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EXHIBIT 4.03
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.
CUPERTINO ELECTRIC, INC.
WARRANT
June 21, 2000 Certificate Number W-1
THIS IS TO CERTIFY that BANCAMERICA CAPITAL INVESTORS SBIC I, L.P., a
Delaware limited partnership, and its transferees, successors and assigns
("Holder") is entitled to purchase from CUPERTINO ELECTRIC, INC., a Delaware
corporation formerly known as Delaware Synergism, Inc. (the "Company"), at an
initial Exercise Price (as defined below) of $0.01 per share, Thirty-Five
Thousand One Hundred Forty-Nine (35,149) shares (the "Aggregate Number") of
Class A Common Stock (as defined below) or Class B Common Stock (as defined
below). The Exercise Price and Aggregate Number are subject to adjustment as set
forth in Section 3 of this Warrant (this "Warrant").
SECTION 1. Definitions. As used herein, in addition to the terms defined
elsewhere herein, the following terms shall have the following meanings.
Capitalized terms not appearing below and not otherwise defined herein shall
have the meaning ascribed to them in the Purchase Agreement.
"Additional Shares of Common Stock" means all shares of Common Stock
issued after the date hereof other than: (a) shares issued in connection with a
Stock Dividend or Stock Subdivision, (b) Warrant Shares, (c) shares issued upon
the exercise or conversion of Options or Convertible Securities outstanding on
the date hereof, other than Incentive Stock Plan Pool Shares, and (d) Incentive
Stock Plan Pool Shares.
"Aggregate Exercise Price" is defined in Section 2(a).
"Aggregate Number" is defined in the first paragraph hereof.
"Board" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina are authorized or
required by law or executive order to close.
"Cashless Exercise" is defined in Section 2(d).
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"Charter" means the Articles of Incorporation of the Company, as amended
or supplemented.
"Class A Common Stock" means the Class A Common Stock of the Company, as
described in the Charter.
"Class B Common Stock" means the Class B Common Stock of the Company, as
described in the Charter.
"Common Stock" means collectively (a) the Common Stock of the Company,
as described in the Charter or (b) any other capital stock into which the
foregoing is reclassified or reconstituted.
"Company" is defined in the first paragraph hereof.
"Convertible Securities" means evidences of indebtedness, shares of
stock or other securities that, directly or indirectly, are exchangeable for or
exercisable or convertible into Common Stock.
"Distribution" is defined in Section 3(a)(ii).
"Dividend Securities" is defined in Section 3(a)(ii).
"Election to Purchase" is defined in Section 2(a).
"Exercise Amount" is defined in Section 2(a).
"Exercise Price" means the price per share of Common Stock (or price per
share of Other Securities) at which shares of Common Stock (or Other Securities)
are purchasable pursuant to this Warrant. The initial Exercise Price shall be
$.01 per share and shall be subject to adjustment as provided herein.
"Expiration Date" means the tenth (10th) anniversary of the date hereof.
"Fair Market Value" shall mean, with respect to the value of a share of
Common Stock on any Business Day, (a) if the Common Stock is Publicly Traded at
the time of determination, the average of the closing prices on such day of the
Common Stock on all domestic securities exchanges on which the Common Stock is
then listed, or, if there have been no sales on any such exchange on such day,
the average of the highest bid and lowest asked prices on all such exchanges at
the end of such day or, if on any such day the Common Stock is not so listed,
the closing price quoted on the Nasdaq Stock Market or if there have been no
sales on the Nasdaq Stock Market on such day the average of the highest bid and
lowest asked prices quoted on the Nasdaq Stock Market on such day, or if on any
day such security is not quoted on the Nasdaq Stock Market, the average of the
highest bid and lowest asked prices on such day in the domestic over-the-counter
market as reported by the OTC Bulletin Board, the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case averaged
over a period of
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twenty (20) days consisting of the day as of which "Fair Market Value" is being
determined and the nineteen (19) consecutive Business Days prior to such day; or
(b) if the Common Stock is not Publicly Traded at the time of determination, the
value of a share of Common Stock based on the per share price for which all the
outstanding shares of Common Stock (on a Fully Diluted basis, assuming receipt
of applicable consideration for any conversion, exchange or exercise of any
Convertible Securities or Options) could be sold in an arm's-length transaction
to a third party, treating the Company and its subsidiaries as a going concern
and assuming such sale was between a willing buyer and a willing seller and
without regard to any discount for minority interest, restrictions on transfer
or lack of marketability.
"Fully Diluted" means, with respect to the Common Stock, as of a
particular time the total outstanding shares of Common Stock as of such time,
determined by treating all outstanding Options then vested and exercisable as
having been exercised and by treating all outstanding Convertible Securities
then convertible or exchangeable as having been so converted or exchanged;
provided, that if at any time of determination, the event giving rise to any
adjustment hereunder would trigger any anti-dilution rights of such Options or
Convertible Securities or otherwise increase the number of shares of Common
Stock subject to such Options or into which such Convertible Securities are
convertible or exchangeable, the number of shares of Common Stock deemed to be
outstanding immediately after such issuance shall include also such increase in
the number of shares of Common Stock subject to such Options or into which such
Convertible Securities are convertible or exchangeable.
