Exhibit 8
EARTHSHELL CORPORATION
COMMON STOCK WARRANT
THIS WARRANT AND THE UNDERLYING COMMON STOCK MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT.
This certifies that, for good and valuable consideration, receipt
of which is hereby acknowledged, TSCP Machinery & Processing Group,
LLC ("HOLDER") is entitled to purchase, subject to the terms and
conditions of this Warrant, from EarthShell Corporation, a Delaware
corporation (the "COMPANY"), Two Hundred Twenty-Two Thousand Two
Hundred Twenty-Two (222,222) fully paid and nonassessable shares of
the common stock, $.01 par value per share ("COMMON STOCK"), of the
Company during the period commencing on the date of this Warrant and
ending at 5:00 p.m. California time five (5) years from such date (the
"EXPIRATION DATE"), at which time this Warrant will expire and become
void unless earlier terminated as provided herein. The shares of
Common Stock of the Company for which this Warrant is exercisable, as
adjusted from time to time pursuant to the terms hereof, are
hereinafter referred to as the "WARRANT SHARES".
1. EXERCISE PRICE. The initial exercise price for the Warrant
Shares shall be $3.90 per share, subject to adjustment pursuant to the
terms hereof (such price, as adjusted from time to time, is
hereinafter referred to as the "EXERCISE PRICE").
2. EXERCISE AND PAYMENT. This Warrant may be exercised, in
whole or in part, from time to time by the Holder prior to the
Expiration Date by surrender to the Company, at the principal
executive offices of the Company, of this Warrant and the Notice of
Exercise annexed hereto duly completed and executed by the Holder,
together with payment in the amount obtained by multiplying the
Exercise Price then in effect by the number of Warrant Shares thereby
being purchased, as designated in the Notice of Exercise. Payment may
be made by one or more of the following means:
(a) in cash or by check payable to the order of the
Company;
(b) the delivery to the Company of a certificate or
certificates representing shares of Common Stock, duly endorsed
or accompanied by a duly executed stock power, which delivery
effectively transfers to the Company good and valid title to such
shares, free and clear of any pledge, commitment, lien, claim or
other encumbrance (such shares to be valued on the basis of their
aggregate fair market value thereof on the date of such
exercise), provided that the Company is not then prohibited from
purchasing or acquiring such shares of Common Stock;
(c) exercising using a "net share" method or "pyramiding"
of the Warrant Shares, provided that the Company is not
prohibited from purchasing or acquiring shares of Common Stock.
This shall mean that in lieu of exercise as provided in (a) and
(b) above, the Holder may elect to convert all or a portion of
this Warrant, without the payment by the Holder of any additional
consideration, by surrendering this Warrant to the Company, into
up to the number of Warrant Shares that is obtained under the
following formula:
X = Y (A-B)
-------
A
where X = the number of shares of Warrant Shares to be
issued to the Holder pursuant to this Section
2(c).
Y = the number of shares of Warrants the Holder elects
to convert.
A = the fair market value of one Warrant Share.
B = the Exercise Price.
(i) If the Company's Common Stock is publicly traded, the per share
fair market value of the Warrant Shares shall be the average of the
closing prices of the Common Stock as quoted on the Nasdaq National
Market or the principal exchange on which the Common Stock is listed,
or if not so listed then the fair market value shall be the average of
the closing bid prices of the Common Stock as published in The Wall
Street Journal, in each case for the fifteen trading days ending five
trading days prior to the date of determination of fair market value;
(ii) If the Company's Common Stock is not so publicly traded, the per
share fair market value of the Shares shall be such fair market value
as is determined in good faith by the parties.
(d) any other means as determined by the Company in its
sole discretion; and/or
(e) any combination of the foregoing.
3. RESERVATION OF SHARES. The Company shall at all times
reserve for issuance and delivery upon exercise of this Warrant such
number of shares of its Common Stock from time to time issuable as
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Warrant Shares. All such Warrant Shares shall be duly authorized, and
when issued upon such exercise, shall be validly issued, fully paid
and non-assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and
clear of all preemptive rights.
