PURCHASE AGREEMENT
This PURCHASE AGREEMENT ("Agreement") is made as of April, 7 1999, by
and between JORE CORPORATION, a Montana corporation ("Company"), and DADCO, a
Montana corporation ("Investor").
RECITAL
In reliance on Rule 506 of Regulation D promulgated under the Securities
Act of 1933, as amended (the "Securities Act"), the Company desires to sell to
Investor, and Investor desires to purchase from the Company, a promissory note
in the principal amount of $2,000,000 (the "Note"), and to issue to Investor a
warrant for the purchase of 333 shares of the Company's common stock (the
"Warrant" and, collectively with the Note, the "Securities").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement and other good and valuable consideration the receipt
and adequacy of which the parties acknowledge, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 SALE OF NOTE. The Company agrees to sell to the Investor and,
subject to the terms and conditions hereof and in reliance upon the
representations and warranties of the Company contained herein or made pursuant
hereto, the Investor agrees to purchase from the Company on the Closing Date
specified in Section 1.3 hereof, a Note in the aggregate principal amount of
$2,000,000, in substantially the form attached hereto as EXHIBIT A.
1.2 ISSUANCE OF WARRANT. In consideration of Investor's investment in
the Company, the Company agrees to issue to Investor a Warrant in substantially
the form attached hereto as EXHIBIT B.
1.3 CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall be held on such date and at such time on or
before April 7, 1999, as the parties may agree, unless such date is extended by
agreement of the parties (the "Closing Date"). On the Closing Date, Investor
shall pay $2,000,000 in immediately available funds by wire transfer or
certified check to the Company, and the Company shall deliver the Securities to
the Investor.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
To induce Investor's execution of this Agreement and the consummation of
the transactions contemplated hereby, the Company represents, warrants and
covenants as follows:
2.1 CORPORATE ORGANIZATION; AUTHORIZATION. The Company is duly
incorporated, validly existing and in good standing as a corporation under the
laws of the State of Montana and has full corporate power and authority to enter
into this Agreement and to issue and sell the Securities, including the shares
of Common Stock issuable upon exercise or conversion of the Warrant. This
Agreement has
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been duly authorized, executed and delivered by the Company and constitutes a
valid and binding agreement of the Company enforceable in accordance with its
terms.
2.2 CAPITAL STOCK. As of April 7, 1999, the Company had authorized
capital stock consisting of 50,000 shares of Common Stock, no par value, of
which 45,051.61 shares of Common Stock were issued and outstanding, and options
and warrants to purchase an additional 3,948.00 shares were issued and
outstanding. There are no preemptive or similar rights of any security holder
of the Company or any other person to acquire any of the Common Stock.
2.3 CHARACTERISTICS OF THE SHARES. The Securities have been duly
authorized and, when issued, the shares of Common Stock issuable upon exercise
or conversion of the Warrant in accordance with the terms thereof, will be duly
and validly issued, fully paid and non-assessable, and free from all taxes,
liens and charges. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be so issued without violation of
any applicable law or regulation. The shares of Common Stock necessary to
permit full exercise or conversion of the Warrant will at all times be reserved
from the authorized but unissued shares of the Company's Common Stock.
2.4 NON-CONTRAVENTION. Neither the execution and delivery of this
Agreement or the performance of any of the provisions of this Agreement by the
Company is in contravention of or in conflict with any law or regulation or any
term or provision of the Company's Articles of Incorporation or Bylaws and does
not require the consent of any governmental body or other regulatory authority.
2.5 LITIGATION. There is no litigation or other proceeding pending or,
to the best knowledge of the Company, threatened against the Company, which
could have an adverse material affect on the Company. The Company is not in
default with respect to any order, writ, injunction, decree or demand of any
court or other governmental or regulatory authority.
2.6 PURCHASE AGREEMENT; NOTE; WARRANT; REGISTRATION RIGHTS AGREEMENT.
This Agreement, the Note, the Warrant, and the Registration Rights Agreement
between the Company and Investor of even date herewith, have been duly and
validly authorized by the Company, this Agreement has been duly executed and
delivered on behalf of the Company and this Agreement is, and the Warrant, Note
and the Registration Rights Agreement, when executed and delivered by the
Company, will be valid and binding obligations of the Company enforceable
against it in accordance with their respective terms, subject to general
principles of equity and to bankruptcy, insolvency, moratorium and other similar
laws affecting the enforcement of creditors' rights generally and limits upon
rights to indemnity.
