EXHIBIT 1
STRATEGIC BUSINESS COMBINATION AGREEMENT
BY AND BETWEEN
STEAG ELECTRONIC SYSTEMS AG
AND
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
JUNE 27, 2000
TABLE OF CONTENTS
Page
ARTICLE I. CAPITALIZATION OF NEWCO.......................................2
1.1 Transfer of Foreign STEAG Subsidiary Shares to Newco.........2
ARTICLE II. PURCHASE AND SALE OF STOCK...................................2
2.1 Purchase and Sale of Stock...................................2
2.2 Adjustment for Capital Changes...............................2
2.3 Assumed Obligations of STEAG.................................3
2.4 Closing......................................................3
2.5 Certificate Legends..........................................3
2.6 Allocation of Purchase Price.................................3
2.7 Tax Election.................................................4
2.8 Early Condition Satisfaction Date............................4
2.9 Post-Closing Adjustments.....................................5
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF STEAG.....................6
3.1 Due Incorporation............................................7
3.2 Due Authorization............................................7
3.3 Non-Contravention/Consents and Approvals.....................8
3.4 Capital Structure............................................9
3.5 Financial Statements; Undisclosed Liabilities;
Other Documents...........................................10
3.6 No Material Adverse Effects or Changes......................10
3.7 Properties..................................................11
3.8 Intellectual Property.......................................12
3.9 Insurance...................................................13
3.10 International Employee Plans................................13
3.11 United States Employee Matters and ERISA....................14
3.12 Labor Matters...............................................15
3.13 Tax Returns and Audits......................................16
3.14 Environmental Matters.......................................18
3.15 Litigation..................................................20
3.16 Compliance with Applicable Laws.............................20
3.17 Contracts; No Defaults......................................21
3.18 Change in Control and Severance Payments....................21
3.19 Year 2000...................................................21
3.20 Broker's/Finder's Fees......................................22
3.21 Interim Operations of Newco.................................22
3.22 Investment..................................................22
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇...................22
4.1 Due Incorporation, Subsidiaries, and Due Authorization......23
4.2 Non-Contravention; Consents and Approvals...................23
4.3 Capitalization..............................................24
4.4 Financial Statements; Undisclosed Liabilities;
Other Documents...........................................25
4.5 SEC Filings.................................................26
4.6 No Material Adverse Effects or Changes......................26
4.7 Properties..................................................26
4.8 Intellectual Property.......................................27
4.9 Insurance...................................................28
4.10 Employee Matters and ERISA..................................28
4.11 Labor Matters...............................................30
4.12 Tax Returns and Audits......................................30
4.13 Environmental Matters.......................................32
4.14 Litigation..................................................33
4.15 Compliance with Applicable Laws.............................34
4.16 Contracts; No Defaults......................................34
4.17 Change in Control and Severance Payments....................34
4.18 Year 2000...................................................35
4.19 Brokers and Finders.........................................35
4.20 Opinion of Financial Advisor................................35
4.21 Vote Required...............................................35
4.22 Investment Company Act......................................35
4.23 CFM Agreement...............................................35
ARTICLE V. CONDUCT PRIOR TO THE CLOSING..................................36
5.1 Conduct of Business of STEAG Subsidiaries...................36
5.2 Conduct of Business of ▇▇▇▇▇▇▇..............................38
5.3 Other Negotiations..........................................40
5.4 German Counterpart Agreement................................41
ARTICLE VI. ADDITIONAL AGREEMENTS AND COVENANTS..........................41
6.1 Covenant to Satisfy Conditions..............................41
6.2 Proxy Materials and Stockholder Approval....................42
6.3 Integration Committee.......................................43
6.4 Employee Benefits...........................................43
6.5 Sale of Shares Pursuant to Regulation D.....................44
6.6 Access to Information.......................................44
6.7 Confidentiality.............................................45
6.8 Public Disclosure...........................................45
6.9 Regulatory Approval; Further Assurances.....................45
6.10 Legal Requirements..........................................46
6.11 Stock Option Grants.........................................47
6.12 Conveyance Taxes............................................47
6.13 STEAG Intercompany Indebtedness; Transfer to Newco..........47
6.14 Non-Solicitation of Employees...............................48
6.15 NASDAQ Listing..............................................48
6.16 Directors; Nominating Committee; Officers...................48
6.17 Name........................................................48
6.18 Access to Business Records..................................48
ARTICLE VII. CONDITIONS TO THE STRATEGIC BUSINESS COMBINATION............49
7.1 Conditions to Each Party's Obligation to Consummate the
Strategic Business Combination............................49
7.2 Conditions to Obligations of ▇▇▇▇▇▇▇........................50
7.3 Conditions to Obligations of STEAG..........................51
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER..........................53
8.1 Optional Termination........................................53
8.2 Automatic Termination.......................................55
8.3 Effect of Termination.......................................55
8.4 Amendment...................................................55
8.5 Extension; Waiver...........................................56
8.6 Notice of Termination.......................................56
ARTICLE IX. INDEMNIFICATION..............................................56
9.1 Indemnification.............................................56
9.2 Procedures for Indemnification..............................57
9.3 Defense of Third Party Claims...............................57
9.4 Settlement of Third Party Claims............................58
ARTICLE X. GENERAL PROVISIONS............................................59
10.1 Notices.....................................................59
10.2 Definitions.................................................60
10.3 Counterparts................................................60
10.4 Entire Agreement; Nonassignability..........................61
10.5 Severability................................................61
10.6 Remedies Cumulative.........................................61
10.7 No Survival of Warranties...................................61
10.8 Expenses....................................................61
10.9 United States Dollars.......................................61
10.10 Governing Law...............................................61
10.11 Consent to Jurisdiction.....................................62
10.12 Rules of Construction.......................................62
10.13 Third Party Beneficiaries...................................62
10.14 Certain Payments by ▇▇▇▇▇▇▇.................................62
THIS STRATEGIC BUSINESS COMBINATION AGREEMENT (this "Agreement"),
dated as of June 27, 2000, is entered into by and among STEAG Electronic
Systems AG, an Aktiengesellschaft organized and existing under the laws of
the Federal Republic of Germany ("STEAG"), and ▇▇▇▇▇▇▇ Technology, Inc., a
Delaware corporation ("Mattson").
RECITALS
A. STEAG and Mattson desire to enter into a transaction pursuant
to which Mattson will directly or indirectly acquire 100% of the issued and
outstanding capital stock, equity ownership or its equivalent (which, for
purposes of this Agreement, shall be referred to as "capital stock") (the
"Stock Acquisition") of the STEAG subsidiaries listed on Exhibit A to this
Agreement and STEAG Electronic Systems Semiconductor GmbH, a Gesellschaft
mit beschraenkter Haftung recently organized in connection with this
Agreement and existing under the laws of the Federal Republic of Germany
("Newco") (collectively with the subsidiaries listed on Exhibit A, the
"STEAG Subsidiaries").
B. Prior to the Closing (as defined below), STEAG will contribute,
assign or otherwise transfer all of the capital stock it owns directly in
of each of those STEAG Subsidiaries incorporated or organized in
jurisdictions other than the U.S.A. and Germany to Newco, and at STEAG's
option, STEAG may also contribute, assign or otherwise transfer to Newco
all of the capital stock STEAG owns directly in of each of those STEAG
Subsidiaries incorporated in the U.S.A. (collectively, all such
subsidiaries of STEAG that STEAG contributes or transfers to Newco, the
"Foreign STEAG Subsidiaries" and such capital stock, the "Foreign
Subsidiary Shares"), after which STEAG will own 100% of the capital stock
of Newco.
C. To effect the Stock Acquisition, at the Closing, STEAG will
sell, assign and transfer to ▇▇▇▇▇▇▇ 100% of the issued and outstanding
capital stock of Newco, each of the other STEAG Subsidiaries incorporated
or organized in Germany and each of the STEAG Subsidiaries incorporated in
the U.S.A. that STEAG owns directly and does not contribute or otherwise
transfer to Newco (the "Direct STEAG Subsidiaries", and such capital stock,
the "Direct Subsidiary Shares"), and in consideration thereof ▇▇▇▇▇▇▇ will
issue and deliver to STEAG shares of ▇▇▇▇▇▇▇'▇ common stock, par value
$0.001 per share (the "▇▇▇▇▇▇▇ Common Stock"), as provided in Article II
below (the "Share Issuance"; together, the Stock Acquisition and the Share
Issuance are referred to herein as the "Strategic Business Combination").
D. Concurrently herewith, Mattson, M2C Acquisition Corporation, a
Delaware corporation and a wholly-owned subsidiary of Mattson ("M2C"), and
CFM Technologies, Inc., a Pennsylvania corporation ("CFM"), are executing
an Agreement and Plan of Merger of even date herewith (the "CFM Agreement")
which provides (among other things) that, subject to the terms and
conditions thereof, M2C shall be merged with and into CFM (the "CFM
Merger"), and it is the intent and desire of STEAG, ▇▇▇▇▇▇▇ and CFM that
the Strategic Business Combination and the CFM Merger be mutually
conditioned on the simultaneous consummation of both such transactions for
the long-term strategic benefit of their respective stockholders.
E. STEAG and ▇▇▇▇▇▇▇ desire to make certain representations,
warranties, covenants, and agreements in connection with the transactions
contemplated by this Agreement.
F. The Supervisory Board (Aufsichtsrat) and the Management Board
(Vorstand) of STEAG and the Board of Directors of ▇▇▇▇▇▇▇ have approved the
transactions contemplated by this Agreement in accordance with the laws of
their respective jurisdictions of organization and have authorized the
execution and delivery of this Agreement.
G. In order to induce STEAG to enter into this Agreement, ▇▇▇▇
▇▇▇▇▇▇▇ has entered into an agreement, dated the date hereof, between STEAG
and ▇▇▇▇ ▇▇▇▇▇▇▇ (the "Voting Agreement"), pursuant to which ▇▇▇▇ ▇▇▇▇▇▇▇
has agreed to vote all of his shares of Mattson Common Stock in favor of
the Mattson Stockholder Proposal (as defined in Section 4.2(b)(iii) below).
NOW, THEREFORE, in consideration of the covenants and
representations set forth herein, and for other good and valuable
consideration, STEAG and ▇▇▇▇▇▇▇ agree as follows:
ARTICLE I.
CAPITALIZATION OF NEWCO
1.1 TRANSFER OF FOREIGN STEAG SUBSIDIARY SHARES TO NEWCO. Prior to
the Closing (as defined below in Section 2.4), STEAG shall transfer and
deliver, whether by capital contribution, sale or otherwise, the Foreign
Subsidiary Shares to Newco, notarized in accordance with applicable law as
necessary to effect their transfer. The transactions described in this
Section 1.1 will be effected in such manner that (a) Newco will own all of
the Foreign Subsidiary Shares, (b) Newco will have no other assets or
liabilities (other than its initial 25,000 Euro cash capitalization) and
(c) STEAG will own 100% of the issued and outstanding capital stock of
Newco (the "Newco Shares" and, together with the Direct Subsidiary Shares,
the "STEAG Shares").
ARTICLE II.
PURCHASE AND SALE OF STOCK
2.1 PURCHASE AND SALE OF STOCK. At the Closing, ▇▇▇▇▇▇▇ shall
purchase and accept delivery of the STEAG Shares from STEAG, and STEAG
shall sell, transfer, and deliver the STEAG Shares to ▇▇▇▇▇▇▇. In
consideration of such sale, at the Closing, (a) ▇▇▇▇▇▇▇ shall issue and
deliver to STEAG: (i) 11,850,000 shares of ▇▇▇▇▇▇▇ Common Stock, subject to
adjustment pursuant to Section 2.2 below (the "▇▇▇▇▇▇▇ Shares"), (ii)
US$100,000 payable in immediately available funds to an account designated
in a written notice delivered to ▇▇▇▇▇▇▇ by STEAG at least three (3)
business days prior to the Closing and (iii) if applicable, the ▇▇▇▇▇▇▇
Note referred to in Section 8.1(j), and (b) ▇▇▇▇▇▇▇ shall assume the
obligations referred to in Section 2.3.
2.2 ADJUSTMENT FOR CAPITAL CHANGES. If, between the date of this
Agreement and the Closing, the outstanding shares of ▇▇▇▇▇▇▇ Common Stock
shall have been changed into a different number of shares or a different
class by reason of any reclassification, recapitalization, stock split,
reverse stock split, combination, or exchange of shares, or a stock
dividend or dividend payable in any other securities shall be declared with
a record date within such period, or any similar event affecting shares of
▇▇▇▇▇▇▇ Common Stock shall have occurred (each a "Capital Change"), the
number of ▇▇▇▇▇▇▇ Shares and/or type of security issuable to STEAG pursuant
to the Share Issuance (the "▇▇▇▇▇▇▇ Share Amount") shall be proportionately
adjusted to reflect any such Capital Change.
2.3 ASSUMED OBLIGATIONS OF STEAG. Effective upon the Closing,
STEAG will assign to ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ will assume from STEAG, STEAG's
rights and obligations under the agreements, guarantees or other
instruments listed on Schedule 2.3 attached hereto. Except as provided in
this Section 2.3 and Schedule 2.3 or as expressly provided elsewhere in
this Agreement, ▇▇▇▇▇▇▇ does not assume any obligation or right of STEAG.
2.4 CLOSING. The closing of the transactions contemplated hereby
(the "Closing") shall take place as soon as practicable, but no later than
three (3) business days, after the later of (i) satisfaction or waiver of
each of the conditions set forth in Article VII hereof and (ii) January 1,
2001, or at such other time as the parties hereto agree (the "Closing
Date"). The Closing shall take place at the offices of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ &
Freidenrich LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ or at such
other location or locations as the parties hereto agree.
2.5 CERTIFICATE LEGENDS. The ▇▇▇▇▇▇▇ Shares to be issued pursuant
to this Article II shall not have been registered and shall be
characterized as "restricted securities" under the United States federal
securities laws, and under such laws such shares may be resold without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), only in certain limited circumstances. Each certificate evidencing
the ▇▇▇▇▇▇▇ Shares to be issued pursuant to this Article II shall bear the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER THE
SECURITIES ACT, SUCH EXEMPTION TO BE EVIDENCED BY AN OPINION OF
LEGAL COUNSEL OR OTHER DOCUMENTATION REASONABLY ACCEPTABLE TO THE
COMPANY."
and such other legends as required pursuant to the Stockholder Agreement
(as defined in Section 7.2(f)).
2.6 ALLOCATION OF PURCHASE PRICE. STEAG and ▇▇▇▇▇▇▇ agree to
allocate the value of (i) the Newco Shares among the Foreign STEAG
Subsidiaries and (ii) the ▇▇▇▇▇▇▇ Shares among the Direct STEAG
Subsidiaries and Newco for financial accounting and tax purposes in
accordance with the percentages set forth on the allocation schedule
attached as Schedule 2.6 attached hereto. Neither STEAG nor ▇▇▇▇▇▇▇ shall
voluntarily take any position for purposes of any federal, state,
provincial, or local income tax with respect to the allocation of the
▇▇▇▇▇▇▇ Shares and Newco Shares which is inconsistent with such allocation.
Nothing herein will limit STEAG's right to determine the stated values of
the Direct Subsidiary Shares contributed to Newco or the number of Newco
Shares issued as long as the percentages provided on Schedule 2.6 are
unaffected.
2.7 TAX ELECTION. After consummation of the Strategic Business
Combination, ▇▇▇▇▇▇▇ may, in its sole discretion, make an election, and may
cause some or all of the STEAG Subsidiaries, to make an election, under
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. ▇▇▇▇▇▇▇ acknowledges and agrees that STEAG makes no
representations or warranties that any such election is available and that
STEAG shall have no liability to ▇▇▇▇▇▇▇ or any other person for the
consequences of any such election.
2.8 EARLY CONDITION SATISFACTION DATE. If (i) prior to December 1,
2000, all of the conditions set forth in Section 7.1 have been satisfied,
▇▇▇▇ ▇▇▇▇▇▇▇ shall have executed and delivered counterparts of the
Stockholder Agreement, and all of the conditions set forth in Sections 7.2
and 7.3 (other than conditions which, by their nature, can only be
satisfied by delivery of securities, documents or other instruments on the
Closing Date) would have been either satisfied or waived by the relevant
party were the Closing to occur at such time and (ii) simultaneously with
the actions contemplated by this Section 2.8, the actions contemplated by
Section 1.10 of the CFM Agreement (the "CFM Early Satisfaction Date
Actions") also occur and STEAG is provided reasonably satisfactory evidence
of the simultaneous occurrence thereof, then, no later than three (3)
business days thereafter (the "STEAG Early Condition Satisfaction Date") at
a place and time (simultaneous with the CFM Early Satisfaction Date
Actions), to be mutually agreed upon by the parties and CFM, the parties
shall take the following actions:
(a) ▇▇▇▇▇▇▇ and STEAG will each deliver or cause to be
delivered to the other the closing certificates and legal
opinions that would have been required at the Closing
pursuant to Sections 7.2 (c) and (g) and Sections 7.3 (c)
and (i); provided, that such certificates and opinions
shall be dated as of the STEAG Early Condition
Satisfaction Date and shall address representations,
warranties and covenants, in the case of certificates,
and opinions, in the case of legal opinions, as of such
date;
(b) ▇▇▇▇▇▇▇ and STEAG shall each execute and deliver the
Stockholder Agreement; and ▇▇▇▇▇▇▇ and STEAG shall
execute and deliver the Transition Services Agreement and
such other agreements as would have been required at the
Closing pursuant to Sections 7.2 and 7.3; provided, that
such agreements shall be dated as of the STEAG Early
Condition Satisfaction Date and shall become effective
upon, but not before, the Closing Date; and
(c) ▇▇▇▇▇▇▇ shall execute and deliver to STEAG an irrevocable
acknowledgement and waiver, in form and substance
reasonably satisfactory to STEAG and CFM, of the
satisfaction or waiver of the closing conditions set
forth in Sections 7.2 and the waiver of ▇▇▇▇▇▇▇'▇
termination rights set forth in Sections 8.1; and STEAG
shall execute and deliver to ▇▇▇▇▇▇▇ an irrevocable
acknowledgement and waiver, in form and substance
reasonably satisfactory to ▇▇▇▇▇▇▇ and CFM, of the
satisfaction or waiver of the closing conditions set
forth in Sections 7.3 and the waiver of STEAG's
termination rights set forth in Sections 8.1.
Notwithstanding anything contained in this Section 2.8 above, the
Closing shall not occur, and STEAG shall not sell or transfer to ▇▇▇▇▇▇▇,
and ▇▇▇▇▇▇▇ shall not acquire ownership of, any of the STEAG Subsidiaries,
prior to January 1, 2001.
For the purposes of this Section 2.8, the condition set forth in
Section 7.1(g) shall be deemed satisfied if, concurrently with the taking
of the actions referred to in clauses (a), (b) and (c) above of this
Section 2.8 on the STEAG Early Condition Satisfaction Date, the CFM Early
Satisfaction Date Actions are taken.
