FORM OF
KEY TECHNOLOGY, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
WARRANT AGREEMENT
DATED __________________, 2000
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of _____________________, 2000, by and
between KEY TECHNOLOGY, INC., an Oregon corporation (the "Company"), and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a New Jersey limited liability
company, as warrant and transfer agent (hereinafter called the "Warrant Agent").
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger
dated February 15, 2000 between the Company and Advanced Machine Vision
Corporation ("AMVC") and KTC Acquisition Corp. ("Sub"), as amended on February
25, 2000 (the "Merger Agreement"), the parties have agreed that Sub shall merge
into AMVC and in connection therewith the shareholders of AMVC shall receive in
exchange cash, shares of the Company's Series B Convertible Preferred Stock,
$0.01 par value and warrants to purchase Common Stock (the "Warrants");
WHEREAS, the Company desires to appoint the Warrant Agent to act on
behalf of the Company in connection with the issuance, registration, transfer,
exchange and exercise of the Warrants, and the Warrant Agent is willing to
accept such appointment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereto agree as follows:
1. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth herein, and the Warrant
Agent hereby accepts such appointment, upon the terms and conditions hereinafter
set forth.
2. Certain Definitions.
As used herein, the following terms shall have the following meanings:
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of Washington or the State of New
Jersey are authorized or obligated by law or executive order to close.
"CLOSING PRICE" means the closing price per share of Common Stock on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if not listed or traded on any such exchange, on the
Nasdaq National Market or if not listed or traded on any such exchange or the
Nasdaq National Market, the average of the last bid and asked prices per share
on the Nasdaq over-the-counter system or, if such quotations are not available,
the fair market value as reasonably determined by the board of directors of the
Company or any committee of such board.
"COMMISSION" means the Securities and Exchange Commission or any
successor governmental organization or entity responsible for administration of
the Securities Act.
"COMMON STOCK" means (i) the class of stock designated as the Common
Stock, $0.01 par value per share, of the Company, on the date hereof or (ii) any
other class of stock resulting from successive changes or reclassifications of
such shares consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. Unless the context requires
otherwise, all references to Common Stock and Warrant Shares in this Agreement
and in the Warrant Certificates shall, in the event of an adjustment pursuant to
Section 12 hereof, be deemed to refer also to any other securities or property
then issuable upon exercise of the Warrants as a result of such adjustment.
"ELIGIBLE INSTITUTION" shall have the meaning set forth in Section 8.2
hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" shall have the meaning set forth in Section 5.2
hereof.
"EXERCISE PERIOD" means the period during which the Warrants may be
exercised as set forth in Section 5.1 hereof.
"EXPIRATION DATE" shall mean, as to each Warrant, 5:00 p.m., Pacific
Standard Time, on _____________, 2005 or such earlier date as the Warrants shall
be redeemed pursuant to Section 16 hereof; provided that if such date shall in
the State of Oregon be a holiday or a day on which banks are authorized or
required to close, then 5:00 p.m., Pacific Standard Time on the next following
day which in the State of Oregon is neither a holiday nor a day on which banks
are authorized or required to close.
"HOLDERS" shall have the meaning set forth in Section 4.2 hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"REDEMPTION DATE" shall have the meaning set forth in Section 16.3
hereof.
"REDEMPTION NOTICE" shall have the meaning set forth in Section 16.2
hereof.
"REDEMPTION PRICE" shall mean the price at which a Holder may, at its
option in accordance with the terms hereof, require the Company to redeem the
Warrants, or the Company, may at its option in accordance with the terms hereof,
redeem the Warrants, which price, in each case, shall be $10.00 per whole share
of Common Stock purchasable upon exercise of such Warrants.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"WARRANT CERTIFICATE" shall have the meaning set forth in Section 3.1
hereof.
"WARRANT REGISTER" means the books and records kept by the Warrant
Agent for the registration, and the registration of transfer, of the Warrant
Certificates in which shall be registered the names and addresses of Holders of
Warrants evidenced by Warrant Certificates in registered form and the
certificate numbers and denominations of such Warrant Certificates.
"WARRANT SHARES" means the shares of Common Stock issuable upon the
exercise of a Warrant.
3. Form of Warrant Certificate.
3.1 The certificates evidencing the Warrants (the "Warrant
Certificates"), and the forms of election to purchase Warrant Shares and of
assignment to be printed on the reverse thereof, shall be substantially in the
form set forth in Exhibit A hereto and may have such letters, numbers or other
marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company reasonably
deems appropriate (but which do not affect the rights or duties of the Warrant
Agent) and as are not inconsistent with the provisions of this Agreement, or as
may be required to comply with any law, any rule or regulation related thereto,
or with any rule or regulation of the NASD, the Nasdaq National Market or any
securities exchange on which the Warrants may from time to time be listed.
