NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
Warrant No. 2006/1/MR/3
Issue Date: May 25, 2006
WARRANT TO PURCHASE
200,000 SHARES
OF COMMON STOCK OF
COMPOSITE TECHNOLOGY CORPORATION
This certifies that Media Relations Strategy Inc, or its assigns (the
"Holder"), for value received, is entitled to purchase from COMPOSITE TECHNOLOGY
CORPORATION, a Nevada corporation (the "Company"), subject to the terms set
forth below, Two Hundred Thousand (200,000) fully paid and nonassessable shares
(subject to adjustment as provided herein) of the Common Stock of the Company
(the "Warrant Shares") for cash at a per share price of $3.00 (the "Exercise
Price") (subject to adjustment as provided herein), at any time after the Issue
Date, from time to time up to and including 5:00 p.m. (Pacific Standard Time) on
December 31, 2008 (the "Expiration Date,") upon surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and upon payment in cash or by check
of the aggregate Exercise Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof. The
Exercise Price is subject to adjustment as provided in Section 3 of this
Warrant.
1. Exercise, Issuance of Certificates, Reduction in Number of Warrant
Shares.
1.1 General. This Warrant is exercisable at the option of the Holder
of record on or prior to the Expiration Date, at any time or from time to time
for all or any part of the vested Warrant Shares (but not for a fraction of a
share) which may be purchased hereunder, as that number may be adjusted pursuant
to Section 3 of this Warrant. The Company agrees that the Warrant Shares
purchased under this Warrant shall be and are deemed to be issued to the Holder
as the record owner of such Warrant Shares as of the close of business on the
date on which this Warrant shall have been surrendered, properly endorsed, the
completed and executed Form of Subscription delivered, and payment made for such
Warrant Shares. Certificates for the Warrant Shares so purchased, together with
any other securities or property to which the Holder is entitled upon such
exercise, shall be delivered to the Holder by the Company at the Company's
expense as soon as practicable after the rights represented by this Warrant have
been so exercised. In case of a purchase of less than all the Warrant Shares
which may be purchased under this Warrant, the Company shall cancel this Warrant
and execute and deliver to the Holder within a reasonable time a new Warrant or
Warrants of like tenor for the balance of the Warrant Shares purchasable under
the Warrant surrendered upon such purchase. Each stock certificate so delivered
shall be registered in the name of the Holder.
1
1.2 Record Ownership. To the extent permitted by applicable law, the
person in whose name any certificate for shares of Common Stock or other
evidence of ownership of any other security is issued upon exercise or exchange
of the Warrant shall for all purposes be deemed to have become the holder of
record of such shares or other security on the Delivery Date, irrespective of
the date of delivery of such certificate or other evidence of ownership
(subject, in the case of any exercise to which Section 1.6 of this Warrant
applies, to the consummation of a transaction upon which such exercise is
conditioned), notwithstanding that the transfer books of the Company shall then
be closed or that such certificates or other evidence of ownership shall not
then actually have been delivered to such person.
1.3 Approvals. If any securities constituting Warrant Shares or any
portion thereof to be issued upon exercise or exchange of the Warrant require
registration or approval under any applicable law, or require listing on any
national securities exchange or national market system before such securities
may be so issued, the Company will as expeditiously as possible cause such
securities to be registered, approved or listed, as applicable. The Company may
suspend the exercise of the Warrant for the period during which such
registration, approval or listing is required but not in effect.
1.4 Conditional Exercise or Exchange. Any form of subscription or
exchange form delivered under Sections 1.1 or 11.2 may condition the exercise or
exchange of this Warrant on the consummation of a transaction being undertaken
by the Company or the Holder, and such exercise or exchange shall not be deemed
to have occurred except concurrently with the consummation of such transaction,
except that, for purposes of determining whether such exercise or exchange is
timely it shall be deemed to have occurred on the date of delivery (the
"Delivery Date") of the subscription or exchange form. If any exercise of the
Warrant is so conditioned, then, subject to delivery of the items required by
Sections 1.1 and 2 of this Warrant, the Company shall deliver the certificates
and other evidence of ownership of other securities or other property in such
manner as the Holder shall direct as required in connection with the
consummation of such transaction upon which the exercise is conditioned. At any
time that the Holder shall give notice to the Company that such transaction has
been abandoned or that the Holder has withdrawn from participation in such
transaction, the Company shall return the items delivered pursuant to Sections
1.1 and 2 of this Warrant, and the Holder's election to exercise the Warrant
shall be deemed rescinded.
1.5 Regulatory Problem. The Holder shall not exercise or exchange
the Warrant for shares of Common Stock if after giving effect to such exercise
or exchange the Holder reasonably determines that such exercise would violate
any law or regulation or any requirement of any governmental authority
applicable to Holder or his affiliates.
