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EXECUTION VERSION
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT, dated as of the 31st day of August, 2001 (the
"Agreement"), is entered into by and among KLA-Tencor Corporation, a Delaware
corporation having an office at 000 Xxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000
("KLA-Tencor"), Katmandu Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of KLA-Tencor ("Merger Sub"), and QC Optics, Inc., a
Delaware corporation having an office at 00 Xxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000 (the "Company").
WHEREAS, the Boards of Directors of Merger Sub and the Company deem it
advisable and in the best interests of such corporations and their respective
stockholders that Merger Sub be merged into and with the Company on the terms
and conditions set forth in this Agreement, as a result of which the Company
will become a wholly-owned subsidiary of KLA-Tencor; and
WHEREAS, the Board of Directors of KLA-Tencor has approved the merger;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt of which is acknowledged by each party hereto, the parties hereto agree
as follows:
ARTICLE 1
THE MERGER
Section 1.1. AGREEMENT AND PLAN OF MERGER. Effective as of the
Effective Date (as defined in Section 2.2 below), Merger Sub shall be merged
with and into the Company (hereinafter sometimes called the "Merger") in
accordance with the terms of this Agreement and the Certificate of Merger set
forth in EXHIBIT A hereto (the "Certificate of Merger"). The Company shall be
the corporation surviving the Merger (the "Surviving Corporation"), and the
separate existence of Merger Sub shall cease as of the Merger. The Certificate
of Incorporation of Merger Sub, as in effect immediately prior to the Effective
Time (as defined in Section 2.2 below), shall thereafter be the Certificate of
Incorporation of the Surviving Corporation; provided, however, that at the
Effective Time, Article I of the Certificate of Incorporation of the Surviving
Corporation shall be amended to read as follows: "The name of the Corporation is
QC Optics, Inc." The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall thereafter be the Bylaws of the Surviving Corporation
until thereafter amended as provided by law and such Bylaws (except as necessary
to conform to the name change contemplated by the preceding sentence). The
directors and officers of Merger Sub immediately prior to the Effective Time
shall be the initial directors and officers of the Surviving Corporation, each
to hold office in accordance with the Certificate of Incorporation and By-Laws
of the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified. The effect of the Merger shall be as
provided by the Delaware General Corporation Law (the "DGCL").
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Section 1.2. CONVERSION OF THE COMPANY'S SHARES. At the Effective Time,
each share of the Company's capital stock outstanding immediately prior thereto
(herein referred to as a "Company Share" and collectively as the "Company
Shares") shall, by virtue of the Merger and without any action on the part of
the holder thereof, but subject to this Section and to Sections 1.3, 1.4 and 1.5
below, be canceled and converted into the right to receive, in cash, an amount
equal to $1.00 per share (the "Per Share Purchase Price"), except that in no
event shall the total amount payable by KLA-Tencor for the Company Shares exceed
$3,010,000 (the "Purchase Price"); provided, however that the Purchase Price
shall be increased by an amount equal to the Per Share Purchase Price multiplied
by the Additional Shares (as defined below) if the Company's Net Cash Position
(as defined in Section 5.1(r)) is increased by the Per Share Purchase Price for
each of the Additional Shares. For purposes hereof, "Additional Shares" shall
mean those Company Shares issued and outstanding at the Effective Time and which
were not issued and outstanding as of the date hereof, which are issued upon the
exercise of any Warrants (as defined in Section 3.2(b) hereof) for cash pursuant
to the terms thereof.
Section 1.3 DISSENTING SHARES. Each outstanding Company Share held by a
stockholder who has demanded and perfected his or her right to an appraisal of
his or her Company Shares in accordance with Section 262 of the DGCL and who has
not effectively withdrawn or lost his or her right to such appraisal (the
"Dissenting Shares") shall not be converted into or represent the right to
receive his or her Per Share Purchase Price represented by such Company Shares
pursuant to Section 1.2 above, but the holder thereof shall be entitled only to
such rights as are granted by Section 262 of the DGCL.