4. DELIVERY OF STOCK CERTIFICATES. Within a reasonable time
after exercise, in whole or in part, of this Warrant, the Company
shall issue in the name of, and deliver to, the Holder a certificate
or certificates for the number of fully paid and nonassessable Warrant
Shares which the Holder shall have requested in the Notice of
Exercise. If this Warrant is exercised in part, the Company shall
deliver to the Holder a new Warrant for the unexercised portion of the
Warrant Shares at the time of delivery of such stock certificate or
certificates.
5. NO FRACTIONAL SHARES. No fractional Warrant Shares shall be
issued upon exercise of this Warrant. If upon any exercise of this
Warrant a fraction of a share results, the Company will pay the Holder
the difference between the cash value of the fractional share and the
portion of the Exercise Price allocable to the fractional share.
6. CHARGES, TAXES AND EXPENSES. The Company shall pay all
transfer taxes or other incidental charges, if any, in connection with
the issuance of the Warrant Shares to the Holder.
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 or security
reasonably satisfactory to the Company, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon
surrender and cancellation of this Warrant, if mutilated, the Company
shall make and deliver a new Warrant of like tenor and dated as of
such cancellation, in lieu of this Warrant.
8. SATURDAYS, SUNDAYS, HOLIDAYS. 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 weekday that is not a legal holiday.
9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The
Exercise Price and the number of Warrant Shares purchasable upon
exercise of this Warrant shall be subject to adjustment from time to
time as follows:
(a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If the
Company shall at any time prior to the Expiration Date subdivide its
shares of Common Stock by split-up or otherwise, or combine its shares
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of Common Stock, then the number of Warrant Shares as to which this
Warrant is exercisable as of the date of such subdivision, split-up or
combination shall be proportionately increased in the case of a
subdivision, or proportionately decreased in the case of a
combination. Appropriate, corresponding adjustment shall also be made
to the Exercise Price so that the aggregate purchase price payable for
the total number of Warrant Shares purchasable under this Warrant as
of such date remains the same.
(b) STOCK DIVIDEND. If at any time the Company declares a
dividend or other distribution on Common Stock payable in Common Stock
or Convertible Securities without payment of any consideration by
their holders for the additional shares of Common Stock or the
Convertible Securities (including the additional shares of Common
Stock issuable pursuant to the terms thereof), then the number of
Warrant Shares as to which this Warrant may be exercised shall be
increased as of the record date (or the date of such dividend
distribution if no record date is set) for determining which holders
of Common Stock shall be entitled to receive such dividend, in
proportion to the increase in the number of outstanding shares (and
shares of Common Stock issuable pursuant to the terms of the
Convertible Securities) of Common Stock as a result of such dividend,
and the Exercise Price shall be adjusted so that the aggregate amount
payable for the purchase of all the Warrant Shares issuable hereunder
immediately after the record date (or on the date of such
distribution, if applicable) for such dividend shall equal the
aggregate amount so payable immediately before such record date (or on
the date of such distribution, if applicable). As used herein,
"Convertible Securities" means evidences of indebtedness, shares of
stock or other securities, which are convertible into, exchangeable
for, with or without payment of additional consideration, shares of
Common Stock, either immediately or upon the arrival of a specified
date or the happening of a specified event or both.
(c) OTHER DISTRIBUTIONS. If at any time after the date
hereof the Company distributes to holders of its Common Stock, other
than as part of its dissolution or liquidation or the winding up of
its affairs, any shares of its capital stock, any evidence of
indebtedness or any of its assets (other than cash, Common Stock or
Convertible Securities), then the Company may, at its option, either
(i) decrease the Exercise Price of this Warrant by an appropriate
amount based upon the value distributed on each share of Common Stock
as determined in good faith by the Company's Board of Directors or
(ii) provide by resolution of the Company's Board of Directors that on
exercise of this Warrant, the Holder hereof shall thereafter be
entitled to receive, in addition to the Warrant Shares otherwise
receivable on exercise hereof, the number of shares or other
securities or property which would have been received had this Warrant
at the time been exercised.
