Document:

exh10-254_16709.htm

EXHIBIT 10.25.4

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

WARRANT TO PURCHASE STOCK

 

	
Corporation:

	
NEXX SYSTEMS, INC., a Delaware corporation

	
Number of Shares:

	
 See Section 1.1 below

	
Class of Stock:

	
Common

	
Initial Exercise Price:

	
  See Section 1.1 below.

	
Issue Date:

	
June 25, 2010

	
Expiration Date:

	
June25, 2020 (Subject to Sections 1.7 and 4.1)

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, the receipt of which is hereby acknowledged, COMERICA BANK or its assignee (“Holder”) is entitled to purchase the number of fully paid and nonassessable shares of the class of securities (the “Shares”) of the corporation (the “Company”) at the initial exercise price per Share (the “Warrant Price”) all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.

 

ARTICLE 1. EXERCISE.

 

1.1 Number of Shares to be Issued and Exercise Price.

 

(a) The number of Shares to be issued hereunder shall be equal to 600,000 divided by the initial offering price to the public in a Qualified IPO and the Warrant Price per share shall equal the price at which the Shares are sold to investors in the Qualified IPO.  A “Qualified IPO” shall mean an initial public offering of the Company’s Common Stock on terms and conditions approved by the Company’s Board of Directors.  [For illustration purposes only, if the Company consummates an IPO at an initial price to investors of $5.00 per share of Common Stock, then the number of shares issuable hereunder shall equal 120,000 shares and the Initial Exercise Price shall be $5.00 per share of Common Stock].

 

(b) In the event of a Sale of the Company prior to a Qualified IPO, (i) the number of shares which the Holder may purchase under the terms of this Warrant shall equal 600,000 divided by the price per share to be paid to holders of the Company’s Common Stock  upon the Sale of the Company, and (ii) the Warrant Price per share shall be equal to 85% of the price per share to be paid to holders of the Company’s Common Stock upon a Sale of the Company.  In the event of any Sale of the Company (whether before or after a Qualified IPO), the Shares to be issued hereunder shall be subject to all of the terms and conditions (including any escrow and other conditions) to which all other holders of the Company’s Common Stock are then subject).  If the Sale of the Company results in holders of the Company’s Common Stock receiving shares of the acquiring company or consideration other than cash, then the fair market value of the consideration received shall be determined by the Company’s Board of Directors, which determination shall be final and binding upon the Holder.  A “Sale of the Company” shall  mean (y) a  merger or consolidation of the Company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation outstanding immediately after such merger or consolidation, or (z) the stockholders of the Company approve an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.

 

(c) Notwithstanding the foregoing, in the event that the Company shall not have completed either a Sale of the Company or a Qualified IPO prior to the first anniversary of the Issue Date, then (i) the Warrant Price per share shall equal the first valuation of the fair market price made within the period from 90 days before to 90 days after the first anniversary of the Issue Date as determined by a third party 

 

  

  

  

retained by the Company to value its common stock in connection with complying with Section 409A of the Internal Revenue Code of 1986, as amended, provided that in all events, such a valuation shall be obtained within 90 days after the first anniversary of the Issue Date; and (ii) the number of shares which the Holder may purchase under the terms of this Warrant shall equal 600,000 divided by the price determined under the preceding clause (i).

 

1.2 Method of Exercise.  Holder may exercise this Warrant by delivering this Warrant and a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company.  Unless Holder is exercising the conversion right set forth in Section 1.3, Holder shall also deliver to the Company a check, wire transfer (to an account designated by the Company) or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased

 

1.3 Cashless Exercise Right.  In lieu of exercising this Warrant as specified in Section 1.2, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share.  The fair market value of the Shares shall be determined pursuant to Section 1.4.

 

1.4 Fair Market Value.  If the Shares are traded regularly in a public market, the fair market value of the Shares shall be the closing price of the Shares (or the closing price of the Company’s stock into which the Shares are convertible) reported for the business day immediately before Holder delivers its Notice of Exercise to the Company. If the Shares are not regularly traded in a public market, the Board of Directors of the Company shall determine fair market value in its good faith judgment.