"Holder" is defined in the first paragraph hereof.
"HSR Act" is defined in Section 6(c).
"Incentive Stock Plan" means the incentive stock plan or plans which the
Company may establish on or after the date hereof, and pursuant to which the
Company may issue Options to purchase shares of Common Stock to officers,
employees, directors, independent contractors, and third party consultants and
vendors providing services to the Company.
"Incentive Stock Plan Pool Shares" means (a) up to 89,268 shares of
Common Stock (subject to appropriate adjustment for Stock Dividends, Stock
Subdivisions and Stock Combinations) issued or issuable pursuant to Options
granted under the Incentive Stock Plan during the Incentive Stock Restricted
Period and (b) any shares of Common Stock issued or issuable pursuant to Options
granted under the Incentive Stock Plan thereafter; provided, that in no event
shall the exercise price per share of Common Stock obtainable upon exercise of
any such Options be less than the fair market value thereof on the date of grant
as determined in good faith by the Board; and provided, further, that in no
event shall the number of shares of Common Stock issuable to members of the
Ravizza Family and the Ryley Family pursuant to Options granted under the
Incentive Stock Plan during the Incentive Stock Restricted Period exceed 16,738
shares (subject to appropriate adjustment for Stock Dividends, Stock
Subdivisions and Stock Combinations).
"Incentive Stock Restricted Period" means the twenty-four month period
commencing the date hereof.
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"Investor Rights Agreement" means the Investor Rights Agreement, dated
the date hereof, among the Company, TA and Holder, as amended or supplemented.
"Note" means any Senior Subordinated Note issued pursuant to the
Purchase Agreement, as amended or supplemented.
"Option" shall mean any option, warrant or other right to subscribe for
or purchase shares of Common Stock.
"Other Securities" shall mean any stock and other securities of the
Company or any other Person which Holder at any time shall be entitled to
receive, upon the exercise of this Warrant or pursuant to Section 3 hereof, in
lieu of or in addition to Common Stock.
"Person" means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or other entity of any kind and includes any successor (by merger or
otherwise) of such entity.
"Principal Office" means the Company's principal office as set forth in
Section 10(d) hereof or such other principal office of the Company in the United
States the address of which first shall have been set forth in a notice to
Holder.
"Publicly Traded" means, with respect to any security, that such
security is (a) listed on a domestic securities exchange, (b) quoted on the
Nasdaq Stock Market or (c) traded in the domestic over-the-counter market, which
trades are reported by the OTC Bulletin Board, the National Quotation Bureau,
Incorporated, or any similar successor organization.
"Purchase Agreement" means the Senior Subordinated Note, Warrant and
Common Stock Purchase Agreement dated as of the date hereof, by and among
Holder, TA, the Company, James S. Ryley, Walter E. Ryley, Eugene A. Ravizza,
Claranne R. Long, the Claranne Ravizza Long Trust, the Ravizza Children's Trust
II and the Ravizza Children's Trust III
"Regulatory Requirement" is defined in Section 5(g).
"Stock Combination" is defined in Section 3(a)(i).
"Stock Dividend" is defined in Section 3(a)(i).
"Stock Subdivision" is defined in Section 3(a)(i).
"Successor" is defined in Section 3(a)(iii).
"TA" means collectively, TA/Advent III L.P., a Delaware limited
partnership, TA/Advent Atlantic and Pacific IV L.P., a Delaware limited
partnership, TA Executives Fund
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LLC, a Delaware limited liability company, TA Investors LLC, a Delaware limited
liability company and TA Subordinated Debt Fund, L.P., a Delaware limited
partnership.
"Transaction" is defined in Section 3(a)(iii).
"Trigger Price" is defined in Section 3(a)(iv).
"Warrant" is defined in the first paragraph hereof.
"Warrant Shares" means (a) the shares of Common Stock or Other
Securities issued or issuable hereunder and, (b) all other shares of the
Company's capital stock issued with respect to such shares by way of stock
dividend, stock split or other reclassification or in connection with any
merger, consolidation, recapitalization or other reorganization affecting the
Company's capital stock, or acquired by way of any rights offering or similar
offering made in respect of the capital stock referred to in this clause (b) or
the foregoing clause (a).
SECTION 2. Exercise.
(a) Right to Exercise; Exercise Amount. On or before the Expiration
Date, Holder, in accordance with the terms hereof, may exercise this Warrant in
whole or in part at any time by delivering this Warrant to the Company during
normal business hours on any Business Day at the Principal Office, together with
an Election to Purchase, in the form attached hereto as Exhibit A (the "Election
to Purchase"), duly executed, and payment of the Exercise Price for each share
of Common Stock (which at the option of each Equity Holder may be shares of
either Class A Common Stock or Class B Common Stock) to be purchased (with the
total number of shares to be purchased being referred to as the "Exercise
Amount") as specified in the Election to Purchase. If the Expiration Date is not
a Business Day, then this Warrant may be exercised on the next succeeding
Business Day. The aggregate Exercise Price (the "Aggregate Exercise Price") to
be paid for the Exercise Amount shall equal the product of (i) the Exercise
Amount multiplied by (ii) the Exercise Price.
