MECHANICAL TECHNOLOGY, INCORPORATED Warrant for the Purchase of Shares of Common Stock
THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED, OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE
SECURITIES ACT OR AN OPINION OF COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE
WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
Dated _______, 2008
MECHANICAL TECHNOLOGY, INCORPORATED
Warrant for the Purchase of Shares of Common Stock
No. W-
THIS CERTIFIES that, for value received, ___and its registered assigns (the
“Holder”), is entitled to subscribe for and purchase from Mechanical Technology,
Incorporated, a New York corporation (the “Company”), up to ___fully paid and
nonassessable shares (the “Warrant Shares”) of common stock, $0.01 par value, of the
Company (the “Common Stock”) at an exercise price of $ per share (the “Exercise
Price”) subject to adjustment as provided in Section 3 hereof, at any time or from time to time
during the period (the “Exercise Period”) commencing on the date hereof and ending on the
five (5) year anniversary of the date hereof (the “Expiration Date”). At 6:30 p.m., New
York City time on the Expiration Date, the portion of this warrant (this “Warrant”) not
exercised prior thereto shall be and become void and of no value.
1. Exercise of Warrant.
(a) The rights represented by this Warrant may be exercised by the Holder hereof, in whole or
in part, at any time and from time to time during the Exercise Period, by (i) delivery of written
notice to the Company in the form attached as Exhibit A hereto (the “Exercise Notice”) at
least five (5) Trading Days (defined below) prior to the date of exercise of the Warrant, (ii) the
surrender of this Warrant (properly endorsed) at the office of the Company, or at such other agency
or office of the Company in the United States of America as it may designate by notice in writing
to the Holder hereof at the address of such Holder appearing on the books of the Company, and (iii)
delivery of payment to the Company of the Exercise Price for the Warrant Shares being purchased. In
the event of the exercise of the rights represented by this Warrant, a certificate or certificates
for the Warrant Shares so purchased, registered in the name of the Holder, and if such exercise
shall not have been for all Warrant Shares, a new Warrant, registered in the name of the Holder
hereof, of like tenor to this Warrant, shall be delivered to the Holder hereof within a reasonable
time, not exceeding five (5) Trading Days, after the rights represented by this Warrant shall have
been so exercised. The person in whose name any certificate for Warrant Shares is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the holder of record of
such Warrant Shares on the date on which the Warrant was surrendered and payment of the Exercise
Price and any applicable taxes was made, irrespective of the date of delivery of such certificate,
except that, if the date of such surrender
and payment is a date when the stock transfer books of the Company are closed, such person
shall be deemed to have become the holder of such Warrant Shares at the close of business on the
next succeeding date on which the stock transfer books are open.
(b) The Company shall, upon request of the Holder, use its reasonable best efforts to deliver
Warrant Shares hereunder electronically through the facilities of The Depository Trust Corporation
or another established clearing corporation performing similar functions.
(c) For purposes of this agreement, “Trading Day” means: (i) any day on which the
Common Stock is listed and traded on the Nasdaq Global Market, or (ii) if the Common Stock is not
then listed and traded on the Nasdaq Global Market, then a day on which trading occurs on any of
the New York Stock Exchange, the American Stock Exchange, or any other market which is a part of
The Nasdaq Stock Market (each, an “Eligible Market”) (or any successor thereto), or (iii)
if trading ceases to occur on an Eligible Market (or any successor thereto), any day other than
Saturday, Sunday, or other day on which commercial banks in New York City are authorized or
required by law to remain closed.
(d) In addition to any other rights available to a Holder, if the Company fails to deliver to
the Holder a certificate representing Warrant Shares by the third (3rd) Trading Day after the date
on which delivery of such certificate is required by this Warrant, and if after such third (3rd)
Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a bona fide sale by the Holder of the Warrant Shares that the
Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within
three (3) Trading Days after the Holder’s request and in the Holder’s discretion, either: (i) pay
cash to the Holder in an amount equal to the closing price of the Common Stock, as listed on the
Eligible Market or any national exchange on which the Common Stock is then listed (the “Closing
Price”), on the date of such purchase by the Holder (plus brokerage commissions, if any) for
the shares of Common Stock so purchased less the Exercise Price (the “Buy-In Price”), at
which point the Company’s obligation to deliver such certificate (and to issue such Common Stock)
shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or
certificates representing such Common Stock and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of: (A) such number of shares of Common Stock,
times (B) the Closing Price on the date of the event giving rise to the Company’s obligation to
deliver such certificate.
(e) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms
hereof are absolute and unconditional upon satisfaction by the Holder of the conditions to exercise
this Warrant set forth in subsection (a) above, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation, or termination, or any breach or alleged breach by the Holder
or any other person of any obligation to the Company (other than the Holder’s obligations with
respect to the exercise hereof in accordance with sub-section (a) above), or any violation or
alleged violation of law by the Holder or any other person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the Holder in connection
with the issuance of Warrant Shares. Nothing herein shall
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limit a ▇▇▇▇▇▇’s right to pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver certificates representing shares of Common
Stock upon exercise of the Warrant as required pursuant to the terms hereof.
2. Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately available funds; provided,
however, that if at any time there is no effective registration statement registering the
issuance of the Warrant Shares or no current prospectus available for the resale of the Warrant
Shares by the Holder, the Holder may satisfy its obligation to pay the Exercise Price through a
“cashless exercise,” in which event the Company shall issue to the Holder the number of Warrant
Shares determined as follows:
X = Y [(A-B)/A]
where:
X =
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the number of Warrant Shares to be issued to the Holder. | |
Y =
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the number of Warrant Shares with respect to which this Warrant is being exercised. | |
A =
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the arithmetic average of the Closing Prices for the five (5) Trading Days immediately prior to (but not including) the Exercise Date. | |
B =
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the Exercise Price. |
3. Adjustment of Exercise Price. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are
subject to adjustment from time to time as set forth in this Section 3.
(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.
(b) Fundamental Transactions. If, at any time while this Warrant is outstanding: (i)
the Company effects any merger or consolidation of the Company with or into another person and the
Company is not the surviving party, (ii) the Company effects any sale of all or substantially all
of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer
(whether by the Company or another person) is completed pursuant to which
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holders of Common Stock are permitted to tender or exchange their shares for other securities,
cash, or property, or (iv) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash, or property (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 3(a) above) (in any such case, a
“Fundamental Transaction”; provided, however, that in no event shall the
sale of all or substantially all of the assets related to the Company’s test and instrumentation
business be deemed to be a Fundamental Transaction), then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash,
or property as it would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the
number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate
Consideration”). The aggregate Exercise Price for this Warrant will not be affected by any such
Fundamental Transaction, but the Company shall apportion such aggregate Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. In the event of a Fundamental Transaction, the
Company shall or shall cause the successor or purchasing person, as the case may be, to execute
with the Holder a written agreement providing that:
(i) this Warrant shall thereafter entitle the Holder to exercise this Warrant for the
Alternate Consideration in accordance with this Section 3(b),
(ii) in the case of any such successor or purchasing person, upon such consolidation, merger,
statutory exchange, combination, sale, or conveyance such successor or purchasing person shall be
jointly and severally liable with the Company for the performance of all of the Company’s
obligations under this Warrant, and
(iii) if registration or qualification is required under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), or applicable state law for the public resale by the
Holder of shares of stock and other securities so issuable upon exercise of this Warrant, all
rights applicable to registration of the Common Stock issuable upon exercise of this Warrant shall
apply to the Alternate Consideration.
If, in the case of any Fundamental Transaction, the Alternate Consideration includes shares of
stock, other securities, other property, or assets of a person other than the Company or any such
successor or purchasing person, as the case may be, in such Fundamental Transaction, then the
Company shall cause such written agreement to also be executed by such other person and to contain
such additional provisions to protect the interests of the Holder as the Board of Directors of the
Company shall reasonably consider necessary by reason of the foregoing. At the Holder’s request,
any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the
Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to
purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The
Company shall cause the terms of any agreement pursuant to which a Fundamental Transaction is
effected to include terms requiring any such successor or
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surviving entity to comply with the provisions of this paragraph (b) and insuring that the
Warrant (or any such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
(c) Calculations. All calculations under this Section 3 shall be made to the nearest
cent or rounded up to the nearest whole share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.
(d) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 3, the Company, at its expense, will promptly compute such adjustment in accordance with
the terms of this Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s transfer agent.
4. Adjustment of Warrant Shares. Upon each adjustment of the Exercise Price as provided in Section 3, the Holder shall
thereafter be entitled to subscribe for and purchase, at the Exercise Price resulting from such
adjustment, the number of Warrant Shares equal to the product of (i) the number of Warrant Shares
existing prior to such adjustment and (ii) the quotient obtained by dividing (A) the Exercise Price
existing prior to such adjustment by (B) the new Exercise Price resulting from such adjustment. No
fractional shares of capital stock of the Company shall be issued as a result of any such
adjustment, and any fractional shares resulting from the computations pursuant to this paragraph
shall be rounded up to the nearest whole share.
5. No Stockholder Rights. This Warrant shall not entitle the Holder hereof to any voting rights or other rights as a
stockholder of the Company.
6. Covenants of the Company. The Company shall at all times have authorized and reserved, or shall authorize and reserve, a
sufficient number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
7. Assignment, Transfer of Warrant. This Warrant may be assigned by the Holder by delivery of a completed Form of Assignment
attached as Exhibit B hereto. This Warrant and all rights hereunder are transferable, in whole or
in part, at the agency or office of the Company or at the office of any warrant agent appointed by
the Company, by the Holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant properly endorsed. Each taker and holder of this Warrant, by taking or holding the same,
consents and agrees that this Warrant, when endorsed, in blank, shall be deemed negotiable, and,
when so endorsed the holder hereof may be treated by the Company and all other persons dealing with
this Warrant as the absolute owner hereof for any purposes and as the person entitled to exercise
the rights represented by this Warrant, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until each transfer on such books, the Company may
treat the registered holder hereof as the owner hereof for all purposes.
