EXHIBIT 10.10
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE HEREUNDER HAS BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR WITH ANY STATE
SECURITIES COMMISSIONER. NEITHER THIS WARRANT NOR THE COMMON STOCK MAY BE SOLD
OR TRANSFERRED UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND QUALIFIED UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR UNLESS EXEMPTIONS
FROM SUCH REGISTRATION AND QUALIFICATION ARE AVAILABLE.
A&R MATERIALS, INC.
COMMON STOCK PURCHASE WARRANT
No. W1-__ September 27, 1996
Reference is hereby made to that certain $___________ Secured
Promissory Note (the "Loan Note") dated the date hereof of A&R Materials, Inc.,
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a California corporation (the "Company"), in favor of _______________, the terms
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of which are incorporated by this reference. The Loan Note is one of several
similar notes sold to DayStar Partners, L.P. ("DayStar") and other purchasers
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(the "Other Purchasers," who together with DayStar are referred to as the
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"Purchasers") pursuant to that certain Note Purchase Agreement, of even date
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herewith, among the Company and the Purchasers (the "Note Purchase Agreement").
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As used herein, an "IPO" means an offering of the Company's securities
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registered under the Securities Act of 1933, as amended, from which the Company
receives gross proceeds of at least $3,500,000.
The Company hereby certifies that, for value received, ___________, or
any transferee who has received this Warrant (the "Holder") is entitled on the
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terms set forth below to purchase from the Company, on or before the Expiration
Date (as defined below), at an exercise price of $.0612 (the "Exercise Price"),
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____________ shares (the "Initial Warrant Shares") of common stock of the
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Company (the "Common Stock").
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The Company and Holder, among other parties, are entering into a
Registration Rights Agreement dated as of September 27, 1996 (the "Registration
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Rights Agreement"). If an IPO has been completed and the Registration Statement
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contemplated by Section 2.1 of the Registration Rights Agreement is not
effective within one year after the effective date of the IPO, then this warrant
shall also be exercisable to acquire an additional number of shares equal to
4.0% of the Initial Warrant Shares for each whole or partial month after the
first anniversary of the effective date of the IPO during which such
Registration Statement has not been declared effective.
1. Expiration Date. This Warrant shall be exercisable in whole or in
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part until 5:00 p.m. (San Francisco time) on September 27, 2001, provided,
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however, that notwithstanding such expiration date, this Warrant shall not
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expire unless and until not less than 30 nor more than 90 days shall have passed
since the Company gave the Holder notice of the anticipated expiration hereof.
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2. Exercise of Warrant. This Warrant shall be exercisable in whole
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or in part at any time commencing (i) one year after the closing of the IPO, or
(ii) if the IPO does not close within six months from the date of this Warrant,
then one year after the date of this Warrant. This Warrant shall be exercised
by surrendering it to the Company at its principal office, with a duly executed
Subscription Form (in substantially the form appearing at the end of this
document), together with payment of the Exercise Price. Promptly after
exercise, the Company shall issue and deliver to or upon the order of the Holder
a certificate or certificates for the number of shares of Common Stock issuable
upon such exercise, and the Company will pay all issue taxes in connection
therewith. All shares of Common Stock which may be issued upon exercise of this
Warrant will, upon issuance by the Company in accordance with the terms of this
Warrant, be validly issued, fully paid and non-assessable, and free from all
taxes and liens with respect to the issuance thereof. To the extent permitted
by law, this Warrant shall be deemed to have been exercised immediately prior to
the close of business on the date of its surrender for exercise as provided
herein, even if the Company's stock transfer books are at that time closed, and
the Holder shall be treated for all purposes as the holder of record of the
Common Stock to be issued upon such exercise as of the close of business on such
date. Upon any partial exercise, the Company will issue to or upon the order of
the Holder a new Warrant for the number of shares of Common Stock as to which
this Warrant has not been exercised.
3. Adjustment of Exercise Price. The Exercise Price and the number
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of shares subject to this Warrant shall be subject to adjustment from time to
time as described below.