(b) Payment of Aggregate Exercise Price. Payment of the Aggregate
Exercise Price shall be made to the Company in cash or other immediately
available funds or as provided in Section 2(c) or (d) or a combination thereof.
In the case of payment of all or a portion of the Aggregate Exercise Price
pursuant to Section 2(c) or (d) below, the direction by Holder to apply a
portion of the Note held by Holder and/or to make a "Cashless Exercise" shall
serve as accompanying payment for that portion of the Aggregate Exercise Price.
(c) Cancellation of Note to Pay Aggregate Exercise Price. At any time
when Holder holds a Note, Holder shall have the right to pay all or a portion of
the Aggregate Exercise Price by applying all or any part of such Note,
regardless of whether such amount is then due or whether the Note is then
redeemable, to the payment of the Aggregate Exercise Price. The amount of the
Note so applied shall be treated as a payment of accrued and unpaid interest
under the Note until such accrued and unpaid interest is paid in full, and then
shall be treated as the prepayment of principal. Any part of the Note not so
applied to payment of the Aggregate Exercise Price shall continue to be due in
accordance with the terms thereof.
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(d) Cashless Exercise. Holder shall have the right to pay all or a
portion of the Aggregate Exercise Price by making a "Cashless Exercise" pursuant
to this Section 2(d), in which case the portion of the Aggregate Exercise Price
to be so paid shall be paid by reducing the number of shares of Common Stock
otherwise issuable pursuant to the Election to Purchase by an amount of Common
Stock with an aggregate Fair Market Value as determined in good faith by the
Board equal to the Aggregate Exercise Price to be so paid.
(e) Issuance of Shares of Common Stock. Upon receipt by the Company of
this Warrant at the Principal Office in proper form for exercise, and
accompanied by payment of the Aggregate Exercise Price, Holder shall be deemed
to be the holder of record of the shares of Common Stock issuable upon such
exercise, notwithstanding that certificates representing such shares of Common
Stock may not then be actually delivered. Upon such surrender of this Warrant
and payment of the Aggregate Exercise Price, the Company shall issue and cause
to be delivered as soon as practicable to, or upon the written order of, Holder
(and in such name or names as Holder may designate) a certificate or
certificates for the Exercise Amount, subject to any reduction as provided in
Section 2(d) for a Cashless Exercise.
(f) Fractional Shares. The Company shall not be required to deliver
fractions of shares of Common Stock upon exercise of this Warrant. If any
fraction of a share of Common Stock would be deliverable upon exercise of this
Warrant, the Company may, in lieu of delivering such fraction of a share of
Common Stock, make a cash payment to Holder in an amount equal to the same
fraction of the Fair Market Value as determined in good faith by the Board.
(g) Partial Exercise. In the event of a partial exercise of this
Warrant, the Company shall issue to Holder a Warrant in like form for the
unexercised portion thereof.
SECTION 3. Adjustments to Exercise Price and Aggregate Number.
(a) Adjustments. The Aggregate Number and the Exercise Price shall be
subject to adjustment as set forth in this Section 3. Upon each adjustment of
the Aggregate Number, the Exercise Price shall be adjusted by multiplying the
Exercise Price then in effect by a fraction, the numerator of which shall be the
Aggregate Number immediately prior to such adjustment, and the denominator of
which shall be the Aggregate Number immediately following such adjustment.
(i) Stock Dividends, Subdivisions and Combinations. If at any
time the Company shall:
(A) take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend payable in,
or other distribution of, Common Stock (a "Stock Dividend"),
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(B) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, including
without limitation by means of a stock split (a "Stock
Subdivision"), or
(C) combine its outstanding shares of Common Stock into
a smaller number of shares of Common Stock (a "Stock
Combination"),
then the Aggregate Number in effect immediately prior thereto shall,
concurrently with the effectiveness of such event, be (1)
proportionately increased in the case of a Stock Dividend or a Stock
Subdivision and (2) proportionately decreased in the case of a Stock
Combination.
(ii) Adjustments for Other Distributions. If at any time the
Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive any dividend or other distribution
(collectively, a "Distribution") of:
(A) cash,
(B) any evidences of its indebtedness, any shares of its
capital stock (other than shares of Common Stock) or any other
securities or property of any nature whatsoever (other than
cash), or
(C) any Options, Convertible Securities or options or
warrants or other rights to subscribe for or purchase any of the
items listed in clause (B) above,
then Holder shall be entitled to elect by written notice to the Company
to receive (1) immediately and without further payment the cash,
evidences of indebtedness, stock, securities, other property, Options,
Convertible Securities, options, warrants and/or other rights to which
such Holder would have been entitled by way of such Distribution
assuming full exercise of this Warrant immediately prior to such
Distribution or (2) upon the exercise of this Warrant at any time on or
after the taking of such record, the number of Warrant Shares to be
received upon exercise of this Warrant determined as stated herein and,
in addition and without further payment, the cash, evidences of
indebtedness, stock, securities, other property, Options, Convertible
Securities, options, warrants and/or other rights to which Holder would
have been entitled by way of such Distribution and subsequent dividends
and Distributions on any shares or other securities received in
connection with such Distributions ("Dividend Securities") through the
date of exercise assuming full exercise of this Warrant immediately
prior to such Distribution and the retention by Holder of all Dividend
Securities through the date of exercise.
