), and (b) in the event of a Change in Control prior to the Class A Warrant Expiration Date which results in all of the date of DMC’s receipt of Warrants becoming fully Vested, the Warrant Certificate, and shall not be subject Company will issue to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock), based on the valuation of Vanguard’s common stock prepared by the Independent Appraiser as of the date of the exercise of the Warrant, which appraisal shall be obtained by Vanguard, at its sole cost and expense, within a reasonable period of time after the date the Warrant is exercised. If such value of the shares of common stock upon exercise of the Warrant is greater than the Remaining CapEx Commitment, DMC shall surrender Ford Warrants to Vanguard, after exercise, a purchase that number of shares of common stock of Vanguard having an aggregate value Common Stock equal to the value Aggregate Number less that number of shares of Common Stock for which Warrants have previously been issued to Ford immediately prior to the effective date of the common stock in excess Change of the Remaining CapEx Commitment (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock)Control. (b) Within five (5) Business Days after the Class A Warrant Expiration Date, the Company shall issue to Ford Warrants to purchase that number of shares of fully paid and non-assessable Common Stock equal to (1) that number of shares of Common Stock issued by the Company during such calendar quarter as a result of the exercise of any Class A Warrants multiplied by (ii) one percent (1%), or, If Buyer shall fail at any time Ford has achieved the Base Volume Levels for 2001 and additional Warrants have been issued to timely deposit any required CapEx Shortfall amounts with the Escrow Agent (provided that Buyer has not otherwise deposited cash amounts in an escrow account with an escrow agent and Ford pursuant to an escrow agreementSection 4.1 prior to the Class A Warrant Expiration Date, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow account has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfalltwo percent (2%), then, after 30 days notice of such default to Vanguard by Seller, and subject to Vanguard’s failure to cure such default during such 30-day period (each a “CapEx Shortfall Default”), DMC shall . Such Warrants will be entitled to obtain from the Escrow Agent the Warrant Certificate then in the possession of the Escrow Agent and the Warrant Shares or Adjusted Warrant Shares, as applicable, shall be immediately exercisable in accordance with the terms of the Warrant Certificate fully Vested upon DMC’s receipt of such Warrant Certificateissuance. (c) Provided Within five (5) Business Days after the Class A Warrant Expiration Date, the Company shall issue to Ford Warrants to purchase that Buyer has deposited any required CapEx Shortfall with the Escrow Agent (or Buyer has otherwise deposited cash amounts in an escrow account with an escrow agent number of shares of fully paid and pursuant non-assessable Common Stock equal to an escrow agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), if Vanguard should wish to consummate an initial public offering of its common stock at any time while the Warrant Certificate remains outstanding (whether the Warrant Certificate is then held by Escrow Agent or DMC), in order to provide for the cancellation of the Warrant Certificate to facilitate such initial public offering, then at any time after Vanguard files its S‑1 Registration Statement with the SEC, but prior to its initial public offering of its common stock: (i) Vanguard maythat number of shares of Common Stock issued by the Company in all Incremental Equity Financings multiplied by (ii) one percent (1%) or, but is not required toif Ford has achieved the Base Volume Levels for 2001, deliver additional Warrants have been issued to Ford pursuant to Section 4.1 prior to the Escrow Agent or DMC (in exchange for the Class A Warrant Certificate then in the possession of the Escrow Agent or DMC, which Warrant Certificate shall be immediately cancelled) a subordinated unsecured promissory note in substantially the form of Exhibit B payable to DMC in a principal amount equal to the Remaining CapEx Commitment at such time (the “Note”)Expiration Date, and the principal amount shares issued in such Incremental Equity Financings were not included in the Aggregate Number prior to issuance of such Note shall Warrants, two percent (2%). Such Warrants will be automatically reduced on a continuous basis by the amount of any reduction in the Remaining CapEx Commitment; or (ii) DMC and Vanguard shall enter into such other satisfactory arrangements in respect of cancellation of the Warrant Certificate as shall be agreed to by DMC and Vanguard, in their sole discretionfully Vested upon issuance. (d) In The Company will deliver to Ford one or more certificates representing the event Vanguard delivers Warrants issued to Ford in such denominations as Ford requests. Such certificates will be issued in Ford's name or in the Note in exchange for name or names of its designee or designees, as the case may be, so long as such designees are Permitted Transferees. The Warrants shall expire on the Warrant Certificate as set forth in Section 12.5(c), the Escrow Agent shall release the Note to DMC upon the occurrence of a CapEx Shortfall Default; provided that upon a CapEx Shortfall Default, the Note shall be in default upon delivery thereof to DMC (the “Note Delivery Expiration Date”). The Note will accrue interest from and after the date of the CapEx Shortfall Default at a market rate of interest for debt of its kind, with payment terms to be determined on the Note Delivery Date so as not to cause Vanguard to default under its then principal credit agreement or any indenture relating to debt securities that are publicly-held or are traded in the Rule 144A market. Notwithstanding any provision to the contrary contained in this Agreement, upon DMC’s receipt of the Note, Buyer shall have no further obligations under Sections 12.4(b) through 12.4(f). (e) In the event the Warrant Certificate remains outstanding on the date which is 60 Business Days after the expiration of the fifth CapEx Year after the Closing, the Warrant Certificate then in the possession of the Escrow Agent shall be delivered to DMC and shall be immediately exercisable in accordance with the terms of the Warrant Certificate upon DMC’s receipt of such Warrant Certificate; provided, however, in the event Buyer has fully complied with its obligations set forth in Section 12.4(e) and in the first sentence of Section 12.4(d), the Warrant Certificate shall be of no force or effect, shall immediately be returned to Vanguard and immediately cancelled.