2.9 POST-CLOSING ADJUSTMENTS. The following adjustments will be
made with regard to the profits and losses, cash position and
capitalization of the STEAG Subsidiaries following the Closing:
(a) As promptly as practicable, but in no event more than 60
days following the Closing Date, ▇▇▇▇▇▇▇ shall prepare and deliver to STEAG
(i) audited income statements of STEAG RTP Systems GmbH and STEAG MicroTech
GmbH for the year ended December 31, 2000 (the "Year 2000 Income
Statements"), and (ii) a statement of the aggregate cash and cash
equivalents of the combined STEAG Subsidiaries as of December 31, 2000 (the
"Closing Cash Statement" and, together with the Year 2000 Income
Statements, the "Closing Financial Statements"). The Year 2000 Income
Statements shall be prepared in accordance with German GAAP (as defined in
Section 3.5) applied on a basis consistent with the accounting principles
used in preparation of the income statements for STEAG RTP Systems GmbH and
STEAG MicroTech GmbH referred to in Section 3.5(a). The Year 2000 Income
Statements shall be audited by PricewaterhouseCoopers ("PWC"), using
procedures and methods consistent with past practice; provided that
▇▇▇▇▇▇▇'▇ auditors, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("AA"), shall be permitted to
participate in such audits. The Closing Cash Statement shall be certified
by PWC. STEAG will make available such STEAG employees who are reasonably
necessary for the preparation of the Closing Financial Statements, using
the books and records of the STEAG Subsidiaries, to assist ▇▇▇▇▇▇▇ in
preparing the Closing Financial Statements.
(b) Unless within 10 business days after its receipt of the
Closing Financial Statements, STEAG delivers to ▇▇▇▇▇▇▇ a detailed written
statement describing its objections to the Year 2000 Income Statements or
the Closing Cash Statement, such Closing Financial Statements shall be
final and binding. If STEAG delivers such a written objection statement to
▇▇▇▇▇▇▇, the parties and their respective auditors will use reasonable
efforts to resolve any disputes, but if a final resolution is not reached
within 20 business days after ▇▇▇▇▇▇▇ has submitted its objections, any
remaining disputes will be resolved by an internationally recognized firm
of independent certified public accountants (excluding PWC and AA) mutually
selected by ▇▇▇▇▇▇▇ and STEAG or, if they are unable to agree, by PWC and
AA (the "Reviewing Accountants"). The Reviewing Accountants shall be
instructed to resolve any matters in dispute as promptly as practicable
and, in any event, within 30 days after the dispute is submitted to them.
The determination of the Reviewing Accountants will be final and binding.
▇▇▇▇▇▇▇ and STEAG will each pay one-half of the fees and expenses of the
Reviewing Accountants. ▇▇▇▇▇▇▇ and STEAG shall cooperate with each other
and the Reviewing Accountants in connection with the matters contemplated
by this Section 2.9, including by furnishing such information and access to
such books, records (including accountants' work papers), personnel and
properties as may be reasonably requested.
(c) Within 5 days after the Closing Financial Statements
become final, in accordance with the Profit Transfer Contracts (as defined
in Section 3.5(c)), (i) ▇▇▇▇▇▇▇ will cause STEAG RTP Systems GmbH and/or
STEAG MicroTech GmbH to transfer the net profit, if any, for fiscal year
2000 to STEAG, or (ii) STEAG will reimburse STEAG RTP Systems GmbH and/or
STEAG MicroTech GmbH for the net loss, if any, for fiscal 2000.
(d) If, after taking into account any profit and loss
reimbursement pursuant to Section 2.9(c), the aggregate cash balance of the
combined STEAG Subsidiaries would exceed $10,075,000, ▇▇▇▇▇▇▇ shall cause
the additional cash in excess of $10,075,000 to be transferred to STEAG at
the time of any payments under Section 2.9(c); provided, that ▇▇▇▇▇▇▇ shall
not be obligated to transfer more than DM20,000,000 of such excess cash.
If, after taking into account any profit and loss reimbursement pursuant to
Section 2.9(c), the aggregate cash balance of the combined STEAG
Subsidiaries would be less than $10,075,000, STEAG shall contribute to the
STEAG Subsidiaries (allocated among the STEAG Subsidiaries as agreed by the
parties) cash in the amount of such deficit at the time of any payments
under Section 2.9(c ); provided, that STEAG shall not be obligated to
contribute more than DM20,000,000 of such deficit.
2.10 TRANSFER OF U.S. STEAG Subsidiaries to Newco. Not later than
10 days prior to the Closing, STEAG may, at its sole discretion, transfer
the shares of each of the STEAG Subsidiaries incorporated in the U.S.A.
that STEAG owns directly to Newco. In such event, notwithstanding anything
to the contrary contained in this Agreement, (i) STEAG shall have no
obligation to transfer the shares of such U.S. STEAG Subsidiaries to
▇▇▇▇▇▇▇ at the Closing, and (ii) at the time of any contribution or
reimbursement to or from the STEAG Subsidiaries pursuant to Section 2.9(c),
STEAG shall contribute to the STEAG Subsidiaries (or the profit to be
transferred to STEAG shall be reduced by) an amount equal to $12,300,000.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF STEAG
STEAG represents and warrants to ▇▇▇▇▇▇▇ as follows, except as
disclosed in a document of even date herewith and delivered by STEAG to
▇▇▇▇▇▇▇ referring to the representations and warranties in this Agreement
(the "STEAG Disclosure Schedule"). (The STEAG 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 STEAG 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 STEAG
Disclosure Schedule is specifically cross-referenced in another numbered
and lettered section of the STEAG Disclosure Schedule.)
3.1 DUE INCORPORATION.
(a) STEAG and each of the STEAG 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. STEAG and each of the STEAG 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 STEAG Material
Adverse Effect (as defined in Section 3.6 hereof). The jurisdictions in
which the STEAG Subsidiaries are qualified to do business as a foreign
corporation are set forth next to each such entity's name on Section 3.1 of
the STEAG Disclosure Schedule. True, correct, and complete copies of
STEAG's Memorandum and Articles of Association (Satzung) and Management
Board (Vorstand) Rules of Procedure (Geschaeftsordnung), and the
organizational documents of each STEAG Subsidiary have been delivered to
▇▇▇▇▇▇▇.
(b) Section 3.1 of the STEAG Disclosure Schedule sets forth
the name of each STEAG Subsidiary, the nation or jurisdiction of its
incorporation or organization, a description of the equity ownership
interest in each such STEAG Subsidiary by STEAG, any other STEAG
Subsidiary, and/or any other person, and a brief description of the
principal line or lines of business conducted by each such entity. Except
as set forth on Section 3.1 of the STEAG Disclosure Schedule, all of the
issued and outstanding shares or other units of capital stock of each STEAG
Subsidiary are validly issued, fully paid, nonassessable, and free of
preemptive rights, and are owned, directly or indirectly, by STEAG 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 (collectively,
"Encumbrances"). None of the STEAG Subsidiaries are subject or party to any
profit distribution, profit-sharing or profit transfer agreements other
than the Profit Transfer Contracts as defined in Section 3.5(c). At the
Closing, ▇▇▇▇▇▇▇ will receive good and valid title to shares or other units
of capital stock representing one hundred percent (100%) of the equity
ownership interest of Newco and each Direct STEAG Subsidiary, and Newco
will hold good and valid title to each Foreign STEAG Subsidiary, free and
clear of any Encumbrances.
3.2 DUE AUTHORIZATION. STEAG has full corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery, and performance by STEAG of
this Agreement have been duly and validly approved and authorized by the
Management Board (Vorstand) and the Supervisory Board (Aufsichtsrat) of
STEAG and, except for resolutions and corporate formalities required to
implement Section 1.1, no other actions or proceedings on the part of STEAG
are necessary to authorize this Agreement and the transactions contemplated
hereby. STEAG has duly and validly executed and delivered this Agreement.
This Agreement constitutes the legal, valid, and binding obligation of
STEAG 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).
3.3 NON-CONTRAVENTION/CONSENTS AND APPROVALS.
(a) The execution and delivery of this Agreement by STEAG does
not, and the performance by STEAG 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 STEAG or any STEAG
Subsidiary under, any of the terms, conditions or provisions of (i)
Memorandum and Articles of Association (Satzung) or Management Board
(Vorstand) Rules of Procedure, or the articles of incorporation or bylaws
(or other comparable charter documents) of STEAG or any STEAG Subsidiary,
or (ii) subject to the taking of the actions described in paragraph (b) of
this Section 3.3, (x) any statute, law, rule, regulation, or ordinance
(together, "Laws") applicable to STEAG and the STEAG Subsidiaries, or any
judgment, decree, order, writ, permit, or license, of any Governmental
Entity (as defined in paragraph (b) below), applicable to STEAG or any
STEAG Subsidiary or any of their respective assets or properties, or (y)
any contract, agreement, or commitment to which STEAG or any STEAG
Subsidiary is a party or by which STEAG or any STEAG 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 STEAG Material
Adverse Effect or would not result in the inability of STEAG 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 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) (a "Governmental Entity"), is
required to be made or obtained by STEAG or any of the STEAG Subsidiaries
for the execution and delivery of this Agreement or the consummation by
STEAG of the transactions contemplated hereby, the failure to obtain which
would reasonably be expected to have a STEAG Material 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 STEAG or its ultimate parent entity under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (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 STEAG is qualified to transact business, including, if applicable,
any filing under the German Act Against Restraints on Competition of 1958
(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
Direct Subsidiary Shares to Newco by STEAG; and
(iv) such other filings, authorization orders and
approvals as may be required of state and local Governmental Entities (the
"Local Approvals") which are specified in Schedule 3.3 hereto.
3.4 CAPITAL STRUCTURE.
(a) Section 3.4 of the STEAG Disclosure Schedule sets forth
for each of the STEAG Subsidiaries:
(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;
(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) 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 STEAG or any of the STEAG Subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of the STEAG Subsidiaries, or (ii) warrants, calls, options, or
other rights to acquire from the STEAG Subsidiaries, or any obligation of
any of the STEAG 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 STEAG
Subsidiaries; and, except for this Agreement, there are no outstanding
obligations of the STEAG 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.
3.5 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES; OTHER
DOCUMENTS.
(a) For purposes of this Agreement, the "STEAG Financial
Statements" shall mean the separate audited financial statements of each of
the STEAG Subsidiaries as of December 31, 1999 and December 31, 1998
(including all notes thereto) and the unaudited combined, consolidated
financial statements of the STEAG Subsidiaries as of December 31, 1999 and
December 31, 1998, consisting of the balance sheets at such dates and the
related statements of income for the years then ended (except as otherwise
specified in Section 3.5(a) of the STEAG Disclosure Schedule). The audited
STEAG Financial Statements for each STEAG Subsidiary have been prepared in
accordance with generally accepted accounting principles ("GAAP")
applicable in the respective countries in which each STEAG Subsidiary is
incorporated or organized, and the unaudited combined, consolidated STEAG
Financial Statements have been prepared in accordance with U.S. GAAP, in
each case consistently applied. The STEAG Financial Statements present
fairly the financial position of the STEAG Subsidiaries as at the dates
thereof and the results of operations of the STEAG Subsidiaries for the
periods covered thereby, except for the absence of notes to the unaudited
combined, consolidated STEAG Financial Statements.
(b) The STEAG Subsidiaries 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 December 31, 1999
unaudited combined, consolidated balance sheet of the STEAG Entities (the
"STEAG Base Balance Sheet") or the notes to the December 31, 1999 audited
STEAG Financial Statements for each of the STEAG Subsidiaries, (ii)
liabilities and obligations incurred since December 31, 1999 which are
either incurred in the ordinary course of its business consistent with past
practice, or, if incurred outside the ordinary course of business, are not
substantial in amount, (iii) such other liabilities and obligations that,
individually and in the aggregate, do not have and would not reasonably be
expected to have a STEAG Material Adverse Effect, and (iv) as otherwise set
forth on the STEAG Disclosure Schedule.
(c) The Profit Transfer Contracts, dated September 30 and 26,
1997, respectively, between STEAG, on the one hand, and STEAG RTP Systems
GmbH and STEAG MicroTech GmbH, on the other hand (the "Profit Transfer
Contracts") shall have terminated on or before December 31, 2000; provided
that such German STEAG Subsidiaries will continue to be obligated in
accordance with such agreements to transfer any profits or losses for the
year ending December 31, 2000 at such time after December 31, 2000 and in
such manner as is set forth in Section 2.9.
3.6 NO MATERIAL ADVERSE EFFECTS OR CHANGES. Except as described on
Section 3.6 of the STEAG Disclosure Schedule, or as disclosed in or
reflected in the STEAG Financial Statements, or as contemplated by this
Agreement, since December 31, 1999, none of the STEAG Subsidiaries has (i)
taken any of the actions set forth in subparagraphs (a) through (r) of
Section 5.1 hereof, (ii) suffered any STEAG Material Adverse Effect, and no
facts or conditions exist which are reasonably likely to have, in the
aggregate, a STEAG Material Adverse Effect, (iii) suffered any damage,
destruction, or Loss to any of its assets or properties which is material
to the STEAG 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 STEAG Subsidiaries, other than in the ordinary course
of business consistent with past practice by more than 10%. "Loss" shall
mean liabilities, losses, costs, claims, damages, penalties, and expenses
(including attorneys' fees and expenses and costs of investigation and
litigation). "STEAG Material Adverse Effect" shall mean an effect on the
business, operations, assets, liabilities, results of operations, cash
flows or condition (financial or otherwise), of all or any of the STEAG
Subsidiaries, which is materially adverse to the STEAG Subsidiaries, taken
as a whole; provided, that any Loss (including loss of business) suffered
by STEAG or any of the STEAG Subsidiaries as a result of certain patent
litigation between CFM and certain STEAG affiliates or the settlement
thereof shall not be deemed to constitute a STEAG Material Adverse Effect
for purposes of this Agreement.
3.7 PROPERTIES.
(a) Except as disclosed on Section 3.7 of the STEAG Disclosure
Schedule, the STEAG Subsidiaries (i) have good and valid title to all of
the tangible and intangible assets, properties, and rights reflected in the
STEAG Base Balance Sheet or acquired after December 31, 1999 (other than
assets leased under the leases set forth in Section 3.7 of the STEAG
Disclosure Schedule and assets disposed of in the ordinary course of
business since the date of the STEAG Base Balance Sheet), 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 lien, encumbrance, pledge, or similar
interest, except for liens for Taxes not yet due and payable and other
imperfections of title that, individually and in the aggregate, are not
substantial in character or amount and do not materially interfere with the
business of the STEAG Subsidiaries as presently conducted ("Permitted
Liens"). The tangible and intangible assets, properties and rights owned by
the STEAG Subsidiaries taken together are sufficient to permit the conduct
of such business as presently conducted.
(b) Except as otherwise identified in Section 3.7 of the STEAG
Disclosure Schedule hereto, the material tangible assets of each of the
STEAG Subsidiaries, including all mobile equipment, are, in the aggregate,
in good condition and repair, reasonable wear and tear excepted, and are,
in the aggregate, in condition suitable for the use to which they are put
in the respective business of each of the STEAG Subsidiaries.
(c) Set forth on Section 3.7(b) of the STEAG Disclosure
Schedule is a complete list of the facilities in which the STEAG
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 to ▇▇▇▇▇▇▇ or its counsel.
3.8 INTELLECTUAL PROPERTY. Except as disclosed in Section 3.8 of
the STEAG Disclosure Schedule hereto:
(a) 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 STEAG 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 STEAG Material Adverse
Effect (the "STEAG Intellectual Property"), are either (i) owned by the
relevant STEAG Subsidiary free and clear of any lien, encumbrance, pledge,
or similar interest and are not subject to any license, royalty or other
agreement or (ii) licensed by the relevant STEAG Subsidiary pursuant to an
agreement described in Section 3.8(g).
(b) None of the STEAG Intellectual Property has been since
January 1, 1998 or is the subject of any pending or, to STEAG's knowledge,
threatened (in writing) litigation or claim of infringement.
(c) No license or royalty agreement to which any STEAG
Subsidiary is a party (including any agreement regarding Licensed
Intellectual Property as defined below) is, to STEAG's knowledge, in breach
or default by any party thereto or the subject of any notice of termination
given or threatened (in writing), which breach, default or termination
would reasonably be expected to have a STEAG Material Adverse Effect.
(d) To STEAG's knowledge, none of the products manufactured or
sold by the STEAG Subsidiaries, nor any process, method, part, design, or
material they employ, nor the marketing, distribution and use by the STEAG
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 STEAG Subsidiaries have not
received any written notice contesting their right to use any STEAG
Intellectual Property, which claim or contestation, if successful, would
reasonably be expected to have a STEAG Material Adverse Effect.
(e) To the extent that any STEAG Intellectual Property is
licensed by a third party to any STEAG Subsidiary (such STEAG 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 such license agreement which would give the other
contracting party a right to terminate such agreement; (ii) alter or
diminish the rights assigned or transferred to ▇▇▇▇▇▇▇ or Newco from that
originally granted to any STEAG Subsidiary (as the case may be) under such
agreement; or (iii) alter or increase the obligations delegated or
transferred to ▇▇▇▇▇▇▇ or Newco from that originally imposed on any STEAG
Subsidiary (as the case may be) under such agreement.
(f) STEAG has disclosed to ▇▇▇▇▇▇▇ any standard forms of
Assignment Agreement generally signed by employees of STEAG Subsidiaries.
To STEAG's knowledge, all employees of the STEAG Subsidiaries who are
employed for the purpose of the development, invention or creation of any
STEAG 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.
(g) Section 3.8(g) of the STEAG 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 STEAG Intellectual Property (other than any Licensed Intellectual
Property), and specifies the jurisdictions in which such STEAG 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 the names of all registered owners;
and (iii) all agreements to which any of the STEAG Intellectual Property
(other than any Licensed Intellectual Property) may be subject.
(h) There are no exclusive licenses, exclusive distributorship
agreements, or noncompetition agreements with respect to the use of any
STEAG Intellectual Property or the development, sale, or distribution of
any products of any STEAG Subsidiary, or any other material restrictions
regarding the right of any of the STEAG Subsidiaries to fully exploit any
STEAG Intellectual Property anywhere in the world. None of the STEAG
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.
3.9 INSURANCE. Section 3.9 of the STEAG Disclosure Schedule hereto
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 STEAG Subsidiary. 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 except as would not have a STEAG Material Adverse Effect. STEAG
has delivered to ▇▇▇▇▇▇▇ a true and complete copy or description of all
insurance policies, including all occurrence-based policies, applicable to
the STEAG Subsidiaries, since January 1, 1998. Except as set forth in
Section 3.9 of the STEAG Disclosure Schedule, none of the STEAG
Subsidiaries has been unable to obtain insurance with respect to its assets
or operations since January 1, 1998.
3.10 INTERNATIONAL EMPLOYEE PLANS. Section 3.10 of the STEAG
Disclosure Schedule contains a complete list or a description of 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, whether written or, to
STEAG's knowledge, unwritten, that has been adopted or maintained by any of
the STEAG Subsidiaries, whether formally or, to STEAG's knowledge,
informally, for the benefit of employees outside the United States ("STEAG
International Employee Plans"). Each STEAG 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 STEAG
International Employee Plan. No STEAG International Employee Plan has
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 STEAG Subsidiaries (or ▇▇▇▇▇▇▇ following the
Strategic Business Combination) from terminating or amending any STEAG
International Employee Plan at any time for any reason.
