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[FORM OF WARRANT]
THIS WARRANT IS NOT AN ACCOUNT OR DEPOSIT AND WILL
NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OR CONVERSION OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE. NEITHER THIS WARRANT NOR THE
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OR CONVERSION OF THIS WARRANT MAY BE SOLD,
TRANSFERRED, HYPOTHECATED, ASSIGNED, OFFERED FOR
SALE OR OTHERWISE DISPOSED OF UNLESS REGISTERED
PURSUANT TO SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE, AS ESTABLISHED TO THE
REASONABLE SATISFACTION OF THE COMPANY, BY OPINION
OF COUNSEL OR OTHERWISE.
March 10, 1994
CONVERTIBLE STOCK PURCHASE WARRANT
To Subscribe for and Purchase Common Stock of
ELECTRONIC FAB TECHNOLOGY CORP.
VOID AFTER MARCH 9, 1999
THIS CERTIFIES that, for value received, [name and address] or
registered assigns, is entitled to subscribe for and purchase from Electronic
Fab Technology Corp., a Colorado corporation whose offices are located at 0000
Xxxx 0xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the "Company"), at the price of $9.00
per share (as from time to time adjusted as provided below, the "Warrant
Price"), at any time and from time to time but not earlier than March 10, 1995
(the "Commencement Date") or later than March 9, 1999 (the "Expiration Date"),
up to [number of shares] fully paid and nonassessable shares of Common Stock,
$.01 par value, of the Company ("Common Stock"), upon the terms and conditions
hereinafter set forth.
Section 1. Exercise of Warrant
(a) Manner of Exercise
Subject to the provisions of Section 11 hereof, this Warrant may be
exercised, at any time and from time to time, in whole or in part, beginning on
the Commencement Date and ending at 5:00 PM in Denver, Colorado on the
Expiration Date, by the holder hereof (hereinafter referred to as the
"Warrantholder"), by completing and signing the subscription form attached
hereto, surrendering this Warrant at the office of the Company in Denver,
Colorado (or at such other agency or office of the Company in the United States
as it may designate by notice in writing to the Warrantholder at the address of
the Warrantholder appearing on the books of the Company), and tendering to the
Company the Warrant Price for each share being purchased by certified or
official bank check made payable to the Company. At 5:01 p.m. on the
Expiration Date, this Warrant, to the extent not previously exercised or
converted, shall become void, and all rights to acquire shares of Common Stock
hereunder shall thereupon cease. A certificate or certificates for the shares
of Common Stock purchased upon exercise, registered in the name of the
Warrantholder, shall be delivered to the Warrantholder within a reasonable
time, not exceeding ten business days, after this Warrant shall have been so
exercised; and, unless this Warrant has expired, a new Warrant covering the
number of shares (except a remaining fractional share of common Stock), if any,
with respect to which this Warrant shall not then have been exercised shall
also be issued to the Warrantholder within such time. The Warrantholder shall
for all purposes be deemed to have become the holder of record of the number of
shares of Common Stock for which this Warrant has been properly exercised from
the date on which this Warrant was surrendered and payment of the Warrant Price
was made as provided above, irrespective of the date of delivery of such
certificate or certificates, except that, if the date of
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such surrender and payment is a date on which the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open. The Company will at no time close its transfer
books against the transfer of the shares of Common Stock issued or issuable upon
the exercise of this Warrant in any manner which materially interferes with the
timely exercise of this Warrant.
(B) FRACTIONAL SHARES
No fractional shares shall be issued upon exercise of this Warrant. If any
fractional interest in a share of Common Stock would, except for the provisions
of this Section 1, be delivered upon any such exercise, the Company shall pay
to the Warrantholder an amount in case equal to the current fair market value
of such fractional interest as determined in good faith by the Board of
Directors of the Company.
(C) ISSUE TAX
The issuance of certificates for shares of Common Stock upon exercise of
this Warrant shall be made without a charge to the Warrantholder for any
issuance tax in respect thereof, provided that the Company shall not be
required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the Warrantholder.
