Document:

Exhibit

Exhibit 10.1
*Confidential Treatment Requested

CEPHEID
2015 EQUITY INCENTIVE PLAN
NOTICE OF PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD
(Performance Period – Fiscal Years 2016 – 2018)

Unless otherwise defined herein, the terms defined in the Cepheid 2015 Equity Incentive Plan, as amended from time to time (the “Plan”), shall have the same meanings in this Notice of Performance-Based Restricted Stock Unit Award (the “Notice”) and the attached Agreement (as defined below).
You (“Participant”) have been granted an award (the “Award”) of Performance-Based Restricted Stock Units (“Units”) under the Plan subject to the terms and conditions of the Plan, this Notice and the Performance-Based Restricted Stock Unit Award Agreement, including any special terms and conditions set forth in the any appendix attached thereto (each, an “Appendix”) (the Performance-Based Restricted Stock Unit Award Agreement and any Appendix are collectively referred to as the “Agreement”).
	
		
	Participant:
	 

	Grant Number:
	 

	Date of Grant:
	 

	Target Number of Units:
	 

	Maximum Number of Units:
	125% of the Target Number of Units

	Performance Period:
	January 1, 2016 – December 31, 2018

	Earned Units:
	Except as otherwise provided by Sections 3 and 4 of the Agreement, the number of Earned Units (if any) shall equal the number of Units determined pursuant to Appendix A to the Agreement.

	Vesting Schedule & Vested Units:
	Except as otherwise provided by Sections 3 and 4 of the Agreement, provided that Participant’s Service has not terminated prior to the completion of the Performance Period, the Earned Units for the Performance Period, if any, shall become vested Units upon the certification by the Compensation Committee on the Certification Date.

	Expiration Date:
	This Award expires on the latest of: (i) Settlement Date, if applicable, following any required certification by the Compensation Committee on the Certification Date or (ii) the date that the Compensation Committee determines that the Performance Metrics have not been satisfied; provided, however, that it will expire earlier if Participant’s Service terminates earlier, as described in the Agreement.

***Certain omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 24b-2 promulgated under the Securities Exchange Act of 1934

You understand that your employment or consulting relationship or service with the Company or a Parent or Subsidiary of the Company is for an unspecified duration, can be terminated at any time, and that nothing in this Notice, the Agreement or the Plan changes your “at-will” employment or service relationship.  You acknowledge and agree that the terms of this Award may change prospectively in the event that your service status changes between full and part-time status in accordance with Company policies relating to work schedules and vesting of awards.  You acknowledge that the vesting of the Units pursuant to this Notice is earned only by continuing Service as an Employee, Non-Employee Director or Consultant and the achievement of the Performance Metrics.  You also understand that this Notice is subject to the terms and conditions of the Agreement and the Plan, both of which are incorporated herein by reference.  You confirm that you have read the Notice, the Agreement and the Plan.  By accepting this Award of Units, you consent to electronic delivery as set forth in the Agreement.

        

APPENDIX A

Performance Metrics

This Appendix A applies to the determination of the number of Earned Units for purposes of Section 3(a) of the Agreement.

1.    Performance Period.  The performance period of the Units is January 1, 2016 through December 31, 2018 (the “Performance Period”).  
2.    Units.  The Target Number of Units and the Maximum Number of Units are as set forth in the Notice. 
3.    Performance Metrics.  The number of Units that may be earned under an Award and become Earned Units is determined by the level of achievement of the Revenue Metric and the Operating Margin Metric (each as defined below, and each, a “Performance Metric”) for the Performance Period.    
(a)    “Revenue Metric” means the Company’s three-year compounded annual growth rate (CAGR) (as defined below) for Revenue (as defined below) for the Performance Period.  
“Revenue” means the Company’s revenue, calculated in accordance with Generally Accepted Accounting Principles (“GAAP”), as reported in its audited quarterly and annual financial statements.  
“Three-Year CAGR” shall be calculated using the following formula:  2018 Revenue divided by 2015 Revenue)^(1/3) – 1, expressed as a percentage with one decimal point.

“2018 Revenue” means Revenue for the Company’s fiscal year 2018 from January 1, 2018 through December 31, 2018, reported in USD on a Constant Currency Basis (based on 2015 Revenue) (as defined below) and adjusted for all FX hedging-related gains and losses.

“2015 Revenue” means Revenue for the Company’s fiscal year 2015 from January 1, 2015 through December 31, 2015, reported in USD and adjusted for all FX hedging-related gains and losses.  

“Constant Currency Basis (based on 2015 Revenue)” means all USD denominated revenue in 2018 plus all foreign currency denominated revenue in 2018 for each individual currency, multiplied by the simple average of the monthly average FX rates for each respective currency in 2015, such that the 2018 revenue does not include the impact of the change in FX rates between 2015 and 2018.  The monthly average FX rates for each currency in 2015 to be used in this calculation are set forth on Appendix B.

(b)     “Operating Margin Metric” means (x) the Company’s operating income, as calculated and publicly reported on a non-GAAP basis for the Company’s 2018 fiscal 

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year divided by (y) the Company’s Revenue for the Company’s 2018 fiscal year, expressed as a percentage with one decimal point.  
4.    Calculation of Earned Units.
(a)    The number of Units that may be earned under an Award and become Earned Units is determined by multiplying the Target Number of Units by the Unit Multiplier (as defined below) that corresponds to the each of the Revenue Metric and the Operating Margin Metric (each as determined pursuant to the Section 5 of Appendix A) with each of the Performance Metrics being equally weighted.  The following table summarizes this calculation of the number of Earned Units: 
	
							
	Target Number of Units
	x
	(50% x Revenue Metric Unit Multiplier (based on the Award Achievement Levels))
	+
	(50% x Operating Margin Metric Unit Multiplier (based on the Award Achievement Levels))
	=
	Earned Units

(b)    The number of Earned Units will be rounded down to the nearest full Share.
5.    Achievement of Performance Metrics.  The achievement of the Performance Metrics will be determined as follows.
(a)    Each Performance Metric has a Threshold, Target and Stretch level of achievement, as set forth in the table below, and a corresponding Unit Multiplier, as set forth in the table below.  The level of achievement percentages will be rounded to the nearest whole number.  
“Revenue Metric Achievement” means the level of achievement of the Revenue Metric, expressed as a percentage and determined pursuant to this Section 5 and for which the Threshold, Target and Stretch levels of achievement are set forth in the table below titled “Award Achievement Levels.”  
“Operating Margin Metric Achievement” means the level of achievement of Operating Margin Metric, expressed as a percentage and determined pursuant to this Section 5 and for which the Threshold, Target and Stretch levels of achievement are set forth in the table below titled “Award Achievement Levels.”   
“Unit Multiplier” is the percentage that corresponds to the Revenue Metric Achievement and the Operating Margin Metric Achievement pursuant to this Section 5 and for which the Threshold, Target and Stretch levels are set forth in the table below.  The Unit Multiplier will be multiplied by the Target Number of Units as set forth in Section 4(a) of Appendix A above to determine the number of Earned Units.  
The following is the “Award Achievement Levels” table:

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	Revenue Metric
	 
	Operating Margin Metric

	Level
	Revenue Metric Achievement
	Unit Multiplier 
(for determining the number of Earned Units)
	 
	Operating Margin Metric Achievement
	Unit Multiplier
(for determining the number of Earned Units)

	Threshold
	***
	33%
	 
	***
	33%

	Target
	***
	100%
	 
	***
	100%

	Stretch
	***
	125%
	 
	***
	125%

(b)    The Performance Metrics are equally weighted at 50%.
(c)    The Revenue Metric Achievement must be at least at the Threshold level in order for the Operating Margin Metric Achievement to be achieved above Target Level.  The Operating Margin Metric Achievement must be at least at the Threshold level in order for the Revenue Metric Achievement to be achieved above Target Level.  For example, if the Revenue Metric Achievement is ***%, but the Operating Margin Metric Achievement is only ***% (which is below the Threshold), then (i) the Revenue Metric Achievement may not exceed ***% (and the corresponding Unit Multiplier may not exceed 100%) and (ii) the Operating Margin Metric Achievement is ***% (and the corresponding Unit Multiplier is 0%).   
(d)    Revenue Metric Achievement and Operating Margin Metric Achievement between Threshold and Target and between Target and Stretch will be measured on a straight-line interpolation basis, and the corresponding Unit Multiplier will likewise be determined on a corresponding straight-line interpolation basis.  
(e)    The Committee will determine the level of performance achievement for each Performance Metric and the corresponding Unit Multiplier pursuant to this Appendix A and Sections 2 and 3(a) the Agreement.
6.    Adjustment of Performance Metrics.    The Committee may, in recognition of unusual or non-recurring items such as acquisition-related activities or changes in applicable accounting rules, provide for one or more equitable adjustments (based on objective standards) to the Performance Metrics to preserve the Committee’s original intent regarding the Performance Metrics at the time of the initial award grant.  

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***Confidential Treatment Requested

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APPENDIX B

Constant Currency Rates

Should the Company record 2018 revenue in a foreign currency not on this list, this revenue will not be calculated on a 2015 constant currency basis, but will be adjusted for all FX hedging-related gains and losses should there be any. 

