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EXHIBIT 10.32
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTIONS 4 AND 10 OF THIS WARRANT
Date of Issuance: March 26, 1996 Number of Shares: 100,000
(subject to adjustment)
American Superconductor Corporation
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Common Stock Purchase Warrant
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(Void after March 26, 2006)
American Superconductor Corporation, a Delaware corporation (the
"Company"), for value received, hereby certifies that Electric Power Research
Institute ("EPRI"), or its registered assigns (the "Registered Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company, at
any time on or after the date of issuance and on or before March 26, 2006 at not
later than 5:00 p.m. (Boston, Massachusetts time) (the "Expiration Time"),
100,000 shares of Common Stock, $.01 par value per share, of the Company, at a
purchase price of $14.00 per share. The shares purchasable upon exercise of this
Warrant, and the purchase price per share, each as adjusted from time to time
pursuant to the provisions of this Warrant, are hereinafter referred to as the
"Warrant Shares" and the "Purchase Price," respectively.
1. EXERCISE.
(a) Subject to the terms set forth below and subject to any revisions
described therein, this Warrant shall be exercisable for 100,000 shares of
Common Stock of the Company as follows:
(i) On the date one year after the date of issuance of this
Warrant and at any time thereafter until the Expiration Time, this Warrant shall
be exercisable for 12,500 shares of Common Stock of the Company (the "First Year
Warrant Shares").
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(ii) In addition to the First Year Warrant Shares, on the date
two years after the date of issuance of this Warrant and at any time thereafter
until the Expiration Time, this Warrant shall be exercisable for an additional
25,000 shares of Common Stock of the Company (the "Second Year Warrant Shares").
(iii) In addition to the First Year Warrant Shares and Second
Year Warrant Shares, on the date three years after the date of issuance of this
Warrant and at any time thereafter until the Expiration Time, this Warrant shall
be exercisable for an additional 25,000 shares of Common Stock of the Company
(the "Third Year Warrant Shares"); provided however, that in the event that the
aggregate amount contributed by EPRI (the "EPRI Contribution") in the form of
direct costs pursuant to Section 2 of the Research and Development Agreement
dated as of the date of this Warrant between the Company and EPRI (the
"Agreement") during the first two contract years under the Agreement is less
than $2.0 million, then the number of Third Year Warrant Shares (and, if
necessary, the number of Fourth or Fifth Year Warrant Shares, as defined below)
shall be reduced by the number obtained by dividing (x) the excess of
$2.0 million over the EPRI Contribution by (y) the number 20, it being agreed
that the exercisability of this Warrant is not contingent upon amounts
contributed by EPRI in excess of the $2.0 million to be contributed during the
first two contract years under the Agreement.
(iv) In addition to the First Year Warrant Shares, Second Year
Warrant Shares and Third Year Warrant Shares, on the date four years after the
date of issuance of this Warrant and at any time thereafter until the Expiration
Time, this Warrant shall be exercisable for an additional 25,000 shares of
Common Stock of the Company (the "Fourth Year Warrant Shares").
(v) In addition to the First Year Warrant Shares, Second Year
Warrant Shares, Third Year Warrant Shares and Fourth Year Warrant Shares, on the
date five years after the date of issuance of this Warrant, and at any time
thereafter until the Expiration Time, this Warrant shall be exercisable for an
additional 12,500 shares of Common Stock of the Company (the "Fifth Year Warrant
Shares").
(vi) Notwithstanding anything to the contrary contained in
subsections 1(a)(i) through 1(a)(v) above, in the event that any person or
entity acquires ownership of capital stock of the Company representing a
majority of the total outstanding voting power, whether by merger, acquisition
or otherwise, or in the event of a sale of all or substantially all
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of the assets of the Company, this Warrant shall be exercisable, immediately
upon such an event and at any time thereafter until the Expiration Time, for
100,000 shares of Common Stock of the Company (less any shares previously
purchased upon exercise of this Warrant) or for such securities for which this
Warrant may become exercisable pursuant to subsection 2(b) below.
(b) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as EXHIBIT I duly executed by such Registered Holder or by such Registered
Holder's duly authorized attorney, at the principal office of the Company, or at
such other office or agency as the Company may designate, accompanied by payment
in full, in lawful money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.
