Exhibit 99.1
AS EXECUTED DECEMBER 12, 1996
Integrated Process Equipment Corp.
and
Xxxxxxxx International Limited
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Subscription Agreement
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Dated as of December 12, 1996
SUBSCRIPTION AGREEMENT
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This Subscription Agreement (the "Agreement") dated December 12, 1996 is entered
into by and between Integrated Process Equipment Corp., a Delaware corporation
(together with its successors, "IPEC"), together with its successors, and
Xxxxxxxx International Limited, a company organized under the laws of the Cayman
Islands (together with its successors, "Xxxxxxxx").
Unless otherwise defined herein, capitalized terms used herein and not defined
herein shall have the meanings given to them in Regulation S ("Regulation S")
under the United States Securities Act of 1933, as amended (the "Securities
Act").
The parties hereto agree as follows:
1. Purchase and Sale. In consideration of and upon the basis
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of the representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement:
a. Convertible Preferred Stock. IPEC agrees to sell to
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Xxxxxxxx, and Xxxxxxxx agrees to purchase from IPEC, on the Closing Date
specified in Section 2 hereof, 100,000 shares of Convertible Preferred
Stock, par value $.01 per share (the "Preferred Shares"), having the terms
and conditions set forth in the Certificate of Designation which is
attached hereto as Annex A at a purchase price per share equal to TWO
HUNDRED AND FIFTY DOLLARS ($250.00).
b. Warrant. In consideration of the purchase of the Preferred
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Shares by Xxxxxxxx, IPEC will issue to Xxxxxxxx on the Closing Date
specified in Section 2 hereof, a warrant having the terms set forth in the
warrant certificate attached hereto as Annex B (the "Warrant") to purchase
up to 456,000 shares of IPEC's Common Stock, par value $0.01 per share (the
"Common Stock"), which, in accordance with the terms and conditions of this
Agreement and the Warrant, will be freely tradable. The shares of Common
Stock issuable pursuant to the Warrant are referred to herein as the
"Warrant Shares."
c. Converted Stock. The term "Converted Stock" shall apply to
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any Common Stock issued or to be issued to Xxxxxxxx upon conversion of the
Preferred Shares pursuant to the terms of this Agreement and the
Certificate of Designation or upon the exercises of the Warrant.
2. Closing Date. The delivery of the Preferred Shares referred
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to in Section 1(a) and the Warrant referred to in Section 1(b) (the "Closing")
shall take place upon satisfaction or, if applicable, waiver of the conditions
set forth in Sections 8 and 9 hereof via facsimile at 1:00 p.m. (New York time)
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on December 16, 1996, or at such other date and time as Xxxxxxxx and IPEC may
agree in writing (such date and time being referred to herein as the "Closing
Date").
At the Closing, the following deliveries shall be made:
a. Preferred Shares. IPEC shall deliver the certificate
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representing the Preferred Shares, duly registered on the books of IPEC in
the name of Xxxxxxxx, against payment by Xxxxxxxx of the purchase price
specified in Section 1(a) hereof in immediately available funds to the
following account: Account Name: Integrated Process Equipment Corp.,
Xxxxx Fargo Bank, Account No. 4159542927, ABA No. 000000000.
b. Warrant. IPEC shall deliver the certificate representing the
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Warrant to Xxxxxxxx. Such certificate shall be substantially in the form
attached hereto as Annex B.
c. Officers' Certificate. The officers' certificates required
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by Sections 8(a) and 9(a) shall be delivered to Xxxxxxxx and IPEC,
respectively.
d. Legal Opinion. The legal opinions required by Section 8(b)
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and 9(e) shall be delivered to Xxxxxxxx and IPEC, respectively.
The foregoing deliveries shall be deemed to occur simultaneously as
part of a single transaction, and no delivery shall be deemed to have been made
until all such deliveries have been made.
3. Representations and Warranties of IPEC. IPEC hereby
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represents and warrants to Xxxxxxxx on the date hereof, on the Closing Date, on
the date any Preferred Share is converted (each a "Conversion Date") and on each
Warrant Exercise Date (as defined in Annex B hereto), except as disclosed in the
Schedule of Disclosure attached hereto as Annex C, as follows:
a. IPEC has been duly incorporated and is validly existing in
good standing under the laws of Delaware, or, after the Closing Date if
another entity has succeeded IPEC in accordance with the terms hereof,
under the laws of one of the United States.
b. The execution, delivery and performance of this Agreement
(including the issuance of the Preferred Shares) and the Warrant by IPEC
have been duly authorized by all requisite corporate action and no further
consent or authorization of IPEC, its Board of Directors or its
stockholders is required. This Agreement and the Warrant have been duly
executed and delivered by IPEC and, when duly authorized, executed and
delivered by Xxxxxxxx, will be valid and binding agreements enforceable
against IPEC in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity.
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c. IPEC has full corporate power and authority necessary to
execute and deliver this Agreement and the Warrant and to perform its
obligations hereunder (including the issuance of the Preferred Shares) and
thereunder.
d. No consent, approval, authorization or order of any court,
governmental agency or other body is required for the execution and
delivery by IPEC of this Agreement and the Warrant or the performance by
IPEC of any of its obligations hereunder (including the issuance of the
Preferred Shares) or thereunder.
e. Neither the execution and delivery by IPEC of this Agreement
and the Warrant nor the performance by IPEC of any of its obligations
hereunder or thereunder:
(1) violates, conflicts with, results in a breach of, or
constitutes a default (or an event which with the giving of notice or
the lapse of time or both would be reasonably likely to constitute a
default) under (A) the Certificate of Incorporation or by-laws of IPEC
or any of its subsidiaries or any Certificate of Designation relating
to any securities of IPEC or any of its subsidiaries, (B) any decree,
judgment, order, law, treaty, rule, regulation or determination of
which IPEC is aware (after due inquiry) of any court, governmental
agency or body, or arbitrator having jurisdiction over IPEC or any of
its subsidiaries or any of their respective properties or assets, (C)
the terms of any bond, debenture, note or any other evidence of
indebtedness, or any agreement, stock option or other similar plan,
indenture, lease, mortgage, deed of trust or other instrument to which
IPEC or any of its subsidiaries is a party, by which IPEC or any of
its subsidiaries is bound, or to which any of the properties or assets
of IPEC or any of its subsidiaries is subject, and which is material
to IPEC and its subsidiaries as a whole, (D) the terms of any "lock-
up" or similar provision of any underwriting or similar agreement to
which IPEC or any of its subsidiaries is a party, or (E) any rules of
the National Association of Securities Dealers, Inc. applicable to
IPEC or the transactions contemplated hereby; or
(2) results in the creation or imposition of any lien,
charge or encumbrance upon (A) any Preferred Share, the Warrant, the
Warrant Shares or any Converted Stock or (B) any of the properties or
assets of IPEC or any of its subsidiaries.
f. IPEC has validly reserved (i) 100,000 Preferred Shares for
issuance pursuant to the terms hereof, (ii) 2,500,000 shares of Common
Stock for issuance pursuant to the terms of this Agreement and the
Certificate of Designation and (iii) 456,000 shares of Common Stock for
issuance pursuant to the Warrant. When issued to Xxxxxxxx against payment
therefor in accordance with the terms of this Agreement, the Certificate of
Designation or the Warrant, each share of Preferred Stock and Converted
Stock:
(1) will have been duly and validly authorized, duly and
validly issued, fully paid and non-assessable;
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(2) will be free and clear of any security interests, liens,
claims or other encumbrances; and
(3) will not have been issued or sold in violation of any
preemptive or other similar rights of the holders of any securities of
IPEC.
g. The Common Stock has been, and upon issuance the Warrant
Shares and the Converted Stock will be, duly listed and admitted for
trading on the Nasdaq National Market ("NASDAQ") or, if applicable,
following the Closing Date, listed and registered on a national securities
exchange (as defined in the United States Securities Exchange Act of 1934,
as amended (the "Exchange Act")). IPEC satisfies all quantitative
maintenance criteria of the NASDAQ.
h. IPEC is a Reporting Issuer within the meaning of Regulation
S.
i. There is no pending or, to the best knowledge of IPEC,
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over IPEC or
any of its affiliates that would materially affect the execution by IPEC
of, or the performance by IPEC of its obligations under this Agreement or
the Warrant, provided, however, that the representations and warranties
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contained in this Section 3(i) shall not apply to any action, threatened
action, suit, proceeding or investigation initiated by Xxxxxxxx.
j. IPEC has timely filed all filings with the United States
Securities and Exchange Commission (the "SEC") under the Securities Act
(including, without limitation, the Registration Statement on Form S-3
(File No. 333-16287) filed on November 18, 1996 (the "November S-3")) or
under Section 13(a) or 15(d) of the Exchange Act (each, an "SEC Filing")
required to be filed by IPEC pursuant to such acts during the past twelve
months and no SEC Filing at the time filed, or press release issued by IPEC
containing information material to the business of IPEC as a whole,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading at the time of
the public disclosure.
k. Since the date of IPEC's most recent SEC Filing, there has
not been, and IPEC is not aware of any development that would require an
amendment to the November S-3 in order to permit public offers and sales of
shares of Common Stock thereunder. The parties hereto acknowledge that (i)
Xxxxxxxx has neither requested of nor received from IPEC any non-public
information relating to IPEC or the business affairs or business prospects
of IPEC and (ii) without limiting Xxxxxxxx'x reliance on any of the
representations, warranties, covenants and agreements of IPEC contained
herein, Xxxxxxxx assumes the risk that the knowledge of any of the non-
public information described in proviso (i) of this Section 3(k) might have
materially influenced Xxxxxxxx'x decision to enter into and perform this
Agreement. IPEC is not aware of any development that might result in IPEC
not satisfying all such quantitative maintenance criteria of the NASDAQ.
The representations and warranties contained in this Section 3(k) shall not
be required to be given in respect of any Conversion Date or Warrant
Exercise Date.
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l. The offer and sale of the Preferred Shares, the Converted
Stock, the Warrant and the Warrant Shares to Xxxxxxxx pursuant to this
Agreement and the Warrant will, subject to compliance by Xxxxxxxx with the
applicable representations and warranties contained in Section 4 hereof and
with the applicable covenants and agreements contained in Section 6 hereof,
be made in accordance with the provisions and requirements of Regulation S
and any applicable state law.
m. Neither IPEC nor any of its affiliates nor any person acting
on its or their behalf has engaged or will engage in any Directed Selling
Efforts with respect to the Preferred Shares, the Converted Stock, the
Warrant or the Warrant Shares, and all such persons understand and have
complied and will otherwise comply with the requirements of Regulation S.
n. The transactions contemplated by this Agreement are not part
of a plan or scheme on the part of IPEC, any of its affiliates or any
person acting on its or their behalf, to evade the registration provisions
of the Securities Act.
o. IPEC has not issued, and after the date hereof, will not
issue, any stop transfer order or other order impeding the sale and
delivery of the Preferred Shares, the Converted Stock, the Warrant or the
Warrant Shares issuable hereunder except for a stop order restricting the
sale of any of the foregoing securities to any person in the United States
or to or for the account or benefit of any U.S. person during an applicable
Restricted Period or otherwise not in compliance with Regulation S.
p. Neither IPEC nor any of its affiliates has offered to sell
or sold any Common Stock or any securities convertible or exchangeable into
or exercisable for Common Stock in reliance upon Regulation S at any time
during the 12 months prior to the date of this Agreement; and there are no
such outstanding convertible or exchangeable securities that have been
offered or sold in reliance upon Regulation S, except, in each case the
Warrant, the Warrant Shares, the Converted Stock and the Preferred Shares
sold pursuant hereto.