The Warrants. (a) At ClosingOn the Closing Date for the $1,500,000 Convertible Debentures, Vanguard shall deliver the Company will issue pro rata to the Escrow Agent an initial Investors a Warrant Certificate for A exercisable beginning on the Warrants. Within 30 Business Days after issuance date of the expiration of each CapEx Year after Warrant A and then exercisable any time over the three year period from this Closing Date, up to and including purchase 50,000 Warrant Shares per $500,000 funded, at the date which is 30 Business Days after Exercise Price (as defined in the expiration of Warrant A). The Warrant A shall be delivered by the fifth CapEx Year after the Closing, Vanguard may deliver to the Escrow Agent a new Warrant Certificate (in exchange for the return of any Warrant Certificate previously delivered Company to the Escrow Agent) for warrants issued to DMC to purchase a number of shares of common stock of Vanguard equal to the product of the Warrant Shares , and the Remaining CapEx Ratio as of the expiration of the applicable CapEx Year after the Closing (the “Adjusted Warrant Shares”) with an exercise price of $.01 per share. At such time as the amount of the Adjusted Warrant Shares equals zero, Vanguard shall provide notice thereof to Escrow Agent and Escrow Agent shall immediately return to Vanguard any Warrant Certificate previously delivered to the Investors pursuant to the terms of this Agreement and the Escrow AgentAgreement. Upon DMC’s receipt of the The Warrant Certificate, Buyer Shares shall be relieved of its obligations under Sections 12,4(b) through 12.4(f) registered for resale pursuant to the extent of the then value of the shares of common stock then purchasable upon exercise of the Warrant (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock), based on the valuation of Vanguard’s common stock prepared by the Independent Appraiser as of the date of the exercise of the Warrant, which appraisal shall be obtained by Vanguard, at its sole cost and expense, within a reasonable period of time after the date the Warrant is exercised. If such value of the shares of common stock upon exercise of the Warrant is greater than the Remaining CapEx Commitment, DMC shall surrender to Vanguard, after exercise, a number of shares of common stock of Vanguard having an aggregate value equal to the value of the common stock in excess of the Remaining CapEx Commitment (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock)Registration Rights Agreement. (b) If Buyer shall fail at On the Closing Date for the $1,500,000 Convertible Debentures, the Company will also issue pro rata to the Investors a Warrant B exercisable beginning six months after the issuance date of the Warrant B and then exercisable any time over the three year period from this Closing Date, to timely deposit any required CapEx Shortfall amounts with purchase an aggregate of 150,000 Warrant Shares at the Exercise Price (as defined in the Warrant B). The Warrant B shall be delivered by the Company to the Escrow Agent (provided that Buyer has not otherwise deposited cash amounts in an escrow account with an escrow agent Agent, and delivered to the Investors pursuant to an escrow agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow account has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), then, after 30 days notice of such default to Vanguard by Seller, and subject to Vanguard’s failure to cure such default during such 30-day period (each a “CapEx Shortfall Default”), DMC shall be entitled to obtain from the Escrow Agent the Warrant Certificate then in the possession of the Escrow Agent and the Warrant Shares or Adjusted Warrant Shares, as applicable, shall be immediately exercisable in accordance with the terms of this Agreement and the Escrow Agreement. The Warrant Certificate upon DMC’s receipt of