Document:

exv10w1

 

Exhibit 10.1

KUHLMAN COMPANY, INC.

SUBSCRIPTION AGREEMENT

     This Subscription Agreement (the “Agreement”) is made effective as of the date of
acceptance set forth on the signature page below, by and between Kuhlman Company, Inc., a Nevada
corporation (the “Company”), and ________________ and _________________ (if joint investor) (referred to throughout the remainder of
this Agreement as the “undersigned”) in connection with the private placement offering (the
“Offering”) of shares of the Company’s common stock at $2.25 per share (the “Common Shares”),
together with warrants (“Warrants”) to purchase shares of the Company’s common stock in a number
equal to 20% of the Common Shares purchased hereunder, at $2.75 per share (the “Warrant Shares”).
Throughout this Agreement, the Common Shares, Warrants and Warrant Shares are collectively referred
to as the “Securities.” The undersigned understands and acknowledges that the Company has the
right to reject any subscription, in whole or in part, for any reason, and that the Company will
promptly return the funds delivered herewith, without interest or deduction, if this subscription
is rejected or if the Offering is otherwise terminated.

     1. Subscription for Securities. Subject to the terms hereinafter set forth, the
undersigned hereby irrevocably subscribes for and agrees to purchase from the Company                                         
Common Shares
at a per-share price of $2.25 per Share, or a total of $                                         . Payment of the aggregate purchase price
is being delivered as follows (please check one):

     o Enclosed check payable to the order of “Kuhlman Company, Inc.”

     o Wire transfer (wire transfer instructions are attached as Annex A)

     Upon acceptance of this subscription and the closing of the Offering (or any part of the
Offering to which this subscription relates), the Company will record the undersigned as an owner
of the Common Shares subscribed, and cause a certificate representing the Common Shares, together
with Warrants in the form attached hereto as Annex B, to be delivered to the undersigned
within 20 days of the closing date to which this subscription relates. All Common Shares will be
duly authorized, validly issued, fully paid and non-assessable shares of the Company’s common
stock. The undersigned hereby authorizes the Company to issues a certificate representing the
Common Shares in the name and to the address set forth below:

	 	 	 	 	 	 	 	 	 
	 	 	 
	 

	 	Print name(s) of investor(s)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 

	 	SSN(s) or Federal TIN	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 

	 	Mailing address	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 

	 	City
	 	State
	 	 	 	Zip code
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 

	 	Telephone no.
	 	 	 	Fax no.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 

	 	E-mail address	 	 	 	 	 	 

 

 

     2. Investor Representations and Warranties. By executing and delivering this Agreement,
the undersigned acknowledges, warrants and represents to the Company as follows:

     (a) The undersigned has (i) had an opportunity to obtain and review the Company’s
periodic and current reports on file with the United States Securities and Exchange
Commission (the “SEC”), and the Company’s registration statement on Form SB-2 on file with
the SEC, including all supplements and amendments thereto, (ii) reviewed this Agreement,
(iii) received and reviewed summary updated financial information of the Company with
respect to the fourth fiscal quarter of 2005 (the “Supplemental Financial Information”), and
(iv) had an opportunity to obtain and review any other documents specifically requested by
the undersigned (all such documents are collectively referred to hereinafter as the
“Disclosure Documents”).

     (b) The undersigned has, either alone or with the assistance of a professional advisor,
sufficient knowledge and experience in financial and business matters that the undersigned
believes himself/herself capable of evaluating the merits and risks of the prospective
investment in the Securities and the suitability of an investment in the Company in light of
the undersigned’s financial condition and investment needs, and legal, tax and accounting
matters.

     (c) The undersigned has been given access to full and complete information regarding
the Company and has utilized such access to the undersigned’s satisfaction for the purpose
of obtaining information in addition to, or verifying information included in, the
Disclosure Documents. Particularly, the undersigned has been given reasonable opportunity
to meet with and/or contact Company representatives for the purpose of asking questions of,
and receiving answers from, such representatives concerning the terms and conditions of the
Offering and to obtain any additional information, to the extent reasonably available,
necessary to verify the accuracy of information provided in the Disclosure Documents.

