1
Exhibit 10.8
WARRANT PURCHASE AGREEMENT
DATED AUGUST 29, 2000
BETWEEN
MCMS, INC.
(THE COMPANY)
AND
THE PERSONS LISTED ON THE SCHEDULE OF PURCHASERS
(PURCHASERS)
2
WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT (the "AGREEMENT") is made as
of August 29, 2000 between MCMS, INC., an Idaho corporation (the "Company"), and
the Persons listed on the Schedule of Purchasers attached hereto (collectively
referred to herein as the "Purchasers" and individually as a "Purchaser").
Except as otherwise indicated herein, capitalized terms used herein are defined
in Section 7 hereof.
WHEREAS, the Purchasers propose to lend $15,000,000 (the "Loan
Amount"), to the Company pursuant to the Loan Agreement; and
WHEREAS, in consideration of the Purchasers' entering into the Loan
Agreement, the Company desires to issue to Purchasers, and the Purchasers desire
to purchase from the Company warrants for an aggregate of 2,500,000 shares of
Convertible Stock (the "Warrants");
NOW THEREFORE, in consideration of the premises and mutual agreements
herein, the Company and the Purchasers hereby agree as follows:
Section 1. Authorization and Closing.
1A. Purchase and Sale of the Warrants.
At the Closing, in consideration of the Purchasers
entering into the Loan Agreement and making certain Advances thereunder, the
Company shall issue warrants (the "Warrants"), in the form set forth in Exhibit
B attached hereto, to each Purchaser on the dates and in the amounts and for the
exercise prices set forth on the Issuance Schedule attached hereto, subject to
the terms and conditions set forth herein; provided that, the Company shall only
issue the Warrants only so long as any Obligation of the Company remains
outstanding.
1B. The Closing. The closing of the separate purchases and
sales of the Warrants (the "Closing") shall take place at the offices of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m. on
________________, or at such other place or on such other date as may be
mutually agreeable to the Company and each Purchaser. At the Closing, the
Company shall deliver to each Purchaser instruments evidencing the Warrant to be
issued to such Purchaser, payable to the order of such Purchaser or its nominee
or registered in such Purchaser's or its nominee's name, respectively.
Section 2. Conditions of the Company's and Each Purchaser's
Obligation at the Closing. The obligation of the Company to issue the Warrants
and of each Purchaser to receive the Warrants at the Closing is subject to the
satisfaction as of the Closing of the following conditions:
3
2A. Representations and Warranties; Covenants. The
representations and warranties contained in Section 5 hereof shall be true and
correct in all material respects at and as of the Closing as though then made,
except to the extent of changes caused by the transactions expressly
contemplated herein, and the Company shall have performed in all material
respects all of the covenants required to be performed by it hereunder prior to
the Closing.
2B. Advances under Loan Agreement. Each of the Purchasers
shall have made an Advance under the Loan Agreement.
2C. Securities Law Compliance. The Company shall have made all
filings under all applicable federal and state securities laws necessary to
consummate the issuance of the Warrants pursuant to this Agreement in compliance
with such laws.
2D. Loan Agreement. The Company and Purchasers shall have
entered into the Loan Agreement, and the Loan Agreement shall be in full force
and effect as of the Closing and shall not have been amended or modified.
2E. Proceedings. All corporate and other proceedings taken or
required to be taken by the Company in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to each Purchaser.
Section 3. Covenants.
3A. Financial Statements and Other Information. The Company shall
deliver to each Purchaser (so long as such Purchaser holds any Underlying
Convertible Stock):
(i) all the documents required to be delivered to
Purchasers pursuant to Section 9 of the Loan Agreement; and
(ii) within ten days after transmission thereof,
copies of all financial statements, proxy statements, reports and any
other general written communications which the Company sends to its
stockholders and copies of all registration statements and all regular,
special or periodic reports which it files, or (to its knowledge) any
of its officers or directors file with respect to the Company, with the
Securities and Exchange Commission or with any securities exchange on
which any of its securities are then listed, and copies of all press
releases and other statements made available generally by the Company
to the public concerning material developments in the Company's and its
Subsidiaries' businesses.
3B. Current Public Information. At all times after the Company has
filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Securities Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder and
- 2 -
4
shall take such further action as any holder or holders of Restricted Securities
may reasonably request, all to the extent required to enable such holders to
sell Restricted Securities pursuant to (i) Rule 144 adopted by the Securities
and Exchange Commission under the Securities Act (as such rule may be amended
from time to time) or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission or (ii) a registration statement on Form S-2
or S-3 or any similar registration form hereafter adopted by the Securities and
Exchange Commission. Upon request, the Company shall deliver to any holder of
Restricted Securities a written statement as to whether it has complied with
such requirements.
3C. Reservation of Convertible Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of
Convertible Stock, solely for the purpose of issuance upon the exercise of the
Warrants, such number of shares of Convertible Stock issuable upon the exercise
of all outstanding Warrants. All shares of Convertible Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Company shall take
all such actions as may be necessary to assure that all such shares of
Convertible Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Convertible Stock may be listed (except for official notice
of issuance which shall be immediately transmitted by the Company upon
issuance).
