EXHIBIT 2.5
STOCK AND ASSET PURCHASE AGREEMENT
FOR WET PRODUCTS DIVISION
by and among
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
▇▇▇▇▇▇▇ INTERNATIONAL, INC.
▇▇▇▇▇▇▇ WET PRODUCTS, INC.
▇▇▇▇▇▇▇ TECHNOLOGY FINANCE, INC.
and
SCP GLOBAL TECHNOLOGIES, INC.
February 12, 2003
TABLE OF CONTENTS
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ARTICLE I. PURCHASE AND SALE OF STOCK AND ASSETS............................................................2
1.1 Purchase and Sale of Transferred Shares.........................................................2
1.2 Purchase and Sale of Assets.....................................................................2
1.3 Transfer of Assumed Contracts and Assumed Liabilities...........................................2
1.4 Purchase Price..................................................................................3
1.5 Closing.........................................................................................6
1.6 Effective Time..................................................................................6
1.7 Allocation of Purchase Price....................................................................6
1.8 No Tax Election.................................................................................6
1.9 Transfer of ▇▇▇▇▇▇▇ Wet Products GmbH to ▇▇▇▇▇▇▇ Cayman.........................................6
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇.......................................................6
2.1 Due Incorporation...............................................................................7
2.2 Due Authorization...............................................................................8
2.3 Non-Contravention; Consents and Approvals.......................................................8
2.4 Capital Structure...............................................................................9
2.5 Financial Statements; Undisclosed Liabilities; Other Documents.................................11
2.6 No Material Adverse Effects or Changes.........................................................11
2.7 Properties.....................................................................................11
2.8 Title to Assets................................................................................12
2.9 Intellectual Property..........................................................................12
2.10 Insurance......................................................................................14
2.11 International Employee Plans...................................................................14
2.12 United States Employee Matters and ERISA.......................................................14
2.13 Labor and Pension Matters......................................................................16
2.14 Tax Returns and Audits.........................................................................17
2.15 Environmental Matters..........................................................................20
2.16 Litigation.....................................................................................20
2.17 Compliance with Applicable Laws................................................................21
2.18 Contracts; No Defaults.........................................................................21
2.19 Change in Control and Severance Payments.......................................................22
2.20 Operations of the Directly Transferred Subsidiaries............................................22
2.21 Adequacy of Assets.............................................................................22
2.22 Inventory......................................................................................22
2.23 Customers and Suppliers........................................................................23
2.24 Banking Relationships..........................................................................23
2.25 Managers; Powers of Attorney...................................................................23
2.26 Accounts Receivable............................................................................23
2.27 Broker's/Finder's Fees.........................................................................23
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER.......................................................24
3.1 Due Incorporation and Due Authorization........................................................24
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TABLE OF CONTENTS
(continued)
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3.2 Non-Contravention; Consents and Approvals......................................................24
3.3 Compliance with Applicable Laws................................................................25
3.4 Litigation.....................................................................................25
3.5 Brokers and Finders............................................................................25
3.6 Investment Company Act.........................................................................26
3.7 Investment.....................................................................................26
ARTICLE IV. CONDUCT PRIOR TO THE CLOSING...................................................................26
4.1 Conduct of Business of ▇▇▇▇▇▇▇ Subsidiaries....................................................26
4.2 Intercompany Accounts and Cash Balances of the ▇▇▇▇▇▇▇ Subsidiaries............................29
4.3 Certain Employees of the ▇▇▇▇▇▇▇ Subsidiaries..................................................29
ARTICLE V. ADDITIONAL AGREEMENTS AND COVENANTS.............................................................30
5.1 Covenant to Satisfy Conditions.................................................................30
5.2 Employee Benefits..............................................................................30
5.3 Continuation of Business.......................................................................31
5.4 Access to Information..........................................................................31
5.5 Confidentiality................................................................................32
5.6 Public Disclosure..............................................................................32
5.7 Regulatory Approval; Further Assurances........................................................32
5.8 Legal Requirements.............................................................................34
5.9 Conveyance Taxes...............................................................................34
5.10 Non-Solicitation of Employees..................................................................34
5.11 Noncompetition Agreement.......................................................................35
5.12 Access to Business Records.....................................................................36
5.13 Reimbursement for FSI Litigations..............................................................36
5.14 Special Accounts; Payments under Customer Contracts............................................36
5.15 Transition Services Agreement..................................................................36
5.16 2001 and 2002 Taxes and Financial Statements...................................................36
5.17 Termination of Profit Transfer Agreement.......................................................37
5.18 Silicon Integrated Systems Claims..............................................................38
5.19 Auction Process................................................................................39
5.20 DNS Settlement.................................................................................39
5.21 ERM Invoice....................................................................................39
ARTICLE VI. CONDITIONS TO THE ACQUISITION..................................................................39
6.1 Conditions to Each Party's Obligation to Consummate the Acquisition............................39
6.2 Conditions to Obligations of Buyer.............................................................40
6.3 Conditions to Obligations of ▇▇▇▇▇▇▇...........................................................41
ARTICLE VII. TERMINATION, AMENDMENT AND WAIVER.............................................................42
7.1 Termination....................................................................................42
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TABLE OF CONTENTS
(continued)
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7.2 Amendment......................................................................................43
7.3 Extension; Waiver..............................................................................43
7.4 Notice of Termination..........................................................................43
ARTICLE VIII. INDEMNIFICATION..............................................................................44
8.1 Indemnification................................................................................44
8.2 Claims.........................................................................................46
8.3 Resolution of Conflicts and Arbitration........................................................46
8.4 Third-Party Claims.............................................................................47
8.5 Exclusivity Of Indemnification Remedies........................................................48
ARTICLE IX. GENERAL PROVISIONS.............................................................................48
9.1 Notices........................................................................................48
9.2 Counterparts...................................................................................49
9.3 Entire Agreement; Nonassignability.............................................................49
9.4 Severability...................................................................................49
9.5 Remedies Cumulative............................................................................49
9.6 Expenses.......................................................................................49
9.7 United States Dollars..........................................................................50
9.8 Governing Law..................................................................................50
9.9 Consent to Jurisdiction........................................................................50
9.10 Rules of Construction..........................................................................50
9.11 Third Party Beneficiaries......................................................................50
9.12 Construction of Certain Terms and Phrases......................................................50
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STOCK AND ASSET PURCHASE AGREEMENT
FOR WET PRODUCTS DIVISION
THIS STOCK AND ASSET PURCHASE AGREEMENT FOR WET PRODUCTS DIVISION (this
"Agreement"), dated as of February 12, 2003, is entered into by and among
▇▇▇▇▇▇▇ Technology, Inc., a Delaware corporation ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇
International, Inc., a Delaware corporation ("MII"), ▇▇▇▇▇▇▇ Wet Products, Inc.,
a Pennsylvania corporation ("WPI"), ▇▇▇▇▇▇▇ Technology Finance, Inc., a
Pennsylvania corporation ("MTF"), and SCP Global Technologies, Inc., an Idaho
corporation ("Buyer"). Capitalized terms used in this Agreement have the defined
meanings provided in Exhibit A attached to this Agreement or elsewhere in the
body of this Agreement.
RECITALS
▇. ▇▇▇▇▇▇▇ owns directly or indirectly all of the issued and
outstanding shares of capital stock of each of the ▇▇▇▇▇▇▇ subsidiaries listed
on Exhibit B attached to this Agreement and incorporated herein by reference
(the "▇▇▇▇▇▇▇ Subsidiaries"). MII and WPI are each a direct wholly-owned
subsidiary of ▇▇▇▇▇▇▇. MII owns all of the issued and outstanding shares of
capital stock of ▇▇▇▇▇▇▇ Technology Cayman, Ltd., a Cayman Island corporation
("▇▇▇▇▇▇▇ Cayman"). WPI owns all of the issued and outstanding shares of capital
stock of MTF and certain assets and contractual rights and obligations that will
be transferred to Buyer pursuant to this Agreement. MTF owns all of the issued
and outstanding shares of capital stock of ▇▇▇▇▇▇▇ Technology IP, Inc., a
Delaware corporation ("▇▇▇▇▇▇▇ IP").
B. The ▇▇▇▇▇▇▇ Subsidiaries are engaged in the business of
developing, manufacturing, selling and servicing wet surface preparation
products for the preparation and cleaning of semiconductor wafers (the "Wet
Business").
▇. ▇▇▇▇▇▇▇ desires to sell, and Buyer desires to purchase, the Wet
Business, on the terms and conditions set forth in this Agreement (the
"Acquisition").
D. In order to effect the Acquisition, ▇▇▇▇▇▇▇ and Buyer desire to
enter into a transaction pursuant to which: (1) Buyer will directly or
indirectly acquire (a) 100% of the issued and outstanding capital stock, equity
ownership or its equivalent (which, for purposes of this Agreement, will be
referred to as "capital stock") of ▇▇▇▇▇▇▇ IP and ▇▇▇▇▇▇▇ Cayman (each, a
"Directly Transferred Subsidiary", and together, the "Directly Transferred
Subsidiaries") and (b) assets used in the Wet Business and owned by ▇▇▇▇▇▇▇ and
WPI, but not owned by the Directly Transferred Subsidiaries, and (2) ▇▇▇▇▇▇▇ or
its subsidiaries will assign and Buyer or its subsidiaries will assume certain
contractual obligations relating to the Wet Business. The Directly Transferred
Subsidiaries together with ▇▇▇▇▇▇▇ Wet Products GmbH ("Wet Products GmbH") are,
collectively, the "Transferred Subsidiaries".
NOW, THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration, ▇▇▇▇▇▇▇, MII,
WPI, MTF and Buyer agree as follows:
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ARTICLE I.
PURCHASE AND SALE OF STOCK AND ASSETS
1.1 Purchase and Sale of Transferred Shares. Upon the terms and
subject to the conditions set forth in this Agreement, effective as of the
Effective Time, ▇▇▇▇▇▇▇, MII, WPI and MTF shall sell and Buyer shall purchase
all of the right, title and interest of ▇▇▇▇▇▇▇, MII, WPI and MTF in and to 100%
of the issued and outstanding capital stock of ▇▇▇▇▇▇▇ IP and 100% of the issued
and outstanding capital stock of ▇▇▇▇▇▇▇ Cayman. The capital stock of the
Directly Transferred Subsidiaries is referred to herein as the "Transferred
Shares."
1.2 Purchase and Sale of Assets. Upon the terms and subject to the
conditions set forth in this Agreement, effective as of the Effective Time,
▇▇▇▇▇▇▇ and WPI shall sell, assign, transfer and convey and deliver to Buyer,
and Buyer shall purchase from ▇▇▇▇▇▇▇ and WPI all of ▇▇▇▇▇▇▇'▇ and WPI's right,
title and interest in and to the assets listed on Section 1.2 of the ▇▇▇▇▇▇▇
Disclosure Schedule (the "Assets"). Notwithstanding the previous sentence, at
▇▇▇▇▇▇▇'▇ option ▇▇▇▇▇▇▇ is permitted to sell, assign, transfer and convey the
Assets designated on Section 1.2 of the ▇▇▇▇▇▇▇ Disclosure Schedule as "▇▇▇▇▇▇▇
Wet Products GmbH Spare Parts" to ▇▇▇▇▇▇▇ Wet Products GmbH on or before the
Effective Time, in which event ▇▇▇▇▇▇▇ shall be deemed to have satisfied its
obligation to Buyer under this Section 1.2 with respect to the Assets
represented by such ▇▇▇▇▇▇▇ Wet Products GmbH Spare Parts. ▇▇▇▇▇▇▇ and WPI will
deliver possession or control of the Assets to Buyer or Buyer's designee upon or
promptly following the Effective Time at the locations and by such means as are
reasonably designated by Buyer; and will further deliver to Buyer appropriate
assignments, bills of sale, conveyances and other instruments of sale and/or
transfer in forms reasonably satisfactory to Buyer in order to convey to Buyer
good title to the Assets. In the event that any assets held by ▇▇▇▇▇▇▇ or any of
its subsidiaries following the Closing are determined to be within the
categories of assets described on Section 1.2 of the ▇▇▇▇▇▇▇ Disclosure Schedule
and to have been part of or previously used in connection with the Wet Business,
▇▇▇▇▇▇▇ shall promptly assign, transfer, convey and deliver such assets (or
cause such assets to be assigned, transferred, conveyed and delivered) to Buyer
as promptly as possible.
1.3 Transfer of Assumed Contracts and Assumed Liabilities. Upon the
terms and subject to the conditions set forth in this Agreement, effective as of
the Effective Time, ▇▇▇▇▇▇▇ and WPI shall assign to Buyer, and Buyer shall
assume from ▇▇▇▇▇▇▇ and WPI, all of ▇▇▇▇▇▇▇'▇ and WPI's rights and obligations
under the contracts listed on Section 1.3 of the ▇▇▇▇▇▇▇ Disclosure Schedule
(the "Assumed Contracts"). Except as specifically set forth to the contrary
herein, subject to and upon the terms and conditions of this Agreement,
effective as of the Effective Time, Buyer shall assume from ▇▇▇▇▇▇▇ and WPI and
thereafter pay, perform and/or otherwise discharge in a timely manner all
liabilities and obligations relating to and arising out of the Assumed Contracts
insofar as (and solely to the extent that) such performance, payment or other
obligations mature, become due or are to be performed after (but not before) the
Effective Time (the "Assumed Liabilities").
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1.4 Purchase Price.
(a) In consideration of the purchase of the Transferred
Shares and the Assets and the assignment of the Assumed Contracts, Buyer will,
at the Closing, (i) pay to ▇▇▇▇▇▇▇ the sum of $2 million, subject to adjustment
as provided in paragraphs (b) and (c) of this Section 1.4 (the "Purchase
Price"), by wire transfer in immediately available funds to an account
designated in a written notice delivered to Buyer by ▇▇▇▇▇▇▇ at least three (3)
business days prior to Closing, and (ii) assume the Assumed Contracts and the
Assumed Liabilities. The Purchase Price will be allocated in accordance with
Section 1.7.
(b) Cash Balance as of Closing. Within fifteen (15) days
following the Closing, Buyer will remit to ▇▇▇▇▇▇▇, in immediately available
funds, cash in an amount equal to any balance of cash or cash equivalents owned
by the Transferred Subsidiaries as of the Effective Time; provided, however,
that to the extent that any ▇▇▇▇▇▇▇ Stay Bonuses (as defined in Section 4.1(k)
below) remain unpaid at Closing, Buyer shall not be required to remit to ▇▇▇▇▇▇▇
the amount of cash necessary to pay such ▇▇▇▇▇▇▇ Stay Bonuses.
(c) Balance Sheet Adjustment.
(i) The Purchase Price shall be adjusted as provided
below, to the extent that the "Effective Time Net Working Capital" (as defined
below) is either less than $17 million or greater than $20 million. The
Effective Time Net Working Capital means the pro forma net working capital of
the Post-Closing Wet Business (as defined below), at and as of the Effective
Time, determined by the value of the assets (other than cash and cash
equivalents) of the Transferred Subsidiaries, together with the assets of the
Wet Business that are transferred at the Closing to the Buyer by ▇▇▇▇▇▇▇ and WPI
(and not owned by the Transferred Subsidiaries), corresponding to the categories
of assets included in a pro forma Wet Business balance sheet determined in
accordance with the description set forth on Section 1.4(c) of the ▇▇▇▇▇▇▇
Disclosure Schedule (the "Pro Forma Balance Sheet Instructions"), minus the
liabilities as described in the Pro Forma Balance Sheet Instructions (which, for
the elimination of doubt, is to include all liabilities of the Transferred
Subsidiaries and all liabilities otherwise assumed under this Agreement by Buyer
at the Effective Time that would constitute "current liabilities" for purposes
of a balance sheet prepared in accordance with GAAP in a manner consistent with
the historic preparation of the ▇▇▇▇▇▇▇ Financial Statements, but is to exclude
all liabilities relating to Special Accounts, as defined in Section 5.14, all in
accordance with the description included in Section 1.4(c) of the ▇▇▇▇▇▇▇
Disclosure Schedule). None of the Transferred Subsidiaries shall have any
long-term liabilities as of the Effective Time, and no long-term liabilities
shall be transferred by ▇▇▇▇▇▇▇ or any of the ▇▇▇▇▇▇▇ Subsidiaries to Buyer
pursuant to this Agreement. The value of the relevant assets and current
liabilities for purposes of determining Effective Time Net Working Capital of
the Post-Closing Wet Business shall be calculated in accordance with GAAP
(except as noted on Section 1.4(c) of the ▇▇▇▇▇▇▇ Disclosure Schedule, where
items are to be valued on a shipments basis), in a manner consistent with the
historic preparation of the ▇▇▇▇▇▇▇ Financial Statements. The "Post-Closing Wet
Business" is the business comprised of the Transferred Subsidiaries, the Assets
and the Assumed Contracts.
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(ii) Within 90 days following the Closing, Buyer
shall prepare (or cause to be prepared) and deliver to ▇▇▇▇▇▇▇ (and the parties
will cooperate to provide access to information and make available their
appropriate employees with relevant historical knowledge to facilitate the
preparation and consistency of) a definitive balance sheet for the Post-Closing
Wet Business as of the Effective Time, after taking into effect the transactions
contemplated by this Agreement (the "Definitive Balance Sheet"), using the same
methodology and accounting principles as were used to prepare the Pro Forma Wet
Division Balance Sheets, and including the same asset and liability line items
as were included in the Pro Forma Wet Division Balance Sheets (it being
understood that the Definitive Balance Sheet will include all liabilities of the
Transferred Subsidiaries and all liabilities otherwise assumed by Buyer under
this Agreement at the Effective Time that constitute current liabilities for
purposes of a balance sheet prepared in accordance with GAAP in a manner
consistent with the historic preparation of the ▇▇▇▇▇▇▇ Financial Statements,
but excluding all liabilities relating to Special Accounts, as defined in
Section 5.14); provided, however, that the amount for the value of the spare
parts inventory on the Definitive Balance Sheet shall not exceed $6.7 million.
In preparing the Definitive Balance Sheet, no change shall be made in any
accounting principle, or in any financial reporting, inventory, or credit
allowance or policy, or in any method of calculating any bad debt, contingency
or other reserve for accounting, financial reporting or similar purposes. The
Definitive Balance Sheet shall be subject to the review and acceptance of
▇▇▇▇▇▇▇, and Buyer shall cooperate and make available to ▇▇▇▇▇▇▇ supporting
information and appropriate employees of Buyer and the Transferred Subsidiaries
with relevant historical knowledge to permit ▇▇▇▇▇▇▇ to evaluate the Definitive
Balance Sheet. In the event the Effective Time Net Working Capital as shown on
the Definitive Balance Sheet exceeds $20 million, then Buyer shall remit to
▇▇▇▇▇▇▇ a wire transfer in the amount of such excess to the account specified by
▇▇▇▇▇▇▇ in writing. In the event the Effective Time Net Working Capital as shown
on the Definitive Balance Sheet is below $17 million, then ▇▇▇▇▇▇▇ shall remit
to Buyer a wire transfer in the amount of such shortfall to the account
specified by Buyer in writing. If any amount is due to Buyer or ▇▇▇▇▇▇▇ pursuant
to either of the immediately preceding sentences, the wire transfer shall be
sent by the paying party within five (5) business days after acceptance by
▇▇▇▇▇▇▇ of the Definitive Balance Sheet and notice of the account to which the
wire transfer is to be delivered has been specified in writing by the receiving
party.
(iii) The Definitive Balance Sheet (including the
amount of Effective Time Net Working Capital determined in accordance
therewith), shall become final and binding on Buyer and ▇▇▇▇▇▇▇ unless ▇▇▇▇▇▇▇
gives written notice of its disagreement (a "Notice of Disagreement") to Buyer
within 30 days following receipt by ▇▇▇▇▇▇▇ of the Definitive Balance Sheet. Any
such Notice of Disagreement shall specify in reasonable detail the nature of any
disagreement so asserted. If ▇▇▇▇▇▇▇ shall give a Notice of Disagreement, Buyer
and ▇▇▇▇▇▇▇ shall attempt in good faith to resolve their disagreements. If Buyer
and ▇▇▇▇▇▇▇ are unable to resolve all of their disagreements with respect to the
Definitive Balance Sheet within 30 days of good faith negotiations after receipt
of the Notice of Disagreement, then the dispute shall be submitted to an
accounting firm of international recognition, with auditing and accounting
offices in the United States and Germany, and mutually acceptable to ▇▇▇▇▇▇▇ and
Buyer (the "Independent Accounting Firm"), which shall, acting as experts and
not as arbitrators, determine, and only with respect to the remaining
differences so submitted, whether, and to what extent, if
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any, the Definitive Balance Sheet or the amount of net working capital thereon,
requires adjustment. The Independent Accounting Firm shall not at the time of
selection be providing, and in the two years prior thereto shall not have
provided, auditing or accounting services to either party. Buyer and ▇▇▇▇▇▇▇
shall direct the Independent Accounting Firm to use its best efforts to render
its determination within 30 days after the submission of any such dispute to the
Independent Accounting Firm. The determination of the Independent Accounting
Firm shall be conclusive, final and binding on the parties. The fees and
disbursements of the Independent Accounting Firm shall be borne fifty percent by
Buyer and fifty percent by ▇▇▇▇▇▇▇.