2. Shares to be Fully Paid. The Company covenants and agrees that all
Warrant Shares, will, upon issuance and, if applicable, payment of the
applicable Exercise Price, be duly authorized, validly issued, fully paid and
nonassessable, and free of all liens and encumbrances, except for restrictions
on transfer provided for herein or under applicable federal and state securities
laws.
3. Adjustment of Exercise Price and Number of Shares. The Exercise Price
and the number of Warrant Shares shall be proportionately adjusted from time to
time upon the occurrence of any capital reorganization or any reclassification
of Common Stock, or the consolidation, merger, combination or exchange of shares
with another entity, or the divisive reorganization of the Company. Upon each
adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be
entitled to purchase, at the Exercise Price resulting from such adjustment, the
number of shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such adjustment.
2
4. Piggyback Registration. If the Company at any time proposes for any
reason to register its restricted common stock under the Securities Act of 1933,
as amended (the "Act") (other than on Form S-4 or Form S-8 promulgated under the
Act or any successor forms thereto), it shall include in such registration all
of the Common Stock issued pursuant to this Warrant on the same terms and
conditions as the securities otherwise being registered in such registration.
The Company shall pay the fees and expenses for such registration.
5. Voting Rights. Nothing contained in this Warrant shall be construed as
conferring upon the Holder the right to vote or to consent to or receive notice
as a shareholder of the Company on any other matters or any rights whatsoever as
a shareholder of the Company.
6. Compliance with Securities Act: Transferability of Warrant, Disposition
of Shares of Common Stock.
6.1 Compliance with Securities Act. The Holder, by acceptance
hereof, agrees that this Warrant and the Warrant Shares to be issued upon
exercise hereof are being acquired for investment and that he will not offer,
sell, or otherwise dispose of this Warrant or any Warrant Shares except under
circumstances which will not result in a violation of the Securities Act of 1933
(the "Act") or any applicable state securities laws. This Warrant and all
Warrant Shares (unless registered under the Act) shall be stamped or imprinted
with a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT.
6.2 Access to Information; Pre-Existing Relationship. Xxxxxx has had
the opportunity to ask questions of, and to receive answers from, appropriate
executive officers of the Company with respect to the terms and conditions of
the transactions contemplated hereby and with respect to the business, affairs,
financial condition and results of operations of the Company. Xxxxxx has had
access to such financial and other information as is necessary in order for
Holder to make a fully informed decision as to investment in the Company, and
has had the opportunity to obtain any additional information necessary to verify
any of such information to which Xxxxxx has had access. Holder further
represents and warrants that he has either (i) a pre-existing relationship with
the Company or one or more of its officers or directors consisting of personal
or business contacts of a nature and duration which enable him to be aware of
the character, business acumen and general business and financial circumstances
of the Company or the officer or director with whom such relationship exists or
(ii) such business or financial expertise as to be able to protect his own
interests in connection with the purchase of the Shares.
3
6.3 Warrant Transferable. Subject to compliance with applicable
federal and state securities laws under which this Warrant was issued, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the Holder (except for transfer taxes), upon surrender of this Warrant
properly endorsed; provided, however, that the Holder shall notify the Company
in writing in advance of any proposed transfer and shall not transfer this
Warrant or any rights hereunder to any person or entity which is then engaged in
a business that in the reasonable judgment of the Company is in direct
competition with the Company. As promptly as practicable but in any event within
ten (10) Business Days of receipt of such properly endorsed Warrant, the Company
shall issue, register and deliver to the Holder thereof a new Warrant or
Warrants of like kind and tenor representing in the aggregate the right to
purchase the same number of Warrant Shares that could be purchased pursuant to
the Warrant being transferred. Holder shall pay Company's reasonable costs
incurred in effectuating such transfer.
6.4 Disposition of Warrant Shares. With respect to any offer, sale,
or other disposition of the Warrant or any Warrant Shares, the Holder hereof and
each subsequent Holder of this Warrant agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder's counsel, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition may be
effected without registration or qualification (under the Act as then in effect
or any federal or state law then in effect) of the Warrant or Warrant Shares, as
the case may be, and indicating whether or not under the Act certificates for
the Warrant or Warrant Shares to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to
insure compliance with the Act. Promptly upon receiving such written notice and
opinion, the Company, as promptly as practicable, shall notify the Holder that
such Holder may sell or otherwise dispose of the Warrant or Warrant Shares, all
in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this subparagraph 6.4 that the opinion
of the counsel for the Holder is not reasonably satisfactory to the Company, the
Company shall so notify the Holder promptly after such determination has been
made. Notwithstanding the foregoing, the Warrant or Warrant Shares may be
offered, sold or otherwise disposed of in accordance with Rule 144 under the
Act, provided that the Company shall have been furnished with such information
as the Company may request to provide reasonable assurance that the provisions
of Rule 144 have been satisfied. Each certificate representing the Warrant or
Warrant Shares thus transferred (except a transfer pursuant to Rule 144) shall
bear a legend as to the applicable restrictions on transferability in order to
insure compliance with the Act, unless in the aforesaid opinion of counsel for
the Holder, such legend is not required in order to insure compliance with the
Act. The Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions.
