EXHIBIT 3
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT (the "AGREEMENT") is entered into as of
December 15, 2000, by and between ▇▇▇▇▇▇▇ TECHNOLOGY, INC., a Delaware
corporation (the "COMPANY"), STEAG ELECTRONIC SYSTEMS AG, an
Aktiengesellschaft organized and existing under the laws of the Federal
Republic of Germany ("STOCKHOLDER") and ▇▇▇▇ ▇▇▇▇▇▇▇, an individual who is
a director and the Chief Executive Officer of the Company ("▇▇▇▇▇▇▇").
A. On June 27, 2000, the Company and Stockholder entered into a
Strategic Business Combination Agreement (the "COMBINATION AGREEMENT")
pursuant to which, subject to satisfaction or waiver of the conditions
therein, (i) Stockholder will sell and transfer 100% of the issued and
outstanding capital stock or other equity ownership interests of certain
wholly-owned subsidiaries of Stockholder to the Company, and (ii) the
Company shall issue to Stockholder 11,850,000 shares of restricted common
stock, par value $.001 per share ("COMMON Stock"), of the Company (the
"STEAG TRANSACTION").
B. Upon consummation of the STEAG Transaction, Stockholder will
own approximately, 31.9% of all outstanding shares of Common Stock and
▇▇▇▇▇▇▇ will own 3,535,516 shares of Common Stock (or approximately 9.5% of
all outstanding shares of Common Stock).
C. On June 27, 2000, the Company, CFM Technologies, Inc., a
Pennsylvania corporation ("CFM"), and M2C Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of the Company ("M2C"),
entered into an Agreement and Plan of Merger (the "CFM MERGER AGREEMENT")
pursuant to which, subject to satisfaction or waiver of the conditions
therein, and concurrently with the consummation of the STEAG Transaction,
(i) M2C will merge with and into CFM, resulting in CFM continuing as the
surviving corporation and M2C ceasing to exist as a separate corporation
(the "CFM MERGER") and (ii) the Company will issue approximately 4,100,000
shares of Common Stock to the stockholders of CFM and will assume
outstanding CFM stock options in accordance with the CFM Merger Agreement.
D. The parties believe that it is in the best interests of the
Company, the Stockholder and ▇▇▇▇▇▇▇ to provide for certain rights and
obligations of the parties with respect to various corporate matters.
NOW THEREFORE, the parties hereto agree as follows:
1. BOARD REPRESENTATION; EXECUTIVE STAFFING; NOMINATING COMMITTEE;
VOTING ARRANGEMENTS.
1.1 BOARD REPRESENTATION; EXECUTIVE STAFFING. Commencing on
the Effective Date, during the term of this Agreement, the Board of
Directors of the Company shall consist of seven (7) members, two of whom
shall be designated by Stockholder (the "STOCKHOLDER REPRESENTATIVES"), one
of whom shall be the Chief Executive Officer of the Company and, subject to
Section 1.1(b) below, the remaining four of whom shall be incumbent
Independent Directors (as such term and certain other capitalized terms are
defined in Section 8.11) as of the Effective Date, or successors, at least
three of whom shall be Independent Directors, nominated in accordance with
the Company's Bylaws, as amended from time to time (the "Bylaws").
(a) Effective as of the Effective Date (as defined
in Section 7.1), the Company shall cause the authorized size of the Board
of Directors to be increased to seven (7) members from five (5) members,
and the Company shall cause two (2) persons designated by Stockholder as
the initial Stockholder Representatives to be appointed to fill the two
vacant seats so created. One such initial Stockholder Representative shall
be ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, who shall be elected and appointed to the class of
the Company's Board of Directors scheduled to be elected at the third (3rd)
Annual Meeting of the Company's stockholders following the Closing (I.E.,
Class III). The other initial Stockholder Representative shall be ▇▇. ▇▇▇▇
▇▇▇▇ , who shall be elected and appointed to the class of the Company's
Board of Directors scheduled to be elected at the second (2nd) Annual
Meeting of the Company's stockholders following the Closing (I.E., Class
II). If either Stockholder Representative or any successor thereto ceases
to be a director of the Company at any time prior to the expiration of such
Stockholder Representative's designated term as director, whether as a
result of death, resignation, retirement, disqualification, removal from
office or other cause, the Company shall cause a successor designated by
Stockholder to be elected and appointed to fill the vacancy so created. The
Company agrees that, at the request of Stockholder, as soon as practicable
following such request, it will cooperate with Stockholder to attempt to
remove any Stockholder Representative, to the extent permitted by Delaware
law, and to take any action reasonably requested by Stockholder for that
purpose including, without limitation, to call a stockholders meeting and
hold such meeting as soon as practicable following such request.
Stockholder Representatives who are not employees of the Company will
receive the same benefits and compensation as other non-employee directors
of the Company.
(b) To the extent required pursuant to the CFM
Merger Agreement, effective as of the effective time of the CFM Merger, the
Company may cause one person designated by CFM (the "CFM REPRESENTATIVE")
to serve on the Company's Board of Directors as a member of Class III of
the Board of Directors, in place of an incumbent Independent Director of
the Company. If the CFM Representative ceases to be a director of the
Company prior to the expiration of the CFM Representative's designated term
as director, whether as a result of death, resignation, retirement,
disqualification, removal from office or other cause, the vacancy so
created shall be filled by the Company's Board of Directors, in accordance
with the Company's Bylaws, with an Independent Director or other person
unanimously approved by the Nominating Committee (as defined in Section
1.2).
(c) Effective as of the Effective Date, the members
of the Company's Board of Directors other than the members elected and
appointed pursuant to Section 1.1(a) and (b) herein shall be the Chief
Executive Officer of the Company and the other incumbent directors of the
Company as of such date.
(d) Effective as of the Effective Date, the Company
shall cause: (i) ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a Stockholder Representative, to
serve as Chairman of the Board for a term of one (1) year, and (ii) ▇▇▇▇▇▇▇
to serve as Vice-Chairman of the Board and as Chief Executive Officer of
the Company.
(e) Effective as of the Effective Date, the Company
shall cause Dr. Ludger Viefhues to be named Chief Financial Officer of the
Company for a term of one year, subject to removal by the Executive
Staffing Committee (as defined below).
(f) Effective as of the Effective Date, the Board of
Directors of the Company will establish an "Executive Staffing Committee,"
in accordance with the provisions set forth in the Bylaws with respect to
the formation of committees of the Board of Directors, with members
consisting of ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ and, if agreed by the Company
and Stockholder, one additional representative of each of Stockholder and
the Company. The Executive Staffing Committee will remain in place for one
year following the Effective Date, and will be responsible during that
period for making key personnel decisions (including the hiring and firing
of the Chief Executive Officer, the Chief Operating Officer, the Chief
Financial Officer and the general managers for divisions). One (1)
Independent Director reasonably acceptable to Stockholder and the Company
will be appointed as a tiebreaker member of the Executive Staffing
Committee in the event the committee reaches deadlock on an issue or
staffing decision.