SECTION 2. ADJUSTMENT OF NUMBER OF SHARES
Upon each adjustment of the Warrant Price for any stock dividend or
distribution or any subdivision or combination of the outstanding shares of the
Common Stock as provided in Section 3, the Warrantholder shall thereafter be
entitled to purchase, at the Warrant Price resulting from such adjustment, the
number of shares (calculated to the nearest tenth of a share) obtained by
multiplying the Warrant 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 Warrant Price resulting from
such adjustment.
SECTION 3. ADJUSTMENTS OF WARRANT PRICE
(a) DIVIDENDS
In case the Company shall declare a dividend or made any other
distribution upon any stock of the Company payable in Common Stock the Common
Stock so distributed shall be deemed to have been issued in a subdivision of
outstanding shares as provided in Section 3(b). In case the Company shall
declare a dividend or make any other distribution upon any stock of the Company
payable in options to purchase Common Stock ("Options") or securities
convertible into or exchangeable for Common Stock ("Convertible Securities") or
other securities, the Options, Convertible Securities or other securities so
distributed, together with the shares of Common Stock with respect to which
they were distributed, shall be deemed to have been issued in a
reclassification of outstanding shares as provided in Section 3(c).
(b) SUBDIVISION OR COMBINATION OF STOCK
In case the Company shall at any time subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall be proportionately reduced, and
conversely, in case the outstanding shares of Common Stock of the Company shall
be combined into a smaller number of shares, the Warrant Price in effect
immediately prior to such combination shall be proportionately increased.
(c) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE
If any capital reorganization or reclassification of the capital stock of
the Company or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all the Company's assets to
another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive securities (including Common Stock) or the
property (including cash) with respect to or in exchange for Common Stock, then
as a condition of such reorganization, reclassification, consolidation, merger
or sale, lawful and adequate provisions shall be made whereby the Warrantholder
shall thereafter have the right to receive upon the exercise of this Warrant,
in addition to or in lieu of (as the case may be) the shares of Common Stock of
the Company immediately theretofore issuable upon such exercise, such
securities (including Common Stock) or other property (including cash) as may
be
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issued or paid in such reorganization, reclassification, consolidation or merger
or as a result of such sale with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of Common
Stock immediately theretofore so issuable had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in any such
case appropriate provision shall be made so that the provisions hereof
(including, without limitation provisions, for adjustments of the Warrant Price)
shall thereafter be applicable, as nearly as may be, in relation to securities
or other property thereafter deliverable upon the exercise of this Warrant.
The Company will not effect any such consolidation or merger unless prior to the
consummation thereof the resulting or surviving corporation (if other than the
Company) in such consolidation or merger shall assume, by written instrument
executed and mailed or delivered to the Warrantholder at the last address of the
Warrantholder appearing on the books of the Company, the obligation to deliver
to the Warrantholder, upon exercise or conversion of this Warrant, such
securities or other assets as, in accordance with the foregoing provisions, the
Warrantholder may be entitled to receive.
(d) NOTICE OF ADJUSTMENT
Upon any adjustment of the Warrant Price, the Company shall give
written notice thereof, by first-class mail, postage prepaid, addressed to the
Warrantholder at the address of the Warrantholder as shown on the books of the
Company, which notice shall state the Warrant Price resulting from such
adjustment and the number of shares of Common Stock issuable upon exercise of
the Warrants following such adjustment, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.
Section 4. CONVERSION
At any time and from time to time, beginning on the Commencement Date
and ending at 5:00 p.m. in Denver, Colorado on the Expiration Date, this
Warrant may by converted, in whole or in part, into a number of shares of fully
paid and nonassessable shares of Common Stock equal to N in the formula:
N = E - P X E
-----
C
where
E = the total number of shares then issuable upon exercise
of the Warrant or, if less than all of the Warrant is
being converted, the number of shares then issuable
upon exercise of the portion of the Warrant being
converted:
P = the Warrant Price in effect on the date on conversion;
and
C = the fair market value of the Common Stock on the date
of conversion.