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CEPHEID

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT 

You (“You” or “Participant”) have been granted an award (the “Award”) of Performance-Based Restricted Stock Units (“Units”) subject to the terms, restrictions and conditions of the Cepheid 2015 Equity Incentive Plan, as amended from time to time (the “Plan”), the Notice of Performance-Based Restricted Stock Unit Award (the “Notice”) and this Performance-Based Restricted Stock Unit Award Agreement, including any special terms and conditions set forth in the appendices attached hereto (each, an “Appendix,” and together with the Performance-Based Restricted Stock Unit Award Agreement, the “Agreement”). 
Unless otherwise defined herein or in the Notice, capitalized terms in this Agreement shall have the same defined meanings set forth in the Plan.
1.    Award.  The Company hereby grants to Participant the Award set forth in the Notice, which, depending on the extent to which the Performance Metrics (as defined in Appendix A) are attained as of the end of the Performance Period, may result in Participant earning as few as zero Units or as many as the Maximum Number of Units set forth in the Notice.  Subject to the terms of the Notice, this Agreement and the Plan, each Unit, to the extent it is earned and becomes an Earned Unit (as defined below) and vests, represents a right to receive on the applicable Settlement Date (as defined below) one (1) Share of Common Stock.  Unless and until a Unit has been determined to be an Earned Unit and has vested  as set forth in the Notice and this Agreement, Participant will have no right to settlement of such Unit.  Prior to settlement of any Earned Units, such Units will represent an unfunded and unsecured obligation of the Company.  The Award will expire on the Expiration Date set forth in the Notice. 
2.    Committee Certification of Earned Units.  As soon as practicable following the completion of the Performance Period, the Compensation Committee of the Board of Directors of the Company (the “Committee”) shall determine and certify in writing (the date of such certification being the “Certification Date”) the Performance Metrics that have been attained for the Performance Period, the resulting Unit Multipliers (as defined in Appendix A) and the resulting number of Units pursuant to the formula set forth in Appendix A or otherwise pursuant to this Agreement (the “Earned Units”) for the Performance Period and the number of Earned Units that vest on, or are eligible to vest after, the Certification Date.  Notwithstanding the foregoing, if pursuant to Sections 3(b) or (c) or Section 4 the Award ceases to be subject to Performance Metrics, certification by the Committee shall no longer be required, and Units that become Vested Units (as defined below) pursuant to such Sections shall be deemed Earned Units for purposes of this Agreement.  The Committee’s determination of the number of Earned Units, and the vesting of such Earned Units, pursuant to this Agreement will be binding on Participant. 
3.    Determination & Vesting of Earned Units.  
(a)    Completion of Performance Period.  Except as otherwise provided by this Agreement, Earned Units will be determined upon the completion of the Performance Period pursuant to Section 2 and Appendix A and such Earned Units will vest on the Certification Date, provided Participant remains in Service to the Company as of the Certification Date.

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(b)    Termination of Employment other than upon Death or Disability prior to Completion of Performance Period.  If Participant’s Service terminates for any reason other than death or Disability prior to the completion of the Performance Period, all Units subject to the Award shall be forfeited to the Company and all rights of Participant to such Units shall immediately terminate.  
[Notwithstanding the foregoing in this Section 3(b), if a Participant’s Service terminates (the date of such termination, the “Services Termination Date”) prior to both the completion of the Performance Period and a Corporate Transaction and such Participant’s employment agreement with the Company provides for vesting acceleration of time-based equity incentive awards in the event of a qualifying termination of Service prior to a Corporate Transaction, then, provided that Participant satisfies the requirements of such agreement, signs a general release of claims in favor of the Company (a “Release”) and satisfies all conditions to make the Release effective within thirty (30) days following the Services Termination Date, then the Target Number of Units (as set forth on the Notice) shall immediately vest in full (each, a “Termination Vested Unit”) and be settled in accordance with Section 5 below.  Notwithstanding anything herein to the contrary, Participant shall not be entitled to earn, vest in or be settled as to more than the Target Number of Units.] 1
(c)    Termination of Employment upon Death or Disability prior to Completion of the Performance Period.  If Participant’s Service terminates upon death or Disability (the date of such termination, the “Death or Disability Termination Date”) prior to the completion of the Performance Period, and upon the Death or Disability Termination Date at least 12 months since the Date of Grant (as set forth on the Notice) have elapsed, then the Award will cease to be subject to the Performance Metrics and Participant will instead vest as set forth below.
		
	(i)
	Participant will vest in a pro-rata portion of the Target Number of Units (as set forth on the Notice).  The pro-ration will be based upon the number of calendar months worked by Participant from (i) the first day of the Performance Period through the Death or Disability Termination Date (ii) divided by 36.  Participant shall be deemed to have worked a full calendar month if Participant has worked any portion of that month.  Each Unit that is vested pursuant to this schedule is referred to as a “Death or Disability Vested Unit.”  

		
	(ii)
	The aggregate number of Death or Disability Vested Units determined pursuant to this Section 3(c) as of the Death or Disability Termination Date will be settled in accordance with Section 5 below.  Any of the Target Number of Units that are not Death or Disability Vested Units pursuant to Section 3(c)(i) as of the Death or Disability Termination Date shall be forfeited to the Company and all rights of Participant to such Units shall immediately terminate.  Notwithstanding anything herein to the contrary, Participant shall not be entitled to earn, vest in or be settled as to more than the Target Number of Units. 

_____________
1 NOTE: The bracketed language in this Section 3(b) regarding a pre-CIC termination will only be included in Performance Restricted Stock Unit Agreement for the Company’s Chief Executive Officer. 

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(d)    Corporate Transaction prior to Completion of Performance Period.  In the event of a Corporate Transaction prior to the completion of the Performance Period, provided Participant remains in Service to the Company as of the Corporate Transaction, Earned Units shall be determined and vest and become Corporate Transaction Vested Units (as defined below) in accordance with Section 4 and Appendix A.  
(e)    Immediately following the determination of the number of Earned Units for purposes of Section 3(a) and the number of the Termination Vested Units, Death or Disability Vested Units or Corporate Transaction Vested Units (each, a “Vested Unit”) for purposes of Section 3(b) – (d), all Units subject to the Award that are not Earned Units or Vested Units, as applicable, shall be forfeited to the Company and all rights of Participant to such Units shall immediately terminate.
(f)    For the avoidance of doubt, if pursuant to Sections 3(b) – (d) the Award is no longer subject to the Performance Metrics, then the Target Number of Units referenced in Sections 3(b) – (d) will equal the number of Target Number of Units set forth on the Notice without adjustment.  
4.    Corporate Transaction.  In the event of a Corporate Transaction and provided Participant remains in Service with the Company as of the Corporate Transaction, this Section 4 shall determine the treatment of the Units.  
(a)    Corporate Transaction on or after Completion of Performance Period.  In the event of the closing of a Corporate Transaction (the “Closing Date”) on or after the completion of the Performance Period, the number of Earned Units shall, if not previously certified by the Committee in accordance with Section 2 and settled in accordance with Section 5, be certified by the Committee on or prior to the Closing Date in accordance with Section 2 and settled immediately prior to or within 30 days following the Closing Date.  
(b)    Corporate Transaction prior to Completion of Performance Period.  In the event that the Closing Date of a Corporate Transaction occurs prior to the completion of the Performance Period, then the Award will cease to be subject to the Performance Metrics and will instead vest pursuant to a time-based vesting schedule as set forth in Section 4(b)(i) and (ii) below.
		
	(i)
	The Target Number of Units (as set forth on the Notice) will vest over time (each such Unit, a “Corporate Transaction Time-Vesting Unit”) as follows:  the Corporate Transaction Time-Vesting Units will vest over three years with equal quarterly installments of 1/12 of the total Corporate Transaction Time-Vesting Units vesting on the last day of each full three-month period commencing on the first day of the Performance Period, subject to Participant’s continued Service on each quarterly vesting date; provided, however, that none of the Corporate Transaction Time-Vesting Units will vest prior to the one-year anniversary of the Date of Grant (the “One-Year Cliff”) such that any Corporate Transaction Time-Vesting Units that would have vested pursuant to the quarterly vesting schedule prior to the One-Year Cliff will not vest and will instead accrue and vest only upon the Participant remaining Service until the One-Year Cliff (the “Time-Based Vesting Schedule”).  Each of the Corporate Transaction Time-

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Vesting Units that vests pursuant to the Time-Based Vesting Schedule is referred to as a “Corporate Transaction Vested Unit.”  Subject to Participant’s continued Service to the Company as of the day prior to the Closing Date (the “Corporate Transaction Measurement Date”) a portion of the Corporate Transaction Time-Vesting Units may be Vested Units pursuant to the Time-Based Vesting Schedule and will be settled within 30 days following the Closing Date, but in any event in accordance with Section 5.  
		
	(ii)
	Each of the Corporate Transaction Time-Vesting Units that is not a Vested Unit as of the Corporate Transaction Measurement Date pursuant to the Time-Based Vesting Schedule will be unvested and will continue to vest pursuant to the Time-Based Vesting Schedule following the Closing Date, provided that Participant’s Service has not terminated prior to an applicable vesting date except as provided in Section 4(d) below.  (For illustrative purposes only, assuming that the Target Number of Units is 36,000, the Date of Grant is July 31, 2016, the Closing Date is May 15, 2017 and Participant continues to provide Service to the Company on the Closing Date, then as of the Closing Date 15,000 Units (representing 5 quarters ending March 31, 2017 with 3,000 Units vesting each quarter) will have accrued, but because the One-Year Cliff has not yet occurred, no Corporate Transaction Time-Vesting Units will vest and become Corporate Transaction Vested Units on the Closing Date.  Then, provided Participant remains in Service with the Company on July 31, 2017, which is the One-Year Cliff, 18,000 Units (representing 6 quarters ending June 30, 2017) will vest and become Corporate Transaction Vested Units and 18,000 Units (representing the remaining 6 quarters) will be unvested and will be eligible to become Corporate Transaction Vested Units pursuant to the Time-Based Vesting Schedule.) 