3.2 Each Warrant shall entitle the Holder thereof to purchase the
number of Warrant Shares set forth on the face of each Warrant Certificate upon
the exercise thereof at the applicable Exercise Price, subject to adjustment as
provided in Section 12 hereof, during the Exercise Period; provided, however,
that the Warrants are exercisable only for whole shares; cash will be paid in
lieu of fractional shares in accordance with Section 5.5 hereof. Each Warrant
Certificate shall be executed on behalf of the Company by the manual or
facsimile signature of the present or any future Chairman of the Board, Chief
Executive Officer, President or any officer of the Company, under its corporate
seal, affixed or in facsimile, attested by the manual or facsimile signature of
the present or any future Secretary or Assistant Secretary of the Company.
Warrants shall be dated as of the date of their initial issue.
4. Registration and Countersignature.
4.1 The Warrant Agent shall maintain the Warrant Register. The
Warrant Certificates shall be countersigned by the Warrant Agent and shall not
be valid for any purpose unless so countersigned. The Warrant Certificates shall
be so countersigned, however, by the Warrant Agent and shall be delivered by the
Warrant Agent, notwithstanding whether the persons whose manual or facsimile
signatures appear thereon as proper officers of the Company shall have ceased to
be such officers at the time of such countersignature or delivery.
4.2 Prior to due presentment for registration or transfer of the
Warrant Certificates, the Company and the Warrant Agent may deem and treat the
registered holder (a "Holder") thereof as the absolute owner of the Warrant
Certificates (notwithstanding any notation of ownership or other writing made
thereon by anyone other than the Company or the Warrant Agent), for the purpose
of any exercise thereof and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary.
5. Duration and Exercise of Warrants.
5.1 Each Warrant may be exercised by the Holder thereof at any time
on or after the date hereof, but not after the Expiration Date, upon the terms
and subject to the conditions set forth herein and in the applicable Warrant
Certificate. Upon the Expiration Date, all rights evidenced by the Warrants
shall cease and the Warrants shall become void.
5.2 Subject to the provisions of this Agreement, the Holder of each
Warrant shall have the right to purchase from the Company (and the Company shall
issue and sell to such
Holder) the number (rounded down to the nearest whole number) of fully paid and
nonassessable Warrant Shares set forth on such Holder's Warrant Certificate (or
such number of Warrant Shares as may result from adjustments made from time to
time as provided in this Agreement) at the price per share of $15.00 in lawful
money of the United States of America (such exercise price per Warrant Share, as
adjusted from time to time as provided herein, being referred to herein as the
"Exercise Price"), upon (i) surrender of the Warrant Certificates to the Company
at the office of the Warrant Agent designated by the Warrant Agent for such
purpose with the exercise form on the reverse thereof duly and properly
completed and signed by the Holder or Holders thereof or by a duly appointed
legal representative thereof or by a duly authorized attorney, such signature to
be guaranteed by an Eligible Institution (as defined in Section 8.2 hereof) and
(ii) payment, in lawful money of the United States of America, of the Exercise
Price for the Warrant Share or Warrant Shares in respect of which such Warrant
is then exercised. The Exercise Price payable upon exercise of any Warrant may
be paid only by certified or, at the option of the Holder, official bank check
payable to the order of the Company, or, in the alternative, if the Closing
Price of one share of the Company's Common Stock is greater than the Exercise
Price on the date of surrender of the Warrant for exercise, in lieu of
exercising the Warrant for cash, a Holder may exercise all or any part of the
Warrant on a "cashless" basis by providing written notice to the Warrant Agent
of its intention to do so, together with the properly endorsed Form of
Subscription and stating the maximum number (the "Maximum Number") of shares of
Common Stock the Holder desires to purchase in consideration of cancellation of
Warrants in payment for such exercise. The number of shares of Common Stock the
Holder shall receive upon such exercise pursuant to this Section 5.2 shall be
equal to the number that is obtained when the product of the Maximum Number and
the difference between the Closing Price per share on the date of surrender of
the Warrant and the Exercise Price is divided by the Closing Price per share.
Upon request of the Warrant Agent, the Company shall promptly inform in writing
the Warrant Agent of the number of shares of Common Stock that may be delivered
to a Holder upon a "cashless" exercise, and the Warrant Agent shall incur no
liability and shall be fully protected in relying on such information provided
to it by the Company. The Warrant Agent shall have no obligation to take any
action under this Section with respect to a "cashless" exercise, nor shall it
incur any liability for failing to take any such action, if it has not received
all such relevant information requested regarding such "cashless" exercise from
theCompany. Upon surrender of the Warrant Certificate, and payment of the
Exercise Price, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the Holder of such Warrant
and in such name or names as such Holder may designate, a certificate or
certificates for the number of Warrant Shares so purchased upon the exercise of
such Warrant, together with a check in the amount of the value of any fraction
of a Warrant Share issuable upon such surrender pursuant to Section 5.5 hereof.