 

1.5 Delivery of Certificate and New Warrant.  Promptly after Holder exercises or converts this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new warrant representing the Shares not so acquired.

 

1.6 Replacement of Warrants.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

 

1.7 Treatment of Warrant in the Event of a Sale of the Company.  The Company shall give Holder written notice at least 20 days prior to the closing of any proposed Sale of the Company.  The Company will use commercially reasonable efforts to request (i) the acquirer of the Company, (ii) successor or surviving entity or (iii) parent entity in a Sale of the Company (the “Acquirer”) to assume this Warrant as a part of the Sale of the Company.

 

1.7.1 If the Acquirer assumes this Warrant, then this Warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing.  The Warrant Price shall be adjusted accordingly, and the Warrant Price and number and class of Shares shall continue to be subject to adjustment from time to time in accordance with the provisions hereof..

 

1.7.2 If the Acquirer refuses to assume this Warrant in connection with the Sale of the Company, the Company shall give Holder an additional written notice at least ten (10) days prior to the closing of the Acquisition of such fact.  In such event, notwithstanding any other provision of this Warrant to the contrary, Holder may immediately exercise this Warrant in the manner specified in this Warrant with such exercise effective immediately prior to closing of the Acquisition.  If Holder elects not to exercise this Warrant, then this Warrant will terminate immediately prior to the closing of the Sale of the Company.

 

  

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ARTICLE 2. ADJUSTMENTS TO THE SHARES.

 

2.1 Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend on its common stock payable in common stock, or other securities, subdivides the outstanding common stock into a greater amount of common stock, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred.

 

2.2 Reclassification, Exchange or Substitution.  Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event.  The Company or its successor shall promptly issue to Holder a new warrant for such new securities or other property.  The new warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events, but shall not apply to any event described in Section 2.1.

 

2.3 Adjustments for Combinations, Etc.  If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased.  If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a greater number of shares, the Warrant Price shall be proportionately decreased.

 

2.4 Adjustments for Diluting Issuances.  In the event the Company shall not have completed a Qualified IPO prior to the first anniversary of the Issue Date of this Warrant, the Warrant Price and the Number of Shares issuable upon the exercise of this Warrant shall be subject to adjustment, from time to time prior to the Company’s completion of a Qualified IPO, in the manner set forth on Exhibit A. 

 

2.5 No Impairment.  The Company shall not, by amendment of its Certificate of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder’s rights under this Article against impairment.

 

2.6 Certificate as to Adjustments.  Upon each adjustment of the Warrant Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based.  The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant Price.

 

2.7 Fractional Shares.  No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the Number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder amount computed by multiplying the fractional interest by the fair market value of a full Share.

 

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

 

3.1 Representations and Warranties.  The Company hereby represents and warrants to the Holder as follows:

 

(a) All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any 

 

  

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liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.

 

(b) The Company’s capitalization table attached to this Warrant as Appendix 2 is true and complete as of the Issue Date.

 

3.2 Notice of Certain Events.  If the Company proposes at any time (a) to declare any dividend or distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of any class or series or other rights; (c) to effect any reclassification or recapitalization of common stock; or (d) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up, then, in connection with each such event, the Company shall give Holder (1) at least 20 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above; and (2) in the case of the matters referred to in (c) and (d) above at least 20 days prior written notice of the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other property deliverable upon the occurrence of such event).  Upon request, the Company shall provide Holder with such information reasonably necessary for Holder to evaluate its rights as a holder of this Warrant or Warrant Shares in the case of matters referred to (a), (b), (c) and (d) herein above.

 

3.3 Information Rights.  So long as the Holder holds this Warrant and/or any of the Shares, the Company shall deliver to the Holder (a) promptly after mailing, copies of all communiques to the shareholders of the Company, (b) within ninety (90) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized standing and (c) within forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company’s quarterly, unaudited financial statements.  In addition, and without limiting the generality of the foregoing, so long as the Holder holds this Warrant and/or any of the Shares, the Company shall afford to the Holder the same access to information concerning the Company and its business and financial condition as would be afforded to a holder of the class of Shares under applicable state law and/or any agreement with any holder of the class of Shares.