(g) The Company will cause the nomination of the
Stockholder Representatives for election as directors of the Company at
each Annual Meeting of the Company's stockholders at which the term of an
incumbent Stockholder Representative will expire, until the termination of
this Agreement.
1.2 NOMINATING COMMITTEE. Effective as of the Effective Date,
the Company's Bylaws shall establish a nominating committee (the
"NOMINATING COMMITTEE") to evaluate and propose nominees to serve as
directors to succeed the CFM Representative or any Independent Director who
leaves office, or to fill additional vacancies on the Board of Directors
not otherwise provided for in Section 1.1(a) herein. During the term of
this Agreement, the Nominating Committee shall be comprised of three (3)
Board members, at least one of whom shall be a Stockholder Representative.
For a period of three (3) years following the Effective Date, the
Nominating Committee shall nominate only those nominees who have received
the unanimous approval of the Nominating Committee members. The Bylaws will
further provide that in the event the Nominating Committee fails to
nominate a nominee within four (4) months after a Board seat becomes
vacant, the Board of Directors may act to elect and appoint a nominee to
fill the vacancy.
1.3 ELECTION OF NOMINEES. Each of Stockholder and ▇▇▇▇▇▇▇
agrees to be present and voting and to affirmatively vote for the election
of the nominees for director designated or nominated pursuant to Sections
1.1 and 1.2 herein, including without limitation, the Stockholder
Representatives, at each meeting of the Company's stockholders at which
directors are to be elected.
1.4 INTERESTED PARTY TRANSACTIONS. In the event any proposed
transaction between the Company, on the one hand, and Stockholder or any of
its Affiliates, on the other hand, is submitted to the Company's
stockholders for their approval, Stockholder agrees to vote its shares of
Voting Stock with regard to such proposed transaction in the same
proportion (for, against or abstain) as all shares of Voting Stock not
owned by Stockholder and represented and voting at a stockholders' meeting
are voted with regard to such proposed transaction; PROVIDED, that the
foregoing shall not apply to a transaction among the Company and its
stockholders generally or with respect to any transaction provided for in
this Agreement including, without limitation, Stockholder's exercise of its
rights under Section 3 hereto.
1.5 AMENDMENT TO BYLAWS. Prior to or simultaneous with the
Closing, the Company shall cause the Bylaws of the Company to be amended
and restated in the form of EXHIBIT A hereto.
2. STANDSTILL RESTRICTIONS ON FURTHER PURCHASES OF COMPANY STOCK.
2.1 RESTRICTION ON ACQUISITION OF VOTING STOCK. Except with
prior Disinterested Director Approval, except as otherwise provided in
Section 2.4 of this Agreement and except for any stock issuances by the
Company in respect of any stock split, stock dividend, recapitalization or
similar corporate transaction, or upon exercise of securities issued
pursuant to rights distributed to holders of Common Stock generally,
Stockholder shall not (and Stockholder shall not permit any of its
majority-owned and controlled Affiliates to) acquire, either directly or
indirectly, agree to acquire or make a tender or exchange offer to acquire
any shares of Voting Stock of the Company; PROVIDED, HOWEVER, that the
foregoing restriction shall not apply to a transfer by Stockholder of all
or any portion of the Voting Stock held by Stockholder to any of its
Affiliates made in accordance with Section 4.5, or any transfer back to
Stockholder pursuant to such Section 4.5.
2.2 PARTICIPATION IN SOLICITATIONS. Except with prior
Disinterested Director Approval, Stockholder shall not (and Stockholder
shall not permit any of its majority-owned and controlled Affiliates to)
(i) "solicit" or in any way participate, directly or indirectly, in the
"solicitation" of "proxies," as those terms are defined in Rule 14a-1 under
the Exchange Act, in respect of any Voting Stock (provided, that
Stockholder shall not be deemed to have violated the restrictions in this
clause (i) by virtue of any action taken in connection with the election of
directors pursuant to Section 1 above), (ii) make any public announcement
in response or with respect to an Acquisition Proposal not solicited or
approved by the Company's Board of Directors, (iii) deposit any shares of
Voting Stock in a voting trust or subject any Voting Stock to any
arrangement or agreement with respect to the voting of such Voting Stock
with any Person or "group" (as such term is defined under the Exchange Act)
other than the Company or other entities within Stockholder's control group
or (iv) form or join any "group" (as such term is defined under the
Exchange Act) with any other Person other than entities within
Stockholder's control group for the purpose of voting, holding, purchasing
or disposing of Voting Stock or for the purpose of taking any of the
actions set forth in this Section 2.2 or Section 2.1, above.
2.3 SUSPENSION OF STANDSTILL RESTRICTIONS. The restrictions
set forth in Sections 2.1 and 2.2 shall be suspended in the event that any
Person or "group" (as such term is defined under the Exchange Act) (other
than Stockholder, any Person who is then an Affiliate of Stockholder, or
the Company), without the prior approval of the Board of Directors of the
Company, (i) commences a tender offer for purposes of Rule 14d-2
promulgated under the Exchange Act, (ii) acquires shares of Voting Stock
resulting in such Person or group having beneficial ownership of Voting
Stock representing more than twenty percent (20%) of the then-outstanding
Voting Stock of the Company or (iii) acquires shares of Voting Stock
resulting in such Person or group having beneficial ownership of Voting
Stock representing more than ten percent (10%) of the then-outstanding
Voting Stock of the Company and commences or publicly announces its
intention to seek to effect a Change of Control, whether through an
Acquisition Transaction or otherwise. Upon the cessation of the event or
events that lead to suspension of the restrictions in Sections 2.1 and 2.2
pursuant to this Section, those restrictions shall be reinstated in
accordance with their terms unless this Agreement has been terminated in
accordance with Section 7.2; provided however that, notwithstanding any
provision of Section 2.1 or 2.2 to the contrary, Stockholder shall have no
obligation to dispose of any Voting Stock that Stockholder has acquired or
agreed to acquire, or to reverse, rescind, violate or breach (x) any
contractual obligation Stockholder has undertaken, (y) any other commitment
Stockholder has made, the reversal, rescission, violation or breach of
which would have adverse consequences to Stockholder, or (z) any legal or
regulatory requirement imposed on Stockholder, in each case during any
suspension of Sections 2.1 and 2.2 pursuant to this Section.
2.4 RIGHT TO MAINTAIN OWNERSHIP. Notwithstanding the
provisions of Section 2.1 to the extent that Stockholder's percentage
beneficial ownership is reduced as a result of any issuance of Voting Stock
by the Company (an "ISSUANCE") for any reason whatsoever, Stockholder may
purchase additional shares of Voting Stock in the open market or in
privately negotiated transactions (to the extent Stockholder has not
already exercised its rights pursuant to Section 3 below with respect to a
particular Issuance) as required to maintain Stockholder's aggregate
percentage beneficial ownership of the Company's outstanding Voting Stock
on the Effective Date.