(c) The Registered Holder may, at its option, elect to pay some or all
of the Purchase Price payable upon an exercise of this Warrant by cancelling a
portion of this Warrant exercisable for such number of Warrant Shares as is
determined by dividing (i) the total Purchase Price payable in respect of the
number of Warrant Shares being purchased upon such exercise by (ii) the excess
of the Fair Market Value per share of Common Stock as of the effective date of
exercise, as determined pursuant to subsection 1(d) below (the "Exercise Date")
over the Purchase Price per share. If the Registered Holder wishes to exercise
this Warrant pursuant to this method of payment with respect to the maximum
number of Warrant Shares purchasable pursuant to this method, then the number of
Warrant Shares so purchasable shall be equal to the total number of Warrant
Shares, minus the product obtained by multiplying (x) the total number of
Warrant Shares by (y) a fraction, the numerator of which shall be the Purchase
Price per share and the denominator of which shall be the Fair Market Value per
share of Common Stock as of the Exercise Date. The Fair Market Value per share
of Common Stock shall be determined as follows:
(i) If the Common Stock is listed on a national securities
exchange, the Nasdaq National Market, the Nasdaq Small-Cap Market, or another
nationally recognized exchange or trading system as of the Exercise Date, the
Fair Market Value per share of Common Stock shall be deemed to be the last
reported sale price per share of Common Stock thereon on the Exercise Date; or,
if no such price is reported on such date, such price on the next preceding
trading day (provided that if no such price is reported
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on the next preceding trading day, the Fair Market Value per share of Common
Stock shall be determined pursuant to clause (ii)).
(ii) If the Common Stock is not listed on a national securities
exchange, the Nasdaq National Market, the Nasdaq Small-Cap Market or another
nationally recognized exchange or trading system as of the Exercise Date, the
Fair Market Value per share of Common Stock shall be deemed to be the amount
most recently determined by the Board of Directors to represent the fair market
value per share of the Common Stock (including without limitation a
determination for purposes of granting Common Stock options or issuing Common
Stock under an employee benefit plan of the Company); and, upon request of the
Registered Holder, the Board of Directors (or a representative thereof) shall
promptly notify the Registered Holder of the Fair Market Value per share of
Common Stock. Notwithstanding the foregoing, if the Board of Directors has not
made such a determination within the three-month period prior to the Exercise
Date, then (A) the Fair Market Value per share of Common Stock shall be the
amount next determined by the Board of Directors to represent the fair market
value per share of the Common Stock (including without limitation a
determination for purposes of granting Common Stock options or issuing Common
Stock under an employee benefit plan of the Company), (B) the Board of Directors
shall make such a determination within 15 days of a request by the Registered
Holder that it do so, and (C) the exercise of this Warrant pursuant to this
subsection 1(c) shall be delayed until such determination is made.
(d) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(b) above. At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as provided
in subsection 1(e) below shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates.
(e) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:
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(i) a certificate or certificates for the number of full Warrant
Shares to which such Registered Holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which such Registered Holder would
otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the sum of (a) the number of such shares purchased by
the Registered Holder upon such exercise plus (b) the number of Warrant Shares
(if any) covered by the portion of this Warrant cancelled in payment of the
Purchase Price payable upon such exercise pursuant to subsection 1(c) above.
2. ADJUSTMENTS.
(a) If outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Purchase Price in effect immediately
prior to such subdivision or at the distribution date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after
the distribution date of such dividend be proportionately reduced. If
outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Purchase Price, the number of Warrant Shares purchasable upon the exercise of
this Warrant shall be changed to the number determined by dividing (i) an amount
equal to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Purchase Price in effect
immediately prior to such adjustment, by (ii) the Purchase Price in effect
immediately after such adjustment.
(b) If there shall occur any capital reorganization or
reclassification of the Company's Common Stock (other than a change in par value
or a subdivision or combination as provided for in subsection 2(a) above), or
any consolidation or merger of the Company with or into another corporation, or
a transfer of all or substantially all of the assets of the Company, then (in
addition to any rights to which the Registered Holder may be entitled under
subsection 1(a)(vi) above), as part of any such
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reorganization, reclassification, consolidation, merger or sale, as the case may
be, lawful provision shall be made so that the Registered Holder of this Warrant
shall have the right thereafter to receive upon the exercise hereof the kind and
amount of shares of stock or other securities or property which such Registered
Holder would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger or sale, as the case may
be, such Registered Holder had held the number of shares of Common Stock which
were then purchasable upon the exercise of this Warrant. In any such case,
appropriate adjustment (as reasonably determined in good faith by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of the
Registered Holder of this Warrant, such that the provisions set forth in this
Section 2 (including provisions with respect to adjustment of the Purchase
Price) shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
(c) When any adjustment is required to be made in the Purchase Price,
the Company shall promptly mail to the Registered Holder a certificate setting
forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in subsection 2(a) or (b) above.
3. FRACTIONAL SHARES. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the Fair Market Value per share of Common
Stock, as determined pursuant to subsection 1(c) above.
4. REQUIREMENTS FOR TRANSFER.
(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the "Act"), or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company, to the effect that such sale or transfer is, and the issuance by
the Company of shares of Common Stock upon exercise thereof will be, exempt from
the registration requirements of the Act.
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(b) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, and may not be offered, sold or otherwise
transferred, pledged or hypothecated unless and until
such securities are registered under such Act or an
opinion of counsel satisfactory to the Company is
obtained to the effect that such registration is not
required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
5. NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder of
this Warrant against impairment.
