Exhibit 10
WARRANT EXERCISE
AGREEMENT
THIS WARRANT EXERCISE
AGREEMENT , dated as of
September 17, 2009 (this “ Agreement ”) is
entered into by and between Capstone Turbine Corporation, a
Delaware corporation (the “ Company ”), and the
holder (the “ Holder ”) of that certain Warrant
to Purchase Common Stock (the “ Initial Warrant
”) issued by the Company to the Holder on May 7, 2009
for the purchase of up to
shares (the “ Initial Warrant Shares ”) of the
Common Stock, $0.001 par value per share, of the Company (the
“ Common Stock ”).
WHEREAS , the Company desires to induce the Holder to
exercise the Initial Warrant with respect to all of the shares of
Common Stock purchasable thereunder;
WHEREAS , in order to induce the Holder to exercise the
Initial Warrant and in exchange for certain cash consideration, the
Company is willing to issue to the Holder a new warrant (the
“ New Warrant ”) to purchase, at an exercise
price of $1.42 per share,
shares of Common Stock (the “ New Warrant Shares
”), such New Warrant to be substantially in the form attached
hereto as Exhibit A ; and
WHEREAS , in consideration of the foregoing, the Holder
is willing to exercise the Initial Warrant and to purchase the New
Warrant.
NOW, THEREFORE
, in consideration of the mutual
covenants contained in this Agreement and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, intending to be legally bound hereby, the
parties hereto agree as follows:
1.
Inducement to Exercise
. On the date hereof, the
Company hereby agrees to issue to the Holder, and the Holder hereby
agrees to purchase from the Company, a New Warrant exercisable for
the New Warrant Shares during the period beginning on the date
hereof and continuing until 11:59 p.m. New York time on
May 7, 2016. The purchase price for the New Warrant is
$0.0625 per New Warrant Share subject to the New Warrant, or an
aggregate purchase price of
$
(the “ New Warrant Purchase Price ”). No
later than one (1) Business Day after the execution of this
Agreement, the Holder shall pay the New Warrant Purchase Price to
the Company by wire transfer of immediately available funds to an
account designated by the Company. The Company shall deliver the
New Warrant to the Holder at the address provided on the signature
page hereto not more than one (1) Business Day after
payment of the Aggregate Exercise Price of the Initial Warrant and
the New Warrant Purchase Price.
2.
Exercise of the Initial
Warrant . Subject
to the terms and conditions set forth herein, the Company hereby
agrees to reduce the Exercise Price of the Initial Warrant to $0.90
so that the Aggregate Exercise Price for the Initial Warrant for
purposes of the transactions effected by this Agreement,
shall be
$ .
On the date hereof, the Holder hereby exercises the entire Initial
Warrant for cash in the amount of the Aggregate Exercise
Price. In connection with such exercise and concurrently with
the execution and delivery of this Agreement, Holder shall deliver
an executed copy of the Exercise Notice attached hereto as
Exhibit B indicating a Cash Exercise of the Initial
Warrant. No later than one (1) Business Day after the
execution of this Agreement, the Holder shall pay the sum equal to
the Aggregate Exercise Price payable upon exercise of the Initial
Warrant as set forth above to the Company by wire transfer of
immediately available funds to an account designated by the Company
and shall deliver the original Initial Warrant to the
Company. The Company shall deliver the Initial Warrant Shares
to the Holder in accordance with the terms of the Initial
Warrant.
3.
Representations of the
Company . The
Company hereby covenants, and makes the following representations
and warranties, to the Holder, Lazard Frères & Co.
LLC and Lazard Capital Markets LLC, each of which is true and
correct on the date hereof and shall survive the transactions
contemplated by this Agreement.
(a)
Power and
Authorization . The
Company is duly incorporated, validly existing and in good
standing, and has the power, authority and capacity to execute and
deliver this Agreement, to perform its obligations hereunder, and
to consummate the transactions contemplated hereby.