such Warrant CertificateShares shall be registered for resale pursuant to the Registration Rights Agreement. (c) Provided that Buyer has deposited any required CapEx Shortfall with On the Escrow Agent (or Buyer has otherwise deposited cash amounts in an escrow account with an escrow agent and pursuant to an escrow agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow has been restricted for use only Closing Date for the CapEx Commitment$500,000 Convertible Debentures, which cash amounts equal or exceed the amounts which were required Company will issue pro rata to have been so deposited to satisfy any CapEx Shortfall), if Vanguard should wish to consummate an initial public offering of its common stock at any time while the Investors a Warrant Certificate remains outstanding (whether A exercisable beginning on the Warrant Certificate is then held by Escrow Agent or DMC), in order to provide for the cancellation issuance date of the Warrant Certificate to facilitate such initial public offering, A and then at exercisable any time over the three year period after Vanguard files its S‑1 Registration Statement with this Closing Date, to purchase 50,000 Warrant Shares, at the SEC, but prior to its initial public offering of its common stock: Exercise Price (i) Vanguard may, but is not required to, deliver as defined in the Warrant A). The Warrant A shall be delivered by the Company to the Escrow Agent or DMC (in exchange for the Warrant Certificate then in the possession of the Escrow Agent or DMCAgent, which Warrant Certificate shall be immediately cancelled) a subordinated unsecured promissory note in substantially the form of Exhibit B payable to DMC in a principal amount equal and delivered to the Remaining CapEx Commitment at such time (the “Note”), and the principal amount of such Note shall be automatically reduced on a continuous basis by the amount of any reduction in the Remaining CapEx Commitment; or (ii) DMC and Vanguard shall enter into such other satisfactory arrangements in respect of cancellation of the Warrant Certificate as shall be agreed Investors pursuant to by DMC and Vanguard, in their sole discretion. (d) In the event Vanguard delivers the Note in exchange for the Warrant Certificate as set forth in Section 12.5(c), the Escrow Agent shall release the Note to DMC upon the occurrence of a CapEx Shortfall Default; provided that upon a CapEx Shortfall Default, the Note shall be in default upon delivery thereof to DMC (the “Note Delivery Date”). The Note will accrue interest from and after the date of the CapEx Shortfall Default at a market rate of interest for debt of its kind, with payment terms to be determined on the Note Delivery Date so as not to cause Vanguard to default under its then principal credit agreement or any indenture relating to debt securities that are publicly-held or are traded in the Rule 144A market. Notwithstanding any provision to the contrary contained in this Agreement, upon DMC’s receipt of the Note, Buyer shall have no further obligations under Sections 12.4(b) through 12.4(f). (e) In the event the Warrant Certificate remains outstanding on the date which is 60 Business Days after the expiration of the fifth CapEx Year after the Closing, the Warrant Certificate then in the possession of the Escrow Agent shall be delivered to DMC and shall be immediately exercisable in accordance with the terms of this Agreement and the Escrow Agreement. The Warrant Certificate upon DMC’s receipt of such Warrant Certificate; provided, however, in the event Buyer has fully complied with its obligations set forth in Section 12.4(e) and in the first sentence of Section 12.4(d), the Warrant Certificate Shares shall be of no force or effect, shall immediately be returned registered for resale pursuant to Vanguard and immediately cancelledthe Registration Rights Agreement.