		
	(iii)
	For purposes of this Section 4(b) payment for each Corporate Transaction Vested Unit shall be made in the amount and in the form of the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a Share of Common Stock on the Closing Date was entitled to receive in the Corporate Transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares of Common Stock).

		
	(iv)
	Any Corporate Transaction Time-Vesting Units that do not vest pursuant to Section 4(b)(i) or (ii) shall be forfeited to the Company and all rights of Participant to such Units shall immediately terminate.  Notwithstanding anything herein to the contrary, Participant shall not be entitled to earn, vest in or be settled as to more than the Target Number of Units.  

(c)    Corporate Transaction in which Awards are not Assumed.  Notwithstanding anything to the contrary in Section 4(b) or the Plan, in the event of a Corporate Transaction in which the Units are not assumed or replaced by the successor entity, the Award will cease to be subject to the Performance Metrics and instead the Target Number of Units (as set forth on the Notice) will vest in full as of immediately prior to the Closing 

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Date and will be settled immediately prior to or within 30 days following the Closing Date but in any event in accordance with Section 5.    
(d)    Qualifying Termination in Connection with Corporate Transaction.  Notwithstanding anything to the contrary in Section 4, in the event of a Corporate Transaction, if a Participant’s Change of Control Retention and Severance Agreement or other similar agreement or employment agreement with the Company provide for accelerated vesting in the event of a qualifying termination of Service on or following a Corporate Transaction, and Participant satisfies the requirements of such agreement,  including, but not limited to any release requirements, then, notwithstanding anything to the contrary in such agreement, for purposes of this Award only, the accelerated vesting provided in such agreement shall apply to the unvested Corporate Transaction Time-Vesting Units as determined in accordance with Section 4(b).  
(e)    For the avoidance of doubt, Corporate Transaction Time-Vesting Units referenced in Section 4 will equal the number of Target Number of Units set forth on the Notice without adjustment.  
5.    Settlement.  For each Earned Unit as determined pursuant to Section 3(a), settlement shall be made within 30 days following the Certification Date and for each Vested Unit as determined pursuant to Section 3(b), 3(c) or 4, settlement shall be made within 30 days following the vesting date, but in any event no later than the 15th day of the third calendar month following the end of the calendar year in which the Certification Date or vesting date occurs, respectively (such date, the “Settlement Date”). 
6.    No Stockholder Rights.  Unless and until such time as Shares are issued in settlement of Vested Units, Participant shall have no ownership of the Shares allocated to the Units and shall have no right to dividends or to vote such Shares.
7.    No Dividend Equivalents.  Dividends, if any (whether in cash or Shares), and dividend equivalents, shall not be credited to Participant on Units.
8.    No Transfer.  Units may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order or unless otherwise permitted by the Committee on a case-by-case basis.   
9.    Section 280G Provision.  If the payments and benefits provided for in this Agreement, pursuant to a Participant’s Change of Control Retention and Severance Agreement or other similar agreement or employment agreement with the Company, or otherwise constitute “parachute payments” within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), but for this Section 9, would be subject to the excise tax imposed by Section 4999 of the Code, then the payments and benefits under this Agreement will be payable, at Participant’s election, either in full or in such lesser amount as would result, after taking into account the applicable federal, state and local income taxes and excise tax imposed by Section 4999 of the Code, in Participant’s receipt on an after-tax basis of the greatest amount of benefits. In the event Participant elects to receive such lesser amount of the payments and benefits under this Agreement, the payments and benefits shall be reduced in the following order: (A) a pro rata reduction of (i) cash payments that are subject to Section 409A of the Code (“Section 409A”) as deferred compensation and (ii) cash payments not subject to Section 409A; 

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(B) a pro rata reduction of (i) employee benefits that are subject to Section 409A as deferred compensation and (ii) employee benefits not subject to Section 409A; and (C) a pro rata cancellation of (i) accelerated vesting of stock and other equity-based awards that are subject to Section 409A as deferred compensation and (ii) stock and other equity-based awards not subject to Section 409A. In the event that acceleration of vesting of stock and other equity-based award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Participant’s stock and other equity-based awards unless Participant elects in writing a different order for cancellation.
10.    Responsibility for Taxes.  
(a)    Withholding and Net Issuance of Shares.  Participant acknowledges that, regardless of any action taken by the Company or, if different, Participant’s employer (the “Employer”) the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant (“Tax-Related Items”), is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer.  Participant further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units, including, but not limited to, the grant, vesting or settlement of the Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Units to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result.  Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
Prior to any relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.  In this regard, Participant authorizes the Company or its agent to satisfy the obligations with regard to all Tax-Related Items by withholding Shares to be issued upon settlement of the Units having a Fair Market Value (determined on the date that the amount of Tax-Related Items to be withheld is determined) equal to the amount of Tax-Related Items required to be withheld.  In the event that such withholding in Shares is problematic under applicable tax or securities law or has materially adverse accounting consequences, by Participant’s acceptance of the Units, Participant authorizes and directs the Company and any brokerage firm determined acceptable to the Company to sell on Participant’s behalf a whole number of Shares from those issued to Participant as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the obligation for Tax-Related Items.
Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case Participant will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent.  If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant is deemed to have been issued the full number of Shares subject to the vested Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items.

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Finally, Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.
Notwithstanding anything in this Section 10 to the contrary, to avoid a prohibited acceleration under Section 409A, if Shares subject to Units will be withheld (or sold on Participant's behalf) to satisfy any Tax-Related Items arising prior to the date of settlement of the Units for any portion of the Units that is considered nonqualified deferred compensation subject to  Section 409A, then the number of Shares withheld (or sold on Participant's behalf) shall not exceed the number of Shares that equals the liability for Tax-Related Items.
(b)    U.S. Tax Consequences.  If Participant is a U.S. taxpayer, he or she acknowledges that there will be tax consequences upon settlement of the Units or disposition of the Shares, if any, received in connection therewith, and Participant should consult a tax adviser regarding Participant’s tax obligations prior to such settlement or disposition.  Upon settlement of the Units, Participant will include in income the fair market value of the Shares subject to the Units.  The included amount will be treated as ordinary income by Participant and will be subject to withholding by the Company and/or Employer when required by applicable U.S. law.  Upon disposition of the Shares, any subsequent increase or decrease in value will be treated as short-term or long-term capital gain or loss, depending on whether the Shares are held for more than one year from the date of settlement.  Further, a Unit may be considered a deferral of compensation that may be subject to Section 409A.  Section 409A imposes special rules to the timing of making and effecting certain amendments of the Units with respect to distribution of any deferred compensation.  Participant should consult with his or her personal tax advisor for more information on the actual and potential tax consequences of the Units.
11.    Nature of Grant.  In accepting the grant, Participant acknowledges, understands and agrees that:
(a)    the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)    the grant of the Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Units, or benefits in lieu of Units, even if Units have been granted in the past; 
(c)    all decisions with respect to future Units or other grants, if any, will be at the sole discretion of the Company; 
(d)    the Unit grant and Participant’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or services contract with the Company, the Employer or any Parent or Subsidiary of the Company;
(e)    Participant is voluntarily participating in the Plan; 

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(f)    the Units and the Shares subject to the Units, and the income and value of same, are not intended to replace any pension rights or compensation; 
(g)    the Units and the Shares subject to the Units, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; 
(h)    unless otherwise agreed with the Company, the Units and the Shares subject to the Units, and the income and value of same, are not granted as consideration for, or in connection with, any service Participant may provide as a Non-Employee Director;
(i)    the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty; 
(j)    unless otherwise expressly provided in this Agreement or determined by the Company, Participant’s right to vest in the Units under the Plan, if any, will terminate as of the Termination Date (regardless of the reason for such termination and whether or not later found to be invalid or in breach of labor laws in the jurisdiction where Participant is employed or the terms of his or her employment or service agreement, if any) and will not be extended by any notice period (e.g., Participant's period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any); the Committee shall have the exclusive discretion to determine when Participant has Terminated for purposes of the Unit grant;
(k)    unless otherwise provided in the Plan or by the Company in its discretion, the Units and the benefits evidenced by this Agreement do not create any entitlement to have the Units or any such benefits transferred to, or assumed by, another company nor be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares of the Company; and
(l)    the following provisions apply only if Participant is providing services outside the United States:
(i)    no claim or entitlement to compensation or damages shall arise from forfeiture of the Units resulting from Participant’s Termination (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant rendered services or the terms of Participant’s employment agreement, if any), and, in consideration of the grant of the Units to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company, any Parent or Subsidiary of the Company (including the Employer), waives his or her ability, if any, to bring any such claim, and releases the Company, its Parent or Subsidiary (including the Employer) from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim;
(ii)    the Units and the Shares subject to the Units, and the income and value of same, are not part of normal or expected compensation or salary for any purpose; and 

8

(iii)    neither the Company, the Employer nor any Parent or Subsidiary of the Company shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Units or of any amounts due to Participant pursuant to the settlement of the Units or the subsequent sale of any Shares acquired upon settlement.
12.    No Advice Regarding Grant.  The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares.  Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
13.    Data Privacy.  Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Unit grant materials by and among, as applicable, the Employer, the Company and its Parent or Subsidiaries for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.
Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Units or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.  