2.5 NOTICE OF STOCKHOLDER POSITION. Upon written request from
the Company, but not more than once each calendar quarter, a duly
authorized officer of Stockholder will certify to the Company in writing
the numbers and classes of shares of Voting Stock beneficially owned by
Stockholder and its majority-owned and controlled Affiliates as of any
record date or other date reasonably requested.
2.6 NOTICE OF ISSUANCES BY THE COMPANY. The Company shall, as
promptly as practicable, but not later than the date of Issuance, provide
written notice to Stockholder of all Issuances of Voting Stock by the
Company, other than issuances described under Section 3.4 (d) or (e),
specifying the number of shares of Voting Stock being issued and the
purchase price therefor; PROVIDED, that with respect to the foregoing
Issuances of Voting Stock by the Company in amounts less than 1% of the
shares of Voting Stock outstanding on such date, the Company may provide
notice to Stockholder of such Issuances on a quarterly basis. Within
fifteen days following the end of each fiscal quarter, the Company shall
provide written notice to Stockholder of all Issuances of Voting Stock
described under Section 3.4, (d), and (e), specifying the number of shares
of Voting Stock so issued during the fiscal quarter.
2.7 COMPANY REPURCHASES. Stockholder shall not be deemed to
have violated its obligations under Section 2.1 by virtue of any increase
in the aggregate percentage of outstanding Voting Stock of the Company
beneficially owned by Stockholder and its Affiliates solely as a result of
a recapitalization of the Company, a repurchase of securities by the
Company or other actions taken by the Company or any of the Company's
Affiliates that have the effect of reducing the number of shares of Voting
Stock outstanding.
2.8 TERMINATION. Notwithstanding any other provision in this
Agreement, all rights and obligations of any party under this Section 2
shall terminate upon the earlier of (x) the fifth (5th) anniversary of the
Closing regardless of whether such rights and obligations are suspended for
any portion of such five-year period or (y) the termination of this
Agreement pursuant to Section 7 hereof.
3. STOCKHOLDER RIGHT TO PURCHASE ADDITIONAL COMPANY STOCK.
3.1 RIGHT OF OFFER TO PURCHASE ADDITIONAL SHARES OF COMMON
STOCK. Prior to any sale or issuance by the Company of any shares of Voting
Stock (other than a sale or issuance described in Section 3.4) (a "PROPOSED
ISSUANCE"), the Company shall give Stockholder advanced written notice (the
"NOTICE OF ISSUANCE") of the Proposed Issuance, setting forth the proposed
price, quantity (which the Company may indicate is a fixed amount to be
offered to third parties, subject to increase to make allowance for
issuance to Stockholder) and other material terms and conditions under
which the Company proposes to make such sale (the date such notice is
received by Stockholder is hereinafter referred to in this Section 3.1 as
the "NOTICE DATE"). Stockholder shall have the right, exercisable as
hereinafter provided, to purchase its proportional share of such Voting
Stock (as defined below) on terms which are at least as favorable to
Stockholder as the terms on which the Company sells such Voting Stock to
any other prospective investor. Stockholder shall have twenty (20) days
after the Notice Date to notify the Company in writing that it elects to
purchase some or all of its share of the Voting Stock so offered. If any
material term of the Proposed Issuance is changed from those set forth in
the Notice of Issuance, the Company shall give Stockholder prompt written
notice (the "REVISED NOTICE OF ISSUANCE") of the revised terms of the
Proposed Issuance setting forth the revised terms of the Proposed Issuance
(the date such Revised Notice of Issuance is received by Stockholder is
hereinafter referred to in this Section 3 as the "REVISED NOTICE DATE").
Stockholder shall have until the later of (x) five (5) days from the
Revised Notice Date or (y) twenty (20) days from the original Notice Date
to notify the Company in writing that it elects to purchase some or all of
its share of the Voting Stock so offered. The proportional share amount of
Voting Stock which Stockholder is entitled to acquire in the Proposed
Issuance shall be equal to (i) the amount of Voting Stock proposed to be
sold or issued by the Company in the Proposed Issuance (which the Company
at its election may indicate to be a fixed amount to be offered to third
parties, subject to increase to make allowance for sales to Stockholder)
multiplied by (ii) a fraction calculated by dividing (A) the number of
shares of Voting Stock owned by Stockholder as of the Notice Date by (B)
the total number of shares of Voting Stock issued and outstanding as of the
Notice Date.
3.2 COMPANY SALE. If, within the later of twenty (20) days
after the Notice Date or five (5) days after the latest Revised Notice
Date, Stockholder does not notify the Company that it desires to purchase a
portion of the Voting Stock proposed to be sold or issued by the Company in
a Proposed Issuance, then the Company may, during a period of ninety (90)
days following the end of such twenty (20) day period or five (5) day
period, as the case may be, sell and issue such Voting Stock not otherwise
purchased by Stockholder to other third parties at a price and upon terms
and conditions no more favorable to such parties than those set forth in
the Notice of Issuance.
3.3 PURCHASE; PAYMENT. If Stockholder elects to purchase
Voting Stock from the Company pursuant to this Section 3, Stockholder and
the Company shall consummate the purchase and sale of such Voting Stock in
the manner and on the terms and date of the closing of the Proposed
Issuance as set forth in the Notice of Issuance or Revised Notice of
Issuance, as the case may be or, if on a later date, the second (2nd)
business day after all regulatory filings required for the consummation of
such purchase have been obtained. Payment for such Voting Stock shall be by
check (or wire transfer of immediately available funds to an account
designated by the Company by written notice delivered to Stockholder not
less than two (2) business days prior to the scheduled closing of such
purchase) or, at Stockholder's election, to the extent practicable, such
other form of consideration as set forth in the Notice of Issuance or
Revised Notice of Issuance, as the case may be, against delivery of such
Voting Stock at the executive offices of the Company at the time of the
scheduled closing therefor. The Company shall take all such action as may
reasonably be required by any regulatory authority in connection with the
exercise by Stockholder of the right to purchase Voting Stock as set forth
in this Section 3.
3.4 LIMITATION. Stockholder's right to participate in a
Proposed Issuance pursuant to this Section 3 shall not apply to the
following sales and issuances of shares of Voting Stock by the Company on
or after the date hereof:
(a) Voting Stock issued to employees, officers,
directors and consultants pursuant to any stock option plan, stock
incentive or purchase plan or agreement approved by the Board of Directors
of the Company;
(b) Voting Stock issued pursuant to or upon exercise
or conversion of securities issued in connection with a merger,
consolidation, share exchange, or other reorganization or business
combination involving the Company, in which the Company is the acquiring
corporation or stockholders of the Company immediately prior to such
merger, consolidation or other reorganization or business combination own
securities with a majority of the voting power of the resulting entity;
(c) Common Stock, in an amount up to 1.0% of the
Company's outstanding Common Stock as of the date hereof, in the case of
any single transaction, or 2.5% of the Company's outstanding Common Stock
as of the date hereof, in the aggregate, issued pursuant to or upon
exercise or conversion of securities issued in connection with (A) any
equipment financing in an amount in excess of $10,000,000 or (B) any
technology licensings, research or development agreements or asset
acquisitions approved by the Company's Board of Directors;
(d) Common Stock issued upon exercise of securities
issued pursuant to rights distributed to holders of Common Stock generally;
(e) Common Stock issued proportionately to all
Stockholders in connection with any stock split, stock dividend or
recapitalization of the Company; or
(f) Common Stock issued pursuant to the exercise of
any stock options or warrants or any other rights to acquire shares of
Common Stock outstanding on the Effective Date.