The Warrant Agent shall deliver on a weekly basis all funds received upon
exercise of the Warrants to the Company, 000 Xxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, President.
5.3 Each person in whose name any certificate for Warrant Shares is
issued upon the exercise of Warrants shall for all purposes be deemed to have
become the holder of record of the Warrant Shares represented thereby, and such
certificate shall be dated the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered and payment of the Exercise Price
(and any applicable transfer taxes pursuant to Section 9 hereof) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Common Stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such Warrant Shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Common Stock transfer books of the Company are open.
5.4 In the event that, during the Exercise Period, fewer than all of
the Warrants represented by a Warrant Certificate are exercised, a new Warrant
Certificate, duly executed by the Company, will be issued for the remaining
number of Warrant Shares purchasable pursuant to the Warrant Certificate so
surrendered, and the Warrant Agent shall countersign and deliver such new
Warrant Certificate to the Holder of such unexercised Warrants pursuant to the
provisions of this Section 5 and of Section 4 hereof.
5.5 No fractional shares of Common Stock or scrip shall be issued to
any Holder in connection with the exercise of a Warrant. Instead of any
fractional shares of Common Stock that would otherwise be issuable to such
Holder, the Company shall pay to such Holder a cash adjustment in respect of
such fractional interest in an amount equal to that fractional interest
multiplied by the sum of $10.00. The Warrant Agent shall have no duty or
obligation with regard to the payment, calculation or valuation of fractional
shares unless and until it has received written instructions from the Company
regarding fractional shares and the Company has otherwise complied with Section
18.2.4(C) of this Agreement.
5.6 The number of Warrant Shares to be received upon the exercise of
a Warrant and the price to be paid for a Warrant Share are subject to adjustment
from time to time as hereinafter set forth.
5.7 Warrants not exercised on or prior to the Expiration Date shall
become void and all rights in respect thereof shall cease as of such time.
6. Reservation of Warrant Shares; Stock Certificates.
The Company shall at all times reserve, for issuance and delivery upon
exercise of the Warrants, such number of Warrant Shares or other shares of
capital stock of the Company as may be issuable from time to time upon exercise
of the Warrants. All such shares shall be duly authorized and, when issued upon
such exercise and receipt by the Company of payment in full of the Exercise
Price, shall be validly issued, fully paid and nonassessable, free and clear of
all liens, security interests, charges and other encumbrances or restrictions on
sale and free and clear of all preemptive rights. The Warrant Agent is hereby
irrevocably authorized to requisition, from time to time from the transfer agent
for the Common Stock, stock certificates issuable upon exercise of outstanding
Warrants. The Company will supply such transfer agent with duly executed stock
certificates for such purpose. All Warrant Certificates surrendered upon
exercise shall be cancelled by the Warrant Agent and shall thereafter be
delivered to the Company or otherwise disposed of in a manner satisfactory to
the Company. Unless all Warrants shall have been exercised prior to 5:00 p.m.,
Pacific Standard Time, on the Expiration Date, the Warrant Agent shall certify
to the Company, as of the close of business on the Expiration Date, the total
aggregate number of Warrants then outstanding, and thereafter no shares of
Common Stock shall be subject to reservation in respect of such Warrants. The
Company shall keep a copy of this Agreement on file with its transfer agent and
with every transfer agent for any shares of Common Stock.
7. Transfer and Registration of the Warrants and Warrant Shares.
7.1 The Warrants and the Warrant Shares, and any interest in either,
may be sold, assigned, pledged, encumbered or in any other manner transferred or
disposed of, in whole or in part, only in accordance with Section 8 hereof and
in compliance with applicable United States federal and state securities laws
and the terms and conditions hereof.
7.2 The Warrants and the Warrant Shares have been registered under
the Securities Act pursuant to a registration statement on Form S-4 (File No.
333-36920) declared effective under the Securities Act (the "Registration
Statement"). The Company covenants and agrees:
7.2.1 it will prepare and file with the Commission such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith as may be necessary to keep the Registration Statement
effective through the termination of the Exercise Period or until such earlier
time as no Warrants remain outstanding;
7.2.2 as expeditiously as possible, to register or qualify the
Warrants and the Warrant Shares under the securities or "Blue Sky" laws of each
jurisdiction in which such registration or qualification is necessary; and
7.2.3 to pay all expenses incurred by the Company in complying
with this Section 7.2, including, without limitation (A) all registration and
filing fees, (B) all printing expenses, (C) all fees and disbursements of
counsel and independent public accountants for the Company, (D) all NASD and
"Blue Sky" fees and expenses (including fees and expenses of counsel in
connection with any "Blue Sky" surveys) and (E) the entire expense of any
special audits incident to or required in connection with any such registration.