     (d) The undersigned is an “accredited investor” as defined in Rule 501(a) of Regulation
D promulgated under the Securities Act of 1933, as amended (the “Securities Act”). This
representation is based on the representation and information provided below (check all that
apply):

	 	 	 	 	 	 	 	 	 
	 

	 	___
	 	 	(1	)	 	The undersigned has had an individual income in excess of
$200,000 in each of the two most recent years or joint income with the
undersigned’s spouse in excess of $300,000 in each of the two most recent
fiscal years, and reasonably expect reaching the same income level in the
current year.
	 
	 	 	 	 	 	 	 	 
	 

	 	___
	 	 	(2	)	 	As of the date hereof, the undersigned (either
individually or with the undersigned’s spouse) have a net worth exceeding
$1,000,000.
	 
	 	 	 	 	 	 	 	 
	 

	 	___
	 	 	(3	)	 	The undersigned is a director or executive officer of the
Company.
	 
	 	 	 	 	 	 	 	 
	 

	 	___
	 	 	(4	)	 	The undersigned is a corporation, partnership or
Massachusetts or similar business trust not formed for the specific purpose of
acquiring the Securities and has total assets exceeding $5,000,000.
	 
	 	 	 	 	 	 	 	 
	 

	 	___
	 	 	(5	)	 	The undersigned (or, in the case of a trust, the
undersigned trustee) is a bank or savings and loan association as defined in
Sections 3(a)(2) and 3(a)(5)(A), respectively, of the Securities Act acting either in the undersigned’s individual or fiduciary capacity.

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	 	_______(6)	 	The undersigned is an insurance company as defined in Section 2(13)
of the Securities Act, an investment company registered under the Investment
Company Act of 1940 or a business development company as defined in Section
2(a)(48) of that act or a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
	 
	 	_______(7)	 	The undersigned is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974
(“ERISA”) and either (check one or more, as applicable):

	 	_________(a)	 	The investment decision is made by a plan
fiduciary, as defined in Section 3(21) of ERISA, which is either a
bank, savings and loan association, insurance company, or registered
investment adviser;
	 
	 	_________(b)	 	The employee benefit plan has total assets
in excess of $5,000,000; or
	 
	 	_________(c)	 	The plan is a self-directed plan with
investment decisions made solely by persons who are “accredited
investors” as defined under the Securities Act.

	 	_______(8)	 	The undersigned is a private business development company
as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
	 
	 	_______(9)	 	The undersigned, if not an individual, is an entity all of
whose equity owners meet one of the tests set forth in paragraph (1) through
(8) above (if relying on this category alone, each equity owner must complete a
separate copy of this Agreement).

     (e) The undersigned acknowledges that an investment in the Securities involves a high
degree of risk, including but not limited to the risk of losing his, her or its entire
investment in the Company.

     (f) The undersigned acknowledges that no federal or state agency, including the SEC or
the securities commission or authority of any state, has approved or disapproved the
Securities, passed upon or endorsed the merits of the Offering of the Securities or the
accuracy or adequacy of the Disclosure Documents, or made any finding or determination as to
the fairness or fitness of the Securities for public sale.

     (g) The undersigned acknowledges that he, she or it will experience substantial
dilution in the book value of the Common Shares immediately upon the purchase thereof, or
shortly thereafter, due to the prior issuance of shares of our common stock (or securities
convertible into shares of our common stock) at per-share prices below the per-share price
at which Common Shares will be sold in the Offering.

     (h) The undersigned has relied upon the advice of the undersigned’s legal counsel and
accountants or other financial advisors with respect to tax and other considerations
relating to the purchase of Securities in the Offering. The undersigned is not relying upon
the Company with respect to the economic considerations involved to make an investment
decision in the Securities.

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     (i) The undersigned acknowledges that the Company may engage one or more placement
agents, financial advisors or consultants in connection with the Offering; and further
acknowledges that the Company may compensate such agents, advisors or consultants through
the issuance securities and/or with payments of cash that may have been received from the
undersigned, in amounts that the Company in its sole discretion may deem customary.

     (j) The undersigned is a bona fide resident of (or, if an entity, is organized or
incorporated under the laws of, and is domiciled in), and received the offer and decided to
invest in the Securities in the state or jurisdiction set forth as the undersigned’s mailing
address in Section 1 above.