q. As of the date hereof, the authorized capital stock of IPEC
consists of 50,000,000 shares of Common Stock, 3,500,000 shares of Class A
Common Stock, par value $0.01 per share ("Class A Common Stock"), and
2,000,000 shares of Preferred Stock, par value $.01 per share ("Preferred
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Stock") of which 21,478 shares are authorized for each of the Series B-1,
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B-2 and B-3 Preferred Stock ("Series B Preferred Stock") and 100,000 shares
are authorized for Series C Convertible Preferred Stock. As of September
30, 1996, (i) 14,354,272 shares of Common Stock, 521,650 shares of Class A
Common Stock and 57,723 shares of Series B Preferred Stock were issued and
outstanding, (ii) 5,029,515 shares of Common Stock were reserved for
issuance upon exercise of Class A Common Stock, outstanding stock options,
convertible Preferred Stock, including the Series B Preferred Stock,
warrants or other rights and (iii) 0 shares of Common Stock were held in
the treasury of IPEC. All the outstanding shares of Common Stock are, and
all shares which may be issued pursuant to stock options, warrants or other
convertible rights will be, when issued and paid for in accordance with the
respective terms thereof, duly authorized, validly issued, fully paid and
nonassessable and free of any preemptive
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rights in respect thereof. As of the date hereof, except as set forth
above, and except for shares of Common Stock or other securities issued
upon conversion, exchange, exercise or purchase associated with the
securities, options, warrants, rights and other instruments referenced
above from September 30, 1996 to the date hereof, and except for shares of
Common Stock related to option grants made after September 30, 1996 to the
date hereof under IPEC's stock plans for employees, directors and
consultants, not in excess of 29,000 shares in the aggregate, (i) no shares
of capital stock or other voting securities of IPEC were outstanding, (ii)
no equity equivalents, interests in the ownership or earnings of IPEC or
other similar rights were outstanding and (iii) there were no existing
options, warrants, calls, subscriptions or other rights or agreements or
commitments relating to the capital stock of IPEC or any of its
subsidiaries or obligating IPEC or any of its subsidiaries to issue,
transfer, sell or redeem any shares of capital stock, or other equity
interest in, IPEC or any of its subsidiaries or obligating IPEC or any of
its subsidiaries to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement or commitment.
4. Representations and Warranties of Xxxxxxxx. Xxxxxxxx hereby
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represents and warrants to IPEC on the date hereof and on the Closing Date, and
agrees with IPEC, as follows:
x. Xxxxxxxx has been duly incorporated and is validly existing
in good standing under the laws of the Cayman Islands, or, after the
Closing Date if another entity has succeeded Xxxxxxxx in accordance with
the terms hereof, under the laws of the jurisdiction of its incorporation.
b. The execution, delivery, and performance of this Agreement
by Xxxxxxxx have been duly authorized by all requisite corporate action and
no further consent or authorization of Xxxxxxxx, its Board of Directors or
its stockholders is required. This Agreement has been duly executed and
delivered by Xxxxxxxx and, when duly authorized, executed and delivered by
IPEC, will be a valid and binding agreement enforceable against Xxxxxxxx in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general
principles of equity.
c. In making the decision to purchase the Preferred Shares, the
Converted Stock, the Warrant and the Warrant Shares in accordance with this
Agreement, Xxxxxxxx has relied solely upon independent investigations made
by it and not upon any representations made by IPEC other than those made
pursuant to this Agreement.
x. Xxxxxxxx understands that the Preferred Shares, the
Converted Stock, the Warrant and the Warrant Shares have not been and,
subject to Section 7, will not be registered under the Securities Act and
may not be reoffered or resold other than pursuant to such registration or
an available exemption therefrom.
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x. Xxxxxxxx is not a U.S. Person and is not acquiring the
Preferred Shares, the Converted Stock, the Warrant or any Warrant Shares
for the account or benefit of any U.S. Person.
f. At the time the buy orders for the Preferred Shares and the
Warrant (and any Converted Stock and Warrant Shares issued during the
applicable Restricted Period) were originated, Xxxxxxxx was located outside
the United States.
g. Neither Xxxxxxxx nor any of its affiliates nor anyone acting
on its or their behalf has engaged or will engage in any Directed Selling
Efforts with respect to the Preferred Shares, the Converted Stock, the
Warrant or any Warrant Shares, and all such persons understand and have
complied and will otherwise comply with the requirements of Regulation X.
x. Xxxxxxxx:
(1) will not, through its own actions or any of its
affiliates or any person acting on its or their behalf, during the
Restricted Period applicable to the Preferred Shares, the Converted
Stock, the Warrant and the Warrant Shares, offer or sell any of the
foregoing securities (or create or maintain any derivative position
equivalent thereto) in the United States, to or for the account or
benefit of a U.S. Person or other than in accordance with Regulation
S; and
(2) will, after the expiration of the applicable Restricted
Period, offer, sell, pledge or otherwise transfer the Preferred
Shares, the Converted Stock, the Warrant or any Warrant Shares (or
create or maintain any derivative position equivalent thereto) only
pursuant to registration under the Securities Act or an available
exemption therefrom and, in any case, in accordance with applicable
state securities laws.
x. Xxxxxxxx is purchasing the Preferred Shares, the Warrant,
the Warrant Shares, and the Converted Stock for its own account, for the
purpose of investment and not with a view to a distribution thereof.
j. The transactions contemplated by this Agreement are not part
of a plan or scheme on the part of Xxxxxxxx, any of its affiliates or any
person acting on its or their behalf to evade the registration requirements
of the Securities Act.
k. Assuming the accuracy of the representations and warranties
of IPEC herein made as of such date, no consent, approval, authorization or
order of any court, governmental agency or other body is required for the
execution by Xxxxxxxx of this Agreement or the performance by Xxxxxxxx of
any of its obligations hereunder, other than such as have been obtained.
l. Neither the execution by Xxxxxxxx of this Agreement nor the
performance by Xxxxxxxx of any of its obligations hereunder will violate,
conflict with, result in a breach of, or
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constitute a default (or an event which with the giving of notice or the
lapse of time or both would be reasonably likely to constitute a default)
under the Memorandum or Articles of Association of Xxxxxxxx.
x. Xxxxxxxx understands that no United States federal or state
agency has passed on, reviewed or made any recommendation or endorsement of
the Preferred Shares, the Converted Stock, the Warrant or the Warrant
Shares.
x. Xxxxxxxx represents and warrants that it has not relied upon
any information or representations and warranties of Xxxxxxxxx & Xxxxx LLC
(the "Placement Agent"), including, without limitation, any information
regarding IPEC and its officers, financial condition, business and
prospects, or the terms of the purchase of the Preferred Shares and the
Warrant. The foregoing, however, does not affect any rights of Xxxxxxxx
relative to IPEC and does not limit or modify the representations and
warranties of IPEC in Section 3 of this Agree ment or the right of
Xxxxxxxx to rely thereon. IPEC and Xxxxxxxx expressly acknowledge and
agree and intend that the Placement Agent is a third party beneficiary of
this Section 4(n).
5. Covenants of IPEC. IPEC covenants and agrees with Xxxxxxxx
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as follows:
a. For so long as any Preferred Share is outstanding or any
portion of the Warrant remains outstanding, and in either case for a period
of 40 days thereafter, IPEC will continue to be a Reporting Issuer within
the meaning of Regulation S and will maintain the eligibility of the Common
Stock for quotation on NASDAQ or listing on a national securities exchange
(as defined in the Exchange Act).
b. For so long as any Preferred Share is outstanding or any
portion of the Warrant remains outstanding, and in either case for a period
of 40 days thereafter, neither IPEC nor any of its affiliates nor any
person acting on its or their behalf will engage in any Directed Selling
Efforts with respect to the Preferred Shares, the Warrant, or the Common
Stock issuable pursuant to this Agreement and the Warrant. Without
limiting the generality of the foregoing, IPEC agrees that, to the extent
it or any of its affiliates or any person acting on its or their behalf
issues a press release or similar written public statement that includes
any reference to the transactions contemplated by this Agreement, IPEC
shall provide Xxxxxxxx the right to review and approve such press release
prior to dissemination.
c. For so long as any Preferred Share is outstanding or any
portion of the Warrant remains outstanding, and in either case for a period
of 40 days thereafter, IPEC and its affiliates and persons acting on its
behalf will comply with all Offering Restrictions with respect to the
Preferred Shares, the Converted Stock, the Warrant and the Warrant Shares.
d. Reserved.
e. IPEC will comply with the terms and conditions of the
Preferred Stock and the Warrant as set forth in Annex B hereto. Prior to
the Closing, the Certificate of Designation
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will have been filed with the Secretary of State of the State of Delaware
in accordance with the Delaware General Corporation Law.
f. So long as any Preferred Share is outstanding or any portion
of the Warrant remains outstanding, IPEC shall at all times reserve and
keep available, free from pre-emptive rights, out of its authorized but
unissued Common Stock, for issuance upon conversion of such Preferred
Shares and exercise of such Warrant, the maximum number of shares of Common
Stock then so issuable.
g. For a period of six months from the date hereof, IPEC will
not offer or sell any of its or its affiliates' securities pursuant to
Regulation S.
h. For a period of one year following the date hereof, IPEC
will not offer to sell to any person any of its or its subsidiaries' Common
Stock (or any securities convertible into or exchangeable for such common
stock) in reliance upon Section 4(2) of the Securities Act, or Regulation D
promulgated thereunder (an "Equity Placement"), unless IPEC shall have (1)
given Xxxxxxxx at least 8 Business Days prior written notice of its
intention to engage in any such Equity Placement or other capital raising
transaction in advance of soliciting or negotiating with any prospective
investor and (2) negotiated in good faith with Xxxxxxxx during such 8
Business Days with respect to any proposed Equity Placement, provided that
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during such 8 Business Day Period, IPEC shall not negotiate with any party
other than Xxxxxxxx with respect to any proposed Equity Placement. The
above restrictions shall not apply to (i) the sale of 50% or more of the
outstanding Common Stock of a subsidiary, (ii) any strategic partnership or
joint venture entered into by IPEC or any of its subsidiaries, (iii) the
merger or consolidation of IPEC with or into any other corporation or
entity which results in one person or entity owning a majority of the
surviving entity, (iv) any registered, underwritten public offering of
IPEC's equity securities, (v) any issuances of Common Stock of IPEC in
connection with bank or equipment financing, (vi) any issuances of Common
Stock in connection with any employee, consultant or director compensation
plan or arrangement or (vii) any transaction intended to be made in
reliance upon Rule 144A of the Securities Act so long as such transaction
involves more than 10 purchasers.
i. Beginning on the date hereof and for so long as any portion
of the Warrant remains outstanding, and in any case for a period of 40 days
thereafter, IPEC will promptly notify Xxxxxxxx if there is any public
disclosure by IPEC of material information regarding IPEC or its financial
condition, prospects or results of operation and will provide Xxxxxxxx with
copies of all press releases, SEC Filings and any publicly available
information it provides to NASDAQ.
j. In accordance with the terms of Regulation S, IPEC will file
with the SEC, within 15 calendar days after the Closing Date, a report on
Form 8-K with respect to the transactions contemplated hereby and in the
Warrant. In addition, IPEC shall file copies of this Agreement, the
Schedule of Disclosure, the Certificate of Designation and the Warrant as
exhibits to the Form 8-K.
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k. IPEC shall take all actions necessary to cause the Warrant
Shares and the Converted Stock to be duly listed and admitted for trading
upon issuance on the NASDAQ or, if applicable, a national securities
exchange (as defined in the Exchange Act) and shall maintain the listing of
such shares after their issuance.