8. Exchange, Transfer of Assignment of Warrants.
8.1 Warrants may be exchanged, at the option of the Holder thereof,
upon presentation and surrender to the Warrant Agent of the Warrant Certificate
evidencing such Warrants, for other Warrant Certificates of different
denominations, entitling the Holder or Holders thereof to purchase in the
aggregate the same number of Warrant Shares as did such surrendered Warrant
Certificate. Subject to the preceding sentence, a Warrant Certificate may be
divided or combined with other Warrant Certificates that carry the same rights
upon presentation thereof at the office of the Warrant Agent, together with
written notice signed by the Holder or Holders thereof specifying the names and
denominations in which new Warrant Certificates are to be issued.
8.2 Warrants may be assigned or transferred, at the option of the
Holder thereof, upon surrender of the Warrant Certificates evidencing such
Warrants to the Warrant Agent, accompanied (if so required by the Company or the
Warrant Agent) by a written instrument or instruments of transfer in form
satisfactory to the Company and the Warrant Agent, duly and properly executed by
such Holder or by a duly authorized representative or attorney, such signature
to be guaranteed by a commercial bank or trust company having an office in the
United States, by a broker or a dealer that is a member of the NASD or by a
member of a national securities exchange (any such entity, an "Eligible
Institution"). Upon any such registration of transfer, a new Warrant Certificate
shall be issued to the transferee and the surrendered Warrant Certificate shall
be cancelled by the Warrant Agent. Warrant Certificates
so cancelled shall be delivered by the Warrant Agent to the Company from time to
time or otherwise disposed of by the Warrant Agent in a manner satisfactory to
the Company.
8.3 Any transfer, exchange or assignment of Warrants (including any
new Warrants issued pursuant to Section 10 hereof) shall be without charge
(other than the cost of any transfer tax or governmental charge) to the Holder
and any new Warrant or Warrants issued pursuant to this Section 8 shall be dated
the date hereof.
9. Payment of Taxes.
The Company shall pay all documentary stamp taxes attributable to the
original issuance of the Warrants and of Warrant Shares; provided, however, that
the Company shall not be required to (a) pay any tax or other governmental
charge which may be payable in respect of any transfer involving the transfer
and delivery of Warrant Certificates or the issuance or delivery of certificates
for Warrant Shares in a name other than that of the Holder of the Warrant
Certificate surrendered upon the exercise of a Warrant or (b) issue or deliver
any certificate for Warrant Shares upon the exercise of any Warrants until any
such tax or charge required to be paid under clause (a) shall have been paid,
all such tax or charge being payable by the Holder of such Warrant at the time
of surrender.
10. Mutilated or Missing Warrant Certificates.
In the event that any Warrant Certificate shall be mutilated, lost,
stolen or destroyed, the Company may in its discretion issue, and the Warrant
Agent may countersign and deliver, upon the request of the Holder of the
Warrants evidenced by such Warrant Certificate, in exchange for and upon
cancellation of any such mutilated Warrant Certificate, or in substitution for
any such lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate of like tenor and evidencing the same number of Warrant Shares as
were evidenced by such mutilated, lost, stolen or destroyed Warrant Certificate,
but only upon receipt of evidence satisfactory to the Company or the Warrant
Agent of such loss, theft or destruction of such Warrant Certificate and an
indemnity, if requested, satisfactory to the Company or the Warrant Agent, as
the case may be. An applicant for such substitute Warrant Certificate shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe. Any such new Warrant
Certificate shall constitute an original contractual obligation of the Company,
whether or not the allegedly mutilated, lost, stolen or destroyed Warrant
Certificate shall be enforceable by any person at any time thereafter.
11. No Stock Rights; Limitation of Liability.
No Holder of any Warrant shall, by virtue thereof, be entitled to the
rights of a shareholder of the Company, unless and until exercise of such
Warrant has occurred. No provisions of any Warrant or of this Agreement, in the
absence of affirmative action by the Holder of any such Warrant to exercise such
Warrant, and no mere enumeration herein of the rights or privileges of such
Holder, shall give rise to any liability of such Holder for the Exercise Price
or as a shareholder of the Company, whether such liability is asserted by the
Company or by its creditors.