2.7 APPROVALS. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the shareholders of the Company is required to be obtained
by Company for (i) the issuance and sale of the Note and the issuance of the
Warrant as contemplated by this Agreement, and (ii) the issuance of shares upon
exercise or conversion of the Warrant, except for the filing of one or more
Notice of Sale on Form D with respect to the Securities as required under
Regulation D under the Securities Act.
2.8 INFORMATION PROVIDED. The information provided by or on behalf of
the Company to Investor in connection with the transactions contemplated by the
Agreement does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances in which they were made, not misleading.
2.9 ABSENCE OF CERTAIN CHANGES. Since January 1, 1999, there has been
no material adverse change and no material adverse development in the business,
properties, operations, condition
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(financial or other), results of operations or prospects of the Company, and,
except as and to the extent disclosed, reflected or reserved against in the
financial statements of the Company has no material (individually or in the
aggregate) liabilities, debts or obligations whether accrued, absolute,
contingent or otherwise, and whether due or to become due. Subsequent to
January 1, 1999, the Company has not incurred any liabilities, debts or
obligations of any nature whatsoever which are individually or in the
aggregate material to the Company, other than those incurred in the ordinary
course of its business.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF INVESTOR
As an inducement to, and with the intent that Company rely on the accuracy
thereof, Investor represents, warrants and covenants as follows:
3.1 ORGANIZATION. Investor is duly incorporated, validly existing and
in good standing as a corporation under the laws of the State of Montana.
Investor has the requisite power and is duly authorized under all applicable
laws and regulations to acquire the Securities.
3.2 APPROVAL OF AGREEMENT. Investor has taken all action required by
applicable law, its governing charter or otherwise to authorize the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement is a legal, valid and binding obligation of
Investor, enforceable against it in accordance with its terms. Investor is not
required to obtain the authorization, approval, consent or order of, or make a
registration or filing with, any court or other regulatory or governmental body
in connection with the execution and delivery by Investor of this Agreement and
the consummation by Investor of the transactions contemplated hereby. The
execution of this Agreement and the consummation of the transactions
contemplated hereby will not result in the breach of any term or provision of,
constitute an event of default under or require the consent or approval of any
third-party pursuant to any material contract, agreement or instrument to which
Investor is a party or by which any of its properties or assets are bound.
3.3 PURCHASE FOR INVESTMENT. Investor is purchasing the Securities for
its own account for investment only and not with a view towards the public sale
or distribution thereof. Investor has been informed and fully understands that
there are significant risks associated with a purchase of the Securities which
factors Investor has considered carefully before executing this Agreement.
3.4 DISCLOSURE OF INFORMATION. The Investor has been furnished with
such materials and has been given access to such information relating to the
Company as the Investor has requested and has been afforded the opportunity to
ask questions regarding the Company and the Securities, all as the Investor has
found necessary to make an informed investment decision. The Investor has been
solely responsible for its own due diligence investigation of the Company and
its proposed business, for its own analysis of the merits and risks of its
investment made pursuant to this Agreement and for its own analysis of the terms
of its investment.
3.5 INVESTOR'S FINANCIAL CONDITION. Investor is an "accredited
investor" within the meaning of Rule 501 promulgated under the Securities Act.
Investor is capable of bearing the economic risk and burden of this investment,
including, without limitation, the possibility of a complete loss of its
investment in the Securities. Investor understands that there are substantial
restrictions on the transferability of the Securities, which may make the
liquidation of the Securities impossible for the immediate future.
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3.6 NO REGISTRATION. Investor acknowledges that the Securities are
being issued without being registered under the Securities Act or other
applicable securities laws under exemptions from such registration
requirements. Investor acknowledges that it must hold the Securities for the
applicable holding period unless the Securities are subsequently registered
under the Securities Act and applicable state securities laws or an exemption
from such registration is available, and that Company will place stop
transfer instructions with the Company's transfer agent regarding the
Securities. The Company is under no obligation to cause or permit the
Securities to be transferred in the absence of such registration or an
opinion satisfactory to the Company's counsel that an exemption is available.
3.7 RULE 144. Investor acknowledges that the Securities are
restricted securities, as defined in Rule 144 under the Securities Act, that
the Securities may not be resold in reliance on Rule 144 for at least one
year after issuance and that once the Securities are eligible for resale
under Rule 144 they will be subject to certain resale restrictions contained
in Rule 144, including volume limitations and restrictions on the manner of
resale, until they have been held for at least one year as provided in Rule
144. If Investor is an affiliate of the Company for purposes of Rule 144,
Investor understands that certain restrictions on resale will continue to
apply under Rule 144 for so long as Investor is an affiliate.