Section 4. Transfer of Restricted Securities.
4A. General Provisions. Restricted Securities are transferable only
pursuant to (i) public offerings registered under the Securities Act, (ii) Rule
144 or Rule 144A of the Securities and Exchange Commission (or any similar rule
or rules then in force) if such rule is available and (iii) subject to the
conditions specified in paragraph 4B below, any other legally available means of
transfer.
4B. Opinion Delivery. In connection with the transfer of any Restricted
Securities (other than a transfer described in paragraph 4A(i) or (ii) above),
the holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, together with an opinion of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ or other counsel which (to the Company's reasonable
satisfaction) is knowledgeable in securities law matters to the effect that such
transfer of Restricted Securities may be effected without registration of such
Restricted Securities under the Securities Act. In addition, if the holder of
the Restricted Securities delivers to the Company an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
or such other counsel that no subsequent transfer of such Restricted Securities
shall require registration under the Securities Act, the Company shall promptly
upon such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in paragraph
8B. If the Company is not required to deliver new certificates for such
Restricted Securities not bearing such legend, the holder thereof shall not
transfer the same until the prospective transferee has confirmed to the Company
in writing its agreement to be bound by the conditions contained in this
paragraph and paragraph 8B.
- 3 -
5
4C. Rule 144A. Upon the reasonable request of any Purchaser, the
Company shall promptly supply to such Purchaser or its prospective transferees
all information regarding the Company required to be delivered in connection
with a transfer pursuant to Rule 144A of the Securities and Exchange Commission.
4D. Legend Removal. If any Restricted Securities become eligible for
sale pursuant to Rule 144(k), the Company shall, upon the request of the holder
of such Restricted Securities, remove the legend set forth in paragraph 8C from
the certificates for such Restricted Securities.
Section 5. Representations and Warranties of the Company. As a material
inducement to the Purchasers to enter into this Agreement and purchase the
Warrants hereunder, the Company hereby represents and warrants that:
5A. Organization, Corporate Power and Licenses. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Idaho and is qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify. The Company
possesses all requisite corporate power and authority and all material licenses,
permits and authorizations necessary to own and operate its properties, to carry
on its businesses as now conducted and presently proposed to be conducted and to
carry out the transactions contemplated by this Agreement. The copies of the
Company's and each Subsidiary's charter documents and bylaws which have been
furnished to the Purchasers' special counsel reflect all amendments made thereto
at any time prior to the date of this Agreement and are correct and complete.
5B. Preemptive Rights. There are no statutory or, to the best of the
Company's knowledge, contractual stockholders preemptive rights or rights of
refusal with respect to the issuance of the Warrants hereunder or the issuance
of the Convertible Stock upon exercise of the Warrants. The Company has not
violated any applicable federal or state securities laws in connection with the
offer, sale or issuance of any of its capital stock, and the offer, sale and
issuance of the Warrants hereunder do not require registration under the
Securities Act or any applicable state securities laws. To the best of the
Company's knowledge, there are no agreements between the Company's stockholders
with respect to the voting or transfer of the Company's capital stock or with
respect to any other aspect of the Company's affairs, except for the
Shareholders Agreement and the Registration Rights Agreement.
5C. Subsidiaries; Investments. The Company does not own or hold any
rights to acquire any shares of stock or any other security or interest in any
other Person.
5D. Authorization; No Breach. The execution, delivery and performance
of this Agreement, the Registration Rights Agreement, the Warrants, the Loan
Agreement and all other agreements and instruments contemplated hereby to which
the Company is a party, have been duly authorized by the Company. This
Agreement, the Warrants, the Loan Agreement and all other agreements and
instruments contemplated hereby to which the Company is a party each constitutes
a valid and binding obligation of the Company, enforceable in accordance with
its
- 4 -
6
terms. The execution and delivery by the Company of this Agreement, the
Warrants, the Loan Agreement and all other agreements and instruments
contemplated hereby to which the Company is a party, the offering, sale and
issuance of the Warrants hereunder, the issuance of the Convertible Stock upon
the issuance of Warrants hereunder, the issuance of Convertible Stock upon
exercise of Warrants and the fulfillment of and compliance with the respective
terms hereof and thereof by the Company, do not and shall not (i) conflict with
or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's or any Subsidiary's capital stock or
assets pursuant to, (iv) give any third party the right to modify, terminate or
accelerate any obligation under, (v) result in a violation of, or (vi) require
any authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental body
or agency pursuant to, the charter or bylaws of the Company or any Subsidiary,
or any law, statute, rule or regulation to which the Company or any Subsidiary
is subject (including, without limitation, any usury laws applicable to the
Notes), or any agreement, instrument, order, judgment or decree to which the
Company or any Subsidiary is subject.
5E. Loan Agreement. As of the Closing, all of the representations and
warranties in the Loan Agreement are true and correct.
Section 6. Representations and Warranties of Purchasers.