Participant understands that Data will be transferred to E*TRADE Corporate Financial Services, Inc. or such stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  Participant understands that the recipients of Data may be located in the United States or elsewhere, and that recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country.  Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of Data by contacting his or her local human resources representative.  Participant authorizes the Company, E*TRADE and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan.  Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan.  Participant understands that if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative.  Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis.  If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent is that the 

9

Company would not be able to grant Participant Units or other equity awards or administer or maintain such awards.  Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan.  For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.
14.    Entire Agreement; Enforcement of Rights.  This Agreement (including the Appendices), the Plan and the Notice constitute the entire agreement and understanding of the parties relating to the subject matter herein and supersede all prior discussions between them. Any prior agreements, commitments or negotiations concerning the Units granted hereunder are superseded. Except as provided in Sections 20 and 21, no modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing and signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.
15.    Compliance with Laws and Regulations.  The issuance of the Shares will be subject to and conditioned upon compliance by the Company and Participant with all applicable securities and exchange control laws and regulations relevant to the Company and the offer of the Units and the underlying Shares and with all applicable requirements of any stock exchange or automated quotation system on which the Company’s Common Stock may be listed or quoted at the time of such issuance or transfer.
16.    Governing Law and Venue; Severability.  If one or more provisions of this Agreement are held to be unenforceable, the parties agree to renegotiate such provisions in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provisions, then (i) such provision shall be excluded from this Agreement, (ii) the balance of this Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of this Agreement shall be enforceable in accordance with its terms.  This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.  For purposes of litigating any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the court of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed. 
17.    No Rights as Employee, Director or Consultant.  Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the Company, to terminate Participant’s service, for any reason, with or without Cause.
18.    Language.  If Participant has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
19.    Electronic Delivery and Acceptance.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  Participant hereby consents to the electronic delivery of the Notice, this Agreement, the Plan, account statements, Plan prospectuses required by the SEC, U.S. financial 

10

reports of the Company, and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the Units. In addition, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.  Electronic delivery may include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service or electronic mail at stock.admin@cepheid.com or another email address selected by the Company in the future.  Participant further acknowledges that Participant will be provided with a paper copy of any documents delivered electronically if electronic delivery fails; similarly, Participant understands that Participant must provide on request to the Company or any designated third party a paper copy of any documents delivered electronically if electronic delivery fails. Also, Participant understands that Participant’s consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered (if Participant has provided an electronic mail address), at any time by notifying the Company of such revised or revoked consent by telephone, postal service or electronic mail at stock.admin@cepheid.com or another email address selected by the Company in the future. Finally, Participant understands that Participant is not required to consent to electronic delivery.
20.    Appendix.  Notwithstanding any provisions in this Agreement, the Unit grant shall be subject to any special terms and conditions set forth in the Appendix.  The Appendix constitutes part of this Agreement.
21.    Imposition of Other Requirements.  The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.  Moreover, if Participant relocates outside of the U.S., special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.  
22.    Acknowledgement.  The Company and Participant agree that the Units are granted under and governed by the Notice, this Agreement (including the Appendices) and the provisions of the Plan.  Participant (i) acknowledges receipt of a copy of the Plan and the Plan prospectus, (ii) represents that Participant has carefully read and is familiar with their provisions, and (iii) hereby accepts the Units subject to all of the terms and conditions set forth herein and those set forth in the Plan and the Notice.  
23.    Section 409A.  If Participant is a U.S. taxpayer, for purposes of this Agreement, a Termination of employment will be determined consistent with the rules relating to a “separation from service” as defined in Section 409A.  Notwithstanding anything else provided herein, to the extent any payments provided under this Agreement in connection with Participant’s termination of employment constitute deferred compensation subject to Section 409A, and Participant is deemed at the time of such termination of employment to be a “specified employee” under Section 409A, then such payment shall not be made or commence until the earlier of (a) the expiration of the six-month period measured from Participant’s separation from service or (b) the 

11

date of Participant’s death following such a separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Participant including, without limitation, the additional tax for which Participant would otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral.  To the extent any payment under this Agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A.  Payments pursuant to this Section are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.
24.    Adjustment.  If the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification, spin-off, split-off or similar change in the capital structure of the Company, the number of Shares covered by the Units may be adjusted pursuant to the Plan. 
25.    Insider Trading Restrictions/Market Abuse Laws.  Participant acknowledges that Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect his or her ability to acquire or sell the Shares or rights to the Shares under the Plan during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in Participant’s country).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy.  Participant acknowledges that it is Participant’s responsibility to comply with any applicable restrictions, and Participant is advised to speak to his or her personal advisor on this matter.
26.    Waiver.  Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Participant or any other Participant.
27.    Award Subject to Company Clawback or Recoupment.  The Units shall be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during or after the term of Participant’s employment or other Service that is applicable to executive officers, Employees, Directors or other service providers of the Company, and in addition to any other remedies available under such policy and applicable law, may require the cancellation of Participant’s Units (whether vested or unvested) and/or the repayment or recoupment of any gains realized with respect to Participant’s Units.  The Participant hereby agrees to promptly pay to the Company any such amounts required to be paid pursuant to any such policy.
* * * * *
Upon electronic acceptance by Participant, Participant and the Company agree that the Units are granted under and governed by the terms and conditions of the Plan, the Notice and this Agreement (including the Appendices).  Participant has reviewed the Plan, the Notice and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all provisions of the Plan, the Notice and this Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Notice and this Agreement.  Participant further agrees to notify the Company upon any change in Participant’s residence address.  

12ex10-1.htm

  

  

  

SUBSCRIPTION AND PURCHASE AGREEMENT

FOR

BOLLENTE COMPANIES, INC.

Number of Units Offered: 60

Price per Unit $50,000; Minimum Investment of 1 Unit

Maximum Aggregate Subscription: $3,000,000

Each Unit consists of:

One (1) 12% Senior Secured Convertible Promissory Note; and

50,000 Common Stock Purchase Warrants

Accredited Investors Only

_________________________________________________________________

ALL INFORMATION HEREIN WILL BE TREATED CONFIDENTIALLY

_________________________________________________________________

Investor(s)                                Russell J. Hooker                                           

Sadie A. Hooker                                           

Number of Units                                       1                                           

Date Signed                                6/2/2016                                           

  

  

  

 

SUBSCRIPTION AGREEMENT

This SUBSCRIPTION AGREEMENT is made by and between Bollente Companies, Inc., a Nevada corporation (the “Company”) and Russell J and Sadie A. Hooker (the “Investor”) (the Company and the Investor may be referred to collectively as the “Parties”).

Each unit to be sold by the Company hereunder consists of: (i) one (1) 12% Senior Secured Convertible Promissory Note with original principal amount of $50,000; and (ii) 50,000 Warrants to purchase Shares of the Company’s Common Stock at $1.50 per share through June 2, 2021.

In connection with the offering by the Company of up to $3,000,000 of 12% senior secured convertible promissory notes due June 2, 2018 (the “Notes”) and warrants to purchase shares of common stock of the Company (the “Warrants”), the Investor will advance the sum of $50,000 to the Company.

The Parties hereto agree as follows:

ARTICLE 1

THE SECURITIES

Section 1.01.  THE SECURITIES.

(a)           The Notes shall be in the form attached hereto, the terms of which are hereby incorporated herein as if such Notes were fully set forth herein; provided, however, that in the event of any conflict between the express provisions of the Notes and this Subscription Agreement, the provisions of the Notes shall control.  The Notes have one conversion provision:

(i)           The Notes are convertible at the option of the holder into Common Stock at any time prior to maturity at a conversion price of $1.00 per share.

(b)           For every $50,000 investment, the investor will receive one Warrant to purchase 50,000 shares of Common Stock at $1.50 per share substantially in the form set forth in the offering documents included with this Subscription Agreement (the “Warrant”). The Warrant shall have a term of five years and shall have net exercise provisions. In the event of any conflict between the express provisions of the Warrant and this Subscription Agreement, the provisions of the Warrant shall control.

Section 1.02.  LEGENDS; SECURITIES NOT REGISTERED UNDER THE SECURITIES ACT OF 1933

Neither the Note nor the Note Shares, the Warrants, nor the shares of Common Stock underlying the Warrants (the “Warrant Shares” and collectively with the Notes and the Note Shares, the Warrants and the Warrant Shares, the “Securities”) have been registered under the Securities Act of 1933, as amended (the “Act”).  Each of the Securities shall bear the following legend:

  

  

  

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

This Offering is not a public offering and is intended to be made pursuant to exemptions from registration as set forth in Section 4(2) of the Act and Regulation D as promulgated by the Securities and Exchange Commission (“SEC”) under the Act.  This Offering is also intended to be exempt from the registration requirements of various state securities laws as may be applicable.

Section 1.03.  CLOSING DATE.

The purchase and sale of the Securities will take place at one closing (the “Closing”) at the offices of the Company at a time and date as soon as practicable after all the conditions set forth in Articles III and IV hereof have been satisfied (“Closing Date”), or at such other location as the Investor and the Company shall agree.

Section 1.04.  DELIVERY.

The Investor shall deliver to the Company, the purchase price of the Securities and all documents in this package signed by the Investor.  The Company shall deliver to the Investor all documents in this package counter-signed by the Company.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Section 2.01.  INVESTOR REPRESENTATIONS AND WARRANTIES.

The Investor makes each and every one of the representations and warranties set forth in the document entitled Investor Representations and Warranties Agreement attached hereto and incorporated herein by this reference as if such document were set forth herein in its entirety.

Section 2.02.  COMPANY REPRESENTATIONS AND WARRANTIES.