3.11 UNITED STATES EMPLOYEE MATTERS AND ERISA. With regard to
those employees of any STEAG Subsidiary which is located within the United
States (a "US STEAG Subsidiary"):
(a) Section 3.11 of STEAG 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 STEAG Subsidiary covering employees, former
employees, directors, or former directors of such US STEAG Subsidiary or
their beneficiaries, or providing benefits to such persons in respect of
services provided to any such entity, including, but not limited to, 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 or change in control agreement, plan, policy, or program between
the US STEAG Subsidiary and any employee thereof (collectively, the "US
STEAG Benefit Plans"). For purposes of this Section 3.11, "US STEAG
Subsidiary" includes any STEAG Subsidiary which has employees in the U.S.,
other than employees of STEAG subsidiaries incorporated outside the U.S.A.
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 STEAG Subsidiary to any US STEAG 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 STEAG Financial Statements.
(c) Qualification; Compliance. Each of the US STEAG 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 STEAG, no circumstances exist that
could reasonably be expected to result in the revocation of any such
determination. Each US STEAG Subsidiary is in compliance in all material
respects with, and each of the US STEAG Benefit Plans is and has been
operated in all material respects in compliance with, all applicable laws,
rules, and regulations governing such plan, including, without limitation,
ERISA and the Code. Each US STEAG 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 STEAG, threatened claims under or in
respect of any US STEAG Benefit Plan by or on behalf of any employee,
former employee, director, former director, or beneficiary thereof, or
otherwise involving any US STEAG Benefit Plan (other than routine claims
for benefits).
(d) Title I or IV Liabilities. No event has occurred and, to
the knowledge of STEAG, 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 STEAG
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) STEAG, any US
STEAG 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 STEAG 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. STEAG has made available to
▇▇▇▇▇▇▇ a true and correct copy of each collective bargaining agreement to
which any US STEAG Subsidiary is a party or under which any US STEAG
Subsidiary has obligations and, with respect to each US STEAG 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 STEAG 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 STEAG 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 STEAG, in the case of each US STEAG 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 ▇▇▇▇▇▇▇, 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 STEAG 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.
3.12 LABOR MATTERS. Each STEAG 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 3.12 of the STEAG Disclosure
Schedule, there are, and during the past three years there have been, no
labor strikes, slow-downs or work stoppages pending or, to STEAG's
knowledge, threatened against or involving any STEAG Subsidiary. Except as
disclosed in Section 3.12 of the STEAG Disclosure Schedule, none of the
employees of any STEAG Subsidiary is covered by any collective bargaining
agreement, no collective bargaining agreement is currently being
negotiated, and, to STEAG's knowledge, no attempt is currently being made
or during the past three years has been made to organize any employees of
any STEAG Subsidiary to form or enter a labor union or similar
organization.
3.13 TAX RETURNS AND AUDITS. For the purposes of this Agreement, a
"Tax" or, collectively, "Taxes" means any and all federal, state, local,
foreign, and other taxes, assessments, and other 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, 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" as used in this Agreement, means a 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 STEAG or any
STEAG Subsidiary, as the case may be, or ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary,
as the case may be.
Except as set forth in Section 3.13 of the STEAG Disclosure
Schedule hereto:
(a) Filing of Timely Tax Returns. Each STEAG 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.
(b) Payment of Taxes. Each STEAG 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 taken.
(c) Tax Liens. There are no Tax liens upon the assets of any
STEAG Subsidiary except liens for Taxes not yet due.
(d) Withholding Taxes. Each STEAG 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 employee wages and pay over to
the proper Governmental Entities all amounts required.
(e) Extensions of Time for Filing Tax Returns. No STEAG
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 STEAG 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) Expiration of Statute of Limitations. The statute of
limitations for the assessment of all Taxes has expired for all applicable
Tax Returns of each STEAG Subsidiary or those Tax Returns have been
examined by the appropriate taxing authorities for all periods through the
date hereof, and no deficiency for any Taxes has been proposed, asserted,
or assessed against any STEAG Subsidiary that has not been resolved and
paid in full.
(h) 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 STEAG Subsidiary.
(i) Powers of Attorney. No power of attorney currently in
force has been granted by any STEAG Subsidiary concerning any Tax matter.
(j) Tax Rulings. No STEAG Subsidiary has received a Tax Ruling
(as defined below) or entered into a Closing Agreement (as defined below)
with any taxing authority that would reasonably be expected to have a
continuing STEAG Material Adverse Effect after the Closing Date. "Tax
Ruling," as used in this Agreement, shall mean a written ruling of a taxing
authority relating to Taxes. "Closing Agreement," as used in this
Agreement, shall mean a written and legally binding agreement with a taxing
authority relating to Taxes.
(k) Availability of Tax Returns. STEAG has made available to
▇▇▇▇▇▇▇ complete and accurate copies of (i) all Tax Returns, and any
amendments thereto, filed by any STEAG Subsidiary since January 1, 1998,
(ii) all audit reports received from any taxing authority relating to any
Tax Return filed by any STEAG Subsidiary and (iii) any Closing Agreements
entered into by any STEAG Subsidiary with any taxing authority.
(l) Tax Sharing Agreements. No STEAG Subsidiary is a party to
any agreement relating to allocating or sharing of Taxes.
(m) Liability for Others. No STEAG Subsidiary has any
liability for Taxes of any person other than STEAG and the STEAG
Subsidiaries (i) under any applicable law as a transferee or successor,
(ii) by contract, or (iii) otherwise, excluding potential obligations to
pay tax liabilities for foreign consultants or employees not to exceed
$250,000 in the aggregate.
(n) Affiliated Group. None of the STEAG Subsidiaries is and
none has been a member of an affiliated group of corporations filing a
consolidated income tax return, or a group of corporations filing a
consolidated, combined, or unitary income tax return under applicable tax
law, other than a group the common parent of which is or was STEAG itself,
STEAG's parent company or another STEAG Subsidiary.
(o) Accounting Adjustments. None of the STEAG 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.
(p) Partnerships or Joint Ventures. None of the STEAG
Subsidiaries is and none has been a member of a limited liability company
or a party to any joint venture, partnership, or other arrangement or
contract that is reported as a partnership for income tax purposes.
(q) Indemnities. None of the STEAG Subsidiaries has entered
into any indemnity for the benefit of any person in connection with any Tax
such as would reasonably be expected to result in a STEAG Material Adverse
Effect.
3.14 ENVIRONMENTAL MATTERS. Except as disclosed in Section 3.14 of
the STEAG Disclosure Schedule:
(a) Compliance. Each STEAG Subsidiary is in compliance with
all applicable Environmental Laws (as defined in Section 3.14(g)(ii)
hereof), and neither STEAG nor any STEAG Subsidiary has received any
written communication from any person or Governmental Entity that alleges
that any STEAG Subsidiary is not in compliance with applicable
Environmental Laws, except where the failure to be in such compliance would
not in the aggregate reasonably be expected to have a STEAG Material
Adverse Effect. STEAG has provided ▇▇▇▇▇▇▇ 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
(as defined in Section 3.14(g)(iii) hereof) by any STEAG Subsidiary or on
any property owned, leased to, controlled by, used by or adjacent to that
of any STEAG Subsidiary.
(b) Environmental Permits. Each STEAG Subsidiary has obtained
or has applied for all environmental, health and safety permits, and
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 STEAG Subsidiary is in compliance with
all terms and conditions of the Environmental Permits, except where the
failure to be in compliance would not in the aggregate reasonably be
expected to have a STEAG Material Adverse Effect, and STEAG believes that
any transfer, renewal, or reapplication for any Environmental Permit
required as a result of the Strategic Business Combination can be
accomplished in the ordinary course of business.
(c) Environmental Claims. There are no Environmental Claims
(as defined in Section 3.14(g)(i) hereof) pending or, to STEAG's knowledge,
threatened (i) against any STEAG Subsidiary or joint ventures, or (ii)
against any real or personal property or operations that any STEAG
Subsidiary owns, leases, or manages, in whole or in part.
(d) Releases. To STEAG's knowledge, there have been no
Releases (as defined in Section 3.14(g)(iv) hereof) of any Hazardous
Material (as defined in Section 3.14(g)(iii) hereof) on, at, upon, into or
from any property owned, leased to, controlled by or used by any STEAG
Subsidiary, nor has there been any Release of Hazardous Material,
including, but, not limited to, the off-site disposal of Hazardous
Material, that would reasonably be expected to form the basis of any
Environmental Claim against any STEAG Subsidiary, except any Environmental
Claims that, individually or in the aggregate, would not have a STEAG
Material Adverse Effect.
(e) USTs, ACM and Lead-Based Paint. To STEAG's knowledge,
there are no underground storage tanks or related piping located on, at,
upon, into or from any property owned, leased to, controlled by or used by
any STEAG Subsidiary, nor is there any asbestos or asbestos-containing
material or lead-based paint in, on or at any property or any facility or
equipment owned, leased or operated in connection with the business of any
STEAG Subsidiary which would reasonably be expected to result in a STEAG
Material Adverse Effect.
(f) Predecessors. STEAG has no knowledge of any Environmental
Claim pending or threatened, or of any Release of Hazardous Materials that
would reasonably be likely to form the basis of any Environmental Claim, in
each case against any person or entity (including, without limitation, any
predecessor of any STEAG Subsidiary) whose liability any STEAG Subsidiary
has or may have retained or assumed either contractually or by operation of
law or against any real or personal property which any STEAG Subsidiary
formerly owned, leased or managed, in whole or in part which would
reasonably be expected to result in a STEAG Material Adverse Effect.
(g) As used in this Agreement:
(i) "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, 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 STEAG
Subsidiaries or joint ventures (for purposes of this Section 3.14); (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.
(ii) "Environmental Laws" means 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, 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.
(iii) "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; and (c) any other
chemical, material, substance, or waste, which is regulated under any
Environmental Law in a jurisdiction in which STEAG or any of its
subsidiaries or joint ventures operate.
(iv) "Release" means any release, spill, emission,
leaking, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the atmosphere, soil, surface water, groundwater, or
property.
3.15 LITIGATION.
(a) Except as disclosed in Section 3.15 of the STEAG
Disclosure Schedule or in the STEAG Financial Statements (including the
notes thereto), there are no actions, suits, arbitrations, regulatory or
other proceedings, litigation, or governmental investigations by or before
any court, arbitration or Governmental Entity (collectively, a "Legal
Proceeding"), which is now pending or, to STEAG's knowledge, threatened (in
writing) against or affecting any of the STEAG Subsidiaries, or any of the
STEAG Subsidiaries' officers or directors in their capacity as such, or any
of the STEAG Subsidiaries' respective properties or businesses, which, if
decided adversely to the STEAG Subsidiaries, would reasonably be expected
to have a STEAG Material Adverse Effect. Except as disclosed in Section
3.15 of the STEAG Disclosure Schedule, none of the STEAG 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, 1998, none of the STEAG 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 STEAG Subsidiary, as the case may be, has
any continuing obligation.
(b) There are no claims or Legal Proceedings pending or, to
STEAG's knowledge, threatened (in writing) by or against STEAG with respect
to this Agreement or in connection with the transactions contemplated
hereby or thereby.
(c) Except as set forth on Section 3.15 of the STEAG
Disclosure Schedule, to STEAG's knowledge, there are no pending or
threatened (in writing) claims against any director, officer, employee, or
agent of the STEAG Subsidiaries in their capacity as such, or any other
Person which, if decided adversely to such Person, would reasonably be
expected to give rise to any claim for indemnification against any STEAG
Subsidiary.
3.16 COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in
Section 3.16 of the STEAG Disclosure Schedule, each STEAG Subsidiary holds
all permits, licenses, variances, exemptions, orders, and approvals of all
Governmental Entities which are required for the operation of their
respective businesses, except those the absence of which would not
reasonably be expected to have a STEAG Material Adverse Effect (the "STEAG
Permits"). Each STEAG Subsidiary is in compliance with the terms of the
STEAG Permits, except where the failure so to comply would not reasonably
be expected to have a STEAG Material Adverse Effect. Except as disclosed in
Section 3.16 of the STEAG Disclosure Schedule, to STEAG's knowledge,
neither STEAG nor any STEAG Subsidiary is 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 STEAG
Material Adverse Effect.
3.17 CONTRACTS; NO DEFAULTS. Except as described in Section 3.17
of the STEAG Disclosure Schedule, none of the STEAG Subsidiaries is a party
to or subject to any agreement, contract, or commitment, written or, to the
knowledge of STEAG, oral (including, without limitation, leases of real
property), which (i) has expected receipts or expenditures by any of the
STEAG Subsidiaries, alone or in the aggregate, in excess of $5 million,
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 STEAG Subsidiaries to indemnify any Person, (iii) grants any
exclusive material licenses or distributorships to any party, (iv)
evidences indebtedness for borrowed or loaned money of $1 million 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 STEAG 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 STEAG
Subsidiaries is in default or, to STEAG's knowledge, alleged to be in
default under any such Material Contract and, to STEAG's knowledge, no
other party thereto is in default except as would not reasonably be
expected to have a STEAG Material Adverse Effect. To STEAG's knowledge,
nothing has occurred which, with or without the passage of time or giving
of notice or both, would constitute a default by any STEAG Subsidiary or by
any other party under any such Material Contract except as would not
reasonably be expected to have a STEAG Material Adverse Effect. STEAG has
not received any written or, to its knowledge, oral, notification that any
such Material Contract is not likely to be renewed. The Strategic Business
Combination contemplated by this Agreement will not create a default under
or permit the termination of or otherwise adversely affect any such
Material Contract in a manner that would reasonably be expected to have a
STEAG Material Adverse Effect. Except as described in Section 3.17 of the
STEAG Disclosure Schedule hereto, neither STEAG nor any STEAG 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.
3.18 CHANGE IN CONTROL AND SEVERANCE PAYMENTS. Except as set forth
on Section 3.18 of the STEAG Disclosure Schedule, none of the STEAG
Subsidiaries have any material 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
STEAG Subsidiaries (including by reason of the consummation of the
Strategic Business Combination), or otherwise upon termination of
employment of any individual with any STEAG Subsidiary.
3.19 YEAR 2000. As of the date hereof, the computer systems used
by any of the STEAG Subsidiaries, and any third party service providers
used by any of the foregoing, have not exhibited any material deficiencies
with respect to formatting in connection with processing any dates after
December 31, 1999 ("Year 2000 Problem"). All issues and modifications, if
any, regarding the Year 2000 Problem compliance by the STEAG Subsidiaries
have been resolved by third-party service providers and the STEAG
Subsidiaries. To STEAG's knowledge, there is no inability on the part of
any customer, insurance company, or service provider with which the STEAG
Subsidiaries transact business to timely remedy their own deficiencies in
respect of the Year 2000 Problem, which inability, individually or in the
aggregate, would reasonably be expected to have a STEAG Material Adverse
Effect.
3.20 BROKER'S/FINDER'S FEES. Except for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, neither STEAG nor any officer, director, or employee of STEAG
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.
3.21 INTERIM OPERATIONS OF NEWCO. Newco is a newly organized
Gesellschaft mit beschraenkter Haftung formed solely for the purpose of
engaging in the transactions contemplated by this Agreement. Prior to the
Closing, Newco will not have conducted any business, incurred any
liabilities, or engaged in any other transactions, other than entering into
this Agreement and doing such acts as are necessary in its capacity as a
holding company with respect to the Foreign STEAG Subsidiaries under this
Agreement.
3.22 INVESTMENT. STEAG 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 ▇▇▇▇▇▇▇ Shares, STEAG is not relying on
any oral or written representations or assurances from ▇▇▇▇▇▇▇ or any other
person other than as set forth in this Agreement, in a document executed by
a duly authorized representative of ▇▇▇▇▇▇▇ making reference to this
Agreement, or the ▇▇▇▇▇▇▇ SEC Documents (as defined in Section 4.5). STEAG
has such experience in business and financial matters that it is capable of
evaluating the risk of its investment in the ▇▇▇▇▇▇▇ Shares and determining
the suitability of its investment. By reason of STEAG's business and
financial and the business and financial experience of STEAG's professional
advisors, STEAG has the capacity to protect its own interest in connection
with the Strategic Business Combination. STEAG represents that it is able
to bear the economic risk of an investment in the ▇▇▇▇▇▇▇ Shares. STEAG
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 ▇▇▇▇▇▇▇
Shares.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ represents and warrants to STEAG as follows, except as
disclosed in a document of even date herewith and delivered by ▇▇▇▇▇▇▇ to
STEAG 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 IV, and the disclosure in any such
numbered and lettered section of the ▇▇▇▇▇▇▇ Disclosure Schedule shall
qualify only the corresponding section in this Article IV, 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.)
4.1 DUE INCORPORATION, SUBSIDIARIES, AND DUE AUTHORIZATION.
(a) Due Incorporation. ▇▇▇▇▇▇▇ is a corporation duly
organized, validly existing, and in good standing under the laws of
Delaware, with all requisite corporate power and authority to own, lease,
and operate its properties and to carry on its business as now being
conducted. ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ Material Adverse Effect (as
defined in Section 4.6 hereof). True, correct, and complete copies of
▇▇▇▇▇▇▇'▇ Certificate of Incorporation and By-Laws, as amended, have been
delivered to STEAG.
(b) Subsidiaries. Except as set forth in Section 4.1 of the
▇▇▇▇▇▇▇ Disclosure Schedule, ▇▇▇▇▇▇▇ has no direct or indirect
subsidiaries, either wholly or partially owned, and ▇▇▇▇▇▇▇ does not hold
any economic, voting, or management interest in any Person or own any
security issued by any Person. For purposes of this Agreement, any direct
or indirect subsidiary of ▇▇▇▇▇▇▇, whether wholly or partially owned, is a
"▇▇▇▇▇▇▇ Subsidiary." Except as set forth on in Section 4.1 of the ▇▇▇▇▇▇▇
Disclosure Schedule hereto, all of the issued and outstanding shares of
capital stock of each ▇▇▇▇▇▇▇ Subsidiary are validly issued, fully paid,
nonassessable, and free of preemptive rights, and are owned, directly or
indirectly, by ▇▇▇▇▇▇▇ 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.
(c) Due Authorization. ▇▇▇▇▇▇▇ has full corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery, and performance by ▇▇▇▇▇▇▇ of
this Agreement have been duly and validly approved by the Board of
Directors of ▇▇▇▇▇▇▇, and no other actions or proceedings on the part of
▇▇▇▇▇▇▇ are necessary to authorize this Agreement and the transactions
contemplated hereby, other than the approval of the ▇▇▇▇▇▇▇ Stockholder
Proposal (as defined in Section 4.2(b)(iii)) by the stockholders of
▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ has duly and validly executed and delivered this
Agreement. This Agreement constitutes the legal, valid, and binding
obligation of ▇▇▇▇▇▇▇, 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).
