EXHIBIT 10.71
8
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Company: National Manufacturing Technologies, Inc., a California corporation
Number of Shares: 50,000
Class of Stock: Common
Initial Exercise Price: $0.40
Issue Date: January 31, 2000
Expiration Date: January 31, 2005
THIS WARRANT CERTIFIES THAT, in consideration of an extension of credit to
Corporation and for other good and valuable consideration, X. Xxxxxx Xxxx and
Xxxx X. Xxxx("Holder") is entitled to purchase the number of fully paid and
non-assessable shares of the class of securities (the "Shares") of National
Manufacturing Technologies, Inc. (the "Company") at the initial exercise price
per Share (the "Warrant Price") all as set forth above and as adjusted pursuant
to Article 2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth of this Warrant.
ARTICLE 1. EXERCISE
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1.1 Method of Exercise. Holder may exercise this Warrant by
delivering this Warrant and a duly executed Notice of Exercise in substantially
the form attached as Appendix 1 to the principal office of the Company.
1.2 Delivery of Certificate and New Warrant. Promptly after Holder
exercises this Warrant, the Company shall deliver to Holder certificates for the
Shares acquired and, if this Warrant has not been fully exercised and has not
expired, a new Warrant representing the Shares not so required.
1.3 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.4 Repurchase on Sale, Merger, or Consolidation of the Company.
1.4.1. "Acquisition". For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets (including intellectual property) of the company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
1.4.2. Assumption of Warrant. Upon the closing of any acquisition
the successor entity must assume the obligations of this Warrant, causing this
Warrant to be exercisable for the same securities, cash, and property as would
be payable for the Shares issuable upon exercise of the unexercised portion of
this Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on its common stock payable in common stock, or other securities,
subdivides the outstanding common stock into a greater amount of common stock,
then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, the number and kind of securities and property that
Holder would have received for the Shares if this Warrant had been exercised
immediately before such reclassification, exchange, substitution, or other
event. The Company or its successor shall promptly issue to Holder a new Warrant
for such new securities or other property. The new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Section 2.2
shall similarly apply to successive reclassifications, exchanges, substitutions,
or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
2.4 No Impairment. The Company shall not, by amendment of its
Articles of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out all the provisions of
this Article 2 and in taking all such action as may be necessary or appropriate
to protect Holder's right under this Article against impairment. If the Company
takes any action affecting the Shares other than as described above that
adversely affects Holder's rights under this warrant, the Warrant Price shall be
adjusted downward and the number of Shares issuable upon exercise of this
Warrant shall be adjusted upward in such a manner that the aggregate Warrant
Price of this Warrant is unchanged.
2.5 Certificate as to Adjustments. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish Holder with a certificate of its Chief Accounting
Officer setting forth such adjustment and the facts upon which such adjustment
is based. The Company shall, upon written request, furnish Holder a certificate
setting forth the Warrant Price in effect upon the date thereof and the series
of adjustments leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows:
(a) The initial Warrant Price referenced on the first page of this
Warrant is not greater than (i) the price per share at which the Shares were
last issued in an arms-length transaction in which at least $50,000 of the
Shares were sold and (ii) the fair market value of the Shares as of the date of
this Warrant.
(b) All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, and all securities, if any, issuable
upon conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 Registration Under Securities Act of 1933, as amended. The
Company agrees that the Shares shall be subject to the registration rights set
forth on Exhibit C, if attached.
ARTICLE 4. MISCELLANEOUS.
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4.1 Term. This Warrant is exercisable, in whole or in part, at any
time and from time to time on or before the Expiration Date set forth above.
4.2 Legends. This Warrant and the Shares shall be imprinted with a
legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and
the Shares issuable upon exercisable this Warrant may not be transferred or
assigned in whole or in part without compliance with applicable federal and
state securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company). The Company shall not require Holder to
provide an opinion of counsel if the transfer is to an affiliate of Holder or if
there is no material question as to the availability of current information as
referenced in Rule 144(c), Holder represents that it has complied with Rule
144(d) and (e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of Holder's
notice of proposed sale.
4.4 Transfer Procedure. Subject to the provisions of Section 4.2,
Holder may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant by giving the Company notice of the portion of the
Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the
Company for reissuance to the transferee(s) (and Holder, if applicable). Unless
the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, the Company shall have the right to refuse to
transfer any portion of this Warrant to any person who directly competes with
the Company.
4.5 Notices. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from time
to time.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 Attorney's Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorney's fees.
4.8 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
National Manufacturing Technologies, Inc.
By /S/ Xxxxxxx X. Xxxxx
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Name Xxxxxxx X. Xxxxx
--------------------
(Print)
Title: Chief Executive Officer
By /S/ Xxxxxxxx X. Xxxxx
--------------------------
Name Xxxxxxxx X. Xxxxx
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(Print)
Title: Secretary
WARRANT HOLDER
By /S/ X. Xxxxxx Hill
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Name: X. Xxxxxx Xxxx
By /S/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
APPENDIX 1
NOTICE OF EXERCISE
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1. The undersigned hereby elects to purchase __________________ shares
of the Common Stock of National Manufacturing Technologies, Inc, pursuant to
the terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
__________________________________________
(Name)
__________________________________________
__________________________________________
(Address)
3. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
____________________________________
By __________________________________
(Signature)
_________________
(Date)
APPENDIX 2
NOTICE THAT WARRANT IS ABOUT TO EXPIRE
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_____________, ______
(Name of Holder)
(Address of Holder)
Dear _____________________:
This is to advise you that the Warrant issued to you described below will
expire on ______________________, _____.
Issuer: National Manufacturing Technologies, Inc
Issue Date: _____________________
Class of Security Issuable: Common
Exercise Price Per Share: _____________________
Number of Shares Issuable: _____________________
Procedure for Exercise:
Please contact [name of contact person] at (phone number) with any
questions you may have concerning exercise of the Warrant. This is your only
notice of pending expiration.
National Manufacturing Technologies, Inc
By _____________________________
Its _____________________________
EXHIBIT A
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Registration Rights
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The Shares shall be deemed "registrable securities" or otherwise entitled
to "piggy back" registration rights in accordance with the terms of any
agreement between the Company and any of its investors (the "Agreement")
The Company agrees that no amendments will be made to the Agreement which
would have an adverse impact on Holder's registration thereunder without the
consent of Holder.
If no Agreement exists, then the Company and the Holder shall enter into a
form of Registration Rights Agreement which shall be no less favorable than any
such agreement subsequently entered into between the Company and any investors
and in no event providing less than piggy back registration rights.