3.8 LEGEND. Investor acknowledges that the certificates representing
the Shares will bear substantially the following legend until such legend may
be removed under applicable securities laws:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND WERE
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND SUCH LAWS. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED
UNDER THE ACT, AND/OR THE LAWS OF CERTAIN STATES, OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE AND THE HOLDER HAS PROVIDED THE COMPANY WITH A
LEGAL OPINION ACCEPTABLE TO THE COMPANY TO THAT EFFECT.
3.9 FURTHER ACTIONS. Investor shall execute and deliver to the
Company, at or prior to the Closing, such further letters of representation,
acknowledgment, suitability or the like, as the Company and its counsel may
reasonably request in connection with the Company's reliance on exemptions from
registration under Regulation D or any other securities laws.
ARTICLE 4
INDEMNIFICATION
4.1 INDEMNIFICATION BY INVESTOR. Investor will indemnify and hold the
Company and its directors, officers, agents and employees, and each person, if
any, who controls the Company within the meaning of the Securities Act
("Affiliates") harmless from and against any and all claims, damages, expenses,
liabilities or actions ("Claims") to which any of them may become subject under
applicable law (including the Securities Act and the Exchange Act), and will
reimburse them for any legal or other expenses reasonably incurred by them in
connection with the investigation or defense of any Claims arising out of or
based upon a misrepresentation or alleged misrepresentation of material fact
contained in any application or statement filed with a governmental body by the
Company or the omission or alleged omission of a material fact required to be
stated therein, or necessary in order to make the statements made therein not
misleading, but only insofar as any such misrepresentation or omission was made
in reliance upon and in conformity with information furnished in writing by
Investor. Investor agrees at any time upon the request of the Company to
furnish a written letter or statement confirming the accuracy of
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any information provided to the Company by Investor. This Section 4.1 shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Company, and shall survive the
consummation of the transactions contemplated by this Agreement.
4.2 INDEMNIFICATION BY THE COMPANY. The Company will indemnify and
hold Investor and its Affiliates harmless from and against any Claims to which
any of them may become subject under applicable law (including the Securities
Act and the Exchange Act) and will reimburse them for any legal or other
expenses reasonably incurred by them in connection with the investigation or
defense of any Claims arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in this Agreement, or
arising out of or based upon the omission or alleged omission of a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. This Section 4.2 shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of
Investor, and shall survive the consummation of the transactions contemplated by
this Agreement.
ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS
The obligations of each party to this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
5.1 ACCURACY OF REPRESENTATIONS. The representations and warranties
made by each party in this Agreement shall have been true when made and shall be
true at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing Date (except
for changes therein permitted by this Agreement), and such party shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by such party prior to or at the
Closing.
5.2 NO EVENT OF DEFAULT. There shall exist no condition that would
constitute an event of default by the Company under the Note or which, after
notice or lapse of time, or both, would constitute an event of default by the
Company.
5.3 PAYMENT OF EXPENSES OF THE INVESTOR. The Company shall have paid
to the Investor all expenses incurred by Investor in negotiating this Agreement,
the Note, the Warrant, and the Registration Rights Agreement, including
reasonable fees and expenses of counsel to Investor.
5.4 OTHER ITEMS. Each party shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as the other party may reasonably request.
ARTICLE 6
GENERAL PROVISIONS
6.1 AMENDMENT OR WAIVER. Every right and remedy provided in this
Agreement shall be cumulative with every other right and remedy, whether
conferred in this Agreement, at law or in equity, and may be enforced
concurrently with any right conferred by this Agreement, and no waiver by any
party of the performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement
may be amended by a writing signed by the parties with respect to any of the
terms contained in this Agreement, and any term or condition of this Agreement
may be waived or the time for
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performance thereof may be extended by a writing signed by the party or
parties for whose benefit the provision is intended.
6.2 ATTORNEYS' FEES. In the event any party institutes and prevails in
any action or suit to enforce this Agreement or to secure relief from any
default under or breach of this Agreement, the defaulting or breaching party or
parties shall reimburse the nonbreaching party or parties for all costs,
including, without limitation, reasonable attorneys' fees incurred in connection
with such dispute and in enforcing or collecting any judgment rendered pursuant
to such dispute.
6.3 GOVERNING LAW. This Agreement shall in all respects, including all
matters of construction, validity and performance, be governed by and construed
and enforced in accordance with the laws of the State of Montana.
