Exhibit 10.68 THE SECURITIES REPRESENTED BY THIS DOCUMENT
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. CLASS A COMMON STOCK WARRANT AGREEMENT
MATECH CORP., a Delaware corporation (the “Company”)
THIS IS TO CERTIFY that, for value received, Palisades
Capital, LLC, a Nevada limited liability company, or its assigns
(collectively, the “Holder”) is entitled, subject to
the terms and conditions set forth herein, to purchase, 10,000,000
shares of Class A common stock of the Company (the “Warrant
Shares”) upon exercise at a purchase price of the lesser of
(i) $0.001 per share, or (ii) 50% of market price (the
“Warrant Price”). This Warrant is issued
under and in accordance with the Settlement Agreement and General
Release, dated June 16, 2008, between the Holder and the Company
and is subject to the terms and provisions contained therein, all
of which are incorporated herein by this reference.
1. TERM. Subject
to the terms of this Warrant, the Holder shall have the right, at
any time during the period commencing at 9:00 a.m., Pacific Time,
on the 17th day of October, 2008 and ending at 5:00 p.m., Pacific
Time, on the 16th day of October, 2015 (the “Termination
Date”), to purchase from the Seller the Warrant Shares upon
payment to the Seller of the Warrant Price. Notwithstanding
anything to the contrary contained in this Warrant or otherwise,
the Holder shall not be required, although it shall have the right,
to exercise this Warrant. It is further agreed that the
Warrant Shares are stated after giving effect to a one for
one-thousand reverse stock split completed in October 2008.
2. MANNER
OF EXERCISE. Payment of the aggregate Warrant Price
shall be made as described below. Upon the payment of
all or a portion of the Warrant Price and delivery of the Election
to Purchase, a form of which is attached hereto, the Company shall
issue and cause to be delivered with all reasonable dispatch to or
upon the written order of the Holder, and in such name or names as
the Holder may designate, a certificate or certificates for the
number of full Warrant Shares so purchased upon each exercise of
the Warrant. Such certificate or certificates shall be
deemed to have been issued and any person so designated to be named
therein shall be
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deemed to have become a holder of record of such securities as of
the date of surrender of the Warrant (or if less than the entire
Warrant is exercised, upon the delivery of the new Warrant
described below) and payment of the Warrant Price, as aforesaid,
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. The Warrant shall be exercisable, at the
election of each Holder, either in full or from time to time in
part and, in the event that a certificate evidencing the Warrant is
exercised in respect of less than all of the Warrant Shares
specified therein at any time prior to the Termination Date, a new
certificate evidencing the remaining portion of the Warrant shall
be issued by the Company to such Holder. Payment of the
Warrant Price may be made by either of the following, or a
combination thereof, at the election of Holder:
(i) Cash
Exercise: cash, bank or cashiers check, or wire transfer;
(ii) Cashless
Exercise: surrender of the Election to Purchase form at the
principal office of the Company (by mail or facsimile) together
with notice of cashless election, in which event the Company shall
issue Holder a number of shares of common stock computed using the
following formula: X = Y (A-B)/A
where: X = the number of shares of common stock to be
issued to Holder. Y = the number of shares of common stock
for which this Warrant is being exercised. A = the Market
Price of one share of common stock (for purposes of this Section
3(ii), the “Market Price” shall be defined as the
average closing price of the common stock for the five trading days
prior to the date of exercise of this Warrant (the “Average
Closing Price”), as reported by the OTC Bulletin or in any
over-the-counter market, provided, however, that if the common
stock is listed on a stock exchange, the Market Price shall be the
Average Closing Price on such exchange for the five trading days
prior to the date of exercise of the Warrants. If the
common stock is/was not traded during the five trading days prior
to the date of 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 five trading day period.
B = the Exercise Price. For purposes of Rule 144 and
sub-section (d)(3)(ii) thereof, it is intended, understood and
acknowledged that the common stock issuable upon exercise of this
Warrant in a cashless exercise transaction shall be deemed to have
been acquired at the time this Warrant was
issued. Moreover, it is intended, understood and
acknowledged that the holding period for the common stock issuable
upon exercise of this Warrant in a cashless exercise transaction
shall be deemed to have commenced on the date this Warrant was
issued.
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(iii) Net
Issuance: through a special sale and remittance
procedure (“Net Issuance Procedure”) pursuant to which
the Holder (or any other person or persons exercising the Warrant)
shall concurrently provide irrevocable instructions (a) to a
Company-approved brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Warrant Price payable for the purchased shares plus all
applicable Federal, State and local income and employment taxes
required to be withheld by the Company by reason of such exercise
and (b) to the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in order to
complete the sale. Notwithstanding the foregoing, in no
event shall Holder be entitled to exercise any portion of the
Warrant to the extent that, after such exercise, the sum of (1) the
number of shares of common stock beneficially owned by the Holder,
and (2) the number of shares of common stock issuable upon the full
or partial exercise of the Warrant with respect to which the
determination of this sentence is being made, would result in
beneficial ownership by Holder of more than 4.99% of the
outstanding shares of the Company’s common stock (after
taking into account the shares to be issued to Holder upon such
exercise). For purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “1934 Act”) ”), and Rule 13d-3
promulgated thereunder. The Holder further agrees that
if the Holder transfers or assigns any of the Warrant to any
affiliate of such Holder, such transfer or assignment shall be made
subject to the transferee’s or assignee’s specific
agreement to be bound by the provisions of this provision.
3. NO
STOCKHOLDER RIGHTS. Unless and until this Warrant is
exercised, this Warrant shall not entitle the Holder hereof to any
voting rights or other rights as a stockholder of the Company, or
to any other rights whatsoever except the rights herein expressed,
and, no dividends shall be payable or accrue in respect of this
Warrant.
4. RECAPITALIZATION. Subject
to any required action by the stockholders of the Company, the
number of Warrant Shares covered by this Warrant, and the price per
Share thereof, shall be proportionately adjusted for any increase
or decrease in the number of issued Warrant Shares resulting from a
subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such
shares affected without receipt of consideration by the Company;
provided however that the conversion of any convertible securities
of the Company shall not be deemed having been “effected
without receipt of consideration by the Company.” In
the event of a proposed dissolution or liquidation of the Company,
a merger or consolidation in which the Company is not the surviving
entity, or a sale of all or substantially all of the assets of the
Company, at the option of the Holder, the Holder shall be kept in a
position equal to the Warrant by retaining the Warrant or by
receiving a similar option in any successor to the Company or,
alternatively, at the election of the Holder, shall be treated as
if the Holder had exercised his right to purchase all or part of
the Warrant Shares immediately prior to the consummation of the
subject transaction.
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Subject to any required action by the stockholders of the Company,
if the Company shall be the surviving entity in any merger or
consolidation, t
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