Exhibit 4
CAPSTONE TURBINE
CORPORATION
WARRANT TO PURCHASE COMMON
STOCK
Warrant No.:
Number of Shares of Common Stock:
Date of Issuance: September 17, 2009
(“ Issuance Date ”)
Capstone Turbine Corporation, a
Delaware corporation (the “ Company ”), hereby
certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged,
,
the registered holder hereof or its permitted assigns (the “
Holder ”), is entitled, subject to the terms set forth
below, to purchase from the Company, at the Exercise Price (as
defined below) then in effect, upon surrender of this Warrant to
Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the
“ Warrant ”), at any time or times on or after
the Issuance Date, but not after 11:59 p.m., New York time, on
the Expiration Date (as defined below),
( )
fully paid nonassessable shares of Common Stock (as defined below)
(the “ Warrant Shares ”). Except as
otherwise defined herein, capitalized terms in this Warrant shall
have the meanings set forth in Section 15. This Warrant
is the Warrant to purchase Common Stock issued pursuant to
(i) that certain Warrant Exercise Agreement (the “
Agreement ”), dated as of the Issuance Date, by and
between the Company and the Holder, and (ii) the
Company’s Registration Statement on Form S-3 (File
number 333-156459) (the “ Registration Statement
”).
1.
EXERCISE OF
WARRANT.
(a)
Mechanics of
Exercise . Subject to the terms
and conditions hereof, this Warrant may be exercised by the Holder
on any Business Day on or after the Issuance Date and on or before
the Expiration Date, in whole or in part, by (i) delivery of a
written notice, in the form attached hereto as
Exhibit A (the “ Exercise Notice ”), of the
Holder’s election to exercise this Warrant and
(ii) (A) payment to the Company of an amount equal to the
applicable Exercise Price multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (the
“ Aggregate Exercise
Price ”) in cash or by wire
transfer of immediately available funds or (B) provided the
conditions for cashless exercise set forth in
Section 1(d) are satisfied, by notifying the Company that
this Warrant is being exercised pursuant to a Cashless Exercise (as
defined in Section 1(d)). The Holder shall not be
required to deliver the original Warrant in order to effect an
exercise hereunder, but shall deliver the original Warrant within
five Business Days thereafter. Execution and delivery of the
Exercise Notice with respect to less than all of the Warrant Shares
shall have the same effect as cancellation of the original Warrant
and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. On or before the first
(1 st ) Business Day following the
date on which the Company has received each of the Exercise Notice
and the Aggregate Exercise Price (or notice of a Cashless Exercise)
(the “ Exercise
Delivery Documents ”), the Company shall
transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the
Company’s transfer agent (the “ Transfer Agent ”). On or before
the third (3 rd ) Business Day following the
date on which the Company has received all of the Exercise Delivery
Documents (the “ Share
Delivery Date ”), the Company shall
(X) provided that the Transfer Agent is participating in The
Depository Trust Company (“ DTC ”) Fast Automated
Securities Transfer Program, upon the request of the Holder, credit
such aggregate number of Warrant Shares to which the Holder is
entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit
Withdrawal Agent Commission system, or (Y) if the Transfer
Agent is not
participating in
the DTC Fast Automated Securities Transfer Program, issue and
dispatch by overnight courier to the address as specified in the
Exercise Notice, a certificate, registered in the Company’s
share register in the name of the Holder or its designee, for the
number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise. Upon delivery of the Exercise
Delivery Documents, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective
of the date such Warrant Shares are credited to the Holder’s
DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be. If this Warrant is
submitted in connection with any exercise pursuant to this
Section 1(a) and the number of Warrant Shares represented
by this Warrant submitted for exercise is greater than the number
of Warrant Shares being acquired upon an exercise, then the Company
shall as soon as practicable and in no event later than three
Business Days after any exercise and at its own expense, issue a
new Warrant (in accordance with Section 7(d)) representing the
right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the
number of Warrant Shares with respect to which this Warrant is
exercised. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but rather the number of
shares of Common Stock to be issued shall be rounded down to the
nearest whole number; provided, however, that if any fractional
share of Common Stock would otherwise be deliverable upon such
exercise, the Company, in lieu of delivering such fractional share,
shall pay to the Holder an amount in cash equal to the Market Price
of such fractional share of Common Stock on the date of exercise.
The Company shall pay any and all documentary stamp taxes
attributable to the initial issuance of Warrant Shares issuable
upon the exercise of this Warrant. The Holder shall be responsible
for any income taxes due under federal, state or other law, if any
such tax is due.
(b)
Exercise
Price . For purposes of this
Warrant, “ Exercise
Price ” means $1.42, subject
to adjustment as provided herein.