6. Covenants of Xxxxxxxx. Xxxxxxxx hereby covenants and agrees
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with IPEC as follows:
a. During any Restricted Period applicable to the Preferred
Shares, the Converted Stock, the Warrant or the Warrant Shares, neither
Xxxxxxxx nor any of its affiliates nor any person acting on its or their
behalf will:
(1) offer or sell such Preferred Shares, Converted Stock,
Warrant or Warrant Shares other than in an Offshore Transaction;
(2) engage in any Directed Selling Efforts with respect to
such Preferred Shares, Converted Stock, Warrant or Warrant Shares;
(3) offer or sell such Preferred Shares, Converted Stock,
Warrant or Warrant Shares other than: (A) in accordance with Rule 903
or Rule 904 of Regulation S; (B) pursuant to registration under the
Securities Act or (C) pursuant to an available exemption therefrom; or
(4) offer or sell such Preferred Shares, Converted Stock,
Warrant or Warrant Shares to any U.S. Person or for the account or
benefit of any U.S. Person.
b. Neither Xxxxxxxx nor any of its affiliates nor any person
acting on its or their behalf will at any time offer or sell any Preferred
Shares, Converted Stock, Warrant or Warrant Shares other than pursuant to
registration under the Securities Act or pursuant to an available exemption
therefrom.
6A. Legend. The term "Restricted Period," with respect to any
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security, shall mean the Restricted Period then applicable to such security
pursuant to Regulation S (or any applicable successor thereto), provided that,
the parties agree that, absent an intervening change in the applicable laws, the
Restricted Period with respect to the Preferred Shares, the Warrant, the Warrant
Shares, and the Converted Stock will expire on the 40th day after the Closing
Date. IPEC shall place the following legend on the certificate representing
securities (other than the Warrant) issued hereunder prior to the expiration of
the Restricted Period:
The securities represented by this certificate were issued on [insert
original issue date] (the "Closing Date") pursuant to the Subscription
Agreement dated December__, 1996 between Integrated Process Equipment
Corp. ("IPEC") and Xxxxxxxx International Limited. The securities
represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the "Securities
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Act"), and have been sold in reliance on the exemption from
registration provided by Regulation S under the Securities Act
("Regulation S"). Prior to the expiration of a 40-day restricted
period beginning on the Closing Date (the "Restricted Period"), the
securities represented by this certificate may not be offered or sold,
directly or indirectly, within the United States (as defined in
Regulation S under the Securities Act), to a U.S. Person (as defined
in Regulation S under the Securities Act) or for the account or
benefit of a U.S. Person. After the Restricted Period, such securities
may be resold in the United States or to a U.S. Person only if they
are registered under the Securities Act or an exemption from
registration is available.
At any time after the expiration of the Restricted Period with respect
to the Warrant or the Preferred Shares, certificates for any Warrant Shares or
Converted Stock issued or for any transferred shares of Common Stock will not be
legended upon satisfaction of the applicable conditions set forth in Section 9
and, if applicable, in the Warrant.
7. Registration Rights.
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a. If, at any time after the date hereof, there is any
determination of application of, or change in, any law or regulation
relating to the issuance and resale of the Preferred Shares, the Converted
Stock, the Warrant or the Warrant Shares, including any interpretation or
revision by the SEC or action by the United States government relating to
Regulation S or any successor or revision to Regulation S, and such
determination, change, interpretation, successor, provision or revision
imposes a Restricted Period applicable to any security issued or issuable
hereunder or under the Warrant that is greater than that in effect on the
date of this Agreement, or would materially impair the ability of Xxxxxxxx
or any of its affiliates to offer, sell or otherwise dispose of any such
security pursuant to Regulation S as contemplated hereby, or requires any
such offer, sale or other disposition to be registered under the Securities
Act, then upon the written request of Xxxxxxxx (a "Registration Request"),
IPEC shall, as promptly as practicable thereafter and at its own expense,
file a registration statement on an appropriate form of the SEC (the
"Registration Statement") (which Registration Statement shall be filed on
Form S-3, if available) under the Securities Act covering the sale or
resale of all such securities (each a "Covered Security") and shall use its
best efforts to cause such registration statement to be declared effective
as promptly as possible; provided that Xxxxxxxx shall have provided such
information and cooperation in connection therewith as IPEC may reasonably
request. Upon the effectiveness of such Registration Statement (A) IPEC
shall issue such securities to Xxxxxxxx in accordance with the terms hereof
and (B) the provisions of Sections 3(1), (m) and (o) and (p), 4(e), (f),
(g), (h), (i) and (j), 5(a), (b), (c) and (d), 6 (collectively, the
"Specified Provisions"), 8(a) and (b) (to the extent applicable to the
Specified Provisions), 9(b), (c) and (d) (to the extent applicable to the
Specified Provisions) shall thereafter be of no force and effect with
respect to the issuance of such Covered Securities.
If a Registration Statement has not been declared effective (a
"Non-Registration") before the 270th day following the date of a
Registration Request, as soon as permitted by any
-12-
Bank Debt (as defined below) but in any event not later than the third
anniversary of such Regis tration Request, IPEC hereby agrees to
repurchase any Covered Securities as may not be resold in the United States
without restriction under the Securities Act upon request for cash in an
amount (the "Cash Amount") equal to (i) the liquidation preference of the
Preferred Shares, (ii) the Conversion Value multiplied by the number of
shares of the Converted Stock, and (iii) the aggregate Exercise Price (as
defined in the Warrant) paid in respect of the Warrant. The "Con version
Value" is equal to the weighted average of the respective conversion prices
of Converted Stock issued to Xxxxxxxx upon the conversion of shares of
Preferred Shares, with each such conversion price weighted according to the
number of shares of Common Stock received on the respective date of
conversion. Upon Xxxxxxxx'x request, the Warrant will be converted into a
number of shares of Common Stock equal to the number of shares represented
by Warrant Shares multiplied by (X) the difference between (i) the average
of the daily volume-weighted average prices of the Common Stock as reported
on the Nasdaq National Market (as published by Bloomberg or other mutually
agreeable source) for 40 trading day period prior to but exclud ing the
date of such request (the "Market Price"), minus (ii) the Exercise Price
(as defined in the Warrant), divided by (Y) the Market Price. In the event
of a Non-Registration, IPEC shall not issue any securities or incur any
indebtedness for borrowed money (other than indebtedness in curred
pursuant to a revolving bank credit agreement ("Bank Debt") or in the
ordinary course of the Corporation's business), except in connection with
the repurchase of Covered Securities.
In the event of a Non-Registration, if IPEC does not repurchase
the Covered Shares, Xxxxxxxx shall have the right to convert some or all of
the Covered Securities into a note (an "Excess Note") in an amount equal to
the Cash Amount due on demand bearing interest at an interest rate of 15%
per annum, provided that the obligation to pay principal and interest on
the Excess Note(s) may be subordinated to Bank Debt, until the third
anniversary of the issuance of such Excess Note(s), at which time all
principal and interest payable in respect of the Excess Note(s) shall be
paid upon demand. The provisions of this Section shall apply successively
as appropriate.
b. In the case of the registration effected by IPEC pursuant to
this Section 7, IPEC will use its best efforts to: (i) keep such
registration effective until the earlier of (A) the third anniversary of
the issuance of each Covered Security, (B) such date as all of the Covered
Securities have been sold by Xxxxxxxx or (C) such time as all of the
Covered Securities held by Xxxxxxxx can be sold by Xxxxxxxx or any of its
affiliates within a three-month period without compliance with the
registration requirements of the Securities Act pursuant to Rule 144 under
the Securities Act ("Rule 144"); (ii) prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement (as so amended and
supplemented from time to time, the "Prospectus") as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all Covered Securities by Xxxxxxxx or any of its affiliates;
(iii) furnish such number of Prospectuses and other documents incident
thereto, including any amendment of or supplement to the Prospectus, as
Xxxxxxxx from time to time may reasonably request; (iv) cause all Covered
Securities that are Common Stock to be listed on each securities exchange
and quoted on each quotation service on which similar securities issued by
IPEC are then listed or quoted; (v) provide
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a transfer agent and registrar for all Covered Securities and a CUSIP
number for all Covered Securities; (vi) otherwise use its best efforts to
comply with all applicable rules and regulations of the SEC; and (vii) file
the documents required of IPEC and otherwise use its best efforts to obtain
and maintain requisite blue sky clearance in (A) all jurisdictions in which
any of the Covered Securities are originally sold and (B) all other states
specified in writing by Xxxxxxxx, provided however, that as to this clause
(B) IPEC shall not be required to qualify to do business or consent to
service of process in any state in which it is not now so qualified or has
not so consented.
c. IPEC shall furnish to Xxxxxxxx upon request a reasonable
number of copies of a supplement to or an amendment of such Prospectus as
may be necessary in order to facilitate the public sale or other
disposition of all or any of the Covered Securities by Xxxxxxxx or any of
its affiliates pursuant to the Registration Statement.
d. With a view to making available to Xxxxxxxx and its
affiliates the benefits of Rule 144 and Form S-3 under the Securities Act,
IPEC covenants and agrees to: (i) make and keep available adequate current
public information (within the meaning of Rule 144(c)) concerning IPEC,
until the earlier of (A) the third anniversary of the issuance of each
Covered Security or (B) such date as all of the Covered Securities shall
have been resold by Xxxxxxxx or any of its affiliates; (ii) maintain its
status as a Reporting Issuer and file with the SEC in a timely manner all
reports and other documents required of IPEC for use of Form S-3; and (iii)
furnish to Xxxxxxxx upon request, as long as Xxxxxxxx owns any Covered
Securities, (A) a written statement by IPEC that it has complied with the
reporting requirements of the Securities Act and the Exchange Act, (B) a
copy of the most recent annual or quarterly report of IPEC, and (C) such
other information as may be reasonably requested in order to avail Xxxxxxxx
and its affiliates of Rule 144 or Form S-3 with respect to such Covered
Securities.
e. Notwithstanding anything else in this Section 7, if, at any
time during which a Prospectus is required to be delivered in connection
with the sale of any Covered Securities, IPEC declares a Blackout Period
(as defined below), then IPEC will immediately notify Xxxxxxxx thereof by
telephone and in writing. Upon receipt of such notification, Xxxxxxxx and
its affiliates will immediately suspend all offers and sales of any Covered
Securities pursuant to the Registration Statement. In such event, IPEC
will amend or supplement the Registration Statement as promptly as
practicable and will take such other steps as may be required to permit
sales of the Covered Securities thereunder by Xxxxxxxx and its affiliates
in accordance with applicable federal and state securities laws. IPEC may
declare a "Blackout Period" if IPEC determines in good faith that (i) a
development has occurred or a condition exists as a result of which the
Registration Statement or the Prospectus contains a material misstatement
or omission, or (ii) circumstances exist that make it impractical or
inadvisable for IPEC to amend or supplement the Registration Statement or
the Prospectus (which circumstances may result, without limitation, from
pending negotiations relating to, or consummation of, a transaction or the
occurrence of some other event) where any of the foregoing would require
disclosure under applicable securities laws of material information in the
Registration Statement (or any document incorporated by reference into the
Registration Statement) or state securities filings and as to which IPEC
has a
-14-
bona fide business purpose for preserving confidentiality. IPEC will
promptly notify Xxxxxxxx after it has determined in good faith that such
sales have become permissible in such manner and will promptly deliver
copies of the Registration Statement and the Prospectus (as so amended or
supplemented) to Xxxxxxxx in accordance with paragraph (b) of this Section
7. Notwithstanding the foregoing, (A) under no circumstances shall IPEC be
entitled to declare a Blackout Period more than two times in any twelve-
month period, (B) the period during which such sales may be suspended
pursuant to a Blackout Period shall not exceed thirty days and (C) no
Blackout Period may commence less than 30 days after the end of the
preceding Blackout Period.