6A. Purchase for Own Account. Each Purchaser represents that it is
acquiring the Warrants and the equity securities issuable upon exercise of the
Warrants ("Warrant Shares"), and the securities issuable upon exercise of the
Warrant Shares solely for its own account and beneficial interest for investment
and not for sale or with a view to distribution of the securities or any part
thereof, has no present intention of selling (in connection with a distribution
or otherwise), granting any participation in, or otherwise distributing the
same, and does not presently have reason to anticipate a change in such
intention.
6B. Information and Sophistication. Each Purchaser acknowledges that it
has received all the information it has requested from the Company and it
considers necessary or appropriate for deciding whether to acquire the
Securities. Each Purchaser represents that it has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of the Securities and to obtain any additional
information necessary to verify the accuracy of the information given the
Purchaser. Each Purchaser further represents that it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risk of this investment.
6C. Ability to Bear Economic Risk. Each Purchaser acknowledges that
investment in the Securities involves a high degree of risk, and represents that
it is able, without materially impairing its financial condition, to hold the
Securities for an indefinite period of time and to suffer a complete loss of its
investment.
- 5 -
7
6D. Further Limitations on Disposition. Without in any way limiting the
representations set forth above, each Purchaser further agrees not to make any
disposition of all or any portion of the Securities unless and until:
(i) There is then in effect a Registration Statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(ii) The Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and if
reasonably requested by the Company, such Purchaser shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration under the 1933 Act or any
applicable state securities laws.
(iii) Notwithstanding the provisions of paragraphs (i) and
(ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by such Purchaser to a shareholder or partner (or
retired partner) of such Purchaser, or transfers by gift, will or intestate
succession to any spouse or lineal descendants or ancestors, if all transferees
agree in writing to be subject to the terms hereof to the same extent as if they
were Purchasers hereunder.
6E. Accredited Investor Status. Each Purchaser is an "accredited
investor" as such term is defined in Rule 501 under the Securities Act.
6F. Further Assurances. Each Purchaser agrees and covenants that at any
time and from time to time it will promptly execute and deliver to the Company
such further instruments and documents and take such further action as the
Company may reasonably require in order to carry out the full intent and purpose
of this Agreement.
Section 7. Definitions.
7A. Definitions. For the purposes of this Agreement, the following
terms have the meanings set forth below:
"advance" shall have the meaning assigned to such term in the Loan
Agreement.
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.
"Convertible Stock" shall mean the Class of Common Stock to be issued
to each Purchaser upon exercise of the Warrants and as set forth on the Schedule
of Purchasers.
- 6 -
8
"Loan Agreement" means the loan agreement and the related agreements
between the Company and Purchasers dated as of the date hereof.
"Investment" as applied to any Person means (i) any direct or indirect
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
"Obligations" shall have the meaning assigned to such term in the Loan
Agreement.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Registration Rights Agreement" means that registration rights
agreement dated February 26, 1998 by and among the Company and Cornerstone
Equity Investors IV, L.P., MEI California, Inc., ▇▇▇▇▇▇▇▇ Street II, BT
Investment Partners, Inc., ▇▇▇▇▇ ▇▇▇▇▇, Jess Asla, August Capital, L.P. for
itself and as nominee for August Capital Strategic Partners, L.P. and August
Capital Associates, L.P., R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, Oak VII Affiliate Fund, Limited Partnership, Oak
Investment Partners VII, Limited Partnership and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"Restricted Securities" means (i) the Warrants issued hereunder, (ii)
the Convertible Stock issued upon exercise of the Warrants and (iii) any
securities issued with respect to the securities referred to in clauses (i)or
(ii) above by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) been distributed to the public through
a broker, dealer or market maker pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act or become eligible for sale pursuant to
Rule 144(k) (or any similar provision then in force) under the Securities Act or
(c) been otherwise transferred and new certificates for them not bearing the
Securities Act legend set forth in paragraph 8B have been delivered by the
Company in accordance with paragraph 4A(ii). Whenever any particular securities
cease to be Restricted Securities, the holder thereof shall be entitled to
receive from the Company, without expense, new securities of like tenor not
bearing a Securities Act legend of the character set forth in paragraph 8B.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
- 7 -
9
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"Shareholders Agreement" means the shareholders agreement dated
February 26, 1998 by and among the Company and Cornerstone Equity Investors IV,
L.P., MEI California, Inc., ▇▇▇▇▇▇▇▇ Street II, BT Investment Partners, Inc.,
▇▇▇▇▇ ▇▇▇▇▇, Jess Asla, August Capital, L.P. for itself and as nominee for
August Capital Strategic Partners, L.P. and August Capital Associates, L.P., R.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, Oak
VII Affiliate Fund, Limited Partnership, Oak Investment Partners VII, Limited
Partnership and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"Subsidiary" means any corporation of which the securities having a
majority of the ordinary voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by the Company
either directly or through one or more Subsidiaries.