6.5 Register. This Warrant is, and any Warrant issued, exchanged or
transferred hereunder shall be registered in a warrant register (the "Warrant
Register"). The Warrant Register shall set forth the number of the Warrant, the
name and address of the Holder hereof and the original number of Warrant Shares
purchasable upon the exercise hereof. The Warrant Register will be maintained by
the Company and will be available for inspection by the Holder at the principal
office of the Company or such other location as the Company may designate to the
Holder in the manner set forth in Section 8. The Company shall be entitled to
treat the Holder as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in the Warrant on
the part of any other person.
7. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged, or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
8. Notices. Any notice, request, or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, as follows:
4
Holder: Media Relations Strategy
00000 Xxxxxx Xxxxx,
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Company: Composite Technology Corporation
0000 XxXxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X Xxxxxxxx
or such other address as either may from time to time provide to the
other.
9. Governing Law; Waiver of Jury Trial.
9.1 Governing Law. All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and construed
and enforced in accordance with the domestic laws of the State of California
without giving effect to any choice or conflict of law provision or rule
(whether in the State of California or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
California. In furtherance of the foregoing, the internal law of the State of
California will control the interpretation and construction of this Agreement,
even if under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily or necessarily
apply.
9.2 Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO
APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
10. Exchange of Warrant for Warrants.
10.1 Lost Warrant. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of the Warrant, the Company will, at the Company's
expense, make and deliver a new Warrant, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant.
10.2 Exchange. The Holder may exchange this Warrant at his option,
upon presentation and surrender of this Warrant to Company, for other Warrants
of different denominations, entitling the Holder to purchase in the aggregate
the same number of Warrant Shares. A Warrant may be divided or combined with
other Warrants that carry the same rights, upon presentation thereof at the
principal office of the Company, together with written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
holder thereof. In order to effect an exchange permitted by this Section 11.2,
the Holder shall deliver to the Company this Warrant accompanied by a written
request signed by the Holder specifying the number and denominations of the
Warrant or the Warrants to be issued in such exchange and the names in which the
Warrant or Warrants are to be issued. As promptly as practicable but in any
event within ten (10) Business Days of receipt of such a request, the Company
shall, without charge, issue, register and deliver to the Holder each Warrant to
be issued in such exchange.
5
11. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
(calculated to the nearest 1/100th of a share) multiplied by the then effective
Exercise Price on the date the Form of Subscription is received by the Company.
12. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company
and the Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant, and shall be
enforceable by any such Holder.
6
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officer, thereunto duly authorized as of the date first written
above
COMPANY:
Composite Technology Corporation
a Nevada corporation
/s/ Xxxxxx X. Xxxxxxxx
----------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
7
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Composite Technology Corporation
The undersigned, the holder of the attached Common Stock Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, ________________________ shares of Common Stock
of Composite Technology Corporation (the "Company") and herewith makes payment
of $_________ therefor.
The undersigned represents that he is acquiring such Common Stock for his own
account for investment and not with a view to or for sale in connection with any
distribution thereof.
DATED: _________________
__________________________________________
(Signature must conform in all respects to
name of Xxxxxx as specified on the face of
the Warrant)
Name: _________________________________
Title: _________________________________
8
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
Warrant No. 2006/1/MR/1
Issue Date: May 25, 2006
WARRANT TO PURCHASE
200,000 SHARES
OF COMMON STOCK OF
COMPOSITE TECHNOLOGY CORPORATION
This certifies that Media Relations Strategy Inc, or its assigns (the
"Holder"), for value received, is entitled to purchase from COMPOSITE TECHNOLOGY
CORPORATION, a Nevada corporation (the "Company"), subject to the terms set
forth below, Two Hundred Thousand (200,000) fully paid and nonassessable shares
(subject to adjustment as provided herein) of the Common Stock of the Company
(the "Warrant Shares") for cash at a per share price of $2.00 (the "Exercise
Price") (subject to adjustment as provided herein), at any time after the Issue
Date, from time to time up to and including 5:00 p.m. (Pacific Standard Time) on
December 31, 2008 (the "Expiration Date,") upon surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and upon payment in cash or by check
of the aggregate Exercise Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof. The
Exercise Price is subject to adjustment as provided in Section 3 of this
Warrant.
1. Exercise, Issuance of Certificates, Reduction in Number of Warrant
Shares.