6.4 NO BROKERS. Investor and the Company agree that no third person
has in any way brought the parties together or been instrumental in the
negotiation, execution or consummation of this Agreement. Investor and the
Company each agree to indemnify the other against any claim by any third person
for any commission, brokerage, finders fee or other payment with respect to this
Agreement or the transactions contemplated hereby based upon any alleged
agreement or understanding between such party and such third person, whether
expressed or implied, arising from the actions of such party. The covenants set
forth in this Section 6.4 shall survive the Closing Date and the consummation of
the transactions contemplated hereby.
6.5 NOTICES. All notices, demands, requests or other communications
required or authorized under this Agreement shall be deemed given sufficiently
if in writing and if personally delivered; if sent by facsimile transmission,
confirmed with a written copy thereof sent by overnight express delivery; if
sent by registered mail or certified mail, return receipt requested and postage
prepaid; or if sent by overnight express delivery:
If to the Company: JORE CORPORATION
Attention: Xxxxx X. Xxxxxxxx
00000 Xxxxxxx 00 Xxxxx
Xxxxx, Xxxxxxx 00000
Facsimile Transmission: (000) 000-0000
Telephone: (000) 000-0000
If to Investor: To the address, telephone or facsimile
numbers set forth on the signature page
or such other addresses and facsimile numbers as shall be furnished in writing
by any party in the manner for giving notices hereunder. Any such notice,
demand, request or other communication shall be deemed to have been given as of
the date personally delivered or on the first business day after a legible copy
sent by facsimile transmission is received, three days after the date mailed by
registered or certified mail, or on the first business day after the date sent
by overnight delivery.
6.6 SURVIVAL; LIABILITY. The representations, warranties and covenants
of the respective parties set forth in this Agreement shall survive the Closing
the transactions contemplated by this Agreement for a period of one year from
the date of this Agreement.
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6.7 THIRD-PARTY BENEFICIARIES. This Agreement is solely between the
Company and Investor, and no director, officer, stockholder, employee, agent,
independent contractor or any other person or entity shall be deemed to be a
third-party beneficiary of this Agreement.
6.8 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be a single instrument.
6.9 ENTIRE AGREEMENT. This Agreement, together with the documents to
be delivered pursuant to this Agreement, represents the entire agreement between
the parties relating to the subject matter of this Agreement. There are no
other understandings, agreements, representations or warranties, written or
oral, with respect to the subject matter hereof except as set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
THE COMPANY:
JORE CORPORATION
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Xxxxxxx X. Xxxx
President
INVESTOR:
DADCO
By: /s/ [ILLEGIBLE]
--------------------------------------------
Its: Vice Chairman
-------------------------------------
Investor's Address:
0 Xxxxx Xxxxxx X.
Xxxxxxxx Xxxxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxx
Facsimile Transmission: (000) 000-0000
Telephone: (000) 000-0000
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EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAW. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE LAW OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
$2,000,000 April 7, 1999
FOR VALUE RECEIVED, Jore Corporation, a Montana corporation (the
"Company"), promises to pay to the order of DADCO, a Montana corporation
("Holder"), at 0 Xxxxx Xxxxxx Xxxxx xx Xxxxx Xxxxx, Xxxxxxx 00000 or such
other place as the Holder from time to time may designate in writing, upon
the terms set forth below, the principal sum of Two million dollars
($2,000,000) in full on the earlier of (a) January 1, 2000 or (b) within five
calendar days following the closing of an initial firm commitment
underwritten public offering of the Company's common stock pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(a "Public Offering").
1. INTEREST. The unpaid principal balance outstanding from time to time
under this Note shall bear interest at the rate of 6.5% per annum. Accrued
interest shall be due and payable at maturity or upon earlier prepayment by
the Company.
2. PAYMENTS AND PREPAYMENTS. Each payment hereunder shall be first
applied to the payment of any costs and expenses for which the Company is
liable hereunder, next to the payment of accrued interest, and lastly to the
reduction of principal. This Note shall continue to bear interest as provided
herein until and including the date of collection. Prepayments of principal
can be made only upon not less than ten days prior written notice to the
Holder, but there shall be no prepayment fee, premium or penalty. Any
prepayments shall be first credited to any accrued an unpaid interest, then
to principal.