     3. Investment Purpose. The undersigned represents and warrants that it is the
undersigned’s intention to acquire the Securities for the account of the undersigned, for
investment purposes and not with a view to the resale thereof in connection with any distribution.
To assure the Company that the undersigned has no present intention to resell or dispose of the
Securities acquired in the Offering, the undersigned further represents and warrants to the Company
as follows:

     (a) The undersigned intends to receive and hold the Securities for the undersigned’s
personal account.

     (b) The undersigned has no contract, undertaking, agreement or arrangement with any
person or entity to sell or otherwise transfer the Securities to any such person or entity
or to have any such person or entity sell the Securities on the undersigned’s behalf.

     (c) The undersigned has no need for immediate liquidity with respect to his, her or its
investment and has sufficient income to meet the undersigned’s current and anticipated
obligations. The loss of the undersigned’s entire investment in the Securities would not
cause financial hardship to the undersigned and would not adversely affect the undersigned’s
current standard of living. In addition, the overall commitment of the undersigned to
investments that are not readily marketable is not disproportionate to the undersigned’s net
worth and the undersigned’s investment in the Securities will not cause such overall
commitment to become excessive.

     (d) The undersigned is not aware of any occurrence, event or circumstance upon the
happening of which the undersigned intends to transfer or sell the Securities and the
undersigned does not have any present intention to transfer or sell the Securities after a
lapse of any particular period of time.

     (e) The undersigned has been informed that, in the view of the SEC and certain state
securities commissions, a purchase of the Securities with a current intent to resell, by
reason of any foreseeable specific contingency or anticipated change in market values, any
change in the condition of the Company or the investment market as a whole, or in connection
with a contemplated liquidation or settlement of any loan obtained for the acquisition of
the Securities, would represent a purchase with an intent inconsistent with the
representations set forth above, and that the SEC and certain state securities commissions
might regard such sale or disposition as a deferred sale with regard to which an exemption
from registration is not available.

     (f) If other than an individual, the undersigned represents and warrants that (i) it
was not organized for the specific purpose of acquiring the Securities, and (ii) this
Agreement has been
duly authorized by all necessary action on the part of the undersigned, has been duly
executed by

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an authorized officer or representative of the undersigned, and is a legal,
valid and binding obligation of the undersigned enforceable in accordance with its terms.

     4. Purchases Through Retirement Accounts. An investment in a private placement of
securities, including the Securities, is HIGHLY SPECULATIVE in nature. Accordingly, such an
investment may not be appropriate for individual retirement accounts or other retirement-type
accounts that have conservative investment objectives. If this investment is in fact purchased in
a retirement-type account, the purchaser hereby represents and affirms that he/she understands the
risks of the investment and has decided that such risks are consistent with the purchaser’s
investment objectives for this account.

     5. Registration Status; Restrictions on Transferability. With respect to the registration
status and transferability of the Securities (in addition to
Section 3 above), the undersigned
understands, acknowledges and agrees that:

     (a) Neither the offer nor the sale of the Securities to be issued in connection with
this subscription and the Offering have been registered under the Securities Act or under
applicable state securities laws on the grounds that they are being issued in a transaction
(i) involving a limited group of knowledgeable investors fully familiar with the proposed
operations of the Company and (ii) not involving a public offering and that, consequently,
such transaction is exempt from registration under the Securities Act and applicable state
securities laws. The Company will rely on the undersigned’s representations herein as a
basis for the exemption from the Securities Act’s registration requirements.

     (b) The Securities may not be sold, transferred or otherwise disposed of except
pursuant to an effective registration statement or appropriate exemption from registration
under applicable state law and, as a result, the undersigned may be required to hold the
Securities for an indefinite period of time.

     (c) Certificates representing the Securities will bear a legend substantially in the
following form:

The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities law of any
state. Such securities have been acquired for investment and without a view
to their distribution and may not be sold or otherwise disposed of in the
absence of any effective registration statement for such securities under
the Securities Act of 1933, as amended, and under applicable state
securities laws, unless an exemption from registration is available under
applicable securities laws.

