SECOND AMENDMENT TO WARRANT
TO PURCHASE 12,800 SHARES OF
SERIES A PREFERRED STOCK
This Amendment to Warrant to Purchase 12,800 Shares of Series A Preferred
Stock (the "Amendment") is entered into as of May 1, 1999, by and between
MMC/GATX Partnership No.1 ("Partnership) and INTEGRATED PACKAGING ASSEMBLY
CORPORATION ("IPAC").
RECITALS
IPAC issued to the Partnership a Warrant to Purchase 12,800 Shares of A
Preferred Stock, amended by Amendment to Warrant, dated as of September 5,
1997 (the "Warrant"). The parties desire to amend the Warrant in accordance
with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. The reference to "$2.00 per share" in the introductory paragraph of
the Warrant is hereby amended to read "$0.1236 per share".
2. A new Section 4(d) is added which reads as follows:
(d) Adjustments for Diluting Issuances.
(i) Adjustment Procedure. Upon each Actual Issuance of
Common Stock or Deemed Issuance of Common Stock ("Issuance of Common Stock")
after May 1, 1999, for no consideration or for a consideration per share
less than the Warrant Price (a "Dilutive Issuance"), then, concurrent with
the closing of the Dilutive Issuance, the number of Shares issuable upon the
exercise of this Warrant shall be increased by the number of shares of
Common Stock determined under the following formula:
X= (BxA)-(BxC)
-----------
C
Where: X= The increase in the number of Shares acquirable
hereunder
B= The Shares acquirable hereunder immediately prior to the
Issuance of Common Stock
A= The Warrant Price in effect immediately prior to the
Issuance of Common Stock
C= The Adjusted Share Value
Page 1
For purposes hereof, the Adjusted Share Value, upon the closing of any
Issuance of Common Stock, shall be the amount equal to the sum of(i) the
amount obtained by multiplying the Common Stock Outstanding immediately
prior to the Issuance of Common Stock by the Warrant Price in effect
immediately prior to the Issuance of Common Stock, and (ii) the Aggregate
Consideration that the Company receives from the Issuance of Common Stock,
and dividing the resulting sum by the Common Stock Outstanding immediately
after the Issuance of Common Stock. Upon each Issuance of Common Stock
described in this subsection (d), the Warrant Price shall be adjusted to the
Adjusted Share Value resulting from such Issuance of Common Stock.
(ii) Special Provisions. Notwithstanding the provisions of
subsection (i) of this Section 4(d), the following provisions shall govern
the adjustment formula set forth in subsection (i):
(A) Deemed Issuances of Common Stock. Whenever an
adjustment is made in the Warrant Price pursuant to subsection (i) based
upon a Deemed Issuance of Common Stock (as defined below), except as
provided in paragraph (C) of this subsection, no further adjustment in the
Warrant Price shall be made upon the subsequent actual issuance of the
shares of Common Stock subject to the applicable Convertible Securities or
Options, nor shall the exercise of any Convertible Security or Option
included in such Deemed Issuance of Common Stock constitute an issuance of
securities for which an adjustment in the Warrant Price may be made under
this Section 4(d).
(B) Change in Exercise Price or Conversion Rate. If;
subsequent to any Deemed Issuance of Common Stock, there is a change (other
than a change required by anti-dilution provisions of any Convertible
Security or Option intended to serve the same purpose as the provisions of
this Section 4(d)) in (i) the purchase or exercise price provided for in any
Option included in such Deemed Issuance of Common Stock (an "Exercise
Price") or (ii) the conversion price or exchange ratio (a "Conversion Rate")
of any Convertible Security included in such Deemed Issuance of Common
Stock, such that the changed Exercise Price or Conversion Rate, as the case
may be, had it been in effect at the time of such Deemed Issuance of Common
Stock, would have resulted in a decrease in the Warrant Price as a result of
such Deemed Issuance of Common Stock, then (A) the Warrant Price shall be
recalculated to equal that Warrant Price which would have been in effect at
such time had all of such Options or Convertible Securities that remain
outstanding at the time of such change (or that may be issued upon the
exercise of any Option or Convertible Securities included in such Deemed
Issuance of Common Stock and that then remain outstanding) provided for such
changed Exercise Price or Conversion Rate, as the case may be, at the time
of such Deemed Issuance of Common Stock, and (B) each other adjustment, if
any, made to the Warrant Price subsequent to such Deemed Issuance of Common
Stpck based on subsequent Issuances of Common Stock shall be recalculated,
utilizing for such purpose the Average Offering Price as recalculated or as
readjusted pursuant to subsection (i) of this Section 4(d).
