Exhibit 10.4

 

EXECUTION COPY

 

Opening Transaction

 

	
 
    	
 
    	
Rudolph   Technologies, Inc.
    
	
To:
    	
 
    	
One   Rudolph Road
    
	
 
    	
 
    	
P.O.   Box 1000
    
	
 
    	
 
    	
Flanders,   New Jersey 07836
    
	
 
    	
 
    	
 
    
	
A/C:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
From:
    	
 
    	
Credit   Suisse International
    
	
 
    	
 
    	
One   Cabot Square
    
	
 
    	
 
    	
London   E14 4QJ
    
	
 
    	
 
    	
England
    
	
 
    	
 
    	
 
    
	
Re:
    	
 
    	
Issuer   Warrant Transaction
    
	
 
    	
 
    	
 
    
	
Ref.   No:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
July   19, 2011
    


 

Dear Sir(s):

 

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between Credit Suisse International (“Dealer”), represented by Credit Suisse Securities (USA) LLC (“Agent”) as its agent, and Rudolph Technologies, Inc (“Issuer”).  This communication constitutes a “Confirmation” as referred to in the Agreement specified below.

 

1.     This Confirmation is subject to, and incorporates, the definitions and provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2000 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.  For purposes of the Equity Definitions, each reference herein to a Warrant shall be deemed to be a reference to a Call Option or an Option, as context requires.

 

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

 

This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border), as published by ISDA, as if Dealer and Issuer had executed an agreement in such form on the date hereof (but without any Schedule except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency, (ii) the replacement of the word “third” in the last line of Section 5(a)(i) with the word “first” and (iii) the election that the “Cross Default” provisions of Section 5(a)(vi) shall apply to Issuer with a “Threshold Amount” of USD 10 million).  The Transaction shall be the only Transaction under the Agreement.

 











 

All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.  In the event of any inconsistency between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.

 

2.     The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions.  The terms of the particular Transaction to which this Confirmation relates are as follows:

 

General Terms:

 

	
Trade Date:
    	
 
    	
July 20, 2011
    
	
 
    	
 
    	
 
    
	
Effective Date:
    	
 
    	
July 25, 2011, or such other date as   agreed between the parties, subject to Section 8(l) below
    
	
 
    	
 
    	
 
    
	
Components:
    	
 
    	
The Transaction will be divided into   individual Components, each with the terms set forth in this Confirmation,   and, in particular, with the Number of Warrants and Expiration Date set forth   in this Confirmation. The payments and deliveries to be made upon settlement   of the Transaction will be determined separately for each Component as if   each Component were a separate Transaction under the Agreement.
    
	
 
    	
 
    	
 
    
	
Warrant Style:
    	
 
    	
European
    
	
 
    	
 
    	
 
    
	
Warrant Type:
    	
 
    	
Call
    
	
 
    	
 
    	
 
    
	
Seller:
    	
 
    	
Issuer
    
	
 
    	
 
    	
 
    
	
Buyer:
    	
 
    	
Dealer
    
	
 
    	
 
    	
 
    
	
Shares:
    	
 
    	
The Common Stock of Issuer, par value   USD 0.001 per share (Ticker Symbol: “RTEC”).
    
	
 
    	
 
    	
 
    
	
Number of Warrants:
    	
 
    	
For each Component, as provided in Annex A to   this Confirmation.
    
	
 
    	
 
    	
 
    
	
Warrant   Entitlement:
    	
 
    	
One Share per   Warrant
    
	
 
    	
 
    	
 
    
	
Strike Price:
    	
 
    	
USD 17.00. Notwithstanding anything to the   contrary in the  Agreement, this   Confirmation or the Equity Definitions, unless Issuer shall have obtained   stockholder approval of the issuance of Shares under the Transaction in   accordance with the applicable rules of the relevant Exchange, in no   event shall the Strike Price be subject to adjustment to the extent that,   after giving effect to such adjustment, the Strike Price would be less than   USD 9.59, except for any adjustment pursuant to the terms of this   Confirmation and the Equity Definitions in connection with stock splits or   similar changes to Issuer’s capitalization.
    
	
 
    	
 
    	
 
    
	
Premium:
    	
 
    	
USD 5,839,346 (Premium per Warrant   approximately USD 1.51)
    
	
 
    	
 
    	
 
    
	
Premium Payment Date:
    	
 
    	
The Effective Date
    
	
 
    	
 
    	
 
    
	
Exchange:
    	
 
    	
NASDAQ Global Select Market
    


 

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Related Exchange:
    	
 
    	
All Exchanges
    
	
 
    	
 
    	
 
    
	
Procedures for Exercise:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
In respect of any   Component:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Expiration Time:
    	
 
    	
Valuation Time
    
	
 
    	
 
    	
 
    
	
Expiration Date:
    	
 
    	
As provided in Annex A to this   Confirmation (or, if such date is not a Scheduled Trading Day, the next   following Scheduled Trading Day that is not already an Expiration Date for   another Component); provided   that if that date is a Disrupted Day, the Expiration Date for such Component   shall be the first succeeding Scheduled Trading Day that is not a Disrupted   Day and is not or is not deemed to be an Expiration Date in respect of any   other Component of the Transaction hereunder; and provided further that if the Expiration Date has not   occurred pursuant to the preceding proviso as of the Final Disruption Date, the Calculation Agent may elect in its   discretion that the Final   Disruption Date shall be the Expiration Date (irrespective of whether such   date is an Expiration Date in respect of any other Component for the   Transaction). “Final Disruption Date” means   January 20, 2017. Notwithstanding the foregoing and anything to the   contrary in the Equity Definitions, if a Market Disruption Event occurs on   any Expiration Date, the Calculation Agent may determine that such Expiration   Date is a Disrupted Day only in part, in which case (i) the Calculation   Agent shall make adjustments to the Number of Warrants for the relevant   Component for which such day shall be the Expiration Date and shall designate   the Scheduled Trading Day determined in the manner described in the   immediately preceding sentence as the Expiration Date for the remaining   Warrants for such Component and (ii) the VWAP Price for such Disrupted   Day shall be determined by the Calculation Agent based on transactions in the   Shares on such Disrupted Day effected before the relevant Market Disruption   Event occurred and/or after the relevant Market Disruption Event ended. Any   day on which the Exchange is scheduled to close prior to its normal closing   time shall be considered a Disrupted Day in whole. If a Market Disruption Event occurs on the Expiration Date for   any Component, the Calculation Agent, in its good faith and   commercially reasonable discretion, may determine the VWAP Price for such   Expiration Date using its good faith estimate of the value of the Shares on   such Expiration Date based on the volume, historical trading patterns and   price of the Shares and such other factors as it deems appropriate. Section 6.6 of the Equity Definitions   shall not apply to any Valuation Date occurring on an Expiration Date.
    