The Warrants. (a) At Closing, Vanguard shall deliver The Company has also authorized the issuance and sale to the Escrow Agent an initial Warrant Certificate Purchasers of the Company's Stock Purchase Warrants for the issuance (subject to adjustment as provided in the Warrants) of shares of the Company's Common Stock as set forth in the Stock Purchase Warrants. Within 30 Business Days after the expiration of each CapEx Year after the Closing Date, up to and including the date which is 30 Business Days after the expiration of the fifth CapEx Year after the Closing, Vanguard may deliver to the Escrow Agent a new Warrant Certificate (in exchange for the return of any Warrant Certificate previously delivered to the Escrow Agent) for warrants issued to DMC to purchase a The number of shares of common stock of Vanguard equal to the product Common Stock of the Warrant Shares Company for which such Stock Purchase Warrants in the aggregate shall be exercisable shall initially be One Million Fifty-Two Thousand Six Hundred Thirty-Two (1,052,632), and the Remaining CapEx Ratio as of the expiration of the applicable CapEx Year after the Closing (the “Adjusted Warrant Shares”) with Stock Purchase Warrants shall have an exercise price of $.01 .57 per share. At such time as Additionally, (i) if the entire principal amount of the Adjusted Warrant Shares equals zeroNotes and all accrued interest has not been repaid on or before December 25, Vanguard shall provide notice thereof to Escrow Agent and Escrow Agent shall immediately return to Vanguard any Warrant Certificate previously delivered to 2005, the Escrow Agent. Upon DMC’s receipt of the Warrant Certificate, Buyer Stock Purchase Warrants shall be relieved of its obligations under Sections 12,4(b) through 12.4(f) to the extent of the then value of the shares of common stock then purchasable upon exercise of the Warrant (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock), based on the valuation of Vanguard’s common stock prepared by the Independent Appraiser as of the date of the exercise of the Warrant, which appraisal shall be obtained by Vanguard, at its sole cost and expense, within a reasonable period of time after the date the Warrant is exercised. If such value of the shares of common stock upon exercise of the Warrant is greater than the Remaining CapEx Commitment, DMC shall surrender to Vanguard, after exercise, a exercisable for an additional number of shares of common stock of Vanguard having an aggregate value Common Stock which is equal to the value ten percent (10%) of the common stock in excess of the Remaining CapEx Commitment (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock). (b) If Buyer shall fail at any time to timely deposit any required CapEx Shortfall amounts with the Escrow Agent (provided that Buyer has not otherwise deposited cash amounts in an escrow account with an escrow agent and pursuant to an escrow agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow account has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), remaining then, after 30 days notice of such default to Vanguard by Seller, and subject to Vanguard’s failure to cure such default during such 30-day period (each a “CapEx Shortfall Default”), DMC shall be entitled to obtain from the Escrow Agent the Warrant Certificate then in the possession of the Escrow Agent and the Warrant Shares or Adjusted Warrant Shares, as applicable, shall be immediately exercisable in accordance with the terms of the Warrant Certificate upon DMC’s receipt of such Warrant Certificate. (c) Provided that Buyer has deposited any required CapEx Shortfall with the Escrow Agent (or Buyer has otherwise deposited cash amounts in an escrow account with an escrow agent and pursuant to an escrow agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), if Vanguard should wish to consummate an initial public offering of its common stock at any time while the Warrant Certificate remains outstanding (whether the Warrant Certificate is then held by Escrow Agent or DMC), in order to provide for the cancellation of the Warrant Certificate to facilitate such initial public offering, then at any time after Vanguard files its S‑1 Registration Statement with the SEC, but prior to its initial public offering of its common stock: (i) Vanguard may, but is not required to, deliver to the Escrow Agent or DMC (in exchange for the Warrant Certificate then in the possession of the Escrow Agent or DMC, which Warrant Certificate shall be immediately cancelled) a subordinated unsecured promissory note in substantially the form of Exhibit B payable to DMC in a principal amount equal to the Remaining CapEx Commitment at such time (the “Note”), and the principal amount of such Note shall be automatically reduced on a continuous basis the Notes issued pursuant to this Agreement divided by the amount of any reduction in the Remaining CapEx Commitment; or 0.57, and (ii) DMC if the remaining principal amount of the Notes and Vanguard all accrued interest has not been repaid on or before June 25, 2007, the Company will be in default under this Agreement and the Stock Purchase Warrants shall enter into be exercisable for an additional number of shares of Common Stock which is equal to twenty percent (20%) of the remaining then-outstanding principal amount of the Notes issued pursuant to this Agreement divided by $0.57. The Stock Purchase Warrants shall be substantially in the form set forth in Exhibit B hereto (which form of Stock Purchase Warrants shall contain such other satisfactory arrangements in respect of cancellation of the Warrant Certificate as shall be agreed to by DMC and Vanguard, in their sole discretion. (d) In the event Vanguard delivers the Note in exchange for the Warrant Certificate applicable terms as set forth in Section 12.5(c), the Escrow Agent shall release the Note to DMC upon the occurrence of a CapEx Shortfall Default; provided that upon a CapEx Shortfall Default, the Note shall be in default upon delivery thereof to DMC (the “Note Delivery Date”). The Note will accrue interest from and after the date of the CapEx Shortfall Default at a market rate of interest for debt of its kind, with payment terms to be determined on the Note Delivery Date so as not to cause Vanguard to default under its then principal credit agreement or any indenture relating to debt securities that are publicly-held or are traded in the Rule 144A market. Notwithstanding any provision to the contrary contained in this Agreement, upon DMC’s receipt of the Note, Buyer shall have no further obligations under Sections 12.4(b) through 12.4(f). (e) In the event the Warrant Certificate remains outstanding on the date which is 60 Business Days after the expiration of the fifth CapEx Year after the Closing, the Warrant Certificate then in the possession of the Escrow Agent shall be delivered to DMC and shall be immediately exercisable in accordance with the terms of the Warrant Certificate upon DMC’s receipt of such Warrant Certificate; provided, however, in the event Buyer has fully complied with its obligations set forth in Section 12.4(etherein) and are herein referred to individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in the first sentence of Section 12.4(d), the Warrant Certificate shall be of no force exchange or effect, shall immediately be returned to Vanguard and immediately cancelledreplacement therefor.