From time to time, but not more than six times in any 12 month
period, upon receipt by Xxxxxxxx of a written notice (an "Advice Notice")
from IPEC, Xxxxxxxx will provide IPEC a notice (a "Sales Notice") as
promptly as practical identifying the Indemnification Amount (as defined
below) based upon the aggregate sale price and volume of Covered Securities
subject to contracts to sell any Covered Securities (each a "Sales
Contract") and that would require delivery of such Covered Securities
during the 30 day period following receipt of an Advice Notice. Upon
receipt of such Sales Notice, IPEC will immediately notify Xxxxxxxx whether
IPEC will declare a Blackout Period and, as promptly as practicable, amend
or supplement the Registration Statement or the Prospectus in order to
correct the material misstatement or omission or otherwise to comply with
the Securities Act and deliver to Xxxxxxxx copies of such amended or
supplemented Registration Statement and Prospectus in accordance with
paragraph (b) of this Section 7. If IPEC elects to declare a Blackout
Period, and Xxxxxxxx or any of its affiliates is therefore unable to
consummate the sale of Covered Securities pursuant to the Sales Contract
(such unsold Covered Securities being hereinafter referred to as the
"Unsold Securities"), IPEC will promptly indemnify each Xxxxxxxx
Indemnified Party (as such term is defined in Section 12(a) below) against
any Proceeding (as such term is defined in Section 12(a) below) that each
Xxxxxxxx Indemnified Party may incur arising out of or in connection with
Xxxxxxxx'x breach or alleged breach of any such Sales Contract, and IPEC
shall reimburse each Xxxxxxxx Indemnified Party for any reasonable costs or
expenses (including reasonable legal fees) incurred by such party in
investigating or defending any such Proceeding (collectively, the
"Indemnification Amount"); provided, however, that each Xxxxxxxx
-------- -------
Indemnified Party shall take all actions reasonably necessary or
appropriate to mitigate such Indemnification Amount; and provided further,
-------- -------
however, that the Indemnification Amount shall be reduced by an amount
-------
equal to the number of Unsold Securities multiplied by the difference
between (x) the actual per share price received by Xxxxxxxx or any of its
affiliates upon the sale of the Unsold Securities (if such sale occurs
within three Trading Days of the end of the Blackout Period) or the closing
sale price of the Common Stock on NASDAQ or other national securities
exchange on which the Common Stock is then listed on the third Trading Day
after the end of the Blackout Period (if the Unsold Securities are not sold
by Xxxxxxxx or any of its affiliates within three Trading Days of the end
of the Blackout Period), and (y) the per share sale price for the Unsold
Securities provided in the Sales Contract. As used herein, the term
"Trading Day" means any day on which IPEC's Common Stock is quoted on
NASDAQ or, if applicable, other national securities exchange.
-15-
8. Conditions Precedent to Xxxxxxxx'x Obligations. The obligations
----------------------------------------------
of Xxxxxxxx hereunder are subject to the performance by IPEC of its obligations
hereunder and to the satisfaction of the following additional conditions
precedent unless expressly waived in writing by Xxxxxxxx:
a. The representations and warranties made by IPEC in this
Agreement shall be true and correct as of the date hereof, on the Closing
Date, on each Conversion Date and on each Warrant Exercise Date (as defined
in Annex B hereto), IPEC shall have complied fully with all the covenants
and agreements in this Agreement and Xxxxxxxx shall have received on each
such date a certificate of the Chief Executive Officer and the Chief
Financial Officer of IPEC dated such date and to such effect.
b. On the Closing Date, on each Conversion Date and on each
Warrant Exercise Date, IPEC shall have delivered to Xxxxxxxx an opinion of
counsel reasonably satisfactory to Xxxxxxxx, dated the date of delivery,
confirming in substance the matters covered in paragraphs (a), (b), (c),
(d), (e), (f), (g), (h), (i) and (q) of Section 3 hereof.
c. Prior to the Closing, the Certificate of Designation will
have been filed with the Secretary of State of the State of Delaware in
accordance with the Delaware General Corporation Law.
d. On the Closing Date, IPEC shall have delivered to Xxxxxxxx
the opinion of counsel reasonably satisfactory to Xxxxxxxx, dated the
Closing Date, to the effect that the offer and sale of the Preferred Shares
and the Warrant hereunder do not require registration under the Securities
Act.
As used herein the term "Business Day" means any day on which banks in
the City of New York are open for business.
9. Conditions Precedent to IPEC's Obligations. The obligations
------------------------------------------
of IPEC hereunder are subject to the performance by Xxxxxxxx of its obligations
hereunder and to the satisfaction of the following additional conditions
precedent unless expressly waived in writing by IPEC:
a. The representations and warranties made by Xxxxxxxx in this
Agreement shall be true and correct as of the date hereof, on the Closing
Date, on each Conversion Date, and on each Warrant Exercise Date, Xxxxxxxx
shall have complied fully with all the covenants and agreements in this
Agreement and IPEC shall have received on each such date a certificate of
an appropriate officer of Xxxxxxxx dated such date and to such effect.
b. On the Closing Date, Xxxxxxxx shall have delivered to IPEC a
written certification of an appropriate officer of Xxxxxxxx dated such date
stating that Xxxxxxxx is not a U.S. Person.
c. On each Conversion Date and each Warrant Exercise Date,
Xxxxxxxx shall have delivered to IPEC either (i) a written certification of
an appropriate officer of Xxxxxxxx dated
-16-
such date stating that Xxxxxxxx is not a U.S. Person or (ii) an opinion of
counsel to the effect that the Warrant or Preferred Shares, as applicable,
and the shares of Common Stock delivered upon exercise or conversion
thereof have been registered under the Securities Act or an exemption from
such registration is available.
d. On the date of any transfer by Xxxxxxxx of the Warrant, any
Preferred Stock or any Converted Stock during the applicable Restricted
Period, Xxxxxxxx shall have delivered to IPEC a written certification of an
appropriate officer of Xxxxxxxx dated such date stating that Xxxxxxxx is
not a U.S. Person and that the Warrant is not being exercised on behalf of
a U.S. Person.
e. On the Closing Date, Xxxxxxxx shall have delivered to IPEC
the opinion of counsel, dated the Closing Date, to the effect that the
offer and sale of the Preferred Shares and the Warrant hereunder do not
require registration under the Securities Act.
10. Fees and Expenses. Each of Xxxxxxxx and IPEC agrees to pay
-----------------
its own expenses incident to the performance of its obligations hereunder,
including, but not limited to, the fees, expenses and disbursements of such
party's counsel, except as otherwise provided for herein. IPEC agrees for the
benefit of Xxxxxxxxx & Xxxxx LLC (H&Q") to pay the cash fee due to H&Q on the
Closing Date and to issue to H&Q on the Closing Date the warrant required under
IPEC's agreement with H&Q which has been separately disclosed to Xxxxxxxx.
11. Non-Performance.
---------------
a. If, on the date hereof, on the Closing Date, on any
Conversion Date or any Warrant Exercise Date, IPEC shall fail to deliver
the Warrant Shares, the Preferred Shares or Converted Stock to Xxxxxxxx
required to be delivered pursuant to this Agreement or the Warrant for any
reason other than the failure of any condition precedent to IPEC's
obligations hereunder or the failure by Xxxxxxxx to comply with its
obligations hereunder, then IPEC shall:
(1) hold Xxxxxxxx harmless against any loss, claim or damage
(including without limitation, incidental and consequential damages)
arising from or as a result of such failure by IPEC; and
(2) reimburse Xxxxxxxx for all of its out-of-pocket
expenses, including fees and disbursements of its counsel, incurred by
Xxxxxxxx in connection with this Agreement and the Warrant and the
transactions contemplated herein and therein;
provided, however, that IPEC shall then be under no further liability to
-------- -------
Xxxxxxxx except as provided in this Section 11 and Section 12 hereof.
b. If, on the Closing Date, Xxxxxxxx shall fail to purchase the
Warrant or the Preferred Shares required to be purchased pursuant to this
Agreement for any reason other than
-17-
the failure of any condition precedent to Xxxxxxxx'x obligations hereunder
or the failure by IPEC to comply with its obligations hereunder, then
Xxxxxxxx shall:
(1) hold IPEC harmless against any loss, claim or damage
(including without limitation, incidental and consequential damages)
arising from or as a result of such failure by Xxxxxxxx; and
(2) reimburse IPEC for all of its out-of-pocket expenses,
including fees and disbursements of its counsel, incurred by IPEC in
connection with this Agreement and the Warrant and the transactions
contemplated herein and therein, provided, however, that Xxxxxxxx
-------- -------
shall then be under no further liability to IPEC except as provided in
this Section 11 and 12 hereof.
12. Indemnification.
---------------
a. Indemnification of Xxxxxxxx. IPEC hereby agrees to
---------------------------
indemnify Xxxxxxxx and each of its officers, directors, employees, agents
and affiliates and each person that controls (within the meaning of Section
20 of the Securities Exchange Act of 1934, as amended) any of the foregoing
persons (each a "Xxxxxxxx Indemnified Party") against any claim, demand,
action, liability, damages, loss, cost or expense (including, without
limitation, reasonable legal fees) (a "Proceeding"), that it may incur in
connection with any of the transactions contemplated hereby arising out of
or based upon:
(1) any of the representations or warranties made by IPEC
herein being untrue or incorrect;
(2) any breach or non-performance by IPEC of any of its
covenants, agreements or obligations under this Agreement; and
(3) any untrue or alleged untrue statement of a material
fact by IPEC or any of its affiliates or any person acting on its or
their behalf or omission or alleged omission to state any material
fact necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading by IPEC or
any of its affiliates or any person acting on its or their behalf.
and IPEC hereby agrees to reimburse each Xxxxxxxx Indemnified Party for any
reasonable legal or other expenses incurred by such Xxxxxxxx Indemnified
Party in investigating or defending any such Proceeding;
provided, however, that the foregoing indemnity shall not apply to any
------------------
Proceeding to the extent that it arises out of or is based upon the gross
negligence or wilful misconduct of Xxxxxxxx in connection therewith.
-18-
b. Indemnification of IPEC. Xxxxxxxx hereby agrees to
-----------------------
indemnify IPEC and each of its officers, directors, employees, agents and
affiliates and each person that controls (within the meaning of Section 20
of the Securities Exchange Act of 1934, as amended) any of the foregoing
persons (each a "IPEC Indemnified Party") against any Proceeding, that it
may incur in connection with any of the transactions contemplated hereby
arising out of or based upon:
(1) any of the representations or warranties made by
Xxxxxxxx herein being untrue or incorrect;
(2) any breach or non-performance by Xxxxxxxx of any of its
covenants, agreements or obligations under this Agreement; and
(3) any untrue or alleged untrue statement of a material
fact by Xxxxxxxx or any of its affiliates or any person acting on its
or their behalf or omission or alleged omission to state any material
fact necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading by Xxxxxxxx
or any of its affiliates or any person acting on its or their behalf.
and Xxxxxxxx hereby agrees to reimburse each IPEC Indemnified Party for any
reasonable legal or other expenses incurred by such IPEC Indemnified Party
in investigating or defending any such Proceeding;
provided, however, that the foregoing indemnity shall not apply to any
------------------
Proceeding to the extent that it arises out of or is based upon the gross
negligence or wilful misconduct of IPEC in connection therewith.
c. Conduct of Claims.