 

3.4 Registration under Securities Act of 1933, as amended.  The Company agrees that the Shares shall be deemed “Registrable Securities” or otherwise entitled to “piggy back” registration rights in accordance with the terms of the that certain Third Amended and Restated Investor Rights Agreement as set forth on Exhibit B attached hereto, as the same may be amended from time to time, provided that the Company agrees that no amendments will be made to the Agreement which would have an adverse impact on Holder’s registration rights hereunder this provision.  Holder shall be deemed to be a party to the Agreement solely for the purpose of the above-mentioned registration rights..

 

ARTICLE 4. MISCELLANEOUS.

 

4.1 Term: Notice of Expiration.  This Warrant is exercisable in whole or in part, at any time and from time to time on or before the Expiration Date set forth above.   If this Warrant has not been exercised prior to the Expiration Date, this Warrant shall be deemed to have been automatically exercised on the Expiration Date by “cashless” conversion pursuant to Section 1.3.  The Company agrees that Holder may terminate this Warrant, upon notice to the Company, at any time in its sole discretion.

 

4.2 Legends.  This Warrant and the Shares shall be imprinted with a legend in substantially the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

  

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4.3 Compliance with Securities Laws on Transfer.  This Warrant and the Shares issuable upon exercise of this Warrant may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee.  The Company shall not require Comerica Bank (“Bank”) or a Bank Affiliate (as defined herein) to provide an opinion of counsel or investment representation letter if the transfer is to Bank’s parent company, Comerica Incorporated (“Comerica”), or any other affiliate of Bank (“Bank Affiliate”)

 

4.4 Transfer Procedure.  After receipt of the executed Warrant, Bank will transfer all of this Warrant to Comerica Ventures Incorporated, a non-banking subsidiary of Comerica and a Bank Affiliate (“Ventures”).  Subject to the provisions of Section 4.3 and the ROFR Agreement and the Voting Agreement as defined in attached Exhibits C and D respectively, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant by giving the Company notice of the portion of this Warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the Company for reissuance to the transferee(s) (and Holder, if applicable); provided, however, that Holder may transfer all or part of this Warrant to its affiliates, including, without limitation, Ventures, at any time without notice or the delivery of any other instrument to the Company, and such affiliate shall then be entitled to all the rights of Holder under this Warrant and any related agreements, and the Company shall cooperate fully in ensuring that any stock issued upon exercise of this Warrant is issued in the name of the affiliate that exercises this Warrant.  The terms and conditions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the holders hereof and their respective permitted successors and assigns.

 

4.5 Notices.  All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, or sent via a nationally recognized overnight courier service, fee prepaid, or on the first business day after transmission by facsimile, at such address or facsimile number as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such Holder from time to time.  Effective upon the receipt of executed Warrant and initial transfer described in Article 5.4 above, all notices to the Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

Comerica Ventures Incorporated

Attn:  Warrant Administrator

1717 Main Street, 5th Floor, MC 6406

Dallas, Texas 75201

Facsimile No. (214) 462-4459

All notices to the Company shall be addressed as follows:

 

Nexx Systems, Inc.

900 Middlesex Turnpike, Building 6

Billerica, Massachusetts 01821

Attn:

4.6 Amendments; Waiver.  This Warrant and any term hereof may be amended, changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such amendment, change, waiver, discharge or termination is sought.

 

4.7 Attorneys’ Fees.  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

 

4.8 Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

4.9 Confidentiality.  The Company hereby agrees to keep the terms and conditions of this Warrant confidential.  Notwithstanding the foregoing confidentiality obligation, the Company may disclose information 

 

  

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relating to this Warrant as required by law, rule, regulation, court order or other legal authority, provided that (i) the Company has given Holder at least ten (10) days’ notice of such required disclosure, and (ii) the Company only discloses information that is required, in the opinion of counsel reasonably satisfactory to Holder, to be disclosed.

 

[end of agreement—signature page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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Signature page to Warrant to Purchase Stock dated June 25, 2010, in favor of Comerica Bank or its assignee.

 

	  	
NEXX SYSTEMS, INC.

