THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
(OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT) AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION THEREFROM.
CASCADE MICROTECH, INC.
Series C Preferred
Stock Purchase Warrant
Expiring December 31, 2002
No. W-1 Beaverton, Oregon
Private Placement Number: 14732 # 11 0 December 16, 1999
Cascade Microtech, Inc. (the "COMPANY"), an Oregon
corporation, for value received, hereby certifies that Teachers Insurance and
Annuity Association of America, or registered assigns, is entitled to purchase
from the Company 250,000 duly authorized, validly issued, fully paid and
nonassessable shares of Series C Preferred Stock, par value $.01 per share, of
the Company (the "WARRANT SHARES") at an exercise price per share as determined
below (the "EXERCISE PRICE"), at any time or from time to time prior to 5:00
P.M., New York City time, on December 31, 2002, all subject to the terms,
conditions and adjustments set forth below in this Warrant.
Section 1. EXERCISE OF WARRANTS. (a) Upon the terms and
subject to the conditions set forth in this Warrant, the holder of the Warrant
(the "HOLDER") shall have the right, which may be exercised until 5:00 p.m., New
York City time, on December 31, 2002 (the "EXPIRATION TIME"), to receive from
the Company the number of fully paid and nonassessable Warrant Shares which the
Holder may at the time be entitled to receive upon exercise of this Warrant and
payment of the Exercise Price then in effect for such Warrant Shares.
The "EXERCISE PRICE" at any date of determination shall,
except as provided
herein, be based on the total revenues of the Company from the sale of products
sold by the Company's Pyramid Probe Division (excluding contract research
revenues) as reflected in the general ledger of the Company for the calendar
year ending December 31, 2000, with such Exercise Price determined in accordance
with the following schedule:
(i) If revenues are greater than or equal to
$11,000,000, then the Exercise Price shall be $18.00 per
share.
(ii) If revenues are less than $11,000,000 and
greater than $4,700,000, then the Exercise Price is equal to
the sum of (x) $6.00, plus (y) .000001904 times the excess of
such revenue over $4,700,000 per share.
(iii) If revenues are less than or equal to
$4,700,000, then the Exercise Price shall be $6.00 per share.
The above determination shall be concluded by the Company not
later than 90 days after the calendar year ending December 31, 2000, PROVIDED,
however, that the initial Holder shall have the right to inspect the records and
books of the Company in connection with such determination made by the Company.
In the event that the initial Holder disputes the good faith determination by
the Company, then such determination shall be made by a nationally recognized
independent accounting firm selected unanimously by the Board of Directors of
the Company in good faith. In the event that the accounting firm's determination
is 105% or more than the determination of the Company, then all costs of such
independent determination shall be borne by the Company. Otherwise, all costs of
the independent determination shall be borne by the initial Holder.
As agreed to by the Company and the initial Holder, the
Exercise Price for any exercise of the Warrant prior to final determination of
the revenue of the Pyramid Probe Division for the calendar year 2000, is $10 per
share, without further adjustment, except as provided in Section 5 hereof, and
regardless of the revenue of the Pyramid Probe Division for the calendar year
2000.
(b) Warrants may be exercised upon surrender of this Warrant
to the Company at its principal office during normal business hours on any
business day, with the form of election to purchase attached hereto duly filled
in and signed and upon payment to the Company of the Exercise Price for each of
the Warrant Shares in respect of which such Warrants are then exercised. Payment
of the aggregate Exercise Price shall be made by wire transfer or certified or
official bank check to the order of the Company.
(c) Each exercise of the Warrant shall be deemed to have been
effected immediately prior to the close of business on the business day on which
the Warrant shall have been surrendered to the Company as provided in Section
1(b), and at such time the person or persons in whose name or names any
certificate or certificates for Warrant Shares shall be issuable upon such
exercise as provided in Section 1(c) shall be deemed to have become the holder
or holders of record thereof.