"Underlying Convertible Stock" means (i) the Convertible Stock issued
or issuable upon exercise of the Warrants and (ii) any Convertible Stock issued
or issuable with respect to the securities referred to in clause (i) above by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. For
purposes of this Agreement, any Person who holds Warrants shall be deemed to be
the holder of the Underlying Convertible Stock obtainable upon exercise of the
Warrants in connection with the transfer thereof or otherwise regardless of any
restriction or limitation on the exercise of the Warrants, such Underlying
Convertible Stock shall be deemed to be in existence, and such Person shall be
entitled to exercise the rights of a holder of Underlying Convertible Stock
hereunder. As to any particular shares of Underlying Convertible Stock, such
shares shall cease to be Underlying Convertible Stock when they have been (a)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, (b) distributed to the public
through a broker, dealer or market maker pursuant to Rule 144 under the
Securities Act (or any similar provision then in force) or (c) repurchased by
the Company or any Subsidiary.
Section 8. Miscellaneous.
8A. Remedies. Each holder of the Warrants shall have all rights and
remedies set forth in this Agreement, the Warrants and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.
8B. Purchaser's Investment Representations. Each Purchaser hereby
represents that it is acquiring the Restricted Securities purchased hereunder or
acquired pursuant hereto for
- 8 -
10
its own account with the present intention of holding such securities for
purposes of investment, and that it has no intention of selling such securities
in a public distribution in violation of the federal securities laws or any
applicable state securities laws; provided that nothing contained herein shall
prevent any Purchaser and subsequent holders of Restricted Securities from
transferring such securities in compliance with the provisions of Section 4
hereof. Each certificate or instrument representing Restricted Securities shall
be imprinted with a legend in substantially the following form:
"The securities represented by this certificate were originally issued
on , and have not been registered under the Securities Act of 1933, as
amended. The transfer of the securities represented by this certificate
is subject to the conditions specified in the Warrant Purchase
Agreement, dated as of August , 2000 and as amended and modified from
time to time, between the issuer (the "Company") and certain investors,
and the Company reserves the right to refuse the transfer of such
securities until such conditions have been fulfilled with respect to
such transfer. A copy of such conditions shall be furnished by the
Company to the holder hereof upon written request and without charge."
8C. Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Purchasers
8D. Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by any Purchaser or on its behalf.
8E. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for any Purchaser's benefit as a
purchaser or holder of the Warrants or Underlying Convertible Stock are also for
the benefit of, and enforceable by, any permitted subsequent holder of such
Warrants or such Underlying Convertible Stock.
8F. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
- 9 -
11
8G. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
8H. Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
8I. GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF NEW YORK SHALL
GOVERN ALL ISSUES AND QUESTIONS CONCERNING THE RELATIVE RIGHTS AND OBLIGATIONS
OF THE COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES AND QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND
THE EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
8J. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable overnight courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to each Purchaser at the address indicated on the
Schedule of Purchasers and to the Company at the address indicated below:
A) If to the Company: MCMS, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: Cornerstone Equity Investors IV, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
- 10 -
12
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(B) if to Purchasers: Cornerstone Equity Investors IV, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
facsimile: (212) 7200
and: Oak Investment Partners
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: August Capital
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Won ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
- 11 -
13
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
and: ▇▇▇▇▇▇▇▇ Street Partners II
c/o Kirkland and ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: ▇▇▇▇▇ ▇▇▇▇▇
c/o MCMS, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: Jess Asla
c/o MCMS, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o MCMS, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o MCMS, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and: ▇▇▇▇▇▇ ▇▇▇▇▇
C/o MCMS, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
8K. Consideration for Warrants. The Purchasers and the Company
acknowledge and agree that for all purposes (including tax and accounting), the
fair market value
- 12 -
14
of the Warrants issued hereunder is $0.001. Each Purchaser and the Company shall
file their respective federal, state and local tax returns in a manner which is
consistent with such valuation and allocation and shall not take any contrary
position with any taxing authority.
8L. Understanding Among the Purchasers. The determination of each
Purchaser to purchase the Warrants pursuant to this Agreement has been made by
such Purchaser independent of any other Purchaser and independent of any
statements or opinions as to the advisability of such purchase or as to the
properties, business, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries which may have been made or given by any other
Purchaser or by any agent or employee of any other Purchaser. In addition, it is
acknowledged by each of the other Purchasers that Cornerstone Equity Investors
IV, L.P. has not acted as an agent of such Purchaser in connection with making
its investment hereunder and that Cornerstone Equity Investors IV, L.P. shall
not be acting as an agent of such Purchaser in connection with monitoring its
investment hereunder.
- 13 -
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
COMPANY:
MCMS, INC.
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
PURCHASER
Cornerstone Equity Investors IV, L.P.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Bankers Trust Company
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
MANAGING MEMBERS OF OAK Oak Investment Partners
ASSOCIATES VII, LLC, THE
GENERAL PARTNER OF OAK
INVESTMENT PARTNERS VII, By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
LIMITED PARTNERSHIP -----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Partner
August Capital L.P. for itself and as nominee
MANAGING MEMBER OF OAK VII for August Capital Strategic Partners, L.P.
AFFILIATES, LLC, THE GENERAL and August Capital Associates, L.P.
PARTNER OF OAK VII AFFILIATES
FUND, LIMITED PARTNERSHIP August Capital
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title:
By: August Capital Management L.L.C.