	  	  
	  	
By:  /s/ Stanley D. Piekos

Name:  Stanley D. Piekos

Title:   Chief Financial Officer

Authorized signatories under Corporate Resolutions to Borrow or an authorized signer(s) under a resolution covering warrants must sign the warrant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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APPENDIX 1

 

NOTICE OF EXERCISE

 

1.           The undersigned hereby elects to purchase ________ shares of the ___________ stock of NEXX SYSTEMS, INC. pursuant to the terms of the attached warrant, and tenders herewith payment of the purchase price of such shares in full.

 

1.           The undersigned hereby elects to convert the attached warrant into shares in the manner specified in the warrant.  This conversion is exercised with respect to _________ of the shares covered by the warrant.

 

[Strike paragraph that does not apply.]

 

2.           Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:

 

Comerica Ventures Incorporated

Attn:  Warrant Administrator

1717 Main Street, 5th Floor, MC 6406

Dallas, Texas 75201

Facsimile No. (214) 462-4459

3.           The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.

 

	
COMERICA VENTURES INCORPORATED or Assignee

	  
	  	  
	

(Signature)

	  
	  	  
	 	 
	

(Date)

	  

  

  

  

APPENDIX 2

 

CAPITALIZATION TABLE

 

 

	
NEXX Capitalization Table

	 
	
As of June 25, 2010

	 
	  	 	 	 
	
Common Stock

	 	 	19,444,854	 
	
Series A Preferred Stock

	 	 	1,550,000	 
	
Series B Preferred Stock

	 	 	7,669,880	 
	
Series C Preferred Stock

	 	 	8,216,011	 
	
Series D Preferred Stock

	 	 	56,003,614	 
	
Warrants to Purchase Series B Preferred Stock

	 	 	115,384	 
	
Warrants to Purchase Series D Preferred Stock

	 	 	4,325,975	 
	
Restricted Stock Units

	 	 	5,275,000	 
	
Outstanding Options to Purchase Common Stock

	 	 	10,737,056	 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

EXHIBIT A

 

Anti-Dilution Provisions

The following provisions are incorporated into and made a part of Section 2.4 of this Warrant:

1.           Definitions.  As used in this Exhibit D, the following terms have the following respective meanings:

(a)           “Common Stock” means the common stock of the Company.

(b)           “Option” means any right, option or warrant to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

(b)           “Convertible Securities” means any evidences of indebtedness, shares of stock or other securities directly or indirectly convertible into or exchangeable for Common Stock.

(c)           “Issue” means to grant, issue, sell, assume or fix a record date for determining persons entitled to receive any security (including Options), whichever of the foregoing is the first to occur.

(d)           “Additional Common Shares” means all Common Stock (including reissued shares) Issued (or deemed to be Issued pursuant to Section 2 below) after the date of this Warrant.  Additional Common Shares does not include, however, any Common Stock Issued (or deemed to be Issued pursuant to Section 2 below) in a transaction described in Sections 2.1 and 2.2 of this Warrant; any common stock Issued (or deemed to be Issued pursuant to Section 2 below) upon exercise or conversion of any Options or Convertible Securities outstanding on the date of this Warrant or any Convertible Securities issued (or deemed to be Issued pursuant to Section 2 below) upon exercise of any Options  outstanding on the date of this Warrant; the Shares; or Common Stock or Options Issued (or deemed to be Issued pursuant to Section 2 below) after the date of this Warrant as incentive or in a non-financing transaction to employees, officers, directors or consultants to the Company.

 

2.           Deemed Issuance of Additional Common Shares.  The shares of common stock ultimately Issuable upon exercise of an Option (including the shares of common stock ultimately Issuable upon conversion or exercise of a Convertible Security Issuable pursuant to an Option) are deemed to be Issued when the Option is Issued.  The shares of common stock ultimately Issuable upon conversion or exercise of a Convertible Security (other than a Convertible Security Issued pursuant to an Option) shall be deemed Issued upon Issuance of the Convertible Security.  The maximum amount of common stock Issuable is determined without regard to any future adjustments permitted under the instrument creating the Options or Convertible Securities.