     6. Confidentiality and Standstill Agreement. The undersigned recognizes that the
Supplemental Financial Information received as a part of the Disclosure Documents is “material,
nonpublic information” concerning a public corporation that is subject to the reporting
requirements of the Securities and Exchange Act of 1934. Accordingly, until the Company shall have
filed its periodic report on Form 10-K relating to the one-year period ended December 31, 2005 (or
otherwise shall have sooner publicly disclosed such information), the undersigned agrees
NOT to: (a) buy or sell (including the short sell of) any security, option, bond or warrant
of the Company
(other than the Securities) received from the Company or others in connection with this
subscription; or (b) provide any other person, firm or entity with such material nonpublic
information, including any relative, associate or other individual who intends to or may (i) trade
Company securities (including short sales of such securities), or (ii) otherwise directly or
indirectly benefit from such information.

5

 

     7. Term. From and after the date of the Company’s acceptance of this subscription, as set
forth on the signature page hereto, this Agreement shall remain in effect until such time as (a)
the undersigned has performed the full subscription by delivering full payment of the aggregate
purchase price for the Securities referenced above and set forth on the signature page hereto, and
(b) the Company has fulfilled its obligation to the undersigned by recording the undersigned as the
owner of the appropriate number of Securities in its required records and delivering (1) a
certificate representing the Common Shares and (2) executed Warrant instrument pursuant to Section
1.

     8. Survival. The covenants made in Section 14 shall be construed as an agreement
independent of any other provision of this Agreement, and shall survive the termination of this
Agreement, together with the provisions of Sections 6, 9, 11, 12 and 13. Furthermore, the
representations and warranties of the undersigned shall survive the termination of this Agreement.

     9. Severability. If any provision of this Agreement or the application of such provision
to any party or circumstances shall be held invalid, the remainder of the Agreement, or the
application of such provision to such party or circumstances other than those to which it is held
invalid, shall not be affected thereby.

     10. Amendment. This Agreement may be modified or amended only by a written instrument
signed by both the Company and the undersigned.

     11. Waiver. No failure or delay by either the Company or the undersigned in exercising or
enforcing any right or remedy under this Agreement will waive any provision of the Agreement. Nor
will any single or partial exercise by either the Company or the undersigned of any right or remedy
under this Agreement preclude either of them from otherwise or further exercising these rights or
remedies, or any other rights or remedies granted by any law or any related document.

     12. Binding Effect. Upon acceptance by the Company, this Agreement shall be binding upon
and shall inure to the benefit of the Company and the undersigned and to the successors and assigns
of the Company and to the personal and legal representatives, heirs, guardians, successors and
permitted assignees of the undersigned.

     13. Governing Law; Venue. This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota without regard to the conflicts-of-law principles thereof.
The venue for any action hereunder
shall be in the State of Minnesota, whether or not such venue is or subsequently becomes
inconvenient, and the parties consent to the jurisdiction of the courts of the State of Minnesota,
County of Hennepin, and the U.S. District Court, District of Minnesota.

     14. Dispute Resolution.

     (a) The parties will, to the greatest extent possible, endeavor to resolve any disputes
relating to this Agreement and this subscription through amicable negotiations. Failing an
amicable settlement, any controversy, claim or dispute arising under or relating to this
Agreement, including the existence, validity, interpretation, performance, termination or
breach of this Agreement, will finally be settled by binding arbitration before a single
arbitrator (the “Arbitration Tribunal”) which will be jointly appointed by the parties. The
Arbitration Tribunal shall self-administer the arbitration proceedings utilizing the
Commercial Rules of the American Arbitration Association; provided, however, the American
Arbitration Association shall not be involved in administration of the arbitration. The
arbitrator must be a retired judge of a state or federal court of the United States or a
licensed lawyer with at least ten years of corporate or commercial law

6

 

experience and have
at least an AV rating by Martindale Hubbell. If the parties cannot agree on an arbitrator,
either party may request the American Arbitration Association to appoint an arbitrator which
appointment will be final.