 

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Market Disruption Events:
    	
 
    	
The first sentence of   Section 6.3(a) of the Equity Definitions is hereby amended   (A) by deleting the words “during the one hour period that ends at the relevant   Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out   Valuation Time, as the case may be” in the third, fourth and fifth lines   thereof, and (B) by replacing the words “or (iii) an Early   Closure.” by “(iii) an Early Closure, or (iv) a Regulatory   Disruption.”
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Section 6.3(d) of the Equity   Definitions is hereby amended by deleting the remainder of the provision   following the term “Scheduled Closing Time” in the fourth line thereof.
    
	
 
    	
 
    	
 
    
	
Regulatory Disruption:
    	
 
    	
Any event that Dealer, in its discretion,   determines makes it appropriate with regard to any legal, regulatory or   self-regulatory requirements or related policies and procedures (whether or   not such requirements, policies or procedures are imposed by law or have been   voluntarily adopted by Dealer, and including without limitation   Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under   the Securities Exchange Act of 1934, as amended (the “Exchange   Act”), and Regulation M), for Dealer to refrain from or decrease   any market activity in connection with the Transaction. Dealer shall notify   Issuer as soon as reasonably practicable that a Regulatory Disruption has   occurred and the Expiration Dates affected by it.
    
	
 
    	
 
    	
 
    
	
Automatic Exercise:
    	
 
    	
Applicable; and means that the Number of   Warrants for the corresponding Expiration Date will be deemed to be automatically   exercised at the Expiration Time on such Expiration Date unless Buyer   notifies Seller (by telephone or in writing) prior to the Expiration Time on   such Expiration Date that it does not wish Automatic Exercise to occur, in   which case Automatic Exercise will not apply to such Expiration Date.
    
	
 
    	
 
    	
 
    
	
Issuer’s Telephone Number and Telex and/or   Facsimile Number and Contact Details for purpose of Giving Notice:
    	
 
    	
Rudolph Technologies, Inc.
    
	
 
    	
 
    	
One Rudolph Road
    
	
 
    	
 
    	
P.O. Box 1000
    
	
 
    	
 
    	
Flanders, New Jersey 07836
    
	
 
    	
 
    	
Attn:
    	
Robert A. Koch
    
	
 
    	
 
    	
Telephone:
    	
(973) 448-4487
    
	
 
    	
 
    	
Facsimile:
    	
(973) 691-1435
    
	
 
    	
 
    	
Email:
    	
robert.koch@rudolphtech.com
    
	
 
    	
 
    	
 
    
	
Settlement Terms:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
In respect of any   Component:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Settlement Currency:
    	
 
    	
USD
    


 

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Net Share Settlement:
    	
 
    	
On each Settlement Date, Issuer shall   deliver to Dealer a number of Shares equal to the Number of Shares to be   Delivered for such Settlement Date to the account specified by Dealer and   cash in lieu of any fractional Shares valued at the Relevant Price on the   Valuation Date corresponding to such Settlement Date. If, in the reasonable   judgment of Dealer, for any reason, the Shares deliverable upon Net Share   Settlement would not be immediately freely transferable by Dealer under Rule 144   under the Securities Act of 1933, as amended (the “Securities   Act”), then Dealer may elect to either (x) accept delivery of   such Shares notwithstanding any restriction on transfer or (y) have the   provisions set forth in Section 8(b) below apply.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Number of Shares to be Delivered shall be   delivered by Issuer to Dealer no later than 12:00 noon (local time in New   York City) on the relevant Settlement Date.
    
	
 
    	
 
    	
 
    
	
Number of Shares to be Delivered:
    	
 
    	
In respect of any Exercise Date, subject to   the last sentence of Section 9.5 of the Equity Definitions, the product   of (i) the Number of Warrants exercised or deemed exercised on such   Exercise Date, (ii) the Warrant Entitlement and (iii) (A) the   excess of the VWAP Price on the Valuation Date occurring on such Exercise   Date over the Strike Price (or, if no such excess, zero) divided by   (B) such VWAP Price.
    
	
 
    	
 
    	
 
    
	
VWAP Price:
    	
 
    	
For any Valuation Date, the volume weighted   average price per Share on the Exchange for the regular trading session   (including any extensions thereof) of the Exchange on such Valuation Date   (without regard to pre-open or after hours trading outside of such regular   trading session), as published by Bloomberg at 4:15 p.m. New York City   time (or 15 minutes following the end of any extension of the regular trading   session) on such Valuation Date, on Bloomberg page “RTEC.UQ   <Equity> AQR” (or any successor thereto) (or if such published volume   weighted average price is unavailable or is manifestly incorrect, the market   value of one Share on such Valuation Date, as determined by the Calculation   Agent using a volume weighted method).
    
	
 
    	
 
    	
 
    
	
Other Applicable Provisions:
    	
 
    	
The provisions of Sections 9.1(c), 9.8, 9.9,   9.10, 9.11 (except that the Representation and Agreement contained in   Section 9.11 of the Equity Definitions shall be modified by excluding   any representations therein relating to restrictions, obligations,   limitations or requirements arising under applicable securities laws as a   result of the fact that Seller is the Issuer of the Shares) and 9.12 of the   Equity Definitions will be applicable, as if “Physical Settlement” applied to   the Transaction.
    


 

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Adjustments:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
In respect of any   Component:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Method of Adjustment:
    	
 
    	
Calculation Agent Adjustment; provided that in respect of an Extraordinary Dividend,   “Calculation Agent Adjustment” shall be as described in the provision below.
    