(iii) Adjustments for Reclassification, Exchange and
Substitution. In case any transaction shall be effected in connection
with which the holders of Common Stock shall be entitled to receive
shares of any class or classes of capital stock of the Company (other
than Common Stock) or any other Person, whether by capital
reorganization, reclassification, merger, share exchange or otherwise (a
"Transaction"), the Aggregate Number then in effect, the Exercise Price
then in effect and the type of security
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purchasable under this Warrant shall, concurrently with the
effectiveness of such Transaction, be appropriately and equitably
adjusted such that this Warrant shall be exercisable for, in lieu of the
Warrant Shares which Holder would otherwise have been entitled to
receive, that number of shares of Common Stock (or Other Securities)
that Holder would have been entitled to receive in connection with such
Transaction assuming full exercise of this Warrant immediately prior
thereto, at an Exercise Price economically equivalent to the Exercise
Price in effect immediately prior thereto. In any such case, appropriate
and equitable provision also shall be made with respect to the rights
and interests of Holder to the end that the provisions hereof shall
thereafter be applicable, as nearly as may be, in relation to any shares
of stock, securities, cash or other property thereafter deliverable upon
the exercise of this Warrant. The Company shall not effect any such
Transaction unless prior to or simultaneously with the consummation
thereof the surviving Person (if other than the Company) (the
"Successor") resulting from such Transaction shall assume, by written
instrument delivered to Holder, the obligation to deliver to Holder such
shares of stock, securities, cash or other property as, in accordance
with the foregoing provisions, Holder may be entitled to purchase. The
above provisions of this Section 3(a)(iii) shall similarly apply to
successive Transactions.
(iv) Issuance of Common Stock. If at any time the Company shall
issue or sell any Additional Shares of Common Stock (whether directly or
in connection with a merger, share exchange or otherwise) for a
consideration per share less than the greater of $134.43, as adjusted on
the same basis as any adjustments required to be made to the Exercise
Price pursuant to Section 3(a) hereunder (including without limitation
as the result of any adjustment to the Aggregate Number pursuant to this
Section 3(a)(iv)) (the "Trigger Price"), and Fair Market Value (in each
case, determined as of the date of issuance of such Additional Shares of
Common Stock), the Aggregate Number shall be adjusted by multiplying the
Aggregate Number in effect immediately prior thereto by a fraction, (A)
the numerator of which shall be the number of shares of Common Stock
outstanding on a Fully Diluted basis immediately following such issuance
(including the number of such Additional Shares of Common Stock so
issued) and (B) the denominator of which shall be the number of shares
of Common Stock outstanding on a Fully Diluted basis immediately prior
to the issuance of such Additional Shares of Common Stock plus the
number of shares of Common Stock which the aggregate consideration for
the total number of such Additional Shares of Common Stock so issued
would purchase at the greater of the Trigger Price and Fair Market
Value; provided, however, the provisions of this Section 3(a)(iv) shall
not apply to any issuance of shares of Common Stock upon the exercise or
conversion of any Options or Convertible Securities, provided that any
adjustment required to have been made upon the issuance of such Options
or Convertible Securities pursuant to Section 3(a)(v) shall have been
made.
(v) Options and Convertible Securities. If at any time the
Company shall in any manner (whether directly, or by assumption in a
merger in which the Company is the surviving corporation or otherwise)
issue or sell any Options or Convertible Securities (other than
Incentive Stock Plan Pool Shares), whether or not the rights to
subscribe, purchase, exchange or convert thereunder are immediately
exercisable, and the consideration per share for which shares of Common
Stock may at any time thereafter be
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issuable pursuant to such Options or Convertible Securities shall be
less than the greater of the Trigger Price and Fair Market Value (in
each case determined as of the date of issuance of such Options or
Convertible Securities) then the Aggregate Number shall be adjusted as
provided in Section 3(a)(iv) on the basis that (1) the maximum number of
Additional Shares of Common Stock issuable pursuant to all such Options
or Convertible Securities shall be deemed to have been issued as of the
date of issuance of such Options or Convertible Securities and (2) the
aggregate consideration for such maximum number of Additional Shares of
Common Stock shall be deemed to be the minimum consideration received
and receivable by the Company for the issuance of such Additional Shares
of Common Stock pursuant to the terms of such Options or Convertible
Securities.
(vi) Special Adjustment if Notes not Prepaid.
(A) No Prepayment within Eighteen Months. If the Company
shall not have prepaid all the Notes on or prior to the date
that is eighteen (18) months from the date hereof (the "First
Adjustment Date"), the Aggregate Number shall immediately be
increased to equal the number of shares of Common Stock (or
Other Securities) that this Warrant would have been exercisable
for (taking into account all adjustments to such increased
Aggregate Number that would be required to be made from the date
hereof pursuant to the terms of this Warrant) had the initial
Aggregate Number on the date of issuance of this Warrant been
(i) 35,149 shares of Common Stock plus (ii) the product (the
"First Adjustment Increment") of 7,811 shares of Common Stock
multiplied by a fraction, the numerator of which is the
principal balance of the Notes (including any Pik Notes, as such
term is defined in the Notes) as of the First Adjustment Date
and the denominator of which is $35,000,000.