The Warrants. (a) At ClosingThe Holder hereby agrees to purchase from the Company, Vanguard shall deliver and the Company hereby agrees to issue to the Escrow Agent an initial Warrant Certificate Holder, Warrants in substantially the form attached to this Agreement as Annex A to purchase ____ shares of Class B Common Stock, all in accordance with the terms and conditions of this Agreement. In consideration for the Warrants. Within 30 Business Days after the expiration of each CapEx Year after the Closing Date, up to and including the date which is 30 Business Days after the expiration purchase of the fifth CapEx Year after Warrants described in the Closingpreceding sentence, Vanguard may deliver the Holder hereby agrees to convey to the Escrow Agent Company a new Warrant Certificate certificate representing ____ shares of Common Stock of the Company owned beneficially and of record by the Holder, together with appropriate instruments of transfer. (b) In conjunction with IPO by Stellex Industries, the Board of Directors of Stellex Aerospace (or other direct parent corporation of the Company) (the "SAH Board") may, in its discretion, require the Holder to exercise his warrants and exchange the shares of Class B Common Stock issued thereunder for the return of any Warrant Certificate previously delivered to the Escrow Agent) for warrants issued to DMC to purchase a number of shares of common stock of Vanguard equal to the product of the Warrant Shares and the Remaining CapEx Ratio as of the expiration of the applicable CapEx Year after the Closing (the “Adjusted Warrant Shares”) with an exercise price of Stellex Industries, par value $.01 per share. At such time as the amount of the Adjusted Warrant Shares equals zero, Vanguard shall provide notice thereof to Escrow Agent and Escrow Agent shall immediately return to Vanguard any Warrant Certificate previously delivered to the Escrow Agent. Upon DMC’s receipt of the Warrant Certificate, Buyer shall be relieved of its obligations under Sections 12,4(b) through 12.4(f) to the extent of the then value of the shares of common stock then purchasable upon exercise of the Warrant share (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock"Stellex Stock"), based on the valuation of Vanguard’s common stock prepared by the Independent Appraiser as of the date of the exercise of the Warrant, which appraisal shall be obtained by Vanguard, at its sole cost and expense, within a reasonable period of time after the date the Warrant is exercised. If such value of the shares of common stock upon exercise of the Warrant is greater than the Remaining CapEx Commitment, DMC shall surrender to Vanguard, after exercise, a number of shares of common stock of Vanguard having an aggregate value equal to the value of the common stock in excess of the Remaining CapEx Commitment (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock). (b) If Buyer shall fail at any time to timely deposit any required CapEx Shortfall amounts with the Escrow Agent (provided that Buyer has not otherwise deposited cash amounts in an escrow account with an escrow agent and pursuant to an escrow agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow account has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), then, after 30 days notice of such default to Vanguard by Seller, and subject to Vanguard’s failure to cure such default during such 30-day period (each a “CapEx Shortfall Default”), DMC shall be entitled to obtain from the Escrow Agent the Warrant Certificate then in the possession of the Escrow Agent and the Warrant Shares or Adjusted Warrant Shares, as applicable, shall be immediately exercisable in accordance with the terms of the Warrant Certificate upon DMC’s receipt of such Warrant Certificateprocedures set forth in paragraph (c) below. (c) Provided that Buyer has deposited any required CapEx Shortfall with If the Escrow Agent (or Buyer has otherwise deposited cash amounts SAH Board, in an escrow account its discretion, should require the Holder to exercise his warrants and exchange the shares of Class B Common Stock issued thereunder for shares of Stellex Stock in conjunction with an escrow agent and IPO by Stellex Industries pursuant to an escrow agreementSection 2.01(b), each the SAH Board will