3. SUBORDINATION TO SENIOR DEBT. The payment of principal of this Note
is subordinated to all existing and future indebtedness and liabilities of
the Company other than other subordinated notes and trade payables, and is a
general, unsecured obligation of the Company. Subject to the rights, if any,
of the holders of senior indebtedness under this Section 3 to receive cash,
securities or other properties otherwise payable or deliverable to the
Holder, nothing contained in this Section 3 shall impair, as between the
Company and the Holder, the obligation of the Company, subject to the terms
and conditions of this Section 3 to pay to the Holder the principal hereof as
and when the same becomes due and payable, or shall prevent the Holder, upon
default hereunder, from exercising all rights, powers and remedies otherwise
provided herein or by applicable law. Subject to payment in full of all
senior indebtedness and until this Note shall be paid in full, the Holder
shall be subrogated to the rights of the holders of senior indebtedness (to
the extent of payments or distributions previously made to such holders of
senior indebtedness pursuant to the provisions hereof) to receive payments or
distributions of assets of the Company applicable to the senior indebtedness.
No such payments or distributions applicable to the senior indebtedness, as
between the Company and its creditors, other than the holders of senior
indebtedness and the Holder, shall be deemed to be a payment by the Company
to or on account of this Note; and for the purposes of such subrogation, no
payments or distributions to the holders of senior indebtedness to which the
Holder would be entitled except for the provisions of this
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Section 3, as between the Company and its creditors, other than the holders of
senior indebtedness and the Holder, shall be deemed to be a payment by the
Company to or on account of the senior indebtedness.
4. EVENTS OF DEFAULT. Each of the following shall constitute an event
of default ("Event of Default") hereunder.
4.1 Failure of the Company to make any payment of principal or
interest upon this Note when due; or
4.2 Breach by the Company in any material respect of any warranty
or any obligation of the Company set forth in this Note; or
4.3 Filing by the Company of a voluntary petition in bankruptcy or
filing by the Company of any petition or answer seeking or acquiescing in any
reorganization, arrangement, composition, readjustment, liquidation, or
similar relief for itself under any present or future federal, state or other
statute, law or regulation relating to bankruptcy, insolvency or other relief
for debtors, or the seeking, consenting to, or acquiescing by the Company in
the appointment of any trustee, receiver, custodian, conservator or
liquidator for the Company, or the making by the Company of any general
assignment for the benefit of creditors, or the inability of or failure by
the Company to pay its debts generally as they become due; or
4.4 Filing of a petition against the Company seeking any
reorganization, arrangement, composition, readjustment, liquidation, or
similar relief under any present or future federal, state or other law or
regulation relating to bankruptcy, insolvency or other relief for debts, or
the appointment of any trustee, receiver, custodian, conservator or liquidator
of the Company, unless such petition shall be dismissed within sixty (60)
days after such filing, but in any event prior to the entry of an order,
judgment or decree approving such petition.
Upon the occurrence and continuation of any Event of Default, then the
principal of this Note, and all accrued interest, shall at the option of the
Holder become immediately due and payable upon written notice of acceleration
from the Holder of the Company.
No right or remedy conferred upon or reserved to the Holder is intended
to be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given under this Section 4 or one or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy. No delay or omission
of the holder to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default. Every right and remedy given by the Section or by law
to the Holder may be exercised from time to time, and as often as the Holder
may deem necessary. The Holder may waive any past default and its
consequences under this Section 4 by way of a written waiver specifying the
default waived, but no such waiver shall extend to any subsequent or other
default or impair any right of the Holder upon such default.
5. COSTS AND FEES. The Company agrees to pay all expenses, including
without limitation reasonable attorneys' fees and costs, including fees and
costs of appeals, incurred by the Holder or any assignee of this Note in
attempting to collect any amounts payable hereunder that are not paid when
due.
6. OBLIGATIONS. Except as otherwise provided in this Note as to
notices, the undersigned and all endorsers and all persons liable or to
become liable on this Note waive presentment, demand,
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protest and notice of demand, protest and nonpayment, and all other demands
and notices in connection with the delivery, acceptance, performance, default
or enforcement of this Note, and consent to any and all renewals and
extensions of the time of payment hereof and further agree that at any time
the terms of payment hereof may be modified without affecting the liability
of any party to this Note or any person liable or to become liable with
respect to any indebtedness evidenced hereby. In any action on this Note, the
Holder or its assignee need not produce or file the original of this Note,
but need only file a photocopy of this Note certified by the Holder or such
assignee to be a true and correct copy of this Note.