(iv) In calculating the adjustments provided by this
Section 1.4(c), it is the intention of the parties to avoid double payment,
double-crediting or other double-counting of items which would result in an
inequitable and unintended benefit to one party or parties to the detriment of
the other party or parties, and no adjustment pursuant to this Section 1.4(c)
shall be made for any loss contingencies for which Buyer has already recovered
indemnification or received reimbursement pursuant to the terms of this
Agreement.
(d) Earn-out Payments.
(i) Provided the Closing occurs, Buyer will pay to
▇▇▇▇▇▇▇, in addition to the Purchase Price and any amounts payable by Buyer
pursuant to Sections 1.4(b) and (c), an amount equal to ten percent (10%) of the
purchase price (after application of any discounts actually taken) of certain
systems sold, as follows: (A) each AWP300 system sold (for money or an agreement
to pay money) to any customer, (B) each 300mm wet surface preparation system
(other than an AWP300 system) sold (for money or an agreement to pay money) to
the customers listed on Section 1.4(d)(i)(1) of the ▇▇▇▇▇▇▇ Disclosure Schedule,
or their affiliates, and (C) each AWP200 system sold (for money or an agreement
to pay money) to the customers listed on Section 1.4(d)(i)(2) of the ▇▇▇▇▇▇▇
Disclosure Schedule or their affiliates, by Buyer or any subsidiary of Buyer in
2003 or 2004, it being specifically understood that any systems delivered to
customers as contemplated under Section 5.14 below shall not be included in the
calculation of systems "sold" for purposes of calculating the Earn-out, and any
systems delivered to customers prior to the Effective Time will not be eligible
for the Earn-out, up to an aggregate maximum of $5 million (the "Earn-out").
(ii) For purposes of this Section 1.4(d), a system
shall be deemed "sold" upon delivery of the system to the customer, and Earn-out
amounts will be earned by ▇▇▇▇▇▇▇ pro rata (i.e., at the rate of ten percent
(10%)) as payments are received by Buyer or its subsidiaries toward the purchase
price for each relevant system. The Earn-out shall be payable with respect to
each relevant system delivered to a customer on or prior to December 31, 2004,
even if it is paid for or subject to acceptance by the customer following
December 31, 2004.
(iii) The Earn-out, if any, shall be payable by Buyer
as follows: (A) on or before March 15, 2004, Buyer shall pay the Earn-out
amounts attributable to payments received by Buyer on or before December 31,
2003 from customers for sales of relevant systems; (B) on or before March 15,
2005, Buyer shall pay the Earn-out amounts attributable to payments received by
Buyer after December 31, 2003 and on or before December 31, 2004 from customers
for sales of relevant systems; and (C) if payments are thereafter received by
Buyer for relevant
5
systems delivered to a customer on or prior to December 31, 2004, Buyer shall
pay ▇▇▇▇▇▇▇ the Earn-out amount attributable to each such payment, if any,
within twenty (20) business days following receipt thereof by Buyer.
Notwithstanding the foregoing, Buyer shall have the right to offset payment of
the Earn-out against any amounts payable to Buyer by ▇▇▇▇▇▇▇ at the time the
Earn-out is to be paid.
1.5 Closing. The closing of the transactions contemplated hereby
(the "Closing") will take place on March 31, 2003, or as soon as practicable
thereafter, or at such other time as the parties mutually agree. The Closing
will take place at the offices of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ or at such other location or locations as the
parties agree.
1.6 Effective Time. At the Effective Time, all properties, rights,
privileges and powers to be transferred to Buyer will vest in Buyer and all
debts, liabilities and duties to be assumed by Buyer hereunder will be assumed
by Buyer.
1.7 Allocation of Purchase Price. ▇▇▇▇▇▇▇ and Buyer agree to
allocate the value of the Purchase Price among the Transferred Subsidiaries, the
Assets and the Assumed Contracts for financial accounting and tax purposes in
accordance with the allocation schedule included in Section 1.7 of the ▇▇▇▇▇▇▇
Disclosure Schedule. Neither ▇▇▇▇▇▇▇ nor Buyer will voluntarily take, nor will
they cause or permit any of their respective subsidiaries to take, any position
for purposes of any federal, state, provincial, or local income tax with respect
to the allocation of the Purchase Price that is inconsistent with such
allocation.
1.8 No Tax Election. Buyer will not make an election or permit/cause
any Directly Transferred Subsidiary to make an election under Section 338(h)(10)
or Section 338(g) of the United States Internal Revenue Code of 1986, as amended
(the "Code") (and any corresponding elections under state, local, or foreign
law) with regard to the transactions contemplated by this Agreement.
1.9 Transfer of ▇▇▇▇▇▇▇ Wet Products GmbH to ▇▇▇▇▇▇▇ Cayman.
▇▇▇▇▇▇▇ shall cause ownership of one hundred percent (100%) of the capital stock
of Wet Products GmbH to be transferred directly to ▇▇▇▇▇▇▇ Cayman, not later
than five (5) business days prior to the Closing. The transfer of Wet Products
GmbH shall be effected in a manner consistent with Section 1.9 of the ▇▇▇▇▇▇▇
Disclosure Schedule, pursuant to documentation that is in form and substance
reasonably satisfactory to Buyer and its counsel.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ represents and warrants to Buyer as follows, except as disclosed
in a document of even date herewith delivered by ▇▇▇▇▇▇▇ to Buyer referring to
the representations and warranties in this Agreement (the "▇▇▇▇▇▇▇ Disclosure
Schedule"). The ▇▇▇▇▇▇▇ Disclosure Schedule will be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
II, and the disclosure in any such numbered and lettered section of the
6
▇▇▇▇▇▇▇ Disclosure Schedule shall qualify only the corresponding section in this
Article II, except to the extent disclosure in any numbered and lettered section
of the ▇▇▇▇▇▇▇ Disclosure Schedule is specifically cross-referenced in another
numbered and lettered section of the ▇▇▇▇▇▇▇ Disclosure Schedule.)
2.1 Due Incorporation.
(a) ▇▇▇▇▇▇▇, MII and each of the ▇▇▇▇▇▇▇ Subsidiaries is a
corporation duly organized, validly existing, and, where such term is recognized
under applicable law, in good standing under the laws of its jurisdiction of
organization, with all requisite corporate power and authority to own, lease,
and operate its properties and to carry on its business as now being conducted.
There are no grounds to initiate insolvency proceedings against Wet Products
GmbH. ▇▇▇▇▇▇▇, and each of the ▇▇▇▇▇▇▇ Subsidiaries is qualified to do business
and is, where such term is recognized under applicable law, in good standing as
a foreign corporation in each jurisdiction where the nature of the properties
owned, leased, or operated by it and the business transacted by it require such
qualification, except where the failure to be so qualified would not reasonably
be expected to have a Wet Business Adverse Effect. The jurisdictions in which
each of the ▇▇▇▇▇▇▇ Subsidiaries is qualified to do business as a foreign
corporation are set forth next to each such entity's name on Section 2.1(a) of
the ▇▇▇▇▇▇▇ Disclosure Schedule. True, correct, and complete copies of the
organizational documents of each ▇▇▇▇▇▇▇ Subsidiary have been delivered to
Buyer. Except as set forth in such organizational documents, there are no
agreements, resolutions or promises concerning the relationship between any of
the ▇▇▇▇▇▇▇ Subsidiaries and its respective stockholders or among the
stockholders of any ▇▇▇▇▇▇▇ Subsidiary, nor is any ▇▇▇▇▇▇▇ Subsidiary under any
obligation to enter into any such agreement, pass any such resolution or make
any such promise.
(b) Section 2.1(a) of the ▇▇▇▇▇▇▇ Disclosure Schedule sets
forth the name of each ▇▇▇▇▇▇▇ Subsidiary, the nation or jurisdiction of its
incorporation or organization, and a description of the equity ownership
interest in each such ▇▇▇▇▇▇▇ Subsidiary by ▇▇▇▇▇▇▇, any other ▇▇▇▇▇▇▇
Subsidiary, and/or any other person. Except as set forth on Section 2.1(b) of
the ▇▇▇▇▇▇▇ Disclosure Schedule, all of the issued and outstanding shares or
other units of capital stock of each Transferred Subsidiary are validly issued,
fully paid and have not been repaid by any means since January 1, 2001 (or to
▇▇▇▇▇▇▇'▇ Knowledge, any time prior to January 1, 2001), including but not
limited to by way of hidden distribution of profits (verdeckte
Gewinnausschuettung), nonassessable, and free of preemptive rights, and are
owned, directly or indirectly, by ▇▇▇▇▇▇▇, MII, or another ▇▇▇▇▇▇▇ Subsidiary,
free and clear of any liens, claims, encumbrances, security interests, equities,
charges, and options of any nature whatsoever, and there are no outstanding
subscriptions, options, calls, contracts, voting trusts, proxies, or other
commitments, understandings, restrictions, arrangements, rights, or warrants,
including any right of conversion or exchange under any outstanding security,
instrument, or other agreement, obligating any such subsidiary to issue,
deliver, or sell, or cause to be issued, delivered, or sold, additional shares
of its capital stock or obligating it to grant, extend, or enter into any such
agreement or commitment. None of the Transferred Subsidiaries is subject or
party to any profit distribution, profit-sharing or profit transfer agreements.
7
(c) At the Closing, MII and MTF will convey to Buyer good
and valid title to shares or other units of capital stock representing one
hundred percent (100%) of the equity ownership interest of each Directly
Transferred Subsidiary, free and clear of any Encumbrances. At the time of the
Closing, ▇▇▇▇▇▇▇ Cayman will hold good and valid title to shares or other units
of capital stock representing one hundred percent (100%) of the equity ownership
interest of Wet Products GmbH.
(d) Except as set forth in Section 2.1(d) of the ▇▇▇▇▇▇▇
Disclosure Schedule, neither of the Directly Transferred Subsidiaries has any
direct or indirect subsidiaries. Except as set forth in Section 2.1(d) of the
▇▇▇▇▇▇▇ Disclosure Schedule, none of the Directly Transferred Subsidiaries nor
any of their direct or indirect subsidiaries: (i) maintains any profit and loss
sharing agreement or similar "direct company relationship" with any third party,
(ii) is obligated to acquire any participation, trustor's position or
subparticipation in any company, or (iii) has entered into any enterprise
agreement within the meaning of Sections 291 or 292 of the German Stock
Corporation Act (AktG) or under any similar law under another jurisdiction.
(e) None of the Transferred Subsidiaries has any
Supervisory, Advisory or Administrative Board or similar body, and there is no
obligation other than as set forth by law or in its organizational documents to
constitute such a body.
2.2 Due Authorization. ▇▇▇▇▇▇▇ and MII each has full corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery, and performance by ▇▇▇▇▇▇▇ and MII
of this Agreement have been duly and validly approved and authorized by the
Boards of Directors of ▇▇▇▇▇▇▇ and MII, and no other actions or proceedings on
the part of ▇▇▇▇▇▇▇ or its stockholders are necessary to authorize this
Agreement and the transactions contemplated hereby. ▇▇▇▇▇▇▇ and MII have each
duly and validly executed and delivered this Agreement. This Agreement
constitutes the legal, valid, and binding obligation of ▇▇▇▇▇▇▇ and MII
enforceable against them in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization, or other laws from time to time in effect
which affect creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
2.3 Non-Contravention; Consents and Approvals.
(a) The execution and delivery of this Agreement by ▇▇▇▇▇▇▇
and MII does not, and the performance by ▇▇▇▇▇▇▇, MII, WPI and MTF of their
obligations hereunder and the consummation of the transactions contemplated
hereby, will not conflict with, result in a violation or breach of, constitute
(with or without notice or lapse of time or both) a default under, result in or
give to any person any right of payment or reimbursement, termination,
cancellation, modification or acceleration of, or result in the creation or
imposition of any lien upon any of the assets or properties of ▇▇▇▇▇▇▇, MII or
any ▇▇▇▇▇▇▇ Subsidiary under, any of the terms, conditions or provisions of (i)
the certificate of incorporation or bylaws (or other comparable charter
documents) of ▇▇▇▇▇▇▇, MII or any ▇▇▇▇▇▇▇ Subsidiary, or (ii) subject to the
taking of the actions described in paragraph (b) of this Section 2.3, (x) Laws
applicable to ▇▇▇▇▇▇▇, MII and the ▇▇▇▇▇▇▇ Subsidiaries, or any judgment,
decree, order, writ, permit, or license, of any
8
Governmental Entity, applicable to ▇▇▇▇▇▇▇, MII or any ▇▇▇▇▇▇▇ Subsidiary or any
of their respective assets or properties, or (y) any contract, agreement, or
commitment to which ▇▇▇▇▇▇▇, MII or any ▇▇▇▇▇▇▇ Subsidiary is a party or by
which ▇▇▇▇▇▇▇, MII or any ▇▇▇▇▇▇▇ Subsidiary or any of their respective assets
or properties is bound, excluding from the foregoing clauses (x) and (y)
conflicts, violations, breaches, defaults, terminations, modifications,
accelerations, and creations and impositions of liens which would not reasonably
be expected to have a Wet Business Adverse Effect or would not result in the
inability of ▇▇▇▇▇▇▇, MII, WPI or MTF to consummate the transactions
contemplated by this Agreement.
(b) No consent, approval, order, or notice to or
authorization of, or registration, declaration, or filing with, any Governmental
Entity is required to be made or obtained by ▇▇▇▇▇▇▇, MII or any of the ▇▇▇▇▇▇▇
Subsidiaries for the execution and delivery of this Agreement or the
consummation by ▇▇▇▇▇▇▇, MII, WPI or MTF of the transactions contemplated
hereby, the failure to obtain which would reasonably be expected to have a Wet
Business Adverse Effect or prevent or materially delay the consummation of the
transactions contemplated hereby, except for:
(i) the filing of a pre-merger notification report
by ▇▇▇▇▇▇▇ or its ultimate parent entity under the HSR Act, and the expiration
or termination of the applicable waiting period thereunder;
(ii) the filing of required documents with the
relevant Governmental Entities of the countries or political subdivisions in
which ▇▇▇▇▇▇▇ is qualified to transact business, including, if applicable, any
filing under the German Act Against Restraints on Competition of 1999 (Gesetz
gegen Wettbewerbsbeschraenkungen), and the expiration or termination of the
waiting period thereunder;
(iii) ministerial notices, filings and registrations
with local Governmental Entities in connection with the transfers of the capital
stock of Wet Products GmbH to ▇▇▇▇▇▇▇ Cayman;
(iv) such other filings, authorization, orders and
approvals as may be required of state and local Governmental Entities;
(c) The transfer of each of the Assumed Contracts (i) does
not require consent from any party to the Assumed Contract, and (ii) will not
result in or give to any person any right of payment, termination, cancellation,
acceleration or modification in or with respect to, any such Assumed Contract.
2.4 Capital Structure.
(a) Section 2.4 of the ▇▇▇▇▇▇▇ Disclosure Schedule sets
forth for each of the Transferred Subsidiaries:
9
(i) where such concept is recognized under
applicable legal and accounting principles, the number of authorized shares or
other units of each class or series of capital stock;
(ii) the number of shares or other units of each
class or series of capital stock which are issued and outstanding as of the date
of this Agreement and, in the case of Wet Products GmbH, the amount of nominal
capital (Stammkapital) represented by each share;
(iii) where applicable, the registered share capital;
(iv) the number of shares of other units of each
class or series of capital stock, if any, which are held in the treasury of such
entity as of the date of this Agreement;
(v) where applicable, the number of shares or other
units of each class or series of capital stock, if any, which are reserved for
issuance, indicating each particular reservation; and
(vi) the aggregate number of shares or other units of
each class or series of capital stock, if any, subject to employee stock options
or other rights to purchase or receive capital stock granted under any stock
option or other stock-based employee or non-employee director benefit plans.
(b) There are no authorized, issued, reserved for issuance,
or outstanding, (i) securities of ▇▇▇▇▇▇▇ or any of the ▇▇▇▇▇▇▇ Subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of the Transferred Subsidiaries, or (ii) warrants, calls, options, or
other rights to acquire from the Transferred Subsidiaries, or any obligation of
any of the Transferred Subsidiaries to issue, any shares of capital stock or
voting securities or securities convertible into or exchangeable or exercisable
for capital stock or voting securities of the Transferred Subsidiaries; and,
except for this Agreement and/or as set forth in the respective certificate of
incorporation or bylaws (or other comparable charter documents) of each
Transferred Subsidiary, there are no outstanding obligations of the Transferred
Subsidiaries to repurchase, redeem, or otherwise acquire any such securities or
to issue, deliver, or sell, or cause to be issued, delivered, or sold, any such
securities.
(c) The Profit and Loss Transfer Agreement, dated March 30,
2001, as amended by the Agreement on the Alteration of the Control and Profit
and Loss Transfer Agreement, dated February 1, 2002 (the "Profit Transfer
Agreement") between Wet Products GmbH and ▇▇▇▇▇▇▇ Technology Holding GmbH
("Holding GmbH") was terminated effective December 31, 2002, without any further
obligations of Wet Products GmbH to Holding GmbH or any other person, other than
obligations to pay over profits or be reimbursed for losses attributable to 2001
and 2002, which obligations will be satisfied or cancelled prior to the
Effective Time.
10
2.5 Financial Statements; Undisclosed Liabilities; Other Documents.
(a) Attached as Section 2.5(a) of the ▇▇▇▇▇▇▇ Disclosure
Schedule are the statutory financial statements of Wet Products GmbH for the
year ended December 31, 2002 (the "Wet Products GmbH Financial Statements").
Except as otherwise specified in Section 2.5(a) of the ▇▇▇▇▇▇▇ Disclosure
Schedule, the Wet Products GmbH Financial Statements have been prepared in
accordance with generally accepted accounting principles applicable in Germany,
consistently applied and without change from the preceding year. The Wet
Products GmbH Financial Statements present fairly the financial position of Wet
Products GmbH at and as of December 31, 2002 and the results of operations of
Wet Products GmbH for the year then ended, in accordance with such generally
accepted accounting principles.
(b) WPI and Wet Products GmbH do not have any liabilities or
obligations of any nature, whether accrued, absolute, contingent, or otherwise,
except (i) as set forth on or reflected in the pro forma unaudited balance
sheets of the Wet Business as of September 30, 2002 and as of December 31, 2002,
attached as Section 2.5(b)(1) of the ▇▇▇▇▇▇▇ Disclosure Schedule (the "Pro Forma
Wet Division Balance Sheets"), (ii) liabilities and obligations incurred since
December 31, 2002 which were incurred in the ordinary course of business
consistent with past practice, and (iii) as otherwise set forth on the ▇▇▇▇▇▇▇
Disclosure Schedule.
(c) Immediately following the Effective Time, none of the
Transferred Subsidiaries will have any liabilities or obligations to STEAG AG,
▇▇▇▇▇▇▇ or any of their respective subsidiaries or lenders. None of STEAG AG,
▇▇▇▇▇▇▇ nor any of their respective subsidiaries has assigned or otherwise
transferred any liability or obligation owed to it by a Transferred Subsidiary,
which liability or obligation remains outstanding as of the date hereof or will
be outstanding as of the Effective Time.
2.6 No Material Adverse Effects or Changes. Except as described on
Section 2.6 of the ▇▇▇▇▇▇▇ Disclosure Schedule, or as contemplated by this
Agreement (including the elimination of intercompany accounts, intercompany
obligations or indebtedness, and the transfer or removal of cash from the
▇▇▇▇▇▇▇ Subsidiaries as contemplated by Section 4.2, and the reductions in force
set forth in Schedule 5.3), since September 30, 2002, none of the ▇▇▇▇▇▇▇
Subsidiaries has (i) taken any of the actions set forth in Section 4.1 hereof,
(ii) suffered any Wet Business Material Adverse Effect, (iii) suffered any
damage, destruction, or Loss to any of its assets or properties which is
material to the ▇▇▇▇▇▇▇ Subsidiaries, taken as a whole (whether or not covered
by insurance), or (iv) increased the base compensation of any executive officer
of any of the ▇▇▇▇▇▇▇ Subsidiaries, other than in the ordinary course of
business consistent with past practice.