(B) No Prepayment within Two Years. If the Company shall
not have prepaid all the Notes on or prior to the date that is
two years from the date hereof (the "Second Adjustment Date"),
the Aggregate Number shall immediately be increased to equal the
number of shares of Common Stock (or Other Securities) that this
Warrant would have been exercisable for (taking into account all
adjustments to such increased Aggregate Number that would be
required to be made from the date hereof pursuant to the terms
of this Warrant) had the initial Aggregate Number on the date of
issuance of this Warrant been (i) 35,149 shares of Common Stock
plus (ii) the First Adjustment Increment, plus (iii) the product
of 7,811 shares of Common Stock multiplied by a fraction, the
numerator of which is the principal balance of the Notes
(including any Pik Notes, as such term is defined in the Notes)
as of the Second Adjustment Date and the denominator of which is
$35,000,000.
(vii) Miscellaneous. The following provisions shall be
applicable to the making of adjustments of the Exercise Price provided
above in this Section 3(a):
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(A) For purposes of this Section 3(a) and if at the time
of determination the Common Stock is not Publicly Traded, "Fair
Market Value" shall be determined as follows: Fair Market Value
shall be determined initially by the Company within ten (10)
Business Days of any event for which such determination is
required and such determination (including the basis therefor)
shall be promptly provided to Holder. Such determination shall
be binding on Holder unless Holder objects thereto in writing
within ten (10) Business Days of receipt. In the event the
Company and Holder cannot agree on Fair Market Value within ten
(10) Business Days of the date of Holder's objection, Fair
Market Value shall be determined by a disinterested appraiser
(which shall be a national or regional investment bank or
national accounting firm) mutually selected by the Company and
Holder, the fees and expenses of which shall be paid fifty
percent (50%) by the Company and fifty percent (50%) by Holder
unless (I) such determination results in a Fair Market Value
more than one hundred ten percent (110%) of the Fair Market
Value initially determined by the Company, in which case such
fees and expenses shall be borne by the Company or (II) such
determination results in a fair market value less than ninety
percent (90%) of the fair market value initially determined by
the Company, in which case such fees and expenses shall be borne
by Holder. Any selection of a disinterested appraiser shall be
made in good faith within seven (7) Business Days after the end
of the last ten (10) Business Day period referred to above and
any determination of Fair Market Value by a disinterested
appraiser shall be made within thirty (30) days of the date of
selection.
(B) The sale or other disposition of any issued shares
of Common Stock (other than Incentive Stock Plan Pool Shares)
owned or held by or for the account of the Company or any of its
subsidiaries shall be deemed an issuance thereof for the
purposes of this Section 3(a).
(C) To the extent that any shares of Common Stock or any
Options or Convertible Securities (1) are issued solely for cash
consideration, the consideration received by the Company
therefor shall be deemed to be the amount of the cash received
by the Company therefor, (2) are offered by the Company for
subscription, the consideration received by the Company shall be
deemed to be the subscription price, or (3) are sold to
underwriters or dealers for public offering, the consideration
received by the Company shall be deemed to be the public
offering price, in any such case excluding any amounts paid or
receivable for accrued interest or accrued dividends. To the
extent that any portion of such issuance shall be for a
consideration other than cash, the amount of such consideration
shall be deemed to be the fair market value of such
consideration at the time of such issuance, determined in the
manner set forth in Section 4(c)(iv).
(D) The consideration for any shares of Common Stock
issuable pursuant to the terms of any Convertible Securities or
Options shall be equal to (1) the consideration received by the
Company for issuing any warrants, options or other rights to
subscribe for or purchase such Convertible Securities or
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Options, plus (2) the consideration paid or payable to the
Company in respect of the subscription for or purchase of such
Convertible Securities or Options, plus (3) the consideration,
if any, payable to the Company upon the exercise of the Options
or the right of conversion or exchange of such Convertible
Securities; provided, however, notwithstanding the foregoing the
consideration for any shares of Common Stock issuable pursuant
to the terms of any Options granted pursuant to the Incentive
Stock Plan that are not Incentive Stock Plan Pool Shares shall
be deemed to be $0.
(E) In case of the issuance at any time of any shares of
Common Stock or Convertible Securities in payment or
satisfaction of any dividends upon any class of stock other than
Common Stock, the Company shall be deemed to have received for
such shares of Common Stock or Convertible Securities
consideration equal to the amount of such dividend so paid or
satisfied.
(b) Other Action Affecting Common Stock. If at any time the
Company shall take any action of the type contemplated in Section 3(a)
hereof but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom
stock rights or other rights with equity features), other than granting
Options to purchase Incentive Stock Plan Pool Shares and issuing shares
of Common Stock upon the exercise thereof, then, unless in the opinion
of the Board such action will not have a material adverse effect upon
the rights of Holder (taking into consideration, if necessary, any prior
actions which the Board deemed not to materially adversely affect the
rights of Holder), the Aggregate Number and the Exercise Price shall be
adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(c) Miscellaneous.