12. Antidilution Provisions.
12.1 The Exercise Price and the number of Warrant Shares that may be
purchased upon the exercise of a Warrant shall be subject to change or
adjustment from time to time as follows:
12.1.1 Stock Splits. If at any time during the Exercise Period
the number of outstanding shares of Common Stock shall have been increased by a
subdivision or split-up of shares of Common Stock, then, on the record date
fixed for the determination of holders of Common Stock immediately after the
effective date of such subdivision or split-up, the number of shares to be
delivered upon exercise of any Warrant will be appropriately increased so that
each Holder thereafter will be entitled to receive the number of shares of
Common Stock that such Holder would have owned immediately following such action
had such Warrant been exercised immediately prior thereto, and the Exercise
Price will be appropriately adjusted. The time of occurrence of an event giving
rise to an adjustment made pursuant to this Section 12.1.1 shall be deemed to be
the effective date thereof.
12.1.2 Combination of Stock. If the number of shares of Common
Stock outstanding at any time during the Exercise Period is decreased by a
combination of the outstanding shares of Common Stock, then, immediately after
the effective date of such combination, the number of shares of Common Stock to
be delivered upon exercise of any Warrant shall be appropriately decreased so
that the Holder of such Warrant thereafter will be entitled to receive the
number of shares of Common Stock that such Holder would have owned immediately
following such action had such Warrant been exercised immediately prior thereto,
and the Exercise Price shall be appropriately adjusted.
12.1.3 No Adjustments to Exercise Price. No adjustment of the
Exercise Price in accordance with the provisions of paragraphs 12.1.1 or 12.1.2
above shall be made in an amount of less than $0.01; provided, however, that the
amount by which any adjustment is not made by reason of the provisions of this
Section shall be carried forward and taken into account at the time of any
subsequent adjustment in the Exercise Price.
12.1.4 Readjustments, Etc. If an adjustment is made under
paragraphs 12.1.1 or 12.1.2 above, and the event to which the adjustment relates
does not occur, then any adjustments in the Exercise Price or Warrant Shares
that were made in accordance with such paragraphs shall be adjusted back to the
Exercise Price and the number of Warrant Shares that were in effect immediately
prior to the record date for such event.
12.2 No Impairment; Certain Events.
12.2.1 The Company shall not, by amendment of its articles of
incorporation or through any reorganization, reclassification, consolidation,
merger, sale, lease or transfer of assets, issuance or sale of securities or any
other action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed under this Section 12 by the Company, but will
at all times in good faith assist in the carrying out of all the provisions of
this Section 12 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holders against impairment.
12.2.2 If any event occurs as to which the provisions of Section
12.1 are not strictly applicable but with respect to which, in the reasonable,
good faith opinion of the Company, an adjustment of the Exercise Price, and the
number of Warrant Shares issuable upon the exercise of a Warrant, would fairly
protect the exercise rights of the Holders in accordance with the basic intent
and principles of such provisions or as to which an adjustment pursuant to such
provisions, if strictly applied, would not fairly protect the purchase rights of
the Holders in accordance with the basic intent and principles of such
provisions, then the Company shall make any computation required under this
Section 12.2.2 with respect to any such adjustment on a basis consistent with
the basic intent and principles established by the provisions of this Section
12, necessary to preserve, without dilution, the exercise rights of the Holders.
The Company shall appoint a firm of independent certified public accountants
(which may be the regular auditors of the Company) of recognized national
standing, which firm shall review the computation of the Company prepared
pursuant to this Section 12.2.2 and prepare a report signed by such firm, which
shall be provided to the Company and which shall acknowledge that the adjustment
calculation prepared by the Company is arithmetically correct. Such report shall
be conclusive evidence of the correctness of the computation made under this
Section 12.2.2. Upon receipt of such report, the Company shall forthwith cause
to be made, or shall act to prevent, the adjustments described in such
calculation.
13. Officer's Certificate.
Whenever the number of Warrant Shares that may be purchased upon
exercise of the Warrant is adjusted as required by the provisions of this
Agreement, the Company shall file forthwith with the Warrant Agent and with its
Secretary or Assistant Secretary at its principal office an officer's
certificate indicating the adjusted number of Warrant Shares that may be
purchased upon exercise of a Warrant and the adjusted Exercise Price, determined
as herein provided, and setting forth in reasonable detail the facts requiring
such adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be made available at all reasonable times for inspection by
the Holders. The Company shall, forthwith after each such adjustment, cause a
copy of such officer's certificate to be mailed to the Holders. The Warrant
Agent may rely on such certificate without further inquiry and shall not be
deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
14. Notice of Certain Events.
In the event that, at any time during the Exercise Period:
14.1 The Company shall pay any dividend on Common Stock that is
payable in stock, or make any distribution (other than regular cash dividends)
to the holders of Common Stock;
14.2 There shall be any capital reorganization or reclassification of
the capital stock of the Company; or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
or
14.3 There shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
Then, the Company will cause to be mailed to the Holder by first-class mail,
postage prepaid, addressed to such Holder at the address appearing in the
Warrant Register, (i) at least 10 days' prior written notice of the date on
which the books of the Company shall close or a
record shall be taken for such dividend or distribution or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, and (ii) in
the case of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding up, at least 10 days' prior written
notice of the date when the same shall take place. Any notice given in
accordance with the foregoing clause (i) shall also specify, in the case of any
such dividend or distribution, the date on which a shareholder shall be entitled
thereto. Any notice given in accordance with the foregoing clause (ii) shall
also specify the date on which shareholders shall be entitled to exchange their
shares for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, winding
up or conversion, as the case may be.