Section 1.4. PAYMENT FOR COMPANY SHARES. KLA-Tencor shall pay the
Purchase Price to State Street Bank and Trust Company (or to another bank, trust
company or transfer agent as may be selected by KLA-Tencor and which shall be
reasonably acceptable to the Company (as the case may be, the "Paying Agent") at
the Effective Time. Promptly (but in any event within five business days)
following the Effective Date, the Paying Agent shall mail to each holder of
record (each, a "Stockholder" and, collectively, the "Stockholders") of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Company Shares (the "Company Certificates"), other than
the Company and any subsidiary of the Company, the following: (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Company Certificates shall pass, only upon delivery of the
Company Certificates to the Paying Agent and shall be in such form and have such
other provisions as KLA-Tencor may reasonably specify) and (ii) instructions for
effecting the surrender of the Company Certificates in exchange for such
holder's or person's Per Share Purchase Price. Upon surrender of a Company
Certificate (or affidavit of lost, stolen or destroyed Company Certificate
pursuant to Section 1.8) to the Paying Agent or to such other agent or agents as
may be appointed by the Surviving Corporation, together with such letter of
transmittal, duly completed and executed, and such other documents as may be
reasonably required by the Paying Agent, the holder of such Company Certificate
shall be entitled to receive in exchange therefor an amount equal to such
holder's Per Share Purchase Price multiplied by the number of Company Shares so
delivered (the "Purchase Payment"), less any amounts required to be withheld
under applicable federal, state, local or foreign income tax regulations; and
the Company Certificates so surrendered shall forthwith be canceled. No interest
will be paid or will accrue on the cash
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payable upon the surrender of any Company Certificate. Until surrendered as
contemplated by this Section 1.4, each Company Certificate shall be deemed at
any time after the Effective Time to represent only the right to receive upon
such surrender, the amount of cash specified in Section 1.2; provided, however,
that unless and until any such outstanding Company Certificate is so surrendered
(or an affidavit of lost, stolen or destroyed Company Certificate and reasonably
satisfactory indemnity bond is provided), the holder of such outstanding Company
Certificate shall cease to have any rights as a Stockholder, except such rights,
if any, as such holder may have with respect to Dissenting Shares, and, except
as set forth above, shall not be entitled to receive any consideration from the
Surviving Corporation and/or KLA-Tencor with respect to the Company Shares
represented by such Company Certificate. Any funds deposited with the Paying
Agent that are payable to a former Stockholder which has not submitted a claim
for its Purchase Payment as described in this Section 1.4 within one year after
the Effective Time shall be paid to the Surviving Corporation upon demand, and
any former Stockholders who have not theretofore complied with the instructions
for exchanging their Company Certificates shall thereafter look only to the
Surviving Corporation for payment, it being acknowledged by KLA-Tencor, Merger
Sub and the Company that the receipt of any such amounts by the Surviving
Corporation shall not relieve it of its payment obligations to such former
Stockholders. After the Effective Time, no further exercises of options to
purchase shares of capital stock of the Company ("Company Options") shall be
permitted.
Section 1.5. CERTAIN OTHER AGREEMENTS. Concurrently with the execution
and delivery of this Agreement, there shall be delivered to KLA-Tencor (i) a
consulting and noncompetition agreement between KLA-Tencor and Xxxx X. Xxxxx
("Xxxxx"), in the form of EXHIBIT B attached hereto, duly executed and delivered
by each of KLA-Tencor and Chase (the "Consulting Agreement"); and (ii) a voting
agreement among the Company, Chase, acting in his own capacity and in his
capacity as Trustee of the QC Optics Voting Trust u/d/t dated as of October 27,
1995 and Xxxx X. Xxxxxxx ("Xxxxxxx") in the form of EXHIBIT C attached hereto,
pursuant to which such Stockholders shall covenant and agree to vote all of the
capital stock of the Company held by them in favor of the adoption of this
Agreement and the Merger (the "Voting Agreement").
Section 1.6. CONVERSION OF MERGER SUB SHARES. On the Effective Date,
each share of Merger Sub's common stock, $.01 par value per share ("Common
Stock"), outstanding immediately prior thereto shall, by virtue of the Merger
and without any action on the part of the holder thereof, be canceled and
converted into one fully paid and nonassessable common share of the Surviving
Corporation, which share shall be registered in the name of and beneficially
owned by KLA-Tencor.