1.1 General. This Warrant is exercisable at the option of the Holder
of record on or prior to the Expiration Date, at any time or from time to time
for all or any part of the vested Warrant Shares (but not for a fraction of a
share) which may be purchased hereunder, as that number may be adjusted pursuant
to Section 3 of this Warrant. The Company agrees that the Warrant Shares
purchased under this Warrant shall be and are deemed to be issued to the Holder
as the record owner of such Warrant Shares as of the close of business on the
date on which this Warrant shall have been surrendered, properly endorsed, the
completed and executed Form of Subscription delivered, and payment made for such
Warrant Shares. Certificates for the Warrant Shares so purchased, together with
any other securities or property to which the Holder is entitled upon such
exercise, shall be delivered to the Holder by the Company at the Company's
expense as soon as practicable after the rights represented by this Warrant have
been so exercised. In case of a purchase of less than all the Warrant Shares
which may be purchased under this Warrant, the Company shall cancel this Warrant
and execute and deliver to the Holder within a reasonable time a new Warrant or
Warrants of like tenor for the balance of the Warrant Shares purchasable under
the Warrant surrendered upon such purchase. Each stock certificate so delivered
shall be registered in the name of the Holder.
1
1.2 Record Ownership. To the extent permitted by applicable law, the
person in whose name any certificate for shares of Common Stock or other
evidence of ownership of any other security is issued upon exercise or exchange
of the Warrant shall for all purposes be deemed to have become the holder of
record of such shares or other security on the Delivery Date, irrespective of
the date of delivery of such certificate or other evidence of ownership
(subject, in the case of any exercise to which Section 1.6 of this Warrant
applies, to the consummation of a transaction upon which such exercise is
conditioned), notwithstanding that the transfer books of the Company shall then
be closed or that such certificates or other evidence of ownership shall not
then actually have been delivered to such person.
1.3 Approvals. If any securities constituting Warrant Shares or any
portion thereof to be issued upon exercise or exchange of the Warrant require
registration or approval under any applicable law, or require listing on any
national securities exchange or national market system before such securities
may be so issued, the Company will as expeditiously as possible cause such
securities to be registered, approved or listed, as applicable. The Company may
suspend the exercise of the Warrant for the period during which such
registration, approval or listing is required but not in effect.
1.4 Conditional Exercise or Exchange. Any form of subscription or
exchange form delivered under Sections 1.1 or 11.2 may condition the exercise or
exchange of this Warrant on the consummation of a transaction being undertaken
by the Company or the Holder, and such exercise or exchange shall not be deemed
to have occurred except concurrently with the consummation of such transaction,
except that, for purposes of determining whether such exercise or exchange is
timely it shall be deemed to have occurred on the date of delivery (the
"Delivery Date") of the subscription or exchange form. If any exercise of the
Warrant is so conditioned, then, subject to delivery of the items required by
Sections 1.1 and 2 of this Warrant, the Company shall deliver the certificates
and other evidence of ownership of other securities or other property in such
manner as the Holder shall direct as required in connection with the
consummation of such transaction upon which the exercise is conditioned. At any
time that the Holder shall give notice to the Company that such transaction has
been abandoned or that the Holder has withdrawn from participation in such
transaction, the Company shall return the items delivered pursuant to Sections
1.1 and 2 of this Warrant, and the Holder's election to exercise the Warrant
shall be deemed rescinded.
1.5 Regulatory Problem. The Holder shall not exercise or exchange
the Warrant for shares of Common Stock if after giving effect to such exercise
or exchange the Holder reasonably determines that such exercise would violate
any law or regulation or any requirement of any governmental authority
applicable to Holder or his affiliates.
2. Shares to be Fully Paid. The Company covenants and agrees that all
Warrant Shares, will, upon issuance and, if applicable, payment of the
applicable Exercise Price, be duly authorized, validly issued, fully paid and
nonassessable, and free of all liens and encumbrances, except for restrictions
on transfer provided for herein or under applicable federal and state securities
laws.
3. Adjustment of Exercise Price and Number of Shares. The Exercise Price
and the number of Warrant Shares shall be proportionately adjusted from time to
time upon the occurrence of any capital reorganization or any reclassification
of Common Stock, or the consolidation, merger, combination or exchange of shares
with another entity, or the divisive reorganization of the Company. Upon each
adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be
entitled to purchase, at the Exercise Price resulting from such adjustment, the
number of shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such adjustment.
2
4. Piggyback Registration. If the Company at any time proposes for any
reason to register its restricted common stock under the Securities Act of 1933,
as amended (the "Act") (other than on Form S-4 or Form S-8 promulgated under the
Act or any successor forms thereto), it shall include in such registration all
of the Common Stock issued pursuant to this Warrant on the same terms and
conditions as the securities otherwise being registered in such registration.
The Company shall pay the fees and expenses for such registration.
5. Voting Rights. Nothing contained in this Warrant shall be construed as
conferring upon the Holder the right to vote or to consent to or receive notice
as a shareholder of the Company on any other matters or any rights whatsoever as
a shareholder of the Company.
6. Compliance with Securities Act: Transferability of Warrant, Disposition
of Shares of Common Stock.
6.1 Compliance with Securities Act. The Holder, by acceptance
hereof, agrees that this Warrant and the Warrant Shares to be issued upon
exercise hereof are being acquired for investment and that he will not offer,
sell, or otherwise dispose of this Warrant or any Warrant Shares except under
circumstances which will not result in a violation of the Securities Act of 1933
(the "Act") or any applicable state securities laws. This Warrant and all
Warrant Shares (unless registered under the Act) shall be stamped or imprinted
with a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT.