-----------------
(1) Whenever a claim for indemnification shall arise under
this Section, the party seeking indemnification (the "Indemnified
Party"), shall notify the party from whom such indemnification is
sought (the "Indemnifying Party") in writing of the Proceeding and the
facts constituting the basis for such claim in reasonable detail;
(2) Upon delivery of such notice, such Indemnified Party
shall have a duty to take all reasonable steps to mitigate any losses,
liabilities, costs, charges and expenses relating to any such
Proceeding;
(3) Such Indemnifying Party shall have the right to retain
the counsel of its choice in connection with such Proceeding and to
participate at its own expense in the defense of any such Proceeding;
provided, however, that counsel to the Indemnifying Party shall not
-------- -------
(except with the consent of the relevant Indemnified Party) also be
counsel to such Indemnified Party. In no event shall the Indemnifying
Party be liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from its
-19-
own counsel for all Indemnified Parties in connection with any one
action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances; and
(4) No Indemnifying Party shall, without the prior written
consent to the Indemnified Parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which
indemnification could be sought under this Section unless such
settlement, compromise or consent (A) includes an unconditional
release of each Indemnified Party from all liability arising out of
such litigation, investigation, proceeding or claim and (B) does not
include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any Indemnified Party.
13. Survival of the Representations, Warranties, etc. The
------------------------------------------------
respective representations, warranties, and agreements made herein by or on
behalf of the parties hereto shall remain in full force and effect, regardless
of any investigation made by or on behalf of the other party to this Agreement
or any officer, director or employee of, or person controlling or under common
control with, such party and will survive delivery of and payment for the
Preferred Shares, the Warrant and any Common Stock issuable hereunder.
14. Notices. All communications hereunder shall be in writing, and
-------
a. if sent to Xxxxxxxx, shall be delivered by hand, sent by
registered mail or transmitted and confirmed by telecopy to Xxxxxxxx at:
Xxxxxxxx International Limited
c/o Midland Bank Trust Corporation (Cayman) Limited
X.X. Xxx 0000, Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Xxxxxxx Xxxx Indies
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-20-
b. if sent to IPEC, shall be delivered by hand, sent by
registered mail or transmitted and confirmed by telecopy to IPEC at:
Integrated Process Equipment Corp.
0000 Xxxx Xxxxxx Xxx.
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, C.A. 94304-1050
Attention: Xxxx Xxxxx
Telephone: (000)000-0000
Facsimile: (000)000-0000
15. Miscellaneous.
-------------
a. This Agreement may be executed in one or more counterparts
and it is not necessary that signatures of all parties appear on the same
counterpart, but such counterparts together shall constitute but one and
the same agreement.
b. This Agreement shall inure to the benefit of and be binding
upon the parties hereto, their respective successors and, with respect to
Section 12 hereof, their respective officers, directors, employees, agents,
affiliates and controlling persons, and no other person shall have any
right or obligation hereunder. IPEC may not assign this Agreement or the
Warrant.
c. This Agreement and the Warrant shall be governed by, and
construed in accordance with, the internal laws of the State of New York,
and each of the parties hereto hereby submits to the non-exclusive
jurisdiction of any State or Federal court in the Borough of Manhattan in
the City and State of New York and any court hearing any appeal therefrom,
over any suit, action or proceeding against it arising out of or based upon
this Agreement and the Warrant (a "Related Proceeding"). Each of the
parties hereto hereby waives any objection to any Related Proceeding in
such courts whether on the grounds of venue, residence or domicile or on
the ground that the Related Proceeding has been brought in an inconvenient
forum.
d. The provisions of this Agreement and the Warrant are
severable, and if any clause or provision hereof or thereof shall be held
invalid, illegal or unenforceable in whole or in part, such invalidity or
unenforceability shall not in any manner affect any other clause or
provision of this Agreement or the Warrant.
-21-
e. This Agreement (including the Warrant and the terms and
conditions of the Certificate of Designations relating to the Preferred
Shares) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the parties
hereto with respect to the subject matter of this Agreement and the Warrant
and is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder or under the terms of the warrant and term
sheets between such parties.
f. The headings of the sections of this document have been
inserted for convenience of reference only and shall not be deemed to be a
part of this Agreement.
16. Time of Essence. Time shall be of the essence in this
---------------
Agreement and the Warrant.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-22-
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, all as of the day and year first above written.
INTEGRATED PROCESS EQUIPMENT CORP.
By: /s/ Xxxx X. Xxxxxxx
-------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and
Chief Financial Officer
XXXXXXXX INTERNATIONAL LIMITED
By: /s/ Xxxxxxx Xxxxxxxx, Xx.
-------------------------------
Name: Xxxxxxx Xxxxxxxx, Xx.
Title: Chairman
-23-
ANNEX A
-------
CERTIFICATE OF DESIGNATION
OF
SERIES C CONVERTIBLE PREFERRED STOCK
OF
INTEGRATED PROCESS EQUIPMENT CORP.
The undersigned, Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx, do hereby
certify:
1. That they are the duly elected and acting Chief Executive Officer
and Secretary, respectively, of Integrated Process Equipment Corp., a Delaware
corporation (the "Corporation").
2. That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, the Board of
Directors on November 25, 1996 adopted the following resolution creating a
series of 100,000 shares of Preferred Stock designated as Series C Convertible
Preferred Stock as required by Section 151 of the Delaware General Corporation
Law:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (the "Board of Directors") in accordance
with the provisions of the Corporation's Certificate of Incorporation (the
"Certificate of Incorporation"), the Board of Directors hereby creates a series
of Preferred Stock, par value $.01 per share, of the Corporation and hereby
states the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series C Convertible Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall
----------------------
be designated as "Series C Convertible Preferred Stock" ("Series C Preferred
Stock") and the number of shares constituting Series C Preferred Stock shall be
100,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors, provided that no decrease shall reduce the number of
shares of Series C Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series C
Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS. No dividends shall accrue or
---------------------------
be payable in respect of the Series C Preferred Stock.
SECTION 3. VOTING RIGHTS. Except as required by applicable law or
-------------
Section 12, the holders of shares of Series C Preferred Stock shall not be
entitled to vote on any matter submitted to a vote of stockholders of the
Corporation and their consent shall not be required for taking any corporate
action.
SECTION 4. CONVERSION.
----------
-1-
(A) Subject to Section 4(C) and Section 4(D), at any time on or after
the 46th day following the first issuance of shares of Series C Preferred Stock,
a holder of Series C Preferred Stock may, by delivering to the Corporation
written notice ("Conversion Notice"), convert one or more shares of Series C
Preferred Stock into the number of shares of the Corporation's common stock (the
"Common Stock") equal to (i) $250.00 divided by (ii) the Conversion Price (as
defined in Section 4(E)). The Conversion Notice shall specify the number of
shares of Series C Preferred Stock to be converted, the applicable Conversion
Price, the number of shares of Common Stock issuable on conversion (which shall
not be less than 50,000 shares of Common Stock, except if all shares of Series C
Preferred Stock then outstanding are being converted to Common Stock). From and
after the date on which the Corporation received a Conversion Notice from a
holder of a share of Series C Preferred Stock (or if such date is not a business
day in the State of California, the next succeeding business day) (the
"Conversion Date"), such share shall cease to be outstanding and the converting
holder shall be deemed the owner of the number of shares of Common Stock into
which such share of Series C Preferred Stock was converted. The Corporation
shall deliver to such holder a stock certificate evidencing such shares of
Common Stock within three business days following the Conversion Date (the
"Issue Date").
On the Issue Date, the Issuer shall issue and cause to be delivered
(against delivery of the certificate representing the Series C Preferred Stock
(the "Preferred Certificate")) to the registered holder thereof at such address
as such holder shall specify in the Conversion Notice a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion, registered in such holder's name, together with cash (if any) as
provided in Section 6. 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 shares as of such Conversion Date. If on
such Issue Date the number of shares of Series C Preferred Stock to be delivered
shall be less than the total number of shares represented by the Preferred
Certificate, there shall be issued to the holder thereof or his assignee on such
Issue Date a new Preferred Certificate evidencing the remaining Series C
Preferred Stock.
(B) Subject to Section 4(C) and Section 4(D), on December 31, 2002,
(or if such date is not a business day in the State of California, the next
succeeding business day) (the "Automatic Conversion Date"), any shares of Series
C Preferred Stock then outstanding shall automatically convert into Common Stock
in accordance with the terms hereof but without the delivery of a Conversion
Notice. From and after the Automatic Conversion Date, such shares of Series C
Preferred Stock shall cease to be outstanding and the converting holder shall be
deemed the owner of the number of shares of Common Stock into which such shares
of Series C Preferred Stock were converted. The Corporation shall deliver to
such holder a stock certificate evidencing such shares of Common Stock within
three business days following the Automatic Conversion Date. For the purpose of
determining the applicable Conversion Price under Section 4(E), the Automatic
Conversion Date shall be deemed the Conversion Date.
(C) If, either at the time that the Corporation received a Conversion
Notice or on December 31, 2002, the aggregate number of shares of Common Stock
issuable pursuant to such Conversion Notice and all other Conversion Notices
received at that time (the "Subject Conversion Notices"), when added to the
aggregate number of shares of Common Stock (a) previously issued pursuant to the
conversion of shares of Series C Preferred Stock and the exercise of that
certain Warrant to purchase Common Stock (the "Warrant") issued by the
Corporation to Xxxxxxxx International Limited
-2-
on the date of the first issuance of shares of Series C Preferred Stock and (b)
issuable upon conversion of all remaining outstanding shares of Series C
Preferred Stock (determining such number as if such Series C Preferred Stock
were converted as of the Conversion Date relating to such Conversion Notice) and
(c) issuable upon exercise of the Warrant (determined based upon the Exercise
Price then in effect under the Warrant) would exceed the number of shares equal
to 19.9% of the total number of shares of Common Stock outstanding (adjusted to
reflect any split, subdivision, combination, or consolidation of the Common
Stock, whether by reclassification, distribution of a dividend with respect to
the outstanding Common Stock payable in shares of Common Stock, or otherwise, or
any recapitalization of the Common Stock) on the date of the first issuance of
shares of Series C Preferred Stock (the "19.9% Limit") and such circumstance
would require the approval of the holders of the Common Stock pursuant to the
listing requirements or rules of the Nasdaq National Market (or such stock
exchange or other interdealer quotation system on which the Common Stock is then
listed or quoted), then the number of shares of Series C Preferred Stock
identified in the Subject Conversion Notices that, if converted into shares of
Common Stock, would equal or exceed the 19.9% Limit (the "Excess Preferred
Shares"), shall not be converted unless and until the stockholder approval
referred to in Section 5 (the "Required Consent") is obtained or is no longer
required. The Excess Preferred Shares will be allocated among the holders
delivering Subject Conversion Notices on a pro rata basis based on the relative
number of shares of Series C Preferred Stock identified in each such Subject
Conversion Notice. Any Excess Preferred Shares shall not be converted into
shares of Common Stock until the later of the date on which the Required Consent
is obtained and the Corporation received a subsequent Conversion Notice with
respect thereto.
(D) Shares of Series C Preferred Stock shall be convertible only into
the Maximum Number of shares of Common Stock. The "Maximum Number" is equal to
the sum of 1,400,000 plus the Convertible Number. The "Convertible Number" is
initially zero and thereafter may be increased upon expiration of a 65 day
period (the "Notice Period") after the holder delivers a notice (a"65 Day
Notice") to the Issuer designating an aggregate number of shares of Common Stock
in excess of 1,400,000 which will become convertible. A 65 Day Notice may be
given at any time. If the initial 65 Day Notice does not designate all of the
shares of Common Stock then issuable upon conversion to such holder under the
Series C Preferred Stock, additional shares of the Series C Preferred Stock will
become convertible for some or all of the remaining shares of Common Stock upon
delivery of one or more 65 Day Notices increasing the Convertible Number after a
further Notice Period. From time to time following the Notice Period, shares of
the Series C Preferred Stock may be converted on any Business Day for any
quantity of shares of Common Stock, such that the aggregate number of shares of
Common Stock issued hereunder is less than or equal to the Maximum Number.
