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EXHIBIT 10.8
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE
144 UNDER SAID ACT OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
April 17, 1995
THIS CERTIFIES THAT, for value received, Lease Management Services, Inc.,
("Holder") is entitled to subscribe for and purchase Fifty Thousand (50,000)
shares of the fully paid and nonassessable Common Stock ("the Shares") of
Argonaut Technologies, Inc., a Delaware corporation (the "Company"), at the
Warrant Price (as hereinafter defined), subject to the provisions and upon the
terms and conditions hereinafter set forth. As used herein, the term "Common
Stock" shall mean the Company's presently authorized Common Stock, and any
stock into which such Common Stock may hereafter be exchanged.
1. Warrant Price. The Warrant Price shall initially be one and 20/100 dollars
($1.20) per share, subject to adjustment as provided in Section 7 below.
2. Conditions to Exercise. The purchase right represented by this Warrant may
be exercised at any time, or from time to time, in whole or in part during the
term commencing on the date hereof and ending on the earlier of:
(a) 5:00 P.M. California time on the sixth annual anniversary of this
Warrant Agreement; or
(b) 5:00 P.M. California time on the day prior to the effectiveness of a
registration statement filed in a bona fide firm commitment underwriting
under the Securities Act of 1933, as amended, covering any of the
Company's securities (as that term is defined under the Securities Act of
1933, as then in effect) with aggregate gross proceeds to the Company, at
the public offering price, of at least $7,500,000; provided that the
Company shall notify the registered Holder of this Warrant of the proposed
registration of its securities on the date that the registration statement
is filed, but in any event at least 30 days prior to the effectiveness of
such registration, such notice to set forth the proposed date of
effectiveness of the subject registration statement; or
(c) the effective date of the merger of the Company with or into, the
consolidation of the Company with, or the sale by the Company of all or
substantially all of its assets to another corporation or other entity
(other than such a transaction wherein the shareholders of the Company
retain or obtain a majority of the voting capital stock of the surviving,
resulting, or purchasing corporation); provided that the Company shall
notify the registered Holder of this Warrant of the proposed effective
date of the merger, consolidation, or sale at least 60 days prior to the
effectiveness thereof.
In the event that, although the Company shall have given notice of a
transaction pursuant to subparagraph (b) or (c) hereof, the transaction
does not close on
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approximately the day specified by the Company, unless otherwise elected by
the Holder any exercise of the Warrant subsequent to the giving of such
notice shall be rescinded and the Warrant shall again be exercisable until
terminated in accordance with this Paragraph 2.
3. Method of Exercise; Payment; Issuance of Shares; Issuance of New Warrant.
(a) Cash Exercise. Subject to Section 2 hereof, the purchase right represented
by this Warrant may be exercised by the Holder hereof, in whole or in part,by
the surrender of this Warrant (with a duly executed Notice of Exercise in the
form attached hereto) at the principal office of the Company (as set forth in
Section 17 below) and by payment to the Company, by check, of an amount equal to
the then applicable Warrant Price per share multiplied by the number of shares
then being purchased. In the event of any exercise of the rights represented by
this Warrant, certificates for the shares of stock so purchased shall be in the
name of, and delivered to, the Holder hereof, or as such Holder may direct
(subject to the terms of transfer contained herein and upon payment by such
Holder hereof of any applicable transfer taxes). Such delivery shall be made
within 10 days after exercise of the Warrant and at the Company's expense and,
unless this Warrant has been fully exercised or expired, a new Warrant having
terms and conditions substantially identical to this Warrant and representing
the portion of the Shares, if any, with respect to which this Warrant shall not
have been exercised, shall also be issued to the Holder hereof within 10 days
after exercise of the Warrant.
(b) Net Issue Exercise. In lieu of exercising this Warrant pursuant to Section
3(a), Holder may elect to receive shares equal to the value of this Warrant (or
of any portion thereof remaining unexercised) by surrender of this Warrant at
the principal office of the Company together with notice of such election, in
which event the Company shall issue to Holder the number of shares of the
Company's 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 purchasable under this Warrant
(at the date of such calculation).
A = the fair market value of one share of the Company's Common Stock (at
the date of such calculation).