apply the exchange formula set forth below. The SAH Board will determine the number of shares of Stellex Stock the Holder would be entitled to receive upon such exchange by multiplying the number of shares of Class B Common Stock covered by such exchange by a fraction, the numerator of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed Fair Market Value of one share of Class B Common Stock on the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), if Vanguard should wish to consummate an initial public offering of its common stock at any time while the Warrant Certificate remains outstanding (whether the Warrant Certificate is then held by Escrow Agent or DMC), in order to provide for the cancellation closing date of the Warrant Certificate to facilitate such initial public offering, then at any time after Vanguard files its S‑1 Registration Statement with the SEC, but prior to its initial public offering of its common stock: (i) Vanguard may, but is not required to, deliver to the Escrow Agent or DMC (in exchange for the Warrant Certificate then in the possession of the Escrow Agent or DMC, which Warrant Certificate shall be immediately cancelled) a subordinated unsecured promissory note in substantially the form of Exhibit B payable to DMC in a principal amount equal to the Remaining CapEx Commitment at such time (the “Note”)Stellex Industries IPO, and the principal amount denominator of such Note shall be automatically reduced on a continuous basis which is the gross price at which one share of Stellex Stock is sold by the amount Stellex Industries in its IPO, as follows: Number of any reduction in the Remaining CapEx Commitment; or (ii) DMC and Vanguard shall enter into such other satisfactory arrangements in respect x Fair Market Value of cancellation one share of the Warrant Certificate as shall be agreed to by DMC and Vanguard, in their sole discretion.Class B Stock Shares of ----------------------------------------------- Class B Stock Per Share IPO Price of Stellex Stock (d) In If a separate IPO is undertaken by the event Vanguard delivers the Note in exchange for the Warrant Certificate as set forth in Section 12.5(c)Company prior to or contemporaneously with an IPO by Stellex Industries, the Escrow Agent shall release the Note to DMC upon the occurrence Class B Common Stock will not be exchangeable for shares of a CapEx Shortfall Default; provided that upon a CapEx Shortfall Default, the Note shall be in default upon delivery thereof to DMC (the “Note Delivery Date”). The Note will accrue interest from and after the date of the CapEx Shortfall Default at a market rate of interest for debt of its kind, with payment terms to be determined on the Note Delivery Date so as not to cause Vanguard to default under its then principal credit agreement or any indenture relating to debt securities that are publicly-held or are traded in the Rule 144A market. Notwithstanding any provision to the contrary contained in this Agreement, upon DMC’s receipt of the Note, Buyer shall have no further obligations under Sections 12.4(b) through 12.4(f)Stellex Stock. (e) In If a separate IPO is undertaken by a corporation in an unbroken chain of corporations between Stellex Industries and the event the Warrant Certificate remains outstanding on the date which is 60 Business Days after the expiration of the fifth CapEx Year after the Closing, the Warrant Certificate then in the possession of the Escrow Agent shall be delivered to DMC and shall be immediately exercisable in accordance with the terms of the Warrant Certificate upon DMC’s receipt of such Warrant Certificate; provided, however, in the event Buyer has fully complied with its obligations set forth in Section 12.4(e) and in the first sentence of Section 12.4(dCompany (an "Intermediate Holding Company"), the Warrant Certificate SAH Board may require the Holder to exercise the Warrants and exchange the shares of Class B Common Stock issued thereunder for shares of the common stock of the Intermediate Holding Company in an equitable manner, and on such terms and conditions, as the SAH Board deems appropriate. The SAH Board's determination in this regard shall be of no force or effectfinal, shall immediately be returned to Vanguard binding and immediately cancelledconclusive.