3.           Adjustments for Diluting Issuances.

3.1           Adjustment of Warrant Price.  If the Company issues Additional Common Shares after the date of this Warrant and the consideration per Additional Common Share is less than the Warrant Price in effect immediately before such Issue (a “Diluting Issuance”), the Warrant Price in effect immediately before such Issue shall be reduced, concurrently with such Issue, to a price (calculated to the nearest hundredth of a cent) determined by multiplying the Warrant Price by a fraction:

(a)           the numerator of which is the amount of shares outstanding immediately before such Issue plus the amount of common stock that the aggregate consideration received by Company for the Additional Common Shares would purchase at the Warrant Price in effect immediately before such Issue, and

(b)           the denominator of which is the amount of shares outstanding immediately before such Issue plus the number of such Additional Common Shares.

3.2           Adjustment of Number of Shares.  Upon each adjustment of the Warrant Price, the number of Shares Issuable upon exercise of this Warrant shall be increased to equal the product obtained by multiplying (a) the number of Shares Issuable upon exercise of this Warrant by (b) the quotient obtained by dividing (i) the Warrant 

 

  

  

  

Price in effect immediately prior to such adjustment, by (ii) the Warrant Price in effect immediately after such adjustment.

 

3.3           Securities Deemed Outstanding.  For the purpose of this Section 3, all securities Issuable upon exercise of any outstanding Convertible Securities or Options, Warrants, or other rights to acquire securities of the Company shall be deemed to be outstanding.

 

3.4           Readjustment.   On the expiration or termination of any Option not exercised in full or of any right to convert or exchange under any Convertible Securities not exercised in full, the Warrant Price then in effect shall forthwith be increased to the Warrant Price which would have been in effect at the time of such expiration had such Option or Convertible Securities been, when originally issued, exercisable or convertible only for the shares of Common Stock actually issued upon exercise or conversion of such Option or Convertible Securities, if any.  No readjustment of the Warrant Price pursuant to this section 3.4 shall (i) increase the Warrant Price by an amount in excess of the adjustment originally made to the Exercise Price in respect of the issue, sale or grant of the applicable Option or Convertible Securities or (ii) require any adjustment to the amount paid or number of Shares received upon any exercise of this Warrant prior to the date upon which such readjustment to the Warrant Price shall occur.

  

  

  

EXHIBIT B

 

Third Amended and Restated Investor Rights Agreement dated as of October 26, 2010

 

[See Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 filed February 11, 2010]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

EXHIBIT C

 

Right of First Refusal and Co-Sale Rights

 

The Shares shall be entitled to the rights and obligations set forth in the Second Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of October 26, 2009 (the “ROFR Agreement”) in accordance with the terms of the ROFR Agreement between the Company and its investor(s), as it may be amended from time to time.   By acceptance of the Warrant to which this Exhibit C is attached, Holder shall be deemed to be a party to the ROFR Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

EXHIBIT D

 

Voting Rights Agreement

 

The Shares  shall be entitled to the rights and obligations set forth in the Fourth Amended and Restated Voting Rights Agreement dated as of October 26, 2009 (the “Voting Agreement”) in accordance with the terms of such Voting Agreement between the Company and its investor(s), as it may be amended from time to time.   By acceptance of the Warrant to which this Exhibit D is attached, Holder shall be deemed to be a party to the Voting Agreement.p0461_ex10-1.htm

 

EXHIBIT 10.1

 

JOINT DEVELOPMENT AGREEMENT

AMENDMENT

 

This agreement (the "Amendment") is entered into effective as of March 31, 2010 by and among WindGen Energy, Inc., formerly named InMedica Development Corporation, a Utah corporation ("WG"), Chi Lin Technology Co., LTD., a corporation organized and existing under the laws of the Republic of China ("CL"), MicroCor, Inc., a Utah corporation ("MC"), and Wescor, Inc., a Utah corporation ("WC").