	
 
    	
 
    	
 
    
	
Extraordinary Dividend:
    	
 
    	
Any cash dividend or distribution on the   Shares with an ex dividend date occurring on or after the Trade Date and on   or prior to the date on which Issuer satisfies all of its delivery   obligations hereunder that exceeds the Ordinary Dividend Amount for such   dividend or distribution.
    
	
 
    	
 
    	
 
    
	
Ordinary Dividend Amount:
    	
 
    	
USD 0.00.
    
	
 
    	
 
    	
 
    
	
Calculation Agent   Adjustment for Extraordinary   Dividend:
    	
 
    	
If an ex-dividend date for an Extraordinary   Dividend occurs, then the Calculation Agent will make adjustments to the   Strike Price, the Number of Warrants, the Warrant Entitlement and/or any   other variable relevant to the exercise, settlement, payment or other terms   of the Transaction as it determines appropriate to account for the economic effect on the Transaction of such Extraordinary Dividend.
    
	
 
    	
 
    	
 
    
	
Extraordinary Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Consequences of Merger Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a) Share-for-Share:
    	
 
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
(b) Share-for-Other:
    	
 
    	
Cancellation and Payment (Calculation Agent   Determination)
    
	
 
    	
 
    	
 
    
	
(c) Share-for-Combined:
    	
 
    	
Cancellation and Payment (Calculation Agent   Determination), provided that the Calculation   Agent may elect Component Adjustment
    
	
 
    	
 
    	
 
    
	
Tender Offer: 
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Consequences of   Tender Offers:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a) Share-for-Share:
    	
 
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
(b) Share-for-Other:
    	
 
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
(c) Share-for-Combined:
    	
 
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
New Shares:
    	
 
    	
In the definition of New Shares in   Section 12.1(i) of the Equity Definitions, the text in clause   (i) shall be deleted in its entirety and replaced with “publicly quoted,   traded or listed on any of the New York Stock Exchange, the NASDAQ Global   Select Market or the NASDAQ Global Market (or their respective successors)”.
    
	
 
    	
 
    	
 
    
	
Modified Calculation Agent Adjustment:
    	
 
    	
With respect to any Merger Event to which   Modified Calculation Agent Adjustment applies, as a condition precedent to   the adjustments contemplated in Section 12.2(e)(i) of the Equity   Definitions, Dealer, the Issuer 
    


 

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of the Affected Shares and the entity that   will be the Issuer of the New Shares shall, prior to the Merger Date, have   entered into such documentation containing representations, warranties and   agreements relating to securities law and other issues as Dealer has   determined, in its reasonable discretion, to be reasonably necessary or   appropriate to allow Dealer to continue as a party to the Transaction, as   adjusted under Section 12.2(e)(i) of the Equity Definitions, and to   preserve its hedging or hedge unwind activities in connection with the Transaction   in a manner compliant with applicable legal, regulatory or self-regulatory   requirements, or with related policies and procedures applicable to Dealer,   and if such conditions are not met or if the Calculation Agent determines   that no adjustment that it could make under Section 12.2(e)(i) of   the Equity Definitions will produce a commercially reasonable result, then   the consequences set forth in Section 12.2(e)(ii) of the Equity   Definitions shall apply.
    
	
 
    	
 
    	
 
    
	
Reference Markets:
    	
 
    	
For the avoidance of doubt, and without   limiting the generality of the foregoing provisions, any adjustment effected   by the Calculation Agent pursuant to Section 12.2(e) and/or   Section 12.3(d) of the Equity Definitions may be determined by   reference to the adjustment(s) made in respect of Merger Events or   Tender Offers, as the case may be, in the convertible bond market.
    
	
 
    	
 
    	
 
    
	
Nationalization, Insolvency or   Delisting:
    	
 
    	
Cancellation and Payment (Calculation Agent   Determination); provided that   in addition to the provisions of Section 12.6(a)(iii) of the Equity   Definitions, it shall also constitute a Delisting if the Exchange is located   in the United States and the Shares are not immediately re-listed, re-traded   or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select   Market or The NASDAQ Global Market (or their respective successors); if the   Shares are immediately re-listed, re-traded or re-quoted on any such exchange   or quotation system, such exchange or quotation system shall thereafter be   deemed to be the Exchange.
    
	
 
    	
 
    	
 
    
	
Additional Disruption Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a) Change in Law:
    	
 
    	
Applicable; provided   that Section 12.9(a)(ii) of the Equity Definitions is hereby   amended by replacing the phrase “the interpretation” in the third line   thereof with the phrase “, or public announcement of, the formal or informal   interpretation”.
    
	
 
    	
 
    	
 
    
	
(b) Insolvency   Filing:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
(c) Hedging   Disruption:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
(d) Increased Cost   of Hedging:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
(e) Loss of Stock   Borrow:
    	
 
    	
Applicable
    


 

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Maximum Stock Loan   Rate: 
    	
 
    	
1.0 % per annum
    
	
 
    	
 
    	
 
    
	
(f) Increased Cost of Stock Borrow:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Initial Stock Loan   Rate:
    	
 
    	
0.25 % per annum
    
	
 
    	
 
    	
 
    
	
Hedging Party:
    	
 
    	
Buyer
    
	
 
    	
 
    	
 
    
	
Determining Party:
    	
 
    	
Buyer
    
	
 
    	
 
    	
 
    
	
Non-Reliance:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Agreements and Acknowledgments Regarding   Hedging Activities:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Additional Acknowledgments:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
3. Calculation Agent:
    	
 
    	
Dealer.
    
	
 
    	
 
    	
 
    
	
4. Account Details:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dealer Payment   Instructions:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SWIFT: XXXXXXXXX
    
	
Bank Routing:   XXXXXXXXX
    
	
Account Name: Credit   Suisse International
    
	
Account No.:   XXXXXXXXX
    
	
 
    	
 
    	
 
    
	
Issuer Payment Instructions:
    	
 
    	
To be provided by Issuer.
    