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(d) MERGER. If at any time after the date hereof there
shall be a merger or consolidation of the Company with or into another
corporation when the Company is not the surviving corporation, then
the Holder shall thereafter be entitled to receive upon exercise of
this Warrant, during the period specified herein and upon payment of
the aggregate Exercise Price then in effect, the number of shares or
other securities or property of the successor corporation resulting
from such merger or consolidation, which would have been received by
the Holder for the Warrant Shares had this Warrant been exercised at
such time.
(e) RECLASSIFICATION. If at any time after the date hereof
there shall be a change or reclassification of the securities as to
which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, then the
Holder shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares or other
securities or property resulting from such change or reclassification,
which would have been received by Holder for the Warrant Shares had
this Warrant been exercised at such time.
10. NOTICE OF ADJUSTMENTS; NOTICES. Whenever the Exercise Price
or number or kind of securities purchasable hereunder is adjusted
pursuant to Section 9 hereof, the Company shall execute and deliver to
the Holder a certificate setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated and the Exercise Price
and number of and kind of securities purchasable hereunder after
giving effect to such adjustment, and shall cause a copy of such
certificate to be mailed (by first class mail, postage prepaid) to the
Holder.
11. RIGHTS AS STOCKHOLDER; NOTICE TO HOLDERS. Nothing contained
in this Warrant shall be construed as conferring upon the Holder, or
any transferee of the Holder, the right to vote or to receive
dividends or to consent or to receive notice as a shareholder in
respect of any meeting of shareholders for the election of directors
of the Company or of any other matter, or any rights whatsoever as
shareholders of the Company. The Company shall notify the Holder by
registered mail if at any time prior to the expiration or exercise in
full of the Warrant, any of the following events occur:
(a) a dissolution, liquidation or winding up of the Company
shall be submitted to the stockholders of the Company for approval; or
(b) a capital reorganization or reclassification of the
Common Stock (other than a subdivision or combination of the
outstanding Common Stock and other than a change in the par value of
the Common Stock) or any consolidation or merger of the Company with
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or into another corporation (other than a consolidation or merger in
which the Company is the continuing corporation and that does not
result in any reclassification or change of Common Stock outstanding)
or in the case of any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an
entirety; or
(c) a taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other rights.
This notice to Holder shall be given simultaneously with the giving of
notice to holders of Common Stock. Such notice shall specify the
record date or the date of closing the stock transfer books, as the
case may be. Failure to provide such notice will not affect the
validity of any action taken in connection with such dividend,
distribution or subscription rights, or proposed merger,
consolidation, sale, conveyance, dissolution, liquidation or winding
up.
12. RESTRICTED SECURITIES. The Holder understands that this
Warrant and the Warrant Shares constitute "restricted securities"
under the federal securities laws inasmuch as they are, or will be,
acquired directly from the Company in transactions not involving a
public offering and accordingly may not, under applicable laws and
regulations, be resold or transferred without registration under the
Securities Act of 1933, as amended (the "1933 Act") or availability of
an applicable exemption from such registration. The Holder further
acknowledges that a securities legend substantially similar to that on
the first page hereof shall be placed on any Warrant Shares issued to
the Holder upon exercise of this Warrant.
13. CERTIFICATION OF INVESTMENT PURPOSE. The Holder covenants
and agrees that at any time that this Warrant is exercised, in whole
or in part, and as a condition thereto, a written certification in the
form attached as EXHIBIT A-1 shall be delivered to the Company by the
Holder.
14. DISPOSITION OF WARRANT AND WARRANT SHARES; TRANSFER OF
WARRANT.