The fair market value of the Common Stock on the date of conversion shall equal
the average "reference price" of the Common Stock on the 10 trading days
immediately preceding the date of conversion. The "reference price" of the
Common Stock on each such trading day shall equal the closing price of the
Common Stock on the principal exchange on which the Common Stock is then listed
or, if the Common Stock is not then listed on an exchange, as reported by
NASDAQ, or, if the closing price of the Common Stock is not then reported by
NASDAQ, the average of the bid and asked prices of the Common Stock as reported
by NASDAQ or, if the Common Stock is not then included on NASDAQ, by any other
recognized source selected by the Company. In order to exercise the
conversion right, the Warrantholder shall complete and sign the conversion form
attached hereto and surrender this Warrant at the office of the Company in
Greeley, Colorado (or at such other agency or office as the Company may have
designated as provided in Section 1(a) and the date of such surrender shall for
all purposes be the date of conversion. The Company shall deliver stock
certificates (and a new Warrant, if applicable) to the Warrantholder, and the
Warrantholder shall be deemed to have become the holder of record of the shares
issuable upon conversion, at the times and in the manner provided in Section
1(a) as though this Warrant had been exercised for such shares on the date of
conversion. If on the date of conversion the Warrantholder would be entitled
to receive upon the exercise of this warrant, in addition to or in lieu of
shares of Common Stock, securities (including Common Stock) or other property
(including cash) as provided in Section 3(c), the provisions of this Section
4 shall apply, mutatis mutandis, to such securities or other property.
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SECTION 5. STOCK TO BE RESERVED
The Company will at all times reserve and keep available out of its
authorized Common Stock or its treasury shares, solely for the purpose of
issuance upon the exercise or conversion of this Warrant as herewith provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant. The Company covenants that all shares of Common
Stock which shall be issued upon exercise or conversion of this Warrant shall
be duly and validly issued and fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Company covenants that it will
from time to time take all such action as may be required to ensure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Warrant Price. The Company will use its reasonable best efforts
to take all such action as may be necessary to ensure that all such shares of
Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirements of any national securities exchange upon
which the Common Stock of the Company may be listed the Company has not
granted and will not grant any right of first refusal with respect to shares
issuable upon exercise or conversion of this Warrant, and there are no
preemptive rights associated with such shares.
SECTION 6. REGISTRATION RIGHTS
(a) CERTAIN DEFINITIONS
As used in this Section 6, the following terms have the indicated
meanings:
"Holders" means the holders of the Registrable Securities,
including the holders of Warrants to purchase Registrable Securities not then
issued.
"Majority of the Holders" means Holders of Warrants and
Registrable Securities theretofore issued upon exercise or conversion of
Warrants who own or have the right to acquire upon exercise or conversion of
Warrants a majority of the Registrable Securities that would be outstanding if
all of the outstanding Warrants were exercised in full on the date as of which
the determination is being made.
"Registrable Securities" means all shares of Common Stock issued
or issuable upon exercise or conversion of the Warrants, all securities other
than Common Stock issued or issuable upon exercise or conversion of the Warrants
as a result of the provisions of Section 3 hereof, any additional shares of
Common Stock or other securities received as a dividend or other distribution
in respect of any such shares of Common Stock or other securities or in
connection with any subdivision or combination thereof, and any other securities
received in lieu of or in exchange for any such shares of Common Stock or other
securities upon exercise or conversion of this Warrant or in connection with any
capital reorganization, reclassification, merger or consolidation; provided,
however, that any shares of Common Stock or other securities that have been sold
pursuant to an effective registration statement pursuant to this Section or
pursuant to Rule 144 of the Regulations or that are freely tradeable under the
Securities Act and the Regulations, without limitation as to amount, shall cease
to be Registrable Securities.
"Regulation" means the rules and regulation of the SEC under
the Securities Act.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subject Stock" means the Registrable Securities that the
Company is requested to include in a registration statement pursuant to
Section 6(b) or 6(c).
"Warrant" means this Warrant and any other warrants derived
from the Warrants originally issued by the Company to XXXX XXXXXXXX
INCORPORATED and XXXXXXXX INC. on March 10, 1994 covering a total of 80,000
shares of Common Stock.