3.5 TERMINATION. The right contained in this Section 3 shall
terminate upon the earliest to occur of (i) the closing of any Acquisition
Transaction that results in a Change of Control, (ii) the sale of all or
substantially all of the Company's assets, or (iii) termination of this
Agreement pursuant to Section 7 hereof.
4. RESTRICTIONS ON TRANSFER OF VOTING STOCK BY STOCKHOLDER.
4.1 LOCKUP PERIOD. For a period of one (1) year commencing
upon the Effective Date ("LOCKUP PERIOD"), except with prior Disinterested
Director Approval, Stockholder shall not offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any Voting Stock
or enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of Voting
Stock, whether any such transaction described in this section is to be
settled by delivery of Voting Stock, in cash or otherwise; PROVIDED,
HOWEVER, that Stockholder shall be permitted to transfer all or any portion
of the Voting Stock to an Affiliate of Stockholder in accordance with
Section 4.5.
4.2 PERMITTED TRANSFERS. Following the Lockup Period,
Stockholder shall not, without first complying with its obligations under
Section 4.4 herein, sell or transfer, directly or indirectly, any shares of
Voting Stock, except (i) pursuant to a bona fide public offering of Voting
Stock registered under the Securities Act (which shall be structured and
conducted through an underwriter or otherwise in a manner reasonably
calculated not to result in the transfer of beneficial ownership of five
percent (5%) or more of the total Voting Stock of the Company then
outstanding to a single Person or group (other than a qualified
institutional buyer, as defined in Rule 144A(a)(1), who is purchasing the
securities for investment purposes)); (ii) pursuant to and in compliance
with Rule 144 (but not pursuant to Rule 144A) under the Securities Act; or
(iii) to an Affiliate of Stockholder in accordance with Section 4.5.
4.3 TRANSFERS SUBJECT TO COMPANY APPROVAL. Following the
Lockup Period, except with Disinterested Director Approval, Stockholder
shall not sell or transfer, directly or indirectly, more than 2,400,000
shares (as adjusted as a result of stock dividends, stock splits,
recapitalizations and the like after the date of this Agreement) of Voting
Stock in a transaction or series of related transactions to a single Person
or "group" (as such term is defined under the Exchange Act), except (i) as
provided in Section 4.2(i) through (iii); (ii) pursuant to an Acquisition
Transaction that will result in a Change of Control and that has received
Disinterested Director Approval or that has received approval by a majority
of the stockholders of the Company excluding Stockholder; (iii) following
the third (3rd) anniversary of the Effective Date; or (iv) during the
suspension or following termination of the Voting Stock acquisition
restrictions pursuant to Section 2.3(ii), in response to any tender or
exchange offer made by another Person or group to purchase or exchange for
cash or other consideration all outstanding Voting Stock of the Company.
4.4 RIGHT OF FIRST REFUSAL ON PERMITTED SALES BY STOCKHOLDER.
(a) GENERAL. Prior to consummating any sale or
transfer of any Voting Stock, except for sales or transfers described in
Section 4.2(i) through (iii), Stockholder shall give the Company the
opportunity to purchase such Voting Stock in the following manner:
(i) Stockholder shall give notice (the
"TRANSFER NOTICE") to the Company in writing of such intention, specifying
the names of the proposed purchasers or transferees, the securities
proposed to be sold or transferred, the proposed price per share therefor
(the "TRANSFER PRICE") and the other material terms upon which such
disposition is proposed to be made.
(ii) The Company shall have the right,
exercisable by written notice given by the Company to Stockholder within
twenty (20) days after receipt of such Transfer Notice, to agree to
purchase all, but not less than all, of the securities specified in such
Transfer Notice. The Company shall have the right to pay for such
securities: (a) the same amount in cash per share, if the consideration to
be paid by the third party consists of cash, or (b) to the extent the
consideration to be paid by the third party does not consist of cash,
consideration per share equivalent to that offered by the third party, or
an amount of cash having equivalent value as determined, at the expense of
the Company, by an investment banking firm mutually agreed to by the
Company and Stockholder.
(iii) If the Company exercises its right of
first refusal hereunder, the closing of the purchase of the securities with
respect to which such right has been exercised shall take place within ten
(10) days after the Company gives notice of such exercise, or, if later,
upon the date on which the proposed transfer was to occur with the third
party. Upon exercise by the Company of its right of first refusal, the
Company and Stockholder shall be legally obligated to consummate the
purchase contemplated thereby and shall use their reasonable commercial
efforts to secure any approvals required in connection therewith. The
Company may elect by notice in writing to Stockholder that, at the closing
of such transaction, the shares be delivered to and payment made to
Stockholder by a designee of the Company, provided that the Company shall
remain liable for its obligations under this Section 4.4.
(iv) If the Company does not exercise its right
of first refusal hereunder within the time specified for such exercise,
Stockholder shall be free, subject to the terms of Section 4.3 herein,
during the period of one hundred and eighty (180) days following the
expiration of such time for exercise, to sell the securities specified in
such Transfer Notice on terms no less favorable to Stockholder than the
terms specified in such Transfer Notice.
(b) NO ASSIGNMENT. The rights of first refusal
provided by this Section 4.4 may not be assigned by the Company; provided,
however, that the Company may provide that a purchase of Voting Stock will
be made by a designee in accordance with Section 4.4(a)(iii).
4.5 AFFILIATE TRANSFER; OBLIGATION TO TRANSFER BACK. As a
condition to the permitted transfer of Voting Stock held by Stockholder to
any Affiliate of Stockholder (each, an "Affiliate Holder"), such Affiliate
Holder must agree to be bound by the terms and conditions of this Agreement
and to hold such Voting Stock subject to all obligations and restrictions
applicable to Stockholder, including Sections 1.3, 2, 4 and 5.11 hereof, in
which event such Affiliate shall be entitled to share, jointly with
Stockholder, the rights and benefits applicable to Stockholder under this
Agreement. If any Affiliate Holder ceases to be an Affiliate of
Stockholder, then not later than thirty (30) days following the date on
which the control relationship ends between such Affiliate Holder and
Stockholder, such Affiliate Holder shall transfer its Voting Stock to
Stockholder or to an Affiliate of Stockholder, or otherwise transfer such
Voting Stock in accordance with Section 4 of this Agreement.
4.6 MERGER OF STOCKHOLDER. For avoidance of doubt, nothing in
this Section 4 shall be deemed to prohibit a transfer of Voting Stock by
operation of law to a successor entity as a result of a merger involving
Stockholder.