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8. Lost, Stolen, Mutilated, or Destroyed Warrant. If this Warrant is lost, stolen, mutilated, or destroyed, the Company may, on such terms as
to indemnity or otherwise as it may in its discretion impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and
tenor as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall
constitute an original contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
9. Notices. All notices, advices, and communications to be given or otherwise made to any party to this
Warrant shall be deemed to be sufficient if contained in a written instrument delivered in person
or by facsimile transmission or duly sent by first class registered or certified mail, return
receipt requested, postage prepaid, or by overnight courier, or by electronic mail, with a copy
thereof to be sent by mail (as aforesaid) within twenty-four (24) hours of such electronic mail,
addressed to such party as provided in the Company’s stock records or to such other address as the
party to whom notice is to be given may have furnished to the other parties hereto in writing in
accordance herewith. Any such notice or communication shall be deemed to have been delivered and
received (i) in the case of personal delivery or delivery by facsimile transmission, on the date of
such delivery, (ii) in the case of nationally recognized overnight courier, on the next business
day after the date when sent, and (iii) in the case of mailing, on the third business day following
that on which the piece of mail containing such communication is posted. As used in this Section 9,
“business day” shall mean any day other than a day on which banking institutions in the state of
New York are legally closed for business.
10. Binding Effect On Successors. Subject to the provisions hereof relating to Fundamental Transactions, this Warrant shall
be binding upon any corporation succeeding the Company by merger, consolidation, or acquisition of
all or substantially all of the Company’s assets.
11. Descriptive Headings and Governing Law.
(a) The description headings of the several sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall be governed by, the
laws of the state of New York (without giving effect to conflicts of law principles thereof).
(b) The Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities, 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 against impairment. Without limiting the generality of the
foregoing, the Company: (i) will not increase the par value of any Warrant Shares above the amount
payable therefor on such exercise, (ii) will take all such action as may be reasonably necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares on the exercise of this Warrant, and (iii) will not close its
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stockholder books or records in any manner which interferes with the timely exercise of this
Warrant.
(c) EACH PARTY AGREES THAT ALL LEGAL PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT,
AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY ANY OF THE TRANSACTION DOCUMENTS (WHETHER BROUGHT
AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES,
OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN. EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THIS
WARRANT), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION, OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT
SUCH SUIT, ACTION, OR PROCEEDING IS IMPROPER. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL
SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION, OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS WARRANT AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.
NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS WARRANT OR ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. IF EITHER PARTY SHALL COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS
OF THIS WARRANT OR ANY TRANSACTION DOCUMENT, THEN THE PREVAILING PARTY IN SUCH ACTION OR PROCEEDING
SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE ATTORNEYS FEES AND OTHER REASONABLE COSTS
AND EXPENSES INCURRED WITH THE INVESTIGATION, PREPARATION, AND PROSECUTION OF SUCH ACTION OR
PROCEEDING.
12. Fractional Shares. No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in
lieu of issuing any fractional share, pay the Holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then-effective Exercise Price.
13. Severability. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable
in any respect, the validity and enforceability of the remaining terms and provisions of this
Warrant shall not in any way be affected or impaired thereby and the
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parties will attempt in good faith to agree upon a valid and enforceable provision which shall
be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned has caused this Warrant to be executed by its duly
authorized officer as of the date first above written.
| MECHANICAL
TECHNOLOGY, INCORPORATED |
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| By: | ||||
| Name: | ||||
| Title: | ||||
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WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to (i) exercise the within Warrant to purchase
shares of the Common Stock of Mechanical Technology, Incorporated, a New York
corporation, pursuant to the provisions of Section 1 of the attached Warrant, and hereby makes
payment of $ in payment therefor, or (ii) exercise this Warrant for the purchase of
shares of Common Stock, pursuant to the provisions of Section 2 of the attached Warrant.
The undersigned’s execution of this form constitutes the undersigned’s agreement to all the terms
of the Warrant and to comply therewith.
| Signature | ||
| Print Name: | ||
| Date | ||
| Signature, if jointly held |
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| Print Name: | ||
| Date |
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
the right represented by the within Warrant to purchase
shares
of Common Stock of Mechanical Technology, Incorporated to which the within Warrant relates and
appoints attorney to transfer said right on the books of Mechanical Technology,
Incorporated with full power of substitution in the premises.
Dated:
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| (Signature must conform in all respects to name of holder as specified on the face of the Warrant) | ||||||
| Address of Transferee: | ||||||