4.2 NON-CONTRAVENTION; CONSENTS AND APPROVALS.
(a) The execution and delivery of this Agreement by ▇▇▇▇▇▇▇
does not, and the performance by 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 ▇▇▇▇▇▇▇ under any of
the terms, conditions, or provisions of (i) the Certificate of
Incorporation or Bylaws of ▇▇▇▇▇▇▇, or (ii) subject to obtaining the
necessary approval by the stockholders of ▇▇▇▇▇▇▇ and the taking of the
actions described in paragraph (b) of this Section 4.2, (x) any Law
applicable to ▇▇▇▇▇▇▇ or any judgment, decree, order, writ, permit, or
license of any Governmental Entity applicable to ▇▇▇▇▇▇▇ or (y) any
contract, agreement, or commitment to which ▇▇▇▇▇▇▇ is a party or by which
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ Material
Adverse Effect or result in the inability of ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ in connection with the execution
and delivery of this Agreement or the consummation by ▇▇▇▇▇▇▇ of the
transactions contemplated hereby, the failure to obtain which would
reasonably be expected to have a ▇▇▇▇▇▇▇ Material 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
under the HSR Act and the expiration or termination of the applicable
waiting period thereunder, and, if applicable, the filing of required
documents with relevant Governmental Entities of the countries or political
subdivisions in which the STEAG Subsidiaries or CFM conduct business
including, if applicable, any filing under the German Act Against
Restraints on Competition of 1958 (Gesetz gegen Wettbewerbsbeschraenkungen)
and the expiration or termination of the waiting period thereunder;
(ii) the approval of the ▇▇▇▇▇▇▇ Shares for listing
on NASDAQ upon official notice of issuance;
(iii) the approval by the stockholders of ▇▇▇▇▇▇▇ of
a single proposal (the "▇▇▇▇▇▇▇ Stockholder Proposal") that provides for:
(A) the Share Issuance and the issuance of shares of ▇▇▇▇▇▇▇ Common Stock
pursuant to the CFM Agreement, and (B) if necessary to effect the Strategic
Business Combination and/or the CFM Merger, an increase in the shares
reserved under ▇▇▇▇▇▇▇'▇ stock option plans (the "Plan Reserve Increase");
and
(iv) the consents and approvals specified on Section
4.2 of the ▇▇▇▇▇▇▇ Disclosure Schedule.
4.3 CAPITALIZATION.
(a) The authorized capital stock of ▇▇▇▇▇▇▇ consists of
60,000,000 shares of ▇▇▇▇▇▇▇ Common Stock, par value $0.001 per share, and
2,000,000 shares of Preferred Stock, par value $0.001 per share. On the
date hereof, there are issued and outstanding 20,887,000 shares of ▇▇▇▇▇▇▇
Common Stock and no shares of Preferred Stock. All of the issued and
outstanding shares of ▇▇▇▇▇▇▇ Common Stock are, and the ▇▇▇▇▇▇▇ Shares,
when issued in accordance with the terms of this Agreement, will be, duly
and validly authorized and issued and outstanding, fully paid, and
nonassessable. On the date hereof, there are 6,575,000 shares of ▇▇▇▇▇▇▇
Common Stock reserved for issuance under ▇▇▇▇▇▇▇ stock option plans, of
which 1,523,204 shares are subject to outstanding options, and no shares
are reserved for issuance upon exercise of outstanding warrants.
(b) Except for this Agreement and the CFM Agreement, and
except as set forth above and in Section 4.3 of the ▇▇▇▇▇▇▇ Disclosure
Schedule, there are no shares of ▇▇▇▇▇▇▇ Common Stock or other equity
securities (whether or not such securities have voting rights) of ▇▇▇▇▇▇▇
issued or outstanding or any subscriptions, options, warrants, calls,
rights, convertible securities, or other agreements or commitments of any
character and no preemptive or similar rights obligating ▇▇▇▇▇▇▇ to issue,
transfer, or sell any shares of capital stock or other securities (whether
or not such securities have voting rights) of ▇▇▇▇▇▇▇. Except for this
Agreement and the CFM Agreement, and except as set forth in Section 4.3 of
the ▇▇▇▇▇▇▇ Disclosure Schedule hereto, there are no outstanding
contractual obligations of ▇▇▇▇▇▇▇ which relate to the purchase, sale,
issuance, repurchase, redemption, acquisition, transfer, disposition,
holding, or voting of any shares of capital stock or other securities of
▇▇▇▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ has entered into the Voting Agreement.
4.4 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES; OTHER
DOCUMENTS.
(a) For purposes of this Agreement, "▇▇▇▇▇▇▇ Financial
Statements" shall mean the audited financial statements of ▇▇▇▇▇▇▇ as of
December 31, 1999 and December 31, 1998 (including all notes thereto), and
the unaudited financial statements of ▇▇▇▇▇▇▇ included in ▇▇▇▇▇▇▇'▇
Quarterly Report on Form 10-Q for the quarter ended March 26, 2000,
consisting of the consolidated balance sheets at such dates and the related
consolidated statements of income, stockholders' equity, and cash flows for
each of the twelve-month periods ended December 31, 1999, December 31,
1998, and December 31, 1997, and the three month period ended March 26,
2000. The ▇▇▇▇▇▇▇ Financial Statements have been prepared in accordance
with US GAAP consistently applied and present fairly the financial
position, assets and liabilities of ▇▇▇▇▇▇▇ as at the dates thereof and the
revenues, expenses, results of operations, and cash flows of ▇▇▇▇▇▇▇ for
the periods covered thereby.
(b) ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ Subsidiaries do not have any
liabilities or obligations of any nature, whether accrued, contingent,
absolute, or otherwise, except (i) as set forth or reflected in the March
26, 2000 balance sheet (the "▇▇▇▇▇▇▇ Base Balance Sheet") in ▇▇▇▇▇▇▇'▇ Form
10-Q for the fiscal quarter ended March 26, 2000; (ii) such other
liabilities and obligations that individually and in the aggregate, do not
have and would not reasonably be expected to have a ▇▇▇▇▇▇▇ Material
Adverse Effect; (iii) liabilities and obligations incurred since March 26,
2000 which are either incurred in the ordinary course of its business
consistent with past practices or, if incurred outside the ordinary course
of business are not substantial in amount; and (iv) as otherwise set forth
on the ▇▇▇▇▇▇▇ Disclosure Schedule.
4.5 SEC FILINGS. Except as set forth in Section 4.5 of the ▇▇▇▇▇▇▇
Disclosure Schedule hereto, ▇▇▇▇▇▇▇ has timely filed all required forms,
reports, and other documents with the SEC since November 1, 1997, all of
which complied when filed, in all material respects, with all applicable
requirements of the Securities Act and Securities Exchange Act, as
applicable. ▇▇▇▇▇▇▇ has heretofore delivered to STEAG complete and correct
copies of (i) its Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, (ii) its Quarterly Report on Form 10-Q for the fiscal
quarter ended ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) all proxy statements relating to
▇▇▇▇▇▇▇'▇ meetings of shareholders (whether annual or special) since
November 1, 1997 and (iv) all other reports, forms and other documents
filed by ▇▇▇▇▇▇▇ with the SEC since November 1, 1997 (together, the
"▇▇▇▇▇▇▇ SEC Documents"). Except as set forth on Section 4.5 of the ▇▇▇▇▇▇▇
Disclosure Schedule hereto, as of their respective dates, such reports,
forms and other documents (including all exhibits and schedules thereto and
documents incorporated by reference therein) did not contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading. The audited
financial statements and the unaudited interim financial statements of
STEAG included or incorporated by reference in such reports, forms and
other documents were prepared in accordance with GAAP consistently applied
during the periods involved (except as may be otherwise indicated in the
notes thereto), and fairly present the financial position of ▇▇▇▇▇▇▇ as of
the dates thereof and the results of its operations and changes in
financial position for the periods then ended (subject, in the case of any
unaudited interim financial statements, to normal year-end adjustments).
4.6 NO MATERIAL ADVERSE EFFECTS OR CHANGES. Except as listed on
Section 4.6 of the ▇▇▇▇▇▇▇ Disclosure Schedule hereto, as contemplated by
this Agreement, or as described in ▇▇▇▇▇▇▇'▇ Quarterly Report on Form 10-Q
for the fiscal quarter ended March 26, 2000, since January 1, 2000, neither
▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary has (i) taken any of the actions set
forth in subparagraphs (a) through (k) of Section 5.2 hereof, (ii) suffered
any ▇▇▇▇▇▇▇ Material Adverse Effect, and no facts or conditions exist which
are reasonably likely to have, in the aggregate, a ▇▇▇▇▇▇▇ Material Adverse
Effect, or (iii) suffered any damage, destruction, or Loss to any of its
assets or properties which is material to ▇▇▇▇▇▇▇ (whether or not covered
by insurance). "▇▇▇▇▇▇▇ Material Adverse Effect" shall mean an effect on
the business, operations, assets, liabilities, results of operations, cash
flows or condition (financial or otherwise) of ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇
Subsidiaries, taken as a whole, which is materially adverse to ▇▇▇▇▇▇▇ and
the ▇▇▇▇▇▇▇ Subsidiaries on a consolidated basis.
4.7 PROPERTIES.
(a) Except as disclosed on Section 4.7 of the ▇▇▇▇▇▇▇
Disclosure Schedule hereto, ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary (i) has
good and valid title to all of the tangible and intangible assets,
properties, and rights reflected in the ▇▇▇▇▇▇▇ Base Balance Sheet or
acquired after March 26, 2000 (other than assets leased under the leases
set forth in Section 4.7 of the ▇▇▇▇▇▇▇ Disclosure Schedule hereto and
assets disposed of in the ordinary course of business since the date of the
▇▇▇▇▇▇▇ Base Balance Sheet), and (ii) at the Closing Date will have good
and valid title to all of such material tangible and intangible assets,
properties, and rights referred to in clause (i) above, in each case free
and clear of any lien, encumbrance, pledge or similar interest, except for
Permitted Liens.
(b) Except as otherwise identified in Section 4.7 of the
▇▇▇▇▇▇▇ Disclosure Schedule hereto, the material tangible assets of ▇▇▇▇▇▇▇
and each ▇▇▇▇▇▇▇ Subsidiary, taken as a whole, including all mobile
equipment, are, in the aggregate, in good condition and repair, reasonable
wear and tear excepted, and are, in the aggregate, in condition suitable
for the use to which they are put in ▇▇▇▇▇▇▇'▇ business.
4.8 INTELLECTUAL PROPERTY. Except as disclosed on Section 4.8 of
the ▇▇▇▇▇▇▇ Disclosure Schedule hereto:
(a) 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, processes, and all other intangible assets,
properties, and rights used by ▇▇▇▇▇▇▇ or 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 ▇▇▇▇▇▇▇ Material
Adverse Effect (the "▇▇▇▇▇▇▇ Intellectual Property"), are either (i) owned
by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary free and clear of any liens, and are
not subject to any license, royalty, or other agreement or (ii) licensed by
▇▇▇▇▇▇▇ or the relevant ▇▇▇▇▇▇▇ Subsidiary pursuant to a valid and
subsisting license agreement.
(b) None of the ▇▇▇▇▇▇▇ Intellectual Property has been since
January 1, 1998 or is the subject of any pending or, to ▇▇▇▇▇▇▇'▇
knowledge, threatened (in writing) litigation or claim of infringement.
(c) No license or royalty agreement to which ▇▇▇▇▇▇▇ or any
▇▇▇▇▇▇▇ Subsidiary is a party, including any agreement regarding Licensed
Intellectual Property as defined below, is, to ▇▇▇▇▇▇▇'▇ knowledge, in
breach or default by any party thereto or the subject of any notice of
termination given or threatened (in writing), which breach, default or
termination would reasonably be expected to have a ▇▇▇▇▇▇▇ Material Adverse
Effect.
(d) To ▇▇▇▇▇▇▇'▇ knowledge, none of the products manufactured
or sold by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, nor any process, method,
part, design, nor material they employ, nor the marketing and use by
▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary of any such product or any service,
infringe any trademark, service ▇▇▇▇, trade name, copyright, trade secret,
patent, or confidential or proprietary rights of another and ▇▇▇▇▇▇▇ and
the ▇▇▇▇▇▇▇ Subsidiaries have not received any written notice contesting
their right to use any ▇▇▇▇▇▇▇ Intellectual Property, which claim or
contestation, if successful, would reasonably be expected to have a ▇▇▇▇▇▇▇
Material Adverse Effect.
(e) ▇▇▇▇▇▇▇ has disclosed to STEAG any standard forms of
Assignment Agreement generally signed by employees of ▇▇▇▇▇▇▇ Subsidiaries.
To ▇▇▇▇▇▇▇'▇ knowledge, 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.
(f) 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, or any other material restrictions regarding the
right of ▇▇▇▇▇▇▇ or any of the ▇▇▇▇▇▇▇ Subsidiaries to fully exploit
▇▇▇▇▇▇▇ Intellectual Property anywhere in the world. Neither ▇▇▇▇▇▇▇ nor
any 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.
4.9 INSURANCE. Section 4.9 of the ▇▇▇▇▇▇▇ Disclosure Schedule
hereto 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 ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary. 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 except as would not have a ▇▇▇▇▇▇▇
Material Adverse Effect. ▇▇▇▇▇▇▇ has delivered to STEAG a true and complete
copy or description of all insurance policies, including all
occurrence-based policies, applicable to ▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇
Subsidiaries, since January 1, 1998. Except as set forth in Section 4.9 of
the ▇▇▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary
has been unable to obtain insurance with respect to its assets or
operations since January 1, 1998.
4.10 EMPLOYEE MATTERS AND ERISA. Except as set forth in Section
4.10 of the ▇▇▇▇▇▇▇ Disclosure Schedule hereto:
(a) Benefit Plans. Section 4.11 of the ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ Subsidiaries
covering employees, former employees, directors, or former directors of
▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ Subsidiaries or their beneficiaries, or providing
benefits to such persons in respect of services provided to any such
entity, including, but not limited to, any employee benefit plans within
the meaning of Section 3(3) of ERISA, and any severance or change in
control agreement, plan, policy, or program between ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇
Subsidiaries and any employee thereof (collectively, the "▇▇▇▇▇▇▇ Benefit
Plans"). Neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary is obligated to
contribute to any "multi-employer plan" as defined in Section 3(37) ERISA.
Section 4.11 of the ▇▇▇▇▇▇▇ Disclosure Schedule separately lists each
▇▇▇▇▇▇▇ Benefit Plan that has been adopted or maintained by any ▇▇▇▇▇▇▇
Subsidiary, whether formally or informally, for the benefit of employees
outside of the United States ("▇▇▇▇▇▇▇ International Benefit Plans").
(b) Contributions. All contributions and other payments
required to be made for any period through the date to which this
representation speaks, by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary to any ▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇ Benefit
Plans intended to be "qualified" within the meaning of Section 401(a) of
the Code has either obtained from 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. ▇▇▇▇▇▇▇ and
each ▇▇▇▇▇▇▇ Subsidiary is in compliance in all material respects with, and
each of ▇▇▇▇▇▇▇ Benefit Plans is and has been operated in all material
respects in compliance with, all applicable laws, rules, and regulations
governing such plan, including, without limitation, ERISA and the Code.
Each ▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇ Benefit Plan by or on behalf of any employee, former employee,
director, former director, or beneficiary thereof, or otherwise involving
any ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ or any
▇▇▇▇▇▇▇ 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.
(e) Documents Made Available. ▇▇▇▇▇▇▇ has made available to
STEAG a true and correct copy of each collective bargaining agreement to
which ▇▇▇▇▇▇▇ is a party or under which ▇▇▇▇▇▇▇ has obligations and, with
respect to each ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ or
any ▇▇▇▇▇▇▇ Subsidiary is a party with third party administrators,
actuaries, investment managers, consultants and other independent
contractors that relate to such plan, (ix) standard 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
▇▇▇▇▇▇▇ 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 STEAG, 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 ▇▇▇▇▇▇▇ 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.
4.11 LABOR MATTERS. ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary have
conducted and currently are conducting their businesses 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 on Section 4.11 of the
▇▇▇▇▇▇▇ Disclosure Schedule hereto, 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 ▇▇▇▇▇▇▇
or any ▇▇▇▇▇▇▇ Subsidiary. Except as disclosed in Section 4.11 of the
▇▇▇▇▇▇▇ Disclosure Schedule, none of the employees of ▇▇▇▇▇▇▇ or 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 or during the past
three years has been made to organize any employees of ▇▇▇▇▇▇▇ or the
▇▇▇▇▇▇▇ Subsidiaries to form or enter a labor union or similar
organization.
4.12 TAX RETURNS AND AUDITS. Except as set forth in Section 4.12
of the ▇▇▇▇▇▇▇ Disclosure Schedule hereto:
(a) Filing of Timely Tax Returns. ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇
Subsidiary have filed (or there has been filed on its behalf) all material
Tax Returns required to be filed by it under applicable law. All such Tax
Returns were and are in all material respects true, complete, and correct,
and filed on a timely basis.
(b) Payment of Taxes. ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary
have, 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 taken.
(c) Tax Liens. There are no Tax liens upon the assets of
▇▇▇▇▇▇▇ except liens for Taxes not yet due.
(d) Withholding Taxes. ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary
have 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 employee
wages and pay over to the proper governmental authorities all amounts
required.
(e) Extensions of Time for Filing Tax Returns. Neither ▇▇▇▇▇▇▇
nor any ▇▇▇▇▇▇▇ 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. Neither ▇▇▇▇▇▇▇ nor any
▇▇▇▇▇▇▇ 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) Expiration of Statute of Limitations. The statute of
limitations for the assessment of all Taxes has expired for all applicable
Tax Returns of ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary or those Tax Returns
have been examined by the appropriate taxing authorities for all periods
through the date hereof, and no deficiency for any Taxes has been proposed,
asserted or assessed against ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary that has not
been resolved and paid in full.
(h) 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 ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇
Subsidiary.
(i) Powers of Attorney. No power of attorney currently in
force has been granted by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary concerning any
Tax matter.
(j) Tax Rulings. Neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇ Material Adverse Effect after the Closing Date.
(k) Tax Sharing Agreements. Neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary is a party to any agreement relating to allocating or sharing of
Taxes.
(l) Liability for Others. Neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary has any liability in excess of $250,000 for Taxes of any person
other than ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ Subsidiaries (i) under any applicable
law, as a transferee or successor, (ii) by contract or (iii) otherwise.
(m) Affiliated Group. Neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary is or has been a member of an affiliated group of corporations
filing a consolidated, combined, or unitary income tax return under
applicable tax law other than a group the common parent of which is or was
▇▇▇▇▇▇▇ itself (or a ▇▇▇▇▇▇▇ subsidiary).
(n) Accounting Adjustments. Neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary has agreed to make, nor is required to make, any material
adjustment under applicable tax law by reason of a change in accounting
method or otherwise.
(o) Partnerships or Joint Ventures. Neither ▇▇▇▇▇▇▇ nor any
▇▇▇▇▇▇▇ Subsidiary is or has been a member of a limited liability company
or a party to any joint venture, partnership, or other arrangement or
contract that is reported as a partnership for federal income tax purposes.