5. REGISTRATION RIGHTS.
5.1 DEFINITIONS. For purposes of this Section 5:
(a) The terms "HOLDER" or "HOLDERS" means
Stockholder and/or any other person who shall subsequently own or have the
right to acquire Registrable Securities or any assignee thereof in
accordance with Section 5.10 hereof.
(b) The terms "REGISTER," "REGISTERED" and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
(c) The term "REGISTRABLE SECURITIES" means (i) any
shares of Common Stock issued by the Company to Stockholder pursuant to the
Combination Agreement or subsequently acquired by Stockholder in compliance
with Section 3 of this Agreement; (ii) any and all shares of Common Stock
issued or issuable upon exercise, conversion or exchange of equity
securities acquired by Stockholder in compliance with Section 3; (iii)
equity securities issued in lieu thereof in any reorganization; or (iv)
equity securities issued in respect of the stock referred to in (i) or
(ii), above, as a result of a stock split, stock dividend, recapitalization
or the like, excluding in all cases, however, any of the foregoing sold by
a Holder pursuant to a registration statement, in a transaction pursuant to
Rule 144 promulgated under the Securities Act, or in any other transaction
in which registration rights are not transferred pursuant to this Section
5.
(d) The number of shares of "REGISTRABLE SECURITIES
THEN OUTSTANDING" shall be determined by the number of shares of Common
Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities which are
exercisable or convertible into, Registrable Securities.
5.2 COMPANY REGISTRATION
(a) If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
Common Stock under the Securities Act for sale after the Lockup Period in
connection with a secondary offering of such securities solely for cash
(other than a registration relating solely to the sale of securities to
participants in a Company stock option, stock purchase or similar plan, or
a registration relating solely to a transaction of the type described in
Rule 145(a) under the Securities Act), the Company shall, at such time,
promptly give each Holder written notice of such registration. Upon the
written request of any Holder given within twenty (20) days after mailing
of such notice by the Company in accordance with Section 8.3 of this
Agreement, the Company shall, subject to the provisions of Section 5.2(b),
include in such registration (and any related qualification under blue sky
laws or other compliance) and in any underwriting involved therein, all of
the Registrable Securities that each such Holder has requested to be
registered.
(b) In connection with any offering involving an
underwriting of shares being issued by the Company, the Company shall not
be required under this Section 5.2 to include any Holder's securities in
such underwriting unless such Holder accepts the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it, and
then only in such quantity as will not, in the opinion of the underwriters,
jeopardize the success of the offering by the Company. In the event that
any registration pursuant to this Section 5.2 shall be, in whole or in
part, an underwritten public offering of Registrable Securities, the number
of shares of Registrable Securities of the Holders to be included in such
an underwriting may be reduced (pro rata among the requesting Holders based
upon the number of shares of Registrable Securities then outstanding that
are owned by such Holders) if and to the extent that the managing
underwriter advises the Company in writing that in its opinion such
inclusion would materially adversely affect the marketing of the securities
to be sold by the Company therein. If any Holder disapproves of the terms
of any such underwriting, it may elect to withdraw therefrom by written
notice to the Company and the underwriter delivered at least seven (7) days
prior to the effective date of the Registration Statement. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration. The Holders shall have no right
to participate in the selection of the underwriters for an offering
pursuant to this Section 5.2.
(c) The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 5.2 prior to
the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration.
5.3 FORM S-3 DEMAND REGISTRATION.
(a) After the Lockup Period, Holders shall have the
right to request registrations on Form S-3 (such requests shall be in
writing and shall state the number of shares of Registrable Securities to
be disposed of and the intended methods of disposition of such shares by
the Holders); PROVIDED, HOWEVER, that the Company shall not be obligated to
effect any such registration: (i) with effectiveness prior to the end of
the Lockup Period, (ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any)
on Form S-3 at an aggregate price to the public of less than $5,000,000,
(iii) if the Company reasonably determines, following consultation with its
outside counsel, that a Holder's sale of Registrable Securities pursuant to
the registration statement would require disclosure of material information
and such disclosure would be materially detrimental to the Company, but
only for so long as such disclosure is required and would be materially
detrimental; (iv) in a given twelve-month period, after the Company has
effected one (1) such registration pursuant to this Section 5.3 in any such
period; or (v) within sixty (60) days of the effective date of a Company
registration statement of the type described in Section 5.2 involving an
underwritten offering, or within one hundred twenty (120) days of the
effective date of a registration statement in which the Holders shall have
been entitled to participate pursuant to Section 5.2 hereto and in which
there shall have been effectively registered all of the Registrable
Securities as to which registration shall have been requested by the
Holders, if any; PROVIDED; HOWEVER, that the Company may not postpone any
registration pursuant to clause (iii) above for more than 60 days from the
date of such request; and, PROVIDED, FURTHER that such right to delay a
request shall be exercised by the Company not more than once in any
twelve-month period.
(b) Following receipt of any notice from Holders
initiating a request for registration in accordance with Section 5.3(a),
the Company shall use its best efforts to register under the Act, for
public sale in accordance with the method of disposition specified in such
notice from Holders, the number of shares of Registrable Securities
specified in such notice and in all notices received by the Company. If
such method of disposition shall be an underwritten public offering, the
Holders may designate the managing underwriter of such offering, subject to
the approval of the Company, which approval shall not be unreasonably
withheld or delayed. If and to the extent the managing underwriter of any
underwritten public offering conducted pursuant to this Section 5.3 advises
the Company in writing that in its opinion the amount of securities
requested to be included in such offering is sufficiently large to
materially adversely affect the marketing of the securities to be sold by
the stockholders therein, the amount of securities to be included in such
offering by Persons other than the Holders shall be reduced.
(c) Subject to the provisions of Section 5.3(b)
above, the Company shall be entitled to include in any registration
statement referred to in this Section 5.3, for sale in accordance with the
method of disposition specified by the requesting Holders, shares of Common
Stock to be sold by the Company for its own account, except as and to the
extent that, in the opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such inclusion would
adversely affect the marketing of the Registrable Securities to be sold.
Except for registration statements on Form ▇-▇, ▇▇▇▇ ▇-▇ or any successor
forms thereto, the Company will not file with the Commission any other
registration statement under the Act with respect to its Common Stock,
whether for its own account or that of other stockholders, from the date of
receipt of a notice from requesting Holders pursuant to this Section 5.3
until the completion of the period of distribution of the registration
contemplated thereby.