WHEREAS, all of the parties hereto previously entered into a Joint Development Agreement dated September 7, 2004 (the "Agreement") for the purpose of developing technology known as "Hematocrit Technology" (as defined in the Agreement); and

WHEREAS, the parties to the Agreement wish to provide for the termination of the Agreement, as well as resolve other matters which have arisen since the execution of the Agreement;

 

NOW THEREFORE, the parties hereto agree as follows:

1.   Termination of Agreement. Upon execution of this Amendment, the parties hereto acknowledge and agree that the Agreement is hereby superseded and terminated and that all obligations of the parties there under have been fully performed, waived, fulfilled, satisfied or otherwise relieved, except Section 7 of the Agreement, which concerns all title to the Hematocrit Technology remaining in MC, and Section 8 of the Agreement shall remain in full force and effect. Likewise, all debts, monetary obligations and any security agreements between the parties hereto resulting from the Agreement or created between the parties hereto after the date of the Agreement are hereby terminated and canceled and all obligations of the parties to pay monies are deemed fully performed, waived, fulfilled, satisfied or otherwise relieved, except for monies owed by MC to WG for sums already advanced or to be advanced since January 1, 2009 for the maintenance of MC's patents.

2.   Transfer of MC Shares. Within fifteen (15) business days after the execution of this Amendment by all of the parties hereto, WG shall transfer to WC Two Hundred Thirty Thousand (230,000) shares of the 1,700,000 MC common stock owned by WG, so that after said transfer WG will own 1,470,000 shares of the outstanding common stock of MC, WC will own 1,105,000 shares of the outstanding common stock of MC, and CL will continue to own 425,000 shares of the outstanding common stock of MC.

  

  

  

 

3.   Future MC Revenue Share. All future revenues of MC shall be allocated among the parties as set forth in this Section 3 below. "Revenues" as used in this Amendment shall be defined as all monetary receipts of MC, except those new monies which are invested, from time to time, in MC: (i) to maintain its patents; (ii) for the further research and development of the Hematocrit Technology; or (iii) after the development of the Hematocrit Technology, for the marketing of the Hematocrit Technology and the management of the operations of MC.

a.    In the event MC is receiving Revenues only as royalties or licensing fees from the Hematocrit Technology and is not actively operating in the capacity of marketing and distribution of the Hematocrit Technology, all such Revenues of MC shall be distributed as follows, after provisions are made for all debts owing to MC creditors other than WG and MC's officers and directors appointed after January 1, 2009:

(i)            The first $150,000 of MC Revenues shall be paid to WC.

 

(ii)            Next, any sums owed to WG for advancements made to MC since January 1, 2009 for the maintenance of MC's patents shall be paid to WG.

(iii)           The next $150,000 of MC Revenues shall be paid 80% to WG ($120,000 total) and 20% to CL ($30,000 total) on a pro-rata basis.

(iv)   Finally, all remaining MC Revenues shall be paid out pro-rata to the MC shareholders based on the stock ownership in MC: specifically, upon the execution of this Amendment, 49.0% to WG, 36.8% to WC, and 14.2% to CL.

b.    In the event in the future MC becomes an active marketer and distributor of the Hematocrit Technology and needs operating capital out of proceeds from investment capital or its Revenues to effectively function as a marketer and distributor, all Revenues of MC shall be distributed as follows, after provisions are made for all debts owing to MC creditors other than WG and MC's officers and directors appointed after January 1, 2009:

(i)    Until WC receives $150,000, WC shall receive from MC the greater of:

A.    The sum equal to 20% of MC's Revenues each month; or

  

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B.    MC's "Excess Working Reserve," as defined as the amount of MC Revenues during the month which cause the cash reserves of MC to exceed the amount of the MC Working Reserve. "MC Working Reserve" is defined as the amount of money determined by MC's management at the beginning of each calendar quarter as the working capital MC will need for its operation as a marketer and distributor during that quarter.

 

(ii)   Next, any Excess Working Reserve will be paid to WG for any sums owed to WG for advancements made to MC since January 1, 2009 for the maintenance of MC's patents.

(iii)          Further additional Excess Working Reserve, not to exceed a cumulative $150,000, as determined in Section 3b(1)B above, shall be paid on a pro-rata basis to WG and CL in a ratio of 80% to WG and 20% to CL.