(i) Abandonment of Declared Dividend. If the Company shall take
a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or distribution or subscription or purchase
rights and shall, thereafter and before the distribution to shareholders
thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then no adjustment shall
be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and
annulled.
(ii) Notice of Proposed Actions. In case the Company shall
propose (A) to pay any Stock Dividend, effect any Stock Subdivision or
Stock Combination or to make any Distribution, (B) to effect any
Transaction, recapitalization or other capital reorganization,
consolidation or merger, share exchange, or sale, lease or other
disposition of all or substantially all of its property, assets or
business or (C) to effect the liquidation, dissolution or winding up of
the Company or (D) to take any other action (including without
limitation the issuance of any Additional Shares of Common Stock,
Options or Convertible Securities) that would require an adjustment to
be made to the Exercise Price and the Aggregate Number, then in each
such case the Company shall give to Holder written notice of such
proposed action, which shall specify the date on which any record is to
be taken, or any action described above is to take place, and shall also
set
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forth such facts with respect thereto as shall be reasonably necessary
to indicate the effect of such action on the Common Stock, the Exercise
Price and the Aggregate Number after giving effect to any adjustment
which will be required as a result of such action. Such notice shall be
so given at least thirty (30) days prior to the earlier of any
applicable record date and the date of the taking of such proposed
action.
(iii) Adjustment Certificate. Upon the occurrence of any event
requiring an adjustment of the Exercise Price or the Aggregate Number
pursuant to this Section 3, the Company at its expense shall promptly
calculate such adjustment in accordance with the terms hereof and
furnish to Holder a certificate setting forth such adjustment and
showing in detail the facts upon which such adjustment is based. Upon
the written request at any time of Holder, the Company shall, furnish or
cause to be furnished to Holder a certificate setting forth all previous
adjustments, the Exercise Price and Aggregate Number at the time in
effect and the amount, if any, of other property which at the time would
be received upon exercise of this Warrant.
(iv) Fair Market Value. Whenever the Aggregate Number is to be
adjusted pursuant to Sections 3(a)(iv)-(v), unless otherwise agreed by
Holder, in addition to any certificate required to be provided by
Section 3(c)(iii), the Company shall also promptly provide to Holder a
certificate signed by the chief financial officer of the Company,
setting forth a description of the basis on which the Board determined,
as applicable, Fair Market Value or the fair market value of any
evidences of indebtedness, shares of stock, other securities, warrants,
other subscription or purchase rights, or other property. In the case of
any determination of Fair Market Value, such certificate shall be
delivered to Holder within the time period set forth in Section
3(a)(vii)(A) and Holder may object thereto as provided therein. In the
case of any other determination of fair market value, Holder may object
to the determination in such certificate by giving written notice within
fifteen (15) Business Days of the receipt of such certificate and, if
Holder and the Company cannot agree to the fair market value within
fifteen (15) Business Days of the date of Holder's objection, the fair
market value shall be determined by a national or regional investment
bank or a national accounting firm mutually selected by Holder and the
Company, the fees and expenses of which shall be paid fifty percent
(50%) by the Company and fifty percent (50%) by Holder unless (I) such
determination results in a fair market value more than one hundred ten
percent (110%) of the fair market value determined by the Board, in
which case such fees and expenses shall be borne by the Company or (II)
such determination results in a fair market value less than ninety
percent (90%) of the fair market value determined by the Board, in which
case such fees and expenses shall be borne by Holder. The Company shall
keep at its Principal Office copies of all such certificates and cause
the same to be available for inspection at said office during normal
business hours by Holder or any prospective purchaser of a Warrant (in
whole or in part) if so designated by Holder.
SECTION 4. Holder's Rights in Case of Other Securities. If Holder at any
time shall have received or shall be entitled to receive Other Securities
pursuant to the terms hereof, appropriate provision shall be made so that Holder
receives with respect to such Other Securities as nearly as possible the
intended benefits of this Warrant with respect thereto.
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SECTION 5. No Impairment and Other Covenants.
(a) No Impairment. The Company will not, by amendment of the Charter or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, share exchange, dissolution or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of this Warrant,
including without limitation the adjustments required under this Section 3, and
will at all times in good faith assist in the carrying out of all such terms and
in taking of all such action as may be necessary or appropriate to protect the
rights of Holder against the type or nature of dilution or other impairment for
which protection is contemplated to be afforded Holder in this Warrant. Without
limiting the generality of the foregoing, the Company agrees that it (i) will
not take any other action if as a result thereof the par value of the Common
Stock shall exceed the Exercise Price, (ii) will not create any class of common
equity security other than the Common Stock and (iii) will take all such action
as may be reasonably necessary or appropriate so that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock on the
exercise of this Warrant.
(b) Reservation of Authorized Common Stock. The Company shall at all
times reserve and keep available out of its authorized but unissued shares such
number of its duly authorized shares of Class A Common Stock and Class B Common
Stock, or other stock or securities deliverable upon the exercise of this
Warrant, as shall be sufficient to enable the Company at any time to fulfill all
of its obligations hereunder.
(c) Affirmative Actions to Permit Exercise and Realization of Benefits.