2.7 Properties.
(a) Except as disclosed on Section 2.7(a) of the ▇▇▇▇▇▇▇
Disclosure Schedule, the Transferred Subsidiaries (i) have good and valid title
to all of the tangible and intangible assets, properties, and rights reflected
in the Wet Division Balance Sheets for such Transferred Subsidiaries or acquired
after December 31, 2002 (other than assets leased under the leases set forth in
Section 2.7 of the ▇▇▇▇▇▇▇ Disclosure Schedule and assets disposed of in the
ordinary
11
course of business since the date of the Wet Division Balance Sheets), and (ii)
at the Closing Date will have good and valid title to all material tangible and
intangible assets, properties, and rights referred to in clause (i) above, in
each case free and clear of any Encumbrances, except for liens for Taxes not yet
due and payable. Section 2.7 of the ▇▇▇▇▇▇▇ Disclosure Schedule sets forth a
list of the assets, properties and rights referred to in clause (i) above
reflected on the Wet Products GmbH Base Balance Sheet.
(b) Except as otherwise identified in Section 2.7(b) of the
▇▇▇▇▇▇▇ Disclosure Schedule hereto, the material tangible Assets and the
material tangible assets of each of the Transferred Subsidiaries are, in the
aggregate, in good condition and repair, reasonable wear and tear excepted, and
are in condition suitable for the use to which they are put in the respective
business of each of the ▇▇▇▇▇▇▇ Subsidiaries.
(c) Set forth on Section 2.7(c) of the ▇▇▇▇▇▇▇ Disclosure
Schedule is a complete list of the facilities in which the ▇▇▇▇▇▇▇ Subsidiaries
operate or conduct business, and for each such facility identifying the title of
the lease, the date of expiration, the monthly rent and the landlord. True and
complete copies of every such lease have been delivered or made available to
Buyer or its counsel.
2.8 Title to Assets. ▇▇▇▇▇▇▇ or WPI has good title to or a valid
leasehold in, all of the Assets, free and clear of all Encumbrances except for
Permitted Encumbrances. At the Closing, ▇▇▇▇▇▇▇ will sell, convey, assign,
transfer and deliver to Buyer good title and all its right, title and interest,
in and to all of the Assets, free and clear of all Encumbrances.
2.9 Intellectual Property. Except as disclosed in Section 2.9 of the
▇▇▇▇▇▇▇ Disclosure Schedule:
(a) The ▇▇▇▇▇▇▇ Intellectual Property is either (i) owned by
the relevant ▇▇▇▇▇▇▇ Subsidiary free and clear of any lien, encumbrance, pledge,
or similar interest and is not subject to any license, royalty or other
agreement or (ii) licensed by the relevant ▇▇▇▇▇▇▇ Subsidiary pursuant to an
agreement described in Section 2.9(g) below. The ▇▇▇▇▇▇▇ Intellectual Property
directly or indirectly transferred to Buyer as of the Effective Time pursuant to
this Agreement will include all of the intellectual property owned, licensed or
controlled by ▇▇▇▇▇▇▇ necessary to conduct the Wet Business, as it is currently
conducted, and, to ▇▇▇▇▇▇▇'▇ Knowledge, all of the intellectual property
necessary to conduct the Wet Business, as it is currently conducted.
(b) To ▇▇▇▇▇▇▇'▇ Knowledge, there have been no challenges to
the validity of any of the ▇▇▇▇▇▇▇ Intellectual Property. None of the ▇▇▇▇▇▇▇
Intellectual Property has been since January 1, 2001 (or to ▇▇▇▇▇▇▇'▇ Knowledge,
any time prior to January 1, 2001) or currently is the subject of any pending
or, to ▇▇▇▇▇▇▇'▇ Knowledge, threatened litigation or claim of infringement.
(c) No license or royalty agreement to which any ▇▇▇▇▇▇▇
Subsidiary is a party (including any agreement regarding Licensed Intellectual
Property as defined below) is in material breach or default by ▇▇▇▇▇▇▇ or, to
▇▇▇▇▇▇▇'▇ Knowledge any other party thereto, or the
12
subject of any notice of termination given or, to ▇▇▇▇▇▇▇'▇ Knowledge,
threatened. All license, royalty and other fees under each license or royalty
agreement regarding Licensed Intellectual Property have been fully and timely
paid.
(d) To ▇▇▇▇▇▇▇'▇ Knowledge, none of the products
manufactured or sold by the ▇▇▇▇▇▇▇ Subsidiaries, nor the marketing,
distribution and use by the ▇▇▇▇▇▇▇ Subsidiaries of any such product or any
service, infringe any trademark, service ▇▇▇▇, trade name, copyright, trade
secret, patent, or confidential or proprietary rights of a third party, and the
▇▇▇▇▇▇▇ Subsidiaries have not received any notice contesting their right to use
any ▇▇▇▇▇▇▇ Intellectual Property.
(e) To the extent that any ▇▇▇▇▇▇▇ Intellectual Property is
licensed by a third party to any ▇▇▇▇▇▇▇ Subsidiary (such ▇▇▇▇▇▇▇ Intellectual
Property referred to as "Licensed Intellectual Property"), the consummation of
the transactions contemplated hereunder will not (i) constitute a breach or
default under any license agreement relating to any Licensed Intellectual
Property, which breach or default would give the other contracting party a right
to terminate such agreement; (ii) alter or diminish the rights assigned or
transferred to Buyer or ▇▇▇▇▇▇▇ Cayman from that originally granted to any
▇▇▇▇▇▇▇ Subsidiary (as the case may be) under any such agreement; (iii) alter or
increase the obligations delegated or transferred to Buyer or ▇▇▇▇▇▇▇ Cayman
from that originally imposed on any ▇▇▇▇▇▇▇ Subsidiary (as the case may be)
under any such agreement; or (iv) require the consent of or any payment to any
licensor under any such agreement.
(f) All of the issued or registered ▇▇▇▇▇▇▇ Intellectual
Property, including without limitation patents and registered trademarks,
service marks and copyrights, are issued or registered solely in the name of one
or more Transferred Subsidiaries.
(g) ▇▇▇▇▇▇▇ has disclosed to Buyer any standard forms of
confidentiality and assignment agreement generally signed by employees of the
▇▇▇▇▇▇▇ Subsidiaries. All employees of the ▇▇▇▇▇▇▇ Subsidiaries who are employed
for the purpose of the development, invention or creation of any ▇▇▇▇▇▇▇
Intellectual Property have signed an agreement which is substantially similar to
the aforementioned form which, when signed by an employee, is valid and
enforceable against such employee.
(h) Section 2.9(h) of the ▇▇▇▇▇▇▇ Disclosure Schedule sets
forth a true and complete list of (i) all material agreements regarding Licensed
Intellectual Property; (ii) all patents and patent applications, registered
trademarks and service marks, registered copyrights, registered mask works,
trade names and service marks and any applications therefor, included in the
▇▇▇▇▇▇▇ Intellectual Property (other than any Licensed Intellectual Property),
and specifies the jurisdictions in which such ▇▇▇▇▇▇▇ Intellectual Property has
been issued or registered or in which an application for such issuance and
registration has been filed, including the respective registration or
application numbers and as to the patents, the names of all inventors; and (iii)
all material agreements to which any of the ▇▇▇▇▇▇▇ Intellectual Property (other
than any Licensed Intellectual Property) may be subject.
13
(i) There are no exclusive licenses, exclusive
distributorship agreements, or noncompetition agreements with respect to the use
of any ▇▇▇▇▇▇▇ Intellectual Property or the development, sale, or distribution
of any products of any ▇▇▇▇▇▇▇ Subsidiary, or any other material restrictions
regarding the right of any of the ▇▇▇▇▇▇▇ Subsidiaries to fully exploit any
▇▇▇▇▇▇▇ Intellectual Property anywhere in the world. None of the ▇▇▇▇▇▇▇
Subsidiaries is a party to any reseller or distribution agreement, other than
agreements that can be cancelled or terminated without cost or penalty upon
notice of sixty (60) days or less.
(j) Each of the Patents set forth on Section 2.9(j) of the
▇▇▇▇▇▇▇ Disclosure Schedule is owned by the relevant Transferred Subsidiary free
and clear of any lien, encumbrance, pledge, or similar interest.
2.10 Insurance. Section 2.10 of the ▇▇▇▇▇▇▇ Disclosure Schedule
contains an accurate and complete list of all policies of fire, liability,
worker's compensation, title, and other forms of insurance owned or held by any
Transferred Subsidiary covering or relating to the Assets. All such policies are
in full force and effect, all premiums with respect thereto covering all periods
up to and including the Closing Date have been, or prior to the Closing Date
will be, paid and no notice of cancellation or termination has been received
with respect to any such policy. ▇▇▇▇▇▇▇ has delivered or made available to
Buyer a true and complete copy or description of all insurance policies
applicable to the Transferred Subsidiaries covering or relating to the Assets,
that are currently in effect. Except as set forth in Section 2.10 of the ▇▇▇▇▇▇▇
Disclosure Schedule, none of the Transferred Subsidiaries has been unable to
obtain insurance with respect to its assets or operations since January 1, 2001.
2.11 International Employee Plans. Section 2.11 of the ▇▇▇▇▇▇▇
Disclosure Schedule contains a complete list or a description of the ▇▇▇▇▇▇▇
International Employee Plans. Each ▇▇▇▇▇▇▇ International Employee Plan has been
established, maintained, and administered in material compliance with its terms
and conditions and with the requirements prescribed by any and all statutory or
regulatory laws that are applicable to such ▇▇▇▇▇▇▇ International Employee Plan.
No ▇▇▇▇▇▇▇ International Employee Plan provides for the issuance or delivery of
securities of ▇▇▇▇▇▇▇ or any of its subsidiaries, nor does any ▇▇▇▇▇▇▇
International Employee Plan have unfunded liabilities that, as of the Closing
Date, will not be offset by insurance or fully accrued. Except as required by
law, no condition exists that would prevent any of the ▇▇▇▇▇▇▇ Subsidiaries (or
Buyer following the Acquisition) from terminating or amending any ▇▇▇▇▇▇▇
International Employee Plan at any time for any reason.
2.12 United States Employee Matters and ERISA. With regard to those
employees of any ▇▇▇▇▇▇▇ Subsidiary which is located within the United States (a
"US ▇▇▇▇▇▇▇ Subsidiary"):
(a) Section 2.12 of ▇▇▇▇▇▇▇ Disclosure Schedule contains a
true and complete list of each employee benefit plan, program, policy,
arrangement, or agreement which is or has been sponsored, maintained, or
contributed to by any US ▇▇▇▇▇▇▇ Subsidiary covering employees, former
employees, directors, or former directors of such US ▇▇▇▇▇▇▇ Subsidiary or their
beneficiaries, or providing benefits to such persons in respect of services
provided to any such entity, including any employee benefit plans within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and any severance
14
or change in control agreement, plan, policy, or program between the US ▇▇▇▇▇▇▇
Subsidiary and any employee thereof (collectively, the "US ▇▇▇▇▇▇▇ Benefit
Plans"). For purposes of this Section 2.12, "US ▇▇▇▇▇▇▇ Subsidiary" includes any
▇▇▇▇▇▇▇ Subsidiary that has employees in the U.S., other than employees of
▇▇▇▇▇▇▇ Subsidiaries incorporated outside the U.S.A. who are on temporary
assignment or secondment in the U.S.A.
(b) Contributions. All contributions and other payments
required to be made for any period through the date to which this representation
speaks, by any US ▇▇▇▇▇▇▇ Subsidiary to any US ▇▇▇▇▇▇▇ Benefit Plan (or to any
person pursuant to the terms thereof) have been timely made or paid in full, or,
to the extent not required to be made or paid on or before the date to which
this representation speaks, have been properly reflected in the ▇▇▇▇▇▇▇
Financial Statements.
(c) Qualification; Compliance. Each of the US ▇▇▇▇▇▇▇
Benefit Plans intended to be "qualified" within the meaning of Section 401(a) of
the Code has either obtained from the Internal Revenue Service (the "IRS") a
favorable determination letter as to its qualified status under the Code,
including all amendments to the Code which are currently effective, or has time
remaining to apply under applicable Treasury Regulations or Internal Revenue
Service pronouncements for a determination or opinion letter and to make any
amendments necessary to obtain a favorable determination or opinion letter; and,
to the Knowledge of ▇▇▇▇▇▇▇, no circumstances exist that could reasonably be
expected to result in the revocation of any such determination. Each US ▇▇▇▇▇▇▇
Subsidiary is in compliance in all material respects with, and each of the US
▇▇▇▇▇▇▇ Benefit Plans is and has been operated in all material respects in
compliance with, all applicable laws, rules, and regulations governing such
plan, including ERISA and the Code. Each US ▇▇▇▇▇▇▇ Benefit Plan intended to
provide for the deferral of income, the reduction of salary or other
compensation, or to afford other income tax benefits, complies in all material
respects with the requirements of the applicable provisions of the Code or other
laws, rules, and regulations required to provide such income tax benefits. There
are no pending or, to the Knowledge of ▇▇▇▇▇▇▇, threatened claims under or in
respect of any US ▇▇▇▇▇▇▇ Benefit Plan by or on behalf of any employee, former
employee, director, former director, or beneficiary thereof, or otherwise
involving any US ▇▇▇▇▇▇▇ Benefit Plan (other than routine claims for benefits).
(d) Title I or IV Liabilities. No event has occurred and, to
the Knowledge of ▇▇▇▇▇▇▇, there exists no condition or set of circumstances that
would reasonably be expected (and none of the transactions contemplated
hereunder are reasonably likely) to subject (i) any US ▇▇▇▇▇▇▇ Subsidiary to any
material liability (whether to a governmental agency, a multiemployer plan, or
any other person or entity) arising under or based upon any provision of Title I
or Title IV of ERISA or (ii) ▇▇▇▇▇▇▇, any US ▇▇▇▇▇▇▇ Subsidiary or any entity
which under Code Section 414(b), (c), (m) or (o) would be required to be a
single employer with any US ▇▇▇▇▇▇▇ Subsidiary to any material liability
(whether to a governmental agency, a multiemployer plan or any other person or
entity) arising under or based upon any provision under Title IV of ERISA.
(e) Documents Made Available. ▇▇▇▇▇▇▇ has made available to
Buyer a true and correct copy of each collective bargaining agreement to which
any US ▇▇▇▇▇▇▇ Subsidiary is a party or under which any US ▇▇▇▇▇▇▇ Subsidiary
has obligations and, with respect to each US
15
▇▇▇▇▇▇▇ Benefit Plan, where applicable, (i) such plan, including all amendments
thereto, and the most recent summary plan description, (ii) the five (5) most
recent annual reports filed with the IRS, (iii) each related trust agreement and
insurance contract, (iv) the most recent determination of the IRS with respect
to the qualified status of such US ▇▇▇▇▇▇▇ Benefit Plan, (v) the most recent
actuarial report or valuation for the most recent three (3) years, (vi)
compliance and nondiscrimination tests for the last three (3) plan years, (vii)
all insurance policies and certificates purchased by or to provide benefits
under such plan, (viii) all contracts and agreements to which any US ▇▇▇▇▇▇▇
Subsidiary is a party with third party administrators, actuaries, investment
managers, consultants, and other independent contractors that relate to such
plan, and (ix) standard Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") forms and notices and (x) every private letter ruling, prohibited
transaction exemption or other ruling or determination from the IRS, Department
of Labor, Pension Benefit Guaranty Corporation, or other Governmental Entity
with respect to such plan. To the Knowledge of ▇▇▇▇▇▇▇, in the case of each US
▇▇▇▇▇▇▇ Benefit Plan, no employee handbook or similar employee communication
relating to such plan nor any written communication of benefits under such plan
from the administrator thereof, in either case that has not been delivered or
made available to Buyer, describes the terms of such plan in a manner that is
materially inconsistent with the documents and summary plan descriptions
relating to such plan that have been made available pursuant to the foregoing
sentence.
(f) Post-Retirement Obligations. No US ▇▇▇▇▇▇▇ Benefit Plan
provides post-retirement health or welfare benefits to any individual, other
than as required by Section 601 et seq. of ERISA and Section 4980B of the Code
or any other laws, rules, or regulations.
2.13 Labor and Pension Matters.
(a) Each ▇▇▇▇▇▇▇ Subsidiary has conducted and currently is
conducting its business in compliance in all material respects with all laws
relating to employment and employment practices, terms, and conditions of
employment, wages, and hours and nondiscrimination in employment. Except as
disclosed in Section 2.13 of the ▇▇▇▇▇▇▇ Disclosure Schedule, there are, and
during the past three years there have been, no labor strikes, slow-downs or
work stoppages pending or, to ▇▇▇▇▇▇▇'▇ Knowledge, threatened against or
involving any ▇▇▇▇▇▇▇ Subsidiary. Except as disclosed in Section 2.13 of the
▇▇▇▇▇▇▇ Disclosure Schedule, none of the employees of any ▇▇▇▇▇▇▇ Subsidiary is
covered by any collective bargaining agreement, no collective bargaining
agreement is currently being negotiated, and, to ▇▇▇▇▇▇▇'▇ Knowledge, no attempt
is currently being made to organize any employees of any ▇▇▇▇▇▇▇ Subsidiary to
form or enter a labor union or similar organization.
(b) All liabilities of Wet Products GmbH concerning payments
for retirement, disablement or for surviving dependants and similar liabilities,
whether they result from written promises, company practice or otherwise, have
been reflected in the Wet Products GmbH Financial Statements with the full
proportionate cash value (Teilwert), even if such provision is not allowable for
tax purposes (e.g., because there is no written promise or because of the
impermissibility of making up for provisions omitted in the past). This applies
to expectancies as well, whether vested or unvested. To the extent that a
pension support fund (Unterstutzungskasse) of Wet Products GmbH has assets less
than the Teilwert of pension
16
entitlements and expectancies against such support fund, a provision has been
made for the difference.
(c) Section 2.13 of the ▇▇▇▇▇▇▇ Disclosure Schedule contains
a correct and complete list of all employment relationships with Wet Products
GmbH, including each employee's name (to be delivered at Closing only), date of
birth, start date with Wet Products GmbH, benefits and other employment
information. No other employment relationships will transfer to Wet Products
GmbH (whether by contract or by operation of law) as a result of the
Acquisition. Wet Products GmbH is not a member of any employers' association,
which membership gives rise to any obligations of Wet Products GmbH to its
employees. No social compensation plans or reconciliation of interest plans that
were entered into by or on behalf of Wet Products GmbH are currently effective
or have an after-effect ("Nachwirkung") according to the German
Betriebsverfassungsgesetz. All collective agreements constituting restrictions
on reductions in force that were entered into by or on behalf of Wet Products
GmbH have been terminated effective no later than April 30, 2003, and have no
after-effect ("Nachwirkung") according to the German Betriebsverfassungsgesetz.
Except for the currently planned reductions in force, lay-offs and social
compensation plans and/or reconciliation of interest plans referenced in this
Agreement, any reconciliation of interests required has been concluded and fully
complied with. No claims for compensation payments have been asserted by
employees of Wet Products GmbH, and no lawsuits are pending in this respect.
Except as set forth in Section 2.13 of the ▇▇▇▇▇▇▇ Disclosure Schedule, none of
the Transferred Subsidiaries has employed or currently employs any independent
contractors.
2.14 Tax Returns and Audits. Except as set forth in Section 2.14 of
the ▇▇▇▇▇▇▇ Disclosure Schedule:
(a) Filing of Timely Tax Returns. Each ▇▇▇▇▇▇▇ Subsidiary
has filed (or there has been filed on its behalf) all material Tax Returns
required to be filed by each of them under applicable law. All such Tax Returns
were and are in all material respects true, complete, and correct and filed on a
timely basis. To ▇▇▇▇▇▇▇'▇ Knowledge, no claim has ever been made by any
authority in any jurisdiction in which ▇▇▇▇▇▇▇ does not file Tax Returns that
▇▇▇▇▇▇▇ is or may be subject to taxation by that jurisdiction.
(b) Payment of Taxes. Each ▇▇▇▇▇▇▇ Subsidiary has, within
the time and in the manner prescribed by law, paid all Taxes required to have
been paid except for those contested in good faith and for which adequate
reserves have been provided.
(c) Tax Liens. There are no Tax liens or security interests
upon the assets of any ▇▇▇▇▇▇▇ Subsidiary that arose in connection with the
failure (or alleged failure) to pay any Tax, except liens for Taxes not yet due.
(d) Withholding Taxes. Each ▇▇▇▇▇▇▇ Subsidiary has complied
in all material respects with the provisions of applicable law relating to the
withholding of Taxes, including the requirement, within the time and in the
manner prescribed by law, to withhold from amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party and
pay over to the proper Governmental Entities all amounts required.
17
(e) Extensions of Time for Filing Tax Returns. No ▇▇▇▇▇▇▇
Subsidiary has requested any extension of time within which to file any Tax
Return, which Tax Return has not since been filed.
(f) Waivers of Statute of Limitations. No ▇▇▇▇▇▇▇ Subsidiary
has executed any outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any Taxes or Tax
Returns.