Section 1.7. CLOSING OF STOCK TRANSFER BOOKS. The stock transfer books
of the Company shall be closed at the close of business on the business day
immediately preceding the Effective Date, and after the Effective Time, except
for transfers of Dissenting Shares in accordance with Section 262 of the DGCL,
there shall be no transfers on the Company's stock transfer books of the Company
Shares which were outstanding immediately prior to the Effective Time. In the
event of a transfer of ownership of Company Shares which is not registered in
the Company's transfer records, the Purchase Price to be paid in the Merger as
provided herein may be delivered to a transferee, if the Company Certificate
representing such Company Shares is
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presented to the Paying Agent, accompanied by all documents required to evidence
and effect such transfer and by payment of any applicable stock transfer taxes.
Section 1.8. LOST CERTIFICATES. In the event any Company Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such Company Certificate to be lost, stolen or
destroyed, the Paying Agent or the Surviving Corporation shall issue in exchange
for such lost, stolen or destroyed Company Certificate the consideration payable
in exchange therefor pursuant to this Article 1. The Paying Agent or the
Surviving Corporation may, as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed Company Certificate to give
the Paying Agent or the Surviving Corporation a bond that is reasonably
satisfactory to KLA-Tencor and the Paying Agent in such sum as it may direct as
indemnity against any claim that may be made against the Surviving Corporation
with respect to the Company Certificate alleged to have been lost, stolen or
destroyed.
Section 1.9. ABANDONED PROPERTY. Neither KLA-Tencor nor the Surviving
Corporation shall be liable to any Stockholder for any portion of the Purchase
Price delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
Section 1.10. ADOPTION. This Agreement shall be submitted to the
stockholders of Merger Sub and the Company in the manner provided by law. In the
case of Merger Sub, KLA-Tencor, as its sole stockholder, shall vote all its
shares in favor of the adoption of this Agreement and the Merger. In the case of
the Company, this Agreement shall be promptly submitted to its Stockholders at a
Stockholder meeting duly called and held pursuant to the DGCL. Subject to the
provisions of Section 4.6(b), the Board of Directors of the Company shall
recommend to the Stockholders the approval of this Agreement and the Merger.
ARTICLE 2
CLOSING
Section 2.1. TIME AND PLACE OF CLOSING. The closing under this
Agreement (the "Closing") shall take place at the offices of Xxxxx, Xxxxxx-Xxxxx
& Xxxxxxxxx, P.C., Reservoir Place, 0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx
00000 at 11:00 A.M., local time, on the day of the later of (i) the approval by
the Stockholders of the execution, delivery and performance by the Company of
this Agreement, and (ii) satisfaction of all other conditions to Closing as set
forth in Article 5 hereof, or at such other time or date as may be mutually
agreeable to the parties hereto. All transactions at the Closing shall be deemed
to take place simultaneously and no transaction shall be deemed to have been
completed and no document or certificate shall be deemed to have been delivered
until all transactions are completed and all documents delivered.
Section 2.2. CONSUMMATION OF THE MERGER. As soon as is practicable
after the satisfaction or waiver of the conditions set forth in Article 5
hereof, the parties hereto will cause the Merger to be consummated by delivering
to the Secretary of State of the State of Delaware the Certificate of Merger.
The Merger shall become effective at the time that the Certificate of
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Merger is filed with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of the DGCL (the "Effective Time"). The
term "Effective Date" shall mean the date and time of the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware.
Section 2.3. DOCUMENTS TO BE DELIVERED BY THE COMPANY. Unless waived in
writing by KLA-Tencor, at the Closing the Company shall deliver or arrange to
have delivered to KLA-Tencor the following:
(a) The secretary's certificate described in Section 5.1(b).
(b) The governmental consents described in Section 5.1(c),
if any.
(c) The contractual consents described in Section 5.1(d),
if any.
(d) The corporate good standing and foreign qualification
certificates described in Section 5.1(e).
(e) The President's certificate described in Section 5.1(f).
(f) The legal opinion of counsel to the Company described in
Section 5.1(h).
(g) The resignations described in Section 5.1(l).
(h) Evidence of the termination of the consulting agreement
described in Section 5.1(m).