If any shares of Common Stock reserved or to be reserved for the purpose of
exercise of this Warrant, or any shares or other securities reserved or to be
reserved for the purpose of issuance pursuant to Section 3 hereof, require
registration with or approval of any governmental authority under any federal or
state law before such shares or other securities may be validly delivered upon
exercise of this Warrant, then the Company covenants that it will, at its sole
expense, secure such registration or approval, as the case may be. The Company's
obligation hereunder shall apply also to approvals or expirations of waiting
periods required under the Hart-Scott-Rodino Antitrust Improvements Act (the
"HSR Act"), and with respect to any filings under the HSR Act, whether by the
Company, Holder or any other Person, the Company shall bear the costs of all
such filing fees with respect to such filings.
(d) Validly Issued Shares. The Company covenants that all shares of
Common Stock that may be delivered upon exercise of this Warrant (including
those issued pursuant to Section 3 hereof) shall upon delivery by the Company be
duly authorized and validly issued, fully paid and nonassessable, free from all
taxes, liens and charges with respect to the issue or delivery thereof and
otherwise free of all other security interests, encumbrances and claims of any
nature whatsoever other than those created by Holder.
(e) Restrictions on Performance. The Company shall not at any time after
the date hereof enter into an agreement or other instrument which, by its terms,
restricts its ability to perform its obligations hereunder or making such
performance or the issuance of shares of Common Stock upon the exercise of this
Warrant a default under any such agreement or instrument.
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(f) Modification of Charter and By-Laws. The Company shall not amend or
consent to any modification, supplement or waiver of any provision of the
Charter or the bylaws of the Company in any manner which would have a material
adverse effect on the rights of Holder hereunder without the prior written
consent of Holder (which consent shall not be unreasonably withheld or delayed).
(g) Regulatory Requirements and Restrictions. In the event of any
reasonable determination by Holder that, by reason of any existing or future
federal or state law, statute, rule, regulation, guideline, order, court or
administrative ruling, request or directive (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) (any such
item, a "Regulatory Requirement"), such Holder is effectively restricted or
prohibited from holding this Warrant or the related Warrant Shares (including
any shares of capital stock or other securities distributable to Holder in any
merger, reorganization, readjustment or other reclassification), or otherwise
realize upon or receive the benefits intended under this Warrant, the Company
shall, and shall use its best efforts to have its shareholders, take such
commercially reasonable action as Holder may deem reasonably necessary to permit
Holder to comply with such Regulatory Requirement. The reasonable costs of
taking such action, whether by the Company, Holder or otherwise, shall be borne
by the Company. Such action to be taken may include without limitation the
Company's authorization of one or more new classes of capital stock for which
this Warrant may be exercised or making such modifications and amendments to the
Charter, this Warrant or any other documents and instruments related to or
executed in connection herewith as may be deemed reasonably necessary by Holder,
but shall not include the redemption or repurchase of any securities for cash
until all Senior Indebtedness is paid in full in cash and all commitments to
extend credit under the Senior Credit Agreement are terminated. Holder shall
give written notice to the Company of any such determination and the action or
actions necessary to comply with such Regulatory Requirement, which notice and
determination shall be conclusive absent manifest error, and the Company shall
take all steps necessary to comply with such determination as expeditiously as
possible.
SECTION 6. Put Rights. Holder shall be entitled to require the Company
to redeem this Warrant in accordance with the terms of the Investor Rights
Agreement.
SECTION 7. [Reserved]
SECTION 8. Transfers of the Warrant.
(a) Transfer and Exchanges. The Company shall initially record this
Warrant on a register to be maintained by the Company with its other stock books
and, subject to Section 8(b) hereof, thereafter shall transfer this Warrant on
such register when this Warrant is: (i) surrendered for transfer in accordance
with the terms hereof, and (ii) properly endorsed and accompanied by appropriate
instructions. Upon any such transfer, a new Warrant or Warrants shall be issued
to the transferee and Holder (in the event that this Warrant is only partially
transferred) and the surrendered Warrant shall be canceled. Each such transferee
shall succeed to the rights of the transferring Holder hereunder to the extent
of such transfer. This Warrant may be exchanged at the option of a Holder, when
surrendered at the Principal Office of the
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Company, for another Warrant or other Warrants of like tenor and representing in
the aggregate the right to purchase a like number of shares of Common Stock,
subject to adjustment as more fully set forth herein.
(b) Transfers. Subject to the securities law restrictions set forth in
the legend on the first page of this Warrant, Holder may at any time freely
transfer this Warrant and the Warrant Shares in whole or in part.
SECTION 9. No Voting Rights. Prior to the exercise of this Warrant,
Holder shall not be entitled to any voting or other rights as a stockholder of
the Company as a result of being a holder of the Warrant except as expressly
provided herein.
SECTION 10. Miscellaneous.
(a) Stamp Taxes. The Company shall pay all stamp taxes attributable to
the initial issuance of shares or other securities issuable upon the exercise of
this Warrant or issuable pursuant to Section 4 hereof, excluding any tax or
taxes which may be payable because of the transfer involved in the issuance or
delivery of any certificates for shares or other securities in a name other than
that of Holder in respect of which such shares or securities are issued.