(d) Subject to the provisions of Section 2 hereof, upon such
surrender of Warrants and payment of the aggregate Exercise Price, the Company
shall issue and cause to be delivered with all reasonable dispatch to or upon
the written order of the Holder and in such name or names as the Holder may
designate, (i) a certificate or certificates for the number of duly authorized,
validly issued, fully paid and nonassessable Warrant Shares to which such Holder
shall be entitled upon such exercise plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash in an amount equal to the
same fraction of the market price per Warrant Share on the business day next
preceding the date of such exercise, and (ii) in case such exercise is in part
only, a new Warrant or Warrants of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares to the number of such
shares called for on the face of the Warrant minus the number of such shares
designated by the Holder upon such exercise as provided in Section 1(b);
PROVIDED that if any consolidation, merger, transfer or lease of assets is
proposed to be effected by the Company as described in Section 5 hereof, or a
tender offer or an exchange offer for Warrant Shares shall be made, upon such
surrender of Warrants and payment of the Exercise Price as aforesaid, the
Company shall, as soon as possible, but in any event not later than three
business days thereafter, issue and cause to be delivered the full number of
Warrant Shares issuable upon the exercise of such Warrants in the manner
described in this sentence and/or any other consideration to be issued to such
Holder pursuant to Section 5 hereof. Such certificate or certificates shall be
deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price.
(e) The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part, and, in the event
that a certificate evidencing Warrants is exercised in respect of fewer than all
of the Warrant Shares issuable upon such exercise at any time prior to the date
of expiration of the Warrants, a new certificate evidencing the remaining
Warrant or Warrants will be issued and delivered pursuant to the provisions of
Section 1(d).
Section 2. PAYMENT OF TAXES. The Company will pay all
documentary
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; PROVIDED that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant or any certificates for Warrant Shares in a name other than
that of the registered Holder, and the Company shall not be required to issue or
deliver such Warrant or certificates for Warrant Shares unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
Section 3. MUTILATED OR MISSING WARRANT. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of, and (a) in the case of loss, theft or destruction, reasonable
indemnity (which in the case of the initial Holder or another institutional
Holder, may be such person's own unsecured agreement of indemnity), and (b) in
the case of mutilation, upon surrender and cancellation of this Warrant, the
Company will make and deliver in lieu of this Warrant a new Warrant of the same
series and of like tenor of this Warrant.
Section 4. RESERVATION OF WARRANT SHARES AND CONVERSION
SHARES. (a) The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Series C
Preferred Stock or its authorized and issued Series C Preferred Stock held in
its treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of shares of Series
C Preferred Stock which may then be deliverable upon the exercise of all
outstanding Warrants. The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants shall be duly authorized and will, upon payment
of the Exercise Price therefor and the issuance thereof, be validly issued,
fully paid, nonassessable with no liability on the part of the Holders thereof,
free of preemptive rights, free from all taxes and free from all liens, charges
and security interests, created by or through the Company, with respect to the
issue thereof.
(b) The Company will at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock or its authorized and issued Common Stock held in its treasury, for
the purpose of enabling it to satisfy any obligation to issue Common Stock upon
conversion of Series C Preferred Stock issued or issuable upon exercise of
Warrants, the maximum number of shares of Common Stock (the "CONVERSION SHARES")
which may then be deliverable upon the conversion of all Series C Preferred
Stock issuable upon exercise of all outstanding Warrants. The Company covenants
that all Conversion Shares which may be issued thereby, be fully paid,
nonassessable, free of preemptive rights, free from all taxes and free from all
liens, charges and security interests, created by or through the Company,
with respect to the issue thereof.
Section 5. REORGANIZATION OF THE COMPANY. (a) CONSOLIDATION,
MERGER, SALE OF ASSETS, REORGANIZATION, ETC. In case at any time the Company
shall be a party to any transaction (including without limitation a merger,
consolidation, sale or lease of all or substantially all of the Company's assets
or recapitalization of the Series C Preferred Stock) in which the previously
outstanding Series C Preferred Stock shall be changed into or exchanged for
different securities of the Company or changed into or exchanged for common
stock or other securities of another corporation or interests in a noncorporate
entity or other property (including cash) or any combination of any of the
foregoing (each such transaction being hereinafter referred to as the
"TRANSACTION") then, as a condition to the consummation of the Transaction,
lawful and adequate provisions shall be made so that, upon the basis and terms
and in the manner provided in this Section 5, the Holder, upon the exercise of
the Warrant, shall be entitled to receive, in lieu of the Series C Preferred
Stock issuable upon such exercise prior to such consummation, the stock and
other securities, cash and property to which the Holder would have been entitled
upon the consummation of the Transaction if the Holder had exercised the Warrant
immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equival ent as possible to the adjustments provided for
under the terms of the Series C Preferred Stock.