(a) This Warrant and any Warrant Xxxxxx purchased hereunder
may not be sold, transferred, assigned, pledged or hypothecated (any
such action, a "Transfer") by the Holder except in compliance with
this Agreement. The Company shall not be required (i) to transfer on
its books this Warrant or any Warrant Shares which have been
Transferred in violation of the provisions of this Agreement or (ii)
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to treat as the owner of the Warrant or the Warrant Shares or
otherwise to accord voting or dividend rights to any transferee to
whom this Warrant or the Warrant Shares have been Transferred in
contravention of the terms of this Warrant. This Warrant may be
divided or combined, upon request to the Company by the Holder, into a
certificate or certificates representing the right to purchase the
same aggregate number of Warrant Shares. If at the time of a
Transfer, a registration statement is not in effect to register the
Warrant Shares, the Company may require the Holder to make such
representations, and may place such legends on certificates
representing this Warrant, as may be reasonably required in the
opinion of counsel to the Company to permit a Transfer without such
registration.
15. MISCELLANEOUS.
(a) CONSTRUCTION. Unless the context indicates otherwise,
the term "Holder" shall include any successor transferee or
transferees of this Warrant, and the term "Warrant" shall include any
and all warrants outstanding pursuant to this Agreement, including
those evidenced by one or more instruments or certificates issued upon
division, exchange, substitution or transfer pursuant to Section 14.
(b) RESTRICTIONS. By receipt of this Warrant, the Holder
is making the same investment representations with respect to the
acquisition of this Warrant as the Holder is required to make upon the
exercise of this Warrant and acquisition of the Warrant Shares.
(c) NOTICES. Unless otherwise provided, any notice
required or permitted under this Warrant shall be given in writing and
shall be deemed effectively given upon personal delivery to the party
to be notified or three days following deposit with the United States
Post Office, by registered or certified mail, postage prepaid and
addressed to the party to be notified (or one (1) day following timely
deposit with a reputable overnight courier with next day delivery
instructions), or upon confirmation of receipt by the sender of any
notice by facsimile transmission, at the address indicated below or at
such other address as such party may designate by ten days' advance
written notice to the other party.
To the Holder: TSCP Machinery & Processing Group, LLC
c/x Xxxxxxxx Street Capital Partners,
L.P.
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Attn.: Xxxxx X. Xxxxxx
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To the Company: EarthShell Corporation
0000 Xxxx Xx. Suite 200
Lutherville, MD 21093
Attention: CEO
(d) GOVERNING LAW. This Warrant shall be governed by and
construed under the laws of the State of Delaware as applied to
agreements among Delaware residents entered into and to be performed
entirely within Maryland.
(e) SEVERABILITY. If one or more provisions of this
Warrant are held to be unenforceable under applicable law, such
provision shall be excluded from this Warrant and the balance of the
Warrant shall be interpreted as if such provision were so excluded and
the balance shall be enforceable in accordance with its terms.
(f) ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement and understanding of the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous
agreements and understandings, whether oral or written, between the
parties hereto with respect to the subject matter hereof.
(g) BINDING EFFECT. This Warrant and the various rights
and obligations arising hereunder shall inure to the benefit of and be
binding upon the Company and its successors and assigns, and Xxxxxx
and its successors and assigns.
(h) WAIVER; CONSENT. This Warrant may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the
parties hereto, and no waiver of any of the provisions or conditions
of this Warrant or any of the rights of a party hereto shall be
effective or binding unless such waiver shall be in writing and signed
by the party claimed to have given or consented thereto.
(i) COUNTERPARTS. This Warrant may be signed in several
counterparts and by facsimile or other electronic means, each of which
shall constitute an original and may be executed by facsimile
signature.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Warrant
effective as of the date hereof
THE COMPANY:
EARTHSHELL CORPORATION,
a Delaware corporation
/s/ Xxxxx Xxxxxxx
----------------------
By: Xxxxx Xxxxxxx
Its: Chief Financial Officer
HOLDER:
TSCP MACHINERY & PROCESSING
GROUP, LLC
By: Xxxxxxxx Street Capital Partners, L.P.,
its Manager
By: Xxxxxxxx Street Capital GP LLC
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx
-----------------------
Xxxxx X. Xxxxxx
DATED: June 22, 2006
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