     (b) The arbitration will be held in Minneapolis, Minnesota. Each party will have
discovery rights as provided by the Federal Rules of Civil Procedure within the limits
imposed by the arbitrator; provided, however, that all such discovery will be commenced and
concluded within 60 days of the selection of the arbitrator. It is the intent of the
parties that any arbitration will be concluded as quickly as reasonably practicable. Once
commenced, the hearing on the disputed matters will be held four days a week until
concluded, with each hearing date to begin at 9:00 a.m. and to conclude at 5:00 p.m. The
arbitrator will use all reasonable efforts to issue the final written report containing
award or awards within a period of five business days after closure of the proceedings.
Failure of the arbitrator to meet the time limits of this Article will not be a basis for
challenging the award. The Arbitration Tribunal will not have the authority to award
punitive damages to either party. Each party will bear its own expenses, but the parties
will share equally the expenses of the Arbitration Tribunal. The Arbitration Tribunal shall
award attorneys’ fees and other related costs payable by the losing party to the successful
party as it deems equitable. This Agreement will be enforceable, and any arbitration award
will be final and non-appealable, and judgment thereon may be entered in any court of
competent jurisdiction.

     15. Entire Agreement. This Agreement constitutes the entire agreement among the parties
with respect to the Company (except for the terms of the Company’s articles of incorporation, as
the same may be amended from time to time). It supersedes any prior agreement or understanding
among them, and it may not be modified or amended in any manner other than as set forth herein.

     16. Further Acts and Assurances. Upon request, the undersigned agrees to furnish to the
Company such additional information as may be deemed necessary to determine the undersigned’s
suitability as an investor.

     17. Counterparts. This Agreement may be executed in counterparts, which taken together shall constitute one
agreement binding on the parties hereto. Facsimile and electronically transmitted signatures shall
be valid and binding to the same extent as original signatures. A party shall become bound by this
Agreement immediately upon signing and delivering any counterpart, independently of the signature
of the other party. Nevertheless, in making proof of this Agreement, it will be necessary to
produce only one copy signed by the party to be charged.

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SUBSCRIPTION AGREEMENT – SIGNATURE PAGE

     In Witness Whereof, the undersigned has executed this Subscription Agreement as of
___, 2006.

	 	 	 	 	 	 	 
	Individuals:	 	 	 	Entities:	 	 
	 
	 	 	 	 	 	 
	 	 	 
	Signature of Investor	 	Name of Entity
	 
	 	 	 	 	 	 
	 	 	 
	Signature of Joint Investor	 	Authorized Signature
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Print Name
	 
	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	 	 	Its:
	 

	 	 	 	 	 	 

Form of ownership for individual investors (check one):

	 	 	 	 	 	 	 
	 

	 	Individual ownership
	 	 	 	Tenants in common
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Joint tenants (JTWROS)
	 	 	 	Individual ownership pursuant to
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	purchases under the Uniform Gift to Minors Act (UGMA)

	 	 	 	 	 	 	 
	Other:	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 

ACKNOWLEDGED AND ACCEPTED:

KUHLMAN COMPANY, INC.:

	 	 	 	 	 
	 	 	 
	By:

	 	 	 	Dated
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

 

 

Annex A

WIRING INSTRUCTIONS

	 	 	 
	Bank Name:
	 	 
	 

	 	 
	 
	 	 
	Routing Number:
	 	 
	 

	 	 
	 
	 	 
	Account Holder:

	 	Kuhlman Company, Inc.
	 
	 	 
	Account Number:exv10w2

 

Exhibit 10.2

WARRANT TO PURCHASE                                          SHARES

OF COMMON STOCK

OF KUHLMAN COMPANY, INC.

EXERCISABLE ON OR BEFORE, AND VOID AFTER

5:00 P.M. MINNEAPOLIS TIME ON JANUARY                     , 2009

     This Certifies That                                                              (the “Holder”), or registered assigns, is
entitled to subscribe for and purchase from Kuhlman Company, Inc., a Nevada corporation (the
“Company”), at any time after January                     , 2006 through January                     , 2009, shares of the
Company’s common stock at an exercise price of $2.75 per share (the “Purchase Price”), subject to
the anti-dilution provisions contained herein.

     The shares that may be acquired upon exercise of this Warrant are referred to herein as the
“Warrant Shares.” As used herein, the term “Holder” means the Holder identified in the paragraph
above and any party who acquires all or a part of this Warrant as a registered transferee of such
Holder. The term “Convertible Securities” means any stock or other securities convertible into, or
exchangeable for, Company common stock. This Warrant is subject to the following terms and
conditions:

     1. Exercise. The rights represented by this Warrant may be exercised by the Holder
hereof, in whole or in part (but not as to a fractional share of Common Stock), by written notice
of exercise (in the form attached hereto) delivered to the Company at the principal office of the
Company prior to the expiration of this Warrant and accompanied or preceded by the surrender of
this Warrant along with a check in payment of the Purchase Price for the number of Warrant Shares
being purchased hereunder.