(c)
Company’s Failure to
Timely Deliver Securities . If the Company shall
fail for any reason or for no reason to issue to the Holder within
three (3) Business Days of receipt of the Exercise Delivery
Documents in compliance with the terms of this Section 1, a
certificate for the number of shares of Common Stock to which the
Holder is entitled and register such shares of Common Stock on the
Company’s share register or to credit the Holder’s
balance account with DTC for such number of shares of Common Stock
to which the Holder is entitled upon the Holder’s exercise of
this Warrant, and if on or after such Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of
shares of Common Stock issuable upon such exercise that the Holder
anticipated receiving from the Company (a “Buy-In” ), then the Company shall,
within three (3) Business Days after the Holder’s
request and in the Holder’s discretion, either (i) pay
cash to the Holder in an amount equal to the Holder’s total
purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased (the “Buy-In Price” ), at which point the
Company’s obligation to deliver such certificate (and to
issue such Warrant Shares) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or
certificates representing such Warrant Shares and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common
Stock, times (B) the Closing Bid Price on the date of
exercise.
(d)
Cashless
Exercise . Notwithstanding anything
contained herein to the contrary, if a registration statement
covering the Warrant Shares that are the subject of the Exercise
Notice, or an exemption from registration , is not available for the
resale of such Warrant Shares (the “ Unavailable Warrant Shares ”), the Holder may, in
its sole discretion, exercise this Warrant in whole or in part and,
in lieu of making the cash payment otherwise contemplated to be
made to
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the Company upon
such exercise in payment of the Aggregate Exercise Price, elect
instead to receive upon such exercise the “Net Number”
of shares of Common Stock determined according to the following
formula (a “ Cashless
Exercise ”):
Net Number = (A x B) - (A x
C)
B
For purposes of the foregoing
formula:
A= the total number of shares with
respect to which this Warrant is then being exercised.
B= the arithmetic average of the
Closing Sale Prices of the shares of Common Stock for the five
(5) consecutive Trading Days ending on the date immediately
preceding the date of the Exercise Notice.
C= the Exercise Price then in effect
for the applicable Warrant Shares at the time of such
exercise.
(e)
Rule 144
. For
purposes of Rule 144(d) promulgated under the Securities
Act, as in effect on the date hereof, assuming the Holder is not an
affiliate of the Company, it is intended that the Warrant Shares
issued in a Cashless Exercise shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall
be deemed to have commenced, on the date this Warrant was
originally issued pursuant to the Agreement.
(f)
Disputes
. In the
case of a dispute as to the determination of the Exercise Price or
the arithmetic calculation of the Warrant Shares, the Company shall
promptly issue to the Holder the number of Warrant Shares that are
not disputed.
(g)
Beneficial
Ownership . The Holder shall not
have the right to exercise this Warrant, to the extent that after
giving effect to such exercise, the Holder (together with the
Holder’s affiliates) would beneficially own in excess of
4.99% (the “ Maximum
Percentage ”) of the shares of
Common Stock outstanding immediately after giving effect to such
exercise. The Company shall be entitled to rely on receipt of an
Exercise Notice as an indication that Holder will not, pursuant to
such exercise, exceed the Maximum Percentage. For purposes of the
foregoing sentence, the aggregate number of shares of Common Stock
beneficially owned by such Holder and its affiliates shall include
the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which the determination of such sentence is
being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by such Holder and its
affiliates and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of the Company
beneficially owned by such Holder and its affiliates (including,
without limitation, any convertible notes or convertible preferred
stock or warrants) subject to a limitation on conversion or
exercise analogous to the limitation contained herein. Except
as set forth in the preceding sentence, for purposes of this
paragraph, beneficial ownership shall be calculated in accordance
with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and the Holder is
solely responsible for any schedules required to be filed in
accordance therewith. For purposes of this Warrant, in
determining the number of outstanding shares of Common Stock, the
Holder may rely on the number of outstanding shares of Common Stock
as reflected in the most recent of (1) the Company’s
most recent Form 10-K, Form 10-Q, Current Report on
Form 8-K or other public filing with the Securities and
Exchange Commission, as the case may be, (2) a
public
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announcement by
the Company or (3) any other notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or
oral request of the Holder, the Company shall within two
(2) Business Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder
and its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. By written
notice to the Company, the Holder may from time to time increase or
decrease the Maximum Percentage to any other percentage not in
excess of 9.99% specified in such notice; provided that
(i) any such increase will not be effective until the
sixty-first (61 st ) day after such notice is
delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this
Section 1(h) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended
beneficial ownership limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to
such limitation.
2.
ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF WARRANT SHARES . The Exercise Price
and the number of Warrant Shares shall be adjusted from time to
time as follows:
(a)
Adjustment
upon Issuance of Shares of Common Stock . If and whenever on
or after the Issuance Date, the Company issues or sells, or in
accordance with this Section 2 is deemed to have issued or
sold, any shares of Common Stock (including the issuance or sale of
shares of Common Stock owned or held by or for the account of the
Company, but excluding shares of Common Stock deemed to have been
issued by the Company in connection with any Excluded Issuance) for
a consideration per share (the “ New Issuance Price ”) less than a price
(the “ Applicable
Price ”) equal to the
Exercise Price in effect immediately prior to such issue or sale or
deemed issuance or sale (the foregoing a “
Dilutive Issuance
”), then
immediately after such Dilutive Issuance, the Exercise Price then
in effect shall be reduced to the product of (A) the Exercise
Price in effect immediately prior to such Dilutive Issuance and
(B) the quotient determined by dividing (1) the sum of
(I) the product derived by multiplying the Exercise Price in
effect immediately prior to such Dilutive Issuance and the number
of shares of Common Stock Deemed Outstanding immediately prior to
such Dilutive Issuance plus (II) the consideration, if any,
received by the Company upon such Dilutive Issuance, by
(2) the product derived by multiplying (I) the Exercise
Price in effect immediately prior to such Dilutive Issuance by
(II) the number of shares of Common Stock Deemed Outstanding
immediately after such Dilutive Issuance. For purposes of
determining the adjusted Exercise Price under this
Section 2(a), the following shall be applicable:
(i)
Issuance of
Options . If the Company in any
manner grants any Options and the lowest price per share for which
one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such
price per share. For purposes of this Section 2(a)(i),
the “lowest price per share for which one share of Common
Stock is issuable upon exercise of such Options or upon conversion,
exercise or exchange of such Convertible Securities issuable upon
exercise of any such Option” shall be equal to the sum of the
lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the
granting or sale of the Option, upon exercise of the Option and
upon
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conversion,
exercise or exchange of any Convertible Security issuable upon
exercise of such Option. No further adjustment of the
Exercise Price or number of Warrant Shares shall be made upon the
actual issuance of such shares of Common Stock or of such
Convertible Securities upon the exercise of such Options or upon
the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities.
(ii)
Issuance of
Convertible Securities . If the Company in
any manner issues or sells any Convertible Securities and the
lowest price per share for which one share of Common Stock is
issuable upon the conversion, exercise or exchange thereof is less
than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this
Section 2(a)(ii), the “lowest price per share for which
one share of Common Stock is issuable upon the conversion, exercise
or exchange thereof” shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the
Company with respect to one share of Common Stock upon the issuance
or sale of the Convertible Security and upon conversion, exercise
or exchange of such Convertible Security. No further
adjustment of the Exercise Price or number of Warrant Shares shall
be made upon the actual issuance of such shares of Common Stock
upon conversion, exercise or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which
adjustment of this Warrant has been or is to be made pursuant to
other provisions of this Section 2(a), no further adjustment
of the Exercise Price or number of Warrant Shares shall be made by
reason of such issue or sale.
(iii)
Change in
Option Price or Rate of Conversion. If the purchase price
provided for in any Options, the additional consideration, if any,
payable upon the issue, conversion, exercise or exchange of any
Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for
shares of Common Stock increases or decreases at any time, then the
Exercise Price and the number of Warrant Shares in effect at the
time of such increase or decrease shall be adjusted to the Exercise
Price and the number of Warrant Shares which would have been in
effect at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the
case may be, at the time initially granted, issued or sold.
For purposes of this Section 2(a)(iii), if the terms of
any Option or Convertible Security that was outstanding as of the
date of issuance of this Warrant are increased or decreased in the
manner described in the immediately preceding sentence, then such
Option or Convertible Security and the shares of Common Stock
deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such increase or
decrease. No adjustment pursuant to this
Section 2(a) shall be made if such adjustment would
result in an increase of the Exercise Price then in effect or a
decrease in the number of Warrant Shares.
(iv)
Calculation of
Consideration Received . In case any Option
is issued in connection with the issue or sale of other securities
of the Company, together comprising one integrated transaction,
(x) the Options will be deemed to have been issued for a value
determined by use of the Black Scholes Option Pricing Model (the
“ Option Value
”) and
(y) the other securities issued or sold in such integrated
transaction shall be deemed to have been issued for the difference
of (I) the aggregate consideration received by the
5
Company, less
(II) the Option Value. If any shares of Common Stock,
Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received
therefor will be deemed to be the net amount received by the
Company therefor. If any shares of Common Stock, Options or
Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company
will be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of
consideration received by the Company will be the Weighted Average
Price of such security on the date of receipt. If any shares
of Common Stock, Options or Convertible Securities are issued to
the owners of the non-surviving entity in connection with any
merger in which the Compan
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