6.2 Access to Information; Pre-Existing Relationship. Xxxxxx has had
the opportunity to ask questions of, and to receive answers from, appropriate
executive officers of the Company with respect to the terms and conditions of
the transactions contemplated hereby and with respect to the business, affairs,
financial condition and results of operations of the Company. Xxxxxx has had
access to such financial and other information as is necessary in order for
Holder to make a fully informed decision as to investment in the Company, and
has had the opportunity to obtain any additional information necessary to verify
any of such information to which Xxxxxx has had access. Holder further
represents and warrants that he has either (i) a pre-existing relationship with
the Company or one or more of its officers or directors consisting of personal
or business contacts of a nature and duration which enable him to be aware of
the character, business acumen and general business and financial circumstances
of the Company or the officer or director with whom such relationship exists or
(ii) such business or financial expertise as to be able to protect his own
interests in connection with the purchase of the Shares.
3
6.3 Warrant Transferable. Subject to compliance with applicable
federal and state securities laws under which this Warrant was issued, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the Holder (except for transfer taxes), upon surrender of this Warrant
properly endorsed; provided, however, that the Holder shall notify the Company
in writing in advance of any proposed transfer and shall not transfer this
Warrant or any rights hereunder to any person or entity which is then engaged in
a business that in the reasonable judgment of the Company is in direct
competition with the Company. As promptly as practicable but in any event within
ten (10) Business Days of receipt of such properly endorsed Warrant, the Company
shall issue, register and deliver to the Holder thereof a new Warrant or
Warrants of like kind and tenor representing in the aggregate the right to
purchase the same number of Warrant Shares that could be purchased pursuant to
the Warrant being transferred. Holder shall pay Company's reasonable costs
incurred in effectuating such transfer.
6.4 Disposition of Warrant Shares. With respect to any offer, sale,
or other disposition of the Warrant or any Warrant Shares, the Holder hereof and
each subsequent Holder of this Warrant agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder's counsel, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition may be
effected without registration or qualification (under the Act as then in effect
or any federal or state law then in effect) of the Warrant or Warrant Shares, as
the case may be, and indicating whether or not under the Act certificates for
the Warrant or Warrant Shares to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to
insure compliance with the Act. Promptly upon receiving such written notice and
opinion, the Company, as promptly as practicable, shall notify the Holder that
such Holder may sell or otherwise dispose of the Warrant or Warrant Shares, all
in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this subparagraph 6.4 that the opinion
of the counsel for the Holder is not reasonably satisfactory to the Company, the
Company shall so notify the Holder promptly after such determination has been
made. Notwithstanding the foregoing, the Warrant or Warrant Shares may be
offered, sold or otherwise disposed of in accordance with Rule 144 under the
Act, provided that the Company shall have been furnished with such information
as the Company may request to provide reasonable assurance that the provisions
of Rule 144 have been satisfied. Each certificate representing the Warrant or
Warrant Shares thus transferred (except a transfer pursuant to Rule 144) shall
bear a legend as to the applicable restrictions on transferability in order to
insure compliance with the Act, unless in the aforesaid opinion of counsel for
the Holder, such legend is not required in order to insure compliance with the
Act. The Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions.
6.5 Register. This Warrant is, and any Warrant issued, exchanged or
transferred hereunder shall be registered in a warrant register (the "Warrant
Register"). The Warrant Register shall set forth the number of the Warrant, the
name and address of the Holder hereof and the original number of Warrant Shares
purchasable upon the exercise hereof. The Warrant Register will be maintained by
the Company and will be available for inspection by the Holder at the principal
office of the Company or such other location as the Company may designate to the
Holder in the manner set forth in Section 8. The Company shall be entitled to
treat the Holder as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in the Warrant on
the part of any other person.
7. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged, or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
8. Notices. Any notice, request, or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, as follows:
4
Holder: Media Relations Strategy
00000 Xxxxxx Xxxxx,
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Company: Composite Technology Corporation
0000 XxXxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X Xxxxxxxx
or such other address as either may from time to time provide to the
other.
9. Governing Law; Waiver of Jury Trial.
9.1 Governing Law. All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and construed
and enforced in accordance with the domestic laws of the State of California
without giving effect to any choice or conflict of law provision or rule
(whether in the State of California or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
California. In furtherance of the foregoing, the internal law of the State of
California will control the interpretation and construction of this Agreement,
even if under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily or necessarily
apply.
9.2 Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO
APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
10. Exchange of Warrant for Warrants.
10.1 Lost Warrant. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of the Warrant, the Company will, at the Company's
expense, make and deliver a new Warrant, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant.