	
 
    	
 
    	
 
    
	
5. Offices:
    	
 
    	
 
    
	
 
    
	
The Office of Dealer for the Transaction is:
    
	
 
    	
 
    	
 
    
	
Credit Suisse   International
    	
 
    	
 
    
	
One Cabot Square
    	
 
    	
 
    
	
London E14 4QJ
    	
 
    	
 
    
	
England
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
The Office of Issuer for the Transaction is:
    
	
 
    
	
Inapplicable, Issuer is not a   Multibranch Party.
    
	
 
    	
 
    	
 
    
	
6.  Notices: For purposes of this   Confirmation:
    
	
 
    
	
(a)        Address for notices   or communications to Issuer:
    
	
 
    	
 
    	
 
    
	
To:
    	
 
    	
Rudolph Technologies, Inc.
    
	
 
    	
 
    	
One Rudolph Road
    
	
 
    	
 
    	
P.O. Box 1000
    
	
 
    	
 
    	
Flanders, New Jersey 07836
    
	
Attn:
    	
 
    	
Robert A. Koch
    
	
Telephone:
    	
 
    	
(973) 448-4487
    
	
Facsimile:
    	
 
    	
(973) 691-1435
    
	
Email:
    	
 
    	
robert.koch@rudolphtech.com
    
	
 
    	
 
    	
 
    
	
(b)        Address for notices   or communications to Dealer:
    
	
 
    	
 
    	
 
    
	
To:
    	
 
    	
Credit Suisse Securities   (USA) LLC
    
	
 
    	
 
    	
Eleven Madison Avenue
    
	
 
    	
 
    	
New York, NY 10010-3629
    
	
Attn:
    	
 
    	
Steve Paek
    
	
Telephone:
    	
 
    	
(212) 325-3081
    
	
Facsimile:
    	
 
    	
(917) 326-8603
    


 

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Email:
    	
 
    	
steve.paek@credit-suisse.com
    


 

7.     Representations, Warranties and Agreements:

 

(a)           In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Issuer represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

 

(i)            On the Trade Date, (A) none of Issuer and its officers and directors is aware of any material nonpublic information regarding Issuer or the Shares and (B) all reports and other documents filed by Issuer with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

 

(ii)           Without limiting the generality of Section 13.1 of the Equity Definitions, Issuer acknowledges that Dealer is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

 

(iii)          The Shares of Issuer initially issuable upon exercise of the Warrant (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Issuer.  The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights. Issuer represents, warrants and agrees that neither Dealer’s entry into this Confirmation nor Dealer’s right to acquire Shares hereunder shall result in or contribute to the implementation, exercise or triggering, howsoever described, of any third party rights under any stockholder rights or similar plan to which Issuer is now or may in the future become a party (any such agreement, an “Issuer Agreement”). Issuer further represents, warrants and agrees that Issuer and Issuer’ Board of Directors shall interpret all Issuer Agreements accordingly.

 

(iv)          Issuer is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act.

 

(v)           Issuer is not, and after giving effect to the transactions contemplated hereby will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

(vi)          On the Trade Date and the Premium Payment Date (A) the assets of Issuer at their fair valuation exceed the liabilities of Issuer, including contingent liabilities, (B) the capital of Issuer is adequate to conduct the business of Issuer and (C) Issuer has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

 

(vii)         Issuer shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below).

 

(viii)        The representations and warranties of Issuer set forth in Section 3 of the Agreement and Section 2 of the Purchase Agreement dated as of the Trade Date between Issuer and Credit Suisse Securities (USA) LLC, as representative of the initial purchasers party thereto 

 

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are true and correct as of the Trade Date and the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.

 

(ix)           Issuer understands no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any governmental agency.

 

(x)            (A) During the period starting on the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”), the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B) Issuer shall not engage in any “distribution,” as such term is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately following the Settlement Period.

 

(xi)           During the Settlement Period, neither Issuer nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 of the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares, except through Dealer.

 

(b)           Each of Dealer and Issuer agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

 

(c)           Each of Dealer and Issuer acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly, Dealer represents and warrants to Issuer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.

 

(d)           Each of Dealer and Issuer agrees and acknowledges that Dealer is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”).  The parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

 

(e)           Each party acknowledges and agrees to be bound by the Conduct Rules of the National Association of Securities Dealers, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.

 

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(f)            Prior to the Trade Date, Issuer shall deliver to Dealer a resolution of Issuer’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.

 

(g)           Issuer shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement.

 

8.  Other Provisions:

 

(a)           Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.  If Issuer shall owe Buyer any amount pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Issuer shall have the right, in its sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable telephonic notice to Buyer, confirmed in writing within one Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Additional Disruption Event, as applicable (“Notice of Share Termination”); provided that if Issuer does not elect to satisfy its Payment Obligation by the Share Termination Alternative, Buyer shall have the right, in its sole discretion, to elect to require Issuer to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Issuer’s failure to elect or election to the contrary; and provided further that Issuer shall not have the right to so elect (but, for the avoidance of doubt, Buyer shall have the right to so elect) in the event of (i) an Insolvency, a Nationalization, a Tender Offer or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Issuer is the Defaulting Party or a Termination Event in which Issuer is the Affected Party, which Event of Default or Termination Event resulted from an event or events within Issuer’s control.  Upon such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, the Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Additional Disruption Event, as applicable:

 

Share Termination Alternative:                          Applicable and means that Issuer shall deliver to Dealer the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of the Payment Obligation.

 

Share Termination Delivery

 

Property:                                                                                                                                            A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price.  The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.

 

Share Termination Unit Price:                                 The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Issuer at the time of notification of the Payment Obligation.

 

Share Termination Delivery Unit:              In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to 

 

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pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer.  If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.

 

Failure to Deliver:                                                                                                  Applicable

 

Other applicable provisions:                                          If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Seller is the Issuer of the Shares) and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”.  If, in the reasonable judgment of Dealer, for any reason, any securities comprising the Share Termination Delivery Units deliverable pursuant to this Section 8(a) would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act, then Dealer may elect to either (x) accept delivery of such securities notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(b) below apply.