3.1 Adjustment for Stock Splits, Stock Combinations and Common Stock
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Dividends. If at any time or from time to time after the date of this Warrant
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(the "Issue Date") the number of shares of Common Stock outstanding is increased
by a stock dividend payable in shares of Common Stock (or in options to purchase
or rights to subscribe for Common Stock, or securities by their terms
convertible into or exchangeable for Common Stock, or options to purchase or
rights to subscribe for such convertible or exchangeable securities
(collectively, "Common Stock Rights")) or by a subdivision or split-up of shares
of Common Stock, then, on the date such payment is made or such change is
effective, the Exercise Price shall be decreased, and the number of shares of
Common Stock which the Holder shall be entitled to purchase hereunder shall be
increased, in direct proportion to such increase in outstanding shares; and if
the number of shares of Common Stock outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of Common Stock,
then, on the effective date of such combination, the Exercise Price shall be
increased, and the number of shares of Common Stock which the Holder shall be
entitled to purchase hereunder shall be decreased, in direct proportion to such
decrease in outstanding shares (it being assumed, in each case, for purposes of
calculating such proportional adjustments, that all Common Stock Rights
outstanding on the date the adjustments are to be made are exercised into the
maximum number of shares of Common Stock into which they may be converted).
3.2 Adjustment for Dividends in Other Stock or Property;
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Reclassifications. In case at any time or from time to time after the holders
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of the Common Stock receive or, on or after the record date fixed for the
determination of eligible stockholders, become entitled to receive, without
payment therefor, (i) other or additional stock or other securities or cash or
other property by way of dividend, or (ii) other or additional stock or other
securities or cash or other
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property by way of stock split, spin-off, split-up, reclassification,
combination of shares or similar corporate rearrangement (in each case other
than additional shares of Common Stock of the Company, or any other stock or
securities into which such Common Stock had been changed, or any Common Stock
Rights, issued as a stock dividend or stock-split), then, and in each such case,
the Holder, upon the exercise of this Warrant, will be entitled to receive the
amount of stock, securities and/or property (including cash) which the Holder
would have received on or before the date of such exercise if on the Issue Date
he had been the holder of record of the number of shares of Common Stock of the
Company which he would have been able to acquire upon exercise in full of this
Warrant and had thereafter, during the period from the Issue Date to and
including the date of such exercise, retained such shares and/or all other or
additional stock and other securities and cash or other property receivable by
him as aforesaid during such period.
3.3 Adjustment for Reorganization, Consolidation, Merger. In case of
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any reorganization of the Company (or any other corporation, the stock or other
securities of which are at the time receivable on the exercise of this Warrant),
or in case the Company (or such other corporation) consolidates with, merges
into or conveys all or substantially all its assets to another corporation after
the Issue Date, then the Holder, upon the exercise of this Warrant at any time
after the consummation of such reorganization, consolidation, merger or
conveyance, will be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise of this Warrant prior to
such consummation, the stock, securities or property to which the Holder would
have been entitled upon such consummation if the Holder had converted this
Warrant immediately prior thereto. The provisions of this Paragraph 3.3 shall
similarly apply to successive reorganizations, consolidations, mergers or
conveyances.
3.4 Other Restrictions Relating to Acquisitions. The Company shall
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not permit a third party to acquire substantially all of its stock or assets, or
to merge with it, prior to the Company's IPO without the written consent of the
Holder of this Warrant, unless in connection therewith the Company pays all
amounts then owing under the Loan Note. If the acquisition price for the
Company's shares is at least 250% of the exercise price of this Warrant, then
the Company may terminate this Warrant if it has not been exercised by the
Holder within 30 days following the Closing of such acquisition.
3.5 Minimal Adjustments. No adjustment in the Exercise Price need be
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made if such adjustment would result in a change in the Exercise Price of less
than one percent (1%); no adjustment in the number of shares of Common Stock
subject to this Warrant need be made if such adjustment would result in a change
of less than one percent (1%) in the number of shares subject hereto. Any
adjustment less than these amounts which is not made shall be carried forward
and shall be made at the time of and together with any subsequent adjustment
which, on a cumulative basis, amounts to an adjustment of at least this amount.
3.6 Reorganization of Company. If the Company consolidates or merges
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with or into, or transfers or leases all or substantially all its assets to, any
person, upon consummation of such transaction this Warrant 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, transfer or lease if the Holder had exercised the Warrant
immediately before the effective date of the transaction. Concurrently with the
consummation of
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such transaction, the corporation formed by or surviving any such consolidation
or merger if other than the Company, or the person to which such sale or
conveyance shall have been made, shall enter into a supplemental Warrant
Agreement 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. The successor Company shall mail to Warrant Holders a notice describing
the supplemental Warrant Agreement. If the issuer of securities deliverable upon
exercise of Warrants under the supplemental Warrant Agreement is an affiliate of
the formed, surviving, transferee or lessee corporation, that issuer shall join
in the supplemental Warrant Agreement. If this subsection applies, other
subsections of this Section 3 shall not apply.