10.2 Exchange. The Holder may exchange this Warrant at his option,
upon presentation and surrender of this Warrant to Company, for other Warrants
of different denominations, entitling the Holder to purchase in the aggregate
the same number of Warrant Shares. A Warrant may be divided or combined with
other Warrants that carry the same rights, upon presentation thereof at the
principal office of the Company, together with written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
holder thereof. In order to effect an exchange permitted by this Section 11.2,
the Holder shall deliver to the Company this Warrant accompanied by a written
request signed by the Holder specifying the number and denominations of the
Warrant or the Warrants to be issued in such exchange and the names in which the
Warrant or Warrants are to be issued. As promptly as practicable but in any
event within ten (10) Business Days of receipt of such a request, the Company
shall, without charge, issue, register and deliver to the Holder each Warrant to
be issued in such exchange.
5
11. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
(calculated to the nearest 1/100th of a share) multiplied by the then effective
Exercise Price on the date the Form of Subscription is received by the Company.
12. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company
and the Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant, and shall be
enforceable by any such Holder.
6
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officer, thereunto duly authorized as of the date first written
above
COMPANY:
Composite Technology Corporation
a Nevada corporation
/s/ Xxxxxx X. Xxxxxxxx
----------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
7
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Composite Technology Corporation
The undersigned, the holder of the attached Common Stock Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, ________________________ shares of Common Stock
of Composite Technology Corporation (the "Company") and herewith makes payment
of $_________ therefor.
The undersigned represents that he is acquiring such Common Stock for his own
account for investment and not with a view to or for sale in connection with any
distribution thereof.
DATED: _________________
__________________________________________
(Signature must conform in all respects to
name of Xxxxxx as specified on the face of
the Warrant)
Name: _________________________________
Title: _________________________________
8
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
Warrant No. 2006/1/MR/2
Issue Date: May 25, 2006
WARRANT TO PURCHASE
200,000 SHARES
OF COMMON STOCK OF
COMPOSITE TECHNOLOGY CORPORATION
This certifies that Media Relations Strategy Inc, or its assigns (the
"Holder"), for value received, is entitled to purchase from COMPOSITE TECHNOLOGY
CORPORATION, a Nevada corporation (the "Company"), subject to the terms set
forth below, Two Hundred Thousand (200,000) fully paid and nonassessable shares
(subject to adjustment as provided herein) of the Common Stock of the Company
(the "Warrant Shares") for cash at a per share price of $2.50 (the "Exercise
Price") (subject to adjustment as provided herein), at any time after the Issue
Date, from time to time up to and including 5:00 p.m. (Pacific Standard Time) on
December 31, 2008 (the "Expiration Date,") upon surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and upon payment in cash or by check
of the aggregate Exercise Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof. The
Exercise Price is subject to adjustment as provided in Section 3 of this
Warrant.
1. Exercise, Issuance of Certificates, Reduction in Number of Warrant
Shares.
1.1 General. This Warrant is exercisable at the option of the Holder
of record on or prior to the Expiration Date, at any time or from time to time
for all or any part of the vested Warrant Shares (but not for a fraction of a
share) which may be purchased hereunder, as that number may be adjusted pursuant
to Section 3 of this Warrant. The Company agrees that the Warrant Shares
purchased under this Warrant shall be and are deemed to be issued to the Holder
as the record owner of such Warrant Shares as of the close of business on the
date on which this Warrant shall have been surrendered, properly endorsed, the
completed and executed Form of Subscription delivered, and payment made for such
Warrant Shares. Certificates for the Warrant Shares so purchased, together with
any other securities or property to which the Holder is entitled upon such
exercise, shall be delivered to the Holder by the Company at the Company's
expense as soon as practicable after the rights represented by this Warrant have
been so exercised. In case of a purchase of less than all the Warrant Shares
which may be purchased under this Warrant, the Company shall cancel this Warrant
and execute and deliver to the Holder within a reasonable time a new Warrant or
Warrants of like tenor for the balance of the Warrant Shares purchasable under
the Warrant surrendered upon such purchase. Each stock certificate so delivered
shall be registered in the name of the Holder.
1
1.2 Record Ownership. To the extent permitted by applicable law, the
person in whose name any certificate for shares of Common Stock or other
evidence of ownership of any other security is issued upon exercise or exchange
of the Warrant shall for all purposes be deemed to have become the holder of
record of such shares or other security on the Delivery Date, irrespective of
the date of delivery of such certificate or other evidence of ownership
(subject, in the case of any exercise to which Section 1.6 of this Warrant
applies, to the consummation of a transaction upon which such exercise is
conditioned), notwithstanding that the transfer books of the Company shall then
be closed or that such certificates or other evidence of ownership shall not
then actually have been delivered to such person.
1.3 Approvals. If any securities constituting Warrant Shares or any
portion thereof to be issued upon exercise or exchange of the Warrant require
registration or approval under any applicable law, or require listing on any
national securities exchange or national market system before such securities
may be so issued, the Company will as expeditiously as possible cause such
securities to be registered, approved or listed, as applicable. The Company may
suspend the exercise of the Warrant for the period during which such
registration, approval or listing is required but not in effect.