 

(b)           Registration/Private Placement Procedures.  (i)  With respect to the Transaction, the following provisions shall apply to the extent provided for above opposite the caption “Net Share Settlement” in Section 2 or in paragraph (a) of this Section 8.  If so applicable, then, at the election of Issuer by notice to Buyer within one Exchange Business Day after the relevant delivery obligation arises,  but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares or Share Termination Delivery Units, as the case may be, delivered by Issuer to Buyer shall be, at the time of such delivery, covered by an effective registration statement of Issuer for immediate resale by Buyer (such registration statement and the corresponding prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in form and content commercially reasonably satisfactory to Buyer) or (B) Issuer shall deliver additional Shares or Share Termination Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined by the Calculation Agent to reflect an appropriate liquidity discount, equals the value of the number of Shares or Share Termination Delivery Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely tradeable (without prospectus delivery) upon receipt by Buyer (such value, the “Freely Tradeable Value”); provided that, if requested by Dealer, Issuer shall make the election described in this clause (B) with respect to Shares delivered on all Settlement Dates no later than one Exchange Business Day prior to the first Expiration Date, and the applicable procedures described below shall apply to all Shares delivered on the Settlement Dates on an aggregate basis.  (For the avoidance of doubt, as used in this paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant securities, as the context shall require.)

 

(ii)           If Issuer makes the election described in clause (b)(i)(A) above:

 

(A)          Buyer (or an affiliate of Buyer designated by Buyer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with respect to Issuer that is customary in scope for underwritten offerings of equity securities and that yields results that are commercially reasonably satisfactory to Buyer or such affiliate, as the case may be, in its discretion; and

 

(B)           Buyer (or an affiliate of Buyer designated by Buyer) and Issuer shall enter into an agreement (a “Registration Agreement”) on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case may be, by Buyer or such affiliate substantially similar to underwriting agreements customary for 

 

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underwritten offerings of equity securities, in form and substance commercially reasonably satisfactory to Buyer or such affiliate and Issuer, which Registration Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the indemnification of, and contribution in connection with the liability of, Buyer and its affiliates and Issuer, shall provide for the payment by Issuer of all expenses in connection with such resale, including all registration costs and all fees and expenses of counsel for Buyer, and shall provide for the delivery of accountants’ “comfort letters” to Buyer or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.

 

(iii)          If Issuer makes the election described in clause (b)(i)(B) above:

 

(A)          Buyer (or an affiliate of Buyer designated by Buyer) and any potential institutional purchaser of any such Shares or Share Termination Delivery Units, as the case may be, from Buyer or such affiliate identified by Buyer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation in compliance with applicable law with respect to Issuer customary in scope for private placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients of customary confidentiality agreements reasonably acceptable to Issuer;

 

(B)           Buyer (or an affiliate of Buyer designated by Buyer) and Issuer shall enter into an agreement (a “Private Placement Agreement”) on commercially reasonable terms in connection with the private placement of such Shares or Share Termination Delivery Units, as the case may be, by Issuer to Buyer or such affiliate and the private resale of such shares by Buyer or such affiliate, substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Buyer and Issuer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection with the liability of, Buyer and its affiliates and Issuer, shall provide for the payment by Issuer of all expenses in connection with such resale, including all fees and expenses of counsel for Buyer, shall contain representations, warranties and agreements of Issuer reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales, and shall use best efforts to provide for the delivery of accountants’ “comfort letters” to Buyer or such affiliate with respect to the financial statements and certain financial information contained in or incorporated by reference into the offering memorandum prepared for the resale of such Shares; and

 

(C)           Issuer agrees that any Shares or Share Termination Delivery Units so delivered to Dealer, (i) may be transferred by and among Dealer and its affiliates, and Issuer shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities issued by Issuer comprising such Share Termination Delivery Units, Issuer shall promptly remove, or cause the transfer agent for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities upon delivery by Dealer (or such affiliate of Dealer) to Issuer or such transfer agent of seller’s and broker’s representation letters customarily delivered by Dealer in connection with resales of restricted securities pursuant to Rule 144 under the Securities Act, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer).

 

(D)          Issuer shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Issuer to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery Units, as the case may be, or the exemption pursuant to Section 4(1) or Section 4(3) of 

 

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the Securities Act for resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).

 

(c)           Make-whole Shares. If Issuer makes the election described in clause (i)(B) of paragraph (b) of this Section 8, then Dealer or its affiliate may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer completes the sale of all such Shares or Share Termination Delivery Units, as the case may be, or a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales exceed the Freely Tradeable Value.  If any of such delivered Shares or Share Termination Delivery Units remain after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery Units to Issuer.  If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Issuer shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale Period the amount of such excess (the “Additional Amount”) in cash or in a number of additional Shares (“Make-whole Shares”) in an amount that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional Amount.  The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(c).  This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(e).

 

(d)           Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Buyer be entitled to receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares, (i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Buyer or any affiliate of Buyer subject to aggregation with Buyer under such Section 13 and rules or any “group”, as such term is used in such Section 13 and rules, of which Buyer or any such affiliate of Buyer is a member or may be deemed to be a member (collectively, “Buyer Group”) would be equal to or greater than 8% or more of the outstanding Shares or (ii) Buyer, Buyer Group or any person whose ownership position would be aggregated with that of Buyer or Buyer Group (Buyer, Buyer Group or any such person, a “Buyer Person”) under Section 203 of the Delaware General Corporation Law (the “DGCL Takeover Statute”) or any state or federal bank holding company or banking laws, or other federal, state or local regulations or regulatory orders applicable to ownership of Shares (“Applicable Laws”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership in excess of a number of Shares equal to (x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Buyer Person under Applicable Laws (including, without limitation, “interested stockholder” or “acquiring person” status under the DGCL Takeover Statute) and with respect to which such requirements have not been met or the relevant approval has not been received minus (y) 2% of the number of Shares outstanding on the date of determination (either such condition described in clause (i) or (ii), an “Excess Ownership Position”).  If any delivery owed to Buyer hereunder is not made, in whole or in part, as a result of this provision, Issuer’s obligation to make such delivery shall not be extinguished and Issuer shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Buyer gives notice to Issuer that such delivery would not result in the existence of an Excess Ownership Position.