(b) DEMAND REGISTRATION
Subject to the qualifications set forth in this Section 6(b), a
Majority of the Holders shall have the right, at any time and from time to
time, but not earlier than the Commencement Date or later than the Expiration
Date, to make
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written request of the Company to register under the Securities Act and the
Regulations all or any portion of the Registrable Securities. Promptly after
receipt of a request for registration pursuant to this Section 6(b), the
Company shall notify all other Holders of such request and shall include in the
registration effected hereunder such Registrable Securities as any other Holder
shall request within 15 days after such notice. As soon as reasonably
practicable after receipt of the original request, the Company shall file with
the SEC a registration statement for the registration of the Subject Stock for
sale to the public and use its reasonable best efforts to cause such
registration statement to become effective. The Company is obligated to effect
only one such registration pursuant to this Section 6(b).
Notwithstanding the foregoing, if the Company shall furnish to each of the
Holders a certificate signed by the Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company it would be significantly disadvantageous to the Company and its
shareholders for such a registration statement to be filed (other than as a
result of the time and expense involved in the registration process), the
Company shall have the right to defer such filing for a period of not more than
90 days after receipt of the request to effect such a registration; provided,
however, that the Company may not utilize this right more than once; and
provided, further, that the Holder who made such written request to effect such
registration, may, at any time in writing during the period of the deferral,
withdraw the request for such registration and thereby preserve the right
provided in this Section 6(b) to request such registration on a subsequent
occasion.
At any time prior to the effectiveness of a registration statement filed
pursuant to this Section 6(b), the Holders of a majority of the Subject Shares
covered thereby may instruct the Company to withdraw the registration
statement. If following any such withdrawal, the Holders shall reimburse the
Company for all out-of-pocket expenses incurred by it in connection with the
registration, including expenses incurred in withdrawing the registration
statement, the Holders shall have the right to require the Company to file a
registration statement under this Section 6(b) on a subsequent occasion.
In connection with any offering of Subject Stock registered pursuant to
this Section 6(b), the Company agrees not to effect any public sale or
distribution of Common Stock for the seven-day period preceding, and the 90-day
period beginning on, the effective date of such registration.
(c) PIGGYBACK REGISTRATION
If, on or before the sixth anniversary of the Commencement Date, the
Company proposes; to register any of its securities with the SEC under the
Securities Act (other than pursuant to a request under Section 6(b) and other
than on a registration statement of Form S-4, 5-8 or other form on which
Registrable Securities cannot be registered for sale to the public), the Company
shall promptly give written notice thereof to the Holders. If, within 15 days
after receipt of such notice, any Holder submits a written request to the
Company specifying the amount of Registrable Securities that the Holder wishes
to include in such registration, the Company shall include the Registrable
Securities specified in such request in such registration statement. The
Holders shall be entitled to a total of two registrations pursuant to this
Section 6(b). Notwithstanding the foregoing, if the registration statement that
the Company proposes to file relates to an underwritten public offering of its
securities, and if the lead underwriter in such offering advises the Company
that, in its opinion, all of the shares of Subject Stock cannot reasonably be
included in the offering without adversely affecting the Company's ability to
sell the securities it proposes to offer, the number of shares of Subject Stock
that the Company is obligated to include in such registration shall be reduced
to the number of shares that the lead underwriter determines in good faith may
be included in the offering. If the number of shares of Subject Stock included
in the offering is so reduced, the reduction shall apply pro rata to all Holders
who have requested that Registrable Securities be included in proportion to the
numbers of shares specified in their respective requests. The Company shall not
be required to complete any registration commenced under this Section 6(c) if it
decides for any reason not to proceed with the offering of the securities it
proposed to register.
(d) HOLDBACK AGREEMENT
The Holders agree not to effect any public sale or public distribution of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 90-day period beginning on the effective date of any underwritten
registration in which Registrable Securities are included (except as part of
such underwritten registration) unless the underwriters managing the registered
public offering otherwise agree.