(E) "Conversion Price" means the lesser of the following:
------
(i) 101% of the average of the daily volume-weighted average prices
as reported by Bloomberg, L.P. (or otherwise as agreed mutually between the
Corporation and the holder of record of Series C Preferred Stock delivering a
Conversion Notice) of the Common Stock on the Nasdaq National Market (or such
other national securities exchange which the Common Stock is then listed) during
the forty trading days ending two Trading Days (as defined below) before the
Conversion Date (the "Pricing Period"); or
-3-
(ii) 115% of the average of the daily volume-weighted average prices
as reported by Bloomberg, L.P. (or otherwise as agreed mutually between the
Corporation and the holder of record of Series C Preferred Stock delivering a
Conversion Notice) of the Common Stock on the Nasdaq National Market (or such
other national securities exchange on which the Common Stock is then listed)
during the first five Trading Days of the Pricing Period. The term "Trading
Day" shall mean any trading day on the Nasdaq National Market (or such other
national securities exchanges on which the Common Stock is then listed).
SECTION 5. STOCKHOLDER APPROVAL. In the event there are Excess
--------------------
Preferred Shares as described in Section 4(C), the Corporation shall promptly
take all actions reasonably necessary to obtain the required consent, including
causing its Board of Directors to call a special meeting of stockholders and
recommend such approval.
In the event the Required Consent is not obtained within 90 days of the
19.9% Limit becoming effective, each holder shall have the right at any time and
from time to time to require the Corporation to repurchase, and the Corporation
hereby agrees to repurchase, any or all Excess Preferred Shares at a price of
$250 per share upon thirty days notice by delivery of a notice requesting such
repurchase. If Excess Preferred Shares exist, the Corporation shall not issue
any securities or incur any indebtedness for borrowed money (other than
indebtedness incurred pursuant to a revolving bank credit agreement ("Bank
Debt") or in the ordinary course of the Corporation's business), except in
connection with the repurchase of Excess Preferred Shares. In the event Excess
Preferred Shares exist, the Requisite Consent is not obtained within 90 days of
the 19.9% limit becoming effective and the Corporation does not repurchase
Excess Preferred Shares as provided in this Section 5, each holder shall have
the right to convert some or all of the Excess Preferred Shares into a note (an
"Excess Note") in an amount equal to the Liquidation Preference (as defined
below) of such Preferred Shares due on demand bearing interest at an interest
rate of 15% per annum, provided that the obligation to pay principal and
interest on the Excess Note(s) may be subordinated to Bank Debt, until the third
anniversary of the issuance of such Excess Note(s), at which time all principal
and interest payable in respect of the Excess Note(s) shall be paid upon demand.
The provisions of this Section shall apply successively as appropriate.
SECTION 6. FRACTIONAL SHARES. Fractional shares of Common Stock
-----------------
shall not be issued upon conversion of shares of Series C Preferred Stock. In
lieu of issuance of a fractional share, the Corporation shall pay to the holder
of the share of Series C Preferred Stock being converted a cash amount equal to
such fraction multiplied by the Conversion Price.
SECTION 7. RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
---------------------------------------------
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series C Preferred Stock, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series C Preferred Stock. If at any
time the number of authorized but unissued shares of Common Stock is not
sufficient to effect the conversion of all the then outstanding shares of
the Series C Preferred Stock (a "Deficiency"), the Corporation shall promptly
take all actions reasonably necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as
-4-
shall be sufficient for such purpose, including causing the Board of Directors
to call a special meeting of stockholders and recommend such increase.
In the event a Deficiency occurs and is not eliminated within 90 days of
its first occurrence, each holder shall have the right at any time and from time
to time to require the Corporation to repurchase, and the Corporation hereby
agrees to repurchase, any or all Preferred Shares not then convertible at a
price of $250 per share upon thirty days notice by delivery of a notice
requesting such repurchase.
If a Deficiency exists, the Corporation shall not issue any securities or
incur any indebtedness for borrowed money (other than indebtedness incurred
pursuant to a revolving bank credit agreement ("Bank Debt") or in the ordinary
course of the Corporation's business), except in connection with the repurchase
of Preferred Shares not then convertible. In the event a Deficiency exists and
is not eliminated within 90 days of its first occurrence and the Corporation
does not repurchase Preferred Shares as provided in this Section 7, each holder
shall have the right to convert some or all of the Preferred Shares not then
convertible into a note (a "Deficiency Note") in an amount equal to the
Liquidation Preference (as defined below) of such Preferred Shares due on demand
bearing interest at an interest rate of 15% per annum, provided that the
obligation to pay principal and interest on the Deficiency Note(s) may be
subordinated to Bank Debt, until the third anniversary of the issuance of such
Deficiency Note(s), at which time all principal and interest payable in respect
of the Deficiency Note(s) shall be paid upon demand. The provisions of this
Section shall apply successively as appropriate.
SECTION 8. LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of
--------------------------------------
any liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of Common Stock or any other series or class or classes of stock of the
Corporation ranking junior to the Series C Preferred Stock upon liquidation,
dissolution or winding up, the holders of the shares of Series C Preferred Stock
shall be entitled to receive $250.00 per share (the "Liquidation Preference").
If, upon any liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation, or proceeds thereof, distributable among the holders
of the shares of Series C Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid and liquidating payments on any other shares
of stock ranking, as to liquidation, dissolution or winding up, on a parity with
the Series C Preferred Stock, if any, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of Series C Preferred Stock and
any such other stock ratably in accordance with the respective amounts which
would be payable on such shares of Series C Preferred Stock and any such other
stock if all amounts payable thereon were paid in full.
SECTION 9. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
---------------------------
be a party to any transaction (including without limitation a merger,
consolidation, sale of all or substantially all of the Corporation's assets or
recapitalization of the Common Stock) (each of the foregoing being referred to
as a "Transaction"), in each case as a result of which shares of Common Stock
shall be converted into the right to receive stock, securities or other property
(including cash or any combination thereof), each share of Series C Preferred
Stock which is not converted into the right to receive stock, securities or
other property in connection with such transaction shall thereafter be
convertible into the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the
-5-
consummation of such Transaction by a holder of that number of shares or
fraction thereof of Common Stock into which one share of Series C Preferred
Stock was convertible immediately prior to such Transaction had such holder
converted such share of Series C Preferred Stock into Common Stock immediately
before such Transaction. The Corporation shall not be a party to any Transaction
unless the terms of such Transaction are consistent with the provisions of this
Section 9 and it shall not consent or agree to the occurrence of any Transaction
until the Corporation has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of the
Series C Preferred Stock which will contain provisions enabling the holders of
the Series C Preferred Stock which remains outstanding after such transaction to
convert into the consideration received by holders of Common Stock at the
Conversion Price as determined pursuant to the terms hereof. The provisions of
this Section 9 shall similarly apply to successive Transactions.
SECTION 10. STOCK DIVIDENDS, STOCK SPLITS, ETC. In case the
----------------------------------
Corporation shall after the date of first issuance of shares of Series C
Preferred Stock (A) pay a dividend or make a distribution on its Common Stock in
shares of its Common Stock, (B) subdivide its outstanding Common Stock into a
greater number of shares, (C) combine its outstanding Common Stock into a
smaller number of shares or (D) issue any shares of capital stock by
reclassification of its Common Stock (excluding any transaction as to which
Section 9 applies), each share of Series C Preferred Stock shall thereafter be
convertible into the kind and amount of shares of stock and other securities and
property receivable by a holder of that number of shares or fraction thereof of
Common Stock into which one share of Series C Preferred Stock was convertible
immediately prior to the happening of such event or the record date therefor,
whichever is earlier. In addition, if any of the events described above in this
Section 10 shall become effective on a Trading Day which is included in the
calculation of the Conversion Price, then the average of the daily volume-
weighted average prices of the Common Stock for the period from the first
Trading Day included in the calculation of the Conversion Price to (but not
including) the effective date of such event (the "Adjustable Average Price")
will be proportionately adjusted to reflect such event in calculating the
Conversion Price. If the event in question causes an increase in the total
number of outstanding Common Stock, then the Adjustable Average Price will be
proportionately decreased. If the event in question causes an decrease in the
total number of outstanding Common Stock, then the Adjustable Average Price will
be proportionately increased. Adjustments made pursuant to this Section shall
become effective immediately after the close of business on the record date in
the case of a dividend or distribution and shall become effective immediately
after the close of business on the record date in the case of subdivision,
combination or reclassification.
SECTION 11. REDEMPTION. The shares of Series C Preferred Stock shall
----------
not be redeemable, except as set forth in Section 5 and Section 7.
SECTION 12. AMENDMENT. So long as any shares of Series C Preferred
---------
Stock are outstanding, the Corporation shall not, without first obtaining the
approval by vote or written consent, in the manner provided by law, of the
holders of at least a majority of the total number of shares of Series C
Preferred Stock outstanding, voting separately as a series, amend or repeal any
provision of, or add any provision to, the Corporation's Certificate of
Incorporation if such action would alter or change the preferences,
rights, privileges or powers of, or the restrictions provided for the benefit
of, the Series C Preferred Stock.
-6-
SECTION 13. REACQUIRED SHARES. Any shares of Series C Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock of the Corporation and may be reissued as part of a new series
of preferred stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designation creating a series of preferred stock of the Corporation or any
similar stock or as otherwise required by applicable law.
SECTION 14. RANK.
----
a. With respect to liquidation preferences, the Series C Preferred
Stock shall rank senior to or on a parity with all other existing
capital stock of the Corporation and shall rank senior to all series
of any other class of the Corporation's capital stock issued after
the date of the filing of this Certificate of Designation.
b. So long as any shares of the Series C Preferred Stock are
outstanding, no Common Stock nor any other such stock of the
Corporation ranking junior to the Series C Preferred Stock, upon
liquidation, will be redeemed, purchased or otherwise acquired for
any consideration by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to the Series C
Preferred Stock, upon liquidation) unless, in each case the
Corporation offers to redeem shares of the Series C Preferred Stock
on substantially the same terms (provided that the redemption price
shall not be less than $250 per share).
-7-
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by the Chief Executive Officer of the Corporation and
attested by its Secretary this ____ day of December, 1996.
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxx, Chief Executive Officer
Attest:
/s/ Xxxx X. Xxxxxxx
--------------------------------
Xxxx X. Xxxxxxx, Secretary
-8-
ANNEX B
-------
AS EXECUTED DECEMBER 16, 1996
The Warrant represented by this certificate was issued on December 16,
1996 (the "Closing Date") pursuant to the Subscription Agreement dated
December 12, 1996 between Integrated Process Equipment Corporation and
Xxxxxxxx International Limited. Neither the Warrant represented by
this certificate nor the securities issuable upon exercise hereof have
been registered under the Securities Act of 1933, as amended (the
"Act"). The Warrant represented by this certificate may not be
exercised by or on behalf of any U.S. Person (as defined in Regulation
S under the Act ("Regulation S")) unless the securities issuable upon
exercise hereof are registered under the Act or an exemption from such
registration is available. The Warrant represented hereby has been
issued and sold in reliance on the exemption from registration
provided by Regulation S.
WARRANT NO. F-1 UP TO 456,000 WARRANT SHARES
-----------
WARRANT CERTIFICATE
INTEGRATED PROCESS EQUIPMENT CORPORATION
This Warrant Certificate certifies that XXXXXXXX INTERNATIONAL LIMITED
("Xxxxxxxx"), or its registered assigns, is the registered holder of one Warrant
(the "Warrant") expiring on the Termination Date (as defined below) to purchase
shares of common stock, par value $.01 per share (the "Common Stock"), of
INTEGRATED PROCESS EQUIPMENT CORPORATION, a Delaware corporation (the "Issuer"
or "IPEC"). The Warrant entitles the holder to purchase from the Issuer up to
456,000 Warrant Shares (as defined below), subject to adjustment on the
Measuring Date (as defined below), at a per share Exercise Price (as defined
below). A "Warrant Share" initially represents one fully paid and
nonassessable share of Common Stock, based upon an Exercise Rate (as defined
below) of one-for-one, subject to adjustment pursuant to Section 10 hereof.