6. NOTICES OF RECORD DATE, ETC. in case:
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or
(b) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity), or any transfer of all or substantially
all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such
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case, the Company will mail or cause to be mailed to the Registered Holder of
this Warrant a notice specifying, as the case may be, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(ii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be mailed at least ten (10) days prior to the record date or
effective date for the event specified in such notice.
7. RESERVATION OF STOCK. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the exercise of this
Warrant, such number of Warrant Shares and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.
8. EXCHANGE OF WARRANTS. Upon the surrender by the Registered Holder
of any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 4
hereof, issue and deliver to or upon the order of such Holder, at the Company's
expense, a new Warrant or Warrants of like tenor, in the name of such Registered
Holder or as such Registered Holder (upon payment by such Registered Holder of
any applicable transfer taxes) may direct, calling in the aggregate on the face
or faces thereof for the number of shares of Common Stock called for on the face
or faces of the Warrant or Warrants so surrendered.
9. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
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10. TRANSFERS, ETC.
(a) The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Any Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and
all rights hereunder are transferable, in whole, upon surrender of this Warrant
with a properly executed assignment (in the form of EXHIBIT II hereto) at the
principal office of the Company; provided that no such transfer may be made
unless such transfer is made to an affiliate of EPRI (including without
limitation any for-profit or non-profit corporation or other entity in which
EPRI holds, directly or indirectly, a controlling interest).
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; PROVIDED, HOWEVER, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
11. REPRESENTATIONS OF THE REGISTERED HOLDER. The Registered Holder of this
Warrant represents and warrants to the Company as follows:
(a) INVESTMENT. The Registered Holder is acquiring this Warrant and
the Warrant Shares issuable upon the exercise of this Warrant for its own
account for investment and not with a view to, or for sale in connection with,
any distribution thereof, nor with any present intention of distributing or
selling the same, except as otherwise may be permitted under applicable
securities laws.
(b) AUTHORITY. The Registered Holder has full power and authority to
enter into and to perform this Warrant in accordance with its terms. The
Registered Holder has not been organized, reorganized or recapitalized
specifically for the purpose of investing in the Company.
(c) EXPERIENCE. The Registered Holder has made detailed inquiry
concerning the Company, its business and its personnel; the officers of the
Company have made available to the
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Registered Holder the opportunity to ask questions and receive answers
concerning the terms and conditions of the this Warrant and the Warrant Shares
and to obtain any additional information that the Company possesses or can
acquire without unreasonable effort or expense that is necessary to verify the
accuracy of information provided by the Company to the Registered Holder; and
the Registered Holder has adequate net worth and means of providing for its
current needs and personal contingencies to sustain a complete loss of its
investment in the Company; the Registered Holder's overall commitment to
investments which are not readily marketable is not disproportionate to his or
its net worth and the Registered Holder's investment in this Warrant and the
Warrant Shares issuable upon exercise of this Warrant will not cause such
overall commitment to become excessive.
(d) ACCREDITED INVESTOR. The Registered Holder is an Accredited
Investor within the definition set forth in Rule 501(a) promulgated under the
Securities Act.
12. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing. All notices and other
communications from the Registered Holder of this Warrant or in connection
herewith to the Company shall be mailed by first-class certified or registered
mail, postage prepaid, to the Company at its principal office set forth below.
If the Company should at any time change the location of its principal office to
a place other than as set forth below, it shall give prompt written notice to
the Registered Holder of this Warrant and thereafter all references in this
Warrant to the location of its principal office at the particular time shall be
as so specified in such notice.
13. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
14. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
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15. HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
16. GOVERNING LAW. This Warrant will be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
AMERICAN SUPERCONDUCTOR CORPORATION
By: /s/ Ramesh Ratan
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[Corporate Seal] Title: Exec. V.P.
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AGREED AND ACCEPTED:
ELECTRIC POWER RESEARCH INSTITUTE
By: /s/ Kurt Yeager
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Title:
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EXHIBIT I
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PURCHASE FORM
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To:_________________ Dated:______________
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to purchase _____ shares of the Common Stock
covered by such Warrant. The undersigned herewith makes payment of
$____________, representing the full purchase price for such shares at the price
per share provided for in such Warrant. Such payment takes the form of (check
applicable box or boxes):
/ / $_________ in lawful money of the United States, and/or
/ / the cancellation of such portion of the attached Warrant as is
exercisable for a total of ______ Warrant Shares (using a Fair Market
Value of $_______ per share for purposes of this calculation).
Signature:
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Address:
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EXHIBIT II
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ASSIGNMENT FORM
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FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant with respect to the number of shares of Common Stock covered thereby set
forth below, unto:
Name of Assignee Address No. of Shares
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Dated: Signature:
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Dated: Witness:
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