The Warrants. (a) At Closing, Vanguard shall deliver to the Escrow Agent an initial Warrant Certificate for the Warrants. Within 30 Business Days after the expiration of each CapEx Year after On the Closing Date, up to and including the date which is 30 Business Days after the expiration each of the fifth CapEx Year after MassMutual Investors agree to purchase from the Closing, Vanguard may deliver Company at the purchase price set forth beneath the name of such Purchaser on the signature page of this Agreement and the Company agrees to issue to the Escrow Agent MassMutual Investors, a new Warrant Certificate (warrant in exchange for substantially the return of any Warrant Certificate previously delivered form attached to the Escrow Agent) for warrants issued to DMC this Agreement as Annex A-1 and incorporated in this Agreement by reference to purchase a (a) the number of shares of common stock Series D Convertible Preferred Stock set forth beneath the name of Vanguard equal to the product of the Warrant Shares and the Remaining CapEx Ratio as of the expiration of the applicable CapEx Year after the Closing (the “Adjusted Warrant Shares”) with an exercise price of $.01 per share. At such time as the amount of the Adjusted Warrant Shares equals zero, Vanguard shall provide notice thereof to Escrow Agent and Escrow Agent shall immediately return to Vanguard any Warrant Certificate previously delivered to the Escrow Agent. Upon DMC’s receipt of the Warrant Certificate, Buyer shall be relieved of its obligations under Sections 12,4(b) through 12.4(f) to the extent of the then value of the shares of common stock then purchasable upon exercise of the Warrant (it being understood that such determination shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock), based MassMutual Investor on the valuation signature page of Vanguard’s common stock prepared by the Independent Appraiser as of the date of this Agreement, plus (b) upon the exercise of the WarrantContingent Options, which appraisal shall be obtained by Vanguard, at its sole cost and expense, within a reasonable period of time after the date the Warrant is exercised. If such value of the shares of common stock upon exercise of the Warrant is greater than the Remaining CapEx Commitment, DMC shall surrender to Vanguard, after exercise, a number of shares of common stock of Vanguard having an aggregate value Common Stock equal to the value Contingent Options Adjustment Number, plus (c) upon the occurrence of an event described in Section 2.12 of this Agreement, the common stock in excess number of the Remaining CapEx Commitment (it being understood that shares of Series D Convertible Preferred Stock or Common Stock provided for therein, as such determination number of shares purchasable under such Warrant shall be made as of the date of DMC’s receipt of the Warrant Certificate, and shall not be subject to further adjustment, including as a result of any subsequent change in the valuation of Vanguard’s common stock). (b) If Buyer shall fail at any adjusted from time to timely deposit any required CapEx Shortfall amounts with the Escrow Agent (provided that Buyer has not otherwise deposited cash amounts in an escrow account with an escrow agent and time pursuant to an escrow agreementthe provisions of this Agreement, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow account has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), then, after 30 days notice of such default to Vanguard by Seller, and subject to Vanguard’s failure to cure such default during such 30-day period (each a “CapEx Shortfall Default”), DMC shall be entitled to obtain from the Escrow Agent the Warrant Certificate then in the possession of the Escrow Agent and the Warrant Shares or Adjusted Warrant Shares, as applicable, shall be immediately exercisable all in accordance with the terms and conditions of this Agreement (the Warrant Certificate upon DMC’s receipt warrants referred to in this sentence are hereinafter referred to as the “2001 MassMutual Investors Warrants”). On the Closing Date, RSTW agrees to purchase from the Company at the purchase price set forth beneath the name of such Warrant Certificate. (c) Provided that Buyer has deposited any required CapEx Shortfall with RSTW on the Escrow Agent (or Buyer has otherwise deposited cash amounts in an escrow account with an escrow agent signature page of this Agreement and pursuant the Company agrees to an escrow agreementissue to RSTW, each of which is reasonably satisfactory to DMC, Buyer and Vanguard, which escrow has been restricted for use only for the CapEx Commitment, which cash amounts equal or exceed the amounts which were required to have been so deposited to satisfy any CapEx Shortfall), if Vanguard should wish to consummate an initial public offering of its common stock at any time while the Warrant Certificate remains outstanding (whether the Warrant Certificate is then held by Escrow Agent or DMC), in order to provide for the cancellation of the Warrant Certificate to facilitate such initial public offering, then at any time after Vanguard files its S‑1 Registration Statement with the SEC, but prior to its initial public offering of its common stock: (i) Vanguard may, but is not required to, deliver to the Escrow Agent or DMC (in exchange for the Warrant Certificate then in the possession of the Escrow Agent or DMC, which Warrant Certificate shall be immediately cancelled) a subordinated unsecured promissory note warrant in substantially the form attached to this Agreement as Annex A and incorporated