B = Warrant exercise price (as adjusted to the date of such calculation).
(c) Fair Market Value. For purposes of this Section 3, Fair Market Value of one
share of the Company's Common Stock shall mean:
(i) In the event of an Initial Public Offering pursuant to Section 2(b),
the per share Fair Market Value for the Common Stock shall be the Offering
Price at which the underwriters sell Common Stock to the public; or
(ii) If the Common Stock is traded on NASDAQ or Over-The-Counter or on an
exchange, the per share Fair Market Value for the Common Stock will be the
average of the closing bid and asked prices of the Common Stock quoted in
the Over-The-Counter Market Summary or the closing price quoted on any
exchange on which the Common Stock is listed, whichever is applicable, as
published in the Western Edition
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of The Wall Street Journal for the ten (10) trading days prior to the date
of determination of Fair Market Value; or
(iii) If the Company shall be subject to a merger, acquisition or other
consolidation in which the Company is not the surviving entity, pursuant to
Section 2(c), the per share Fair Market Value for the Common Stock shall be
the value received per share of Common Stock by all Holders of the Common
Stock as determined by the Board of Directors; or
(iv) In any other instance, the per share Fair Market Value for the Common
Stock shall be as determined by the Board of Directors in its reasonable
business judgment.
In the event of 3(c)(iii) or 3(c)(iv), above, the Company's Board of
Directors shall prepare a certificate, to be signed by an authorized
Officer of the Company, setting forth in reasonable detail the basis for
and method of determination of the per share Fair Market Value of the
Common Stock. The Board will also certify to the Holder that this per share
Fair Market Value will be applicable to all holders of the Company's Common
Stock. Such certification must be made to Holder at least thirty (30)
business days prior to the proposed effective date of the merger,
consolidation, sale, or other triggering event as defined in 3(c)(iii) or
3(c)(iv).
(d) Automatic Exercise. To the extent this Warrant is not previously
exercised, it shall be automatically exercised in accordance with Sections 3(b)
and 3(c) hereof (even if not surrendered) immediately before; (i) its
expiration, (ii) the consummation of a Public Offering of the Company's Common
Stock pursuant to Section 2(b), or (iii) the consummation of any consolidation
or merger of the Company, or any sale or transfer of a majority of a company's
assets pursuant to Section 2(c).
4. Representations and Warranties of Holder and Restrictions on Transfer
Imposed by the Securities Act of 1933.
(a) Representations and Warranties by Xxxxxx. The Holder represents and
warrants to the Company with respect to this purchase as follows:
(i) The Holder has substantial experience in evaluating and investing in
private placement transactions of securities of companies similar to the
Company so that the Holder is capable of evaluating the merits and risks of
its investment in the Company and has the capacity to protect its
interests.
(ii) The Holder is acquiring the Warrant and the Shares of Common Stock
issuable upon exercise of the Warrant (collectively the "Securities") for
investment for its own account and not with a view to, or for resale in
connection with, any distribution thereof. The Holder understands that the
Securities have not been registered under the Act by reason of a specific
exemption from the registration provisions of the Act which depends upon,
among other things, the bona fide nature of the investment intent as
expressed herein. In this connection, the Holder understands that, in the
view of the Securities and Exchange Commission (the "SEC"), the statutory
basis for such exemption may be unavailable if this representation was
predicated solely upon a present intention to hold the Securities for the
minimum capital gains period specified under tax statutes, for a deferred
sale, for or until an increase or decrease in the market price of the
Securities or for a period of one year or any other fixed period in the
future.
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(iii) The Holder acknowledges that the Securities must be held indefinitely
unless subsequently registered under the Act or an exemption from such
registration is available. The Holder is aware of the provisions of Rule
144 promulgated under the Act ("Rule 144") which permits limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions, including, in case the securities have been held for
less than three years, the existence of a public market for the shares, the
availability of certain public information about the Company, the resale
occurring not less than two years after a party has purchased and paid for
the security to be sold, the sale being through a "broker's transaction" or
in a transaction directly with a "market maker" (as provided by Rule
144(f)) and the number of shares or other securities being sold during any
three-month period not exceeding specified limitations.