(g) Audit, Administrative and Court Proceedings. No audits
or other administrative proceedings or court proceedings are presently pending
with regard to any Taxes or Tax Returns of any ▇▇▇▇▇▇▇ Subsidiary. There is no
dispute concerning any Tax liability of any ▇▇▇▇▇▇▇ Subsidiary either (i)
claimed by any authority in writing or (ii) as to which any of ▇▇▇▇▇▇▇, WPI,
MII, MTF and the directors and officers (and employees responsible for Tax
matters) of the ▇▇▇▇▇▇▇ Subsidiaries has Knowledge based upon personal contact
with any agent of such authority.
(h) Powers of Attorney. No power of attorney currently in
force has been granted by any ▇▇▇▇▇▇▇ Subsidiary concerning any Tax matter.
(i) Tax Rulings. No ▇▇▇▇▇▇▇ Subsidiary has received a Tax
Ruling or entered into a Closing Agreement with any taxing authority that would
reasonably be expected to have a continuing Wet Business Adverse Effect after
the Closing Date.
(j) Availability of Tax Returns. ▇▇▇▇▇▇▇ has made available
to Buyer complete and accurate copies of (i) all Tax Returns, and any amendments
thereto, filed by any ▇▇▇▇▇▇▇ Subsidiary since January 1, 2001, (ii) all audit
reports received from any taxing authority relating to any Tax Return filed by
any ▇▇▇▇▇▇▇ Subsidiary and (iii) any Closing Agreements entered into by any
▇▇▇▇▇▇▇ Subsidiary with any taxing authority.
(k) Tax Sharing Agreements. No ▇▇▇▇▇▇▇ Subsidiary is (or to
▇▇▇▇▇▇▇'▇ Knowledge has been) a party to any agreement relating to allocating or
sharing of Taxes.
(l) Liability for Others. None of the ▇▇▇▇▇▇▇ Subsidiaries
(A) has been a member of an affiliated group, as defined in Internal Revenue
Code Section 1504, filing a consolidated federal income tax return, or (B) has
any liability for Taxes of any person other than ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇
Subsidiaries (i) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, or local law), (ii) under any applicable law as a transferee
or successor, (iii) by contract, or (iv) otherwise, excluding potential
obligations to pay tax liabilities for foreign consultants or employees not to
exceed $250,000 in the aggregate.
(m) Accounting Adjustments. None of the ▇▇▇▇▇▇▇ Subsidiaries
has agreed to make, nor is it required to make, any material adjustments under
applicable tax law by reason of a change in accounting method or otherwise.
(n) Partnerships or Joint Ventures. None of the ▇▇▇▇▇▇▇
Subsidiaries is and none has been a member of a limited liability company or a
party to any joint venture,
18
partnership, or other arrangement or contract that is reported as a partnership
for income tax purposes.
(o) Indemnities. None of the ▇▇▇▇▇▇▇ Subsidiaries is a party
to any indemnity for the benefit of any person in connection with any Tax such
as would reasonably be expected to result in a Wet Business Adverse Effect.
(p) Tax Benefits. Neither the execution of this Agreement
nor the consummation of the transactions contemplated hereby will result in any
obligation to repay any grants, tax advantages or comparable benefits of any
kind whatsoever granted to ▇▇▇▇▇▇▇ or any of the ▇▇▇▇▇▇▇ Subsidiaries in respect
of the Wet Business.
(q) Public Infrastructure. All public charges that attach to
public infrastructure works (Erschlie(beta)▇▇▇▇-und sonstige Anliegerbeitrage)
carried out until the date of Closing have been paid in full.
(r) Forgiveness of Intercompany Indebtedness; Transfer of
Wet Products GmbH. No forgiveness of intercompany indebtedness by ▇▇▇▇▇▇▇ or any
of its subsidiaries, nor the transfer of Wet Products GmbH to ▇▇▇▇▇▇▇ Cayman as
provided in Section 1.9 above, has or will create any taxable income to any of
the Transferred Subsidiaries, either because (i) there is no reportable income
created thereby or (ii) any reportable income has been or will be reported on
▇▇▇▇▇▇▇'▇ consolidated return(s) and offset by reportable losses or loss
carryforwards.
(s) Collapsible Corporations; Golden Parachute Payments;
Real Property Holding Company. None of the Transferred Subsidiaries has filed a
consent under Internal Revenue Code Section 341(f) concerning collapsible
corporations. None of the Transferred Subsidiaries has made any payments, is
obligated to make any payments, or is a party to any agreement that under
certain circumstances could obligate it to make any payments that will not be
deductible under IRC Section 280G. None of the Transferred Subsidiaries has been
a United States real property holding corporation within the meaning of IRC
Section 897(c)(2) during the applicable period specified in IRC Section
897(c)(1)(A)(ii).
(t) Inclusion of Income In or Exclusion of Deductions From
Taxable Income. To ▇▇▇▇▇▇▇'▇ Knowledge, none of the ▇▇▇▇▇▇▇ Subsidiaries will be
required to include any item of income in, or exclude any item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of any: (A) change in method of accounting for a
taxable period ending on or prior to the Closing Date under IRC Section 481 (or
any corresponding or similar provision of state, local, or foreign income Tax
law); (B) "closing agreement" as described in IRC Section 7121 (or any
corresponding or similar provision of state, local, or foreign income Tax law)
executed prior to the Closing Date; (C) deferred intercompany gain or any excess
loss account described in Treasury Regulations under IRC Section 1502 (or any
corresponding or similar provisions of state, local, or foreign income Tax law);
(D) installment sale or open transaction disposition made on or prior to the
Closing Date; or (E) prepaid amount received on or prior to the Closing Date.
19
2.15 Environmental Matters. Except as disclosed in Section 2.15 of
the ▇▇▇▇▇▇▇ Disclosure Schedule:
(a) Compliance. Each Transferred Subsidiary is in compliance
in all material respects with all applicable Environmental Laws, and neither
▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary has received any written communication from
any person or Governmental Entity that alleges that any ▇▇▇▇▇▇▇ Subsidiary is
not in compliance with applicable Environmental Laws. ▇▇▇▇▇▇▇ has provided Buyer
with complete and correct copies of or access to all reports, studies,
assessments, and test results in its possession relating to any storage, use, or
disposal of Hazardous Materials by any ▇▇▇▇▇▇▇ Subsidiary or on any property
owned, leased to, controlled by, used by or adjacent to that of any ▇▇▇▇▇▇▇
Subsidiary.
(b) Environmental Permits. Each ▇▇▇▇▇▇▇ Subsidiary has
obtained or has applied for all environmental, health and safety permits, and
governmental and quasi-governmental authorizations (collectively, the
"Environmental Permits") necessary for the construction of its facilities or the
conduct of its operations, and all such Environmental Permits are in good
standing or, where applicable, a renewal application has been timely filed and
is pending agency approval, and each ▇▇▇▇▇▇▇ Subsidiary is in material
compliance with all terms and conditions of the Environmental Permits. To
▇▇▇▇▇▇▇'▇ Knowledge, any transfer, renewal, or reapplication for any
Environmental Permit required as a result of the Acquisition can be accomplished
in the ordinary course of business.
(c) Environmental Claims. There are no Environmental Claims
pending or, to ▇▇▇▇▇▇▇'▇ Knowledge, threatened (i) against any ▇▇▇▇▇▇▇
Subsidiary or joint ventures, or (ii) against any real or personal property or
operations that any ▇▇▇▇▇▇▇ Subsidiary owns, leases, or manages, in whole or in
part.
(d) Releases. There have been no Releases of any Hazardous
Material on, at, upon, into or from any property owned, leased to, controlled by
or used by any ▇▇▇▇▇▇▇ Subsidiary, nor has there been any Release of Hazardous
Material, including the off-site disposal of Hazardous Material, that would
reasonably be expected to form the basis of any Environmental Claim against any
▇▇▇▇▇▇▇ Subsidiary.
(e) Predecessors. There is no Environmental Claim pending or
threatened, nor has there been any Release of any Hazardous Materials that would
reasonably be likely to form the basis of any Environmental Claim, in each case
against any person or entity (including any predecessor of any ▇▇▇▇▇▇▇
Subsidiary) whose liability any ▇▇▇▇▇▇▇ Subsidiary has or may have retained or
assumed either contractually or by operation of law or against any real or
personal property which any ▇▇▇▇▇▇▇ Subsidiary formerly owned, leased or
managed, in whole or in part.
2.16 Litigation.
(a) Except as disclosed in Section 2.16 of the ▇▇▇▇▇▇▇
Disclosure Schedule, there are no Legal Proceedings that are now pending or, to
▇▇▇▇▇▇▇'▇ Knowledge, threatened against or affecting any of the ▇▇▇▇▇▇▇
Subsidiaries, or any of the ▇▇▇▇▇▇▇ Subsidiaries'
20
respective properties or businesses. Except as disclosed in Section 2.16 of the
▇▇▇▇▇▇▇ Disclosure Schedule, none of the ▇▇▇▇▇▇▇ Subsidiaries is currently
subject to any order, judgment, decree, injunction, stipulation, or consent
order of or with any court or other Governmental Entity. Since January 1, 2001,
none of the ▇▇▇▇▇▇▇ Subsidiaries has entered into any agreement to settle or
compromise any Legal Proceeding pending or threatened against it which has
involved any obligation other than the payment of money or for which any ▇▇▇▇▇▇▇
Subsidiary, as the case may be, has any continuing obligation.
(b) There are no claims or Legal Proceedings pending or, to
▇▇▇▇▇▇▇'▇ Knowledge, threatened (in writing) by or against ▇▇▇▇▇▇▇ with respect
to this Agreement or in connection with the transactions contemplated hereby.
(c) Except as set forth on Section 2.16 of the ▇▇▇▇▇▇▇
Disclosure Schedule, to ▇▇▇▇▇▇▇'▇ Knowledge, there are no pending or threatened
Legal Proceedings against any director, officer, employee, or agent of the
Transferred Subsidiaries in their capacity as such.
2.17 Compliance with Applicable Laws. Except as disclosed in Section
2.17 of the ▇▇▇▇▇▇▇ Disclosure Schedule, each Transferred Subsidiary holds (or,
at the required times, held) all Permits and/or Approvals that are (or
previously were) required for the construction of their owned buildings and
facilities, and for the operation of their respective businesses. Each
Transferred Subsidiary is in material compliance with the terms of the Permits
and/or Approvals. Except as disclosed in Section 2.17 of the ▇▇▇▇▇▇▇ Disclosure
Schedule, neither ▇▇▇▇▇▇▇ nor any Transferred Subsidiary is in material
violation of any law, ordinance, or regulation of any Governmental Entity.
2.18 Contracts; No Defaults.
(a) Except as described in Section 2.18 of the ▇▇▇▇▇▇▇
Disclosure Schedule, none of the ▇▇▇▇▇▇▇ Subsidiaries is a party to or subject
to any agreement, contract, or commitment, written or, to the Knowledge of
▇▇▇▇▇▇▇, oral (including leases of real property), which (i) has expected
receipts or expenditures by any of the ▇▇▇▇▇▇▇ Subsidiaries, alone or in the
aggregate in any series of similar or related agreements, contracts or
commitments, in excess of $500,000, other than purchase orders from customers
and purchase orders to suppliers in the ordinary course of business, (ii)
requires, as its primary purpose, any of the ▇▇▇▇▇▇▇ Subsidiaries to indemnify
any Person, other than indemnification of officers and directors of such ▇▇▇▇▇▇▇
Subsidiary, (iii) grants any material licenses or distributorships to any party,
(iv) individually or in any series of similar or related agreements, contracts
or commitments, evidences indebtedness for borrowed or loaned money of $500,000
or more, including guarantees of such indebtedness (other than trade accounts
receivable and trade accounts payable), or (v) has an initial term of more than
one year and is not cancelable without significant penalties by any of the
▇▇▇▇▇▇▇ Subsidiaries on 60 days' or less notice (other than employment
agreements with a current term of three years or less) (each of the items
described under (i) through (v), a "Material Contract"). None of the ▇▇▇▇▇▇▇
Subsidiaries is in material default or, to ▇▇▇▇▇▇▇'▇ Knowledge, alleged to be in
material default under any such Material Contract and, to ▇▇▇▇▇▇▇'▇ Knowledge,
no other party thereto is in material default. To ▇▇▇▇▇▇▇'▇ Knowledge, nothing
has occurred which, with or without the passage of time or giving of notice or
both, would constitute a material default by
21
any ▇▇▇▇▇▇▇ Subsidiary or by any other party under any such Material Contract.
▇▇▇▇▇▇▇ has not received any written or, to its Knowledge oral, notification
that any such Material Contract is not likely to be renewed. The Acquisition
contemplated by this Agreement will not create a material default under or
permit the termination of or otherwise adversely affect any such Material
Contract. Except as described in Section 2.18 of the ▇▇▇▇▇▇▇ Disclosure
Schedule, neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary is required to give any
notice to any person regarding this Agreement or the transactions contemplated
hereby pursuant to the terms of any such Material Contract, nor will the
transactions contemplated hereby result in or give to any person any right of
payment, termination, cancellation, acceleration or modification in or with
respect to, any such Material Contract.
(b) Section 2.18(b) of the ▇▇▇▇▇▇▇ Disclosure Schedule sets
forth a complete and accurate list of the customers to whom product returns,
replacements, penalties and similar costs may be owed or are claimed to be owed
by the ▇▇▇▇▇▇▇ Subsidiaries under contracts for product performance problems or
failures, including late deliveries/installations of systems and downtime of
systems in excess of the specifications stated in the customer contracts,
including an itemization of the specific systems to which the such amounts
relate, the amount owed or claimed to be owed, and ▇▇▇▇▇▇▇'▇ proposed resolution
plan with respect to each such system.
2.19 Change in Control and Severance Payments. Except as set forth on
Section 2.19 of the ▇▇▇▇▇▇▇ Disclosure Schedule, none of the ▇▇▇▇▇▇▇
Subsidiaries have any plans, programs, or agreements to which they are parties,
or to which they are subject, pursuant to which payments (or acceleration of
benefits) may be required upon, or may become payable directly or indirectly as
a result of, a change of control of any of the ▇▇▇▇▇▇▇ Subsidiaries (including
by reason of the consummation of the Acquisition).
2.20 Operations of the Directly Transferred Subsidiaries. ▇▇▇▇▇▇▇
Cayman is a Cayman Islands corporation formed solely for the purpose of serving
as a holding company for certain subsidiaries of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ IP is a
Delaware corporation formed solely for the purpose of holding certain
intellectual property used in the Wet Business. At and as of the Closing, the
sole asset of ▇▇▇▇▇▇▇ Cayman will be its ownership interest in the capital stock
of Wet Products GmbH, and the sole assets of ▇▇▇▇▇▇▇ IP will be the intellectual
property set forth in Section 2.20 of the ▇▇▇▇▇▇▇ Disclosure Schedule. At and as
of the Closing, neither of the Directly Transferred Subsidiaries will have any
liabilities or obligations of any nature, whether accrued, absolute, contingent,
or otherwise.
2.21 Adequacy of Assets. Upon Closing, the Transferred Subsidiaries,
the Assets and the Assumed Contracts, together will constitute, in all material
respects, all of the tangible and intangible, real and personal property assets
required for the conduct of the Wet Business as currently conducted by ▇▇▇▇▇▇▇,
except as disclosed in Section 2.21 of the ▇▇▇▇▇▇▇ Disclosure Schedule.
2.22 Inventory. Section 2.22 of the ▇▇▇▇▇▇▇ Disclosure Schedule sets
forth, as of December 31, 2002, all of the inventory of the Transferred
Subsidiaries and all of the inventory included in the Assets. The values of all
items of obsolete materials and of materials of below standard quality have been
written down to realizable market value on the books of the
22
Transferred Subsidiaries. The values at which the inventory is carried reflect
the normal inventory valuation policy of ▇▇▇▇▇▇▇ and the Transferred
Subsidiaries, and such valuation policy as applied is in accordance with GAAP.
2.23 Customers and Suppliers.
(a) Section 2.23 of the ▇▇▇▇▇▇▇ Disclosure Schedule sets
forth a correct list of the 10 largest customers and the 10 largest suppliers of
the Wet Business, as well as all suppliers of the Wet Business which are the
sole source of supply, listing in the case of each customer and supplier the
business volume with the Wet Business in 2002. All business of ▇▇▇▇▇▇▇ and its
subsidiaries with the listed customers and suppliers in respect of the Wet
Business has been transacted on an arm's length basis.
(b) None of the ▇▇▇▇▇▇▇ Subsidiaries has, nor will any of
the Transferred Subsidiaries have after Closing, any obligation to use the
services of, buy products from or pay money to STEAG Electronic Systems s.r.o.,
Nove Mesto nad Vahom, or Olpe Jena GmbH, which presently supply Marangoni dryers
and other equipment to Wet Products GmbH.
2.24 Banking Relationships Schedule 2.24 of the ▇▇▇▇▇▇▇ Disclosure
Schedule sets forth a complete and correct list of all bank and Postgiro
accounts of the Transferred Subsidiaries, listing in each case the persons
authorized to draw from such account and the balance of each account as of
December 31, 2002.
2.25 Managers; Powers of Attorney. Schedule 2.25 of the ▇▇▇▇▇▇▇
Disclosure Schedule sets forth a complete and correct list of all managers and
prokurists of the Transferred Subsidiaries, as well as all general and other
powers of attorney granted by any of the Transferred Subsidiaries, except
authorizations concerning bank and Postgiro accounts, insurance, customs and tax
matters granted in the ordinary course of business.
2.26 Accounts Receivable. All of the accounts receivable of the
Transferred Subsidiaries as of the Effective Time will have arisen out of the
sales of inventory or services in the ordinary course of business and are
believed by ▇▇▇▇▇▇▇ to be collectible in the face value thereof, using normal
collection procedures, net of the reserve for doubtful accounts set forth in the
▇▇▇▇▇▇▇ Financial Statements for the respective Transferred Subsidiary, which
reserves were determined in accordance with GAAP.
2.27 Broker's/Finder's Fees. Except for ▇▇ ▇▇▇▇▇▇ & Co. Incorporated,
whose fees will be paid by ▇▇▇▇▇▇▇, neither ▇▇▇▇▇▇▇ nor any officer, director,
or employee of ▇▇▇▇▇▇▇ has employed any broker, finder, or investment banker or
incurred any liability for any brokerage or investment banking fees,
commissions, or finders' fees in connection with the transactions contemplated
by this Agreement.
23
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to ▇▇▇▇▇▇▇ as follows, except as disclosed
in a document of even date herewith and delivered by Buyer to ▇▇▇▇▇▇▇ referring
to the representations and warranties in this Agreement (the "Buyer Disclosure
Schedule"). The Buyer Disclosure Schedule will be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
III, and the disclosure in any such numbered and lettered section of the Buyer
Disclosure Schedule shall qualify only the corresponding section in this Article
III, except to the extent disclosure in any numbered and lettered section of the
Buyer Disclosure Schedule is specifically cross-referenced in another numbered
and lettered section of the Buyer Disclosure Schedule.
3.1 Due Incorporation and Due Authorization.
(a) Due Incorporation. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of Idaho, with
all requisite corporate power and authority to own, lease, and operate its
properties and to carry on its business as now being conducted. Buyer is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the nature of the properties owned, leased, or operated
by it and the business transacted by it require such qualification, except where
the failure to be so qualified would not reasonably be expected to have a Buyer
Material Adverse Effect. True, correct, and complete copies of Buyer's
Certificate of Incorporation and By-Laws, as amended, have been delivered to
▇▇▇▇▇▇▇.
(b) Due Authorization. Buyer has full corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery, and performance by Buyer of this
Agreement have been duly and validly approved by the Board of Directors of
Buyer, and no other actions or proceedings on the part of Buyer are necessary to
authorize this Agreement and the transactions contemplated hereby. Buyer has
duly and validly executed and delivered this Agreement. This Agreement
constitutes the legal, valid, and binding obligation of Buyer, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization, or other laws from time to time in effect which affect
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
3.2 Non-Contravention; Consents and Approvals.
(a) The execution and delivery of this Agreement by Buyer
does not, and the performance by Buyer of its obligations hereunder and the
consummation of the transactions contemplated hereby will not, conflict with,
result in a violation or breach of, constitute (with or without notice or lapse
of time or both) a default under, result in or give to any person any right of
payment or reimbursement, termination, cancellation, modification, or
acceleration of, or result in the creation or imposition of any lien upon any of
the assets or properties of Buyer
24
under any of the terms, conditions, or provisions of (i) the Certificate of
Incorporation or Bylaws of Buyer, or (ii) subject to obtaining the necessary
approval by the stockholders of Buyer and the taking of the actions described in
paragraph (b) of this Section 3.2, (x) any Law applicable to Buyer or any
judgment, decree, order, writ, permit, or license of any Governmental Entity
applicable to Buyer or (y) any contract, agreement, or commitment to which Buyer
is a party or by which Buyer or any of its assets or properties is bound,
excluding from the foregoing clauses (x) and (y) conflicts, violations,
breaches, defaults, terminations, modifications, accelerations, and creations
and impositions of liens which would not reasonably be expected to have a Buyer
Material Adverse Effect or result in the inability of Buyer to consummate the
transactions contemplated by this Agreement.