 

(e)           Limitations on Settlement by Issuer.  Notwithstanding anything herein or in the Agreement to the contrary, in no event shall Issuer be required to deliver Shares in connection with the Transaction in excess of 7,724,100 (subject to adjustment from time to time in accordance with the provisions hereof as a result of actions of Issuer or events within Issuer’s control) (the “Capped Number”).  Issuer represents and warrants to Dealer (which representation and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less than the number of authorized but unissued Shares of the Issuer that are not reserved for future issuance in connection with transactions in the Shares (other than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available Shares”).  In the event Issuer shall not have delivered the full number of Shares otherwise deliverable as a result of this Section 8(e) (the resulting deficit, the 

 

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“Deficit Shares”), Issuer shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Issuer or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved and (iii) Issuer additionally authorizes any unissued Shares that are not reserved for other transactions.  Issuer shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver such Shares thereafter.

 

(f)            Amendments to Equity Definitions.  The following amendments shall be made to the Equity Definitions:

 

(i)            Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence.

 

(ii)           The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has an effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)”;

 

(iii)          Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “diluting or concentrative” and replacing them with “material”;

 

(iv)          Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Issuer” in the first sentence of such section; and

 

(v)           Section 12.9(b)(v) of the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) replacing in the penultimate sentence the words “either party” with “the Hedging Party” and (4) deleting clause (X) in the final sentence.

 

(g)           Additional Termination Events.  The occurrence of any of the following shall constitute an Additional Termination Event with respect to which the Transaction shall be the sole Affected Transaction and Issuer shall be the sole Affected Party; provided that with respect to any Additional Termination Event, Dealer may choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

 

(i)            Buyer reasonably determines that it is advisable to terminate a portion of the Transaction so that Buyer’s related hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of Buyer (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Buyer);

 

(ii)           a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Issuer, Issuer’s subsidiaries and employee benefit plans of Issuer’s and Issuer’s 

 

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subsidiaries, has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of Issuer’s common equity representing more than 50% of the voting power of Issuer’s common equity;

 

(iii)          consummation of (A) any recapitalization, reclassification or change of Shares (other than changes resulting from a subdivision or combination) as a result of which Shares would be converted into, or exchanged for, stock, other securities, other property or assets or (B) any share exchange, consolidation or merger involving us pursuant to which Shares will be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of Issuer’s and Issuer’s subsidiaries’ consolidated assets, taken as a whole, to any Person other than one of Issuer’s subsidiaries; other than a transaction where the holders of all classes of Issuer’s common equity immediately prior to such transaction that is a share exchange, consolidation or merger (each such holder, a “pre-transaction holder”) own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such event, so long as the proportion of the respective ownership of each pre-transaction holder remains substantially the same relative to all other pre-transaction holders;

 

(iv)          at any time Issuer’s Continuing Directors (as defined below) do not constitute a majority of Issuer’s board of directors (or, if applicable, a successor Person to Issuer);

 

(v) Issuer’s stockholders approve any plan or proposal for Issuer’s liquidation or dissolution; or

 

(vi) Shares cease to be listed on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors).

 

Notwithstanding the foregoing, a transaction set forth in clause (iii) above will not constitute an Additional Termination Event if at least 90% of the consideration paid for the Shares (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in connection with such transaction or transactions otherwise constituting an Additional Termination Event under clause (iii) above consists of shares of common stock listed on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors) (or will be so listed when issued or exchanged in connection with such transaction or transactions) (“Listed Shares”).

 

“Person” includes any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

 

“Continuing Directors” means (i) a director who either was a member of Issuer’s board of directors on the date hereof or (ii) a director who becomes a member of Issuer’s board of directors subsequent to the date hereof and whose election, appointment or nomination for election by Issuer’s stockholders is duly approved by a majority of the Continuing Directors on Issuer’s board of directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by Issuer on behalf of Issuer’s entire board of directors in which such individual is named as nominee for director.

 

(h)           Extension of Settlement.  Dealer may divide any Component into additional Components and designate the Expiration Date and the Number of Warrants for each such Component if Dealer determines, in its reasonable discretion, that such further division is necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing liquidity conditions in the cash market or stock loan market or to enable Dealer to effect purchases of Shares in connection with its hedging activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal and regulatory requirements.

 

(i)            Transfer and Assignment.  Buyer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at any time without the consent of Issuer; provided  that at any time at which (i) an Excess Ownership Position exists or (ii) a Hedging Disruption has occurred and is continuing, if Buyer, in its discretion, is unable to effect a transfer or assignment to a third party after 

 

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using its commercially reasonable efforts on pricing terms reasonably acceptable to Buyer such that an Excess Ownership Position or a Hedging Disruption, as the case may be, no longer exists, Buyer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of the Transaction, such that such Excess Ownership Position or Hedging Disruption, as the case may be, no longer exists.   In the event that Buyer so designates an Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the Agreement and Section 8(a) of this Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Issuer shall be the sole Affected Party with respect to such partial termination and (iii) such portion of the Transaction shall be the only Terminated Transaction.

 

(j)            Equity Rights.  Buyer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Issuer’s bankruptcy.  For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Issuer’s bankruptcy to any claim arising as a result of a breach by Issuer of any of its obligations under this Confirmation or the Agreement.  For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Issuer herein under or pursuant to any other agreement.

 

(k)           Netting and Set-off.