The Company hereby represents, warrants and covenants to the Investor as follows:

  

  

  

 

(a)           The Company has been duly organized and is validly existing as a corporation in good standing under the laws of its state of incorporation.  The Company is duly qualified or licensed and in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of any properties or the character of its operations requires such qualification or licensing and where failure to so qualify would have a material effect on the Company.  The Company has all requisite corporate power and authority, and all material and necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies to own or lease its properties and conduct its businesses and the Company is doing business in compliance with all such authorizations, approvals, orders, licenses, certificates and permits and all federal, state and local laws, rules and regulations concerning the business in which it is engaged except where the failure so to do business in compliance would not have a material adverse effect on the business of the Company.  The disclosures herein concerning the effects of federal, state and local regulation on the Company’s business as currently conducted and as contemplated are correct in all material respects and do not omit to state a material fact.  The Company has all corporate power and authority to enter into this Agreement, the Note and the Warrant and to carry out the provisions and conditions hereof and thereof, and all consents, authorizations, approvals and orders required in connection herewith and therewith have been obtained or will have been obtained prior to each Closing Date.  No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the issuance of the Note, the Warrant or any securities issuable in respect of the Note or Warrant pursuant to this Agreement except with respect to applicable federal and state securities laws.

(b)           The Company is authorized to issue One Hundred Million (100,000,000) shares of common stock and Ten Million (10,000,000) Preferred Shares. As of April 13, 2016 the Company had Twenty Million Eight Hundred Eighteen Thousand One Hundred Eighty Six (20,818,186) issued and outstanding shares of common stock and Zero (0) shares of Preferred Stock. Except for the transactions contemplated by this Agreement, there are: (A) no outstanding warrants, options or rights to subscribe for or purchase any capital stock or other securities from the Company, (B) no voting trusts or voting agreements among, or irrevocable proxies executed by, stockholders of the Company, (C) no existing rights of stockholders to require the Company to register any securities of the Company or to participate with the Company in any registration by the Company of its securities.

(c)           This Agreement and the attachments hereto have been duly and validly authorized, executed and delivered by the Company and are valid and binding agreements of the Company, enforceable in accordance with their respective terms, except to the extent that the enforceability hereof or thereof may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or similar laws from time to time in effect and affecting the rights of creditors generally, (B) limitations upon the power of a court to grant specific performance or any other equitable remedy, or (C) a finding by a court of competent jurisdiction that the indemnification provisions herein are in violation of public policy.  The Securities have been duly authorized and are, or in the case of the Note Shares and Warrant Shares, will be, upon the conversion or exercise therefor, validly issued, fully paid and non-assessable; all corporate action required to be taken for the authorization, issue and sale of such securities has been duly and validly taken; to the best knowledge of the Company, the Securities are not and will not be subject to the preemptive rights of any stockholder of the Company.

  

  

  

 

(d)           The Company has good and marketable title to, or valid and enforceable leasehold estates in, all items of real and personal property owned or leased by it, free and clear of all liens, claims, encumbrances, security interests and defects of any material nature whatsoever, except for Permitted Liens.  “Permitted Liens” means liens, claims, encumbrances, security interests and defects of any material nature whatsoever that are described herein or otherwise disclosed to the Investor.  Investor acknowledges and agrees that (i) Notes and (ii) Warrants are being sold in this offering.

(e)           There is no litigation or governmental proceeding pending or threatened against, or involving the properties or business of the Company which the Company believes would materially adversely affect the value or the operation of the properties or the business of the Company.

(f)           There has been no material adverse change in the condition or prospects for commercialization of the Company, financial or otherwise, as of the latest dates as of which such condition or prospects, respectively, are set forth in this Agreement; and the outstanding debt, the property and the business of the Company each conforms in all material respects to the descriptions thereof contained herein.

(g)           The Securities shall conform in all respects to all statements in relation thereto contained herein.

(h)           The Company is not in violation of its Articles of Incorporation or Bylaws.  Neither the execution and delivery of this Agreement, the Note or the Warrant, nor the issuance of the Note, the Note Shares upon conversion of the Note, the Warrant, the Warrant Shares upon exercise of the Warrant, nor the consummation of any of the transactions contemplated herein, in the Note or the Warrant, nor the compliance by the Company with the terms and provisions contained herein, or in the Note, has conflicted with or will conflict with, or has resulted in or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, note, loan or credit agreement or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which the Company is subject; nor will such action result in any violation of the provisions of the Articles of Incorporation or the Bylaws of the Company, or any statute or any order, rule or regulation applicable to the Company of any court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company; except for any conflict, breach, default, lien, charge or encumbrance which does not have a material and adverse effect on the Company, any of its business, property or assets, or any transactions contemplated hereby or by the Note.

(i)           All taxes which are due and payable from the Company have been paid in full, and the Company does not have any material tax deficiency or claim outstanding, assessed, or proposed against it.

  

  

  

 

(j)           The Company owns or possesses, free and clear of all liens or encumbrances and rights thereto or therein by third parties, other than Permitted Liens, the requisite licenses or other rights to use all trademarks, service marks, copyrights, service names, trade names, patents, patents applications and licenses necessary to conduct and material to its business (including, without limitation any such licenses or rights described herein as being owned or possessed by the Company), and there is no material claim or action by any person pertaining to, or proceeding, pending or threatened, which challenges the exclusive rights of the Company with respect to any trademarks, service marks, copyrights, service names, trade names, patents, patent applications and licenses used in the conduct of the Company’s businesses (including, without limitation, any such licenses or rights described herein as being owned or possessed by the Company); the Company’s current products, services and processes do not and will not infringe on any patents currently held by third parties.

(k)           None of the documents contained in this package contain any untrue statement of a material fact or omits to state any material fact required to be stated herein or therein or necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading.  All statements of material facts herein or therein (including, without limitation, any attachment, exhibit or schedule hereto or thereto) are true and correct as of the date hereof and will be true and correct on each Closing Date.

(m)           The minute books and corporate records of the Company contain a complete summary of all meetings and actions of the managers, members, officers, directors and stockholders of the Company since the time of its incorporation (and of any predecessor to the Company) and reflect all transactions referred to in such minutes accurately in all respects.

(n)           Subject to all applicable federal and state securities laws, the Company will facilitate all transfers between assignees of the Securities at the Company’s expense.

ARTICLE III

NOTICES

Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by facsimile transmission to the addresses of the Parties set forth below each Party’s signature on this Agreement.  The persons and addresses set forth below each Party’s signature on this Agreement may be changed from time to time by a notice sent as aforesaid.  If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Article, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient.  If notice is given by mail in accordance with the provisions of this Article, such notice shall be conclusively deemed given upon receipt and delivery or refusal.  If notice is given by facsimile transmission in accordance with the provisions of this Article, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

  

  

  

 

ARTICLE IV

MISCELLANEOUS

(a)           This Agreement shall be governed by and construed and interpreted in accordance with the laws of the state of Nevada applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law.  The Parties agree that the courts of the Clark County, State of Nevada shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

(b)           This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

(c)           This Agreement represents the entire agreement between the Parties relating to the subject matter hereof, superseding any and all prior to contemporaneous oral and prior written agreements and understandings.  This Agreement may not be modified or amended nor may any right be waived except by a writing signed by the party against whom the modification or waiver is sought to be enforced.

(d)           The captions and headings contained herein are solely for convenience of reference and do not constitute a part of this Agreement.

(e)           There are no unlicensed finder fees owed in connection with the sale of the Notes.

(f)           Each of the attachments hereto is hereby incorporated herein as if each of such attachments were fully set forth herein in its entirety.  Each of such attachments is hereby expressly made a part of this Agreement.

(g)           This Agreement 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.  The Parties agree that this Agreement may be executed by facsimile or email signatures and such signatures shall be deemed originals.

(h)           All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

(i)           The term “days,” as used in this Agreement and in all documents contained in this package, refers to calendar days unless otherwise clearly indicated.

[SIGNATURE PAGES TO FOLLOW]

  

  

  

 

INDIVIDUAL

IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have executed this

Agreement as of the 2nd day of June, 2016.

/S/ Russell J. Hooker                                                                                                /S/ Sadie A. Hooker

 

Signature (Individual)                                                                                 Signature (All record holders sign)

 

Russell J. Hooker                                                                                     Sadie A. Hooker

 

Name Typed or Printed                                                                                 Name Typed or Printed

 

 

Tax ID or Social Security Number                                                                                 Tax ID or Social Security Number

Address to Which Correspondence Should Be Directed

 

 

Street Address

 

 

City, State and Zip Code

 

 

Telephone Number

 

 

 

E-Mail Address

  

  

  

 

 

CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY

 

IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have executed this

Agreement as of the ___ day of ____________, 2016.

Name of Entity                                                                           Signature (Authorized Signatory)

Federal Tax I.D.                                                                           Print Name (Authorized Signatory)

Address to Which Correspondence Should Be Directed

 

 

Street Address

 

 

City, State and Zip Code

 

 

Telephone Number

 

 

 

E-Mail Address

 

  

  

  

 

CERTIFICATE OF SIGNATORY

 

To be completed if Shares are being subscribed for by an entity.

 

I,                                                                                          , am the                                         

 

 

(“Title”) of                                                                                                                  (the “Entity”).

 

 

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and Letter of Investment Intent and to purchase and hold the Shares, and certify that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

 

IN WITNESS WHEREOF, I have hereto set my hand this                                                                                                    day of                                             ,

201              .

Signature (Authorized Signatory)

Print Name (Authorized Signatory)

  

  

  

 

 

ACCEPTANCE

This Subscription Agreement is accepted this  2nd day of June, 2016.

 

 

Bollente Companies, Inc.