7. NOTICES. All notices and other information hereunder shall be
delivered personally or if mailed, sent first-class postage prepaid, and if
to the Holder, then to the Holder's address appearing on the Company's
records, and if to the Company, then to Xxx Corporation, 00000 Xxxxxxx 00
Xxxxx, Xxxxx, Xxxxxxx 00000 Attention: Xxxxx X. Xxxxxxxx, or to such other
address as the Holder or the Company may have so provided to the other by
written notice given pursuant to this Section.
8. WAIVER. The Holder shall not be deemed, by any act or failure to
act, to waive any of its rights or remedies hereunder unless such waiver is
in writing and signed by the Holder, and then only to the extent specifically
set forth in writing.
9. GOVERNING LAW AND INTERPRETATION. This Note shall be governed by
and construed in accordance with the internal laws of Montana applicable to
contracts executed and to be performed wholly in that state. This Note
(together with the other agreements relating to the Company that are being
executed contemporaneously herewith) constitutes the entire agreement among
the parties with respect to the subject matter hereof, and supersedes any and
all previous agreements, understandings, term sheets, commitments or
discussions relating thereto. This Note has been reviewed and negotiated by
the Company and Holder at arms' length with each party having had the
benefit of, or the opportunity to seek the assistance of, legal counsel and
shall not be construed against either party. The titles and captions in this
Note are inserted for convenience only and in no way define, limit, extend,
or modify the scope or intent of this Note.
IN WITNESS WHEREOF, the Company has caused this Note to be executed as
of the date and year first above written.
JORE CORPORATION
By /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx, President
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EXHIBIT B
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR, AT THE
OPTION OF THE COMPANY, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO AN
EXEMPTION TO SUCH ACT.
COMMON STOCK PURCHASE WARRANT
JORE CORPORATION
THIS CERTIFIES that, for value received, DADCO, or registered
assigns, is entitled, upon the terms and subject to the conditions hereinafter
set forth, at any time or from time to time at or prior to 11:59 p.m., Pacific
time, on April 7, 2002 (the "EXPIRATION DATE"), to acquire from Jore
Corporation, a Montana corporation (the "COMPANY"), three hundred thirty three
(333) fully paid and nonassessable shares of common stock, or its equivalent,
however designated, of the Company (the "WARRANT SHARES"), for $1,965.37 per
share (the "EXERCISE PRICE"). The number of Warrant Shares, type of security
and Exercise Price are subject to adjustment as provided herein.
1. EXERCISE OF WARRANT. This Warrant is exercisable by the registered holder
hereof, at any time and from time to time at or prior to the Expiration Date by
the surrender of this Warrant and delivery of a Notice of Exercise/Conversion,
the form of which is attached hereto as ANNEX A, duly executed to the principal
offices of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered holder hereof), and upon
payment of the Exercise Price for the shares thereby purchased (by check payable
to the order of the Company or by wire transfer the account of the Company);
whereupon the Company shall issue to the holder of this Warrant the number of
Warrant Shares so purchased and shall deliver a stock certificate in proper form
representing such number of Warrant Shares.
2. CONVERSION OF WARRANT. The registered holder hereof shall have the right
(but not the obligation) to require the Company to convert this Warrant, in
whole or in part, at any time and from time to time at or prior to the
Expiration Date, by the surrender of this Warrant and delivery of a Notice of
Exercise/Conversion duly executed to the principal offices of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the registered holder hereof), into Warrant Shares as provided in
this Section 2. Upon exercise of this conversion right (and without payment by
the holder of the Exercise Price), the holder hereof shall be entitled to
receive that number of Warrant Shares determined in accordance with the
following formula:
Warrant Shares Issuable to Holder = [ (A/B) x C ] DIVIDED BY A
where:
A = the Fair Market Value (as defined below) of one Warrant
Share on the date of conversion of this Warrant;
B = the Exercise Price; and
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C = the number of Warrant Shares as to which this Warrant is
being converted.
"Fair Market Value" of one Warrant Share shall mean:
(a) if the conversion right is being exercised in connection with a
transaction specified in Section 9 hereof, the value of the consideration
(determined, in the case of non-cash consideration, in good faith by the Board
of Directors of the Company) to be received pursuant to such transaction by the
holder of one Warrant Share;
(b) if the conversion right is being exercised after the occurrence of
an initial public offering of common stock of the Company, the average of the
high and low trading prices of a share of Common Stock as reported by the
principal securities exchange or market on which the common stock is listed for
trading for the three trading days prior to the surrender of this Warrant for
conversion in accordance with the terms hereof; or
(c) in all other cases, the fair value as determined in good faith by
the Board of Directors of the Company.