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(e) PREPARATION OF DOCUMENTS
Prior to filing any registration statement, or any amendments or
supplements thereto, which includes any Registrable Securities, the Company
will furnish to counsel for each Holder who has included Registrable Securities
in such registration statement copies of all documents proposed to be filed,
which documents will be subject to the timely review of such counsel. Each
Holder shall be responsible for all fees and expenses of its own counsel. The
Company shall allow each such Holder to conduct any desired due diligence in
connection with such review, subject to receipt of a reasonably satisfactory
confidentiality agreement from such Holder. Each Holder agrees to provide all
such information and materials and take all action as may be reasonably
required in order to permit the Company to comply with all applicable
requirements of the SEC and to obtain any desired acceleration of the effective
date of such registration statement.
(f) COVENANTS OF THE COMPANY
In connection with any registration of Subject Stock pursuant to this
Section 6, the Company shall (i) file such pre-effective amendments, provide
such supplemental information to the SEC and take such other steps as may
reasonably be required to cause the registration statement to become effective;
(ii) furnish to each Holder of Subject Stock such number of copies of the
registration statement and each amendment thereto, and of each preliminary and
final prospectus and each supplement thereto, as such Holder may reasonably
request in order to effect the offering and sale of the Subject Stock, but only
while the Company shall be required under the provisions hereof to cause the
Registration Statement to remain current; (iii) use its best efforts to qualify
the Subject Stock covered by the registration statement for offer and sale
under the blue sky or securities laws of such jurisdictions as any such Holder
shall reasonably request; (iv) keep each such Holder advised in writing as to
the status of each registration throughout the registration process; (v) use
its best efforts to keep the registration statement current and effective for a
period of at least 90 days after its original effective date; (vi) prepare and
file with the SEC such post-effective amendments and supplements to the
registration statement and the related prospectus as may be necessary to comply
with the provisions of the Securities Act and the Regulations with respect to
the disposition of all securities covered by the Registration Statement; (vii)
use its best efforts to cause all Subject Stock to be listed on each securities
exchange or automated quotation system on which the Common Stock is then
listed; (viii) provide a transfer agent and registrar for all Subject Stock and
a CUSIP number for all Subject Stock, in each case not later than the effective
date of the registration; and (ix) otherwise comply with the
Securities Act and the Regulations.
(g) EXPENSES
With respect to any registration of Subject Stock pursuant to this
Section 6, except as otherwise expressly provided in Section 6(b), the Company
will pay all expenses incident to the performance of its obligations hereunder,
including, without limitation, all registration and filing fees, fees and
expenses of compliance with state securities or blue sky laws, printing or
copying expenses, messenger, telephone and delivery expenses, and fees and
disbursements of its counsel and independent certified public accountants.
Each Holder including Registrable Securities in any registration pursuant to
this Section 6 will be responsible for all stock transfer taxes and
underwriter's or broker's discounts and commissions relating to the Registrable
Securities sold by such Holder, all internal management, personnel and
administrative costs of such Holder and the fees and expenses of counsel, if
any, retained by such Holder in connection with the registration.
(h) INDEMNIFICATION
The Company will indemnify, to the maximum extent permitted by law,
each Holder who includes Registrable Securities in any registration pursuant to
this Section 6, its officers and directors and each person who controls such
Holder (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses (or actions, proceedings or settlements in
respect thereof) arising out of any untrue or alleged untrue statement of a
material fact contained in any registration statement, prospectus or
preliminary prospectus (or any amendment or supplement thereto) in which
Subject Stock is included pursuant to this Section 6, including any exhibits or
materials incorporated by reference therein, or any omission or alleged
omission to state therein a material fact required to be stated therein (in the
case of a prospectus, in the light of the circumstances under which they were
made) or necessary to make the statements therein not misleading, except
insofar as the same are (i) caused by or contained in any information with
respect to such Holder furnished in writing to the Company by such Holder for
use therein or (ii) caused by the Holder's failure to deliver a copy of the
prospectus or any amendments or supplements thereto after the Company has
furnished the Holder with a sufficient number of copies thereof. In connection
with an underwritten offering, the
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Company will indemnify the underwriters thereof, their officers and directors
and each person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of the Subject Stock.