/S/ Robertson J. Orr

 

Robertson J. Orr

 

President

 

Corporate Seal (optional):

 

  

  

  

 

MAY NOT BE OFFERED, SOLD TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

BOLLENTE COMPANIES, INC.,

A NEVADA CORPORATION

12% SENIOR SECURED CONVERTIBLE PROMISSORY NOTE AND SECURITY AGREEMENT

Principal Amount $50,000                                                                                     Issue Date June 2, 2016

FOR VALUE RECEIVED, the undersigned, Bollente Companies, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of Russell J. Hooker and Sadie A. Hooker, or their assigns (the “Noteholder”), in lawful money of the United States of America, and in immediately payable funds, the principal sum of $50,000.  The principal hereof and any unpaid accrued interest thereon shall be due and payable on June 2, 2018 (the “Maturity Date”).

This Note (the “Note”) is one of a series of identical twelve percent (12%) senior secured convertible promissory note and security agreements (the “Promissory Notes”) issued or to be issued as part of an Offering being conducted by the Company in an aggregate principal amount of Three Million Dollars ($3,000,000). The Promissory Notes rank equally and ratably without priority over one another.

This Note has been issued pursuant to a Subscription Agreement of even date herewith between the Company and the Noteholder (the “Subscription Agreement”), which contains representations and warranties and additional covenants of the Company with respect to the Note.  Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement.  THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.

1.           PAYMENTS.  The Company hereby promises to pay to the Noteholder, in lawful money of the United States of America, and in immediately payable funds, the principal sum of $50,000.  The principal hereof and any unpaid interest thereon shall be due and payable on the Maturity Date (unless such payment date is accelerated as provided in Section 4 hereof).  Payment of all amounts due hereunder shall be made at the address of the Noteholder provided for in the Subscription Agreement.  The Company further promises to pay simple interest at the rate of 12% per annum (“Interest”) on the outstanding principal balance hereof, such interest to be payable semi-annually and at the Maturity Date (prorated for any partial month).

  

  

  

 

2.           CONVERSION.  At any time prior to the payment in full of this Note, the outstanding principal amount of this Note, along with all accrued but unpaid Interest hereunder (the “Outstanding Balance”) may be converted by one of the following events:

(a)           The Outstanding Balance is convertible at the option of the holder into Common Stock at a conversion price of $1.00 per share.  In order to convert the Outstanding Balance, Noteholder shall deliver to the Company a written Election to Convert, a form of which is attached hereto as Exhibit A.  As soon as reasonably practicable upon receipt of the written Election to Convert, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Noteholder, and in such name or names as the Noteholder may designate, a certificate or certificates for the full number of Note Shares so purchased upon conversion of the Note.  Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such securities as of the date of delivery of the Election to Convert, notwithstanding that the certificate or certificates representing such securities shall not actually have been delivered or that the stock transfer books of the Company shall then be closed.

3.           SENIOR INDEBTEDNESS.  This Note is senior in the right of payment to all other indebtedness of the Company. For purposes of this Note, indebtedness shall mean and include the aggregate amount of, without duplication, (i) all obligations for borrowed money, (ii) all obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations to pay the deferred purchase price of property or services (other than accounts payable incurred in the ordinary course of business determined in accordance with generally accepted accounting principals), (iv) all obligations with respect to capital leases, (v) all guaranty obligations, and (vi) all reimbursement and any other payment obligations, contingent or otherwise, in respect of letters of credit.

Additionally, for the term of this Note the Company shall not issue any additional senior or parity debt or pay any shareholder cash dividends unless otherwise agreed to by the Noteholder.

4.           SECURITY INTEREST.  The Company hereby grants the Noteholder a security interest in all of the Company’s assets and property, whether now owned or hereafter acquired, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”), including, without limitation, all cash, equipment, inventory, accounts, notes, contracts, general intangibles and proceeds of any and all of the Collateral. The security interest created hereunder is pari passu with any other holder(s) of Notes.  This security interest is granted to secure the debt evidenced by this note and agreement. The Company will prepare and file a UCC financing statement in the state of Nevada, or whatever documents are necessary to perfect Noteholder’s security interest.

5.           DEFAULT.  The occurrence of any one of the following events shall constitute an Event of Default:

(a)           The non-payment, when due, of any principal or interest pursuant to this Note;

  

  

  

 

(b)           The material breach of any representation or warranty in this Note or in the Subscription Agreement.  In the event the Noteholder becomes aware of a breach of this Section 5(b), the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days notice to effect a cure of such breach;

(c)           The material breach of any covenant or undertaking in this Note or in the Subscription Agreement, not otherwise provided for in this Section 5.  In the event the Noteholder becomes aware of a breach of this Section 5(c), the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days notice to effect a cure of such breach;

(d)           A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any indebtedness of the Company or an event of default or similar event shall occur with respect to such indebtedness, if the effect of such default or event (subject to any required notice and any applicable grace period) would be to accelerate the maturity of any such indebtedness or to permit the holder or holders of such indebtedness to cause such indebtedness to become due and payable prior to its express maturity;

(e)           The commencement by the Company of any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, receivership, dissolution, or liquidation law or statute or any jurisdiction, whether now or hereafter in effect; or the adjudication of the Company as insolvent or bankrupt by a decree of a court of competent jurisdiction; or the petition or application by the Company for, acquiescence in, or consent by the Company to, the appointment of any receiver or trustee for the Company or for all or a substantial part of the property of the Company; or the assignment by the Company for the benefit of creditors; or the written admission of the Company of its inability to pay its debts as they mature; or

(f)           The commencement against the Company of any proceeding relating to the Company under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, receivership, dissolution or liquidation law or statute or any jurisdiction, whether now or hereafter in effect, provided, however, that the commencement of such a proceeding shall not constitute an Event of Default unless the Company consents to the same or admits in writing the material allegations of same, or said proceeding shall remain undismissed for 30 days; or the issuance of any order, judgment or decree for the appointment of a receiver or trustee for the Company or for all or a substantial part of the property of the Company, which order, judgment or decree remains undismissed for 30 days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the property of the Company.

Upon the occurrence of any Event of Default, the Noteholder may, by written notice to the Company, declare all or any portion of the unpaid principal amount due to Noteholder, together with all accrued interest thereon, immediately due and payable.

  

  

  

 

6.           NOTICES.  Any notice, request, instruction, or other document required by the terms of this Note, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by facsimile transmission to the addresses of the Parties set forth below each Party’s signature on the Subscription Agreement.  The persons and addresses set forth below each Party’s signature on the Subscription Agreement may be changed from time to time by a notice sent as aforesaid.  If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient.  If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal.  If notice is given by facsimile transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

7.           EXCLUSIVE JURISDICTION AND VENUE.  The Parties agree that the courts of the Maricopa County, State of Arizona shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

8.           GOVERNING LAW.                                            This Note shall be governed by and construed and interpreted in accordance with the laws of the state of Arizona applicable to contracts made and to be performed entirely therein, without giving effect to the rules and conflicts of law.

9.           CONFORMITY WITH LAW.  It is the intention of the Company and of the Noteholder to conform strictly to applicable usury and similar laws.  Accordingly, notwithstanding anything to the contrary in this Note, it is agreed that the aggregate of all charges which constitute interest under applicable usury and similar laws that are contract for, chargeable or receivable under or in respect of this Note, shall under no circumstances exceed the maximum amount of interest permitted by such laws, and any excess, whether occasioned by acceleration or maturity of this Note or otherwise, shall be canceled automatically, and if theretofore paid, shall be either refunded to the Company or credited on the principal amount of this Note.

10.           NOTICE OF RIGHT TO COUNSEL.  All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

[SIGNATURE PAGE FOLLOWS]

  

  

  

IN WITNESS WHEREOF, the Company has signed and sealed this Note and delivered it on the 2nd of June, 2016.

COMPANY:

Bollente Companies, Inc.,

a Nevada corporation

/S/ Robertson J. Orr

By:  Robertson J. Orr

Its:  Chief Executive Officer

INVESTOR:

/S/ Russell J. Hooker

Signature

Russell J. Hooker

_______________________________

Print Name

/S/ Sadie A. Hooker

Signature

Sadie A. Hooker

_______________________________

Print Name

  

  

  

EXHIBIT A

FORM OF ELECTION TO CONVERT

The undersigned, the holder of the attached Note, hereby irrevocably elects to exercise their right

to convert $_____________ of the Note into common shares of Bollente Companies, Inc., a Nevada corporation at $1.00, as more fully described in the Note, and requests that the certificates for such securities be issued in the name of, and delivered to, Robertson J. Orr whose address is 8800 N. Gainey Center Dr., Suite 270, Scottsdale, AZ 85258.

Dated:__________________________                                                                SIGNATURE:

(Signature must conform in all respects to name

of Noteholder as specified in the Note)

(Social Security or Federal Tax I.D.

Number of Noteholder)

IF NOTE IS HELD JOINTLY, BOTH PARTIES MUST SIGN:

(Signature must conform in all respects to name

of Noteholder as specified in the Note)

(Social Security or Federal Tax I.D.

Number of Joint Noteholder)

  

  

  

 

INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT

This INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT (“Agreement”), dated as of June 2, 2016, is by and between Bollente Companies, Inc., a Nevada corporation (the “Company”), and Russel J. and Sadie A. Hooker (the “Investor”) (the Company and the Investor may be referred to collectively as the “Parties”).