Upon conversion of this Warrant in accordance with this Section 2, the
registered holder hereof shall be entitled to receive a certificate for the
number of Warrant Shares determined in accordance herewith.
3. ISSUANCE OF SHARES; NO FRACTIONAL SHARES OR SCRIP. Certificates for
shares purchased upon exercise or issuable upon conversion hereof shall be
delivered to the holder by the Company's stock transfer agent at the
Company's expense within three business days after the date on which this
Warrant shall have been exercised or converted, as the case may be, in
accordance with the terms hereof. Each certificate so delivered shall be in
such denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or, subject to applicable laws, any
other name or names as shall be requested by such holder; PROVIDED, HOWEVER,
that in the event certificates for Warrant Shares are to be issued in a name
other than the name of the holder of this Warrant, this Warrant when
surrendered for exercise or conversion shall be accompanied by an Assignment
Form, the form of which is attached hereto as ANNEX B, duly executed by the
holder hereof. If, upon exercise or conversion of this Warrant, fewer than
all of the Warrant Shares evidenced by this Warrant are purchased or issued
prior to the Expiration Date, one or more new warrants of like tenor to this
Warrant will be issued for the remaining number of Warrant Shares not
purchased upon such exercise or issued upon such conversion. The Company
agrees that the shares so issued shall be deemed to be issued to such holder
as the record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered for exercise or conversion in
accordance with the terms hereof. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise or conversion of this
Warrant. With respect to any fraction of a share otherwise issuable upon the
exercise or conversion of this Warrant, an amount equal to such fraction
multiplied by the then current price at which each share may be purchased
hereunder shall be paid in cash to the holder of this Warrant.
4. CHARGES, TAXES AND EXPENSES. Issuance of certificates for shares of
Warrant Shares upon the exercise or conversion of this Warrant shall be made
without charge to the holder hereof for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company.
5. NO RIGHTS AS SHAREHOLDER. This Warrant does not entitle the holder hereof
to any voting rights or other rights as a shareholder of the Company prior to
the exercise or conversion hereof.
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6. EXCHANGE AND REGISTRY OF WARRANT. This Warrant is exchangeable, upon the
surrender hereof by the registered holder at the principal above-mentioned
office or agency of the Company, for a new Warrant of like tenor and dated as of
such exchange. The Company shall maintain at its principal offices (or such
other office or agency of the Company as it may designate by notice in writing
to the registered holder hereof), a registry showing the name and address of the
registered holder of this Warrant. This Warrant may be surrendered for
exchange, transfer, exercise or conversion, in accordance with its terms, at
such office or agency of the Company, and the Company shall be entitled to rely
in all respects, prior to written notice to the contrary, upon such registry.
7. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation,
in lieu of this Warrant.
8. SATURDAYS, SUNDAYS AND HOLIDAYS. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday or a Sunday or shall be a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day not a
legal holiday.
9. MERGER, SALE OF ASSETS, ETC. If at any time the Company proposes to merge
or consolidate with or into any other corporation, effect any reorganization, or
sell or convey all or substantially all of its assets to any other entity, in a
transaction in which the shareholders of the Company immediately prior to
completion of the transaction will own immediately after completion of the
transaction less than a majority of the outstanding voting securities of the
entity (or its parent) succeeding to the business of the Company, then the
Company shall give the holder of this Warrant sixty (60) days' prior written
notice of the proposed effective date of such transaction, and if this Warrant
has not been exercised or converted by or on the effective date of such
transaction, it shall terminate.
10. SUBDIVISION, COMBINATION, RECLASSIFICATION, CONVERSION, ETC. If the
Company at any time shall, by subdivision, combination, reclassification of
securities or otherwise, change the Warrant Shares into the same or a different
number of securities of any class or classes, this Warrant shall thereafter
entitle the holder to acquire such number and kind of securities as would have
been issuable in respect of the Warrant Shares (or other securities which were
subject to the purchase rights under this Warrant immediately prior to such
subdivision, combination, reclassification or other change) as the result of
such change if this Warrant had been exercised in full for cash immediately
prior to such change. The Exercise Price hereunder shall be adjusted if and to
the extent necessary to reflect such change. If the Warrant Shares or other
securities issuable upon exercise or conversion hereof are subdivided or
combined into a greater or smaller number of shares of such security, the number
of shares issuable hereunder shall be proportionately increased or decreased, as
the case may be, and the Exercise Price shall be proportionately reduced or
increased, as the case may be, in both cases according to the ratio which the
total number of shares of such security to be outstanding immediately after such
event bears to the total number of shares of such security outstanding
immediately prior to such event. The Company shall give the holder prompt
written notice of any change in the type of securities issuable hereunder, any
adjustment of the Exercise Price for the securities issuable hereunder, and any
increase or decrease in the number of shares issuable hereunder.