1.4 Conditional Exercise or Exchange. Any form of subscription or
exchange form delivered under Sections 1.1 or 11.2 may condition the exercise or
exchange of this Warrant on the consummation of a transaction being undertaken
by the Company or the Holder, and such exercise or exchange shall not be deemed
to have occurred except concurrently with the consummation of such transaction,
except that, for purposes of determining whether such exercise or exchange is
timely it shall be deemed to have occurred on the date of delivery (the
"Delivery Date") of the subscription or exchange form. If any exercise of the
Warrant is so conditioned, then, subject to delivery of the items required by
Sections 1.1 and 2 of this Warrant, the Company shall deliver the certificates
and other evidence of ownership of other securities or other property in such
manner as the Holder shall direct as required in connection with the
consummation of such transaction upon which the exercise is conditioned. At any
time that the Holder shall give notice to the Company that such transaction has
been abandoned or that the Holder has withdrawn from participation in such
transaction, the Company shall return the items delivered pursuant to Sections
1.1 and 2 of this Warrant, and the Holder's election to exercise the Warrant
shall be deemed rescinded.
1.5 Regulatory Problem. The Holder shall not exercise or exchange
the Warrant for shares of Common Stock if after giving effect to such exercise
or exchange the Holder reasonably determines that such exercise would violate
any law or regulation or any requirement of any governmental authority
applicable to Holder or his affiliates.
2. Shares to be Fully Paid. The Company covenants and agrees that all
Warrant Shares, will, upon issuance and, if applicable, payment of the
applicable Exercise Price, be duly authorized, validly issued, fully paid and
nonassessable, and free of all liens and encumbrances, except for restrictions
on transfer provided for herein or under applicable federal and state securities
laws.
3. Adjustment of Exercise Price and Number of Shares. The Exercise Price
and the number of Warrant Shares shall be proportionately adjusted from time to
time upon the occurrence of any capital reorganization or any reclassification
of Common Stock, or the consolidation, merger, combination or exchange of shares
with another entity, or the divisive reorganization of the Company. Upon each
adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be
entitled to purchase, at the Exercise Price resulting from such adjustment, the
number of shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such adjustment.
2
4. Piggyback Registration. If the Company at any time proposes for any
reason to register its restricted common stock under the Securities Act of 1933,
as amended (the "Act") (other than on Form S-4 or Form S-8 promulgated under the
Act or any successor forms thereto), it shall include in such registration all
of the Common Stock issued pursuant to this Warrant on the same terms and
conditions as the securities otherwise being registered in such registration.
The Company shall pay the fees and expenses for such registration.
5. Voting Rights. Nothing contained in this Warrant shall be construed as
conferring upon the Holder the right to vote or to consent to or receive notice
as a shareholder of the Company on any other matters or any rights whatsoever as
a shareholder of the Company.
6. Compliance with Securities Act: Transferability of Warrant, Disposition
of Shares of Common Stock.
6.1 Compliance with Securities Act. The Holder, by acceptance
hereof, agrees that this Warrant and the Warrant Shares to be issued upon
exercise hereof are being acquired for investment and that he will not offer,
sell, or otherwise dispose of this Warrant or any Warrant Shares except under
circumstances which will not result in a violation of the Securities Act of 1933
(the "Act") or any applicable state securities laws. This Warrant and all
Warrant Shares (unless registered under the Act) shall be stamped or imprinted
with a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT.
6.2 Access to Information; Pre-Existing Relationship. Xxxxxx has had
the opportunity to ask questions of, and to receive answers from, appropriate
executive officers of the Company with respect to the terms and conditions of
the transactions contemplated hereby and with respect to the business, affairs,
financial condition and results of operations of the Company. Xxxxxx has had
access to such financial and other information as is necessary in order for
Holder to make a fully informed decision as to investment in the Company, and
has had the opportunity to obtain any additional information necessary to verify
any of such information to which Xxxxxx has had access. Holder further
represents and warrants that he has either (i) a pre-existing relationship with
the Company or one or more of its officers or directors consisting of personal
or business contacts of a nature and duration which enable him to be aware of
the character, business acumen and general business and financial circumstances
of the Company or the officer or director with whom such relationship exists or
(ii) such business or financial expertise as to be able to protect his own
interests in connection with the purchase of the Shares.
3
6.3 Warrant Transferable. Subject to compliance with applicable
federal and state securities laws under which this Warrant was issued, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the Holder (except for transfer taxes), upon surrender of this Warrant
properly endorsed; provided, however, that the Holder shall notify the Company
in writing in advance of any proposed transfer and shall not transfer this
Warrant or any rights hereunder to any person or entity which is then engaged in
a business that in the reasonable judgment of the Company is in direct
competition with the Company. As promptly as practicable but in any event within
ten (10) Business Days of receipt of such properly endorsed Warrant, the Company
shall issue, register and deliver to the Holder thereof a new Warrant or
Warrants of like kind and tenor representing in the aggregate the right to
purchase the same number of Warrant Shares that could be purchased pursuant to
the Warrant being transferred. Holder shall pay Company's reasonable costs
incurred in effectuating such transfer.