(iv) The Holder further understands that at the time the Holder wishes to
sell the Securities there may be no public market upon which such a sale
may be effected, and that even if such a public market exists, the Company
may not be satisfying the current public information requirements of Rule
144, and that in such event, the Holder may be precluded from selling the
Securities under Rule 144 unless a) a three-year minimum holding period has
been satisfied and b) the Holder was not at the time of the sale nor at any
time during the three-month period prior to such sale an affiliate of the
Company.
(v) The Holder has had an opportunity to discuss the Company's business,
management and financial affairs with its management and an opportunity to
review the Company's facilities. The Holder understands that such
discussions, as well as the written information issued by the Company, were
intended to described the aspects of the Company's business and prospects
which it believes to be material but were not necessarily a thorough or
exhaustive description.
(b) Legends. Each certificate representing the Securities shall be endorsed
with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION" LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, A
TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND
EXCHANGE COMMISSION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH
REGISTRATION.
The Company need not register a transfer of Securities unless the conditions
specified in the foregoing legend are satisfied. The Company may also instruct
its transfer agent not to register the transfer of any of the Shares unless the
conditions specified in the foregoing legend are satisfied.
(c) Removal of Legend and Transfer Restrictions. The legend relating to the Act
endorsed on a certificate pursuant to paragraph 4(b) of this Warrant and the
stop transfer instructions with respect to the Securities represented by such
certificate shall be removed and the Company shall issue a certificate without
such legend to the Holder of the Securities if (i) the Securities are
registered under the Act and a prospectus meeting the requirements of Section
10 of the Act is available or (ii) the Holder provides to the Company an
opinion of counsel for the Holder reasonably satisfactory to the Company, or a
no-action letter or interpretive opinion of the staff of the SEC reasonably
satisfactory to the Company, to the effect that public sale,
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transfer or assignment of the Securities may be without registration and
without compliance with any restriction such as Rule 144.
5. Condition of Transfer or Exercise of Warrant. It shall be a condition to any
transfer or exercise of this Warrant that at the time of such transfer or
exercise, the Holder shall provide the Company with a representation in writing
that the Holder or transferee is acquiring this Warrant and the shares of Common
Stock to be issued upon exercise, for investment purposes only and not with a
view to any sale or distribution, or a statement of pertinent facts covering any
proposed distribution. As a further condition to any transfer of this Warrant or
any or all of the shares of Common Stock issuable upon exercise of this Warrant,
other than a transfer registered under the Act, the Company must have received a
legal opinion, in form and substance satisfactory to the Company and its
counsel, reciting the pertinent circumstances surrounding the proposed transfer
and stating that such transfer is exempt from the registration and prospectus
delivery requirements of the Act. Each certificate evidencing the shares issued
upon exercise of the Warrant or upon any transfer of the shares (other than a
transfer registered under the Act or any subsequent transfer of shares so
registered) shall, at the Company's option, contain a legend in form and
substance satisfactory to the Company and its counsel, restricting the transfer
of the shares to sales or other dispositions exempt from the requirements of the
Act.
As further conditions to each transfer, the transferee shall receive and
accept a Warrant, of like tenor and date, executed by the Company.
6. Stock Fully Paid; Reservation of Shares. All Shares which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
fully paid and nonassessable, and free from all taxes, liens, and charges with
respect to the issue thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have authorized, and reserved for issuance upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this Warrant.
7. Adjustment for Certain Events. In the event of changes in the outstanding
Common Stock by reason of stock dividends, split-ups, recapitalizations,
reclassifications, mergers, consolidations, combinations or exchanges of
shares, separations, reorganizations, liquidations, or the like, the number and
class of shares available under the Warrant in the aggregate and the Warrant
Price shall be correspondingly adjusted, as appropriate, by the Board of
Directors of the Company. The adjustment shall be such as will give the Holder
of this Warrant upon exercise for the aggregate Warrant Price the total number,
class and kind of shares as it would have owned had the Warrant been exercised
prior to the event and had it continued to hold such shares until after the
event requiring adjustment.