11. TRANSFERABILITY; COMPLIANCE WITH SECURITIES ACT
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(a) This Warrant shall inure to the benefit of the successors to and
assigns of the holder. Prior to the Expiration Date and subject to compliance
with applicable laws, this Warrant and all rights hereunder are transferable by
the holder hereof, in whole or in part, at the principal offices of the Company
(or such other office or agency of the Company as it may designate by notice in
writing to the registered holder hereof). Any such transfer shall be made in
person or by the holder's duly authorized attorney, upon surrender of this
Warrant together with a properly endorsed Assignment Form.
(b) Each certificate representing the Warrant Shares or other
securities issued in respect of the Warrant upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall bear a
legend substantially in the following form (in addition to any legend required
under applicable state securities laws):
These securities have not been registered under the Securities Act of
1933, as amended (the "Act"), or any state securities laws. They may
not be sold, offered for sale, pledged, hypothecated or otherwise
transferred n the absence of a registration statement in effect with
respect to the securities under such act or, at the option of the
company, an opinion of counsel reasonably satisfactory to the Company
that such registration is not required, or unless sold pursuant to an
exemption to such Act.
12. COOPERATION. The Company will not, by amendment of its charter documents
or through any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of the Warrant against impairment.
13. NOTICES OF RECORD DATE, ETC. In the event of
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend on, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any transfer of all or substantially all of the assets of the Company to or
consolidation or merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
holder hereof, at least ten days prior to such record date, a notice specifying
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right; (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or other
securities) shall be entitled to exchange their shares of Common Stock (or other
securities) for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up; and (iii) the amount and character of
any stock or other securities, or rights or options with respect thereto,
proposed to be issued or granted, the date of such proposed issue or grant and
the persons or class of persons to whom such proposed issue or grant is to be
offered or made.
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Such notice shall also state that the action in question or the record date
is subject to the effectiveness of a registration statement under the
Securities Act of 1933, as amended, or a favorable vote of shareholders, if
either is required. Such notice shall be mailed at least ten days prior to
the date specified in such notice on which any such action is to be taken or
the record date, whichever is earlier.
14. NOTICES, ETC. All notices and other communications from the Company to the
registered holder of this Warrant shall be mailed by first class certified mail,
postage prepaid, at such address as may have been furnished to the Company in
writing by such holder or at the address shown for such holder on the register
of Warrants referred to in Section 6.
15. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Montana.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officers.
Dated: April 7, 1999 JORE CORPORATION,
a Montana corporation,
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx, President
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ANNEX A
NOTICE OF EXERCISE/CONVERSION
To: JORE CORPORATION
1. The undersigned Holder of the attached original, executed Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
______________ Warrant Shares, as defined in the Warrant, of Jore Corporation, a
Montana corporation (the "Company").
2. The undersigned Holder (check one):
- elects to pay the aggregate purchase price for such Warrant
Shares (i) by lawful money of the United States or the
enclosed certified or official bank check payable in United
States dollars to the order of the Company in the amount of
$___________, or (ii) by wire transfer of United States
funds to the account of the Company in the amount of
$____________, which transfer has been made before or
simultaneously with the delivery of this Form of
Exercise/Conversion pursuant to the instructions of the
Company;
or
- elects to receive the number of Warrant Shares as calculated
in accordance with Section 2 of the Warrant.
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3. Please issue a stock certificate or certificates
representing the appropriate number of shares of Common Stock in the name of the
undersigned or in such other names as is specified below:
Name:
------------------------------------------
Address:
--------------------------------------
--------------------------------------
Dated:
------------------ -------------------------------------
(Signature must conform to name of
Holder as specified on the face of the
Warrant)
------------------------------------
------------------------------------
(Address)
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ANNEX B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form
and supply required information.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
-------------------------------------------------------------
(Please Print)
whose address is
-------------------------------------------------------------
(Please Print)
Dated:
---------------------------------------
Holder's Signature:
---------------------
Holder's Address:
-----------------------
-----------------------------------------
Guaranteed Signature:
---------------------------------------
NOTE: The signature to this Assignment Form must correspond with the name
as it appears on the face of the Warrant, without alteration or enlargement or
any change whatever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
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