Each Holder who includes Registrable Securities in any registration
pursuant to this Section 6 will indemnify, to the maximum extent permitted by
law, the Company, its officers and directors, and each person who controls the
Company (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses or actions, proceedings or settlements in
respect thereof) arising out of (i) any untrue or alleged untrue statement of a
material fact contained in any registration statement, prospectus or
preliminary prospectus (or any amendment or supplement thereto) in which such
Registrable Securities are included, including any exhibits or materials
incorporated by reference therein, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, insofar and only
insofar as the same are caused by or contained in any information with respect
to such Holder furnished in writing to the Company by such Holder for use
therein or (ii) the Holder's failure to deliver a copy of the prospectus or any
amendments or supplements thereto after the Company has furnished the Holder
with a sufficient number of copies thereof. In connection with an underwritten
offering, each such Holder will indemnify the underwriters thereof, their
officers and directors and each person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Company. Notwithstanding the foregoing,
the liability of any Holder pursuant to this Section shall not exceed an amount
equal to the proceeds of the sale of Registrable Securities sold pursuant to
such registration statement that are received by or for the benefit of such
Holder.
Any person entitled to indemnification under this Section 6(b) will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment (based on written advice of counsel) a conflict of interest
between such indemnified and indemnifying parties may exist or arise with
respect to such claim which would prevent the same counsel from representing
both parties, permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified party. If such
defense is assumed, the indemnifying party will not be responsible for
attorneys' fees subsequently incurred by any indemnified party, but, if the
counsel retained by the indemnifying party to represent the indemnified parties
also represents the indemnifying party in the action, each indemnified party
shall be entitled to participate in (but not control) the defense of the
claim with counsel selected and compensated by it. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in
the reasonable judgment of any indemnified party (based on written advice of
counsel) a conflict of interest may exist or arise between such indemnified
party and any other of such indemnified parties with respect to such claim
which would prevent the same counsel from representing both parties.
If the indemnification provided for in this subsection 6(h) is legally
unavailable to an indemnified party hereunder in respect of any losses,
claims, damages, liabilities or expenses (or actions, proceedings or
settlements in respect thereof) referred to herein, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities, expenses, actions, proceedings or settlements in
such proportion as is appropriate to reflect the relative fault of indemnifying
party and the indemnified party. The relative fault of the indemnifying and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, the
indemnifying or the indemnified party or parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any reasonable legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding. The parties
agree that it would not be just and equitable if contribution pursuant to this
paragraph were determined by pro rata allocation or by any other method of
allocation which does not take into account the relative fault of the parties
as described above. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribute from any person who is not guilty of such fraudulent
misrepresentation.
The indemnification and contribution obligations set forth in this
Section 6(h) shall survive the termination or expiration of this Warrant.
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(l) Limitation
Notwithstanding any other provision hereof, the Company shall not be
required to include in any registration hereunder the Registrable Securities of
any Holder who could, at the time such registration becomes effective, sell all
Registrable Securities owned by such Holder in a single three-month period
pursuant to Rule 144 of the Regulations.
SECTION 7. NOTICES OF RECORD DATES
In the event that the Company shall propose
(1) the establishment of a record date or the closing of the
transfer books of the Company for the purpose of determining the
holders of any class of securities who are entitled to receive
any dividend or other distribution, 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
right to sell shares of stock of any class or any other right,
or
(2) 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 the assets of the Company
to or consolidation or merger of the Company with or into any
other corporation or entity, or
(3) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will give notice to the Warrantholder
specifying (i) the record date or the date such transfer books are to be closed
for the purpose of such dividend, distribution or right and stating the amount
and character of such dividend, distribution or right and (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 will be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up. Such notice shall be given at least 10
days and not more than 90 days prior to the date therein specified, and such
notice shall state that the action in question or the record date is subject to
the effectiveness of a registration statement under the Securities Act or to a
favorable vote of stockholders, if either is required.
SECTION 8. NO STOCKHOLDER RIGHTS OR LIABILITIES
This Warrant shall not entitle the Warrantholder to any voting rights
or other rights as a stockholder of the Company. No provision hereof, in the
absence of affirmative action by the Warrantholder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the
Warrantholder shall give rise to any liability of such Warrantholder for the
Warrant Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
SECTION 9. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall, on such terms as to indemnity as it may reasonably impose (which shall,
in the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated
or destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone.