4.   Appointment of New MC Directors. In the event, after December 31, 2010, it is determined that MC will become a marketer and distributor of the fully developed Hematocrit Technology as described in Section 3b, WG and WC shall each be permitted to appoint a director to MC's Board of Directors to be comprised of no more than 3 directors. A third Director may be elected by the MC Shareholders.

5.   Patent Maintenance. Through December 31, 2011, WG shall advance funds and be solely responsible to pay for any and all costs to maintain MC's patents. Thereafter, WG and MC shall mutually agree as to how and when MC shall pay for its continuing costs of patent maintenance.

6.   Return of Prototypes and Information.

 

a.    Upon MC's request, WC shall return to MC any and all prototypes of the device representing the development of MC's Hematocrit Technology in WC's possession.

b.    Upon MC's request, WC shall provide MC with copies of any and all information on the Hematocrit Technology in WC's possession, including, but not limited to, technical data, engineering reports, test reports, parts descriptions, technical drawings and schematics, bills of materials and results of clinical trials.

7.   WC as Consultant. WC shall, at no cost to MC, make its personnel with knowledge of the development of MC's present Hematocrit Technology available to answer questions of a third party developer or appraiser of the Hematocrit Technology in order for the third party developer or appraiser to understand the development history, documentation and operation of prototypes involving the Hematocrit Technology.

 

  

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8.           Litigation and Arbitration. Any controversy or claim arising out of or relating to this Amendment, except for a request for injunctive relief, shall be settled by arbitration in the Salt Lake City metropolitan area in accordance with the then governing rules of the American Arbitration Association. The party to whom the arbitrator or arbitration panel makes an award shall be entitled to receive as part of the award the reasonable cost of its attorney fees and litigation expenses. Judgment upon the award rendered in the arbitration may be enforced in court described in Paragraph 10 below of this Amendment.

 

9.           Assignment. Rights and obligations of a party to this Amendment may not be assigned or transferred without the other parties' prior written consent thereto.

10.         Governing Law And Venue. This Amendment shall be governed by and interpreted in accordance with the laws of the State of Utah, United States of America. The parties hereby expressly agree that the proper venue for any injunctive claim or enforcement of an arbitration award pursuant to Section 8 above shall be the Utah state court for Salt Lake City and the each party upon execution of this Amendment consents to the service of process from such court.

11.         Modification. No modification or amendment of this Amendment shall be valid unless it is in writing and signed by all parties hereto.

12.         Complete Agreement. This Amendment constitutes the entire agreement between the parties and supersedes all prior agreements and understandings; except that Sections 7 and 8 of the Agreement shall remain in full force and effect.

13.         Waiver. The waiver by any party of a breach of any term of this Amendment shall not operate as, or be construed as, a waiver of any subsequent breach.

14.         Headings. The headings in this Amendment are inserted for convenience only and shall not be considered in interpreting the provisions hereof.

15.         Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

  

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IN WITNESS WHEREOF,  the parties have executed this Amendment to the Agreement, effective as of March 31, 2010.

 

	 	
WINDGEN ENERGY, INC.

	 
	 	 	 	 
	
Date:  April 14, 2010

	
By: 

	/s/ Ronald Conquest	 
	 	 	
Name: Ronald Conquest

Title: Chairman/CEO

	 
	 	 	 	 

 

	 	
CHI LIN TECHNOLOGY CO., LTD.

	 
	 	 	 	 
	
Date:  June 24, 2010

	
By: 

	/s/ Yeou-Geng, Hsu 	 
	 	 	
Name: Yeou-Geng, Hsu 

Title: President

	 
	 	 	 	 

	 	
MICROCOR, INC.

	 
	 	 	 	 
	
Date:  April 15, 2010

	
By: 

	/s/ Larry E. Clark	 
	 	 	

Name: Larry Clark

Title: Chairman

	 
	 	 	 	 

 

	 	
WESCOR, INC.

	 
	 	 	 	 
	
Date:  April 13, 2010

	
By: 

	/s/ Dennis Briscoe	 
	 	 	
Name:  Dennis Briscoe

Title: President, Wescor Division

	 
	 	 	 	 

  

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