Name: August Capital Management L.L.C.
Title: General Partner
- ▇▇ -
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners II
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇▇▇▇▇
/s/ Jess Asla
---------------------------
Jess Asla
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
- 15 -
17
SCHEDULE OF PURCHASERS
Cornerstone Equity Investors, IV L.P.
Bankers Trust Company
Oak Investment Partners
August Capital
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ Asla
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Street Partners II
- 16 -
18
ISSUANCE SCHEDULE
---------------------------------------------------------------------------------------------------------------------------------
Name Closing Date First Month Second Month Third Month Fourth Month
Anniversary of Anniversary of Anniversary of Anniversary of
Closing Date Closing Date Closing Date Closing Date
---------------------------------------------------------------------------------------------------------------------------------
Cornerstone 296,028 shares 296,028 shares 296,028 shares of 296,028 shares of 296,028 shares of
Equity of Class B of Class B Class B Common Class B Common Class B Common
Investors Common Stock Common Stock Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
Bankers 113,336 shares 113,336 shares 113,336 shares of 113,336 shares of 113,336 shares of
Trust of Class B of Class B Class B Common Class B Common Class B Common
Company Common Stock Common Stock Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
Oak 48,845 shares 48,845 shares 48,845 shares of 48,845 shares of 48,845 shares of
Investment of Class A of Class A Class A Common Class A Common Class A Common
Partners Common Stock Common Stock Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
August 33,333 shares 33,333 shares 33,333 shares of 33,333 shares of 33,333 shares of
Capital of Class A of Class A Class A Common Class A Common Class A Common
Common Stock Common Stock Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ 1,692 shares of 1,692 shares of 1,692 shares of 1,692 shares of 1,692 shares of
Class A Class A Class A Common Class A Common Class A Common
Common Stock Common Stock Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 846 shares of 846 shares of 846 shares of 846 shares of Class 846 shares of
Class A Class A Class A Common A Common Stock Class A Common
Common Stock Common Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
Jess Asla 1,269 shares of 1,269 shares of 1,269 shares of 1,269 shares of 1,269 shares of
Class A Class A Class A Common Class A Common Class A Common
Common Stock Common Stock Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ 846 shares of 846 shares of 846 shares of 846 shares of Class 846 shares of
Cheheyl Class A Class A Class A Common A Common Stock Class A Common
Common Stock Common Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ 423 shares of 423 shares of 423 shares of 423 shares of Class 423 shares of
▇▇▇▇▇▇▇ Class A Class A Class A Common A Common Stock Class A Common
Common Stock Common Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ 3,383 shares of 3,383 shares of 3,383 shares of 3,383 shares of 3,383 shares of
Street Class A Class A Class A Common Class A Common Stock Class A Common
Partners II Common Stock Common Stock Stock Stock
---------------------------------------------------------------------------------------------------------------------------------
- 17 -
19
LIST OF EXHIBITS
Exhibit A - [Intentionally Omitted]
Exhibit B - Form of Warrants
- 18 -
20
This Warrant was originally issued on ______________, and such issuance
was not registered under the Securities Act of 1933, as amended. The
transfer of this Warrant and the securities obtainable upon exercise
thereof is subject to the conditions on transfer specified in the
Warrant Purchase Agreement, dated as of August 29, 2000 (as amended and
modified from time to time), between the issuer hereof (the "Company")
and the initial holder hereof, and the Company reserves the right to
refuse the transfer of such security until such conditions have been
fulfilled with respect to such transfer. Upon written request, a copy
of such conditions shall be furnished by the Company to the holder
hereof without charge.
MCMS, INC.
STOCK PURCHASE WARRANT
Date of Issuance: ________ Certificate No. W-_______
FOR VALUE RECEIVED, MCMS, Inc., an Idaho corporation (the "Company"),
hereby grants to _______________________ or its registered assigns (the
"Registered Holder") the right to purchase from the Company _______ shares of
the Company's Common Stock at a price per share of $0.001 (as adjusted from time
to time hereunder, the "Exercise Price"). This Warrant is one of several
warrants (collectively, the "Warrants") issued by the Company to certain
investors pursuant to the Warrant Purchase Agreement, dated as of August 29,
2000 (the "Purchase Agreement"). Certain capitalized terms used herein are
defined in Section 5 hereof. The amount and kind of securities obtainable
pursuant to the rights granted hereunder and the purchase price for such
securities are subject to adjustment pursuant to the provisions contained in
this Warrant.
For income tax purposes, the value of this Warrant on the date hereof
is $0.001.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
1A. Exercise Period. The Registered Holder may exercise, in whole or in
part (but not as to a fractional share of Common Stock), the purchase rights
represented by this Warrant at any time and from time to time after the Date of
Issuance to and including the fifth anniversary thereof (the "Exercise Period").
The Company shall give the Registered Holder written notice of the expiration of
the rights hereunder at least 30 days but not more than 90 days prior to the end
of the Exercise Period.