5.4 OBLIGATIONS OF THE COMPANY. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the Commission a
registration statement with respect to such Registrable Securities within
45 days after receipt of requisite requests from Holders for registration
and use its best efforts to cause such registration statement to become
effective and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration
statement effective for the period of the distribution contemplated thereby
(determined as hereinafter provided);
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to keep the registration statement effective for the period
specified in paragraph (a) above and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement;
(c) furnish to the Holders of Registrable Securities
covered by such registration statement such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act and such other documents as they may
reasonably request in order to facilitate the disposition of such
Registrable Securities;
(d) use its best efforts to register and qualify the
securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be requested by
the Holders thereof, PROVIDED that (i) the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions and (ii) notwithstanding anything in this Agreement to the
contrary, in the event any jurisdiction in which the securities shall be
qualified imposes a non-waivable requirement that expenses incurred in
connection with the qualification of the securities be borne by selling
stockholders, such expenses shall be payable pro rata by selling
stockholders;
(e) in the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of
such offering. Each Holder participating in such underwriting shall also
enter into and perform its obligations under such an agreement;
(f) promptly notify each Holder participating in the
registration covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing and at the request of any Holder, within 5 days, prepare and
furnish to such Holder so requesting a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a
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 under which they are made, not misleading; provided that, if
the Company reasonably determines, following consultation with its outside
counsel, that such a supplement or amendment would require disclosure of
material information and such disclosure would be materially detrimental to
the Company, then upon written notice to participating Holders to that
effect, each Holder shall suspend any sales or trades of the Company's
securities under any registration statement for so long as the Company
determines such disclosure is required and materially detrimental, but in
any case not longer than thirty (30) days immediately following such
notice;
(g) cause all such Registrable Securities registered
pursuant to this Agreement to be listed on each securities exchange or
national market system on which similar securities issued by the Company
are then listed or traded;
(h) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Agreement, (i) such
representations and warranties to such Holder and the underwriters, if any,
as is customary in primary underwritten offerings, (ii) an opinion, dated
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, and
(iii) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters;
(i) make available upon reasonable notice for
inspection by each seller of Registrable Securities, any underwriter
participating in any distribution pursuant to such registration statement,
and any attorney, accountant or other agent retained by such seller of
Registrable Securities or underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with preparation and verification of such
registration statement;
(j) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
(18) months, beginning with the first month after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act; and
(k) take such other actions as are reasonably
required in order to expedite or facilitate the sale of such Registrable
Securities, including, without limitation, causing management of the
Company to participate in "road show" presentations.
For purposes of Sections 5.4(a) and 5.4(b), the period of
distribution of Registrable Securities in a firm commitment underwritten
public offering shall be deemed to extend until each underwriter has
completed the distribution of all securities purchased by it, and the
period of distribution of Common Stock in any other registration shall be
deemed to extend until the earlier of the sale of all Common Stock covered
thereby or 120 days after the effective date thereof.
5.5 PROVISION OF INFORMATION. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
this Section 5 that the selling Holders shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them
and the intended method of disposition of such securities as shall be
required to effect the registration of the Registrable Securities.
5.6 EXPENSES OF REGISTRATION. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications of Registrable Securities pursuant
to Sections 5.2 and 5.3, including (without limitation) all registration,
filing and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the participating Holders, shall be borne
by the Company.
5.7 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder of such Registrable Securities, the
officers and directors of each such Holder, any underwriter (as defined in
the Securities Act) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively, a "VIOLATION"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state
securities law; and the Company will reimburse each such Holder, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that
the indemnity agreement contained in this Section 5.7(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld or delayed), nor shall
the Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by any such Holder, officer, director, underwriter or
controlling person.
(b) To the extent permitted by law, each selling
Holder, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
registration statement, each person, if any, who controls the Company
within the meaning of the Securities Act, any underwriter and any other
Holder selling securities in such registration statement or any of its
directors or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to which the
Company or any such director, officer, controlling person, underwriter, or
other such Holder or director, officer, controlling person or underwriter
may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with
such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter, or other such Holder or director, officer,
controlling person or underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED,
HOWEVER, that the indemnity agreement contained in this Section 5.7(b)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Holder from whom indemnification is sought (which consent
shall not be unreasonably withheld or delayed); PROVIDED, that, in no event
shall any indemnity under this Section 5.7(b) exceed the gross proceeds
from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party
under this Section 5.7 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under
this Section 5.7, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties;
PROVIDED, HOWEVER, that an indemnified party shall have the right to retain
its own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained
by the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, shall only relieve such indemnifying party
of any liability to the indemnified party under this Section 5.7 if and to
the extent the indemnifying party is materially prejudiced by such
omission, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 5.7. No indemnifying
party, in the defense of any such claim or litigation against an
indemnified party, shall consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release
from all liability in respect of such claim or litigation, unless such
indemnified party shall otherwise consent in writing.
(d) In order to provide for just and equitable
contributions in any case in which either (i) any Holder exercising
registration rights under Sections 5.2 or 5.3 of this Agreement, or any
controlling person of any such Holder, makes a claim for indemnification
pursuant to this Section 5.7 but it is judicially determined (by the entry
of a final judgment or decree by a court of competent jurisdiction and
following the expiration of time to appeal or the denial of the last right
of appeal) that such indemnification may not be enforced in such case,
notwithstanding the fact that this Section 5.7 provides for indemnification
in such case, or (ii) contribution under the Act may be required on the
part of any such Holder or any such controlling person in circumstances for
which indemnification is provided under this Section 5.7; then, and in each
such case, the Company and such Holder shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (after
contribution from others) in such proportion as is appropriate to reflect
both the relative benefit received by such Holder and the relative fault of
the Company and such Holder; PROVIDED, HOWEVER, that, in any such case, (A)
no such Holder will be required to contribute any amount in excess of the
net proceeds received by such selling Holder from the sale of Registrable
Securities covered by such registration statement; and (B) no person or
entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person
or entity who was not guilty of such fraudulent misrepresentation. For
purposes of the preceding sentence, the relative benefit received by such
Holder shall be deemed to be in the same proportion as the public offering
price of its Registrable Securities offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement; and the relative fault of the Company and such
Holder shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission of a
material fact relates to information supplied by the Company or by such
Holder and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) The obligations of the Company and Holders under
this Section 5.7 shall survive the completion of any offering of
Registrable Securities in a registration statement filed pursuant to this
Agreement, the termination of this Agreement pursuant to Section 7 hereof
and otherwise.
5.8 REPORTS UNDER THE EXCHANGE ACT. With a view to making
available to the Holders the benefits of Rule 144 under the Securities Act
and any other rule or regulation of the Commission that may at any time
permit a Holder to sell securities of the Company to the public without
registration, the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144, at all times;
(b) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities
Act and the Exchange Act; and
(c) furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested in availing any Holder of any
rule or regulation of the Commission which permits the selling of any such
securities without registration.
5.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may
be assigned by a Holder; PROVIDED, that within a reasonable time after such
transfer, the Company is furnished with written notice of the name and
address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; and PROVIDED, FURTHER,
that such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act. Any assignee or transferee
asserting rights under this Agreement shall be deemed to have consented to
the terms and conditions hereof. Notwithstanding the foregoing, Holders'
rights to cause the Company to register their Registrable Securities and to
keep information available, granted to them by the Company under this
Section 5, may be assigned (or assigned in part and retained in part) to
one or more transferees or assignees who either (x) are Affiliates of
Stockholder or (y) receive Registrable Securities which, upon full exercise
and conversion, represent the right to obtain at least five hundred
thousand (500,000) shares of Registrable Securities (as adjusted for stock
dividends, stock split, recapitalizations and the like that occur after the
date of this Agreement), PROVIDED, that (i) the Company is given written
notice by such Holder at the time of or within a reasonable time after said
transfer or assignment, stating the name and address of said transferee or
assignee and identifying the securities with respect to which such rights
are being assigned, and (ii) upon request by the Company, such permitted
transferee or assignee executes a counterpart to Section 5 of this
Agreement.