Page 2
(C) Expiration of Option or Convertible Right. With
respect to any Deemed Issuance of Common Stock, effective as of the close of
business on the first business day on which no share of Common Stock may
thereafter be issued upon an exercise of an Option or Convertible Security
included in such Deemed Issuance of Common Stock (whether by reason of (i)
the full exercise of all Options and/or Convertible Securities Included in
such Deemed Issuance of Common Stock or (ii) the expiration or termination
of any right to exercise any Options and/or Convertible Securities included
in such Deemed Issuance of Common Stock that have not theretofore been
exercised and/or (iii) the purchase by the Company and cancellation or
retirement of some or all Options and/or Convertible Securities included in
such Deemed Issuance of Common Stock that have not theretofore been
exercised), the Warrant Price shall be adjusted by (x) recalculating the
Warrant Price pursuant to Section 4(d) hereof; basing such recalculation on
each issuance of shares of Common Stock upon an exercise of an Option or
Convertible Security included in such Deemed Issuance of Common Stock,
rather than the Common Stock Outstanding on which the original calculation
was based and (y) recalculating each other adjustment, if any, made to
Warrant Price subsequent to such Deemed Issuance of Common Stock based on
subsequent Issuances of Common Stock, utilizing the Warrant Price as
adjusted pursuant to subsection (i) of this Section 4(d) and including in
Common Stock Outstanding for such purpose only the shares of Common Stock
actually issued upon the exercise of Options and/or Convertible Securities
included in such Deemed Issuance of Common Stock in place of the shares of
Common Stock Outstanding in respect of such Deemed Issuance of Common Stock
as utilized in the original calculations of those adjustments.
(iii) Definitions.
Actual Issuance of Common Stock means any issuance by the Company of Common
Stock other than pursuant to conversion of a Convertible Security or
exercise of an Option.
Aggregate Consideration means with respect of an Issuance of Common Stock,
an amount equal to (I) the aggregate consideration that the Company receives
with respect to an issuance by the Company of Common Stock other than
pursuant to conversion of a Convertible Security or exercise of an Option
("Actual Consideration"), if any, issued and (ii) the Deemed Consideration
received with respect to the Options and Convertible Securities, if any,
issued.
Common Stock Outstanding means as of any date (i) all shares of Common Stock
that are outstanding as of such date, ~lus (ii) all shares of Common Stock
issuable upon conversion of Convertible Securities outstanding as of such
date, whether or not convertible as of such date, nIus (iii) all shares of
Common Stock issuable upon exercise of Options outstanding as of such date,
whether or not such Options are exercisable as of such date (assuming for
this purpose that Convertible Securities acquirable upon exercise of any
such Options are converted into Common Stock as of such date).
Page 3
Convertible Securities means evidence of indebtedness, shares of stock or
other securities which are convertible into or exchangeable for, with or
without payment of additional consideration, shares of Common Stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event or both.
Deemed Consideration means the aggregate consideration received or deemed
received by the Company with respect to the Company's issuance of a
Convertible Security or Option (a "Deemed Issuance of Common Stock"),
determined by adding (i) the aggregate amount, if any, received or
receivable by the Company as consideration in respect of the issuance of
Options and/or Convertible Securities constituting such Deemed Issuance of
Common Stock, and (ii) the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the full exercise of the
Options (and if Options to acquire Convertible Securities, upon full
exercise of the conversion rights with respect to such Convertible
Securities) and upon full conversion of the Convertible Securities in order
to acquire the underlying shares of Common Stock.
Deemed Issuance of Common Stock means an issuance by the Company of a
Convertible Security or an Option.
Option means any right, warrant or option to subscribe or purchase shares of
Common Stock or Convertible Securities.
3. Existing Section 4(d) is redesignated as Section 4(e) and the
phrase "Upon each adjustment in the Warrant Price pursuant to this Section
4" is amended to read "Upon each adjustment in the Warrant Price under
subsections (a), (b) and (c) of this section."
4. Unless otherwise defined, all capitalized terms in this Amendment
shall be as defined in the Warrant. Except as amended, the Warrant remains
in full force and effect.
5. This Amendment may be executed in two or more counterparts., each
of which shall be deemed an original, but all of which together shall
constitute one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
INTEGRATED PACKAGING ASSEMBLY CORPORATION
BY: /S/ Xxxxxx Xxxxxxxxx
TITLE; EVP and CFO
MMC/GATX PARTNERSHIP NO. 1
By: GATX Capital Corporation as Agent
By: /s/ Xxxxxx X. Nacd
Title: Vice President
Page 4