- 1 -
21
1B. Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "Exercise Time"):
(a) a completed Exercise Agreement, as described in paragraph
1D below, executed by the Person exercising all or part of the purchase
rights represented by this Warrant (the "Purchaser");
(b) this Warrant;
(c) if this Warrant is not registered in the name of the
Purchaser, an Assignment or Assignments in the form set forth in
Exhibit II hereto evidencing the assignment of this Warrant to the
Purchaser, in which case the Registered Holder shall have complied with
the provisions set forth in Section 7 hereof; and
(d) either (1) a check payable to the Company in an amount
equal to the product of the Exercise Price multiplied by the number of
shares of Common Stock being purchased upon such exercise (the
"Aggregate Exercise Price"), (2) the surrender to the Company of equity
securities of the Company having a Market Price equal to the Aggregate
Exercise Price of the Common Stock being purchased upon such exercise
(provided that for purposes of this subparagraph, the Market Price of
any preferred stock shall be deemed to be equal to the aggregate
outstanding principal amount or liquidation value thereof plus all
accrued and unpaid interests thereon or accrued or declared and unpaid
dividends thereon) or (3) a written notice to the Company that the
Purchaser is exercising the Warrant (or a portion thereof) by
authorizing the Company to withhold from issuance a number of shares of
Common Stock issuable upon such exercise of the Warrant which when
multiplied by the Market Price of the Common Stock is equal to the
Aggregate Exercise Price (and such withheld shares shall no longer be
issuable under this Warrant).
(ii) Certificates for shares of Common Stock purchased upon exercise of
this Warrant shall be delivered by the Company to the Purchaser within ten
business days after the date of the Exercise Time. Unless this Warrant has
expired or all of the purchase rights represented hereby have been exercised,
the Company shall prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant which have not
expired or been exercised and shall within such five-day period, deliver such
new Warrant to the Person designated for delivery in the Exercise Agreement.
(iii) The Common Stock issuable upon the exercise of this Warrant shall
be deemed to have been issued to the Purchaser at the Exercise Time, and the
Purchaser shall be deemed for all purposes to have become the record holder of
such Common Stock at the Exercise Time.
(iv) The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Registered Holder
or the Purchaser for any issuance tax in respect thereof or other cost incurred
by the Company in connection with such exercise and the
- 2 -
22
related issuance of shares of Common Stock. Each share of Common Stock issuable
upon exercise of this Warrant shall upon payment of the Exercise Price therefor,
be fully paid and nonassessable and free from all liens and charges with respect
to the issuance thereof.
(v) The Company shall not close its books against the transfer of this
Warrant or of any share of Common Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Common Stock
acquirable upon exercise of this Warrant is at all times equal to or less than
the Exercise Price then in effect.
(vi) The Company shall assist and cooperate with any Registered Holder
or Purchaser required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any exercise of this
Warrant (including, without limitation, making any filings required to be made
by the Company).
(vii) Notwithstanding any other provision hereof, if an exercise of any
portion of this Warrant is to be made in connection with a registered public
offering or the sale of the Company, the exercise of any portion of this Warrant
may, at the election of the holder hereof, be conditioned upon the consummation
of the public offering or sale of the Company in which case such exercise shall
not be deemed to be effective until the consummation of such transaction.
(viii) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the purpose of
issuance upon the exercise of the Warrants, such number of shares of Common
Stock issuable upon the exercise of all outstanding Warrants. All shares of
Common Stock which are so issuable shall, when issued, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges.
The Company shall take all such actions as may be necessary to assure that all
such shares of Common Stock may be so issued without violation of any applicable
law or governmental regulation or any requirements of any domestic securities
exchange upon which shares of Common Stock may be listed (except for official
notice of issuance which shall be immediately delivered by the Company upon each
such issuance). The Company shall not take any action which would cause the
number of authorized but unissued shares of Common Stock to be less than the
number of such shares required to be reserved hereunder for issuance upon
exercise of the Warrants.
1C. Exercise Agreement. Upon any exercise of this Warrant, the Exercise
Agreement shall be substantially in the form set forth in Exhibit I hereto,
except that if the shares of Common Stock are not to be issued in the name of
the Person in whose name this Warrant is registered, the Exercise Agreement
shall also state the name of the Person to whom the certificates for the shares
of Common Stock are to be issued, and if the number of shares of Common Stock to
be issued does not include all the shares of Common Stock purchasable hereunder,
it shall also state the name of the Person to whom a new Warrant for the
unexercised portion of the rights hereunder is to be delivered. Such Exercise
Agreement shall be dated the actual date of execution thereof.
1D. Fractional Shares. If a fractional share of Common Stock would, but
for the provisions of paragraph 1B, be issuable upon exercise of the rights
represented by this Warrant, the
- 3 -
23
Company shall, within five business days after the date of the Exercise Time,
deliver to the Purchaser a check payable to the Purchaser in lieu of such
fractional share in an amount equal to the difference between Market Price of
such fractional share as of the date of the Exercise Time and the Exercise Price
of such fractional share.
Section 2. Adjustment of Exercise Price and Number of Shares. In order
to prevent dilution of the rights granted under this Warrant, the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 2,
and the number of shares of Common Stock obtainable upon exercise of this
Warrant shall be subject to adjustment from time to time as provided in this
Section 2.