(p) Indemnities. Neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary
has entered into an indemnity for the benefit of any person in connection
with any Tax such as would reasonably be expected to have a ▇▇▇▇▇▇▇
Material Adverse Effect.
(q) Availability of Tax Returns. ▇▇▇▇▇▇▇ has made available to
STEAG complete and accurate copies of (i) all Tax Returns, and any
amendments thereto, filed by ▇▇▇▇▇▇▇ and any ▇▇▇▇▇▇▇ Subsidiary since
January 1, 1998, (ii) all audit reports received from any taxing authority
relating to any Tax Return filed by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary and
(iii) any Closing Agreements entered into by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇
Subsidiary with any taxing authority.
4.13 ENVIRONMENTAL MATTERS. Except as disclosed in Section 4.13 of
the ▇▇▇▇▇▇▇ Disclosure Schedule hereto:
(a) Compliance. ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary is in
compliance with all applicable Environmental Laws and ▇▇▇▇▇▇▇ has not
received any written communication from any person or Governmental Entity
that alleges that ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary is not in compliance
with applicable Environmental Laws, except where the failure to be in such
compliance would not in the aggregate reasonably be expected to have a
▇▇▇▇▇▇▇ Material Adverse Effect. ▇▇▇▇▇▇▇ has provided STEAG 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 ▇▇▇▇▇▇▇ and any ▇▇▇▇▇▇▇ Subsidiary or on any
property owned, leased to, controlled by, used by or adjacent to that of
▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary.
(b) Environmental Permits. ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary
have obtained or have applied for all Environmental Permits necessary for
the construction of their facilities or the conduct of their 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 ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary is in compliance
with all terms and conditions of the Environmental Permits, except where
the failure to be in compliance would not in the aggregate reasonably be
expected to have a ▇▇▇▇▇▇▇ Material Adverse Effect, and ▇▇▇▇▇▇▇ believes
that any transfer, renewal or reapplication for any Environmental Permit
required as a result of the Strategic Business Combination can be
accomplished in the ordinary course of business.
(c) Environmental Claims. There are no Environmental Claims
pending or threatened (i) against ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, any
subsidiary or joint ventures, or (ii) against any real or personal property
or operations ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary owns, leases or manages, in
whole or in part.
(d) Releases. To ▇▇▇▇▇▇▇'▇ knowledge, there have been no
Releases of any Hazardous Materials on, at, upon, into or from any property
owned, leased to, controlled by or used by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇
Subsidiary, nor has there been any Release of Hazardous Materials,
including, but, not limited to, the off-site disposal of Hazardous
Materials, that would reasonably be expected to form the basis of any
Environmental Claim against ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, except any
Environmental Claims that, individually or in the aggregate, would not have
a ▇▇▇▇▇▇▇ Material Adverse Effect.
(e) USTs, ACM and Lead-Based Paint. To ▇▇▇▇▇▇▇'▇ knowledge,
there are no underground storage tanks or related piping located on, at,
upon, into or from any property owned, leased to, controlled by or used by
▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, nor is there any asbestos or
asbestos-containing material or lead-based paint in, on or at any property
or any facility or equipment owned, leased or operated in connection with
the business of ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary which would reasonably be
expected to result in a ▇▇▇▇▇▇▇ Material Adverse Effect.
(f) Predecessors. ▇▇▇▇▇▇▇ has no knowledge of any
Environmental Claim pending or threatened, or of any Release of Hazardous
Materials that would reasonably be likely to form the basis of any
Environmental Claim, in each case against any person or entity (including,
without limitation, any predecessor of ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary)
whose liability ▇▇▇▇▇▇▇ has or may have retained or assumed either
contractually or by operation of law or against any real or personal
property which ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary formerly owned, leased or
managed, in whole or in part which would reasonably be expected to result
in a ▇▇▇▇▇▇▇ Material Adverse Effect.
4.14 LITIGATION.
(a) Except as disclosed in Section 4.14 of the ▇▇▇▇▇▇▇
Disclosure Schedule hereto or in the ▇▇▇▇▇▇▇ Financial Statements
(including the notes thereto), there are no actions, suits, arbitrations,
regulatory proceedings or other litigation, proceedings or governmental
investigations by or before any court, arbitration or Governmental Entity
which is now pending or, to ▇▇▇▇▇▇▇'▇ knowledge, threatened (in writing)
against or affecting ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Subsidiaries or any of their officers
or directors in their capacity as such, or any of their respective
properties or businesses which, if decided adversely to ▇▇▇▇▇▇▇ or the
▇▇▇▇▇▇▇ subsidiaries, would reasonably be expected to have a ▇▇▇▇▇▇▇
Material Adverse Effect. Except as set forth in Section 4.14 of the ▇▇▇▇▇▇▇
Disclosure Schedule, all of the proceedings pending against ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ Subsidiaries are covered and being defended by insurers (subject to
such deductibles as are set forth in such Schedule). Except as disclosed in
Section 4.14 of the ▇▇▇▇▇▇▇ Disclosure Schedule hereto, neither ▇▇▇▇▇▇▇ nor
any ▇▇▇▇▇▇▇ Subsidiary 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, 2000, neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary has entered into any agreement to settle or compromise any
proceeding pending or threatened against it which has involved any
obligation other than the payment of money or for which ▇▇▇▇▇▇▇ or any
▇▇▇▇▇▇▇ Subsidiary, as the case may be, has any continuing obligation.
(b) There are no claims, actions, suits, proceedings, or
investigations 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 in Section 4.14 of the ▇▇▇▇▇▇▇
Disclosure Schedule, to ▇▇▇▇▇▇▇'▇ knowledge, there are no pending or
threatened (in writing) claims against any director, officer, employee or
agent of ▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇ Subsidiaries, in their capacity as such, or
any other Person which, if decided adversely to such Person would
reasonably be expected to give rise to any claim for indemnification
against ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary.
4.15 COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in
Section 4.15 of the ▇▇▇▇▇▇▇ Disclosure Schedule hereto, ▇▇▇▇▇▇▇ and each
▇▇▇▇▇▇▇ Subsidiary holds all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities which are required for
the operation of its business, except those the absence of which would not
reasonably be expected to have a ▇▇▇▇▇▇▇ Material Adverse Effect (the
"▇▇▇▇▇▇▇ Permits"). ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ Subsidiary is in compliance
with the terms of ▇▇▇▇▇▇▇ Permits, except where the failure so to comply
would not reasonably be expected to have a ▇▇▇▇▇▇▇ Material Adverse Effect.
Except as disclosed in Section 4.15 of the ▇▇▇▇▇▇▇ Disclosure Schedule, to
▇▇▇▇▇▇▇'▇ knowledge, ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ Material Adverse Effect.
4.16 CONTRACTS; NO DEFAULTS. Except as described in Section 4.16
of the ▇▇▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary is a party to or subject to any agreement, contract, or
commitment, written or, to the knowledge of ▇▇▇▇▇▇▇, oral (including,
without limitation, leases of real property), which (i) has expected
receipts or expenditures by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, alone or in
the aggregate, in excess of $2 million, other than purchase orders from
customers and purchase orders to suppliers in the ordinary course of
business, (ii) requires, as its primary purpose, ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇
Subsidiary to indemnify any Person, (iii) grants any exclusive material
licenses or distributorships to any party, (iv) evidences indebtedness for
borrowed or loaned money of $1 million 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 ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇
Subsidiary on 60 days' or less notice or (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"). Neither ▇▇▇▇▇▇▇ nor any
▇▇▇▇▇▇▇ Subsidiary is in default or alleged to be in default under any such
Material Contract and, to ▇▇▇▇▇▇▇'▇ knowledge, no other party thereto is in
default except as would not reasonably be expected to have a ▇▇▇▇▇▇▇
Material Adverse Effect. To ▇▇▇▇▇▇▇'▇ knowledge, nothing has occurred
which, with or without the passage of time or giving of notice or both,
would constitute a default by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary or by any
other party under any such Material Contract except as would not reasonably
be expected to have a ▇▇▇▇▇▇▇ Material Adverse Effect. ▇▇▇▇▇▇▇ has not
received any written or, to its knowledge, oral, notification that any such
Material Contract is not likely to be renewed. The Strategic Business
Combination contemplated by this Agreement will not create a default under
or permit the termination of or otherwise adversely affect any such
Material Contract in a manner that would reasonably be expected to have a
▇▇▇▇▇▇▇ Material Adverse Effect. Except as described in Section 4.16 of the
▇▇▇▇▇▇▇ Disclosure Schedule hereto, 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.
4.17 CHANGE IN CONTROL AND SEVERANCE PAYMENTS. Except as set forth
in Section 4.17 of the ▇▇▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇▇ nor any
▇▇▇▇▇▇▇ Subsidiary has any material plans, programs or agreements to which
it is a party, or to which it is subject, pursuant to which payments (or
acceleration of benefits) may be required upon, or may become payable
directly or indirectly as a result of, or by reason of the consummation of
the Strategic Business Combination.
4.18 YEAR 2000. As of the date hereof, the computer systems used
by ▇▇▇▇▇▇▇, any ▇▇▇▇▇▇▇ Subsidiary and any third party service providers
used by either of the foregoing have not exhibited any material
deficiencies with respect to formatting for the Year 2000 Problem. All
issues and modification, if any, regarding Year 2000 Problem compliance by
▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Subsidiaries have been resolved by third-party service
providers and ▇▇▇▇▇▇▇. To ▇▇▇▇▇▇▇'▇ knowledge, there is no inability on the
part of any customer, insurance company or service provider with which
▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Subsidiaries transact business to timely remedy their
own deficiencies in respect of the Year 2000 Problem, which inability,
individually or in the aggregate, would reasonably be expected to have a
▇▇▇▇▇▇▇ Material Adverse Effect.
4.19 BROKERS AND FINDERS. Except for Alliant Partners, neither
▇▇▇▇▇▇▇ nor any officer, director, or employee of ▇▇▇▇▇▇▇ has employed any
brokers, 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.
4.20 OPINION OF FINANCIAL ADVISOR. ▇▇▇▇▇▇▇ has received the
opinion of Alliant Partners to the effect that the shares of ▇▇▇▇▇▇▇ Common
Stock to be issued to STEAG in the Strategic Business Combination and the
shares of ▇▇▇▇▇▇▇ Common Stock to be issued to stockholders of CFM pursuant
to the CFM Merger, taken together, are fair from a financial point of view
to the holders of ▇▇▇▇▇▇▇ Common Stock, and a true and correct copy of such
opinion has been provided to STEAG.
4.21 VOTE REQUIRED. The approval of the ▇▇▇▇▇▇▇ Stockholder
Proposal by the affirmative vote of a majority of the votes cast in person
or by proxy by the holders of ▇▇▇▇▇▇▇ Common Stock is the only vote of the
holders of any class or series of the capital stock of ▇▇▇▇▇▇▇ required to
approve the ▇▇▇▇▇▇▇ Stockholder Proposal.
4.22 INVESTMENT COMPANY ACT. ▇▇▇▇▇▇▇ and each ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary is required to be registered under the Investment Company Act.
4.23 CFM AGREEMENT. ▇▇▇▇▇▇▇ has furnished to STEAG a true and
complete copy of the proposed CFM Agreement, as well as the disclosure
schedules thereto and the proposed related stock option and voting
agreements contemplated by the recitals thereto, in each case in the form
in which such document is being executed by the respective parties thereto
concurrently with the execution of this Agreement by STEAG and ▇▇▇▇▇▇▇.
ARTICLE V.
CONDUCT PRIOR TO THE CLOSING
5.1 CONDUCT OF BUSINESS OF STEAG SUBSIDIARIES. During the period
from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing, STEAG and Newco agree (except
to the extent expressly contemplated by this Agreement or as consented to
in writing by ▇▇▇▇▇▇▇), to carry on the business of the STEAG Subsidiaries
in the ordinary course in substantially the same manner as heretofore
conducted; to pay and to cause to be paid the debts and Taxes of the STEAG
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 its present business organizations,
keep available the services of the present officers, employees and
consultants of the STEAG Subsidiaries and preserve the STEAG Subsidiaries'
relationships with customers, suppliers, distributors, licensors,
licensees, and others having business dealings with the STEAG Subsidiaries.
STEAG agrees to promptly notify ▇▇▇▇▇▇▇ of any event or occurrence
described in clauses (a) through (s) below. Without limiting the foregoing,
except as expressly contemplated by this Agreement (including with respect
to the formation and capitalization of Newco and the transfer of the
Foreign Subsidiaries Shares to Newco) or Section 5.1 of the STEAG
Disclosure Schedule, STEAG shall not allow, cause or permit any of the
STEAG Subsidiaries to do, cause, or permit any of the following as to any
of them, without the prior written consent of ▇▇▇▇▇▇▇:
(a) Charter Documents. Cause or permit any amendments to any
of their Memorandum and Articles of Association (Satzung), Management Board
(Vorstand) Rules of Procedure (Geschaftsordnung), Articles, Bylaws, or
other applicable organizational or charter documents;
(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 except from former
employees, directors, and consultants in accordance with agreements
providing for the repurchase of shares in connection with any termination
of service;
(c) Stock Option Plans, Etc. Accelerate, amend, or change the
period of exercisability or vesting of options or other rights granted
under any of their stock plans or authorize cash payments in exchange for
any options or other rights granted under any of such plans;
(d) 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
the issuance of shares of their common stock pursuant to the exercise of
stock options, warrants, or other rights therefore outstanding as of the
date of this Agreement;
(e) Intellectual Property. Transfer to any person or entity
any rights to STEAG Intellectual Property other than in the ordinary course
of business consistent with past practice;
(f) Exclusive Rights. Enter into or amend any agreements
pursuant to which any other party is granted exclusive marketing or other
exclusive rights of any type or scope with respect to any of the STEAG
Products or STEAG Intellectual Property;
(g) 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 STEAG Subsidiaries, taken as a
whole, except in the ordinary course of business, consistent with past
practice;
(h) 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
STEAG or any of its affiliates which loans will be cancelled at or prior to
Closing;
(i) Agreements. Enter into, terminate, or amend, in a manner
which will adversely affect the business of the STEAG Subsidiaries (i) any
agreement involving an obligation to pay or the right to receive $2,000,000
or more, (ii) any agreement relating to the license, transfer, or other
disposition or acquisition of STEAG Intellectual Property rights or rights
to market or sell STEAG Products, 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;
(j) Payment of Obligations. Pay, discharge, or satisfy in an
amount in excess of $2,000,000 in the aggregate, any claim, liability, or
obligation (absolute, accrued, asserted or unasserted, contingent, or
otherwise) arising other than in the ordinary course of business, other
than the payment, discharge, or satisfaction of liabilities reflected or
reserved against in the STEAG Financial Statements;
(k) Capital Expenditures. Make any capital expenditures,
capital additions, or capital improvements in excess of $2,000,000 beyond
the aggregate amounts provided in the operation plans for the STEAG
Subsidiaries in effect on the date of the Agreement;
(l) Insurance. Materially reduce the amount of any material
insurance coverage provided by existing insurance policies, other than in
the ordinary course of business;
(m) Termination or Waiver. Terminate or waive any right of
substantial value, other than in the ordinary course of business;
(n) Employee Benefit Plans; New Hires; Pay Increases. Amend
any STEAG Employee Plan or STEAG International Employee Plan or adopt any
plan that would constitute a STEAG Employee Plan or STEAG 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
STEAG Subsidiaries exceeds, in aggregate, 120% 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 except in the ordinary course of business in accordance with its
standard past practice; provided, that the STEAG Subsidiaries may pay such
reasonable special bonuses and grant such reasonable increases in salaries,
wages and other benefits as STEAG deems appropriate in order to attract or
retain its employee work force and management personnel at levels
consistent with current practice;
(o) Severance Arrangements. Grant any severance or termination
pay or benefits (i) to any director or officer or (ii) to any other
employee of a US STEAG Subsidiary except payments made pursuant to written
agreements outstanding on the date hereof and/or disclosed on the STEAG
Disclosure Schedule and except for reasonable severance or termination
arrangements as STEAG deems appropriate in order to attract or retain its
employee work force and management personnel at levels consistent with
current practice;
(p) 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 STEAG
Subsidiaries;
(q) Taxes. Other than in the ordinary course of business, make
or change any material 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;
(r) Revaluation. Revalue any of its assets, including without
limitation writing down the value of inventory or writing off notes or
accounts receivable other than in the ordinary course of business or as
required by applicable law or regulations; or
(s) Other. Agree in writing or otherwise to take, any of the
actions described in Sections 5.1(a) through (r) above, or take any action
which would cause a material breach of its representations or warranties
contained in this Agreement or prevent it from materially performing or
cause it not to materially perform its covenants hereunder.
5.2 CONDUCT OF BUSINESS OF ▇▇▇▇▇▇▇. 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 or as consented to in writing by
STEAG), to carry on the business of ▇▇▇▇▇▇▇ in the ordinary course in
substantially the same manner as heretofore conducted; to pay and to cause
to be paid the debts and Taxes of ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ Subsidiaries when
due subject to good faith disputes over such debts or Taxes and to pay or
perform other obligations when due, and to use all reasonable efforts to
preserve intact its present business organizations, keep available the
services of the present officers, key employees and consultants of ▇▇▇▇▇▇▇
and preserve ▇▇▇▇▇▇▇'▇ relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings
with ▇▇▇▇▇▇▇, to the end that ▇▇▇▇▇▇▇'▇ good will and ongoing businesses
shall be unimpaired at the Closing. ▇▇▇▇▇▇▇ agrees to promptly notify STEAG
of any event or occurrence not in the ordinary course of business for
▇▇▇▇▇▇▇, and of any event which could have a ▇▇▇▇▇▇▇ Material Adverse
Effect. Without limiting the foregoing, except as expressly contemplated by
this Agreement or Section 5.2 of the ▇▇▇▇▇▇▇ Disclosure Schedule, ▇▇▇▇▇▇▇
shall not do, cause, or permit any of the following, without the prior
written consent of STEAG:
(a) Charter Documents. Cause or permit any amendments to its
Certificate of Incorporation or Bylaws;
(b) Dividend; 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 its capital stock, or split, combine, or
reclassify any of its 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 its capital stock except from former
employees, directors, and consultants in accordance with agreements
providing for the repurchase of shares in connection with any termination
of service;
(c) Transfer of Material Assets. Sell, transfer, convey,
assign or otherwise dispose of its material assets or properties, except
sales of inventory in the ordinary course of business, consistent with past
practice;
(d) Waiver of Claims. Waive, release or cancel any claims
against third parties or debts owing to it, or any rights which have any
value in an amount greater than $5,000,000;
(e) Change in Accounting. Make any changes in its accounting
systems, policies, principles or practices, other than as may be required
by reason of changes in GAAP or rules and regulations of the SEC pertaining
to accounting principles or practices;
(f) Capital Expenditures. Authorize or make any capital
expenditures which individually or in the aggregate are in excess of
$25,000,000;
(g) Tax Elections. Make or change any Tax election or Tax
accounting method or settle or compromise any material federal, state,
local or foreign Tax dispute, or waive or extend the statute of limitations
in respect of any such Taxes or make any other Tax filings other than in
the ordinary course of business and consistent with past practice or
incident to the filing for extensions for Tax Reports;
(h) Settlement. Pay or agree to pay any amount in settlement
or compromise of any suits or claims of liability in an amount more than
$10,000,000;
(i) Issuances. Issue, sell, transfer, pledge, dispose of or
encumber any shares of, or securities convertible into or exchangeable for,
or options, warrants, calls, commitments or rights of any kind to acquire,
any shares of capital stock of any class or series of ▇▇▇▇▇▇▇ or any of its
Subsidiaries, other than (i) issuances of Common Stock pursuant to the
exercise of employee or director stock options outstanding on the date of
this Agreement or that are granted in accordance with clause (iii) below,
(ii) the issuance of up to 4,500,000 shares of ▇▇▇▇▇▇▇ Common Stock, plus
the assumption of unexercised options to purchase stock of CFM, in the CFM
Merger, (iii) additional options or stock-based awards to acquire ▇▇▇▇▇▇▇
Common Stock granted under the terms of any employee or director stock
option or compensation plan or arrangement of ▇▇▇▇▇▇▇ as in effect as of
this Agreement in the ordinary course consistent with past practice, or
(iv) the issuance of up to 2,000,000 shares of ▇▇▇▇▇▇▇ Common Stock in
connection with acquisitions of assets or businesses;
(j) Certain Transactions. Adopt a plan or agreement of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of ▇▇▇▇▇▇▇ or any
of its significant Subsidiaries, other than transactions permitted under
Sections 5.3(b) and (c);
(k) Dispositions. Sell, lease, license or otherwise dispose of
any of their properties or assets which are material individually or in the
aggregate to the business of ▇▇▇▇▇▇▇ and its subsidiaries, taken as a
whole, except in the ordinary course of business, consistent with past
practice; or
(l) Other. Take or agree in writing or otherwise to take, any
of the actions described in Sections 5.2(a) through (k) above, or any
action which would cause a material breach of its representations or
warranties contained in this Agreement or prevent it from materially
performing or cause it not to materially perform its covenants hereunder.