     2. Exchange and Replacement. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant, the Company will
make and deliver a new Warrant of like tenor, in lieu of this Warrant. This Warrant shall be
promptly canceled by the Company upon the surrender hereof in connection with any exchange or
replacement.

     3. Issuance of the Warrant Shares.

     (a) Subject to the provisions of paragraph (b) below, certificates for the Warrant
Shares purchased hereunder shall be delivered to the Holder within a reasonable time, not
exceeding 15 days, after the rights represented by this Warrant shall have been so
exercised, and, unless this Warrant has expired, a new Warrant representing the right to
purchase the number of Warrant Shares, if any, with respect to which this Warrant shall not
then have been exercised shall also be delivered to the Holder within such time.

     (b) Notwithstanding the foregoing, however, the Company shall not be required to
deliver any certificate for Warrant Shares upon exercise of this Warrant except in
accordance with exemptions from the applicable securities, registration requirements or
registrations under applicable securities laws. Nothing herein, however, shall obligate the
Company to effect registrations under federal or state securities laws. The Holder agrees
to execute such documents and make such representations, warranties, and agreements as may
be required solely to comply

 

 

with the exemptions relied upon by the Company, or the registrations made, for the
issuance of the Warrant Shares.

     4. Covenants of the Company. The Company covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the Company will at all times
have authorized for the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant a sufficient number of shares of common stock to provide for the exercise
of the rights represented by this Warrant.

     5. Anti-Dilution Adjustments. The provisions of this Warrant are subject to adjustment
as provided in this Section 5.

     (a) The Purchase Price shall be adjusted from time to time such that in case the
Company shall hereafter: (i) pay any dividends on any class of stock of the Company payable
in common stock or Convertible Securities; (ii) subdivide its then outstanding shares of
common stock into a greater number of shares; or (iii) combine outstanding shares of common
stock, by reclassification or otherwise; then, in any such event, the Purchase Price in
effect immediately prior to such event shall (until adjusted again pursuant hereto) be
adjusted immediately after such event to a price (calculated to the nearest full cent)
determined by dividing (A) the number of shares of common stock outstanding immediately
prior to such event, multiplied by the then-existing Purchase Price, by (B) the total number
of shares of common stock outstanding immediately after such event (including in each case
the maximum number of shares of common stock issuable in respect of any Convertible
Securities), and the resulting quotient shall be the adjusted Purchase Price per share. An
adjustment made pursuant to this paragraph shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or reclassification. If,
as a result of an adjustment made pursuant to this paragraph, the Holder of any Warrant
thereafter surrendered for exercise shall become entitled to receive shares of two or more
classes of capital stock or share of common stock and other capital stock of the Company,
the Company’s board of directors (whose determination shall be conclusive) shall determine
the allocation of the adjusted Purchase Price between or among shares of such classes of
capital stock or shares of common stock and other-capital stock. All
calculations under this paragraph shall be made to the nearest cent or to the nearest 1/100
of a share, as the case may be. In the event that at any time as a result of an adjustment
made pursuant to this paragraph, the holder of any Warrant thereafter surrendered for
exercise shall become entitled to receive any shares of the Company other than shares of
common stock, thereafter the Purchase Price of such other shares so receivable upon exercise
of any Warrant shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to common stock contained in
this Section.

     (b) Upon each adjustment of the Purchase Price pursuant to paragraph (a) above, the
Holder of each Warrant shall thereafter (until another such adjustment) be entitled to
purchase at the adjusted Purchase Price the number of Warrant Shares, calculated to the
nearest full share, obtained by multiplying the number of such shares specified in such
Warrant (as adjusted as a result of all adjustments in the Purchase Price in effect prior to
such adjustment) by the Purchase Price in effect prior to such adjustment and dividing the
product so obtained by the adjusted Purchase Price.