(b) Notwithstanding anything contained herein to the contrary,
the Company will not effect any Transaction unless, prior to the consummation
thereof, each corporation or entity (other than the Company) which may be
required to deliver any stock, securities, cash or property upon the exercise of
the Warrant as provided herein shall assume, by written instrument delivered to,
and reasonably satisfactory to, the Holder, (i) the obligations of the Company
hereunder (and if the Company shall survive the consummation of such
Transaction, such assumption shall be in addition to, and shall not release the
Company from, any continuing obligations of the Company hereunder) and (ii) the
obligation to deliver to the Holder such shares of stock, securities, cash or
property as, in accordance with the foregoing provisions, the Holder may be
entitled to receive, and such corporation or entity shall have similarly
delivered to the Holder an opinion of counsel for such corporation or entity,
which counsel shall be reasonably satisfactory to the Holder, stating that the
Warrant shall thereafter continue in full force and effect and the terms hereof
shall be applicable to the stock, securities, cash or property which such
corporation or entity may be required to deliver upon any conversion of any
Warrants or the exercise of any rights pursuant hereto.
(c) Upon any liquidation, dissolution or winding up of the
Company, the Holder shall receive such cash or property (less the Exercise
Price) which the Holder would have been entitled to receive upon the happening
of such liquidation, dissolution or winding up had the Warrant been exercised in
full and the shares of Series C Preferred Stock in respect of such exercise
issued immediately prior to the occurrence of such liquidation, dissolution or
winding-up.
Section 6. CHANGES AFFECTING THE SERIES C PREFERRED STOCK. If
the Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall pay any dividend or make any other distribution
on the Series C Preferred Stock payable in shares of Series C Preferred Stock or
shall split, subdivide or combine the Series C Preferred Stock into a different
number of securities of the same class, the Exercise Price for such securities
shall be proportionately decreased in the case of a stock dividend, split or
subdivision or proportionately increased in the case of a combination and the
number of the securities as to which purchase rights under this Warrant exist
shall be increased or decreased proportionately in accordance with such stock
dividend, split, subdivision or combination.
Section 7. NOTICES OF CORPORATE ACTION. In the event of
(a) any taking by the Company of a record of the holders of
its Series C Preferred Stock for the purpose of determining the holders
thereof who are entitled to receive any right,
(b) any subdivision of outstanding shares of Series C
Preferred Stock into a larger number of shares of Series C Preferred Stock, or
any combination of such shares into smaller number of shares of Series C
Preferred Stock,
(c) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other person or any
transfer of all or substantially all the assets of the Company to any other
person, or
(d) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company shall mail to each Holder a notice specifying (I) the date or
expected date on which any such record is to be taken for the purpose of such
right, and (II) the date or expected date on which any such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place and the time, if any
such time is to be fixed, as of which the holders of record of Series C
Preferred Stock shall be entitled to exchange their Warrant Shares for the
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 15
business days prior to the date specified in subdivisions (i) and (ii) above.
Section 8. OWNERSHIP, TRANSFER AND SUBSTITUTION OF THE
WARRANT. OWNERSHIP OF WARRANT. (a) The Company or such designee as the Company
shall indicate to the initial Holder by prompt written notice, shall have an
option to repurchase the Warrant if the initial Holder proposes to sell, assign,
pledge, encumber, transfer or otherwise dispose of for value the Warrant to any
party that (I) is in the business of manufacturing, distributing or selling any
product or service which competes with any product or service of the Company,
(II) is in the business of manufacturing, distributing or selling any
semiconductor test or measurement product or service to any party that
manufactures semiconductors or integrated circuits, whether or not such
semiconductor test or measurement product or service competes with any products
or services of the Company, (III) is in the business of manufacturing,
distributing or selling semiconductors or integrated circuits, or (IV) is an
affiliate of any of the foregoing unless the affiliate is a "qualified
institutional buyer" as that term is defined in Rule 144A(a)(1) of the
Securities Act of 1933, as amended, or any similar successor federal statute and
the rules and regulations thereunder, all as the same shall be in effect from
time to time.
(b) The Company may treat the person in whose name the
Warrant, or any Warrant or Warrants issued in substitution therefor, is
registered on the register kept at the principal office of the Company as the
owner and the Holder thereof for all purposes, notwithstanding any notice to the
contrary, except that, if and when any Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the bearer thereof as the
owner of such Warrant for all purposes, notwithstanding any notice to the
contrary. A Warrant, if properly assigned, may be exercised by a new Holder
without first having a new Warrant issued.