5.3 OTHER NEGOTIATIONS.
(a) Prior to the termination of this Agreement pursuant to
Article VIII (the "Exclusivity Period"), STEAG will not (and it will use
its best efforts to assure that its officers, directors, employees, agents
and affiliates do not on its behalf) take any action (directly or
indirectly) to solicit, initiate, seek, encourage or support any inquiry,
proposal or offer (whether written or oral) from, furnish any information
to, or participate in any negotiations with, any corporation, partnership,
person or other entity or group (other than discussions with ▇▇▇▇▇▇▇)
regarding any acquisition of STEAG or the STEAG Subsidiaries, any merger or
consolidation with or involving STEAG or the STEAG Subsidiaries, or any
acquisition of any material portion of the stock or assets of STEAG or any
of the STEAG Subsidiaries. STEAG agrees that any such negotiations in
progress as of the date hereof will be terminated or suspended during the
Exclusivity Period. During the Exclusivity Period, STEAG will immediately
notify ▇▇▇▇▇▇▇ regarding any contact by any third party regarding any
offer, proposal or inquiry regarding any such acquisition or financing of
STEAG or any of the STEAG Subsidiaries. In no event will STEAG or any of
the STEAG Subsidiaries accept or enter into an agreement concerning any
such third party transaction during the Exclusivity Period. During the
Exclusivity Period, STEAG will immediately notify ▇▇▇▇▇▇▇ regarding any
contact by any third party regarding any offer proposal or inquiry
regarding any such acquisition.
(b) During the Exclusivity Period, ▇▇▇▇▇▇▇ will not (and it
will use its best efforts to assure that its officers, directors,
employees, agents and affiliates do not on its behalf) take any action
(directly or indirectly) to solicit, initiate, seek, or encourage any
inquiry, proposal or offer (whether written or oral) from any corporation,
partnership, person or other entity or group (other than discussions with
STEAG), or, except in response to an unsolicited inquiry, proposal or offer
(whether written or oral) from any such person, furnish any information to,
or participate in any negotiations with any such person, regarding (i) any
merger or consolidation with or involving ▇▇▇▇▇▇▇ which results in the
stockholders of ▇▇▇▇▇▇▇ prior to such transaction owning less than 50% of
the capital stock of the surviving corporation, or any acquisition of any
material portion of the stock or assets of ▇▇▇▇▇▇▇ (an "Acquisition
Transaction") or (ii) any acquisition, whether by merger, stock
acquisition, asset acquisition, joint venture, partnership or otherwise, by
▇▇▇▇▇▇▇ of any business which competes with STEAG or the STEAG Subsidiaries
in the RTP, CVD, wet processing or copper businesses. ▇▇▇▇▇▇▇ agrees that
any such negotiations in progress as of the date hereof will be terminated
or suspended during the Exclusivity Period. In no event will ▇▇▇▇▇▇▇ accept
or enter into an agreement concerning any such third party transaction
during the Exclusivity Period. During the Exclusivity Period, ▇▇▇▇▇▇▇ will
immediately notify STEAG regarding any contact by any third party regarding
any offer, proposal or inquiry regarding any such acquisition.
(c) Notwithstanding the foregoing provisions of this Section
5.3, ▇▇▇▇▇▇▇ and STEAG will each have the right to conduct discussions with
and furnish information to CFM with regard to the CFM Merger and the
Strategic Business Combination, and further provided that ▇▇▇▇▇▇▇ and STEAG
agree to provide each other prompt updates regarding any such discussions.
Notwithstanding the foregoing provisions of this paragraph 5.3, ▇▇▇▇▇▇▇ is
permitted to pursue negotiations with and furnish information in connection
with potential transaction(s) disclosed to STEAG in writing prior to the
date of this Agreement, and to enter into and consummate agreements to
effectuate such transaction(s).
5.4 GERMAN COUNTERPART AGREEMENT. As promptly as practicable
following the date of this Agreement, ▇▇▇▇▇▇▇ and STEAG shall execute and
deliver the German-law-governed agreement attached as Exhibit D hereto (the
"Counterpart Agreement"), which shall be notarized in accordance with
German law or as otherwise agreed among the parties.
ARTICLE VI.
ADDITIONAL AGREEMENTS AND COVENANTS
6.1 COVENANT TO SATISFY CONDITIONS. Subject to the terms and
conditions hereof, each party hereto shall use its reasonable commercial
efforts to take all action required of it to satisfy the conditions set
forth in Article VII, and otherwise to fulfill its obligations under the
terms of this Agreement and to facilitate the consummation of the
transactions contemplated hereby. No party shall, nor shall 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.
6.2 PROXY MATERIALS AND STOCKHOLDER APPROVAL. As soon as
practicable after the date hereof, ▇▇▇▇▇▇▇ will prepare and file with the
SEC, at its own expense, a joint proxy statement/prospectus relating to the
▇▇▇▇▇▇▇ Stockholder Proposal (the "Proxy Statement") to be presented for
voting and adoption at meetings of the ▇▇▇▇▇▇▇ stockholders (the "▇▇▇▇▇▇▇
Stockholders' Meeting") and the shareholders of CFM. ▇▇▇▇▇▇▇ will duly
call, give notice of, convene and hold the ▇▇▇▇▇▇▇ Stockholders' Meeting as
promptly as practicable to consider and vote on the ▇▇▇▇▇▇▇ Stockholder
Proposal. Subject to its fiduciary obligations under applicable law, the
Board of Directors of ▇▇▇▇▇▇▇ shall recommend to ▇▇▇▇▇▇▇'▇ stockholders the
approval of the ▇▇▇▇▇▇▇ Stockholder Proposal. The Proxy Statement will
comply as to form in all material respects with all applicable laws,
including the Securities Exchange Act of 1934, as amended. STEAG shall
provide such information about the STEAG Subsidiaries as ▇▇▇▇▇▇▇ shall
reasonably request. The information supplied by ▇▇▇▇▇▇▇ for inclusion in
the Proxy Statement shall not, on the date the Proxy Statement is first
mailed to ▇▇▇▇▇▇▇'▇ stockholders or at the Closing, contain any statement
which, at such time, is false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they are
made, not false or misleading, or omit to state any material fact necessary
to correct any statement in any earlier communication which has become
false or misleading. Notwithstanding the foregoing, ▇▇▇▇▇▇▇ makes no
representation, warranty or covenant with respect to any information
supplied by STEAG in writing expressly for inclusion in the Proxy
Statement. The information supplied by STEAG in writing expressly for
inclusion in the Proxy Statement shall not, on the date the Proxy Statement
is first mailed to ▇▇▇▇▇▇▇'▇ stockholders, nor at the Closing, contain any
statement which, at such time, is false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which it
is made, not false or misleading; or omit to state any material fact
necessary to correct any statement in any earlier communication which has
become false or misleading. Notwithstanding the foregoing, STEAG makes no
representation, warranty or covenant with respect to any information
contained in the Proxy Statement which was not provided in writing by STEAG
expressly for inclusion in the Proxy Statement. Each of STEAG and ▇▇▇▇▇▇▇
agrees to provide promptly to the other such information concerning its
business and financial statements and affairs as, in the reasonable
judgment of the providing party or its counsel, may be required or
appropriate for inclusion in the Proxy Statement or in any amendments or
supplements thereto, and to cause its counsel and auditors to cooperate
with the other's counsel and auditors in the preparation of the Proxy
Statement. ▇▇▇▇▇▇▇ will promptly advise STEAG, and STEAG will promptly
advise ▇▇▇▇▇▇▇, in writing if at any time prior to the Closing either
▇▇▇▇▇▇▇ or STEAG shall obtain knowledge of any facts that might make it
necessary or appropriate to amend or supplement the Proxy Statement in
order to make the statements contained or incorporated by reference therein
not misleading or to comply with applicable law (including information
relating to CFM). If at any time prior to the Closing Date any event with
respect to ▇▇▇▇▇▇▇, its officers, and directors or any of its subsidiaries
shall occur which is or should be described in an amendment of, or a
supplement to, the Proxy Statement, such event shall be so described and
the presentation in such amendment or supplement of such information will
not contain any statement which, at the time and in light of the
circumstances under which it is made, is false or misleading in any
material respect or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not false or misleading.
6.3 INTEGRATION COMMITTEE. To facilitate transition and
integration planning, ▇▇▇▇▇▇▇, STEAG and CFM will maintain an integration
committee (the "Integration Committee") consisting of the CEO's of ▇▇▇▇▇▇▇,
CFM and STEAG, Dr. Ludger Viefhues and the future head of integration
planning for ▇▇▇▇▇▇▇, which will continue to develop the organization and
staffing plan prior to Closing. As of the Closing, the ▇▇▇▇▇▇▇ Board of
Directors will establish and appoint in accordance with the procedures for
establishing committees set forth in ▇▇▇▇▇▇▇'▇ By-laws an "Executive
Staffing Committee," consisting of ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇
(and, if agreed by ▇▇▇▇▇▇▇ and STEAG, one additional representative of each
of STEAG and ▇▇▇▇▇▇▇), which will remain in place for one year following
closing, and will be responsible during that period for making key
personnel decisions (including the hiring and firing of CEO, CFO, COO,
general managers for divisions). A mutually acceptable independent ▇▇▇▇▇▇▇
board member will be appointed as a tiebreaker in the event the Executive
Staffing Committee reaches deadlock on an issue.
6.4 EMPLOYEE BENEFITS. For a period of two years following the
Closing, ▇▇▇▇▇▇▇ will provide or cause benefits to be provided to all
employees of the STEAG Subsidiaries who were employees of US STEAG
Subsidiaries who were so employed immediately prior to the Closing ("STEAG
Employees") that are no less favorable in the aggregate to the benefits
provided to the STEAG Employee on the date of this Agreement, and
thereafter will provide STEAG Employees with benefits comparable to those
provided to similarly-situated and located employees of ▇▇▇▇▇▇▇. Time of
service with STEAG Subsidiaries shall be credited for all purposes, other
than benefit accrual, under any comparable plans maintained by ▇▇▇▇▇▇▇,
except to the extent such credit would result in a duplication of benefits.
Notwithstanding the foregoing, to the extent a ▇▇▇▇▇▇▇ sabbatical plan
remains in effect for employees in a particular country, the service
credited to STEAG Employees under the ▇▇▇▇▇▇▇ employee benefit programs
shall not be considered for purposes of eligibility to participate in
▇▇▇▇▇▇▇'▇ sabbatical plan. ▇▇▇▇▇▇▇ and STEAG agree that where applicable
with respect to any medical or dental benefit plan of ▇▇▇▇▇▇▇, (i) ▇▇▇▇▇▇▇
shall waive, with respect to any STEAG 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 ▇▇▇▇▇▇▇ employee
benefit plan) and (ii) any covered expenses incurred on or before the
Closing by a STEAG Employee or a STEAG Employee's covered dependents shall
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 ▇▇▇▇▇▇▇. STEAG Employees shall receive
compensation no less favorable than their current salaries. ▇▇▇▇▇▇▇
acknowledges the obligations of German companies toward their employees.
▇▇▇▇▇▇▇ shall provide continuation health care coverage to all STEAG
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 Section 4980D of the
Code and Sections 601 through 608 of ERISA ("COBRA"). STEAG shall be
responsible for providing continuation coverage and all related notices to
the extent required by law to any STEAG Employee (or qualified beneficiary)
who incurs a "qualifying event" under COBRA on or before the Closing Date.
STEAG and/or the relevant STEAG Subsidiary, as applicable, will terminate
the STEAG RTP Systems Inc. 401(k) Savings Plan immediately prior to
Closing, unless ▇▇▇▇▇▇▇, in its sole and absolute discretion, agrees to
sponsor and maintain such plan by providing STEAG with written notice of
such election at thirty (30) days before the Closing Date. Unless ▇▇▇▇▇▇▇
provides such notice to STEAG, ▇▇▇▇▇▇▇ shall receive from STEAG evidence
that the STEAG RTP Systems Inc. 401(k) Savings Plan has been terminated
pursuant to resolutions of the relevant STEAG Subsidiary's Board of
Directors (the form and substance of which resolutions shall be subject to
review and approval by ▇▇▇▇▇▇▇), effective as of the day immediately
preceding the Closing Date.
6.5 SALE OF SHARES PURSUANT TO REGULATION D. The parties hereto
acknowledge and agree that the ▇▇▇▇▇▇▇ Shares issuable to STEAG pursuant to
Article II hereof, shall constitute "restricted securities" under the
Securities Act. Until such time as such shares are no longer "restricted
securities" under the Securities Act, the certificates of ▇▇▇▇▇▇▇ Common
Stock shall bear the legend set forth in Section 2.5 hereof.
6.6 ACCESS TO INFORMATION.
(a) STEAG and its counsel and advisors shall have reasonable
access during normal business hours to all books, records, assets and
contracts of or relating to ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ and its counsel and
advisors shall have reasonable access during normal business hours to all
books, records, assets and contracts of or relating to the STEAG
Subsidiaries, in each case to complete such party's respective diligence
investigation for the purposes of the Strategic Business Combination. Key
personnel shall 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 ▇▇▇▇▇▇▇ and STEAG shall 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 6.6 shall 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. Notwithstanding the foregoing sentence, to the extent that either
▇▇▇▇▇▇▇ or STEAG obtains information which the receiving party knows the
failure of which to include in the STEAG Disclosure Schedule or the ▇▇▇▇▇▇▇
Disclosure Schedule, as the case may be, would result in a breach of a
representation and warranty herein by the other party, then the party that
first obtained such information shall promptly notify the other in writing
of such information and such other party may supplement or amend the STEAG
Disclosure Schedule or the ▇▇▇▇▇▇▇ Disclosure Schedule, as the case may be;
provided, however, that, if the disclosure pursuant to such supplement or
amendment would constitute a basis pursuant to Section 7.2(b) or Section
7.3(b), as the case may be, under which ▇▇▇▇▇▇▇ or STEAG, respectively,
would have the right to not consummate the Strategic Business Combination
and the transactions contemplated hereby, then ▇▇▇▇▇▇▇ or STEAG shall have
ten (10) days from the date of such amendment or supplement being delivered
to the other party pursuant to Section 10.1 to terminate this Agreement
pursuant to Section (h) or (i), respectively, after which such amendment or
supplement shall be deemed accepted. Notwithstanding any other provision
hereof, if the Closing occurs, any such supplement or amendment of the
STEAG Disclosure Schedule or the ▇▇▇▇▇▇▇ Disclosure Schedule, as the case
may be, will be effective to cure and correct for all purposes any breach
of any representation, warranty or covenant which would have existed by
reason of STEAG or ▇▇▇▇▇▇▇, respectively, not having made such supplement
or amendment.
6.7 CONFIDENTIALITY. The parties acknowledge that ▇▇▇▇▇▇▇ and
STEAG have previously executed a Mutual Non-Disclosure Agreement dated
February 25, 2000 (the "Non-Disclosure Agreement"), which Non-Disclosure
Agreement is hereby incorporated herein by reference and shall continue in
full force and effect in accordance with its terms.
6.8 PUBLIC DISCLOSURE. Unless otherwise permitted by this
Agreement, ▇▇▇▇▇▇▇ and STEAG shall 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 shall issue any such press release or make
any such statement or disclosure without the prior approval of the other
(which approval shall 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 shall, 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).
6.9 REGULATORY APPROVAL; FURTHER ASSURANCES.
(a) Each party shall 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 Strategic Business Combination 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, STEAG and ▇▇▇▇▇▇▇
shall, promptly after the date of this Agreement, prepare and file the
notifications required under the HSR Act in connection with the Strategic
Business Combination, and such filings as are required under the Act
Against Restraints on Competition of 1958 (Gesetz gegen
Wettbewerbsbeschrankungen). Each party shall 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 Strategic Business
Combination and the other transactions contemplated by this Agreement.
STEAG and ▇▇▇▇▇▇▇ shall respond as promptly as practicable to (i) any
inquiries or requests received from the Federal Trade Commission or the
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 STEAG and ▇▇▇▇▇▇▇ shall give the other party prompt notice of the
commencement of any Legal Proceeding by or before any Governmental Entity
with respect to the Strategic Business Combination 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
Strategic Business Combination. STEAG and ▇▇▇▇▇▇▇ 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
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, "Antitrust Laws"). In addition, each
party shall 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 STEAG and ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ and STEAG shall 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
▇▇▇▇▇▇▇ and STEAG shall cooperate and use all reasonable efforts vigorously
to contest and resist any such Legal Proceeding, and to have vacated,
lifted, reversed, or overturned any decree, judgment, injunction or other
order whether temporary, preliminary or permanent (each an "Order"), that
is in effect and that prohibits, prevents, or restricts consummation of the
Strategic Business Combination or any other transactions contemplated by
this Agreement, including, without limitation, by vigorously pursuing all
available avenues of administrative and judicial appeal and all available
legislative action, unless by mutual agreement ▇▇▇▇▇▇▇ and STEAG decide
that litigation is not in their respective best interests. Notwithstanding
the foregoing or any other provisions of this Agreement, nothing in this
Section 6.9(b) shall limit a party's right to terminate this Agreement
pursuant to Article VIII, so long as such party has up to then complied in
all material respects with its obligations under this Section 6.9(b). Each
of STEAG and ▇▇▇▇▇▇▇ shall use all reasonable efforts to take such action
as may be required to cause the expiration of the notice periods under the
HSR Act or other 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 ▇▇▇▇▇▇▇ nor STEAG shall
be required to hold separate (including by trust or otherwise) or divest
any of their respective businesses or assets.