SECTION 10. NOTICES
All notices, requests and other communications required or permitted
to be given or made hereunder shall be in writing, and shall be personally
delivered, or shall be sent by certified or registered mail, return receipt
requested, postage prepaid, to the addresses of the parties given above or to
such other address as either party shall designate in a written notice to the
other party or by telecopy. Delivery by Federal Express or other recognized
courier service shall be deemed personal delivery. Any notice shall be
effective upon the earliest of receipt, the first business day after such
notice is sent by Federal Express, the second business day after such notice is
sent by mail in accordance with this
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Section 10 or, if telecopied, upon receipt by the sending telecopy machine of
confirmation of receipt by the receiving telecopy machine.
SECTION 11. RESTRICTIONS ON TRANSFER
(a) SECURITIES LAW RESTRICTIONS
Neither this Warrant nor the shares of Common Stock issuable upon the
exercise or conversion of this Warrant have been registered under the
Securities Act of 1933, as amended, or under the securities laws of any state.
Neither this Warrant nor the shares of Common Stock issuable upon the exercise
or conversion of this Warrant may be sold, transferred, hypothecated, assigned,
offered for sale or otherwise disposed of unless registered pursuant to such
Act and applicable state securities laws or unless an exemption from such
registration is available, as established to the reasonable satisfaction of the
Company, by opinion of counsel or otherwise. Certificates representing
securities issued upon exercise or conversion of this Warrant shall bear a
legend setting forth the foregoing restriction.
(b) OTHER RESTRICTIONS
This Warrant may not be sold, transferred, assigned, pledged or
hypothecated by the Warrantholder prior to the Commencement Date except to or
among (i) officers of Xxxx Xxxxxxxx Incorporated or its parent or of any
successor to the business of Xxxx Xxxxxxxx Incorporated or its parent or (ii)
officers of Xxxxxxxx Inc. or its parent or any successor to the business of
Xxxxxxxx Inc. or its parent. The foregoing restriction shall not apply to any
transfer by operation of law, by will, pursuant to the laws of descent and
distribution, or by reason of any reorganization of the Warrantholder.
(c) DIVISION OR COMBINATION OF CERTIFICATES
This Warrant may be divided or combined, upon request made to the
Company by the Warrantholder, into a certificate or certificates evidencing the
right to acquire upon exercise or conversion the same aggregate number of
shares of Common Stock.
SECTION 12. AMENDMENTS AND WAIVERS
This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
SECTION 13. SEVERABILITY
If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provision shall be excluded from this Warrant, and
the balance of this Warrant shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
SECTION 14. GOVERNING LAW
This Warrant shall be governed by and construed under the laws of the
State of Colorado as applied to agreements among Colorado residents entered
into and to be performed entirely within the State of Colorado.
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SECTION 15. HEADINGS
The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, ELECTRONIC FAB TECHNOLOGY CORP. has executed this
Warrant on and as of the day and year first above written.
ELECTRONIC FAB TECHNOLOGY CORP.
By: /s/ XXX XXXXXXX
---------------------------
Xxx Xxxxxxx
President
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SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date _______________
To Electronic Fab Technology Corp.:
The undersigned, pursuant to the provisions set forth in the Warrant,
hereby elects to subscribe for and purchase _____________ shares of
_____________ covered by such Warrant, and herewith tenders $______________ in
full payment of the purchase price for such shares.
Name of Holder:
_______________________________________
By: ___________________________________
Address _______________________________
_______________________________
12
CONVERSION FORM TO BE EXECUTED
UPON CONVERSION OF THE WARRANT
Date _______________
To Electronic Fab Technology Corp.:
The undersigned, pursuant to the provisions set forth in the Warrant,
hereby elects to convert this Warrant as to _____________ shares (number of
shares represented by E in the formula set forth in Section 4 of this Warrant)
of _____________ issuable upon the exercise hereof.
Name of Holder:
_______________________________________
By: ___________________________________
Address _______________________________
_______________________________