ARTICLE 1

RECITALS

This Agreement is being made pursuant to an Offering of up to $3,000,000 of 12% Senior Secured Convertible Promissory Note Units. Each Unit consists of: (i) one (1) 12% Senior Secured Convertible Promissory Note (the “Note”) with original principal amount of $50,000 and (ii) 50,000 Warrants to purchase Shares of the Company’s Common Stock at $1.50 per share through June 2, 2021 (the “Warrant”). The Note and the Warrant has been issued pursuant to a Subscription Agreement of even date herewith between the Company and the holder of the Note (the “Subscription Agreement”), which contains representations and warranties and additional covenants of the Company with respect to the Note.  Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement.  THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

The Investor hereby represents and warrants that:

(a)      Investor acknowledges that the Securities are “restricted securities” (as such term is defined in Rule 144 promulgated under the Securities Act of 1933, as amended (“Rule 144”), that the Securities will include the restrictive legend set forth in Section 1.02 of the Subscription Agreement, and, except as otherwise set forth in the Subscription Agreement, that the Securities cannot be sold unless registered with the United States Securities and Exchange Commission (“SEC”) and qualified by appropriate state securities regulators, or unless Investor otherwise complies with an exemption from such registration and qualification (including, without limitation, compliance with Rule 144).

(b)      Investor has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the Securities.  Investor represents that Investor is able to bear the economic risk of the investment and at the present time could afford a complete loss of such investment.  Investor has reviewed the Subscription Agreement, the Note, and the Disclosure Documents with care.  Additionally, Investor has had a full opportunity to inspect the books and records of the Company and to make any and all inquiries of Company officers and directors regarding the Company and its business as Investor has deemed appropriate.

  

  

  

 

(c)      Investor is an “Accredited Investor” as defined in Regulation D of the Securities Act of 1933 (the “Act”) or Investor, either alone or with Investor’s professional advisers who are unaffiliated with, have no equity interest in and are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Investor is capable of evaluating the merits and risks of an investment in the Securities offered by the Company and of making an informed investment decision with respect thereto and has the capacity to protect Investor’s own interests in connection with Investor’s proposed investment in the Securities.

(d)      Investor is acquiring the Securities solely for Investor’s own account as principal, for investment purposes only and not with a view to the resale or distribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Securities.

(e)      Investor will not sell or otherwise transfer the Securities without registration under the Act or an exemption therefrom and fully understands and agrees that Investor must bear the economic risk of Investor’s purchase for an indefinite period of time because, among other reasons, the Securities have not been registered under the Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

ARTICLE 3

MISCELLANEOUS

 (a)                 This Agreement shall be governed by and construed and interpreted in accordance with the laws of the state of Nevada applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law.  The Parties agree that the courts of the Maricopa County, State of Arizona shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

(b)      This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

(c)      This Agreement represents the entire agreement between the Parties relating to the subject matter hereof, superseding any and all prior to contemporaneous oral and prior written agreements and understandings.  This Agreement may not be modified or amended nor may any right be waived except by a writing signed by the party against whom the modification or waiver is sought to be enforced.

(d)      The warranties and representations of the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and each Closing.

(e)      The captions and headings contained herein are solely for convenience of reference and do not constitute a part of this Agreement.

(f)      There are no unlicensed finder fees owed in connection with the sale of the Note.

  

  

  

 

(g)      The terms of the Offering and of the Notes may only be amended or modified by the agreement of Investor subscribing for and/or holders of a majority of the outstanding principal amount of the Notes.

(h)      This Agreement 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.  The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

(i)      All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have executed this Agreement as of the 2nd day of June, 2016.

COMPANY:

Bollente Companies, Inc.,

a Nevada corporation

/S/ Robertson J. Orr

__________________________________________

By: Robertson J. Orr

Its:  Chief Executive Officer

INVESTOR:

PLEASE CHECK ONE:

As an individual, I certify that I am an “accredited investor” because:

X         I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year; OR

______ I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence).

Print name:

/S/ Russell J. Hooker

By:  Russell J. Hooker

/S/ Sadie A. Hooker

By:  Sadie A. Hooker

  

  

  

 

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

BOLLENTE COMPANIES, INC.

WARRANT AGREEMENT

To Purchase Shares of Common Stock

 

	
No. 03

	
Issue Date: June 2, 2016

 

THIS CERTIFIES that, for value received, Russell J. Hooker and Sadie A. Hooker (the “Holder”), is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the date hereof, to subscribe for and purchase from, BOLLENTE COMPANIES, INC., a California corporation (the “Company”), 50,000 of the fully paid non-assessable shares of the Company’s common stock (“Common Stock”) at a purchase price of $1.50 per share, provided that such right will terminate, if not terminated earlier in accordance with the provisions hereof, at 5:00 p.m. (Pacific time) on the fifth year anniversary of the issuance of this Warrant (the “Expiration Date”).  The purchase price and the number of shares for which this warrant (the “Warrant”) is exercisable are subject to adjustment, as provided herein.  The Warrants being sold and issued pursuant to this agreement shall be evidenced by the warrant certificate attached as Annex A hereto (the “Warrant Certificate”).  This Warrant was issued in connection with a Subscription Agreement of even date herewith between the Company and Holder (the “Subscription Agreement”) for the sale of (i) a note bearing interest at the rate of 12% per annum, on the principal amount of $50,000 (the “Note”), and (ii) this Warrant to purchase shares of the Company’s common stock, and is subject to the terms of the Subscription Agreement; provided, however, that any that any conflict between the provisions of this Warrant and the Subscription Agreement, the provisions of this Warrant shall control.  Capitalized terms used and not otherwise defined herein will have the respective meanings ascribed to such terms in the Subscription Agreement.

 

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(a)           The term “Company” shall include Bollente Companies, Inc., and any entity which shall succeed or assume the obligations of Bollente Companies, Inc., hereunder.

  

  

  

 

(b)           The term “Warrant Shares” includes (i) the Company’s common stock and (ii) any other securities into which or for which any of the Common Stock may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

(c)           The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities.

(d)           The term “Exercise Price” shall be $1.50 per share, subject to adjustment pursuant to the terms hereof.

(e)           The  “Fair Market Value” of one share shall be defined as the average closing price of the common stock for the ten trading days prior to the date of exercise of this Warrant (the “Average Closing Price”), as reported by any over-the-counter electronic quotation system; provided, however, that if the common stock is listed on a national securities exchange, the Fair Market Value shall be the Average Closing Price on such exchange for the ten trading days prior to the date of exercise of the Warrant.  If the shares of common stock are/were not traded during the ten trading days prior to the date of the exercise, then the closing price for the last publicly traded day shall be deemed to be the closing price for any and all (if applicable) days during such ten trading day period. If the shares of Common Stock are/were not traded for longer than ten trading days prior to the date of the exercise, of if the shares were never publicly traded prior to the date of the exercise, the Fair Market Value of a Warrant Share shall be determined in good faith by the Company’s Board of Directors.

	
1.  

	
Number of Shares Issuable upon Exercise.

 

Unless sooner terminated in accordance herewith, from and after the date hereof through and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, the number of Warrant Shares set forth on the first page of this Warrant, subject to adjustment pursuant hereto, by delivery of an original or fax copy of the exercise notice on the reverse side of the warrant certificate attached hereto as Annex A  (the “Notice of Exercise”) along with payment to the Company of the Exercise Price.  The company is obligated to provide ten business days written notice to the Holder of the expiration of the warrant by US mail at the Holder’s address of record and by email.

2.      Exercise of Warrant.

 

(a)           The purchase rights represented by this Warrant are exercisable by the registered Holder hereof, in whole at any time or in part from time to time by delivery of the Notice of Exercise duly completed and executed at the office of the Company in Arizona (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder hereof at the address of such Holder appearing on the books of the Company), and upon payment of the Exercise Price of the shares thereby purchased (in the manner provided in Section 2(d) hereof); whereupon the Holder of this Warrant shall be entitled to receive a certificate for the number of Warrant Shares so purchased; provided that the Company will place on each certificate a legend substantially the same as that appearing on this Warrant,

  

  

  

 

in addition to any legend required by any applicable state or federal law. If this Warrant is exercised in part, the Company will issue to the Holder hereof a new Warrant upon the same terms as this Warrant but for the balance of Warrant Shares for which this Warrant remains exercisable.  The Company agrees that upon exercise of this Warrant the Holder shall be deemed to be the record owner of the Warrant Shares issued upon exercise as of the close of business on the date on which this Warrant shall have been exercised as aforesaid.  This Warrant will be surrendered at the time of exercise or if lost, stolen, misplaced, or destroyed, the Holder will comply with Section 7 below.

(b)           Certificates for Warrant Shares purchased hereunder shall be delivered to the Holder hereof within a reasonable time after the date on which this Warrant shall have been exercised as aforesaid.

 

(c)           The Company covenants that all Warrant Shares which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be fully paid and nonassessable and free from all preemptive rights, taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue which shall be paid by the Company in accordance with Section 4 below).

(d)           In order to exercise this Warrant with respect to all or any part of the Warrant Shares for which this Warrant is at the time exercisable, Holder (or any other person or persons exercising the Warrant) must take the following actions:

(i)           Execute and deliver to the Company a written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Annex A; and

(ii)           Pay the aggregate Exercise Price for the Warrant Shares in one or more of the following forms:

(A)           Cash, check, or wire transfer; or

(B)           A promissory note payable to the Company, but only to the extent authorized by the Company.

3.           No Fractional Shares.

The Company shall not be required to issue fractional Warrant Shares upon the exercise of this Warrant or to deliver Warrant Certificates which evidence fractional Warrant Shares.  In the event that a fraction of a Warrant Share would, except for the provisions of this Section 3, be issuable upon the exercise of this Warrant, the Company shall pay to the Holder exercising the Warrant an amount in cash equal to such fraction multiplied by the Fair Market Value of the Warrant Share.