(b) Replacement Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue and deliver in exchange and substitution for
and upon cancellation of the mutilated Warrant, or in lieu of and in
substitution for the Warrant lost, stolen or destroyed, a new Warrant of like
tenor and representing an equivalent right or interest, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction of such Warrant and upon receipt of indemnity reasonably
satisfactory to the Company; provided, that an indemnity by Holder shall be
satisfactory.
(c) Delays, Omissions and Indulgences. No delay or omission to exercise
any right, power or remedy accruing to Holder upon any breach or default of the
Company hereunder shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach or default, or any acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on Holder's part of any breach or
default hereunder or under this Warrant, or any waiver on Holder's part of any
provisions or conditions hereof must be in writing and that all remedies, either
hereunder or by law or otherwise afforded to Holder, shall be cumulative and not
alternative.
(d) Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopy, overnight
courier service or personal delivery and shall be addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party:
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(i) if to the Company:
Cupertino Electric, Inc.
1132 North Seventh Street
San Jose, CA 95112
Attention: Chief Financial Officer
Telecopy: (408) 275-6987
with a required copy to:
Jeffrey P. Newman
Farella Braun & Martel LLP
235 Montgomery Street 30th Floor
San Francisco, CA 94104
Telecopy: (415) 954-4480
(ii) If to the initial Holder hereunder:
BancAmerica Capital Investors SBIC I, L.P.
Bank of America Corporate Center
100 North Tryon Street, 25th Floor
Charlotte, NC 28255
Attention: Ann B. Hayes
Telecopy: (704) 386-6432
(iii) if to any subsequent Holder, to the respective address set forth
on the corporate records of the Company.
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; when delivered by courier, if
delivered by commercial overnight courier service; five (5) Business Days after
being deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.
(e) Successors and Assigns. This Warrant shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, provided that the Company shall have no right to assign its rights, or
to delegate its obligations, hereunder without the prior written consent of
Holder.
(f) Amendments. No amendment to or waiver of this Warrant shall be
effective unless in writing and executed by the Company and Holder.
(g) Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the
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provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
(h) Governing Law. THIS AGREEMENT AND EACH WARRANT IS TO BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.
(i) Injunctive Relief; Specific Performance. The Company hereby
acknowledges that an action for money damages may not be adequate to protect the
interests of Holder hereunder and hereby agrees that Holder may bring an action
for injunctive relief or specific performance of any term or covenant contained
herein.
(j) Entire Agreement. This Warrant, the Investor Rights Agreement and
the Purchase Agreement are intended by the parties as a final expression of
their agreement and are intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(k) Rules of Construction. The titles and captions of the Sections and
other provisions hereof are for convenience of reference only and are not to be
considered in construing this Agreement. Unless the context otherwise requires
"or" is not exclusive, and references to sections or subsections refer to
sections or subsections of this Warrant. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
* * * * *
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first above written.
CUPERTINO ELECTRIC, INC.
By: /s/ James S. Ryley
--------------------------------------------
Name: James S. Ryley
---------------------------------------
Title: President
--------------------------------------
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EXHIBIT A
FORM OF ELECTION TO PURCHASE
To: CUPERTINO ELECTRIC, INC.
1. The undersigned, pursuant to the provisions of the attached Warrant,
hereby elects to exercise such Warrant with respect to ________ shares of [Class
A or Class B] Common Stock (the "Exercise Amount"). Capitalized terms used but
not otherwise defined herein have the meanings ascribed thereto in the attached
Warrant.
2. The undersigned herewith tenders payment for such shares in the
following manner (please check type, or types, of payment and indicate the
portion of the Aggregate Exercise Price to be paid by each type of payment):
____ Exercise for Cash
____ Note Cancellation
____ Cashless Exercise
3. Please issue a certificate or certificates representing the shares
issuable in respect hereof under the terms of the attached Warrant, as follows:
- --------------------------------------------------------------------------------
(Name of Record Holder/Transferee)
and deliver such certificate or certificates to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Address of Record Holder/Transferee)
4. The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
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5. If the Exercise Amount is less than all of the shares of Common Stock
purchasable hereunder, please issue a new warrant representing the remaining
balance of such shares, as follows:
-------------------------------------
(Name of Record Holder/Transferee)
and deliver such warrant to the following address:
-------------------------------------
-------------------------------------
-------------------------------------
(Address of Record Holder/Transferee)
In witness whereof, the undersigned Holder has caused this Election to
Purchase to be executed as of this _____ day of __________, ______.
-------------------------------------
(Name of Holder)
By:
----------------------------------
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TABLE OF CONTENTS
Page No.
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SECTION 1. Definitions...................................................................1
SECTION 2. Exercise......................................................................5
SECTION 3. Adjustments to Exercise Price and Aggregate Number............................6
SECTION 4. Holder's Rights in Case of Other Securities..................................12
SECTION 5. No Impairment and Other Covenants............................................13
SECTION 6. Put Rights...................................................................14
SECTION 7. Notice of Expiration Date....................................................14
SECTION 8. Transfers of the Warrant.....................................................14
SECTION 9. No Voting Rights.............................................................15
SECTION 10. Miscellaneous................................................................15