(b)
Valid and Enforceable Agreement;
No Violations .
This Agreement has been duly executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except that such enforcement may be subject to
(a) bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting or relating to enforcement of
creditors’ rights generally, and (b) general principles
of equity. Consummation of the transactions contemplated
hereby will not violate or conflict with the Company’s
charter or bylaws or any material agreement or instrument to which
the Company is a party or by which the Company or any of its assets
are bound, or any laws or regulations applicable to the
Company.
(c)
Issuance of Securities
. The New Warrant has been
duly authorized and, when issued in accordance with this Agreement,
will be duly and validly issued. The Company has reserved
from its duly authorized capital stock a sufficient number of
shares of Common Stock to cover the issuance of the New Warrant
Shares. The offering and sale of the New Warrant and the New
Warrant Shares is being made pursuant to (a) an effective
Registration Statement on Form S-3, No. 333-156459 (the
“ Registration Statement ”) filed by the Company
with the Securities and Exchange Commission (the “
Commission ”), including the Prospectus contained
therein (the “ Base Prospectus ”), and
(b) a Prospectus Supplement (the “ Prospectus
Supplement ” and, together with the Base Prospectus, the
“ Prospectus ”) containing certain supplemental
information regarding the New Warrant and terms of the offering
that will be filed with the Commission and delivered to the Holder.
The offering and sale of the Initial Warrant Shares was previously
registered pursuant to the Registration Statement and a Prospectus
Supplement, dated as of and filed with the Commission on
May 4, 2009 (together with the Base Prospectus, the “
May Prospectus ”).
(d)
Registration Statement
. The Company and the
transactions contemplated by this Agreement meet the requirements
and comply with the conditions for the use of Form S-3 under
the Securities Act of 1933, as amended (the “ Securities
Act ”). The Registration Statement meets, and the
offering and sale of the New Warrant and New Warrant Shares as
contemplated hereby complies with, the requirements of
Rule 415 under the Securities Act (including, without
limitation, Rule 415(a)(4) and (a)(5) of the
Rules and Regulations). The Company has complied, to the
Commission’s satisfaction, with all requests of the
Commission for additional or supplemental information. No
stop order preventing or suspending use of the Registration
Statement, any Preliminary Prospectus or the Prospectus or the
effectiveness of the Registration Statement has been issued by the
Commission, and no proceedings for such purpose pursuant to
Section 8A of the Securities Act against the Company or
related to the offering have been instituted or are pending or, to
the Company’s knowledge, are contemplated or threatened by
the Commission, and any request received by the Company on the part
of the Commission for additional information has been complied
with.
2
(e)
SEC Filings
. The Company is current in
its filings of all reports, schedules, forms, statements and other
documents required to be filed by it with the Commission pursuant
to the reporting requirements of the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”).
Upon issuance, the New Warrant Shares are eligible for sale by the
Holders to the public pursuant to the Prospectus and the Initial
Warrant Shares are eligible for sale by the Holders to the public
pursuant to the May Prospectus.
(f)
Disclosure
. The Company confirms that
neither it nor any other person acting on its behalf has provided
the Holder or their agent or counsel with any information that
constitutes or could reasonably be expected to constitute material,
nonpublic information about the Company. The Company understands
and confirms that the Holder will rely on the foregoing
representations in effecting transactions in securities of the
Company. All disclosure provided to the Holder regarding the
Company or any of its subsidiaries, their business and the
transactions contemplated hereby furnished by or on behalf of the
Company is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading. Each press release issued by the Company or any
of its subsidiaries during the twelve (12) months preceding the
date of this Agreement did not at the time of release contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the
Company or any of its subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so
publicly announced or disclosed
(g)
Consents . Other than such filings as may be
required to be made with the Principal Market or the Commission,
the Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or
any other person, including, without limitation, any other security
holders of the Company, in order for it to execute, deliver or
perform any of its obligations