(b) No consent, approval, order, or notice to or
authorization of, or registration, declaration, or filing with any Governmental
Entity is required to be made or obtained by Buyer in connection with the
execution and delivery of this Agreement or the consummation by Buyer of the
transactions contemplated hereby, the failure to obtain which would reasonably
be expected to have a Buyer Material Adverse Effect or prevent or materially
delay the consummation of the transactions contemplated hereby, except for:
(i) if applicable, the filing of a pre-merger
notification report under the HSR Act and the expiration or termination of the
applicable waiting period thereunder, and the filing of required documents with
relevant Governmental Entities of the countries or political subdivisions in
which the ▇▇▇▇▇▇▇ Subsidiaries conduct business, including any filing under the
German Act Against Restraints on Competition of 1999 (Gesetz gegen
Wettbewerbsbeschraenkungen) and the expiration or termination of the waiting
period thereunder; and
(ii) the consents and approvals specified on Section
3.2 of the Buyer Disclosure Schedule.
3.3 Compliance with Applicable Laws. Except as disclosed in Section
3.3 of the Buyer Disclosure Schedule, Buyer holds all Permits and/or Approvals
which are required for the operation of its business, except those the absence
of which would not reasonably be expected to have a Buyer Material Adverse
Effect. Buyer is in compliance with the terms of such Permits and/or Approvals,
except where the failure so to comply would not reasonably be expected to have a
Buyer Material Adverse Effect. Except as disclosed in Section 3.3 of the Buyer
Disclosure Schedule, to Buyer's Knowledge, Buyer and each Buyer Subsidiary is
not in violation of any law, ordinance or regulation of any Governmental Entity,
except for possible violations which individually and in the aggregate do not
have a Buyer Material Adverse Effect.
3.4 Litigation. There are no claims or Legal Proceedings pending or,
to Buyer's Knowledge threatened (in writing) by or against Buyer with respect to
this Agreement or in connection with the transactions contemplated hereby.
3.5 Brokers and Finders. Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., whose
fees will be paid by Buyer, neither Buyer nor any officer, director, or employee
of Buyer has employed any brokers, finder or investment banker or incurred any
liability for any brokerage or investment
25
banking fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
3.6 Investment Company Act. Buyer and each Buyer Subsidiary (i) is
not an "investment company," or a company "controlled" by, or an "affiliated
company" with respect to, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), or
(ii) satisfies all conditions for an exemption from the Investment Company Act,
and, accordingly, neither Buyer nor any Buyer Subsidiary is required to be
registered under the Investment Company Act.
3.7 Investment. Buyer is an "accredited investor" as defined in Rule
501(a) under the Securities Act of 1933, as amended. In making its investment
decision to acquire the Transferred Shares, Buyer is not relying on any oral or
written representations or assurances from ▇▇▇▇▇▇▇ or any other person other
than as set forth in this Agreement. Buyer has such experience in business and
financial matters that it is capable of evaluating the risk of its investment in
the Transferred Shares and determining the suitability of its investment. By
reason of Buyer's business and financial and the business and financial
experience of Buyer's professional advisors, Buyer has the capacity to protect
its own interest in connection with the transactions contemplated hereby. Buyer
represents that it is able to bear the economic risk of an investment in the
Transferred Shares. Buyer understands that no United States federal or state
agency or similar agency of any other country has passed upon or made any
recommendation or endorsement of ▇▇▇▇▇▇▇, this transaction, or the acquisition
of the Transferred Shares.
ARTICLE IV.
CONDUCT PRIOR TO THE CLOSING
4.1 Conduct of Business of ▇▇▇▇▇▇▇ Subsidiaries. During the period
from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing, ▇▇▇▇▇▇▇ agrees (except to the
extent expressly contemplated by this Agreement, including Section 4.2 below, or
as consented to in writing by Buyer), to carry on the business of the ▇▇▇▇▇▇▇
Subsidiaries in the ordinary course and consistent with past practice; to pay
and to cause to be paid the debts and Taxes of the ▇▇▇▇▇▇▇ Subsidiaries when due
(subject to good faith disputes over such debts or Taxes), to pay or perform
other obligations when due, and to use all reasonable efforts to preserve intact
their present business organizations, keep available the services of the present
officers, employees and consultants of the ▇▇▇▇▇▇▇ Subsidiaries and preserve the
▇▇▇▇▇▇▇ Subsidiaries' relationships with customers, suppliers, distributors,
licensors, licensees, and others having business dealings with the ▇▇▇▇▇▇▇
Subsidiaries. ▇▇▇▇▇▇▇ agrees to promptly notify Buyer of any event or occurrence
described in clauses (a) through (t) below. Without limiting the foregoing,
except as expressly contemplated by this Agreement, ▇▇▇▇▇▇▇ will not allow,
cause or permit any of the ▇▇▇▇▇▇▇ Subsidiaries to do, cause, or permit any of
the following as to any of them, without the prior written consent of Buyer:
(a) Charter Documents. Cause or permit any amendments to any
of their Memorandum and Articles of Association (Gesellschaftsvertrag),
Management Board (Geschaftsfuhrer), Rules of Procedure (Geschaftsordnung),
Certificate or Articles of Incorporation, Bylaws, or other applicable
organizational or charter documents;
26
(b) Dividends; Changes in Capital Stock. Declare or pay any
dividends on or make any other distributions (whether in cash, stock, or
property) in respect of any of their capital stock, or split, combine, or
reclassify any of their capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of, or in substitution for shares of
their capital stock, or repurchase or otherwise acquire, directly or indirectly,
any shares of their capital stock;
(c) Issuance of Securities. Issue, deliver, or sell or
authorize or propose the issuance, delivery, or sale of, or purchase or propose
the purchase of, any shares of their capital stock or securities convertible
into, or subscriptions, rights, warrants, or options to acquire, or other
agreements or commitments of any character obligating them to issue any such
shares or other convertible securities other than to implement the transfer of
ownership of Wet Products GmbH as contemplated by Section 1.9 of the ▇▇▇▇▇▇▇
Disclosure Schedule;
(d) Intellectual Property. Transfer or license to any person
or entity any rights to ▇▇▇▇▇▇▇ Intellectual Property other than the ordinary
course of business in connection with product sales on standard terms,
consistent with past practice;
(e) Distribution Rights. Enter into or amend any agreements
pursuant to which any other party is granted distribution, marketing or other
rights of any type or scope with respect to resale or distribution any of the
Wet Business products;
(f) Dispositions. Sell, lease, license, or otherwise dispose
of or encumber any of their properties or assets which are material individually
or in the aggregate, to the ▇▇▇▇▇▇▇ Subsidiaries, taken as a whole, except in
the ordinary course of business, consistent with past practice;
(g) Indebtedness. Incur any indebtedness for borrowed money
or guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others, other than intercompany loans from
▇▇▇▇▇▇▇ or any of its affiliates, which intercompany loans will be repaid or
otherwise eliminated at or prior to Closing;
(h) Agreements. Enter into, terminate, or amend (i) any
agreement involving an obligation to pay or the right to receive $500,000 or
more, (ii) any agreement relating to the license, transfer, or other disposition
or acquisition of ▇▇▇▇▇▇▇ Intellectual Property rights, or (iii) any other
agreement which is or would be a Material Contract, other than, in the case of
clauses (i), (ii) and (iii), in the ordinary course of business;
(i) Insurance. Reduce the amount of any insurance coverage
provided by existing insurance policies, other than in the ordinary course of
business;
(j) Termination or Waiver. Terminate or waive any right of
substantial value, other than in the ordinary course of business consistent with
past practice;
(k) Employee Benefit Plans; New Hires; Pay Increases. Amend
any ▇▇▇▇▇▇▇ Employee Plan or ▇▇▇▇▇▇▇ International Employee Plan or adopt any
plan that would constitute a
27
▇▇▇▇▇▇▇ Employee Plan or ▇▇▇▇▇▇▇ International Employee Plan except as required
by law, regulation or tax qualification requirement, hire any new executive
officer-level employee or hire additional employees such that the number of
worldwide employees of the ▇▇▇▇▇▇▇ Subsidiaries exceeds, in aggregate, 105% of
the worldwide aggregate number of such employees on the date of this Agreement,
pay any special bonus (except payments made pursuant to written agreements
outstanding on the date hereof), or increase the benefits, salaries, or wage
rates of its employees; provided, that the ▇▇▇▇▇▇▇ Subsidiaries may pay such
reasonable special bonuses and grant such reasonable increases in salaries,
wages and other benefits as ▇▇▇▇▇▇▇ deems appropriate in order to attract or
retain its employee work force and management personnel at levels consistent
with current practice, that are in place or are put into place by ▇▇▇▇▇▇▇ prior
to Closing ("▇▇▇▇▇▇▇ Stay Bonuses"), which amounts shall be paid by ▇▇▇▇▇▇▇ or
the employing ▇▇▇▇▇▇▇ Subsidiary from cash available prior to Closing;
(l) Severance Arrangements. Grant any severance or
termination pay or benefits (i) to any director or officer or (ii) to any other
employee of a ▇▇▇▇▇▇▇ Subsidiary except payments made pursuant to written
agreements outstanding on the date hereof and disclosed on the ▇▇▇▇▇▇▇
Disclosure Schedule and except for reasonable severance or termination
arrangements as ▇▇▇▇▇▇▇ deems appropriate in order to attract or retain its
employee work force and management personnel at levels consistent with current
practice;
(m) Acquisitions. Acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, association,
or other business organization or division thereof or otherwise acquire or agree
to acquire any assets which are material individually or in the aggregate, to
the business of any of the ▇▇▇▇▇▇▇ Subsidiaries;
(n) Taxes. Other than as required by law, make (other than
in the ordinary course of business and consistent with past practice) or change
any election in respect of Taxes, adopt or change any material accounting method
in respect of Taxes, file any material Tax Return or any amendment to a material
Tax Return, enter into any closing agreement pertaining to material matters,
settle any material claim or assessment in respect of Taxes, or consent to any
extension or waiver of the limitation period applicable to any material claim or
assessment in respect of Taxes;
(o) Revaluation. Revalue any of its assets, including
writing down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business and consistent with past practice,
or as required by applicable law or regulations;
(p) Litigation. Settle or cease to pursue the FSI
Litigations;
(q) Warranty Obligations. Modify or extend any warranty
relating to one or more Wet Business systems shipped prior to Closing;
(r) Accounting Changes. Except to the extent required by
applicable law, make any material change in any accounting or financial
reporting practice or policy;
28
(s) Accounts Receivable and Payable. Make or give any
material discount, modification or amendment of any accounts receivable, or
grant concessions in connection with the collection of any accounts receivable
except as contemplated by Section 5.14 below, or fail to pay accounts payable in
the ordinary course of business and consistent with past practice (including
with respect to the timing of such payments); or
(t) Other. Agree in writing or otherwise to take any of the
actions described in Sections 4.1(a) through (s) above, or take or agree to take
any action which would cause a breach of its representations or warranties
contained in this Agreement or prevent it from performing or cause it not to
perform, in all material respects, its covenants hereunder.
4.2 Intercompany Accounts and Cash Balances of the ▇▇▇▇▇▇▇
Subsidiaries. Notwithstanding the provisions of Section 4.1, ▇▇▇▇▇▇▇ and the
▇▇▇▇▇▇▇ Subsidiaries are permitted to, and with respect to the Transferred
Subsidiaries shall, repay, offset, cancel, or otherwise eliminate all
intercompany accounts and intercompany obligations (including accounts payable,
accounts receivable, and profit/loss sharing obligations, including any such
obligations resulting under the Profit Transfer Agreement) in existence between
the ▇▇▇▇▇▇▇ Subsidiaries and ▇▇▇▇▇▇▇ (or any affiliate of ▇▇▇▇▇▇▇, other than
▇▇▇▇▇▇▇ Japan K.K.), at or before the Effective Time. Notwithstanding the
provisions of Section 4.1 (other than the provision of paragraph (k) requiring
any ▇▇▇▇▇▇▇ Stay Bonuses to be paid or provided for from cash available prior to
Closing), ▇▇▇▇▇▇▇ is permitted to cause any and all of the ▇▇▇▇▇▇▇ Subsidiaries
to transfer to ▇▇▇▇▇▇▇ (or as directed by ▇▇▇▇▇▇▇) all cash and cash equivalent
assets of the ▇▇▇▇▇▇▇ Subsidiaries, through and until the Effective Time,
provided that sufficient cash remains to pay the ▇▇▇▇▇▇▇ Stay Bonuses. Such
transfers may be effectuated by dividend, repayment of intercompany indebtedness
or otherwise; provided, however, that no action permitted by this Section 4.2
shall result in an over-indebtedness of a ▇▇▇▇▇▇▇ Subsidiary such that the
directors of such subsidiary would be required under applicable law to file for
insolvency of the subsidiary. In the event that the elimination of intercompany
accounts payable to Wet Products GmbH and / or the transfer of cash and cash
equivalents out of Wet Products GmbH causes Wet Products GmbH to become
insolvent or undercapitalized as of the Effective Time, then ▇▇▇▇▇▇▇ will cause
Holding GmbH to (or ▇▇▇▇▇▇▇ will itself) remit back to Wet Products GmbH
sufficient funds to cure such insolvency or undercapitalization, and the full
amount of any such remittance by Holding GmbH (or ▇▇▇▇▇▇▇) to Wet Products GmbH
shall be promptly reimbursed to ▇▇▇▇▇▇▇ by Buyer.
4.3 Certain Employees of the ▇▇▇▇▇▇▇ Subsidiaries. Prior to the
Closing, ▇▇▇▇▇▇▇ will identify to Buyer and provide Buyer with appropriate
information relating to employees of subsidiaries of ▇▇▇▇▇▇▇ other than the
Transferred Subsidiaries who primarily provide field support services to
customers of the Wet Business, and will provide Buyer with access to such
employees to facilitate Buyer's efforts to assess and potentially hire such
employees. Buyer will assess and interview such employees for the purpose of
determining their abilities and to determine the list of such employees to whom
Buyer desires to make offers of employment, which offers will be effective on
Closing.
29
ARTICLE V.
ADDITIONAL AGREEMENTS AND COVENANTS
5.1 Covenant to Satisfy Conditions. Subject to the terms and
conditions hereof, each party hereto will use all reasonable commercial efforts
to take all action required of it to satisfy the conditions set forth in Article
VI, and otherwise to fulfill its obligations under the terms of this Agreement
and to facilitate the consummation of the transactions contemplated hereby. No
party will, nor will any party permit any of its subsidiaries to, willfully take
any action that would or is reasonably likely to result in a material breach of
any provision of this Agreement or in any of its representations and warranties
set forth in this Agreement being untrue in any material respect on and as of
the Closing Date.
5.2 Employee Benefits.
(a) For a period of two years following the Closing,
provided that such employees remain employed by Buyer or a Transferred
Subsidiary, Buyer will provide, or cause to be provided, benefits to all
employees of the Transferred Subsidiaries resident in the United States who were
so employed immediately prior to the Closing ("▇▇▇▇▇▇▇ Employees") that are in
the aggregate comparable to the benefits provided to similarly-situated and
located employees of Buyer. Time of service with the Transferred Subsidiaries
will be credited for all purposes, other than benefit accrual, under any
comparable plans maintained by Buyer, except to the extent such credit would
result in a duplication of benefits. Buyer and ▇▇▇▇▇▇▇ agree that with respect
to any medical or dental benefit plan of Buyer, where applicable and to the
extent permissible under Buyer's benefit plans and policies, (i) Buyer will
waive, with respect to any ▇▇▇▇▇▇▇ Employee, any pre-existing condition
exclusion and actively-at-work requirements (to the extent such exclusion or
requirement would not have applied under the applicable Buyer employee benefit
plan) and (ii) any covered expenses incurred on or before the Closing by a
▇▇▇▇▇▇▇ Employee or a ▇▇▇▇▇▇▇ Employee's covered dependents will be taken into
account for purposes of satisfying applicable deductible, coinsurance and
maximum out-of-pocket provisions after the Closing to the same extent as such
expenses would be taken into account if incurred by similarly-situated employees
of Buyer. Nothing in this Section 5.2 shall be construed as a guarantee of
employment for any ▇▇▇▇▇▇▇ Employee for any period of time following the
Closing. Buyer will provide continuation health care coverage to all ▇▇▇▇▇▇▇
Employees and their qualified beneficiaries who incur a qualifying event after
the Closing Date in accordance with and to the extent required under the
continuation health care coverage requirements of COBRA. ▇▇▇▇▇▇▇ will be
responsible for providing continuation coverage and all related notices to the
extent required by law to any ▇▇▇▇▇▇▇ Employee (or qualified beneficiary) who
incurs a "qualifying event" under COBRA on or before the Closing Date.
(b) Prior to Closing, ▇▇▇▇▇▇▇ shall assume or transfer to a
subsidiary of ▇▇▇▇▇▇▇ other than a Transferred Subsidiary, and shall cause Wet
Products GmbH to be fully released from, any and all pension obligations of
▇▇▇▇▇▇▇ Tech GmbH.
30
5.3 Continuation of Business.
(a) Buyer agrees to continue to operate Wet Products GmbH,
and not to terminate or substantially curtail such operations, for a period of
at least one year following the Closing, except as set forth in this Agreement.
Buyer has no intention of liquidating ▇▇▇▇▇▇▇ Cayman, for purposes of Cayman
Island law or Code, and agrees not to liquidate ▇▇▇▇▇▇▇ Cayman for a period of
two years from the Closing Date.
(b) Reductions in Force. ▇▇▇▇▇▇▇, Wet Products GmbH and
Buyer agree that reductions in force of employees of Wet Products GmbH shall be
done in accordance with the terms and conditions of Section 5.3(b) of the
▇▇▇▇▇▇▇ Disclosure Schedule to this Agreement.
(c) ▇▇▇▇▇▇▇ acknowledges that Buyer intends to (or cause Wet
Products GmbH to) close the Wet Products GmbH facility in Donaueschingen, and to
consolidate its operations at the Wet Products GmbH facility in Pliezhausen (the
"Pliezhausen Facility"). Prior to Closing, ▇▇▇▇▇▇▇ shall assume, or, cause one
of ▇▇▇▇▇▇▇'▇ subsidiaries (other than a Transferred Subsidiary) to assume (in
which case performance will be guaranteed by ▇▇▇▇▇▇▇), each real property lease
relating to the Pliezhausen Facility (the "Master Leases") and shall cause Wet
Products GmbH, and any other Transferred Subsidiary that may be party to or
otherwise bound by the Master Leases, to be fully released as of the Closing
from its obligations thereunder. At or prior to Closing, ▇▇▇▇▇▇▇ (or the
relevant ▇▇▇▇▇▇▇ subsidiary) shall enter into a sublease with Wet Products GmbH
with respect to the Pliezhausen Facility (the "Pliezhausen Sublease"), which
Pliezhausen Sublease shall be on terms satisfactory to Buyer, pursuant to which
▇▇▇▇▇▇▇ shall permit Wet Products GmbH and any of its affiliates following
Closing full use of the Pliezhausen Facility (or the portion of the Pliezhausen
Facility that continues to be leased by Wet Products GmbH) for conduct of the
Wet Business until the earlier of (X) expiration of the underlying Master Lease,
and (Y) termination by Wet Products GmbH. The Pliezhausen Sublease shall be on
terms substantially similar to the current terms of the existing leases in
respect of the Pliezhausen Facility, including the monthly rent, except that (i)
at the election of Wet Products GmbH following Closing, upon 90 days written
notice to ▇▇▇▇▇▇▇, Wet Products GmbH shall be entitled to terminate the
Pliezhausen Sublease with respect to the front building (that is, the building
fronting on the street) and continue to sublease only the rear building (that
is, the building currently used predominately for manufacturing operations), in
which event the monthly rent and other charges shall be reduced proportionately,
(ii) any renovation or restoration costs shall be borne by ▇▇▇▇▇▇▇ (or the
relevant ▇▇▇▇▇▇▇ subsidiary) or the master lessor, and (iii) the Pliezhausen
Sublease shall be terminable unilaterally by Wet Products GmbH following Closing
upon 90 days written notice. ▇▇▇▇▇▇▇ represents and warrants to Buyer that the
copies of the leases relating to the Pliezhausen Facility that were provided by
▇▇▇▇▇▇▇ to Buyer are true and complete copies; there are no amendments,
supplements or riders thereto, except those that have been provided to Buyer;
and such leases constitute all of the leases relating to the Pliezhausen
Facility or any portion thereof.
5.4 Access to Information.
(a) Buyer and its counsel and advisors will have reasonable
access during normal business hours to all books, records, assets and contracts
of or relating to the ▇▇▇▇▇▇▇
31
Subsidiaries, in each case to complete such party's respective diligence
investigation for the purposes of the Acquisition. Key personnel will be made
available by each party as necessary to assist in this diligence effort. Each
party will permit the other party on prior notice to contact key customers and
suppliers as part of the due diligence process.