The Warrant represented hereby was issued on December 16, 1996 (the
"Closing Date") pursuant to the Subscription Agreement dated December 12, 1996
(the "Subscription Agreement"), between the Issuer and Xxxxxxxx, and is subject
to the terms and conditions thereof. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings set forth in the
Subscription Agreement. A copy
-1-
of the Subscription Agreement may be obtained by the registered holder hereof
upon written request to the Issuer.
The Warrant represented hereby may be exercised on any Business Day (a
"Warrant Exercise Date") from and including June 16, 1998 (the "Unrestricted
Date") (or such earlier date as shall be provided for in paragraph 10(d) hereof)
to and including December 16, 2002 (the "Termination Date").
On June 16, 1997 (the "Measuring Date"), the number of Warrant Shares is
subject to reduction in accordance with the terms of this paragraph. The
"Equivalent Value" is equal to the sum of (i) the aggregate liquidation value of
the shares of Series C Preferred Stock of the Issuer held by Xxxxxxxx on the
Measuring Date and (ii) the number of shares of Common Stock held by Xxxxxxxx on
the Measuring Date multiplied by the Conversion Value. The "Conversion Value" is
equal to the weighted average of the respective conversion prices of shares of
Common Stock issued to Xxxxxxxx upon the conversion of shares of Series C
Preferred Stock of the Issuer on or prior to the Measuring Date, with each such
conversion price weighted according to the number of shares of Common Stock
received on the respective date of conversion. If on the Measuring Date, the
Equivalent Value is less than $12.5 million, the number of Warrant Shares shall
equal:
456,000 X [ 9.6 OVER (X - 3.3) ]
where X represents the average of the daily volume-weighted average prices of
the Common Stock as reported by Bloomberg, L.P. ("Bloomberg") for the six-month
period beginning on the Closing Date and ending on the Measuring Date; provided
that the number of Warrant Shares shall not exceed 456,000 or be less than
228,000. If a third party merges or consolidates with, or acquires all or
substantially all the assets of, the Issuer prior to the Unrestricted Date, the
number of Warrant Shares shall equal 456,000.
The exercise price per Warrant Share shall be $24.567 (plus transfer
taxes, if applicable, the "Exercise Price"). The Exercise Price multiplied by
the Exercise Amount (as defined below) at any Warrant Exercise Date is referred
to herein as a "Warrant Purchase Price".
The Warrant represented hereby shall have the following additional
terms:
1. To exercise the Warrant, the registered holder must, prior to the
Termination Date, surrender this Warrant Certificate to the Issuer at
its principal office with the Exercise Notice attached hereto (an
"Exercise Notice") duly completed and signed by the registered holder
hereof and stating the total number of Warrant Shares in respect of
which the Warrant is then exercised (the "Exercise Amount") and tender
in cash or by certified or official bank check the applicable Warrant
Purchase Price. In order to exercise the Warrant, the registered
holder hereof is required to give either (a) a written certification
that it is not a U.S. Person (as defined in Regulation S) and the
Warrant is not being exercised on behalf of a U.S. Person or (b) a
written opinion of counsel to the effect that the Warrant and the
securities deliverable upon exercise hereof have been registered under
the Act or are exempt from registration thereunder. The Warrant shall
-2-
be exercisable only in the minimum amount of 50,000 Warrant Shares (or
such lesser amount as shall constitute the full amount remaining of
this Warrant). As used herein the term "Business Day" means any day on
which banks in the City of New York are open for business.
2. On the third Business Day following a Warrant Exercise Date (an "Issue
Date") the Issuer shall issue and cause to be delivered to the
registered holder hereof at such address as such holder shall specify
in the Exercise Notice a certificate or certificates for the number of
full Warrant Shares issuable upon the exercise of such Warrant,
registered in such holder's name, together with cash (if any) as
provided in paragraph 4. 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 such Warrant Exercise Date.
3. If on such Issue Date the number of Warrant Shares to be delivered
shall be less than the total number of Warrant Shares deliverable
hereunder, there shall be issued to the holder hereof or his assignee
on such Issue Date a new warrant certificate substantially identical
to this Warrant Certificate, except that such new warrant certificate
shall evidence the right to purchase the number of Warrant Shares
equal to (x) the total number of Warrant Shares deliverable hereunder
less (y) the number of Warrant Shares so delivered.
4. The Issuer shall not be required to issue fractional Warrant Shares on
the exercise of the Warrant represented hereby. The number of full
Warrant Shares which shall be issuable upon the exercise of the
Warrant shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrant so presented. If
any fraction of a Warrant Share would, except for the provisions of
this paragraph 4, be issuable on the exercise of the Warrant, the
Issuer shall pay an amount in cash equal to the last per share sale
price of the Common Stock on the day immediately preceding the Warrant
Exercise Date, multiplied by such fraction.
5. For so long as the Warrant represented hereby has not been exercised
in full, the Issuer shall at all times prior to the Termination Date
reserve and keep available, free from pre-emptive rights, out of its
authorized but unissued Common Stock, for issuance upon exercise of
the Warrant represented hereby, the maximum number of shares of Common
Stock then so issuable. In furtherance of the foregoing, subject to
adjustment pursuant to Section 10, the Issuer shall reserve for
issuance hereunder not less than 456,000 shares of Common Stock. In
the event the number of shares of Common Stock issuable in respect of
the Warrant Shares exceeds the authorized number of shares of Common
Stock or other securities, the Issuer shall promptly take all actions
necessary to increase the authorized number, including causing its
Board of Directors to call a special meeting of stockholders and
recommend such increase.
6. By accepting delivery of this Warrant Certificate, the registered
holder hereof covenants and agrees with the Issuer not to exercise the
Warrant or transfer the Warrant or the
-3-
Warrant Shares represented hereby except in compliance with the terms
of the Subscription Agreement and this Warrant Certificate.
7. By accepting delivery of this Warrant Certificate, the registered
holder hereof covenants and agrees with the Issuer that no Warrant may
be sold, assigned, conveyed, encumbered, pledged, hypothecated or in
any other manner disposed of or transferred, in whole or in part,
unless and until such holder shall deliver to the Issuer (i) written
notice of such transfer and of the name and address of the transferee
and such notice has been received by the Issuer; (ii) a written
agreement of the transferee to comply with the terms of the
Subscription Agreement and this Warrant Certificate and (iii) a
written certification of appropriate officers of the transferee that
such transferee is not a "U.S. person" as defined in Regulation S
under the Securities Act of 1933, as amended, or any person holding on
behalf of any U.S. Person or that such transfer is otherwise exempt
from any registration requirements. If a portion of the Warrant is
transferred, all rights of the registered holder hereunder may be
exercised by the transferee (subject to the requirement that such
transferee shall provide a written certification of appropriate
officers of the transferee that such transferee is not a U.S. Person
or exercising on behalf of a U.S. Person or that such transfer is
otherwise exempt from any registration requirements in respect of the
number of Warrant Shares transferred with the portion of the Warrant)
provided that any registered holder of the Warrant may deliver an
Exercise Notice or elect the form of consideration pursuant to Section
10 only with respect to the Warrant Shares subject to such holder's
portion of the Warrant, and, for purposes of paragraph 10(d), the
selection of the investment banker shall be made by the registered
holder(s) of a majority in interest of the Warrant.
8. The Issuer will pay all documentary stamp taxes (if any) attributable
to the issuance of Warrant Shares upon the exercise of the Warrant by
the registered holder hereof; provided, however, that the Issuer
-------- -------
shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the registration of the Warrant
Certificate or any certificates for Warrant Shares in a name other
than that of the registered holder of the Warrant Certificate
surrendered upon the exercise of a Warrant, and the Issuer shall not
be required to issue or deliver the Warrant Certificate or
certificates for Warrant Shares unless or until the person or persons
requesting the issuance thereof shall have paid to the Issuer the
amount of such tax or shall have established to the satisfaction of
the Issuer that such tax has been paid.
9. In case this Warrant Certificate shall be mutilated, lost, stolen or
destroyed, the Issuer may in its discretion issue in exchange and
substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of
like tenor, but only upon receipt of evidence reasonably satisfactory
to the Issuer of such loss, theft or destruction of such Warrant
Certificate and indemnity, if requested, reasonably satisfactory to
the Issuer. Applicants for a substitute Warrant Certificate shall also
comply with such other reasonable regulations and pay such other
reasonable charges as the Issuer may prescribe.
-4-
10. The number of shares of Common Stock (and other capital stock or
property) (as adjusted from time to time, the "Exercise Rate")
issuable in respect of each Warrant Share upon the exercise of the
Warrant and the terms and conditions of the Warrant are subject to
adjustment by the Issuer, in consultation with the holder hereof, from
time to time as follows:
(a) If the Issuer:
1. subdivides its outstanding shares of Common Stock into a
greater number of shares;
2. combines its outstanding shares of Common Stock into a
smaller number of shares; or
3. issues by reclassification of its Common Stock any shares
of its Capital Stock (as defined below);
then the Exercise Rate in effect immediately prior to such
action shall be adjusted so that the registered holder hereof
shall thereafter be entitled to receive upon exercise the number
of shares of Common Stock or other Capital Stock of the Issuer
which such holder would have owned immediately following such
action if such holder had exercised the Warrant immediately prior
to such action.
As used herein, the term "Capital Stock" means, with respect to
any corporation, any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents
of or interests (however designated) in stock issued by that
corporation.
Such adjustment shall become effective simultaneously with the
effective date of any subdivision, combination or
reclassification.
If, after an adjustment, the registered holder hereof would
receive upon exercise shares of two or more classes of Capital
Stock of the Issuer, the Exercise Rate shall thereafter be
subject to adjustment upon the occurrence of an action taken with
respect to each such class of Capital Stock as is contemplated
hereby with respect to the Common Stock, on terms comparable to
those applicable to Common Stock hereunder.
(b) Whenever any of the actions described in this Section 10 are to
be taken, the Issuer shall provide the notices required by
paragraph 12 hereof.
(c) If:
-5-
1. the Issuer takes any action that would require an
adjustment in the Exercise Rate pursuant to subparagraph (a)
above; or
2. there is a liquidation or dissolution of the Issuer;
then the Issuer shall mail to the registered holders hereof a
notice stating the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution, as the case may be. The
Issuer shall mail the notice at least 15 days before such date
provided that failure to do so shall not affect the validity of
the action.
(d) 1. If the Issuer proposes to consolidate or merge with or into,
or sell, transfer or lease all or substantially all its
assets or if any person offers to purchase less than all of
the outstanding shares of Common Stock (a "Partial Offer")
and as a result of such Partial Offer such person would
become the beneficial owner of a majority of the then
outstanding shares of Common Stock (any of which, a
"Transaction"), the Issuer shall comply with the provisions
of this paragraph (d). The Issuer shall promptly notify the
holders of the Warrant of the date the Transaction will
become effective (the "Transaction Date") at least 20
Business Days in advance of such date. The person who
consolidates, merges with or into, or acquires the Issuer or
substantially all its assets or who makes a Partial Offer is
referred to as the "Acquiror."
2. The holders of the Warrant may, by giving the Issuer written
exercise notice at least 5 Business Days prior to the
Transaction Date ("Transaction Exercise Notice"), elect to
exercise the Warrant immediately before the Transaction
closes. If the Transaction Date would occur prior to the
Unrestricted Date, such Transaction Date shall be a Warrant
Exercise Date for all purposes hereof. If the holder gives
the Transaction Exercise Notice, shares of Common Stock
issued under this Warrant immediately prior to the Closing
shall be exchanged for or converted into the consideration
payable in respect of all other shares of Common Stock in
the Transaction.