15. Listing on Securities Exchanges.
15.1 Except as otherwise provided in Section 15.2, the Company will,
within 120 days of the issue date of the Warrants, list on each national
securities exchange or, if not so listed, will list for quotation on the Nasdaq
National Market, or such other over-the-counter quotation system on which any
Common Stock or Warrants may at any time be listed, all Warrants and shares of
the Common Stock from time to time issuable upon the exercise of the Warrants,
and will maintain such listing so long as any Warrants or other shares of Common
Stock are so listed; and the Company shall so list on each national securities
exchange or the Nasdaq National Market, or such other over-the-counter quotation
system, and shall maintain such listing of, any other shares of capital stock of
the Company issuable upon the exercise of the Warrants if and so long as any
shares of capital stock of the same class are listed on such national securities
exchange or are traded on the Nasdaq National Market or such over-the-counter
quotation system. Any such listing or quotation will be at the Company's
expense.
15.2 The Company shall not be obligated or required to maintain the
listing or quotation of the Warrants under Section 15.1 above, and shall, in its
sole discretion, withdraw such listing or quotation when the number of shares of
Common Stock purchasable under all outstanding Warrants falls below 100,000
shares.
16. Rights of Redemption.
16.1 A Holder shall at all times prior to the Expiration Date, and
except to the extent exercised, have the right to require the Company to redeem
the Warrant at the Redemption Price. To exercise the right of redemption, a
Holder must surrender the Warrant, duly and properly endorsed by such Holder or
by a duly authorized representative or attorney, such signature to be guaranteed
by an Eligible Institution, to the Company's Warrant Agent, together with the
completed form of redemption notice attached thereto.
16.2 The Warrants shall be redeemable by and at the option of the
Company at the Redemption Price at any time when the number of shares of Common
Stock purchasable upon exercise of all outstanding Warrants is less than 100,000
shares, whether occurring by exercise or redemption, or both. If the Company
desires to exercise its right to redeem the remaining outstanding Warrants, it
shall instruct the Warrant Agent to mail, upon receipt by the Warrant Agent of
such form of notice, a notice of redemption (the "Redemption Notice") to each of
the Holders of the Warrants to be redeemed, by first class, postage prepaid, not
later than the thirtieth Business Day before the date fixed for redemption, at
his or its last address as it shall appear on the Warrant Register of the
Warrant Agent. Any notice mailed in the manner provided herein shall be
conclusively presumed to have been duly given whether or not the Holder receives
such notice.
16.3 The Redemption Notice shall specify (i) the Redemption Price,
(ii) the date fixed for redemption (the "Redemption Date"), (iii) the place
where the Warrant Certificates shall be delivered and the Redemption Price paid,
and (iv) that the right to exercise the Warrant shall terminate at 5:00 p.m.,
Pacific Standard Time on the Business Day immediately preceding the Redemption
Date. No failure to mail such notice nor any defect therein or in the mailing
thereof shall affect the validity of the proceedings for such redemption except
as to a Holder (a) to whom notice was not mailed or (b) whose notice was
defective. An affidavit of the Warrant Agent or of the Secretary or an Assistant
Secretary of the Company that notice of redemption has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
16.4 Any right to exercise a Warrant shall terminate at 5:00 p.m.,
Pacific Standard Time on the Business Day immediately preceding the Redemption
Date. On and after the Redemption Date, Holders of the Warrants shall have no
further rights except to receive, upon surrender of the Warrant, the Redemption
Price.
16.5 From and after the Redemption Date, the Company shall, at the
place specified in the notice of redemption, upon presentation and surrender to
the Company by or on behalf of the Holder thereof of one or more Warrant
Certificates evidencing Warrants to be redeemed, deliver or cause to be
delivered to or upon the written order of such Holder a sum
in cash equal to the Redemption Price of such Warrants. From and after the
Redemption Date and upon the deposit or setting aside by the Company of a sum
sufficient to redeem all the Warrants called for redemption, such Warrants shall
expire and become null and void and all rights hereunder and under the Warrant
Certificates, except the right to receive payment of the Redemption Price, shall
cease. If the Company shall purchase or acquire any Warrant or Warrants by
redemption, the Warrant Certificate or Warrant Certificates evidencing the same
shall thereupon be delivered to the Warrant Agent and canceled by it and
retired.