2A. Subdivision or Combination of Common Stock. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares of Common
Stock obtainable upon exercise of this Warrant shall be proportionately
increased. If the Company at any time combines (by reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Common Stock obtainable upon exercise of this Warrant shall be proportionately
decreased.
2B. Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets or other transaction,
in each case which is effected in such a way that the holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "Organic Change." Prior to the consummation of any Organic Change,
the Company shall make appropriate provision (in form and substance satisfactory
to the Registered Holders of the Warrants representing a majority of the Common
Stock obtainable upon exercise of all Warrants then outstanding) to insure that
each of the Registered Holders of the Warrants shall thereafter have the right
to acquire and receive, in lieu of or addition to (as the case may be) the
shares of Common Stock immediately theretofore acquirable and receivable upon
the exercise of such holder's Warrant, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for the number
of shares of Common Stock immediately theretofore acquirable and receivable upon
exercise of such holder's Warrant had such Organic Change not taken place. In
any such case, the Company shall make appropriate provision (in form and
substance satisfactory to the Registered Holders of the Warrants representing a
majority of the Common Stock obtainable upon exercise of all Warrants then
outstanding) with respect to such holders' rights and interests to insure that
the provisions of this Section 2 and Sections 3 and 4 hereof shall thereafter be
applicable to the Warrants (including, in the case of any such consolidation,
merger or sale in which the successor entity or purchasing entity is other than
the Company, an immediate adjustment of the Exercise Price to the value for the
Common Stock reflected by the terms of such consolidation, merger or sale, and a
corresponding immediate adjustment in the number of shares of Common Stock
acquirable and receivable upon exercise of the Warrants, if the value so
reflected is less than the Exercise Price in effect immediately prior to such
consolidation, merger or sale). The Company shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof, the
successor entity
- 4 -
24
(if other than the Company) resulting from consolidation or merger or the entity
purchasing such assets assumes by written instrument (in form and substance
satisfactory to the Registered Holders of Warrants representing a majority of
the Common Stock obtainable upon exercise of all of the Warrants then
outstanding), the obligation to deliver to each such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.
2C. Certain Events. If any event occurs of the type contemplated by the
provisions of this Section 2 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
board of directors shall make an appropriate adjustment in the Exercise Price
and the number of shares of Common Stock obtainable upon exercise of this
Warrant so as to protect the rights of the holders of the Warrants; provided
that no such adjustment shall increase the Exercise Price or decrease the number
of shares of Common Stock obtainable as otherwise determined pursuant to this
Section 2.
2D. Notices.
(i) Immediately upon any adjustment of the Exercise Price, the Company
shall give written notice thereof to the Registered Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
(ii) The Company shall give written notice to the Registered Holder at
least 20 days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the Common Stock,
(B) with respect to any pro rata subscription offer to holders of Common Stock
or (C) for determining rights to vote with respect to any Organic Change,
dissolution or liquidation.
(iii) The Company shall also give written notice to the Registered
Holders at least 20 days prior to the date on which any Organic Change,
dissolution or liquidation shall take place.
Section 3. Liquidating Dividends. If the Company declares or pays a
dividend upon the Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted accounting
principles, consistently applied) except for a stock dividend payable in shares
of Common Stock (a "Liquidating Dividend"), then the Company shall pay to the
Registered Holder of this Warrant at the time of payment thereof the Liquidating
Dividend which would have been paid to such Registered Holder on the Common
Stock had this Warrant been fully exercised immediately prior to the date on
which a record is taken for such Liquidating Dividend, or, if no record is
taken, the date as of which the record holders of Common Stock entitled to such
dividends are to be determined.
Section 4. Purchase Rights. If at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "Purchase Rights"), then the Registered holder of
this Warrant shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the
- 5 -
25
number of shares of Common Stock acquirable upon complete exercise of this
Warrant immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.
Section 5. Definitions. The following terms have meanings set forth
below:
"Common Stock" means the Company's Common Stock, ____ par value, and
except for purposes of the shares obtainable upon exercise of this Warrant, any
capital stock of any class of the Company hereafter authorized which is not
limited to a fixed sum or percentage of par or stated value in respect to the
rights of the holders thereof to participate in dividends or in the distribution
of assets upon any liquidation, dissolution or winding up of the Company.
"Convertible Securities" means any stock or securities (directly or
indirectly) convertible into or exchangeable for Common Stock.
"Loan Agreement" means the loan agreement by and between the Company,
as borrower and Cornerstone Equity Inventors IV, L.P., Deutsche Bank, Oak
Investment Funds and August Capital, as lenders, dated August 29, 2000.