Section 2.4. DOCUMENTS TO BE DELIVERED BY KLA-TENCOR. Unless waived in
writing by the Company, at the Closing KLA-Tencor shall deliver or arrange to
have delivered to the Company the following:
(a) The secretary's certificate described in Section 5.2(b).
(b) The governmental consents described in Section 5.2(c),
if any.
(c) The corporate good standing certificate described in
Section 5.2(e).
(d) The officer's certificate described in Section 5.2(f).
(e) The legal opinion of counsel to KLA-Tencor described in
Section 5.2(h).
Section 2.5. DOCUMENTS TO BE DELIVERED BY MERGER SUB. Unless waived
in writing by the Company, at the Closing Merger Sub shall deliver or arrange to
have delivered to the Company the following:
(a) The secretary's certificate described in Section 5.2(b).
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(b) The governmental consents described in Section 5.2(c),
if any.
(c) The corporate good standing certificate described in
Section 5.2(e).
(d) The officer's certificate described in Section 5.2(f).
(e) The legal opinion of counsel to Merger Sub described in
Section 5.2(h).
(f) Evidence of payment of the Purchase Price to the Paying
Agent.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1. DEFINITIONS. The term "knowledge," when used below with
respect to the Company, shall mean the actual knowledge of any of the officers
or directors of the Company and the knowledge such persons would have acquired
after conducting a reasonable and diligent investigation concerning the relevant
matters, including without limitation inquiry of the employees of the Company
identified on Schedule 3.1 of the Disclosure Schedule and any other employee or
employees of the Company generally responsible for the relevant matters. The
term "ordinary course of business," when used below, shall mean the ordinary
course of business of the Company consistent with its past custom and practice
(including with respect to frequency and amount); provided, however, that the
term "ordinary course of business" shall also include actions required or
specifically contemplated by this Agreement to be taken or not to be taken in
connection with the Merger. The term "Material Adverse Effect" shall mean a
material adverse effect on the financial condition, assets (including intangible
assets), liabilities, earnings or business of the Company other than any effect
resulting solely from (a) the execution or announcement of this Agreement or
pendency of the transactions contemplated hereby or (b) conditions generally
affecting the Company's industry or the economy as a whole.
Section 3.2. REPRESENTATIONS AND WARRANTIES PERTAINING TO THE COMPANY.
The Company represents and warrants to KLA-Tencor and Merger Sub that, except as
set forth on the Disclosure Schedule attached hereto as EXHIBIT D (specifically
identifying the relevant subsection hereof):
(a) ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate and other power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to do so would not,
individually or in the aggregate, have a Material Adverse Effect. The
Certificate of Incorporation and By-Laws of the Company, as amended to date, are
attached hereto as EXHIBITS E and F, respectively. Except as set forth on the
Disclosure Schedule, the Company is duly qualified as a foreign corporation to
do business, and is in good standing, in the Commonwealth of Massachusetts and
in each jurisdiction in which the character of the properties owned,
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operated or leased by it or the nature of its activities is such that such
qualification is required by applicable law, except where the failure to be so
duly qualified and in good standing that would not, individually or in the
aggregate, have a Material Adverse Effect. All such jurisdictions are listed on
the Disclosure Schedule.