 

(i)            If on any date cash would otherwise be payable or Shares or other property would otherwise be deliverable hereunder or pursuant to the Agreement or pursuant to any other agreement between the parties by Issuer to Buyer and cash would otherwise be payable or Shares or other property would otherwise be deliverable hereunder or pursuant to the Agreement or pursuant to any other agreement between the parties by Buyer to Issuer and the type of property required to be paid or delivered by each such party on such date is the same, then, on such date, each such party’s obligation to make such payment or delivery will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable or deliverable by one such party exceeds the aggregate amount that would otherwise have been payable or deliverable by the other such party, replaced by an obligation of the party by whom the larger aggregate amount would have been payable or deliverable to pay or deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

 

(ii)           In addition to and without limiting any rights of set-off that a party hereto may have as a matter of law, pursuant to contract or otherwise, upon the occurrence of an Early Termination Date, Buyer shall have the right to terminate, liquidate and otherwise close out the Transaction and to set off any obligation or right that Buyer or any affiliate of Buyer may have to or against Issuer hereunder or under the Agreement against any right or obligation Buyer or any of its affiliates may have against or to Issuer, including without limitation any right to receive a payment or delivery pursuant to any provision of the Agreement or hereunder.  In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of the same type, such obligation and right shall be set off in kind.  In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of any other type, the value of each of such obligation and such right shall be determined by the Calculation Agent and the result of such set-off shall be that the net obligor shall pay or deliver to the other party an amount of cash or assets, at the net obligor’s option, with a value (determined, in the case of a delivery of assets, by the Calculation Agent) equal to that of the net obligation.  In determining the value of any obligation to release or deliver Shares or any right to receive Shares, the value at any time of such obligation or right shall be determined by reference to the market value of the Shares at such time, as determined by the Calculation Agent.  If an obligation or right is unascertained at the time of any such set-off, the Calculation Agent may in good faith estimate the amount or value of such obligation or right, in which case set-off will be effected in respect of that estimate, and the relevant party shall account to the other party at the time such obligation or right is ascertained.

 

(iii)          Notwithstanding any provision of the Agreement (including without limitation Section 6(f) thereof) and this Confirmation (including without limitation this Section 8(k)) or any other agreement between the parties to the contrary, (A) Issuer shall not net or set off its 

 

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obligations under the Transaction against its rights against Buyer under any other transaction or instrument; (B) Buyer may net and set off any rights of Buyer against Issuer arising under the Transaction only against obligations of Buyer to Issuer arising under any transaction or instrument if such transaction or instrument does not convey rights to Buyer senior to the claims of common stockholders in the event of Issuer’s bankruptcy and (C) in the event of bankruptcy or liquidation of Issuer, neither party shall have the right to set off any obligation that it may have to the other party under the Transaction against any obligation such other party may have to it under the Agreement, this Confirmation or any other agreement between the parties hereto, by operation of law or otherwise.  Buyer will give notice to Issuer of any netting or set off effected under this provision.

 

(l)            Effectiveness.  If, prior to the Effective Date, Buyer reasonably determines that it is advisable to cancel the Transaction because of concerns that Buyer’s related hedging activities could be viewed as not complying with applicable securities laws, rules or regulations, the Transaction shall be cancelled and shall not become effective, and neither party shall have any obligation to the other party in respect of the Transaction.

 

(m)          Designation by Dealer.  Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Issuer, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may perform such obligations.  Dealer shall be discharged of its obligations to Issuer to the extent of any such performance.

 

(n)           Disclosure.  Effective from the date of commencement of discussions concerning the Transaction, Issuer and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Issuer relating to such tax treatment and tax structure.

 

(o)   Counterparts. This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

(p)           Waiver of Trial by Jury.  EACH OF ISSUER AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF DEALER OR ITS AFFILIATES OR ISSUER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

(q)           Submission to Jurisdiction. Each party hereby irrevocably and unconditionally submits for itself and its property in any legal action or proceeding by the other party against it relating to the Transaction to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the Supreme Court of the State of New York, sitting in New York County, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof.

 

(r)            Governing Law.  THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE).

 

(s)           Role of Agent.   Credit Suisse Securities (USA) LLC, in its capacity as Agent will be responsible for (A) effecting this Transaction, (B) issuing all required confirmations and statements to Dealer and Issuer, (C) maintaining books and records relating to this Transaction in accordance with its standard practices and procedures and in accordance with applicable law and (D) unless otherwise requested by Issuer, receiving, delivering, and safeguarding Issuer’s funds and any securities in connection with this Transaction, in accordance with its standard practices and procedures and in accordance with applicable law.

 

18











 

(i)            Agent is acting in connection with this Transaction solely in its capacity as Agent for Dealer and Issuer pursuant to instructions from Dealer and Issuer.  Agent shall have no responsibility or personal liability to Dealer or Issuer arising from any failure by Dealer or Issuer to pay or perform any obligations hereunder, or to monitor or enforce compliance by Dealer or Issuer with any obligation hereunder, including, without limitation, any obligations to maintain collateral.  Each of Dealer and Issuer agrees to proceed solely against the other to collect or recover any securities or monies owing to it in connection with or as a result of this Transaction.  Agent shall otherwise have no liability in respect of this Transaction, except for its gross negligence or willful misconduct in performing its duties as Agent.

 

(ii)           Any and all notices, demands, or communications of any kind relating to this Transaction between Dealer and Issuer shall be transmitted exclusively through Agent at the following address:

 

Credit Suisse Securities (USA) LLC
 Eleven Madison Avenue
 New York, NY 10010-3629

 

For payments and deliveries:
 Facsimile No.: (212) 325 8175
 Telephone No.: (212) 325 8678 / (212) 325 3213

 

For all other communications:
 Facsimile No.: (212) 325 8173
 Telephone No.: (212) 325 8676 / (212) 538 5306 / (212) 538 1193 / (212) 538 6886

 

(iii)          The date and time of the Transaction evidenced hereby will be furnished by the Agent to Dealer and Issuer upon written request.

 

(iv)          The Agent will furnish to Issuer upon written request a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with the Transaction evidenced hereby.

 

(v)           Dealer and Issuer each represents and agrees (A) that this Transaction is not unsuitable for it in the light of such party’s financial situation, investment objectives and needs and (B) that it is entering into this Transaction in reliance upon such tax, accounting, regulatory, legal and financial advice as it deems necessary and not upon any view expressed by the other or the Agent.

 

(vi)          Dealer is regulated by The Securities and Futures Authority and has entered into this Transaction as principal. The time at which this Transaction was executed will be notified to Issuer (through the Agent) on request.

 

19











 

Issuer hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Issuer with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, NY 10010-3629, Facsimile No. (212) 325-8173.