8. Notice of Adjustments. Whenever any Warrant Price shall be adjusted pursuant
to Section 7 hereof, the Company shall prepare a certificate signed by its
chief financial officer 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 Warrant Price and number of shares issuable
upon exercise of the Warrant after giving effect to such adjustment, and shall
cause copies of such certificate to be mailed (by certified or registered mail,
return receipt required, postage prepaid) within thirty (30) days of such
adjustment to the Holder of this warrant as set forth in Section 18 hereof.
9. "Market Stand-Off" Agreement. Holder hereby agrees that for a period of 180
days following the effective date of the first registration statement of the
Company covering common stock (or other securities) to be sold on its behalf in
an underwritten public offering, it will not, to the extent requested by the
Company and any underwriter, sell or otherwise
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transfer or dispose of (other than to donees or transferees who agree to be
similarly bound) any of the Shares at any time during such period except common
stock included in such registration; provided, however, that all officers and
directors of the Company who hold securities of the Company or options to
acquire securities of the Company and all other persons with registration
rights enter into similar agreements.
10. Transferability of Warrant. This Warrant is transferable on the books of
the Company at its principal office by the registered Holder hereof upon
surrender of this Warrant properly endorsed, subject to compliance with
applicable federal and state securities laws. The Company shall issue and
deliver to the transferee a new Warrant representing the Warrant so
transferred. Upon any partial transfer, the Company will issue and deliver to
Holder a new Warrant with respect to the Warrant not so transferred. Holder
shall not have any right to transfer any portion of this Warrant to any direct
competitor of the Company.
11. No Fractional Shares. No fractional share of Common Stock will be issued
in connection with any exercise hereunder, but in lieu of such fractional share
the Company shall make a cash payment therefor upon the basis of the Warrant
Price then in effect.
12. Charges, Taxes and Expenses. Issuance of certificates for shares of Common
Stock upon the exercise of this Warrant shall be made without charge to the
Holder for any United States or state of the United States documentary stamp
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.
13. No Shareholder Rights Until Exercise. 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.
14. Registry of Warrant. The Company shall maintain a registry showing the
name and address of the registered Holder of this Warrant. This Warrant may be
surrendered for exchange or exercise, in accordance with its terms, at such
office or agency of the Company, and the Company and Holder shall be entitled
to rely in all respects, prior to written notice to the contrary, upon such
registry.
15. 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 the case of loss, theft,
or destruction, of indemnity reasonably satisfactory to it, and, if mutilated,
upon surrender and cancellation of this Warrant, the Company will execute and
deliver a new Warrant, having terms and conditions substantially identical to
this Warrant, in lieu hereof.
16. Miscellaneous.
(a) Issue Date. The provisions of this Warrant shall be construed and
shall be given effect in all respect as if it had been issued and delivered
by the Company on the date hereof.
(b) Successors. This Warrant shall be binding upon any successors or
assigns of the Company.
(c) Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California.
(d) Headings. The headings used in this Warrant are used for convenience
only and are not to be considered in construing or interpreting this
Warrant.
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[ARGONAUT TECHNOLOGIES LOGO]
NOTICE OF EXERCISE
TO:
1. The undersigned Warrantholder ("Holder") elects to acquire shares of the
Common Stock of __________ (the "Company"), pursuant to the terms of the
Stock Purchase Warrant dated ______________, 1995 (the "Warrant").
2. The Holder exercises its rights under the Warrant as set forth below:
( ) The Holder elects to purchase ______ shares of Common Stock
as provided in Section 3(a), (c) and tenders herewith a
check in the amount of $___________ as payment of the
purchase price.
( ) The Holder elects to convert the purchase rights into shares
of Common Stock as provided in Section 3(b), (c) of the
Warrant.
3. The Holder surrenders the Warrant with this Notice of Exercise.
4. The Holder represents that it is acquiring the aforesaid shares of Common
Stock for investment and not with a view to, or for resale in connection
with, distribution and that the Holder has no present intention of
distributing or reselling the shares.
5. Please issue a certificate representing the shares of Common Stock in the
name of the Holder or in such other name as is specified below:
Name:
Address:
Taxpayer I.D.:
______________________________
(Holder)
By: _______________________
Title: _______________________
Date: _______________________