17. Availability of Information.
The Company will comply with all applicable periodic public
information reporting requirements of the Commission to which it may from time
to time be subject.
18. Warrant Agent.
18.1 Merger, Consolidation or Change of Name of Warrant Agent.
18.1.1 Any entity into which the Warrant Agent may be merged or
with which it may be consolidated, or any entity resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any entity
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however, that
such successor entity must be otherwise eligible for appointment as a Warrant
Agent hereunder. In the event that at the time such successor to the Warrant
Agent shall succeed to the agency created by this Agreement any of the Warrant
Certificates shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of such predecessor Warrant
Agent and deliver such Warrant Certificates so countersigned; and in the event
that at the time of such succession any of the Warrant Certificates shall not
have been countersigned, any such successor to the Warrant Agent may countersign
such Warrant Certificates either in the name of such predecessor Warrant Agent
or in the name of such successor Warrant Agent; and in any event, all such
Warrant Certificates shall have the full force and effect provided in such
Warrant Certificates and in this Agreement.
18.1.2 In the case that at any time the name of the Warrant
Agent shall be changed and at such time one or more of the Warrant Certificates
shall have been countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates so
countersigned; in the event that at that time one or more of the Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name; and in all such cases such Warrant Certificates shall have the full force
and effect provided in such Warrant Certificates and in this Agreement.
18.2 Duties of Warrant Agent. The Warrant Agent undertakes only the
duties and obligations expressly imposed by this Agreement upon the following
terms and conditions, by which the Holders, by their acceptance of Warrants, and
the Company, shall be bound:
18.2.1 The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants to be complied with
by the Company that are contained in this Agreement or in the Warrant
Certificates.
18.2.2 The Warrant Agent may consult at any time with counsel
satisfactory thereto, and the Warrant Agent shall incur no liability or
responsibility to the Company or to any Holder in respect of any action taken,
suffered or omitted by the Warrant Agent hereunder in accordance with the
opinion or the advice of such counsel, provided that the Warrant Agent shall
have exercised reasonable care in the selection and continued employment of such
counsel. Whenever in the performance of its duties hereunder the Warrant Agent
is unsure of or has questions as to what action it is required to take under
this Warrant Agreement, the Warrant Agent shall promptly seek clarification
thereof from the Company, and the Warrant Agent shall be fully protected and
incur no liability in not taking any such action prior to receiving a written
response from the Company.
18.2.3 The Warrant Agent shall incur no liability or
responsibility to the Company or to any Holder for any action taken in reliance
on any notice, resolution, waiver, consent, order, certificate or other paper,
document or instrument believed by the Warrant Agent to be genuine and to have
been signed, sent or presented by the party or parties thereto.
18.2.4 The Company shall (A) pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the preparation,
execution, delivery, amendment and administration of this Agreement and the
exercise and performance of its duties hereunder, (B) reimburse the Warrant
Agent for all expenses, disbursements, counsel fees, taxes (other than taxes
based on such Warrant Agent's net income), governmental charges, and other
charges of any kind and nature, incurred by the Warrant Agent in the
performance of this Agreement, (C) if the Warrant Agent has been instructed in
writing to pay out fractional shares, advance to the Warrant Agent, upon
request, funds to pay cash in lieu of fractional shares of Common Stock issuable
upon exercise of Warrants and (D) indemnify the Warrant Agent and save it
harmless against any and all losses, damages, judgments, fines, penalties,
claims, demands, settlements, costs, expenses or liabilities, including counsel
fees, arising out of or in connection with its agency under this Agreement,
except as a result of its negligence or bad faith. In no case shall the Warrant
Agent be liable for special, indirect, incidental or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost profits). The
costs and expenses incurred in enforcing this right of indemnification shall be
paid by the Company. Any liability of the Warrant Agent under this Warrant
Agreement will be limited to the amount of fees paid by the Company to the
Warrant Agent.
18.2.5 The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve the incurrence by the Warrant Agent of expenses unless the
Company or one or more Holders shall have furnished the Warrant Agent with
security and indemnity for any costs and expenses which may be incurred. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the
18.2.6 Warrant Agent without the possession of any of the
Warrants or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent, and any recovery of judgment
shall be for the ratable benefit of the Holders, as their respective rights or
interests may appear.
18.2.7 The Warrant Agent and any shareholder, affiliate,
director, officer or employee of the Warrant Agent may buy, sell or deal in any
of the Warrants or other securities of the Company, or become interested in any
transaction in which the Company may be interested or contract with or lend
money or otherwise act as fully and freely as though it were not the Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
18.2.8 The Warrant Agent shall act hereunder solely as agent,
and its duties shall be determined solely by the provisions hereof. The Warrant
Agent shall not be liable for any actions which it may take, suffer or refrain
from taking, in connection with this Agreement, except as result from its own
gross negligence or bad faith.