3. If the holders of the Warrant do not give the Transaction
Exercise Notice, then upon consummation of such Transaction
(other than a Partial Offer, unless the holder consents) the
Warrant shall automatically become exercisable upon similar
terms as the Warrant for the Adjusted Number (as defined
below) of shares of common stock of the Acquiror (without
regard to the form of acquisition consideration) at a price
per share equal to the Adjusted Exercise Price (as defined
below). The "Adjusted Number" shall be equal to the number
of Warrant Shares immediately prior to consummation of the
Transaction multiplied by a fraction the
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numerator of which is the closing sales price per share of
IPEC Common Stock as reported by Bloomberg L.P. for the last
full Trading Day immediately before the Transaction Date and
the denominator of which is the closing sales price per
share as reported by Bloomberg L.P. of common stock of the
Acquiror for the last full Trading Day immediately prior to
the Transaction Date (the "Acquiror Share Price"). The
"Adjusted Exercise Price" shall be equal to the Exercise
Price multiplied by a fraction the numerator of which is the
number of Warrant Shares immedi ately prior to the
Transaction Date and the denominator of which is the
Adjusted Number.
4. If the shares of common stock of the Acquiror are not listed
on a national securities exchange in the United States, (i)
the Acquiror Share Price shall be determined using the
procedures set forth below, and (ii) the Warrant shall not
be exercisable except on the Termination Date for cash equal
to the appraised value of the shares of the Acquiror's
common stock underlying the Warrant as of the Termination
Date as follows. Values as of the Transaction Date and the
Termination Date will be appraised by two nationally
recognized investment banks, one selected by the Issuer and
the other by the registered holder. If such appraisals
differ by less than ten percent of the lower of the two,
then such appraised value shall be equal to the average of
such appraisals. If such appraisals differ by more than ten
percent of the lower of the two, then such appraised value
shall be determined by a third nationally recognized
investment bank selected by such two previous investment
banks.
5. The Issuer covenants and agrees with the registered holders
of this Warrant that the Issuer will not enter into an
agreement with an Acquiror for a Transaction unless such
agreement expressly obligates the Acquiror for the benefit
of the registered holders of this Warrant to assume all of
the Issuer's obligations under the Subscription Agreement
and under this Warrant (including this paragraph (d)), and
to give the registered holders of this Warrant written
notice that the Acquiror has assumed such obligations.
6. If a record date is used in connection with a Transaction,
the holder of the Warrant shall be deemed to be the record
holder as of any record date set in connection with the
Transaction of the number of shares of Common Stock such
holder would receive in the Transaction if and only if such
holder timely delivered the Transaction Exercise Notice and
also delivered the Warrant Purchase Price to the Issuer
before the closing of the Transaction.
7. This Section (d) shall similarly apply to successive
Transactions.
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(e) After an adjustment to the Exercise Rate hereunder, any
subsequent event requiring an adjustment hereunder shall cause an
adjustment to the Exercise Rate as so adjusted.
(f) Upon the issuance of any stock dividend or distribution of Common
Stock pro rata to all holders of Common Stock, the Exercise Rate
shall be adjusted so that the registered holder hereof on the
record date for such distribution shall be entitled to receive
such dividend or distribution on the same terms as the holders of
Common Stock upon exercise hereof.
11. Upon any adjustment of the Exercise Rate pursuant to paragraph 10, the
Issuer shall promptly thereafter but in any event within 15 days
following such adjustment (i) cause to be delivered to the registered
holder hereof a certificate of its Chief Financial Officer setting
forth the Exercise Rate after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which
such calculations are based, which certificate shall be conclusive
evidence of the correctness of the matters set forth therein, and (ii)
cause to be delivered to the registered holder hereof at its address
appearing on the Warrant Register written notice of such adjustments
by first-class mail, postage prepaid. Where appropriate, such notice
may be given in advance and included as part of the notice required to
be mailed under the other provisions of this paragraph 12.
In case:
(a) the Issuer shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription
rights or warrants; or
(b) of any proposal for a consolidation or merger to which the Issuer
is a party, the sale or transfer of all or substantially all of
the assets of the Issuer or of any reclassification or change of
Common Stock issuable upon exercise of the Warrant (other than a
change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), or of a tender offer or exchange offer for shares
of Common Stock; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Issuer; or
(d) the Issuer proposes to take any action which would require an
adjustment of the Exercise Rate pursuant to paragraph 10;
then the Issuer shall cause to be given to the registered holder
hereof at its address appearing on the Warrant Register, at least 20
days (or 10 days in any case specified in clauses (a) or (b) above)
prior to the applicable record date hereinafter specified, or
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promptly in the case of events for which there is no record date, by
first class mail, postage prepaid, a written notice stating (i) the
date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution
are to be determined, or (ii) the initial expiration date set forth in
any tender offer or exchange offer for shares of Common Stock, or
(iii) the date on which any such reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up
is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock
shall be entitled to exchange such shares for securities or other
property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up.
13. The Issuer shall serve as warrant agent (the "Warrant Agent") under
this Agreement. The Warrant Agent hereunder shall at all times
maintain a register (the "Warrant Register") of the holders of
Warrants. Upon 30 days' notice to the registered holder hereof, the
Issuer may appoint a new Warrant Agent. Such new Warrant Agent shall
be a corporation doing business and in good standing under the laws
of the United States or any state thereof, and having a combined
capital and surplus of not less than $50,000,000. The combined
capital and surplus of any such new Warrant Agent shall be deemed to
be the combined capital and surplus as set forth in the most recent
annual report of its condition published by such Warrant Agent prior
to its appointment; provided that such reports are published at least
--------
annually pursuant to law or to the requirements of a federal or state
supervising or examining authority. After acceptance in writing of
such appointment by the new Warrant Agent, it shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be
reasonably necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the
expense of the Issuer and shall be legally and validly executed and
delivered by the Issuer.
Any corporation into which the Issuer or any new Warrant Agent may be
merged or any corporation resulting from any consolidation to which
the Issuer or any new Warrant Agent shall be a party or any
corporation to which the Issuer or any new Warrant Agent transfers
substantially all of its corporate trust or shareholders services
business shall be a successor Warrant Agent under this Agreement
without any further act; provided that such corporation (i) would be
--------
eligible for appointment as successor to the Warrant Agent under the
provisions of this paragraph 13 or (ii) is a wholly owned subsidiary
of the Warrant Agent. Any such successor Warrant Agent shall promptly
cause notice of its succession as Warrant Agent to be mailed (by first
class mail, postage prepaid) to the registered holder hereof at such
holder's last address as shown on the Warrant Register.
This Warrant Certificate shall not be valid unless signed by the
Issuer.
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IN WITNESS WHEREOF, Integrated Process Equipment Corporation has
caused this Warrant Certificate to be signed by its duly authorized officer.
Dated: December 16, 1996
INTEGRATED PROCESS EQUIPMENT CORPORATION
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Title: Xxxx S> Xxxxxxx
Title: Vice President and
Chief Financial Officer
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FORM OF EXERCISE NOTICE
(To Be Executed Upon Exercise Of the Warrant)
[DATE]
Integrated Process Equipment Corporation
[Address]
[Address]
Attention: *
Re: Warrant No.
-----------------------
Ladies and Gentlemen:
The undersigned is the registered holder of the above-referenced
warrant (the "Warrant") issued by Integrated Process Equipment Corporation,
evidenced by the Warrant Certificate attached hereto, and hereby elects to
exercise the Warrant to purchase ____________ Warrant Shares (as defined in such
Warrant Certificate) and herewith tenders $____________ by certified or official
bank check to the order of Integrated Process Equipment Corporation as payment
for such Warrant Shares in accordance with the terms of such Warrant Certificate
and the Subscription Agreement (as defined in the Warrant Certificate). The
undersigned hereby certifies that it is not a "U.S. Person" (as defined in
Regulation S under the Securities Act of 1933, as amended (the "Act")), it is
not exercising this Warrant on behalf of any U.S. Person and the Warrant is not
being exercised within the United States. This exercise notice is accompanied by
the certificates required to be delivered pursuant to Section 8 of the
Subscription Agreement.
In accordance with the terms of the attached Warrant Certificate, the
undersigned requests that certificates for such shares be registered in the name
of and delivered to the undersigned at the following address:
____________________
____________________
____________________.
By providing the above address, the undersigned confirms that, upon
exercise of the Warrant, the Warrant Shares will not be delivered within the
United States (as defined in Regulation S under the Act) unless (i) in an
offering deemed to meet the definition of "offshore transaction" pursuant to
paragraph (i)(3) of Rule 902 under the Act or (ii) an opinion of counsel has
been provided to the effect that the Warrant and the Warrant Shares have been
registered under the Act or an exemption from such registration is available.
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[If the number of Warrant Shares to be delivered is less than the
total number of Warrant Shares deliverable under the Warrant, insert the
following -- The undersigned requests that a new warrant certificate
substantially identical to the attached Warrant Certificate be issued to the
undersigned evidencing the right to purchase the number of Warrant Shares equal
to (x) the total number of Warrant Shares deliverable under the Warrant less (y)
the number of Warrant Shares to be delivered in connection with this exercise.]
NAME OF REGISTERED HOLDER
[ADDRESS]
[ADDRESS]
[ADDRESS]
By: _______________________________
Name:
Title:
-2-
ANNEX C
-------
SCHEDULE OF DISCLOSURE
----------------------
This Schedule of Disclosure is made and given pursuant to Section 3 of
the Subscription Agreement (the "Agreement") between Integrated Process
Equipment Corp. (the "Company") and Xxxxxxxx International Limited. The
paragraph numbers in this Schedule of Disclosure correspond to the paragraph
numbers in the Agreement; however, any information disclosed herein under any
paragraph number shall be deemed to be disclosed and incorporated into any other
paragraph number under the Agreement where such disclosure would be appropriate.
Any terms defined in the Agree ment shall have the same meaning when used in
this Schedule of Disclosure as when used in the Agreement unless the context
otherwise requires.
3(e)(1)(B) IPEC makes no representation as to Xxxxxxxx'x compliance
with the requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 or Section 13(d) or Section 16(a) of the Securities Exchange Act of 1934.
IPEC assumes that Xxxxxxxx will comply in a timely manner with all such
requirements.
3(j). IPEC filed its quarterly report on Form 10-Q for the period
ended December 31, 1995 one day after the extended filing deadline under Rule
12b-25. The last date for filing was February 20, 1996 and the report was filed
on February 21, 1996. IPEC subsequently communicated with the SEC branch chief
seeking the concurrence of the Staff of the SEC in IPEC's conclusion that IPEC
should be considered to have timely filed all reports required under the
Securities Exchange Act of 1934 notwithstanding the late filing. The branch
chief advised IPEC management in a telephone conversation that the SEC would not
issue a formal statement to this effect, but that there would be no notation
placed on the SEC's internal computer system indicating that the report had been
filed late and that IPEC should assume that it would be continue to be eligible
for Form S-3 and be viewed as having filed the Form 10-Q report in a timely
manner for other purposes under the Securities Act of 1933 and the Securities
Exchange Act of 1934.
3(q). The Company has agreed to issue warrants to purchase up to
90,000 shares of Common Stock on December 31, 1996 and up to 100,000 shares of
Common Stock on March 31, 1997. In addition, at the Closing, the Company will
issue a warrant to Xxxxxxxxx & Xxxxx LLC to purchase between 19,000 and 23,000
shares of Common Stock on the same terms as the Warrant issued to Xxxxxxxx.