(b) Subject to compliance with applicable law, from the date
hereof until the Closing, each of Buyer and ▇▇▇▇▇▇▇ will confer on a regular and
frequent basis with one or more representatives of the other party to report
material operational matters and the general status of ongoing operations.
(c) No information or knowledge obtained in any
investigation pursuant to this Section 5.4 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the transactions contemplated hereby.
5.5 Confidentiality. The parties acknowledge that Buyer and ▇▇▇▇▇▇▇
have previously executed a Confidentiality Agreement dated June 20, 2002 (the
"Non-Disclosure Agreement"), which Non-Disclosure Agreement is incorporated
herein by this reference and will continue in full force and effect in
accordance with its terms.
5.6 Public Disclosure. Unless otherwise permitted by this Agreement,
Buyer and ▇▇▇▇▇▇▇ will consult with each other before issuing any press release
or otherwise making any public statement or making any other public (or
non-confidential) disclosure (whether or not in response to an inquiry)
regarding the terms of this Agreement and the transactions contemplated hereby,
and neither will issue any such press release or make any such statement or
disclosure without the prior approval of the other (which approval will not be
unreasonably withheld), except as may be required by law or by obligations
pursuant to any listing agreement with any national securities exchange or with
the NASDAQ Stock Market (in which case the disclosing party will, to the extent
practicable within the time available to comply therewith, use its reasonable
efforts to obtain the consent of the other party prior to such disclosure).
5.7 Regulatory Approval; Further Assurances.
(a) Each party will use all reasonable efforts to file, as
promptly as practicable after the date of this Agreement, all notices, reports,
and other documents required to be filed by such party with any Governmental
Entity with respect to the Acquisition and the other transactions contemplated
by this Agreement, and to submit promptly any additional information requested
by any such Governmental Entity. Without limiting the generality of the
foregoing, ▇▇▇▇▇▇▇ and Buyer will, promptly after the date of this Agreement, if
required for consummation of the transactions contemplated by this Agreement,
prepare and file the notifications required under the HSR Act in connection with
the Acquisition and such filings as are required under the Act Against
Restraints on Competition of 1999 (Gesetz gegen Wettbewerbsbeschrankungen). Each
party will use all reasonable efforts to furnish to each other all information
required for any application or other filing to be made pursuant hereto in
connection with the Acquisition and the other transactions contemplated by this
Agreement. ▇▇▇▇▇▇▇ and Buyer will respond as promptly as practicable to (i) any
inquiries or requests received from the Federal Trade Commission or the
32
Department of Justice for additional information or documentation and (ii) any
inquiries or requests received from any state attorney general or other
Governmental Entity in connection with antitrust or related matters. Each of
▇▇▇▇▇▇▇ and Buyer will give the other party prompt notice of the commencement of
any Legal Proceeding by or before any Governmental Entity with respect to the
Acquisition or any of the other transactions contemplated by this Agreement,
keep the other party informed as to the status of any such Legal Proceeding, and
promptly inform the other party of any communication to or from, and any
proposed undertaking or agreement with the Federal Trade Commission, the
Department of Justice or any other Governmental Entity regarding any such
filings or the Acquisition. ▇▇▇▇▇▇▇ and Buyer will consult and cooperate with
one another in connection with any analysis, appearance, presentation,
memorandum, brief, argument, opinion, or proposal made or submitted in
connection with any Legal Proceeding under or relating to the Antitrust Laws. In
addition, each party will give the other prior notice of, and except as may be
prohibited by any Governmental Entity or by any legal requirement, in connection
with any Legal Proceeding under or relating to the Antitrust Laws or any other
similar Legal Proceeding, each of ▇▇▇▇▇▇▇ and Buyer will permit authorized
representatives of the other party to be present at and participate in each
meeting or conference relating to any such Legal Proceeding and to have access
to and be consulted in connection with any document, opinion, or proposal made
or submitted to any Governmental Entity in connection with any such Legal
Proceeding.
(b) Each of Buyer and ▇▇▇▇▇▇▇ will use all reasonable
efforts to resolve such objections, if any, as may be asserted by any
Governmental Entity with respect to the transactions contemplated by this
Agreement under the Antitrust Laws. In connection therewith, if any Legal
Proceeding is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement is violative of any Antitrust Law,
each of Buyer and ▇▇▇▇▇▇▇ will cooperate and use all reasonable efforts
vigorously to contest and resist any such Legal Proceeding, and to have vacated,
lifted, reversed, or overturned any Order that is in effect and that prohibits,
prevents, or restricts consummation of the Acquisition or any other transactions
contemplated by this Agreement, including by vigorously pursuing all available
avenues of administrative and judicial appeal and all available legislative
action, unless by mutual agreement Buyer and ▇▇▇▇▇▇▇ decide that litigation is
not in their respective best interests. Notwithstanding the foregoing or any
other provisions of this Agreement, nothing in this Section 5.7(b) will limit a
party's right to terminate this Agreement pursuant to Article VII, so long as
such party has up to then complied in all material respects with its obligations
under this Section 5.7(b). Each of ▇▇▇▇▇▇▇ and Buyer will use all reasonable
efforts to take such action as may be required to cause the expiration of the
notice periods under the Antitrust Laws with respect to such transactions as
promptly as possible after the execution of this Agreement. Notwithstanding
anything to the contrary in this Agreement, neither Buyer nor ▇▇▇▇▇▇▇ will be
required to hold separate (including by trust or otherwise) or divest any of
their respective businesses or assets.
(c) At any time and from time to time after the Closing, at
Buyer's request and without further consideration, ▇▇▇▇▇▇▇ shall promptly
execute and deliver (or shall cause to be executed and delivered) such
instruments of sale, transfer, conveyance, assignment and confirmation, and take
all such other action as Buyer may reasonably request to effect the
33
transfer, conveyance and assignment of the Transferred Shares and the Assets to
Buyer, to assist the Buyer in exercising all rights with respect to the
Transferred Shares and the Assets and otherwise to carry out the full purpose
and intent of this Agreement, provided, however, that Buyer shall be responsible
for any and all incidental our of pocket fees or costs incurred by ▇▇▇▇▇▇▇ as a
result.
5.8 Legal Requirements. Subject to Section 5.7(b), each of ▇▇▇▇▇▇▇,
and Buyer will, and will cause their respective subsidiaries to, take all
commercially reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on them with respect to the consummation of
the transactions contemplated by this Agreement and will promptly cooperate with
and furnish information to any party hereto necessary in connection with any
such requirements imposed upon such other party in connection with the
consummation of the transactions contemplated by this Agreement and will take
all reasonable actions necessary to obtain (and will cooperate with the other
parties hereto in obtaining) any consent, approval, order or authorization of or
any registration, declaration, or filing with, any Governmental Entity or other
person, required to be obtained or made in connection with the taking of any
action contemplated by this Agreement.
5.9 Conveyance Taxes. ▇▇▇▇▇▇▇ and Buyer will cooperate in the
preparation, execution, and filing of all returns, questionnaires, applications,
or other documents regarding any property transfer or gains, sales, use, value
added, stock transfer, and stamp Taxes, any transfer, recording, registration,
and other fees or any similar taxes that become payable in connection with the
transactions contemplated by this Agreement that are required or permitted to be
filed on or before the Closing, or after the Closing. Except as provided below,
each party will pay any such Taxes or fees imposed on it by any taxing authority
(and any penalties and interest with respect to such Taxes and fees) that become
payable in connection with the transactions contemplated by this Agreement;
provided, however, that Buyer will be responsible for paying, and will reimburse
▇▇▇▇▇▇▇ for, any Taxes and fees imposed on ▇▇▇▇▇▇▇ that become payable as a
result of the sale and transfer of the Assets by ▇▇▇▇▇▇▇ to Buyer.
Notwithstanding the foregoing, any Taxes and fees payable as a result of the
deemed sale and transfer of the real estate owned by Wet Products GmbH shall be
paid fifty percent by Buyer and fifty percent by ▇▇▇▇▇▇▇.
5.10 Non-Solicitation of Employees.
(a) From the Effective Time through June 20, 2004, Buyer
will not, without the prior written consent ▇▇▇▇▇▇▇, solicit for employment (and
Buyer will cause its controlled affiliates not to solicit for employment),
whether directly or indirectly, any person who is now employed by ▇▇▇▇▇▇▇;
provided however, that Buyer and its affiliates shall not be prohibited from
making general, public solicitations for employment for any position or from
employing any current employee of the other party who contacts the party on his
or her own initiative and without impermissible solicitation by such party.
(b) From the Effective Time through June 20, 2004, ▇▇▇▇▇▇▇
will not, without the prior written consent Buyer, solicit for employment (and
▇▇▇▇▇▇▇ will cause its controlled affiliates not to solicit for employment),
whether directly or indirectly, any person who is
34
employed by Buyer or any subsidiary of Buyer (including without limitation
persons who are employed by a Transferred Subsidiary or other company that
becomes a subsidiary of Buyer after the date hereof); provided however, that
▇▇▇▇▇▇▇ and its affiliates shall not be prohibited from making general, public
solicitations for employment for any position or from employing any current
employee of the other party who contacts the party on his or her own initiative
and without impermissible solicitation by such party.
(c) The obligations set forth in this Section 5.10 will
survive the termination of this Agreement.
5.11 Noncompetition Agreement.
(a) For the period beginning at the Effective Time and
ending at the two (2) year anniversary of the Effective Time, ▇▇▇▇▇▇▇ will not,
without Buyer's prior written consent, directly or indirectly, in any capacity
whatsoever: (i) develop, make, market or sell AWP Products or (ii) own, control,
engage in, participate in, operate, or become financially interested in, any
business, entity or venture that develops, makes, markets or sells AWP Products
anywhere in the world. Notwithstanding the foregoing, ▇▇▇▇▇▇▇ is permitted to
perform development and enter into contractual or other relationships with third
parties who develop, make, market or sell AWP Products solely for the purpose of
ensuring compatibility and to improve performance of ▇▇▇▇▇▇▇ products with the
AWP Products of such third parties. For purposes of this Section 5.11, "AWP
Products" are fully automated semiconductor wafer processing machines capable of
wet chemistry cleaning and drying of semiconductor wafers, in multiple-wafer
batches or as single wafers, as a stand-alone machine. AWP Products do not
include so-called "hybrid" machines (for example plasma-based stripping or rapid
thermal processing in combination with single wafer wet cleaning and drying, all
integrated into a single machine).
(b) For the period beginning at the Effective Time and
ending at the one (1) year anniversary of the Effective Time, ▇▇▇▇▇▇▇ and Buyer
each will not, without the other party's prior written consent (or as part of a
joint development effort of ▇▇▇▇▇▇▇ and Buyer), market, demonstrate, develop
jointly with a customer, or sell (but each is permitted to individually develop
and make) "hybrid" machines.
(c) Notwithstanding the terms of Section 5.11(a) and (b),
the restrictions under this Section 5.11 shall immediately expire and terminate,
and shall be of no further force or effect, in the event of a Change of Control
of ▇▇▇▇▇▇▇. For purposes of this Section 5.11, a "Change of Control" shall mean
the consummation of a merger, consolidation or similar transaction involving
▇▇▇▇▇▇▇ that is approved by the board of directors of ▇▇▇▇▇▇▇, and an acquiror
where, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of ▇▇▇▇▇▇▇ immediately prior thereto do
not own, directly or indirectly, outstanding voting securities representing more
than fifty percent (50%) of the total voting power represented by the voting
securities of the surviving entity in such merger, consolidation or similar
transaction or more than fifty percent (50%) of the voting power of the parent
of the surviving entity in such merger, consolidation or similar transaction.
35
5.12 Access to Business Records. From and after the Closing, each
party will afford the other reasonable access to all preclosing business records
of or directly relating to the ▇▇▇▇▇▇▇ Subsidiaries, upon reasonable notice
during ordinary business hours for all reasonable business purposes, and each
party will permit the other party to make copies of any such records and retain
possession of such copies.
5.13 Reimbursement for FSI Litigations. ▇▇▇▇▇▇▇ shall reimburse Buyer
and its subsidiaries in an amount up to $1 million of legal fees and other
litigation costs, which fees and costs are incurred or paid by Buyer or any of
its subsidiaries following Closing in one or both of the following current
proceedings pending in the FSI Litigations (the "Reimbursable Fees"): (i) the
appeal now pending in the Federal Court of Appeal in the lawsuit with YieldUP
International Corp. ("YieldUP") relating to claims of infringement of U.S.
Patents Nos. 4,778,532 and 4,917,123 by YieldUP, and (ii) the proceedings to
trial in the United States District Court for the District of Delaware relating
to claims of infringement of U.S. Patent No. 4,911,761 by YieldUP. All legal
fees and other costs relating to the FSI Litigations incurred prior to Closing,
including without limitation attorneys' fees for time spent prior to Closing,
irrespective of whether ▇▇▇▇▇▇▇ or any of its subsidiaries has received an
invoice for such fees or costs prior to Closing (collectively, "Pre-Closing
Legal Expenses"), shall be paid by ▇▇▇▇▇▇▇ or reimbursed to Buyer, if paid by
Buyer or any of its subsidiaries. Pre-Closing Legal Expenses shall not be
charged against the Reimbursable Fees. Buyer and its subsidiaries following the
Closing shall be permitted to pursue or settle the FSI Litigations, at their
discretion, without any obligation to minimize or mitigate the fees or costs
reimbursable by ▇▇▇▇▇▇▇. Buyer or its designee shall be entitled to retain any
and all amounts received upon settlement or other resolution of the FSI
Litigations, even if any portion of such amounts are deemed to be attorneys'
fees, legal costs or similar consideration. Any amounts received by ▇▇▇▇▇▇▇ or
its subsidiaries upon the settlement or other resolution of the FSI Litigations
post-Closing shall be remitted promptly to Buyer or its designee.
5.14 Special Accounts; Payments under Customer Contracts. ▇▇▇▇▇▇▇
agrees to reimburse Buyer for amounts to cover special arrangements with
customers and other costs as identified and in accordance with the terms and
conditions of Section 5.14 of the ▇▇▇▇▇▇▇ Disclosure Schedule ("Special
Accounts").
5.15 Transition Services Agreement. At the Closing, Buyer and ▇▇▇▇▇▇▇
shall enter into a transition services agreement (the "Transition Services
Agreement"), substantially in the form attached hereto as Exhibit 5.15.
5.16 2001 and 2002 Taxes and Financial Statements. ▇▇▇▇▇▇▇ shall file
all Tax Returns relating to, and shall timely pay, all Taxes payable by or
attributable to Wet Products GmbH for 2001 and 2002, and shall prepare related
or required financial statements for Wet Products GmbH. ▇▇▇▇▇▇▇ shall file all
Tax Returns relating to, and shall timely pay, all Taxes payable by or
attributable to ▇▇▇▇▇▇▇ Cayman and ▇▇▇▇▇▇▇ IP for 2001, 2002 and the period from
January 1, 2003 until the Effective Time. ▇▇▇▇▇▇▇ shall prepare related or
required financial statements for the Transferred Subsidiaries for 2001 and
2002. Buyer and its subsidiaries, as shareholders of the Transferred
Subsidiaries, will ratify or confirm such financial statements, and will not
cause the Transferred Subsidiaries to subsequently restate such financial
36
statements, except to the extent ordered by a court or taxing authority to make
such a restatement. All refunds or credits of Taxes for or attributable to
taxable years 2001 and 2002 for Wet Products GmbH, or attributable to taxable
years or periods of the other Transferred Subsidiaries ending on or before the
Closing Date, shall be for the account of ▇▇▇▇▇▇▇. Following the Closing, the
Buyer shall forward or pay to ▇▇▇▇▇▇▇ any such refunds or credits due pursuant
to this section within ten days of receipt or realization thereof by Buyer.
▇▇▇▇▇▇▇ shall take all actions necessary to prevent, and shall indemnify and
hold Buyer and the Transferred Subsidiaries harmless from and against, any
recharging of Taxes against or reimbursement of Taxes by any Transferred
Subsidiary relating to any period for which ▇▇▇▇▇▇▇ is required to file Tax
Returns and pay Taxes, including any assessments levied by any Governmental
Entity relating to such periods, or any additional Taxes incurred as a result of
any disallowance of any consolidated Tax Return for any such period.
5.17 Termination of Profit Transfer Agreement.
(a) ▇▇▇▇▇▇▇ and Buyer assume that the Profit Transfer
Agreement (between Wet Products GmbH and Holding GmbH) has terminated (i) with
effect vis-a-vis Wet Products GmbH and vis-a-vis third parties as of 24:00
o'clock on December 31, 2002, (ii) with effect for tax purposes as of 24:00
o'clock on December 31, 2002, and (iii) will be registered in the commercial
register of Wet Products GmbH prior to the Effective Time. If, for any reason,
this assumption is incorrect or unfulfilled as of the Effective Time, the
parties undertake to take all measures that are reasonably necessary to procure
termination of the Profit Transfer Agreement as of the earliest possible time
and to procure the earliest possible registration of such termination in the
commercial register of Wet Products GmbH. In addition, the parties shall put
each other commercially into a position as if the termination of the Profit
Transfer Agreement had been effective as of December 31, 2002, as set forth
above. In particular, the following shall apply:
(i) ▇▇▇▇▇▇▇ undertakes to procure that Holding GmbH
waives any rights to receive from Wet Products GmbH any profits made by Wet
Products GmbH after December 31, 2002. Further, ▇▇▇▇▇▇▇ shall indemnify Buyer
and keep it harmless against any claims raised by Holding GmbH in connection
with the Profit Transfer Agreement, including any compensation for taxes paid in
respect of Wet Product GmbH's business up until the Effective Time.
(ii) If Holding GmbH is obliged to compensate Wet
Products GmbH for any losses incurred by Wet Products GmbH after December 31,
2002, Buyer shall indemnify ▇▇▇▇▇▇▇ and Holding GmbH by increasing the Purchase
Price by any amounts paid by Holding GmbH to Wet Products GmbH.
(b) Except to the extent contemplated by Section 4.2, (i)
▇▇▇▇▇▇▇ and its subsidiaries shall not be obligated to repay to Wet Products
GmbH or Buyer any profits incurred nor any cash or cash equivalent paid out by
Wet Products GmbH prior to the Effective Time, even if Wet Products GmbH should
produce no profit (or should incur a loss) for the entire fiscal year 2003, or
should become undercapitalized after the Effective Time, and (ii) Buyer agrees
to hold ▇▇▇▇▇▇▇ and Holding GmbH harmless from any claims of Wet Products GmbH
or third
37
parties to repay any profits or cash or cash equivalents accrued at Wet Products
GmbH up to the Effective Time and paid to ▇▇▇▇▇▇▇ or its subsidiaries.
(c) Any and all profits of Wet Products GmbH accruing
between January 1, 2003 and the Effective Time shall belong to Buyer. Any and
all profits and cash of Wet Products GmbH accruing after the Effective Time
shall belong to Buyer.
(d) Buyer agrees to indemnify and hold ▇▇▇▇▇▇▇ and Holding
GmbH harmless from any claims of third parties or Wet Products GmbH in analogy
to Section 303 et seq. of the German Stock Corporation Act (Aktiengesetz),
subject to the following. If any third party should require ▇▇▇▇▇▇▇ or Holding
GmbH to provide security for a claim of such third party against Wet Products
GmbH, then
(i) In the event such claim relates to a liability
of Wet Products GmbH that was included in the Definitive Balance Sheet, or that
was disclosed to Buyer as a contractual obligation of Wet Products GmbH, or that
arose after the Effective Time, then Buyer at its expense shall provide such
required security to the third party and shall be responsible for resolving the
related claims of such third party; provided, however, that if ▇▇▇▇▇▇▇ or
Holding GmbH is nevertheless required to provide such security, Buyer shall
reimburse ▇▇▇▇▇▇▇ for such security and any associated costs; or
(ii) In the event such claim relates to a liability
of Wet Products GmbH that was not included in the Definitive Balance Sheet and
that was not disclosed to Buyer as a contractual obligation of Wet Products GmbH
(or in the event ▇▇▇▇▇▇▇ and Buyer disagree as to whether such claim was so
included or disclosed) (a "Third Party Disputed Claim"), ▇▇▇▇▇▇▇ or Holding GmbH
shall either provide such security, or, at ▇▇▇▇▇▇▇'▇ election, request that
Buyer provide the security, in which case Buyer at its expense shall provide
such required security to the third party and shall be responsible for resolving
the related claims of such third party, and the amount of such security and the
related third party claim shall be deemed to be a claim by Buyer for Damages for
purposes of Section 8.1(b)(i), and the amount of such security will be deemed to
have been paid by Buyer for purposes of Section 8.1(c) in determining whether
the aggregate amount of Damages under claims by the Buyer Indemnified Persons
equals or exceeds Five Hundred Thousand Dollars ($500,000). If the Third Party
Disputed Claim is ultimately determined not to be subject to indemnification by
▇▇▇▇▇▇▇, or is resolved for less than the amount of the security originally
provided, the amount deemed to be a claim for Damages shall be reversed, or
reduced to the actual amount paid to resolve such Third Party Disputed Claim, as
appropriate (and the amount of Damages paid or payable by ▇▇▇▇▇▇▇ to Buyer will
likewise be reduced, and if applicable Buyer will reimburse ▇▇▇▇▇▇▇ to the
extent of any excess Damages paid by ▇▇▇▇▇▇▇).