  

  

  

 

4.           Charges, Taxes, and Expenses.

 

Issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder of this Warrant, or in such name or names as may be directed by the Holder of this Warrant; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder of this Warrant, the Company may require, as a condition thereto, that the transferee execute an appropriate investment representation as may be reasonably required by the Company.

5.           No Rights as Shareholders.

 

This Warrant does not entitle the Holder hereof to any voting rights or other rights as a Shareholder of the Company prior to the exercise hereof.

6.           Exchange and Registry of Warrant.

This Warrant is exchangeable, upon the surrender hereof by the registered Holder at the above-mentioned office or agency of the Company, for a new Warrant or Warrants aggregating the total Warrant Shares of the surrendered Warrant of like tenor and dated as of such exchange.  The Company shall maintain at the above-mentioned office or agency a registry showing the name and address of the registered Holder of this Warrant.  This Warrant may be surrendered for exchange, transfer, or exercise, in accordance with its terms, at such office or agency of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry.

 

7.           Loss, Theft, Destruction, or Mutilation of Warrant.

Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor (but with no additional rights or obligations) and dated as of such cancellation, in lieu of this Warrant.

8.           Saturdays, Sundays, Holidays, etc.

 

If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

9.           Cash Distributions.

 

No adjustment on account of cash dividends or interest on the Company’s Common Stock or Other Securities that may become purchasable hereunder will be made to the Exercise Price under this Warrant.

  

  

  

 

10.           Consolidation, Merger, or Sale of the Company.

If the Company is a party to a consolidation, merger or transfer of assets which reclassifies or changes its outstanding Common Stock, the successor corporation (or corporation controlling the successor corporation or the Company, as the case may be) shall by operation of law assume the Company’s obligations under this Warrant.  Upon consummation of such transaction, the Warrants shall automatically become exercisable for the kind and amount of securities, cash, or other assets which the holder of a Warrant would have owned immediately after the consolidation, merger, or transfer if the holder had exercised the Warrant immediately before the effective date of such transaction.  As a condition to the consummation of such transaction, the Company shall arrange for the person or entity obligated to issue securities or deliver cash or other assets upon exercise of the Warrant to, concurrently with the consummation of such transaction, assume the Company’s obligations hereunder by executing an instrument so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section 10.

11.           Adjustments for Stock Splits, Combinations, etc.

 

The number of shares and class of capital stock purchasable under this Warrant are subject to adjustment from time to time as set forth in this Section 11.

(a)           Adjustment for change in capital stock.  If the Company:

(i)           pays a dividend or makes a distribution on its Common Stock, in each case, in shares of its Common Stock;

(ii)           subdivides its outstanding shares of Common Stock into a greater number of shares;

(iii)           combines its outstanding shares of Common Stock into a smaller number of shares;

(iv)           makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or

(v)           issues by reclassification of its shares of Common Stock any shares of its capital stock;

then the number and classes of shares purchasable upon exercise of each Warrant in effect immediately prior to such action shall be adjusted so that the holder of any Warrant thereafter exercised may receive the number and classes of shares of capital stock of the Company which such holder would have owned immediately following such action if such holder had exercised the Warrant immediately prior to such action.

For a dividend or distribution the adjustment shall become effective immediately after the record date for the dividend or distribution.  For a subdivision, combination, or reclassification, the adjustment shall become effective immediately after the effective date of the subdivision, combination, or reclassification.

  

  

  

 

If after an adjustment the Holder, upon exercise of a Warrant, may receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall in good faith determine the allocation of the adjusted Exercise Price between or among the classes of capital stock.  After such allocation, that portion of the Exercise Price applicable to each share of each such class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Warrant.  Notwithstanding the allocation of the Exercise Price between or among shares of capital stock as provided by this Section 11(a), a Warrant may only be exercised in full by payment of the entire Exercise Price currently in effect.

(b)           The Company will not, by amendment of its Certificate of Incorporation or through any 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 hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 11 and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holders of this Warrant against impairment.

12.           Certificate as to Adjustments.

 

In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant agent of the Company (appointed pursuant to Section 16 hereof).

 

13.           Reservation of Stock Issuable on Exercise of Warrant.

 

The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant.

  

  

  

 

14.           Assignment; Exchange of Warrant.

 

Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered Holder hereof (a “Transferor”) with respect to any or all of the shares underlying this Warrant.  On the surrender for exchange of this Warrant, together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, a legal opinion from the Transferor’s counsel that such transfer is exempt from the registration requirements of applicable securities laws, the Company at its expense (but with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of Warrant Shares called for on the face or faces of the Warrant so surrendered by the Transferor; and provided further, that upon any such transfer, the Company may require, as a condition thereto, that the Transferee execute an appropriate investment representation as may be reasonably required by the Company.

 

15.           Rule 144 Rights.

The Company will provide any and all legal opinions required for the removal of the restrictive legend from any stock certificate(s) issued upon exercise of this Warrant under Rule 144, at the Company’s expense.  The Company shall process any request for removal of the restrictive legend within ten business days.  If the Company fails to process any legal request for removal of restrictive legends for more than ten business days after receipt of a written request to do so, the Company shall pay the Holder or stockholder, as applicable, a cash penalty of 1% per day of the Fair Market Value of the securities whose legends were requested to be removed.

16.           Warrant Agent.

 

The Company may, by written notice to each Holder of a Warrant, appoint an agent for the purpose of issuing Warrant Shares (or Other Securities) on the exercise of this Warrant pursuant to Section 2, exchanging this Warrant pursuant to Section 14, and replacing this Warrant pursuant to Section 7, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

17.           Notices, etc.

 

Any notice pursuant to this Warrant by the Company or by a Holder or a holder of Warrant Shares shall be in writing and shall be deemed to have been duly given if delivered personally, or if mailed by certified mail, postage prepaid, or transmitted by facsimile, to the parties at the addresses or facsimile numbers set forth below.

(a)           Holder Address.  If to the Holder or the holder of Warrant Shares, addressed to him, her or it at the address set forth below such party’s signature on the Subscription Agreement, as it may be amended by the Holder or the holder of Warrant Shares from time to time by written notice to the Company.

  

  

  

 

(b)           Company Address.  If to the Company addressed to it at 8800 N. Gainey Dr., Suite 270, Scottsdale, AZ 85258, Attention: Robertson J. Orr, CEO.

All such notices and other communications will (i) if delivered personally to the address as provided in this Section 17, be deemed given upon delivery, (ii) if delivered by facsimile transmission to the facsimile number as provided in this Section 17, be deemed given upon receipt, and (iii) if delivered by mail in the manner described above to the address as provided in this Section 17, be deemed given upon receipt (in each case regardless of whether such notice is received by any other person to whom a copy of such notice, request or other communication is to be delivered pursuant to this Section 17).  Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other party hereto.

18.           Notices of Record Date.

 

In case,

(a)           The Company takes a record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase any shares of stock of any class or to receive a dividend, distribution or any other rights;

 

(b)           There is any capital reorganization of the Company, reclassification of the capital stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock), or consolidation or merger of the Company with or into another corporation which does not constitute a sale of the Company; or

 

(c)           There is a voluntary or involuntary dissolution, liquidation, or winding up of the Company;

 

then, and in any such case, the Company shall cause to be mailed to the Holder, at least 20 business days prior to the date hereinafter specified, a notice stating the date on which (i) a record is to be taken for the purpose of such dividend, distribution or rights, or (ii) such reclassification, reorganization, consolidation, merger, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, dissolution, liquidation or winding up.

19.           Amendments and Supplements.

 

(a)           The Company may from time to time supplement or amend this Warrant without the approval of any Holders in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision, or to make any other provisions in regard to matters or questions herein arising hereunder which the Company may deem necessary or desirable and which shall not materially adversely affect the interest of the Holder.  All other supplements or amendments to this Warrant must be signed by the party against whom such supplement or amendment is to be enforced.

  

  

  

 

(b)           Notwithstanding Section 19(a), the Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

20.           Investment Intent.

 

Holder represents and warrants to the Company that Holder is acquiring the Warrants for investment and with no present intention of distributing or reselling any of the Warrants.

21.           Certificates to Bear Language.

The Warrants and the Warrant Shares issuable upon exercise thereof shall bear the following legend by which Holder shall be bound:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

Certificates for Warrants or Warrant Shares without such legend shall be issued if such Warrants or Warrant Shares are sold pursuant to an effective registration statement under the Act, or if the Company has received an opinion from counsel reasonably satisfactory to counsel for the Company, that such legend is no longer required under the Act.

22.           Miscellaneous.

 

(a)           This Warrant shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws.  The Company and the Holder hereby submit to the exclusive jurisdiction of the Courts of the County of Maricopa, State of Arizona for the resolution of all legal disputes arising under the terms of this Warrant.  The Company and the Holder agree to waive trial by jury.

 

(b)           If any action or proceeding is brought by the Company on the one hand or by the Holder on the other hand to enforce or continue any provision of this Warrant, the prevailing party’s costs and expenses, including its reasonable attorney’s fees, in connection with such action or proceeding shall be paid by the other party.

 

(c)           In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant.

  

  

  

 

(d)           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, the Company has caused this Warrant to be executed by its officers thereunto duly authorized as of the date first written above.

BOLLENTE COMPANIES, INC.,

a Nevada corporation

/S/ Robertson J. Orr

 By: Robertson J. Orr

Its: Chief Executive Officer

	
  

	
HOLDER

 

/S/ Russell J. Hooker

By: Russell J. Hooker

/S/ Sadie A. Hooker

By: Sadie A. Hooker

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