Section 9. TRANSFER AND EXCHANGE OF THE WARRANT. Upon the
surrender of the Warrant, properly endorsed, for registration of transfer or for
exchange at the principal office of the Company, the Company at its expense
shall execute and deliver to or upon the order of the Holder thereof a new
Warrant or Warrants of like tenor, in the
name of such Holder or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Series C Preferred Stock called for on
the face or faces of the Warrant or Warrants so surrendered.
Section 10. REMEDIES. The Company stipulates that the remedies
at law of the Holder in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of the Warrant
are not and shall not be adequate and hereby agrees, to the fullest extent
permitted by law, (A) such terms may be specifically enforced by a decree for
the specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise, and (B) to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
Section 11. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing
contained in the Warrant shall be construed as conferring upon the Holder hereof
any rights as a stockholder of the Company or as imposing any liabilities on
such Holder to purchase any securities or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors or
stockholders of the Company or otherwise.
Section 12. NOTICES. All notices and other communications
under the Warrant, except notices of the exercise of any Warrant (which shall be
effected in the manner provided in Section 1), shall be in writing and shall be
mailed by registered or certified mail, return receipt requested, addressed as
follows or to such other address as such party may have designated to the other
in writing:
(a) if to the initial Holder, at:
Teachers Insurance and Annuity Association of America
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Private Direct Equity Team
or
(b) if to the Company, to it at:
Xxxx Xxxxx X.X.X.
222 S.W. Columbia, Suite 1800
Portland, OR 97201
Attn: Xxxx X. Xxxxxxxxxxxxxx, Xx., Esq.
or
(c) if to any other Holder, as such Holder may have
specified in writing to the Company.
Section 13. GOVERNING LAW. (a) This Agreement shall be
governed by and construed under the laws of the State of New York as applied
to agreements among New York residents entered into and to be performed
entirely within New York.
(b) Notwithstanding the other provisions of this Warrant, this
Warrant is subject to the limitations (including, without limitation, any
restrictions on transfer) and rights
applicable thereto specified in the Investors' Rights Agreement.
Section 14. MISCELLANEOUS. The Warrant and any term hereof may
be changed, waived, discharged or terminated (other than the expiration of this
Warrant pursuant to its terms) only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. The agreements of the Company contained in the Warrant other than
those applicable solely to the Warrant and the Holder thereof shall inure to the
benefit of and be enforceable by any Holder or Holders at the time of any
Warrant Shares issued upon the exercise of the Warrant, whether so expressed or
not. The section headings in the Warrant are for purposes of convenience only
and shall not constitute a part hereof.
IN WITNESS WHEREOF, Cascade Microtech, Inc. has caused this
Warrant to be duly executed, as of December 16, 1999.
CASCADE MICROTECH, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President - Finance and
Chief Financial Officer
FORM OF ELECTION TO PURCHASE
(To be Executed Upon Exercise of Warrant)
To:____________________
The undersigned hereby irrevocably elects to exercise Warrants for,
and purchases thereunder, ____* shares of Series C Preferred Stock of Cascade
Microtech, Inc. and has tendered tenders payment for such shares to the order of
Cascade Microtech, Inc. in the amount of $______ per share of Series C Preferred
Stock in accordance with the terms
hereof.
The undersigned requests that a certificate for such shares be
registered in the name of _______________, whose address is
_____________________, and that such shares be delivered to __________________,
whose address is ____________________.
If said numbers of shares is less than all of the shares of Series C
Preferred Stock purchasable under the Warrant, the undersigned requests that a
new Warrant representing the remaining balance of such Warrants be registered in
the name of _______________, whose address is _____________________, and that
such shares be delivered to __________________, whose address is
____________________.
Dated:_______________________
Your Signature: [HOLDER]**
[Address]
--------
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised). In the case of a partial exercise, a new
Warrant or Warrants shall be issued and delivered, representing the
unexercised portion of the Warrant, to the holder surrendering the same.
** Signature must conform in all respects to name of holder as specified on the
face of the Warrant.
By:_________________________
Name:
Title:
FORM OF ASSIGNMENT
(To be executed only upon transfer of Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto ________________ the right
represented by such Warrant to purchase ______ shares of Series C Preferred
Stock of Cascade Microtech, Inc. to which such Warrant relates, and appoints
___________ Attorney to make such transfer on the books of Cascade Microtech,
Inc. maintained for such purpose, with full power of substitu tion in the
premises.
Dated: ______________
[HOLDER]*
[Address]
By__________________________
Name:
Title:
Signed in the presence of:
------------------------------
------------------------------
* Signature must conform in all respects to name of holder as specified on the
face of the Warrant.