6.10 LEGAL REQUIREMENTS. Subject to 6.9(b), each of STEAG, and
▇▇▇▇▇▇▇ will, and will cause their respective subsidiaries to, take all
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.
6.11 STOCK OPTION GRANTS. Effective on the Closing, the Board of
Directors of ▇▇▇▇▇▇▇ will ▇▇▇▇▇ options to purchase 850,000 shares of
▇▇▇▇▇▇▇ Common Stock (as adjusted for any stock split, stock dividend,
reverse stock split and recapitalization) to directors, officers and
employees of the STEAG subsidiaries under existing ▇▇▇▇▇▇▇ Stock Option
Plans, with an exercise price equal to the fair market value of ▇▇▇▇▇▇▇
Common Stock on the date of the Closing and with other terms consistent
with outstanding ▇▇▇▇▇▇▇ Stock options.
6.12 CONVEYANCE TAXES. STEAG and ▇▇▇▇▇▇▇ shall 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. Each
party shall 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.
6.13 STEAG INTERCOMPANY INDEBTEDNESS; TRANSFER TO NEWCO.
(a) As soon as practicable after the date of this Agreement,
STEAG will cause agreements or instruments of transfer with respect to the
transfer of the Foreign STEAG Subsidiaries to Newco to be duly executed
and, to the extent necessary, filed or registered. Thereafter, STEAG will
use commercially reasonable efforts to cause Newco to become the owner, in
accordance with all applicable legal requirements, of the Foreign
Subsidiary Shares.
(b) As soon as practicable after the date of this Agreement
but, in any event, prior to the Closing, STEAG will take such action as is
reasonably necessary to cause all indebtedness of any of the STEAG
Subsidiaries to STEAG or any of its affiliates (other than another STEAG
Subsidiary), other than Excluded Indebtedness (as defined in the next
sentence) to be cancelled without any payment on the part of such STEAG
Subsidiaries. The term Excluded Indebtedness means: (i) accounts payable to
STEAG Electronic Systems spol s r.o.; (ii) any reimbursement obligations
under any other provision of this Agreement; (iii) rental payments owed
under leases between any STEAG Subsidiary and STEAG Walsum Immobilien AG;
(iv) obligations under the Profit Transfer Contracts; and (v) obligations
to reimburse payments made by STEAG to or on behalf of certain employees in
France. As of the date of this Agreement, the amount of indebtedness of the
STEAG Subsidiaries to STEAG that will be forgiven pursuant to this Section
6.13(b) is approximately DM 200,000,000.
6.14 Non-Solicitation of Employees. ▇▇▇▇▇▇▇ and STEAG each agrees
that, without the prior written consent of the other, it will not, and will
cause its controlled affiliates not to, during the term of this Agreement
and for a period of one year from the date of termination of this Agreement
directly or indirectly (including through instruction to its agents)
solicit for employment any person who is now employed by the other;
provided however, that neither ▇▇▇▇▇▇▇ nor STEAG nor any of their
respective affiliates is 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. The
obligations set forth in this Section 6.14 will survive the termination of
this Agreement.
6.15 NASDAQ LISTING. ▇▇▇▇▇▇▇ will use its reasonable commercial
efforts to cause the ▇▇▇▇▇▇▇ Shares issuable pursuant to the terms of this
Agreement to be approved for listing on NASDAQ, subject to official notice
of issuance, as promptly as practicable after the date of this Agreement
and in any event prior to the Closing.
6.16 DIRECTORS; NOMINATING COMMITTEE; OFFICERS. ▇▇▇▇▇▇▇ shall
cause the actions required to be taken as of Closing under Section 1 of the
Stockholder Agreement to be taken on or prior to the Closing Date,
including (a) causing the Board of Directors of ▇▇▇▇▇▇▇ to be expanded from
five (5) to seven (7) members; (b) causing two (2) persons designated by
STEAG to be appointed to the Board of Directors of ▇▇▇▇▇▇▇; (c) causing one
of the STEAG designees to be named Chairman of the Board of Directors of
▇▇▇▇▇▇▇; and (d) causing ▇▇▇▇▇▇▇'▇ Bylaws to be amended. During the period
between the Early Condition Satisfaction Date, if applicable, and the
Closing Date, ▇▇▇▇▇▇▇ will provide the STEAG designees with notice of all
meetings of the Board (at such times and with such additional information
as is provided to current directors) and shall permit such STEAG designees
to attend, either in person or by videoconference, all such meetings,
subject to such STEAG designees agreeing to keep confidential all
information disclosed in connection with such meetings.
6.17 NAME. The name of the company resulting from the Strategic
Business Combination (the "Company") will be ▇▇▇▇▇▇▇ or such other name, if
any, which the parties, acting through the Integration Committee, mutually
determine to be more beneficial to the company's business, such
determination to be made in a timely manner. In the event that a different
name is agreed upon, ▇▇▇▇▇▇▇ shall take such corporate and other action as
is reasonably necessary to effect such name change. Within one year after
the Closing Date, ▇▇▇▇▇▇▇ will cause the names of each of the STEAG
Subsidiaries to be changed so as to no longer include the name "STEAG," and
from and after the first anniversary of the Closing Date, ▇▇▇▇▇▇▇ shall,
and shall cause its subsidiaries to, otherwise discontinue the use of the
name "STEAG". Notwithstanding the foregoing, ▇▇▇▇▇▇▇ and its subsidiaries
may continue to use any current product names and trademarks containing the
name "STEAG" to the extent associated with any products currently
manufactured and sold by the STEAG Subsidiaries, as well as modified, but
otherwise substantially similar, versions of such products.
6.18 ACCESS TO BUSINESS RECORDS. From and after the Closing, each
party shall afford the other reasonable access to all preclosing business
records of or directly relating to the STEAG Subsidiaries, upon reasonable
notice during ordinary business hours for all reasonable business purposes,
and each party shall permit the other party to make copies of any such
records and retain possession of such copies.
ARTICLE VII.
CONDITIONS TO THE STRATEGIC BUSINESS COMBINATION
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO CONSUMMATE THE
STRATEGIC BUSINESS COMBINATION. The respective obligations of each party to
consummate the Strategic Business Combination shall 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; provided,
however, that the condition specified in Section 7.1(g) hereof may be
waived only by a written instrument executed by each of ▇▇▇▇▇▇▇, STEAG and
CFM:
(a) Stockholder Approval. The stockholders of ▇▇▇▇▇▇▇ shall
have approved the ▇▇▇▇▇▇▇ Stockholder Proposal in accordance with ▇▇▇▇▇▇▇'▇
Certificate of Incorporation and By-laws, applicable state corporate laws
and the rules and listing requirements of NASDAQ and in accordance with
this Agreement.
(b) 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 Strategic Business Combination shall be and remain
in effect, nor shall there be any action taken, or any law, statute, rule,
regulation, decree or order been enacted, adopted, entered, enforced, or
deemed applicable to the Strategic Business Combination, which remains in
effect and which makes the consummation of the Strategic Business
Combination illegal.
(c) Regulatory Approval. Any waiting period applicable to the
Strategic Business Combination or any of the transactions contemplated
hereby, including but not limited to a waiting period under HSR Act or the
Act Against Restraint on Competition of 1958 (Gesetz gegen
Wettbewerbeschrenkuyen) shall have expired or been terminated, and any
other required U.S. or German regulatory approvals, including, but not
limited to, any approvals required by the German cartel office or the
European Union or any council, commission, or subdivision thereof, shall
have been obtained. STEAG and each of the STEAG Subsidiaries, and ▇▇▇▇▇▇▇
shall have timely obtained from each Governmental Entity all approvals,
waivers, and consents, if any, necessary for consummation of the Strategic
Business Combination and the several transactions contemplated hereby,
including such approvals, waivers, and consents as may be required under
the Securities Act, and under state Blue Sky laws.
(d) NASDAQ Listing. The ▇▇▇▇▇▇▇ Shares issuable pursuant to
the Strategic Business Combination shall have been approved for listing by
NASDAQ upon official notice of issuance.
(e) Legal Proceedings. There shall 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 Strategic Business
Combination; (ii) relating to the Strategic Business Combination and
seeking to obtain from ▇▇▇▇▇▇▇, STEAG, or the STEAG Subsidiaries any
damages or other relief that would be material to either ▇▇▇▇▇▇▇ or STEAG;
(iii) seeking to prohibit or limit in any material respect ▇▇▇▇▇▇▇'▇
ability to vote, receive dividends with respect to, or otherwise exercise
ownership rights with respect to the stock of the STEAG Subsidiaries; (iv)
seeking to prohibit or limit in any material respect STEAG's ability to
vote, receive dividends with respect to, or otherwise exercise ownership
rights with respect to the ▇▇▇▇▇▇▇ Shares, (v) which would materially and
adversely affect the right of ▇▇▇▇▇▇▇ to own the assets or operate the
business of the STEAG Subsidiaries; (vi) seeking to compel ▇▇▇▇▇▇▇, STEAG
or any of their controlled affiliates to dispose of or hold separate any
material assets, (vii) which is reasonably likely to have a STEAG Material
Adverse Effect or a ▇▇▇▇▇▇▇ Material Adverse Effect, or (viii) which is
reasonably likely to enjoin, restrain or prohibit any integration of any
operations of the STEAG Subsidiaries with those of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇
Subsidiaries.
(f) Transfers to Newco. Newco shall have become the owner, in
accordance with all applicable legal requirements, of the outstanding
capital stock of all of the Foreign STEAG Subsidiaries.
(g) Closing of CFM Merger. The closing of the CFM Merger shall
occur concurrently with the Closing.
7.2 CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇▇. The obligations of
▇▇▇▇▇▇▇ to consummate the Strategic Business Combination and the
transactions contemplated under the Agreement shall 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. STEAG and the
STEAG Subsidiaries each shall 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 STEAG contained herein (i) shall be true and correct in all
material respects, on and as of the date of this Agreement, and (ii) shall
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 STEAG 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. ▇▇▇▇▇▇▇ shall have received a
certificate signed by authorized officers of STEAG, dated the Closing Date,
certifying that the conditions set forth in Section 7.2(a) and 7.2(b) have
been satisfied.
(d) Consents and Approvals. ▇▇▇▇▇▇▇ shall have received
written evidence reasonably satisfactory to it that all consents and
approvals required to be obtained in connection with the Strategic Business
Combination and the transactions contemplated hereby have been obtained and
shall 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 ▇▇▇▇▇▇▇ Material Adverse Effect.
(e) No STEAG Material Adverse Effect. No STEAG Material
Adverse Effect shall have occurred and no event shall have occurred which,
in the reasonable judgment of ▇▇▇▇▇▇▇, is reasonably likely to have a STEAG
Material Adverse Effect.
(f) Stockholder Agreement. STEAG shall have executed the
Stockholder Agreement substantially in the form set forth as Exhibit B (the
"Stockholder Agreement"), with full force and effect from and after the
Closing.
(g) Opinion. Counsel for STEAG in the U.S.A. shall have
delivered to ▇▇▇▇▇▇▇ an opinion in the form attached hereto as Exhibit
7.2(g).
(h) Transition Services Agreement. STEAG shall have executed a
Transition Services Agreement to be mutually agreed by STEAG and ▇▇▇▇▇▇▇,
acting through the Integration Committee, and having terms consistent with
the key points set forth in Exhibit C (the "Transition Services
Agreement"), with full force and effect from and after the Closing.
(i) Subsidiary Director Resignations. ▇▇▇▇▇▇▇ shall have
received the written resignations, effective as from the Closing Date, of
the directors of all of the STEAG Subsidiaries, except for those
employee/directors whom the parties have mutually agreed, through the
Integration Committee, to retain immediately following the Closing.
(j) Other Closing Documents. ▇▇▇▇▇▇▇ shall have received the
share certificates evidencing the STEAG Shares, the documents and
instruments required for the notarization and transfer of the STEAG Shares
and such other closing and transfer documents as ▇▇▇▇▇▇▇ shall reasonably
request to effect and consummate the Strategic Business Combination and the
transactions contemplated hereby, in each case in form and substance
reasonably satisfactory to ▇▇▇▇▇▇▇ and its counsel.
7.3 CONDITIONS TO OBLIGATIONS OF STEAG. The obligations of STEAG
to consummate the Strategic Business Combination under this Agreement shall
be further subject to the satisfaction, at or prior to the Closing, of the
following conditions except as may be waived by STEAG in writing:
(a) Compliance with Agreements and Covenants. ▇▇▇▇▇▇▇ shall
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) shall be true and correct on and
as of the date of this Agreement in all material respects, and (ii) shall
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 ▇▇▇▇▇▇▇ 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. STEAG shall have received a
certificate signed by the Chief Executive Officer and Chief Financial
Officer of ▇▇▇▇▇▇▇, dated the Closing Date, certifying that the conditions
set forth in Section 7.3(a) and 7.3(b) have been satisfied.
(d) Consents and Approvals. STEAG shall have received written
evidence reasonably satisfactory to it that all consents and approvals
required to be obtained in connection with the Strategic Business
Combination and the transactions contemplated hereby have been obtained and
shall 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 STEAG Material Adverse Effect.
(e) No ▇▇▇▇▇▇▇ Material Adverse Effect. No ▇▇▇▇▇▇▇ Material
Adverse Effect shall have occurred and no event shall have occurred which,
in the reasonable judgment of STEAG, is reasonably likely to have a ▇▇▇▇▇▇▇
Material Adverse Effect.
(f) Other Closing Documents. STEAG shall have received share
certificates evidencing the ▇▇▇▇▇▇▇ Shares and such other documents and
instruments as STEAG shall reasonably request to effect and consummate the
Strategic Business Combination and the transactions contemplated hereby, in
each case in form and substance reasonably satisfactory to STEAG and its
counsel.
(g) Stockholder Agreement. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ shall have
executed the Stockholder Agreement, with full force and effect from and
after the Closing.
(h) Transition Services Agreement. ▇▇▇▇▇▇▇ shall have executed
the Transition Services Agreement, with full force and effect from and
after the Closing.
(i) Opinion. Counsel for ▇▇▇▇▇▇▇ shall have delivered to STEAG
an opinion in the form attached hereto as Exhibit 7.3(i).
(j) Composition of Board of Directors; Officers; Nominating
Committee; Bylaws. The actions required under Section 1 of the Stockholder
Agreement as of Closing shall have been taken.
(k) Option Grants. The grants of options contemplated under
Section 6.11 of this Agreement shall have been made effective as of the
Closing.
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
8.1 OPTIONAL TERMINATION. This Agreement may be terminated at any
time prior to the Closing by action taken or authorized by the Board of
Directors or the Supervisory Board, as applicable, of the terminating party
or parties and, except as provided below, whether before or after approval
of the ▇▇▇▇▇▇▇ Stockholder Proposal by the stockholders of ▇▇▇▇▇▇▇:
(a) By mutual written consent of ▇▇▇▇▇▇▇, STEAG and CFM;
(b) By either ▇▇▇▇▇▇▇ or STEAG, if the Closing shall not have
occurred on or before February 28, 2001 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section
8.1(b) shall 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 ▇▇▇▇▇▇▇ or STEAG, 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 6.9)
permanently 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
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 Section 6.9),
in the case of each of (i) and (ii) which is necessary to fulfill the
conditions set forth in Article VII, as applicable; provided, however, that
the right to terminate this Agreement under this Section 8.1(c) shall 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 either ▇▇▇▇▇▇▇ or STEAG, if the approval of the
stockholders of ▇▇▇▇▇▇▇ contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a duly
held meeting of ▇▇▇▇▇▇▇ stockholders (including any adjournment or
postponement thereof) at which the vote was taken; provided, however, that
a party shall not be permitted to terminate this Agreement pursuant to this
Section 8.1(d) if the failure to obtain such approval is attributable to a
failure on the part of such party to perform any material obligation
required to be performed by such party;
(e) By STEAG, if (i) ▇▇▇▇▇▇▇ shall have materially breached
its obligations under this Agreement by reason of a failure to call the
▇▇▇▇▇▇▇ Stockholders Meeting in accordance with this Agreement or a failure
to prepare and mail to its stockholders the Proxy Statement as required
hereunder, (ii) ▇▇▇▇▇▇▇'▇ Board of Directors shall have failed to recommend
that ▇▇▇▇▇▇▇'▇ stockholders vote in favor of approval of the ▇▇▇▇▇▇▇
Stockholder Proposal or shall have withdrawn, modified or changed in a
manner adverse to STEAG such recommendation, whether or not permitted by
the terms of this Agreement (iii) ▇▇▇▇▇▇▇ shall have entered into a
definitive acquisition agreement for an Acquisition Transaction involving
▇▇▇▇▇▇▇, or (iv) an Acquisition Transaction involving ▇▇▇▇▇▇▇ shall have
occurred, or (v) ▇▇▇▇▇▇▇ shall have materially breached its obligations
under Section 5.3(b), or (vi) ▇▇▇▇ ▇▇▇▇▇▇▇ shall have materially breached
his obligations under the Voting Agreement;
(f) By ▇▇▇▇▇▇▇ if (i) ▇▇▇▇▇▇▇ shall have entered into a
definitive acquisition agreement for an Acquisition Transaction or (ii) an
Acquisition Transaction involving ▇▇▇▇▇▇▇ shall have occurred; (g) By
▇▇▇▇▇▇▇, if STEAG shall have materially breached its obligations under
Section 5.3(a), but only if such breach results in STEAG entering into a
third party acquisition agreement prohibited by such provision or otherwise
materially adversely affects ▇▇▇▇▇▇▇'▇ ability to consummate the
transactions contemplated by this Agreement.
