This Warrant Agreement involves
Title: WARRANT to Series B Preferred Stock,
par value $0.001, of
RUBICON TECHNOLOGY, INC.
Governing Law: Illinois Date: 9/5/2007
THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY WAS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE OR OTHER SECURITIES LAWS. NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT (I) PURSUANT TO EFFECTIVE REGISTRATIONS UNDER APPLICABLE SECURITIES LAWS OR (II) UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL (OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY) ACCEPTABLE TO THE COMPANY, THAT THE PROPOSED DISPOSITION MAY BE EFFECTED IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS WITHOUT REGISTRATION. ADDITIONAL RESTRICTIONS ON TRANSFER ARE SET FORTH HEREIN.
|SHARES||$ PER SHARE|
(the “ Warrant ”)
to Series B Preferred Stock,
par value $0.001, of
RUBICON TECHNOLOGY, INC.
Expiring no later than April , 2008 (the “ Expiration Date ”)
THIS IS TO CERTIFY THAT, for value received, , or its registered assigns (the “ Holder ”), is (subject to the restrictions provided herein) entitled to purchase from Rubicon Technology, Inc., a Delaware corporation (the “ Company ”), at any time or from time to time after the date hereof and prior to 5:00 p.m. local time at the location of the Warrant Office (as defined in Section 2.1) on the Expiration Date, at a purchase price of $ per share (the “ Warrant Price ”), up to duly authorized, fully paid, validly issued and nonassessable shares of the Company’s Series B Preferred Stock, par value $0.001 (the “ Preferred Stock ”) or other securities or property for which this Warrant becomes exercisable as provided herein (collectively, the Preferred Stock and any other such securities and property being the “ Warrant Shares ”), subject to adjustment as provided herein, and is also entitled to exercise the other rights, powers and privileges hereinafter set forth. Capitalized terms used in this Warrant but not defined in the context thereof shall have the meanings specified in Article V.
EXERCISE OF WARRANT
1.1 Method of Exercise . To exercise this Warrant in whole or in part, the Holder shall deliver to the Company at the Warrant Office (i) this Warrant together with the subscription notice attached hereto as Exhibit A (the “ Subscription Notice ”) filled out and duly executed by the Holder indicating the Holder’s election to exercise this Warrant and specifying the number of Warrant Shares to be purchased; and (ii) a certified or bank cashier’s check payable to the order of the Company in an amount equal to the aggregate Warrant Price for the number of Warrant Shares being purchased. Subject to the restrictions provided herein, the Company shall as promptly as practicable, and in any event within 14 days thereafter, execute and deliver or cause to be executed and delivered, in accordance with the Subscription Notice, a single certificate in the name of the Holder representing the aggregate number of Warrant Shares specified in the Subscription Notice. Such certificate shall be deemed to have been issued, and the Holder shall be deemed for all purposes to have become a holder of record of such shares, as of the date the Subscription Notice is actually received by the Company with payment as provided above. If this Warrant
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shall have been exercised only in part, the Company shall, at the time of delivery of such certificate or certificates, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the remaining Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant, or at the request of the Holder, appropriate notation may be made on this Warrant and the same returned to the Holder. The Company shall pay all expenses, taxes and other charges payable in connection with the preparation, issuance and delivery of such stock certificates and new Warrants.
1.2 Right to Convert Warrant into Stock: Net Issuance .
(a) Right to Convert . In addition to and without limiting the rights of the Holder under the terms of this Warrant, the Holder shall have the right to convert this Warrant or any portion hereof into Warrant Shares as provided in this Section 1.2 at any time that this Warrant is otherwise exercisable during the term of this Warrant (the “ Conversion Right ”). Upon exercise of the Conversion Right, the Company shall deliver to the Holder (without payment by the Holder of the Warrant Price) that number of fully paid and nonassessable Warrant Shares equal to the quotient of (i) the number of Warrant Shares purchasable under this Warrant (or the portion thereof being exercised); multiplied by the difference of (A) the Fair Market Value of one (1) Warrant Share; minus (B) the Warrant Price; divided by (ii) the Fair Market Value of one (1) Warrant Share.
(b) Method of Exercise . The Conversion Right may be exercised by the Holder by the surrender of this Warrant, at the Warrant Office, together with the Subscription Notice specifying that the Holder thereby intends to exercise the Conversion Right and indicating the number of Warrant Shares with respect to which the Holder intends to exercise this Warrant. The Holder shall also deliver therewith additional consideration, if any, such that the aggregate consideration received by the Company in respect of any Warrant Shares is at least equal to the par value of any Warrant Shares having a par value, or the stated capital of any Warrant Shares not having a par value. The conversion shall be effective on the date which is the later of (i) receipt by the Company of the items described above; or (ii) a date specified in the Holder’s notice to the Company.
1.3 No Fractional Shares to be Issued . The Company shall not be required upon any exercise or conversion of this Warrant to issue a certificate representing any fraction of a share, but, in lieu thereof, may pay to the Holder cash in an amount equal to a corresponding fraction (calculated to the nearest 1/100th of a share) of the Fair Market Value of one Warrant Share as of the date of receipt by the Company of notice of exercise of this Warrant.