5.10 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees
that it shall not, to the extent requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, sell,
make short sale of, loan, grant any option for the purchase of or otherwise
transfer or dispose (other than to donees who agree to be similarly bound)
of any Registrable Securities for a period of time, as agreed to by the
Company and the underwriter not to exceed ninety (90) days, following the
effective date of a registration statement of the Company filed under the
Securities Act for an offering in which the Holder participates; PROVIDED,
HOWEVER, that all officers and directors of the Company and all other
persons with registration rights (whether or not pursuant to this
Agreement) except passive, outside investors enter into similar agreements.
5.11 TERMINATION OF REGISTRATION RIGHTS. The Company's
obligations pursuant to this Section 5 shall terminate as to any Holder of
Registrable Securities when the Holder can sell all of such Holder's
Registrable Securities pursuant to Rule 144(k) under the Securities Act and
shall be suspended, but not terminated, during any three-month period in
which such Holder is entitled to sell all shares issued or issuable to such
Holder under Rule 144. This Section 5 shall expressly survive termination
of this Agreement pursuant to Section 7 hereto.
5.12 NO INCONSISTENT AGREEMENTS. The Company shall not, on or
after the date of this Agreement, enter into any agreement with respect to
its securities which is inconsistent with the rights granted to the
Stockholder and other Holders in this Section 5 or otherwise conflicts with
the provisions of this Section 5. The Company represents and warrants to
Stockholder that the rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with any registration rights
granted to any holders of the Company's securities.
5.13 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of Stockholder, enter into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder any registration rights, other than registration rights
which are no more favorable (in terms of rights and limitations) than those
granted to Stockholder hereunder and under which the rights of such third
party holder or prospective holder to include securities in such
registration are subordinate to the right of Holders to include Registrable
Securities therein; provided however that the Company may grant
registration rights which are equivalent in priority to the registration
rights granted hereunder to recipients of Voting Stock issued by the
Company in connection with a transaction of the type described in Rule
145(a) under the Securities Act or a share exchange in which the Company is
the acquiring corporation.
6. NOTICE OF VOTING STOCK TRANSFERS BY ▇▇▇▇▇▇▇.
6.1 GENERAL. Except as otherwise provided in Section 6.2, ten
(10) business days prior to any sale or transfer of, or entering into any
agreement to sell or transfer, Voting Stock by ▇▇▇▇▇▇▇ (other than a sale
or transfer that would satisfy section 4.2(i) or (ii) if such sale or
transfer were made by Stockholder), ▇▇▇▇▇▇▇ shall provide Stockholder
written notice stating: (i) the number of shares of Voting Stock to be sold
or transferred; (ii) the name, address and relationship to ▇▇▇▇▇▇▇, if any,
of the purchaser or transferee; and (iii) the cash price or other
consideration per share for which the Voting Stock is to be sold or
transferred.
6.2 EXCEPTIONS. Section 6.1 shall not apply to any of the
following sales or transfers of Voting Stock by ▇▇▇▇▇▇▇:
(a) any transfer to ▇▇▇▇▇▇▇'▇ spouse, lineal
descendant or antecedent, father, mother, brother or sister, the adopted
child or adopted grandchild of ▇▇▇▇▇▇▇, or the spouse of any child, adopted
child, grandchild or adopted grandchild of ▇▇▇▇▇▇▇, or to a trust or trusts
for the exclusive benefit of ▇▇▇▇▇▇▇ or his family members as described in
this Section 6.2(a), transfers from ▇▇▇▇▇▇▇ by devise or descent, or
transfers by way of any pledge by ▇▇▇▇▇▇▇;
(b) any transfer pursuant to a bona fide loan
transaction that creates a mere security interest; or
(c) sales or transfers not exceeding 100,000 shares
in any single transaction or series of related transactions, or 200,000
shares in the aggregate in any twelve (12) month period.
7. EFFECTIVENESS; TERMINATION.
7.1 EFFECTIVENESS. This Agreement shall become effective upon
the Closing of the STEAG Transaction as contemplated by the Combination
Agreement (the "Effective Date") and prior thereto shall be of no force or
effect. If the Combination Agreement shall be terminated in accordance with
its terms, this Agreement shall automatically be deemed to have been
terminated and shall thereafter be of no force or effect.
7.2 TERMINATION. Except with respect to the rights and
obligations set forth in Section 5 which by their terms expressly survive
until terminated pursuant to Section 5.11 and the general provision set
forth in Section 8, all rights, remedies, obligations and liabilities of
the parties under this Agreement shall terminate upon the earliest to occur
of:
(a) Stockholder's beneficial ownership of Voting
Stock constituting less than twenty percent (20%) of the then-outstanding
Voting Stock;
(b) Stockholder's beneficial ownership of fifty
percent (50%) or more of the then-outstanding Voting Stock other than as a
result of Stockholder's violation of Section 2 of this Agreement; or
(c) a material breach by the Company of any of its
material obligations under this Agreement. Notwithstanding the foregoing, a
good faith disagreement with respect to the Company's indemnification
obligations under Section 5.7, or the failure by the Company to timely
satisfy a notice or filing obligation under Sections 2.6, 3.1, 5.3, 5.4(a)
or 5.8, if such notice or filing is ultimately made by the Company not more
than thirty (30) days after the date prescribed therefor, shall not result
in termination of the parties' rights, remedies, obligations and
liabilities under this Section 7.2(c); provided, that nothing contained in
this Section 7.2(c) shall limit any rights Stockholder may have to damages
or other remedies, whether at law or in equity, as a result of any of the
breaches described in this Section 7.2(c).
8. MISCELLANEOUS.
8.1 OTHER AGREEMENTS SUPERSEDED. This Agreement supersedes all
prior agreements or understandings written or oral between the parties
hereto, relating to the subject matter hereof, and incorporates the entire
understanding of the parties with respect thereto.
8.2 AMENDMENT OR MODIFICATION; WAIVER. This Agreement may be
amended or supplemented only by a written instrument signed by the party
against whom the amendment or supplement is sought to be enforced. The
party benefited by any condition or obligation may waive the same, but such
waiver shall not be enforceable by another party unless made by written
instrument signed by the waiving party. Any waiver by any party of a breach
of any provision of this Agreement on one occasion shall not operate as or
be construed to be a waiver of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict compliance with any
term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
compliance with that term or any other term of this Agreement.
8.3 NOTICES. Any notice or other communication under or relating
to this Agreement shall be given in writing and shall be deemed
sufficiently given and served for all purposes when personally delivered or
given by telecopy with receipt verified by printout of the transmitting
machine (or otherwise confirmed in writing, in which case the notice shall
be deemed given when such written confirmation is received):
(a) If to the Company:
▇▇▇▇▇▇▇ Technology, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Chief Operating Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Rock, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to Stockholder:
STEAG Electronic Systems AG
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
Attn: Chief Executive Officer
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
Attn: General Counsel
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to ▇▇▇▇ ▇▇▇▇▇▇▇:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
c/o Mattson Technology, Inc.