(h) By ▇▇▇▇▇▇▇ if (i) any of STEAG'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 7.2(b) would not be satisfied or (ii) any of STEAG's
covenants contained in this Agreement shall have been breached such that
the condition set forth in Section 7.2(a) would not be satisfied; provided,
however, that if an inaccuracy in the representations and warranties of
STEAG arising as of a date subsequent to this Agreement is curable by STEAG
by the Termination Date and STEAG is continuing to exercise all reasonable
efforts to cure such inaccuracy, then ▇▇▇▇▇▇▇ may not terminate this
Agreement under this Section 8.1(h) on account of such inaccuracy;
(i) By STEAG 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 7.3(b) would not be satisfied or (ii) if any of ▇▇▇▇▇▇▇'▇
covenants contained in this Agreement shall have been breached such that
the condition set forth in Section 7.3(a) would not be satisfied; provided,
however, that if an inaccuracy in ▇▇▇▇▇▇▇'▇ representations and warranties
arising as of a date subsequent to the date of this Agreement is curable by
▇▇▇▇▇▇▇ by the Termination Date and ▇▇▇▇▇▇▇ is continuing to exercise all
reasonable efforts to cure such inaccuracy, then STEAG may not terminate
this Agreement under this Section 8.1(i) on account of such inaccuracy; or
(j) By STEAG, if the Closing Stock Price (as defined in this
Section 8.1(j)) is less than $20.00 (subject to appropriate adjustment in
the event of a Capital Change). The "Closing Stock Price" shall mean the
average of the closing sale prices of ▇▇▇▇▇▇▇ Common Stock as reported in
the Wall Street Journal on the basis of information provided by the Nasdaq
National Market for each of the twenty trading days immediately preceding
(but not including) the date two (2) business days prior to the earlier of
(i) the satisfaction or waiver of each of the conditions set forth in
Article VII hereof and (ii) the STEAG Early Condition Satisfaction Date, if
applicable. Notwithstanding the foregoing, STEAG shall not be permitted to
terminate this Agreement pursuant to this Section 8.1(j) if the Closing
Stock Price is at least $15.78, provided that ▇▇▇▇▇▇▇, in its sole
discretion, elects to deliver to STEAG at the Closing a ▇▇▇▇▇▇▇ Note (as
defined below) as additional consideration for the sale of the STEAG Shares
by STEAG to ▇▇▇▇▇▇▇, which ▇▇▇▇▇▇▇ note is in a principal amount equal to
the product obtained by multiplying 11,850,000 by the difference between
$20.00 and the Closing Stock Price. A "▇▇▇▇▇▇▇ Note" is an unsecured
promissory note payable by ▇▇▇▇▇▇▇ with a term of three (3) years, with
simple interest payable annually at LIBOR plus 2%.
In the event of termination of this Agreement and abandonment of
the Strategic Business Combination pursuant to this Article VIII, no party
hereto (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except as provided
in Section 8.3 hereof and except that (i) nothing herein will relieve any
party from liability for any material breach of this Agreement and (ii) the
agreements contained in Sections 6.15, 8.3 and 10.14 hereof shall survive.
8.2 AUTOMATIC TERMINATION. Upon the termination for any reason of
the CFM Agreement prior to the consummation of the Strategic Business
Combination, this Agreement shall automatically terminate without any
further action on the part of either party.
8.3 EFFECT OF TERMINATION.
(a) If STEAG shall terminate this Agreement pursuant to
Section 8.1(d) or (e) or ▇▇▇▇▇▇▇ shall terminate this Agreement pursuant to
Section 8.1(f), then ▇▇▇▇▇▇▇ shall promptly, but in no event later than the
date of such termination, pay STEAG a nonrefundable fee in an amount equal
to $20,000,000, payable by wire transfer of immediately available funds to
an account designated by STEAG.
(b) If ▇▇▇▇▇▇▇ shall terminate this Agreement pursuant to
Section 8.1(g), then STEAG shall promptly, but in no event later than the
date of such termination, pay ▇▇▇▇▇▇▇ a nonrefundable fee in an amount
equal to $20,000,000, payable by wire transfer of immediately available
funds to an account designated by ▇▇▇▇▇▇▇.
(c) The parties acknowledge that the agreements contained in
this Section 8.3 are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, none of the parties
would enter into this Agreement; accordingly, if either the STEAG or
▇▇▇▇▇▇▇ fails promptly to pay any amount due pursuant to this Section 8.3,
and, in order to obtain such payment, the other party commences a suit
which results in a judgment against such party for the fee set forth in
this Section 8.3, such party shall pay to the other party its costs and
expenses (including attorneys' fees and expenses) in connection with such
suit, together with interest on the amount of the fee at two points above
the prime rate of Citibank, N.A. in effect on the date such payment was
required to be made. The parties agree that any remedy or amount payable
pursuant to this Section 8.3 shall not preclude any other remedy or amount
payable hereunder and shall not be an exclusive remedy for any breach of
any representation, warranty, covenant or agreement contained in this
Agreement.
8.4 AMENDMENT. This Agreement may be amended by the parties at any
time before or after receipt of approval by ▇▇▇▇▇▇▇ stockholders of the
▇▇▇▇▇▇▇ Stockholder Proposal; provided, however, that after receipt of the
▇▇▇▇▇▇▇ stockholder approval, there shall be made no amendment that by law
requires further approval by the stockholders of ▇▇▇▇▇▇▇ without the
further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
8.5 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) subject to the proviso of Section 8.4, 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 shall 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 shall not constitute a waiver of such rights.
8.6 NOTICE OF TERMINATION. Any party wishing to terminate this
Agreement under Section 8.1 shall deliver written notice to the other
party, setting forth the paragraph under Section 8.1 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 shall not affect the validity of the termination. Upon
the automatic termination of the Agreement under Section 8.2, ▇▇▇▇▇▇▇ shall
give STEAG written notice thereof. Any such termination notice shall be
delivered in accordance with Section 10.1 of this Agreement.
ARTICLE IX.
INDEMNIFICATION
9.1 INDEMNIFICATION.
(a) Survival of Warranties. The representations and warranties
made by STEAG in Sections 3.1 through 3.4 and by ▇▇▇▇▇▇▇ in Sections 4.1
through 4.3 shall survive the Closing and continue in full force and effect
for a period of one year following the Closing, except for the last
sentence of Section 3.1(b) and the third sentence of Section 4.3(a), each
of which shall survive for an unlimited period of time. The representations
and warranties by STEAG set forth in Section 3.13 shall survive the Closing
and continue in full force and effect until thirty (30) days after the
expiration of the applicable statute of limitations.
(b) STEAG will indemnify and hold harmless ▇▇▇▇▇▇▇, its
affiliates and its and their respective officers, directors, agents,
attorneys and employees (hereinafter referred to individually as an
"▇▇▇▇▇▇▇ Indemnified Person" and collectively as "▇▇▇▇▇▇▇ Indemnified
Persons") from and against any and all losses, costs, damages, liabilities
and expenses arising from claims, demands, actions, causes of action,
including, without limitation, legal fees, (collectively, "Damages")
arising out of any misrepresentation or breach of any of the
representations and warranties by STEAG in Sections 3.1 through 3.4 and
3.13. ▇▇▇▇▇▇▇ will indemnify, defend and hold harmless STEAG, its
affiliates and its and their respective officers, directors, agents,
attorneys and employees (hereinafter referred to individually as a "STEAG
Indemnified Person" and collectively as "STEAG Indemnified Persons") from
and against any and all Damages arising out of any misrepresentation or
breach of the representations and warranties by ▇▇▇▇▇▇▇ in Sections 4.1
through 4.3. The obligations of STEAG to indemnify a ▇▇▇▇▇▇▇ Indemnified
Person for any Damages is subject to the condition that STEAG shall have
received an Indemnification Claim (as defined in Section 9.2) for all
Damages for which indemnity is sought on or before the expiration date for
the applicable representation or warranty set forth in Section 9.1(a)
above. The obligation of ▇▇▇▇▇▇▇ to indemnify a STEAG Indemnified Person
for Damages is subject to the condition that ▇▇▇▇▇▇▇ shall have received an
Indemnification Claim for all Damages for which indemnity is sought on or
before the expiration date for the applicable representation or warranty
set forth in Section 9.1(a) above.
9.2 PROCEDURES FOR INDEMNIFICATION.
(a) As used in this ARTICLE IX, the term "Indemnitor" means
the party against whom indemnification hereunder is sought, and the term
"Indemnitee" means the party seeking indemnification hereunder.
(b) A claim for indemnification hereunder (an "Indemnification
Claim") shall be made by Indemnitee by delivery of a written notice to
Indemnitor requesting indemnification and specifying the basis on which
indemnification is sought in reasonable detail (and shall attach relevant
documentation related to the Indemnification Claim), the amount of the
asserted Damages, and, in the case of a Third Party Claim, containing (by
attachment or otherwise) such other information as Indemnitee shall have
concerning such Third Party Claim.
(c) If the Indemnification Claim involves a Third Party Claim,
then the procedures set forth in Section 9.3 hereof shall be observed by
Indemnitee and Indemnitor.
(d) If the Indemnification Claim involves a matter other than
a Third Party Claim (as defined below), Indemnitor shall have thirty (30)
days to object to such Indemnification Claim by delivery of a written
notice of such objection to Indemnitee specifying in reasonable detail the
basis for such objection. Failure to timely so object shall constitute a
final and binding acceptance of the Indemnification Claim by Indemnitor,
and the Indemnification Claim shall thereafter be paid by Indemnitor in
accordance with Section 9.2(e) hereof. If an objection is timely delivered
by Indemnitor and the dispute is not resolved within twenty (20) business
days from the delivery of such objection (the "Negotiation Period"), the
parties shall be entitled to pursue their remedies at law and in equity
subject to the terms of this Agreement.
(e) Upon determination of the amount of an Indemnification
Claim, whether by (i) an agreement between Indemnitor and Indemnitee, (ii)
an arbitration award or (iii) a final judgment (after expiration of all
periods for appeal of such judgment) or other final nonappealable order,
Indemnitor shall pay the amount of such Indemnification Claim by check
within ten (10) days of the date such amount is determined.
9.3 DEFENSE OF THIRD PARTY CLAIMS. Should any claim be made, or
suit or proceeding (including, without limitation, a binding arbitration or
an audit by any taxing authority) be instituted against Indemnitee which,
if prosecuted successfully, would be a matter for which Indemnitee is
entitled to indemnification under this Agreement (a "Third Party Claim"),
the obligations and liabilities of the parties hereunder with respect to
such Third Party Claim shall be subject to the following terms and
conditions:
(a) Indemnitee shall give Indemnitor written notice of any
such claim promptly after receipt by Indemnitee of notice thereof. Any
delay in giving notice hereunder which does not materially prejudice
Indemnitor, shall not affect Indemnitee's rights to Indemnification
hereunder. Indemnitor may, at its option, (i) undertake control of the
defense thereof by counsel of its own choosing reasonably acceptable to
Indemnitee, or (ii) decline to assume control of but participate in the
defense thereof provided that such participation by Indemnitee shall be at
its own expense. Indemnitee may participate in the defense through its own
counsel at its own expense. The assumption of the defense of any Third
Party Claim by Indemnitor shall be an acknowledgment by Indemnitor that
such Third Party Claim is subject to indemnification under the provisions
of this ARTICLE IX and that such provisions are binding on Indemnitor. If,
however, Indemnitor fails or refuses to undertake the defense of such Third
Party Claim within twenty (20) days after written notice of such claim has
been delivered to Indemnitor by Indemnitee, Indemnitee shall have the right
to undertake the defense, compromise and, subject to Section 9.4,
settlement of such Third Party Claim with counsel of its own choosing. In
the circumstances described in the preceding sentence, Indemnitee shall,
promptly upon its assumption of the defense of such Third Party Claim, make
an Indemnification Claim as specified in Section 9.2(b) which shall be
deemed an Indemnification Claim that is not a Third Party Claim for the
purposes of the procedures set forth herein. Failure of Indemnitee to
furnish written notice to Indemnitor of a Third Party Claim shall not
release Indemnitor from Indemnitor's obligations hereunder, except to the
extent Indemnitor is prejudiced by such failure.
(b) Indemnitee and Indemnitor shall cooperate with each other
in all reasonable respects in connection with the defense of any Third
Party Claim, including making available records relating to such claim and
furnishing employees of Indemnitee as may be reasonably necessary for the
preparation of the defense of any such Third Party Claim or for testimony
as witness in any proceeding relating to such claim.
9.4 SETTLEMENT OF THIRD PARTY CLAIMS. Unless Indemnitor has failed
to fulfill its obligations under this ARTICLE IX, no settlement by
Indemnitee of a Third Party Claim shall be made without the prior written
consent by or on behalf of Indemnitor, which consent shall not be
unreasonably withheld or delayed. If Indemnitor has assumed the defense of
a Third Party Claim as contemplated by Section 9.3, no settlement of such
Third Party Claim may be made by Indemnitor without the prior written
consent by or on behalf of Indemnitee, which consent shall not be
unreasonably withheld or delayed. In the event of any dispute regarding the
reasonableness of a proposed settlement, the party that will bear the
larger financial loss resulting from such settlement shall make the final
determination in respect thereto, which determination shall be final and
binding on all involved parties.
9.5 Limitation on Indemnification. Notwithstanding anything
contained in this Article IX to the contrary, except for breaches of
Section 3.13 (which shall not be limited),(a) the maximum aggregate
liability of STEAG to ▇▇▇▇▇▇▇ Indemnified Persons for indemnification
pursuant to Section 9.1(b) shall not exceed the value of the ▇▇▇▇▇▇▇ Shares
on the Closing Date (the "Transaction Value"), in the case of a breach of
Sections 3.1, 3.2, 3.3 or 3.4, and (b) the maximum aggregate liability of
▇▇▇▇▇▇▇ to STEAG Indemnified Persons for indemnification pursuant to
Section 9.1(b) shall not exceed the Transaction Value. Notwithstanding the
preceding sentence, to the extent any breach of Sections 3.1, 3.2, 3.3 or
3.4 relates to one or more of the STEAG Subsidiaries denoted as "Foreign
Sales Subsidiaries" on Schedule 2.6, the maximum aggregate liability of
STEAG to ▇▇▇▇▇▇▇ Indemnified Persons for indemnification pursuant to
Section 9.1(b) shall not exceed twice the value of that percentage of the
▇▇▇▇▇▇▇ Shares on the Closing Date allocated to such Foreign Sales
Subsidiaries in accordance with Section 2.6.
ARTICLE X.
GENERAL PROVISIONS
10.1 NOTICES. All notices and other communications hereunder shall
be in writing and shall 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, to:
▇▇▇▇▇▇▇ Technology, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Rock
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇)▇▇▇-▇▇▇▇
(b) if to STEAG or the STEAG Subsidiaries, to:
STEAG Electronic Systems AG
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇-▇
▇-▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Chief Executive Officer
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
Tel: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
Tel: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
10.2 DEFINITIONS. In this Agreement 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. In this Agreement, any
reference to a party's "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; provided,
that "such other employees" shall be limited to those persons listed on
Schedule 10.2 under such party's name. A "person" means any corporation,
proprietorship, firm, partnership, limited partnership, trust, association,
individual, or other entity. In this Agreement, "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. The term "joint venture" of a person shall mean
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.
10.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall 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.
10.4 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 STEAG Disclosure Schedule, and the ▇▇▇▇▇▇▇ 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, including the letter agreement between the
parties dated May 25, 2000, provided that the Non-Disclosure Agreement
shall continue in full force and effect, and shall survive any termination
of this Agreement or the Closing, in accordance with its terms. This
Agreement shall not be assigned by operation of law or otherwise without
the written consent of the other party.
10.5 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.
10.6 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.
10.7 NO SURVIVAL OF WARRANTIES. Except as otherwise provided in
Article IX, none of the representations and warranties in this Agreement or
in any instrument or document delivered pursuant to this Agreement shall
survive the Closing. This Section 10.7 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after
the Closing.
10.8 EXPENSES. In the event that the Strategic Business
Combination is not consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby,
including legal, accounting and investment banking fees, shall be paid by
the party incurring such expense, except as provided in Sections 8.3 and
10.14. In the event the Strategic Business Combination is consummated, the
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including legal, accounting and
investment banking fees, by (i) STEAG shall be borne fifty percent (50%) by
STEAG and fifty percent (50%) by the STEAG Subsidiaries, and (ii) ▇▇▇▇▇▇▇
shall be borne by ▇▇▇▇▇▇▇.
10.9 UNITED STATES DOLLARS. All references to dollars herein shall
mean United States dollars.
10.10 GOVERNING LAW. The assignment and transfer of capital stock
of the Foreign STEAG Subsidiaries to Newco, the issuance of shares of
Newco, and the assignment and transfer of capital stock of Newco and the
other Direct STEAG Subsidiaries to ▇▇▇▇▇▇▇ (to the extent such actions are
conducted in Germany) shall be governed by and effected in accordance with
German law. In all other respects, this Agreement shall be governed by and
effected in accordance with Delaware law without regard to the principles
of conflicts of laws thereof.
10.11 CONSENT TO JURISDICTION. Except with respect tothe matters
described in the first sentence of Section 10.10, 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, without limitation, 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.
10.12 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.
10.13 THIRD PARTY BENEFICIARIES. This Agreement is not intended to
and shall not confer upon any person other than the parties hereto any
rights or remedies hereunder.
10.14 CERTAIN PAYMENTS BY ▇▇▇▇▇▇▇.
(a) If this Agreement shall automatically terminate pursuant
to Section 8.2 hereof by reason of the CFM Agreement terminating pursuant
to Sections 8.1(g) or (i) of the CFM Agreement, then ▇▇▇▇▇▇▇ shall
promptly, but in no event later than three (3) business days following the
date of such termination (or such later date as STEAG shall request), make
a nonrefundable cash payment to STEAG in an amount equal to the aggregate
amount of all actual and documented fees and expenses (including all
attorneys' fees, accountants' fees, financial advisory fees and filing
fees) that have been paid by or on behalf of STEAG in connection with the
preparation and negotiation of this Agreement or otherwise in connection
with the Strategic Business Combination, provided that in no event shall
such amount exceed $5,000,000, such amount to be payable by wire transfer
of immediately available funds to an account designated by STEAG.
(b) If (i) this Agreement shall automatically terminate
pursuant to Section 8.2 hereof and (ii) the reason for such termination is
that either ▇▇▇▇▇▇▇ or CFM has terminated the CFM Agreement under
circumstances obligating (or potentially obligating) CFM to pay ▇▇▇▇▇▇▇ the
termination fee specified in Section 8.2(b) or (c) of the CFM Agreement,
then ▇▇▇▇▇▇▇ shall, within three (3) business days of receipt of such
termination fee or any portion thereof, remit to STEAG, in the manner
specified in Section 10.14 (a) hereof, one-half of the amount actually
received by ▇▇▇▇▇▇▇ from CFM.
(c) If (i) this Agreement is terminated by ▇▇▇▇▇▇▇ pursuant to
Section 8.1(h) and (ii) as a result of such termination, STEAG is required
to pay CFM the $40 million fee specified in Section 3.04(ii) of the Interim
Patent License Agreement dated the date hereof between CFM, a subsidiary of
CFM and STEAG, ▇▇▇▇▇▇▇ shall, immediately upon request from STEAG, by
written notice given in the manner specified in Section 10.1, that it is
required to make or has made such payment to CFM, remit to CFM or STEAG, as
the case may be, one-half of the amount to be paid as so paid by STEAG to
CFM provided that ▇▇▇▇▇▇▇ shall not be required to make any payment in
advance of, or in an amount greater than, a payment by STEAG.
(The remainder of this page is left intentionally blank)
IN WITNESS WHEREOF, STEAG and ▇▇▇▇▇▇▇ 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.
STEAG ELECTRONIC SYSTEMS AG
By:/s/ ▇▇▇▇ ▇▇▇▇
---------------------------
▇▇. ▇▇▇▇ ▇▇▇▇, CEO
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇
---------------------------
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Chairman
and Chief Executive Officer