1.4 Legend on Warrant Shares . Each certificate for Warrant Shares initially issued upon exercise of this Warrant, unless at the time of exercise such Warrant Shares are registered under the Securities Act of 1933, as amended (the “ Act ”) and applicable state securities laws, shall bear a legend in substantially the following form (and any additional legend required by law or by any securities exchange upon which such Warrant Shares may, at the time of such exercise, be listed):
THE ISSUANCE OF THE SHARES EVIDENCED HEREBY WAS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE OR OTHER SECURITIES LAWS. NEITHER THE SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT (I) PURSUANT TO EFFECTIVE REGISTRATIONS UNDER APPLICABLE SECURITIES LAWS OR (II) UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL (OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION) ACCEPTABLE TO THE CORPORATION, THAT THE PROPOSED DISPOSITION MAY BE EFFECTED IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS WITHOUT REGISTRATION.
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS, A FULL SUMMARY OR STATEMENT OF ALL OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH POWERS, PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST SHOULD BE ADDRESSED TO THE SECRETARY OF THE CORPORATION.
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Any certificate issued at any time in exchange or substitution for any certificate bearing such legend (except a new certificate issued upon completion of a public distribution pursuant to a registration statement which has become effective under the Act of the securities represented thereby) shall also bear such legend unless, in the opinion of such counsel as shall be approved by the Company, the securities represented thereby need no longer be subject to the restrictions contained in Article III. The provisions of Article III shall be binding upon all subsequent holders of this Warrant.
1.5 Stockholders’ Agreement . In connection with any exercise of this Warrant, the Company may require that the Holder enter into and become bound by the terms and conditions of any stockholders’ agreement by and among the Company and the stockholders of the Company.
WARRANT OFFICE; TRANSFER
DIVISION OR COMBINATION OF WARRANTS
2.1 Warrant Office . The Company shall maintain an office for certain purposes specified herein (the “ Warrant Office ”), which office shall initially be the Company’s office at 9931 Franklin Avenue, Franklin Park, Illinois 60131 and may subsequently be such other office of the Company or of any transfer agent in the continental United States as to which written notice has been given to the Holder.
2.2 Warrant Non-Transferable; Ownership of Warrant . This Warrant and all rights hereunder may not be transferred, sold, hypothecated or assigned, without the prior written consent of the Company which shall be promptly provided on the condition that Holder has complied with the provisions of Article III hereof. The Company may deem and treat the Person in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary, until presentation of this Warrant for registration of transfer as provided in this Article II.
2.3 Warrant Register . Subject to Section 2.2 and Article III hereof, the Company shall maintain at the Warrant Office books for the registration of warrants and the registration of transfers of warrants. To effect a transfer of this Warrant upon satisfaction of the provisions of Section 2.2 and Article III the Holder shall surrender this Warrant at the Warrant Office, together with a written assignment of this Warrant duly executed by the Holder or the Holder’s duly authorized agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and payment the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and this Warrant shall be canceled.
2.4 Division or Combination of Warrants . This Warrant may be divided or combined with other warrants exercisable at the same Warrant Price upon presentation hereof and of any warrant or warrants with which this warrant is to be combined at the Warrant Office, together with a written notice specifying the names and denominations in which new warrants are to be issued, signed by the Holder and the holders thereof or their respective duly authorized agents or attorneys. Subject to compliance with Sections 2.2 and 2.3 and Article III as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new warrant or warrants in exchange for the warrant or warrants to be divided or combined in accordance with such notice.
2.5 Expenses of Delivery of Warrants . The Company shall pay all expenses, taxes (other than transfer taxes) and other charges payable in connection with the preparation, issuance and delivery of warrants hereunder.
RESTRICTIONS ON EXERCISE AND TRANSFER
3.1 Restrictions on Exercise and Transfer . Notwithstanding any provisions contained in this Warrant to the contrary, this Warrant shall not be exercisable or transferable and the related Warrant Shares shall not be transferable except upon the conditions specified in this Article III, which conditions are intended, among other things, to enable compliance with the provisions of the Act and applicable state securities laws in respect of the exercise or transfer of such Warrant or transfer of such Warrant Shares. The Holder of this Warrant, by acceptance
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hereof, agrees not to: (i) transfer this Warrant prior to delivery to the Company of an opinion of counsel or other evidence (as such opinion and such counsel or other evidence are described in Section 3.2); (ii) exercise this Warrant prior to delivery to the Company of an opinion of counsel or other evidence (as such opinion and such counsel or other evidence are described in Section 3.2) or until registration of the related Warrant Shares under the Act has become effective and compliance with applicable state securities laws have been obtained; or (iii) transfer such Warrant Shares prior to delivery to the Company of the opinion of counsel or other evidence (as such opinion and such counsel or other evidence are described in Section 3.2) or until registration of such Warrant Shares under the Act has become effective and compliance with applicable state securities laws has been obtained.
3.2 Opinion of Counsel . In connection with any exercise or transfer of this Warrant or any transfer of the related Warrant Shares, the following provisions shall apply:
(a) If in the written opinion of counsel approved by the Company, the proposed exercise or transfer of this Warrant and/or the proposed transfer of such Warrant Shares may be effected without registration of this Warrant and/or such Warrant Shares under the Act and applicable state securities laws, the Holder of this Warrant shall be entitled to exercise or transfer this Warrant and/or transfer such Warrant Shares in accordance with the proposed method of disposition. In lieu of such opinion of counsel the Company may, in its discretion, accept such other evidence of compliance with or exemption from the Act and applicable state securities laws as it deems satisfactory.
(b) If the Company does not obtain the opinion or other evidence referred to in Section 3.2(a), the Holder of this Wa