in this Agreement by reference to purchase (a) the number of Exhibit B payable shares of Series D Convertible Preferred Stock set forth beneath the name of RSTW as the number of warrant shares pertaining to DMC in a principal amount the 2001 RSTW New Warrant on the signature page of this Agreement, plus (b) upon the exercise of the Contingent Options, the number of shares of Common Stock equal to the Remaining CapEx Commitment at such time Contingent Options Adjustment Number, plus (the “Note”), and the principal amount of such Note shall be automatically reduced on a continuous basis by the amount of any reduction in the Remaining CapEx Commitment; or (iic) DMC and Vanguard shall enter into such other satisfactory arrangements in respect of cancellation of the Warrant Certificate as shall be agreed to by DMC and Vanguard, in their sole discretion. (d) In the event Vanguard delivers the Note in exchange for the Warrant Certificate as set forth in Section 12.5(c), the Escrow Agent shall release the Note to DMC upon the occurrence of a CapEx Shortfall Default; provided that upon a CapEx Shortfall Default, the Note shall be an event described in default upon delivery thereof to DMC (the “Note Delivery Date”). The Note will accrue interest from and after the date Section 2.12 of the CapEx Shortfall Default at a market rate of interest for debt of its kind, with payment terms to be determined on the Note Delivery Date so as not to cause Vanguard to default under its then principal credit agreement or any indenture relating to debt securities that are publicly-held or are traded in the Rule 144A market. Notwithstanding any provision to the contrary contained in this Agreement, upon DMC’s receipt the number of the Noteshares of Series D Convertible Preferred Stock or Common Stock provided for therein, Buyer shall have no further obligations as such number of shares purchasable under Sections 12.4(b) through 12.4(f). (e) In the event the such Warrant Certificate remains outstanding on the date which is 60 Business Days after the expiration of the fifth CapEx Year after the Closing, the Warrant Certificate then in the possession of the Escrow Agent shall be delivered adjusted from time to DMC and shall be immediately exercisable time pursuant to the provisions of this Agreement, all in accordance with the terms and conditions of this Agreement (the warrant referred to in this sentence is hereinafter referred to as the “2001 RSTW New Warrants”). On the Original Closing Date, RSTW purchased from AMHC at the purchase price of One Hundred Dollars ($100), and AMHC issued to RSTW, a warrant in the form attached to this Agreement as Annex A-2 and incorporated in this Agreement by reference to purchase the number of shares of AMHC’s Series D Convertible Preferred Stock and AMHC’s common stock provided for therein set forth, as such number of shares purchasable under such warrant are to be adjusted from time to time (the warrant referred to in this sentence is hereinafter referred to as the “1998 RSTW Warrant”). Effective as of September 25, 2000, RSTW purchased from AMHC at the purchase price of One Hundred Dollars ($100), and AMHC issued to RSTW, a warrant in the form attached to this Agreement as Annex A-3 and incorporated in this Agreement to purchase the number of shares of AMHC’s Series D Convertible Preferred Stock and AMHC’s Common Stock provided for therein, as such number of shares purchasable under such warrant are to be adjusted from time to time (the warrant referred to in this sentence is hereinafter referred to as the “2000 RSTW Warrant”; and together with the 1998 RSTW Warrant are hereinafter referred to as the “Original RSTW Warrants”). On the Closing Date, the Original RSTW Warrants will be converted, pursuant to the Advantage Merger, into one or more warrants which will be exchanged pursuant to this Agreement for Warrants in substantially the form attached to this Agreement as Annex A-4 and incorporated in this Agreement by reference to purchase (a) the number of shares of Series D Convertible Preferred Stock set forth beneath the name of RSTW on the signature page of this Agreement, plus (b) upon the exercise of the Warrant Certificate Contingent Options, the number of shares of Common Stock equal to the Contingent Options Adjustment Number, plus (c) upon DMC’s receipt each occurrence of such Warrant Certificate; provided, however, in the an event Buyer has fully complied with its obligations set forth described in Section 12.4(e) and in the first sentence 2.12 of Section 12.4(d)this Agreement, the Warrant Certificate number of shares of Series D Convertible Preferred Stock or Common Stock provided for therein, as such number of shares purchasable under such warrant shall be adjusted from time to time pursuant to the provisions of no force this Agreement, all in accordance with the terms and conditions of this Agreement (the warrant referred to in this sentence is hereinafter referred to as the “2001 RSTW Merger Warrants”). Without limiting any other rights and benefits to which the 2001 RSTW Merger Warrant shall be entitled under the Advantage Merger or effectotherwise, the 2001 RSTW Merger Warrant also shall immediately be returned treated as purchased and issued under this Agreement and entitled to Vanguard all of the rights and immediately cancelledbenefits of this Agreement inuring to the Warrants purchased and issued hereunder (including, but not limited to, the rights and benefits inuring to such Warrants under the Stockholders’ Agreement and the Registration Rights Agreement).