3.7 Certificate as to Adjustments. Upon the occurrence of each
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adjustment pursuant to this Paragraph 3 or pursuant to the initial paragraph of
this Warrant, the Company, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to the Holder a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon written request at any time of
the Holder, furnish or cause to be furnished to the Holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the then effective
number of shares of Common Stock subject to the Warrant, and (iii) the then
effective amount of securities (other than Common Stock) and other property, if
any, which would be received upon exercise of the Warrant.
4. No Dilution or Impairment. The Company will not, by amendment of
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its Articles of Incorporation or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against dilution or
other impairment. Without limiting the generality of the foregoing, the Company
will take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares of
Common Stock upon the exercise of this Warrant and will take no action to amend
its Articles of Incorporation which would change to the detriment of the holders
of Common Stock (whether or not any Common Stock is outstanding at the time) the
dividend or voting rights of the Company's Common Stock as constituted on the
date hereof.
5. Reservation of Stock Issuable on Exercise of Warrant. The Company
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will at all times reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, all such shares of Common Stock and other
stock, securities and property as from time to time are receivable upon the
exercise of this Warrant. If at any time the number of authorized but unissued
shares of Common Stock (or other stock, securities or property) shall not be
sufficient to effect the exercise of this Warrant, the Company will use its best
efforts to take such corporate action as may be necessary, in the opinion of its
counsel, to increase its authorized but unissued shares of Common Stock (or
other stock, securities or property) to such number of shares as shall be
sufficient for such purpose.
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6. Fractional Shares. No fractional shares of the Common Stock will
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be issued in connection with any exercise of this Warrant, but in lieu of such
fractional shares the Company shall make a cash payment therefor upon the basis
of the Exercise Price then in effect.
7. Notice of Record Date. In case (i) the Company takes a record of
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the holders of its Common Stock (or other stock or securities at the time
receivable upon the exercise of the Warrant) for the purpose of entitling them
to receive any dividend (other than a cash dividend at the same rate as the rate
of the last cash dividend theretofore paid) or other distribution, or any right
to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or (ii) of any capital reorganization
of the Company, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation, or any
conveyance of all or substantially all of the assets of the Company to another
corporation, or (iii) of any voluntary dissolution, liquidation or winding-up of
the Company, then, and in each such case, the Company will mail or cause to be
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mailed to the Holder a notice specifying, as the case may be, (a) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (b) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time receivable
upon the exercise of the Warrant) will be entitled to exchange their shares of
Common Stock (or such other stock or securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up. Such notice shall
be mailed at least fifteen (15) days prior to the date specified therein.
8. Warrant Register. The Company, or its duly appointed agent, shall
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maintain a register for this Warrant and other warrants of similar tenor on
which it shall register the issuance and transfer of such warrants. The duly
registered holder ("Registered Owner") of each warrant shall be deemed the
actual owner of the warrant so registered until the Company, or its agent, is
required to record a transfer thereof.
9. Transfer.
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9.1 Transfer. Subject to compliance with all applicable federal and
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state securities laws and the terms of this Warrant, this Warrant may be
transferred, in whole or in part, without the consent of the Company. The
Company acknowledges that one or more of the Purchasers may wish to transfer
their Warrants to a stock brokerage firm which would then exercise the Warrant
and sell the underlying stock. If the Company is notified that one or more of
the Purchasers wish to proceed in this manner, the Company will cooperate with
the parties and use reasonable efforts to assist the brokerage firm in disposing
of the underlying securities in accordance with applicable law.
9.2 Registration or Exemption. This Warrant and the Warrant Shares
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shall not be sold or transferred unless either (i) they first shall have been
registered under the Securities Act of 1933, as amended (the "Act"), or (ii) the
Company first shall have been furnished with an
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opinion of legal counsel, reasonably satisfactory to the Company, to the effect
that such sale or transfer is exempt from the registration requirements of the
Act.
9.3 Legend. Each certificate representing Warrant Shares shall bear
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a legend substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be offered, sold or otherwise transferred, pledged or hypothecated
unless and until such securities are registered under such Act or an
opinion of counsel satisfactory to the Company is obtained to the
effect that such registration is not required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act or otherwise.