     (c) In case of any consolidation or merger to which the Company is a party other than a
merger or consolidation in which the Company is the surviving corporation, or in case of any
sale or conveyance to another corporation of the property of the Company as an entirety or
substantially as an entirety, or in the case of any statutory exchange of securities with
another

2

 

corporation (including any exchange effected in connection with a merger of a third
corporation into the Company), there shall be no adjustment under paragraph (a) above but
the Holder of each Warrant then outstanding shall have the right thereafter to convert such
Warrant into the kind and amount of shares of stock and other securities; and property which
he would have owned or have been entitled to receive immediately after such consolidation,
merger, statutory exchange sale or conveyance had such Warrant been converted immediately
prior to the effective date of such consolidation, merger, statutory exchange, sale, or
conveyance. The provisions of this paragraph shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.

     6. No Voting Rights. This Warrant shall not entitle the Holder to any voting rights
or other rights as a stockholder of the Company.

     7. Notice of Transfer of Warrant or Resale of the Warrant Shares.

     (a) The Holder, by acceptance hereof, agrees to give written notice to the Company
before transferring this Warrant or transferring any Warrant Shares of such Holder’s
intention to do so, describing briefly the manner of any proposed transfer. If in the
opinion of the Company counsel the proposed transfer may be effected without registration or
qualification (under any federal or state securities laws), the Company, as promptly as
practicable, shall notify the Holder of such opinion, whereupon the Holder shall be entitled
to transfer this Warrant or to dispose of Warrant Shares received upon the previous exercise
of this Warrant, all in accordance with the terms of the notice delivered by the Holder to
the Company; provided that an appropriate legend may be endorsed on this Warrant or the
certificates for such Warrant Shares respecting restrictions upon transfer thereof necessary
or advisable in the opinion of counsel and satisfactory to the Company to prevent further
transfers which would be in violation of Section 5 of the Securities Act of 1933, as
amended, and applicable state securities laws; and provided further that the prospective
transferee or purchaser shall execute such documents and make such representations,
warranties, and agreements as may be required solely to. comply with the
exemptions relied upon by the Company for the transfer of disposition of the Warrant or
Warrant Shares.

     (b) If in the opinion of counsel referred to in this Section 7, the proposed transfer
or disposition of this Warrant or such Warrant Shares described in the written notice given
pursuant to this Section 7 may not be effected without registration or qualification of this
Warrant or such Warrant Shares the Company shall promptly give written notice thereof to the
Holder, and the Holder will limit its activities in respect to such transfer or disposition
as, in the opinion of both such counsel, are permitted by law.

     8. No Fractional Shares. No fractional shares will be issued upon the exercise
hereof.

     In Witness Whereof, Kuhlman Company, Inc. has caused this Warrant to be signed by its
duly authorized officer.

	 	 	 	 	 	 	 
	 	 	KUHLMAN COMPANY, INC.:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Jon Gangelhoff, Chief Financial Officer
	 	 

3

 

SUBSCRIPTION FORM

(To be signed upon exercise of Warrant)

     The Undersigned, the holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase thereunder, of the
shares of common stock of Kuhlman Company, Inc. to which such Warrant relates and herewith makes
payment of $                                                             therefor in cash or by certified check and requests that the
certificate for such shares be issued in the name of, and be delivered to,                                                             
the address for which is set forth below the signature of the undersigned.

Dated:                                                             , 20                    

	 	 	 	 	 
	 

	 	 

Signature
	 	 
	 
	 	 	 	 
	 

	 	 

Name
	 	 
	 
	 	 	 	 
	 

	 	 

Address
	 	 
	 
	 	 	 	 
	 

	 	 

Social Security or Tax Identification No.
	 	 

4

 

ASSIGNMENT FORM

(To be signed only upon authorized transfer of Warrant)

     For Value Received, the undersigned hereby sells, assigns, and transfers unto
                                                             the right to purchase the securities of Kuhlman Company, Inc., a
Nevada corporation, to which the within Warrant relates and appoints                                         ,
attorney, to transfer said right on the books of Kuhlman Company, Inc. with full power of
substitution in the premises.

Dated:                                                             , 20                    

	 	 	 	 	 
	 

	 	 

Signature
	 	 
	 
	 	 	 	 
	 

	 	 

Name
	 	 
	 
	 	 	 	 
	 

	 	 

Address
	 	 
	 
	 	 	 	 
	 

	 	 

Social Security or Tax Identification No.
	 	 

5

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