5.18 Silicon Integrated Systems Claims. ▇▇▇▇▇▇▇ shall reimburse Buyer
and its subsidiaries following the Closing for any costs, expenses or damages,
including without limitation reasonable attorneys' fees and costs, that arise
from or relate to any personal injury claim arising from the Silicon Integrated
Systems accident in Taiwan.
38
5.19 Auction Process. Buyer acknowledges that the Wet Business has
been offered to multiple potential buyers, including parties who may compete
with the Buyer after the Closing. Buyer waives, and following the Closing will
cause the Transferred Subsidiaries to waive, any claim against the current
officers and directors of the Transferred Subsidiaries or the ▇▇▇▇▇▇▇
Indemnified Parties (as defined below) with respect to competitive harm, loss of
trade secret protection, or diminution of value of the Wet Business resulting
from the disclosure of information relating to the Wet Business to such
potential buyers prior to the date of this Agreement in connection with their
evaluation of the Wet Business.
5.20 DNS Settlement. Buyer hereby acknowledges that it has no right
to receive any payments with respect to the Settlement Agreement and the
Worldwide Technology Transfer and Cross-License Agreement, both dated June 24,
2002, by and among ▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇ IP, Dainippon Screen Manufacturing Co. Ltd.
and DNS Electronics, LLC (collectively, the "DNS Agreements"). Buyer hereby
assigns to ▇▇▇▇▇▇▇ any such rights to payments it may otherwise have had under
the DNS Agreements. If Buyer or its subsidiaries are in receipt of any payments
under the DNS Agreements, Buyer will promptly cause such payments to be remitted
to ▇▇▇▇▇▇▇.
5.21 ERM Invoice. Upon presentation by Buyer to ▇▇▇▇▇▇▇ of the
invoice from ERM ▇▇▇▇▇▇▇▇ International GmbH (the "ERM Invoice") for
environmental evaluation services performed on properties of Wet Products GmbH,
▇▇▇▇▇▇▇ shall pay to Buyer 15,000 Euros; provided, however, that if the
aggregate amount set forth in such ERM Invoice is less than 15,000 Euros,
▇▇▇▇▇▇▇ shall pay to Buyer only the amount set forth in the ERM Invoice.
ARTICLE VI.
CONDITIONS TO THE ACQUISITION
6.1 Conditions to Each Party's Obligation to Consummate the
Acquisition. The respective obligations of each party to consummate the
Acquisition will be subject to the satisfaction on or prior to the Closing Date
of the following conditions, except that, to the extent permitted by applicable
law, such conditions may be waived in writing by the joint action of the parties
hereto.
(a) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction, or other order issued by
any court of competent jurisdiction or any other Governmental Entities, or other
legal or regulatory restraint or prohibition preventing the consummation of the
Acquisition will be and remain in effect, nor will there be any action taken, or
any law, statute, rule, regulation, decree or order been enacted, adopted,
entered, enforced, or deemed applicable to the Acquisition, which remains in
effect and which makes the consummation of the Acquisition illegal.
(b) Regulatory Approval. Any waiting period applicable to
the Acquisition or any of the transactions contemplated hereby, including a
waiting period under HSR Act or the Act Against Restraint on Competition of 1999
(Gesetz gegen Wettbewerbeschrenkuyen) will have expired or been terminated, and
any other required U.S. or German regulatory approvals, including any approvals
required by the German cartel office or the European Union or any council,
commission, or subdivision thereof, will have been obtained. ▇▇▇▇▇▇▇ and each of
the
39
▇▇▇▇▇▇▇ Subsidiaries, and Buyer will have timely obtained from each Governmental
Entity all approvals, waivers, and consents, if any, necessary for consummation
of the Acquisition and the transactions contemplated hereby.
(c) Legal Proceedings. There will not be pending any Legal
Proceeding by any Governmental Entity or other person: (i) challenging or
seeking to restrain or prohibit the consummation of the Acquisition; (ii)
relating to the Acquisition and seeking to obtain from Buyer, ▇▇▇▇▇▇▇, or the
▇▇▇▇▇▇▇ Subsidiaries any damages or other relief that would be material to
either Buyer or ▇▇▇▇▇▇▇; (iii) seeking to prohibit or limit in any material
respect Buyer's ability to vote, receive dividends with respect to, or otherwise
exercise ownership rights with respect to the stock of the ▇▇▇▇▇▇▇ Subsidiaries;
(iv) which would materially and adversely affect the right of Buyer to own the
assets or operate the business of the ▇▇▇▇▇▇▇ Subsidiaries; (v) seeking to
compel Buyer, ▇▇▇▇▇▇▇ or any of their controlled affiliates to dispose of or
hold separate any material assets, (vi) which is reasonably likely to have a Wet
Business Material Adverse Effect or a Buyer Material Adverse Effect, or (vii)
which is reasonably likely to enjoin, restrain or prohibit any integration of
any operations of the ▇▇▇▇▇▇▇ Subsidiaries with those of Buyer or Buyer's
Subsidiaries.
6.2 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the Acquisition and the transactions contemplated under the Agreement
will be further subject to the satisfaction, at or prior to the Closing, of the
following conditions, except as may be waived by Buyer in writing:
(a) Compliance With Agreements and Covenants. ▇▇▇▇▇▇▇, MII
and the ▇▇▇▇▇▇▇ Subsidiaries each will have performed and complied in all
material respects with all of its covenants, obligations and agreements
contained in this Agreement to be performed and complied with on or prior to the
Closing Date.
(b) Representations and Warranties. The representations and
warranties of ▇▇▇▇▇▇▇ contained herein (i) will be true and correct in all
material respects on and as of the date of this Agreement, and (ii) will also be
true and correct, on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date, except for such inaccuracies which
in the aggregate do not constitute, and are not reasonably expected to result
in, a Wet Business Material Adverse Effect (disregarding for purposes of
evaluating whether subsection (b)(ii) of this condition is satisfied, any
"material adverse effect" or other materiality qualifications contained in such
representations and warranties).
(c) Closing Certificate. Buyer will have received a
certificate signed by authorized officers of ▇▇▇▇▇▇▇, dated the Closing Date,
certifying that the conditions set forth in Section 6.2(a) and 6.2(b) have been
satisfied.
(d) Stock Certificates. ▇▇▇▇▇▇▇ and MII will have delivered
to Buyer certificates representing the Transferred Shares, duly endorsed in
blank or accompanied by duly executed stock powers endorsed in blank, and
satisfactory evidence of the transfer of the capital stock of Wet Products GmbH
to ▇▇▇▇▇▇▇ Cayman by notarial deed in accordance with German law.
40
(e) Consents and Approvals. Buyer will have received written
evidence reasonably satisfactory to it that all consents and approvals required
to be obtained in connection with the Acquisition and the transactions
contemplated hereby have been obtained and will be in full force and effect, and
all required filings have been made, other than those consents and approvals
which, individually and in the aggregate, would not have a Buyer Material
Adverse Effect.
(f) Subsidiary Director Resignations. Buyer will have
received the written resignations, effective as from the Closing Date, of the
directors of all of the Transferred Subsidiaries, except for those
employee/directors whom the parties have mutually agreed to retain immediately
following the Closing.
(g) Transition Services Agreement. The Transition Services
Agreement shall have been executed and delivered by ▇▇▇▇▇▇▇ and shall be in full
force and effect as of the Effective Time.
(h) Sublease. The Pliezhausen Sublease shall be in full
force and effect as of the Effective Time.
(i) Legal Opinion. Buyer shall have received an opinion of
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, in a form and substance reasonably
satisfactory to Buyer and its counsel.
(j) Other Closing Documents. Buyer will have received any
necessary documents and instruments required for the notarization and transfer
of the Transferred Shares, bills of sale conveying the Assets and such other
closing and transfer documents as Buyer will reasonably request to effect and
consummate the Acquisition and the transactions contemplated hereby, in each
case in form and substance reasonably satisfactory to Buyer and its counsel.
(k) Receipt of Payments. Buyer will have received any
payments that may be due at Closing from ▇▇▇▇▇▇▇ pursuant to this Agreement.
6.3 Conditions to Obligations of ▇▇▇▇▇▇▇. The obligations of ▇▇▇▇▇▇▇
to consummate the Acquisition under this Agreement will be further subject to
the satisfaction, at or prior to the Closing, of the following conditions except
as may be waived by ▇▇▇▇▇▇▇ in writing:
(a) Compliance with Agreements and Covenants. Buyer will
have performed and complied in all material respects with all of its covenants,
obligations and agreements contained in this Agreement, to be performed and
complied with on or prior to the Closing Date.
(b) Representations and Warranties. The representations and
warranties of Buyer contained herein (i) will be true and correct on and as of
the date of this Agreement in all material respects, and (ii) will also be true
and correct on and as of the Closing Date with the same force and effect as
though made on and as of the Closing Date, except for such inaccuracies which,
in the aggregate, do not constitute and are not reasonably expected to result
in, a Buyer Material Adverse Effect (disregarding for purposes of evaluating
whether subsection (b)(ii) of
41
this condition is satisfied, any "material adverse effect" or other materiality
qualifications contained in such representations and warranties).
(c) Closing Certificate. ▇▇▇▇▇▇▇ will have received a
certificate signed by the Chief Executive Officer and Chief Financial Officer of
Buyer, dated the Closing Date, certifying that the conditions set forth in
Section 6.3(a) and 6.3(b) have been satisfied.
(d) Consents and Approvals. ▇▇▇▇▇▇▇ will have received
written evidence reasonably satisfactory to it that all consents and approvals
required to be obtained in connection with the Acquisition and the transactions
contemplated hereby have been obtained and will be in full force and effect, and
all required filings have been made other than those consents and approvals
which, individually and in the aggregate, would not have a Wet Business Material
Adverse Effect.
(e) Purchase Price. ▇▇▇▇▇▇▇ will have received payment of
the Purchase Price provided for in Section 1.4(a).
(f) Legal Opinion. ▇▇▇▇▇▇▇ shall have received an opinion of
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, in a form and substance reasonably satisfactory to
▇▇▇▇▇▇▇ and its counsel.
ARTICLE VII.
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior
to the Closing by any of the following actions taken or authorized by the Board
of Directors of the terminating party or parties:
(a) By mutual written consent of Buyer and ▇▇▇▇▇▇▇;
(b) By either Buyer or ▇▇▇▇▇▇▇, if the Closing shall not
have occurred on or before March 31, 2003 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 7.1(b)
will not be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before the Termination Date;
(c) By either Buyer or ▇▇▇▇▇▇▇, if any Governmental Entity
(i) shall have issued an order, decree or ruling or taken any other action
(which the parties shall have used their reasonable commercial efforts to
resist, resolve or lift, as applicable, in accordance with Section 5.6)
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order decree, ruling or other action shall have become
final and nonappealable or (ii) shall have failed to issue an order, decree or
ruling or to take any other action, and such denial of a request to issue such
order, decree, ruling or to take such other action shall have become final and
nonappealable (which order, decree, ruling or other action the parties shall
have used their reasonable commercial efforts to obtain, in accordance with
42
Section 5.6), in the case of each of (i) and (ii) which is necessary to fulfill
the conditions set forth in Article VII; provided, however, that the right to
terminate this Agreement under this Section 7.1(c) will not be available to any
party whose failure to use their reasonable commercial efforts has been the
cause of such action or inaction;
(d) By Buyer if (i) any of ▇▇▇▇▇▇▇'▇ representations and
warranties shall have been inaccurate as of the date of this Agreement or shall
have become inaccurate as of a date subsequent to the date of this Agreement (as
if made on such subsequent date), such that the condition set forth in Section
6.2(b) would not be satisfied or (ii) any of ▇▇▇▇▇▇▇'▇ covenants contained in
this Agreement shall have been breached such that the condition set forth in
Section 6.2(a) would not be satisfied; provided, however, that if an inaccuracy
in the representations and warranties of ▇▇▇▇▇▇▇ arising as of a date subsequent
to this Agreement is curable by ▇▇▇▇▇▇▇ by the Termination Date and ▇▇▇▇▇▇▇ is
continuing to exercise all reasonable efforts to cure such inaccuracy, then
Buyer may not terminate this Agreement under this Section 7.1(d) on account of
such inaccuracy; or
(e) By ▇▇▇▇▇▇▇ if (i) any of Buyer's representations and
warranties shall have been inaccurate as of the date of this Agreement or shall
have become inaccurate as of a date subsequent to the date of this Agreement (as
if made on such subsequent date), such that the condition set forth in Section
6.3(b) would not be satisfied or (ii) if any of Buyer's covenants contained in
this Agreement shall have been breached such that the condition set forth in
Section 6.3(a) would not be satisfied.
In the event of termination of this Agreement and abandonment of the
Acquisition pursuant to this Article VII, no party hereto (or any of its
directors or officers) will have any liability or further obligation to any
other party to this Agreement, except that nothing herein will relieve any party
from liability for any breach of this Agreement.
7.2 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
7.3 Extension; Waiver. At any time prior to the Closing, the parties
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement, or (c) waive compliance
with any of the agreements or conditions contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver will be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise will not constitute a waiver of such rights.
7.4 Notice of Termination. Any party wishing to terminate this
Agreement under Section 7.1 will deliver written notice to the other party,
setting forth the paragraph under Section 7.1 pursuant to which the Agreement is
being terminated and, unless obvious from the nature of the termination clause,
a description of the facts and circumstances forming the basis for such
termination; provided, that any failure to provide such additional details will
not affect
43
the validity of the termination. Any such termination notice will be delivered
in accordance with Section 9.1 of this Agreement.
ARTICLE VIII.
INDEMNIFICATION
8.1 Indemnification.
(a) Survival of Representations and Warranties; No
Additional Representations and Warranties. All representations and warranties
made by Mattson or Buyer herein, or in any certificate, schedule or exhibit
delivered pursuant hereto, shall survive the Closing and continue in full force
and effect until the earlier of (i) the date of the auditor's report for the
audit of Buyer's financial statements for the year ending December 31, 2003, or
(ii) June 1, 2004; provided however that (x) the representations and warranties
set forth in Section 2.14 shall survive until the date six months after the
expiration of the statute of limitations applicable to the relevant tax
obligation, and (y) the representations and warranties set forth in Section
2.1(c) shall survive for five years after the Effective Time. Neither Mattson
nor Buyer has made any representations or warranties to the other, other than as
set forth herein.
(b) Indemnified Persons; Limits on Liability.
(i) Subject to the limitations set forth in this
Article VIII, Mattson will 2indemnify and hold harmless Buyer and its
subsidiaries, officers, directors, agents, attorneys and employees, and each
person, if any, who controls or may control Buyer within the meaning of the
Securities Act (hereinafter referred to individually as a "Buyer Indemnified
Person" and collectively as "Buyer Indemnified Persons") from and against any
and all losses, costs, diminution of value, damages, liabilities and expenses
and from any and all claims, demands, actions and causes of action, including
reasonable legal fees (collectively, "Damages"), arising out of any
misrepresentation or breach of or default in connection with any of the
representations, warranties, covenants and agreements given or made by Mattson
or its subsidiaries in, or otherwise relating to, this Agreement or any
certificate, exhibit or schedule to this Agreement.
(ii) Subject to the limitations set forth in this
Article VIII, Buyer will indemnify and hold harmless Mattson and its respective
officers, directors, agents, attorneys and employees, and each person, if any,
who controls or may control Mattson within the meaning of the Securities Act
(hereinafter referred to individually as a "Mattson Indemnified Person" and
collectively as "Mattson Indemnified Persons") from and against any and all
Damages arising out of (A) any misrepresentation or breach of or default in
connection with any of the representations, warranties, covenants and agreements
given or made by Buyer in, or otherwise relating to, this Agreement or any
certificate, exhibit or schedule to this Agreement, and (B) except to the extent
arising from a fact or circumstance for which Mattson is liable to indemnify the
Buyer Indemnified Persons pursuant to Section 8.2 (b)(i) or to the extent that
such Damages are payable or reimbursable by Mattson under this Agreement, (x)
the Assumed Liabilities, or (y) the ownership and operation of the Assets and
the Wet Business from and after the Closing Date, including any product or
component thereof produced or shipped, or any
44
services provided, by Buyer in connection with its operations of the Wet
Business from and after the Closing Date.
(c) General Provisions Regarding Indemnification Rights.
(i) No claim for Damages based upon or arising out
of any misrepresentation or breach of the representations and warranties under
Articles II and III will be eligible for compensation under this Article VIII
unless and until the aggregate amount of the Damages arising from or in
connection with all such claims by the Buyer Indemnified Persons or by the
Mattson Indemnified Persons, as the case may be, equals or exceeds Five Hundred
Thousand Dollars ($500,000), in which case the Buyer Indemnified Persons or
Mattson Indemnified Persons, as the case may be, shall be entitled to seek
compensation for all Damages in excess of the limitation set forth in this
sentence. The maximum aggregate liability of Mattson or Buyer for Damages under
this Article VIII is limited to $3 million (the "Indemnification Limitation"),
except that Damages based upon or arising out of ▇▇▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇'▇
subsidiaries' representations and warranties set forth in the following
sections/paragraphs of this Agreement shall not be subject to the
Indemnification Limitation:
. Paragraphs (b) or (c) of Section 2.1
(Due Incorporation)
. Paragraph (b) of Section 2.4 (Capital
Structure)
. Paragraph (j) of Section 2.9
(Intellectual Property)
. Section 2.14 (Tax Returns and Audits)
. Section 2.19 (Change in Control and
Severance Payments)
. Section 2.20 (Operations of the Directly
Transferred Subsidiaries).
(ii) A party entitled to indemnification hereunder
will take all reasonable steps to mitigate all Damages upon and after becoming
aware of any event which could reasonably be expected to give rise to Damages
that are indemnifiable hereunder.
(iii) No party will be entitled to indemnification to
the extent any Tax or other benefits result from, or which may be claimed as a
result of the facts and circumstances related to, any indemnifiable claim.
(iv) If any Damages are covered by insurance or
subject to other third party recoveries (collectively, "Third Party Rights"),
Buyer and Mattson will use Reasonable Commercial Efforts to recover the amount
of coverage or claim from the insurer or such third party, which recovery (after
deduction for costs of collection) will reduce any related Damages hereunder.
Each of Buyer and Mattson agrees to assign all Third Party Rights to the other
and to appoint the other as its limited agent and attorney-in-fact for seeking
such recovery to the extent that such party fails to recover. Each party also
agrees to cooperate with the other in connection
45
therewith. Such appointment as limited agent and attorney-in-fact is coupled
with an interest and is irrevocable.
(v) To the extent that an indemnifying party
discharges any claim for indemnification hereunder, the indemnifying party will
be subrogated to all rights of the indemnified party against third parties.
8.2 Claims. Upon receipt by Mattson of a certificate signed by any
officer of Buyer (an "Officer's Certificate") stating that with respect to the
indemnification obligations of Mattson set forth in Section 8.1, Damages exist
and specifying in reasonable detail the individual items of such Damages
included in the amount or estimated amount so stated, the date each such item
was paid, or properly accrued or arose, and the nature of the misrepresentation,
breach of warranty, covenant or claim to which such item is related, Mattson
will, subject to the provisions of this Article VIII, pay to Buyer, as promptly
as practicable, an amount in cash in value equal to such Damages.
8.3 Resolution of Conflicts and Arbitration.
(a) In case Mattson shall object in writing to any claim or
claims by Buyer made in any Officer's Certificate, Buyer will have thirty days
to respond in a written statement to the objection of Mattson. If after such 30
day per period there remains a dispute as to any claims, then Buyer and Mattson
will attempt in good faith for 60 days to agree upon the rights of the
respective parties with respect to each of such claims. To the extent no
agreement can be reached after good faith negotiation between the parties,
either Mattson or Buyer may, by written notice to the other, demand arbitration
of the matter unless the amount of the Damages is at issue in pending litigation
or dispute with a third party, in which event arbitration with respect to the
specific portion of the claim at issue in the pending litigation or dispute
shall not be commenced until such amount is ascertained or Mattson and Buyer
agree to arbitration; and in either such event the matter will be settled by
arbitration conducted by one arbitrator. Mattson and Buyer will agree on the
arbitrator, provided that if Mattson and Buyer cannot agree on such arbitrator,
either Mattson or Buyer can request that JAMS select the arbitrator. The
arbitrator will set a limited time period and establish procedures designed to
reduce the cost and time for discovery while allowing the parties an
opportunity, adequate in the sole judgment of the arbitrator, to discover
relevant information from the opposing parties about the subject matter of the
dispute. The arbitrator will rule upon motions to compel or limit discovery and
will have the authority to impose sanctions, including attorneys' fees and
costs, to the same extent as a court of competent jurisdiction in law or equity,
should the arbitrator determine that discovery was sought without substantial
justification or that discovery was refused or objected to without substantial
justification. The decision of the arbitrator will be written, will be in
accordance with applicable law and with this Agreement, and will be supported by
written findings of fact and conclusion of law, which will set forth the basis
for the decision of the arbitrator. The decision of the arbitrator as to the
validity and amount of any claim in an Officer's Certificate will be binding and
conclusive upon the parties to this Agreement, and notwithstanding anything in
this Article VIII, the parties will be entitled to act in accordance with such
decision.