 

 

	
 
    	
CREDIT SUISSE INTERNATIONAL
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Shui Wong
    
	
 
    	
 
    	
Name: Shui Wong
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joyce Lim
    
	
 
    	
 
    	
Name: Joyce Lim
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CREDIT   SUISSE SECURITIES (USA) LLC,  AS AGENT   FOR CREDIT SUISSE   INTERNATIONAL
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Shui Wong
    
	
 
    	
 
    	
Name: Shui Wong
    
	
 
    	
 
    	
Title:   Vice President
    


 

Agreed and Accepted By:

 

RUDOLPH TECHNOLOGIES, INC.

 

	
By:
    	
/s/ Paul F. McLaughlin
    	
 
    
	
 
    	
Name:    Paul F. McLaughlin
    	
 
    
	
 
    	
Title:     CEO & Chairman
    	
 
    


 











 

Annex A

 

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

 

	
Component Number
    	
 
    	
Number of Warrants
    	
 
    	
Expiration Date
    
	
1.
    	
 
    	
64,367
    	
 
    	
10/13/2016
    
	
2.
    	
 
    	
64,3679
    	
 
    	
10/14/2016
    
	
3.
    	
 
    	
64,367
    	
 
    	
10/17/2016
    
	
4.
    	
 
    	
64,367
    	
 
    	
10/18/2016
    
	
5.
    	
 
    	
64,367
    	
 
    	
10/19/2016
    
	
6.
    	
 
    	
64,367
    	
 
    	
10/20/2016
    
	
7.
    	
 
    	
64,367
    	
 
    	
10/21/2016
    
	
8.
    	
 
    	
64,367
    	
 
    	
10/24/2016
    
	
9.
    	
 
    	
64,367
    	
 
    	
10/25/2016
    
	
10.
    	
 
    	
64,367
    	
 
    	
10/26/2016
    
	
11.
    	
 
    	
64,367
    	
 
    	
10/27/2016
    
	
12.
    	
 
    	
64,367
    	
 
    	
10/28/2016
    
	
13.
    	
 
    	
64,367
    	
 
    	
10/31/2016
    
	
14.
    	
 
    	
64,367
    	
 
    	
11/1/2016
    
	
15.
    	
 
    	
64,367
    	
 
    	
11/2/2016
    
	
16.
    	
 
    	
64,367
    	
 
    	
11/3/2016
    
	
17.
    	
 
    	
64,367
    	
 
    	
11/4/2016
    
	
18.
    	
 
    	
64,367
    	
 
    	
11/7/2016
    
	
19.
    	
 
    	
64,367
    	
 
    	
11/8/2016
    
	
20.
    	
 
    	
64,367
    	
 
    	
11/9/2016
    
	
21.
    	
 
    	
64,367
    	
 
    	
11/10/2016
    
	
22.
    	
 
    	
64,367
    	
 
    	
11/11/2016
    
	
23.
    	
 
    	
64,367
    	
 
    	
11/14/2016
    
	
24.
    	
 
    	
64,367
    	
 
    	
11/15/2016
    
	
25.
    	
 
    	
64,367
    	
 
    	
11/16/2016
    
	
26.
    	
 
    	
64,367
    	
 
    	
11/17/2016
    
	
27.
    	
 
    	
64,367
    	
 
    	
11/18/2016
    
	
28.
    	
 
    	
64,367
    	
 
    	
11/21/2016
    
	
29.
    	
 
    	
64,367
    	
 
    	
11/22/2016
    
	
30.
    	
 
    	
64,367
    	
 
    	
11/23/2016
    
	
31.
    	
 
    	
64,367
    	
 
    	
11/25/2016
    
	
32.
    	
 
    	
64,367
    	
 
    	
11/28/2016
    
	
33.
    	
 
    	
64,367
    	
 
    	
11/29/2016
    
	
34.
    	
 
    	
64,367
    	
 
    	
11/30/2016
    
	
35.
    	
 
    	
64,367
    	
 
    	
12/1/2016
    
	
36.
    	
 
    	
64,367
    	
 
    	
12/2/2016
    
	
37.
    	
 
    	
64,367
    	
 
    	
12/5/2016
    
	
38.
    	
 
    	
64,367
    	
 
    	
12/6/2016
    
	
39.
    	
 
    	
64,367
    	
 
    	
12/7/2016
    
	
40.
    	
 
    	
64,367
    	
 
    	
12/8/2016
    
	
41.
    	
 
    	
64,367
    	
 
    	
12/9/2016
    
	
42.
    	
 
    	
64,367
    	
 
    	
12/12/2016
    
	
43.
    	
 
    	
64,367
    	
 
    	
12/13/2016
    
	
44.
    	
 
    	
64,367
    	
 
    	
12/14/2016
    
	
45.
    	
 
    	
64,367
    	
 
    	
12/15/2016
    
	
46.
    	
 
    	
64,367
    	
 
    	
12/16/2016
    
	
47.
    	
 
    	
64,367
    	
 
    	
12/19/2016
    
	
48.
    	
 
    	
64,367
    	
 
    	
12/20/2016
    
	
49.
    	
 
    	
64,367
    	
 
    	
12/21/2016
    
	
50.
    	
 
    	
64,367
    	
 
    	
12/22/2016
    
	
51.
    	
 
    	
64,367
    	
 
    	
12/23/2016
    


 

2











 

	
52.
    	
 
    	
64,367
    	
 
    	
12/27/2016
    
	
53.
    	
 
    	
64,367
    	
 
    	
12/28/2016
    
	
54.
    	
 
    	
64,367
    	
 
    	
12/29/2016
    
	
55.
    	
 
    	
64,367
    	
 
    	
12/30/2016
    
	
56.
    	
 
    	
64,367
    	
 
    	
1/3/2017
    
	
57.
    	
 
    	
64,367
    	
 
    	
1/4/2017
    
	
58.
    	
 
    	
64,367
    	
 
    	
1/5/2017
    
	
59.
    	
 
    	
64,367
    	
 
    	
1/6/2017
    
	
60.
    	
 
    	
64,397
    	
 
    	
1/9/2017
    


 

3