6.4 Disposition of Warrant Shares. With respect to any offer, sale,
or other disposition of the Warrant or any Warrant Shares, the Holder hereof and
each subsequent Holder of this Warrant agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder's counsel, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition may be
effected without registration or qualification (under the Act as then in effect
or any federal or state law then in effect) of the Warrant or Warrant Shares, as
the case may be, and indicating whether or not under the Act certificates for
the Warrant or Warrant Shares to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to
insure compliance with the Act. Promptly upon receiving such written notice and
opinion, the Company, as promptly as practicable, shall notify the Holder that
such Holder may sell or otherwise dispose of the Warrant or Warrant Shares, all
in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this subparagraph 6.4 that the opinion
of the counsel for the Holder is not reasonably satisfactory to the Company, the
Company shall so notify the Holder promptly after such determination has been
made. Notwithstanding the foregoing, the Warrant or Warrant Shares may be
offered, sold or otherwise disposed of in accordance with Rule 144 under the
Act, provided that the Company shall have been furnished with such information
as the Company may request to provide reasonable assurance that the provisions
of Rule 144 have been satisfied. Each certificate representing the Warrant or
Warrant Shares thus transferred (except a transfer pursuant to Rule 144) shall
bear a legend as to the applicable restrictions on transferability in order to
insure compliance with the Act, unless in the aforesaid opinion of counsel for
the Holder, such legend is not required in order to insure compliance with the
Act. The Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions.
6.5 Register. This Warrant is, and any Warrant issued, exchanged or
transferred hereunder shall be registered in a warrant register (the "Warrant
Register"). The Warrant Register shall set forth the number of the Warrant, the
name and address of the Holder hereof and the original number of Warrant Shares
purchasable upon the exercise hereof. The Warrant Register will be maintained by
the Company and will be available for inspection by the Holder at the principal
office of the Company or such other location as the Company may designate to the
Holder in the manner set forth in Section 8. The Company shall be entitled to
treat the Holder as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in the Warrant on
the part of any other person.
7. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged, or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
8. Notices. Any notice, request, or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, as follows:
4
Holder: Media Relations Strategy
00000 Xxxxxx Xxxxx,
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Company: Composite Technology Corporation
0000 XxXxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X Xxxxxxxx
or such other address as either may from time to time provide to the
other.
9. Governing Law; Waiver of Jury Trial.
9.1 Governing Law. All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and construed
and enforced in accordance with the domestic laws of the State of California
without giving effect to any choice or conflict of law provision or rule
(whether in the State of California or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
California. In furtherance of the foregoing, the internal law of the State of
California will control the interpretation and construction of this Agreement,
even if under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily or necessarily
apply.
9.2 Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO
APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
10. Exchange of Warrant for Warrants.
10.1 Lost Warrant. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of the Warrant, the Company will, at the Company's
expense, make and deliver a new Warrant, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant.
10.2 Exchange. The Holder may exchange this Warrant at his option,
upon presentation and surrender of this Warrant to Company, for other Warrants
of different denominations, entitling the Holder to purchase in the aggregate
the same number of Warrant Shares. A Warrant may be divided or combined with
other Warrants that carry the same rights, upon presentation thereof at the
principal office of the Company, together with written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
holder thereof. In order to effect an exchange permitted by this Section 11.2,
the Holder shall deliver to the Company this Warrant accompanied by a written
request signed by the Holder specifying the number and denominations of the
Warrant or the Warrants to be issued in such exchange and the names in which the
Warrant or Warrants are to be issued. As promptly as practicable but in any
event within ten (10) Business Days of receipt of such a request, the Company
shall, without charge, issue, register and deliver to the Holder each Warrant to
be issued in such exchange.
5
11. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
(calculated to the nearest 1/100th of a share) multiplied by the then effective
Exercise Price on the date the Form of Subscription is received by the Company.
12. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company
and the Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant, and shall be
enforceable by any such Holder.
6
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officer, thereunto duly authorized as of the date first written
above
COMPANY:
Composite Technology Corporation
a Nevada corporation
/s/ Xxxxxx X. Xxxxxxxx
----------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
7
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Composite Technology Corporation
The undersigned, the holder of the attached Common Stock Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, ________________________ shares of Common Stock
of Composite Technology Corporation (the "Company") and herewith makes payment
of $_________ therefor.
The undersigned represents that he is acquiring such Common Stock for his own
account for investment and not with a view to or for sale in connection with any
distribution thereof.
DATED: _________________
__________________________________________
(Signature must conform in all respects to
name of Xxxxxx as specified on the face of
the Warrant)
Name: _________________________________
Title: _________________________________
8