▇▇▇▇▇▇▇ Technology, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
8.4 LAW GOVERNING; CONSENT TO JURISDICTION; EQUITABLE RELIEF;
ATTORNEYS' FEES.
(a) This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware, without regard to
the principles of conflicts of laws thereof.
(b) Each of the parties hereto (i) 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 of any
dispute arising out of or relating to this Agreement or any of the
transactions contemplated by this Agreement, (ii) 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, (iii) 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 (iv) 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.
(c) If any provisions of this Agreement is breached,
the nonbreaching party shall be entitled without limiting any other remedy
available at law or equity, to an injunction, specific performance or other
forms of equitable relief. The nonbreaching party shall be entitled to
recover the costs (including attorneys' fees) of enforcing its rights and
the breaching party's obligations pursuant to this Agreement.
8.5 SUCCESSORS; ASSIGNABILITY. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
right, remedy, obligation or liability hereunder may be assigned by any of
the parties hereto without the prior written consent of the other parties
hereto.
8.6 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and each such executed counterpart shall be deemed to be
an original instrument, but all such executed counterparts together shall
constitute one and the same instrument.
8.7 PARTIES IN INTEREST. Nothing in this Agreement, express or
implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any Person other than the parties hereto and their
respective permitted successors and assigns, nor is anything in this
Agreement intended to relieve or discharge any obligation of any third
Person to any party hereto or give any third Person any right of
subrogation or action over or against any party hereto.
8.8 HEADINGS. The headings used in this Agreement are provided
for convenience only and this Agreement shall be interpreted as though they
did not appear herein.
8.9 TRANSACTIONAL EXPENSES. Except as otherwise specifically
provided herein, each party shall pay its own fees and expenses incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement including, without limitation, the fees and expenses of its
counsel, accountants and other advisors.
8.10 SEVERABILITY. Should any provisions of this Agreement be
held by a court of law to be illegal, invalid or unenforceable, the
legality, validity and enforceability of the remaining provisions of this
Agreement shall not be affected or impaired thereby.
8.11 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms have the respective meanings set forth below:
(a) ACQUISITION PROPOSAL means any offer, proposal,
inquiry or indication of interest contemplating or otherwise relating to
any Acquisition Transaction.
(b) ACQUISITION TRANSACTION means any transaction or
series of transactions involving:
(i) any merger, consolidation, reorganization,
share exchange, business combination, issuance of securities,
recapitalization, acquisition of securities, tender offer, exchange offer
or other similar transaction (i) in which the Company or any of its
Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the
Commission) is a constituent corporation, (ii) in which a Person or "group"
(as defined in the Exchange Act) of Persons directly or indirectly acquires
beneficial or record ownership of securities representing more than 20% of
the outstanding securities of any class of voting securities of the Company
or any of its Significant Subsidiaries or (iii) in which the Company or any
of its Significant Subsidiaries issues securities representing more than
20% of the outstanding securities of any class of voting securities of the
Company or any of its Significant Subsidiaries;
(ii) any sale, lease, exchange, transfer,
exclusive license, acquisition or disposition of any business or businesses
or assets that constitute or account for 20% or more of the consolidated
net revenues, net income or assets of the Company or any of its Significant
Subsidiaries; or
(iii) any liquidation or dissolution of any of
the Company or any of its Significant Subsidiaries.
(c) AFFILIATE means any Person which controls, is
controlled by or is under common control with, another Person. For purposes
of this definition, "control" means with respect to a corporation or
limited liability company the right to exercise, directly or indirectly,
more than fifty percent (50%) of the voting rights attributable to the
controlled corporation or limited liability company and, with respect to
any individual, partnership, trust, other entity or association, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled entity.
(d) BENEFICIAL OWNER, beneficially own, beneficial
ownership and words of similar import have the meanings ascribed to such
terms in Rule 13d-3 of the General Rules and Regulations under the Exchange
Act.
(e) CHANGE OF CONTROL means (i) the Company's sale
of all or substantially all of its assets, (ii) any transaction or series
of related transactions (including, without limitation, any reorganization,
merger or consolidation) which will result in the holders of the
outstanding Voting Stock immediately prior to such transaction or series of
related transactions holding less than fifty percent (50%) of the voting
equity securities of the surviving entity immediately following such
transaction or (iii) any Person or group (other than Stockholder or any of
its Affiliates) becomes the beneficial owner of more than fifty percent
(50%) of the total voting power of the outstanding voting equity securities
of the Company.
(f) CLOSING means the closing of the STEAG
Transaction contemplated by the Combination Agreement.
(g) COMMISSION means the Securities and Exchange
Commission.
(h) COMMON STOCK means the common stock, par value
$0.001 per share, of the Company.
(i) DISINTERESTED DIRECTOR means a director of the
Company who is not a Stockholder Representative and who is not and has
never been an officer, employee or paid consultant of Stockholder or any of
its Affiliates.
(j) DISINTERESTED DIRECTOR APPROVAL means approval
by the Board of Directors, which approval included votes to approve by a
majority of all the Disinterested Directors, or a public recommendation to
the stockholders of the Company approved by a majority of the Disinterested
Directors.
(k) EXCHANGE ACT means the Securities Exchange Act
of 1934, as amended, or any successor rule (together with the rules and
regulations of the Commission promulgated thereunder).
(l) INDEPENDENT DIRECTOR means any incumbent
director of the Company as of the Effective Date other than ▇▇▇▇▇▇▇, and
any future director of the Company who is not and has never been an
officer, employee or paid consultant of (i) Stockholder or any of its
Affiliates or (ii) the Company or any of its Affiliates.
(m) PERSON means an individual, partnership,
corporation, trust or unincorporated organization or any federal, state,
local or foreign government or any political subdivision thereof
(including, without limitation, the executive and legislative branches
thereof) or any department, commission, board, bureau, agency, court, panel
or other instrumentality of any kind of any of the foregoing.
(n) SECURITIES ACT means the Securities Act of 1933,
as amended, or any successor rule (together with the rules and regulations
of the Commission promulgated thereunder).
(o) SUBSIDIARY means, with respect to any party, any
corporation, limited liability company, partnership, joint venture or other
business association or entity, at least a majority of the voting
securities or economic interests of which is directly or indirectly owned
or controlled by such party or by any one or more of its Subsidiaries.
(p) VOTING STOCK means Common Stock, any securities
convertible into or exchangeable for Common Stock or any other right or
option to acquire Common Stock of the Company.
[SIGNATURE PAGE FOLLOWS.]
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first written above.
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Chairman and
Chief Executive Officer
STEAG ELECTRONIC SYSTEMS AG
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, General Counsel
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
▇▇. ▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
EXHIBIT A
SECOND AMENDED AND RESTATED BYLAWS OF THE COMPANY