"Market Price" means as to any security the average of the closing
prices of such security's sales on all domestic securities exchanges on which
such security may at the time be listed, or, if there have been no sales on any
such exchange on any day, the average of the highest bid and lowest asked prices
on all such exchanges at the end of such day, or, if on any day such security is
not so listed, the average of the representative bid and asked prices quoted in
the NASDAQ System as of 4:00 P.M., New York time, on such day, or, if on any day
such security is not quoted in the NASDAQ System, the average of the highest bid
and lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of 21 days
consisting of the day as of which "Market Price" is being determined and the 20
consecutive business days prior to such day; provided that if such security is
listed on any domestic securities exchange the term "business days" as used in
this sentence means business days on which such exchange is open for trading. If
at any time such security is not listed on any domestic securities exchange or
quoted in the NASDAQ System or the domestic over-the-counter market, the "Market
Price" shall be the fair value thereof determined jointly by the Company and the
Registered Holders of Warrants representing a majority of the Common Stock
purchasable upon exercise of all the Warrants then outstanding; provided that if
such parties are unable to reach agreement within a reasonable period of time,
such fair value shall be determined by an appraiser jointly selected by the
Company and the Registered Holders of Warrants representing a majority of the
Common Stock purchasable upon exercise of all the Warrants then outstanding. The
determination of such appraiser shall be final and binding on the Company and
the Registered Holders of the Warrants, and the fees and expenses of such
appraiser shall be paid by the Company.
"Obligations" shall have the meaning assigned to such term in the Loan
Agreement.
- 6 -
26
"Options" means any rights or options to subscribe for or purchase
Common Stock or Convertible Securities.
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"PNC Loan Agreement" means that Revolving Credit, Equipment Loan and
Security Agreement, dated as of February 26, 1999, by and among Company, PNC
Bank, National Association (as lender and as agent in such capacity as agent)
and the lenders from time to time a party thereto, as same may be amended,
modified, restated or supplemented from time to time.
Other capitalized terms used in this Warrant but not defined herein
shall have the meanings set forth in the Purchase Agreement.
Section 6. No Voting Rights; Limitations of Liability. This Warrant
shall not entitle the holder hereof to any voting rights or other rights as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the Registered Holder to purchase Common Stock, and no enumeration
herein of the rights or privileges of the Registered Holder shall give rise to
any liability of such holder for the Exercise Price of Common Stock acquirable
by exercise hereof or as a stockholder of the Company.
Section 7. Warrant Transferable. Subject to the transfer conditions
referred to in the legend endorsed hereon, this Warrant and all rights hereunder
are transferable, in whole or in part, without charge to the Registered Holder,
upon surrender of this Warrant with a properly executed Assignment (in the form
of Exhibit II hereto) at the principal office of the Company.
Section 8. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Registered Holder at
the principal office of the Company, for new Warrants of like tenor representing
in the aggregate the purchase rights hereunder, and each of such new Warrants
shall represent such portion of such rights as is designated by the Registered
Holder at the time of such surrender. The date the Company initially issues this
Warrant shall be deemed to be the "Date of Issuance" hereof regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued. All Warrants
representing portions of the rights hereunder are referred to herein as the
"Warrants."
Section 9. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing this Warrant, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the Company
(provided that if the holder is a financial institution or other institutional
investor its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Company shall (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like kind representing the same rights represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost, stolen,
destroyed or mutilated certificate.
- 7 -
27
Section 10. Notices. Except as otherwise expressly provided herein, all
notices referred to in this Warrant shall be in writing and shall be delivered
personally , sent by reputable overnight courier service (charges prepaid) or
sent by registered or certified mail, return receipt requested, postage prepaid
and shall be deemed to have been given when so delivered, sent or deposited in
the U.S. Mail (i) to the Company, at its principal executive offices and (ii) to
the Registered Holder of this Warrant, at such holder's address as it appears in
the records of the Company (unless otherwise indicated by any such holder).
Section 11. Amendment and Waiver. Except as otherwise provided herein,
the provisions of the Warrants may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Registered Holders of Warrants representing a majority of the shares of Common
Stock obtainable upon exercise of the Warrants; provided that no such action may
change the Exercise Price of the Warrants or the number of shares or class of
stock obtainable upon exercise of each Warrant without the written consent of
the Registered Holders of Warrants representing at least 66 2/3% of the shares
of Common Stock obtainable upon exercise of the Warrants.
Section 12. Descriptive Headings; Governing Law. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporation
laws of the Idaho shall govern all issues concerning the relative rights of the
Company and its Stockholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be governed by
the internal law of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Idaho or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.
* * * * * *
- 8 -
28
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed and attested by its duly authorized officers under its corporate seal and
to be dated the Date of Issuance hereof.
MCMS, INC.
By_________________________
Its________________________
[Corporate Seal]
Attest:
______________________________
Title: ______________________
- 9 -
29
EXHIBIT I
EXERCISE AGREEMENT
To: Dated:
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. W-____), hereby agrees to subscribe for the
purchase of ______ shares of the Common Stock covered by such Warrant and makes
payment herewith in full therefor at the price per share provided by such
Warrant.
Signature ____________________
Address ______________________
EXHIBIT II
EXHIBIT II
ASSIGNMENT
FOR VALUE RECEIVED, ______________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. W-_____) with respect to the number of shares of the
Common Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
Signature ____________________
____________________
Witness ____________________
- 10 -