46
(b) Judgment upon any award rendered by the arbitrator may
be entered in any court having jurisdiction. Any such arbitration will be held
in Alameda County, California under the commercial rules then in effect of the
American Arbitration Association. For purposes of this Section 8.3(b), in any
arbitration hereunder in which any claim or the amount thereof stated in the
Officer's Certificate is at issue, Buyer will be deemed to be the Non-Prevailing
Party unless the arbitrators award Buyer more than one-half (1/2) of the amount
in dispute, plus any amounts not in dispute; otherwise, Mattson will be deemed
to be the Non-Prevailing Party. The Non-Prevailing Party to an arbitration will
pay the fees of the arbitrator and any administrative fee of JAMS, and each
party will bear its own expenses.
8.4 Third-Party Claims. As used herein, an "Indemnified Party" will
refer to a Buyer Indemnified Party, or a Mattson Indemnified Party, as
applicable, the "Notifying Party" will refer to the party hereto whose
Indemnified Parties are entitled to indemnification hereunder, and the
"Indemnifying Party" will refer to the party hereto obligated to indemnify such
Notifying Party's Indemnified Parties. In the event that any of the Indemnified
Parties is made a defendant in or party to any action or proceeding, judicial or
administrative, instituted by any third party for the liability or the costs or
expenses of which are Damages, the Notifying Party will give the Indemnifying
Party prompt notice thereof. The failure to give such notice will not affect any
Indemnified Party's ability to seek reimbursement unless such failure has
materially and adversely affected the Indemnifying Party's ability to defend
successfully a claim. The Indemnifying Party will be entitled to contest and
defend such claim; provided, that the Indemnifying Party (i) has a reasonable
basis for concluding that such defense may be successful and (ii) diligently
contests and defends such claim. Notice of the intention to so contest and
defend will be given by the Indemnifying Party to the Notifying Party within
twenty (20) business days after the Notifying Party's notice of such claim (but,
in all events, at least five (5) business days prior to the date that an answer
to such claim is due to be filed). Such contest and defense will be conducted by
reputable attorneys employed by the Indemnifying Party. The Notifying Party will
be entitled at any time, at its own cost and expense (which expense will not
constitute Damages unless the Notifying Party reasonably determines that the
Indemnifying Party is not adequately representing or, because of a conflict of
interest, may not adequately represent, any interests of the Indemnified
Parties, and only to the extent that such expenses are reasonable), to
participate in such contest and defense and to be represented by attorneys of
its or their own choosing. If the Notifying Party elects to participate in such
defense, the Notifying Party will cooperate with the Indemnifying Party in the
conduct of such defense. Neither the Notifying Party nor the Indemnifying Party
may concede, settle or compromise any claim without the consent of the other
party, which consents will not be unreasonably withheld or delayed.
Notwithstanding the foregoing, (i) if a claim seeks equitable relief or (ii) if
the subject matter of a claim relates to the ongoing business of any of the
Indemnified Parties, which claim, if decided against any of the Indemnified
Parties, would have a Material Adverse Effect on the ongoing business or
reputation of any of the Indemnified Parties, then, in each such case, the
Indemnified Parties alone will be entitled to contest, defend and settle such
claim in the first instance and, if the Indemnified Parties do not contest,
defend or settle such claim, the Indemnifying Party will then have the right to
contest and defend (but not settle) such claim.
47
8.5 Exclusivity Of Indemnification Remedies. In the absence of
fraud or intentional misrepresentation, indemnification pursuant to the
provisions of this Article VIII shall be the sole and exclusive remedy of
Mattson, Buyer and the other Indemnified Parties for any breach of any
representation or warranty contained in this Agreement. Buyer waives, and
acknowledges that Mattson Cayman has waived, any and all warranties, claims,
rights and remedies under German law with respect to Mattson and its
subsidiaries that pertain to the transfer of the capital stock of Wet Products
GmbH to Mattson Cayman, which warranties, claims, rights and remedies are
limited to those provided under this Agreement.
ARTICLE IX.
GENERAL PROVISIONS
9.1 Notices. All notices and other communications hereunder will be
in writing and will be deemed duly delivered if delivered personally (upon
receipt), or three (3) business days after being mailed by registered or
certified mail, postage prepaid (return receipt requested), or one (1) business
day after it is sent by commercial overnight courier service, or upon
transmission, if sent via facsimile (with confirmation of receipt) to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
(a) if to Mattson or MII, to:
▇▇▇▇▇▇▇ Technology, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Rock
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Buyer, to:
SCP Global Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
48
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
9.2 Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9.3 Entire Agreement; Nonassignability. This Agreement and the
documents and instruments and other agreements specifically referred to herein
or delivered pursuant hereto, including the Exhibits, the Schedules, the Mattson
Disclosure Schedule, and the Buyer Disclosure Schedule constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, provided that the
Non-Disclosure Agreement will continue in full force and effect, and will
survive any termination of this Agreement or the Closing, in accordance with its
terms. This Agreement will not be assigned by operation of law or otherwise
without the written consent of the other party; provided, however, that Buyer
may assign all, but not less than all, of its rights and may delegate all, but
not less than all, of its obligations under this Agreement, provided, and only
in the event that, the company to which such rights and obligations are assigned
concurrently (or previously) (a) succeeds to all of the wet processing business
currently operated by Buyer, and (b) receives equity financing in an amount
equal to or greater than $35 million.
9.4 Severability. In the event that any provision of this Agreement,
or the application thereof becomes or is declared by a court of competent
jurisdiction to be illegal, void, or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business, and other purposes of such void or unenforceable provision.
9.5 Remedies Cumulative. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
9.6 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby, including legal,
accounting and investment banking fees, will be paid by the party incurring such
expense.
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9.7 United States Dollars; Payment Terms. All references to dollars
herein will mean United States dollars. Once any payment due hereunder by one
party to the other is fixed and determinable, and provided that no other payment
terms are set forth in the specific provisions of this Agreement relating to
such payment, then such payment will become due and payable within thirty days
following the date of invoice or notice to the party required to make such
payment from the party entitled to receive such payment.
9.8 Governing Law. The transfer of capital stock of Wet Products
GmbH to Mattson Cayman pursuant to separate agreement, will be governed by and
effected in accordance with German law. In all other respects, this Agreement
will be governed by and effected in accordance with Delaware law without regard
to the principles of conflicts of laws thereof.
9.9 Consent to Jurisdiction. Except for claims subject to
arbitration as provided in Section 8.3 above, and except with respect to the
first sentence of Section 9.8 above, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the
State of Delaware or any Delaware state court in the event any dispute arising
out of or relates to this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
including a motion to dismiss on the grounds of forum non conveniens, (c) agrees
that it will not bring any action arising out of or relating to this Agreement
or any of the transactions contemplated by this Agreement in any court other
than a federal court sitting in the State of Delaware or a Delaware state court,
and (d) waives any right to a trial by jury with respect to any claim,
counterclaim, or action arising out of or in connection with this Agreement or
the transactions contemplated hereby. With respect to the first sentence of
Section 9.8 above, and to the extent of matters which, under German law, must
mandatorily be adjudicated in German court, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any court of competent
subject matter jurisdiction located in Dusseldorf, Germany, and (b) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, including a motion to dismiss on
the grounds of forum non conveniens.
9.10 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation, preparation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
9.11 Third Party Beneficiaries. This Agreement is not intended to and
will not confer upon any person other than the parties hereto and their
respective subsidiaries any rights or remedies hereunder.
9.12 Construction of Certain Terms and Phrases. Unless the context of
this Agreement otherwise requires: (i) words of any gender include each other
gender; (ii) words using the singular or plural number also include the plural
or singular number, respectively; (iii) the terms "hereof," "herein," "hereby"
and derivative or similar words refer to this entire Agreement; (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement;
50
(v) the phrase "ordinary course of business" refers to the Wet Business of the
Mattson Subsidiaries; (vi) the words "include," "includes" or "including" as
used in this Agreement mean "including without limitation" and are intended by
the parties to be by way of example rather than limitation; (vii) the phrase
"made available" will mean that the information referred to has been made
available if requested by the party to whom such information is to be made
available; (viii) all accounting terms used herein and not expressly defined
herein will have the meanings given to them under generally accepted accounting
principles; and (ix) the table of contents and headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
(The remainder of this page is left intentionally blank)
51
IN WITNESS WHEREOF, Mattson, MII, WPI, MTF and Buyer have caused this
Agreement to be executed and delivered by each of them or their respective
officers thereunto duly authorized, all as of the date first written above.
SCP GLOBAL TECHNOLOGIES, INC.
By:
-----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
By:
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
President and Chief Executive Officer
MATTSON INTERNATIONAL, INC.
By:
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
President
MATTSON WET PRODUCTS, INC.
By:
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
President
▇▇▇▇▇▇▇ TECHNOLOGY FINANCE, INC.
By:
-----------------------------------------
Ludger Viefhues
Treasurer
52
EXHIBIT A
DEFINITIONS
As used in this Agreement, the following terms have the meanings indicated
below:
"Actions" or "Proceedings" mean any action, suit, proceeding, arbitration or
Governmental Entity investigation.
"Antitrust Laws" mean the HSR Act, the ▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇ Act,
as amended, the Federal Trade Commission Act, as amended, and any other federal,
state or foreign statutes, rules, regulations, orders, decrees, administrative
or judicial doctrines or other laws that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade, collectively.
"Affiliate" means, with respect to any person, any other person, directly or
indirectly, controlling, controlled by, or under common control with, such
person, and "control" (including the correlative terms "controlling",
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, by
contract, or otherwise.
"Business Day" means a day that is not a Saturday or a Sunday in California,
U.S.A. or Germany, on which banks are open for normal banking business in both
California, U.S.A. and Germany.
"Buyer Material Adverse Effect" means an effect on the business, operations,
assets, liabilities, results of operations, cash flows or condition (financial
or otherwise), of Buyer, which is materially adverse to Buyer.
"Closing Agreement" means a written and legally binding agreement with a taxing
authority relating to Taxes.
"Closing Date" means the date upon which the Closing occurs is referred to in
this Agreement.
"Contract" means any written or oral contract, agreement or understanding
between two or more parties.
"Effective Time" means the effective time of the Closing, which will be midnight
California time on the Closing Date.
"Encumbrances" mean any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge, option, right of first refusal, encumbrance,
restriction or other encumbrance of any kind, or any conditional sales contract,
title retention contract or other contract to give any of the foregoing.
"Environmental Claim" means any and all administrative, regulatory, or judicial
actions, suits, demands, demand letters, directives, claims, liens,
investigations, proceedings, or notices of noncompliance or violation by any
person or entity (including any Governmental Entity) alleging liability or
potential liability (including, without limitation, potential responsibility for
or liability for enforcement costs, investigatory costs, cleanup costs,
containment measures costs, governmental response costs, removal costs, remedial
costs, natural resources damages, property damages, personal injuries, fines or
penalties) arising out of, based on or resulting from (A) the presence, or
Release or threatened Release into the environment, of any Hazardous Materials
at any location, whether or not owned, operated, leased, or managed by any
Mattson Subsidiaries or joint ventures (for purposes of this Section 2.15); (B)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law; or (C) any and all claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation, or injunctive relief
resulting from the presence or Release of any Hazardous Materials.
"Environmental Laws" mean all applicable federal, state, local, and foreign
laws, rules, regulations, and requirements of common law relating to pollution,
the environment (including, without limitation, ambient air, surface water,
groundwater, land surface, subsurface air, or subsurface strata) or protection
of human health as it relates to Hazardous Materials, including, without
limitation, laws and regulations relating to Releases or threatened Releases of
Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
Hazardous Materials.
"FSI Litigations" means the two currently pending patent infringement lawsuits
before the United States District Court for the District of Delaware: Civil
Action ▇▇. ▇▇-▇▇▇ ▇▇▇ (▇▇▇) (▇▇▇) and 98-790-RRM (JJF) (MPT) to which Mattson
and certain of the Mattson Subsidiaries are party.
"GAAP" means generally accepted accounting principles in the United States.
"Governmental Entity" means any United States federal, state, local, or foreign
court, administrative agency or commission, or other governmental entity or
instrumentality (including a stock exchange or other self-regulatory body).
"Hazardous Materials" means (a) any petroleum or petroleum products, radioactive
materials, asbestos, urea formaldehyde foam insulation and transformers or other
equipment that contain dielectric fluid containing polychlorinated biphenyls
("PCBs") in regulated concentrations; (b) any chemicals, materials, or
substances which are now defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants,"
or words of similar import, under any Environmental Law; (c) any other chemical,
material, substance, or waste, which is regulated under any Environmental Law in
a jurisdiction in which Mattson or any of its subsidiaries or joint ventures
operate; and (d) any buildings or parts thereof, technical installations or
warfare agents buried in the ground.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended.
2
"Indebtedness" of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"JAMS" means the Judicial Arbitration and Mediation Services.
"Joint venture" of a person means any person that is not a subsidiary of such
person, in which such person or one or more of its subsidiaries owns an equity
interest, other than equity interests held for passive investment purposes which
are less than 10% of any class of the outstanding voting securities or equity of
any such person.
"Knowledge" means such party's actual knowledge after reasonable inquiry of
officers, directors, and other employees of such party reasonably believed to
have knowledge of such matters;
"Laws or Decrees" means all applicable German and U.S. federal, state,
provincial and local laws, ordinances, rules, statutes, regulations and all
Orders or awards.
"Legal Proceedings" means any actions, suits, arbitrations, regulatory or other
proceedings, litigation, or governmental investigations by or before any court,
arbitration or Governmental Entity.
"Liabilities" with respect to any Person means all Indebtedness, obligations and
other liabilities of such Person (whether absolute, accrued, contingent,
asserted, unasserted, fixed or otherwise, known or unknown, or whether due or to
become due).
"Loss" means liabilities, losses, costs, claims, damages, penalties, and
expenses (including attorneys' fees and expenses and costs of investigation and
litigation).
Any reference to any event, change, condition or effect being "material" with
respect to any entity or group of entities means any material event, change,
condition or effect related to the financial condition, properties, assets
(including intangible assets), liabilities, business, operations or results of
operations of such entity or group of entities.
"▇▇▇▇▇▇▇ Intellectual Property" means all of the trademarks, trade names,
service marks, patents, copyrights (including any registrations of or pending
applications for any of the foregoing), technology, trade secrets, inventions,
know-how, designs, computer programs, mask works, processes, and all other
intangible assets, properties, and rights used by any ▇▇▇▇▇▇▇ Subsidiary in the
conduct of its business, other than such items the loss or absence of which
(individually or in the aggregate) would not have a Wet Business Material
Adverse Effect.
"▇▇▇▇▇▇▇ Financial Statements" mean the audited consolidated financial
statements of ▇▇▇▇▇▇▇ Technology, Inc. as of December 31, 2001 (including all
notes thereto), consisting of the balance sheet at such date and the related
statements of income for the year then ended.
3
"▇▇▇▇▇▇▇ International Employee Plans" mean each material compensation scheme,
retirement plan or program, collective agreement with a union or worker's
council, employee loan, bonus, and/or incentive system, stock option, stock
purchase, stock bonus, phantom stock, stock appreciation right, or fringe
benefits, that has been adopted or maintained by any of the ▇▇▇▇▇▇▇
Subsidiaries, whether formally or, to ▇▇▇▇▇▇▇'▇ Knowledge, informally, for the
benefit of employees outside the United States.
"Order" means any writ, judgment, decree, injunction or similar order of any
Governmental Entity (in each such case whether preliminary or final).
"Permits and/or Approvals" means all permits, licenses, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental Entity.
"Permitted Encumbrances" means (a) liens for Taxes not yet due and payable, (b)
liens described in Schedule 2.8 of the ▇▇▇▇▇▇▇ Disclosure Schedule, and (c)
Encumbrances created or suffered to exist by Buyer.
"Person" means an individual, a partnership, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization or
a Governmental Entity.
"Reasonable Commercial Efforts" mean all efforts that a person acting
commercially in a similar situation would expend to accomplish a goal that such
person sought to achieve, but will not include spending any material funds or
assuming any material liability or obligations or commencing any legal action.
"Release" means any release, spill, emission, leaking, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the atmosphere, soil,
surface water, groundwater, subsurface air, or property.
"Severance Costs" means (a) any severance payments paid in accordance with one
or more social compensation plans pursuant to Sections112 BetrVG ("Sozialplan")
which are agreed by the Wet Products GmbH with one or more of the Works
Councils; plus (b) any other costs arising from or in connection with the social
compensation plan (e.g. training costs, transportation costs), including without
limitation reasonable attorneys fees and the costs and expenses of any
reconciliation procedure ("Einigungsstellenverfahren") such as reasonable fees
and expenses payable to members of the reconciliation board; plus (c) any
additional severance payments paid in accordance with one or more arrangements
which are individually agreed by Wet Products GmbH with one or more of the
employees to settle labour court proceedings initiated by the relevant employee
to challenge the validity of a termination notice given as part of the First RIF
or the Second RIF.
"Tax" or, collectively, "Taxes" means any and all federal, state, local,
foreign, and other taxes, assessments, and other governmental or
quasi-governmental charges, duties, impositions, and liabilities, including
taxes based upon or measured by gross receipts, income, profits, sales, use, and
occupation, and value added, ad valorem, transfer, gains, franchise, capital
stock, severance,
4
withholding, payroll, recapture, employment, excise, unemployment insurance,
social security, business license, occupation, business organization, stamp,
environmental, and property taxes, together with all interest, penalties, and
additions imposed with respect to such amounts.
"Tax Return" means any report, return, or other information required to be
supplied to a Governmental Entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that includes ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, as the case may be, or
Buyer or any Buyer Subsidiary, as the case may be.
"Tax Ruling" means a written ruling of a taxing authority relating to Taxes.
"Terminating Employees" means the employees of Wet Products GmbH whose
employment is terminated between Closing and January 31, 2004.
"Wet Business Adverse Effect" means an adverse effect on the business,
operations, assets, liabilities, or condition (financial or otherwise), of all
or any of the Transferred Subsidiaries and the Assets that has a value greater
than $100,000. Notwithstanding any other provision of this Agreement, actions
taken that are expressly contemplated by this Agreement, and the directly
intended effects thereof (including Sections 4.2, and 5.3) shall not be deemed
to constitute a Wet Business Adverse Effect.
"Wet Business Material Adverse Effect" means an effect on the business,
operations, assets, liabilities, results of operations, cash flows or condition
(financial or otherwise), of all or any of the ▇▇▇▇▇▇▇ Subsidiaries and the
Assets, which is materially adverse to the ▇▇▇▇▇▇▇ Subsidiaries and the Assets,
taken as a whole, except to the extent that any such effect primarily results
from (i) changes in general economic conditions or changes affecting the
industry generally in which such entities operate (provided that such changes do
not affect such entities in a disproportionate manner), (ii) the announcement or
pendency of the Acquisition (including resulting losses, deferrals, delays or
cancellations of customer orders). Notwithstanding any other provision of this
Agreement, actions taken that are expressly contemplated by this Agreement, and
the directly intended effects thereof (including Sections 4.2, and 5.3) shall
not be deemed to constitute a Wet Business Material Adverse Effect.
5
EXHIBIT B
▇▇▇▇▇▇▇ SUBSIDIARIES
▇▇▇▇▇▇▇ Wet Products, Inc. (Pennsylvania) ▇▇▇▇▇▇▇ Technology Cayman, Ltd.
(Cayman)
▇▇▇▇▇▇▇ Technology Finance, Inc. ▇▇▇▇▇▇▇ Wet Products GmbH (Germany)
(Pennsylvania) (a wholly owned subsidiary of
(a wholly owned subsidiary of ▇▇▇▇▇▇▇ Wet ▇▇▇▇▇▇▇ Technology Cayman, Ltd.)
Products, Inc.)
▇▇▇▇▇▇▇ Technology IP, Inc. (Delaware)
(a wholly owned subsidiary of ▇▇▇▇▇▇▇
Technology Finance,Inc.)