10. Payment of Taxes. The Company will pay all documentary stamp taxes
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attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
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tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Warrant Shares in a
name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
11. Replacement of Warrant. Upon receipt of evidence reasonably
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satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) upon delivery of
an indemnity agreement or bond in such reasonable amount as the Company may
determine or (in the case of mutilations) upon surrender and cancellation
hereof, the Company, at its expense, will issue a replacement.
12. Notices. All notices, requests, consents and other communications
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required or permitted hereunder shall be in writing and shall be deemed to have
been delivered one business day after deposit with a reputable overnight
delivery service, or two business days after deposit in the mail with the United
States Postal Service addressed as follows:
(a) If to any Holder, addressed to such Holder at its address as
shown on the books of the Company, or at such other address as such Holder
may specify from time to time by written notice to the Company, with a copy
to Xxxx Xxxxxxxx, Esq., Coblentz, Cahen, XxXxxx & Breyer, LLP, 000 Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, XX 00000.
(b) If to the Company, at the address set forth below, or at such
other address as the Company may specify from time to time by written
notice to the Holder,
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with a copy to Xxxxx Xxxxx, Xxxxxxx & West LLP, Xxx Xxxx Xxxx Xxxxxx, Xxxx
Xxxx, XX 00000;
and such notices and other communications shall for all purposes of this Warrant
be treated as being effective or having been given upon delivery, if delivered
personally, or, if sent by mail, seventy-two (72) hours after the same has been
deposited in a regularly maintained receptacle for the deposit of United States
mail, addressed and postage prepaid as aforesaid.
13. Survival of Covenants, Representations and Warranties, etc. All
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covenants, representations and warranties made in, pursuant to, or in connection
with this Warrant shall survive the execution and delivery hereof.
14. Severability. Should any one or more of the provisions of this
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Warrant be determined to be illegal or unenforceable, all other provisions of
this Warrant shall be given effect separately from the provision or provisions
determined to be illegal or unenforceable and shall not be affected thereby.
15. Parties in Interest. All the terms and provisions of this Warrant
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shall be binding upon and inure to the benefit of and be enforceable by the
respective transferees, successors, assigns, administrators, executors, heirs,
and legal representatives of the Holder and the Company, whether so expressed or
not.
16. Changes; Waiver. Neither this Warrant nor any term hereof may be
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changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
17. Headings. The headings in this Warrant are for purposes of
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convenience of reference only, and shall not be deemed to constitute a part
hereof.
18. Governing Law. This Warrant shall be construed in accordance with and
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governed by the laws of that State. Any litigation or arbitration between the
parties which arises out of this Warrant shall be instituted and prosecuted only
in the appropriate California or Federal court or other tribunal, situated in
San Jose, California. The Company hereby specifically submits itself and its
properties to the exclusive jurisdiction of such courts for purposes of any such
action and the enforcement of any judgment or order arising therefrom. The
parties hereto each waive any right to a change of venue and any and all
objections to the jurisdiction of the California courts. Notwithstanding the
foregoing, the Purchasers may take such actions in a foreign jurisdiction with
they deem necessary and appropriate to enforce or collect any court judgment in
any dispute arising out of the Warrant or to seek and obtain other relief as is
necessary to enforce the terms of this Warrant. Each party agrees that service
upon such party in any such action or proceeding maybe made as provided above
for the giving of notices.
19. Expiration. If the last day on which this Warrant may be exercised,
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or on which it may be exercised at a particular Exercise Price, is a Sunday or a
legal holiday or a day on which banking institutions doing business in the City
of San Francisco are authorized by law to close,
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this Warrant may be exercised prior to 5:00 p.m. (San Francisco time) on the
next succeeding full business day with the same force and effect and at the same
Exercise Price as if exercised on such last day specified herein.
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IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase
Warrant to be duly executed and delivered on the date first set forth above.
A&R MATERIALS, INC.,
a California corporation
By:
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Its:
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Address: 0000 Xxxxxxxx Xxx., Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
ACCEPTANCE BY HOLDER:
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By:
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By:
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Title:
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Dated: _____________, 1996
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SUBSCRIPTION FORM
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The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing _______ shares of the Common Stock of A&R MATERIALS,
INC. and hereby delivers $______________ in payment of the Exercise Price
thereof, in accordance with the Common Stock Purchase Warrant dated
____________________, ______.
DATED: _______________, _____
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Name of Warrant Holder
By
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Authorized Signature
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