18.2.9 The Warrant Agent shall make copies of this Agreement
available for inspection at its offices at ____________ during normal business
hours and shall provide copies to Holders upon their written request.
18.3 Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by providing 45 days' written
notice to the Company, and the Company upon 45 days' notice may discharge and
terminate the Warrant Agent, and in either instance the Warrant Agent shall send
written notice, sent at the Company's expense by first-class mail, postage
prepaid, to each Holder at such Holder's address appearing in the Warrant
Register, which notice shall specify a date when such termination of services
shall take effect and which shall be sent at least two weeks prior to the date
so specified. In all events that the Warrant Agent will cease to act as Warrant
Agent hereunder, the Company shall appoint a successor thereto. If the Company
shall fail to make such appointment within a period of 30 days after termination
of services by the Warrant Agent or by any Holder (which Holder shall, with such
notice, submit Warrant Certificates held thereby for inspection by the Company),
then any Holder may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by a court, the duties
of the Warrant Agent shall be carried out by the Company. After such
appointment, the successor Warrant Agent shall be vested with such powers,
rights, duties and responsibilities as such Warrant Agent would have been vested
had such Warrant Agent been named originally as Warrant Agent hereunder, without
further act or deed. Upon payment in full of all amounts owed to the former
Warrant Agent, the former Warrant Agent shall deliver and transfer to the
successor Warrant Agent any property at the time held by such former Warrant
Agent hereunder and shall execute and deliver any further assurance, conveyance,
act or deed necessary therefor. Failure to provide any notice called for in this
Section 18, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or the appointment
of a successor Warrant Agent.
19. Identity of New Transfer Agent.
Forthwith upon the appointment after the date hereof of any new
transfer agent for the Common Stock, the Company will file with the Warrant
Agent a statement setting forth the name and address of such transfer agent.
20. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company, the Warrant Agent or any of the Holders shall bind and
inure to the benefit of their respective successors, assigns, heirs and personal
representatives.
21. Termination.
This Agreement shall terminate at 5 p.m., Pacific Standard Time, on
the Expiration Date except that the Warrant Agent shall account to the Company
for all cash held by it at 5 p.m., Pacific Standard Time, on such Expiration
Date.
22. Headings.
The headings of sections of this Agreement have been inserted for
convenience of reference only, are not to be considered a part hereof, and shall
in no way modify or restrict any of the terms or provisions hereof.
23. Amendments.
This Agreement may be amended only by both (i) the written consent of
the Company and (ii) the affirmative vote or the written consent of Holders
holding not less than a majority in interest of the then outstanding Warrants;
provided, however, that, except as expressly provided herein, this Agreement may
not be amended to change (a) the Exercise Price, (b) the Exercise Period, (c)
the number or type of securities to be issued upon the exercise of the Warrants,
(d) the provisions of this Section 23, without the consent of each Holder, or
(e) any provisions which affect the rights, duties or obligations of the Warrant
Agent without the consent of the Warrant Agent.
24. Counterparts.
This Agreement may be executed in any number of counterparts each of
which when so executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement.
25. Notices.
Any notice required by the provisions of this Agreement to be provided
to the Company by the Warrant Agent or by any Holder shall be deemed given if
deposited in the United States mail, first class postage prepaid, addressed
(until another address is filed in writing by the Company with the Warrant
Agent) as follows:
Key Technology, Inc.
000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attention: Corporate Secretary
Any notice required by the provisions of this Agreement to be provided
to the Warrant Agent by the Company or by any Holder shall be deemed given if
deposited in the United States mail, first class postage prepaid, addressed
(until another address is filed in writing by the Warrant Agent with the Company
or notice of the address of a successor Warrant Agent is provided pursuant to
this Agreement) as follows:
ChaseMellon Shareholder Services, L.L.C.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Relationship Manager
Any notice required by the provisions of this Agreement to be provided
to any Holder by the Company or by the Warrant Agent shall be deemed given if
deposited in the United States mail, first class postage prepaid, addressed to
such Holder at its address set forth in the Warrant Register. Any notice given
in conformity with this Section 25 shall be deemed effective three days after
mailing.
26. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation, other than the Company, the Warrant Agent and the Holders, any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and the Holders.
27. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Oregon, without reference to principles of conflict of
laws; provided, however, that all provisions regarding the rights, duties and
obligations of the Warrant Agent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such state.
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be signed by its duly authorized officers.
KEY TECHNOLOGY, INC.
By __________________________________
Name ________________________________
Title _______________________________
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C. as Warrant Agent
By __________________________________
Name ________________________________
Title _______________________________