(b) CAPITALIZATION. The authorized capital stock of the
Company consists of (i) 10,000,000 shares of Common Stock, of which, as of the
date of this Agreement, 2,994,888 shares were issued and outstanding and 314,754
shares were held as treasury stock; and (ii) 1,000,000 shares of Preferred
Stock, $.01 par value per share, of which, as of the date of this Agreement, no
shares were issued and outstanding. There is no other capital stock of the
Company authorized for issuance. The shares described in the first sentence of
this Section 3.2(b) constitute the total issued and outstanding share capital of
the Company. All of such shares have been duly authorized and validly issued,
are fully paid, nonassessable and free of preemptive rights. In addition, the
Company has issued (i) redeemable warrants to purchase up to 1,075,000
additional shares of Common Stock (the "Redeemable Warrants") and (ii)
representatives' warrants (the "Representatives' Warrants") to purchase up to
95,000 additional shares of Common Stock and up to 95,000 additional Redeemable
Warrants (the "Representatives' Additional Warrants"), each to purchase an
additional share of Common Stock (the Redeemable Warrants, the Representatives'
Warrants and the Representatives' Additional Warrants are sometimes hereinafter
referred to collectively as the "Warrants"). As of the date of this Agreement,
the Redeemable Warrants have an exercise price of $7.80 per share of Common
Stock, the Representatives' Warrants have an exercise price of $9.60 per share
of Common Stock and $0.16 per Representatives' Additional Warrant, and the
Representatives' Additional Warrants have an exercise price of $12.48 per share
of Common Stock. All of the Warrants expire in accordance with their terms on
October 23, 2001. The offer and sale of all securities of the Company (including
the Warrants) complied with all federal, state and foreign securities laws. As
of the date of this Agreement, there were outstanding 263,382 Company Options
held by the persons ("Optionholders") and in the amounts listed on the
Disclosure Schedule. All other options or warrants to purchase or subscribe for
the capital stock of the Company have expired or have been legally terminated.
Except for 314,754 shares of Common Stock repurchased from K. Xxxxxx Xxxxxx, no
shares of capital stock of the Company have been repurchased from stockholders.
No shares of the Company's capital stock are reserved for issuance, except
pursuant to the exercise of the Warrants and the Company Options. Other than the
Warrants and the Company Options, there are no warrants, convertible instruments
or other rights, agreements or commitments, contingent or otherwise, obligating
the Company to issue, sell or purchase shares of capital stock. The books and
records of the Company and the Subsidiary, including without limitation the
books of account, minute books, stock certificate books and security ledgers,
are complete and correct and accurately reflect the conduct of the business and
affairs of the Company and the Subsidiary, taken together as a whole.
(c) SUBSIDIARIES. The Company owns 100% of the voting power
and equity interest in QC Optics International, Inc., a Barbados corporation
(the "Subsidiary"). The Company does not own, directly or indirectly, any equity
interest in any entity other than the Subsidiary. Neither the Company nor the
Subsidiary is a partner or joint venturer with any other person. Neither the
Company nor the Subsidiary is subject to any obligation, contingent or
otherwise, to provide funds to or make an investment (in the form of a loan,
capital contribution
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or otherwise) in any entity. There are no warrants, convertible instruments or
other rights, agreements or commitments, contingent or otherwise, obligating the
Subsidiary to issue, sell or purchase shares of its capital stock.
(d) AUTHORITY. Subject only to Stockholder approval, the
Company has the corporate power and authority to execute, deliver and perform
this Agreement, to execute, deliver and file the Certificate of Merger and to
consummate the transactions contemplated thereby. This Agreement has been duly
and validly authorized by all necessary corporate action on the part of the
Company, subject only, in respect of the consummation of the Merger, to approval
by the Stockholders of the Company holding a majority of the Company Shares. The
Board of Directors of the Company has (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, are fair to and in the
best interests of the Stockholders, (ii) approved this Agreement and the
transactions contemplated hereby, including the Merger, and (iii) resolved,
subject to the provisions of Section 4.6(b), to recommend approval and adoption
of this Agreement and the transactions contemplated hereby, including the
Merger, by the Stockholders. This Agreement has been duly and validly executed
and delivered by the Company and constitutes the valid and binding obligation of
the Company, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity. Upon execution
and filing of the Certificate of Merger, the Certificate of Merger will have
been duly executed and filed by the Company. Neither the execution, delivery and
performance of this Agreement, the filing of the Certificate of Merger nor the
consummation of the transactions contemplated hereby will (i) conflict with or
result in a violation, breach, termination or acceleration of, or default under
(or would result in a violation, breach, termination, acceleration or default
with the giving of notice or passage of time, or both) any of the terms,
conditions or provisions of the Certificate of Incorporation or Bylaws of the
Company, as amended, or of any note, bond, mortgage, indenture, license,
agreement, warrant or other instrument or obligation to which either the Company
or the Subsidiary is a party or by which the Company or the Subsidiary or any of
their respective properties or assets may be bound or affected, except where
such conflict, violation, breach, termination, acceleration or default would
not, individually or in the aggregate, have a Material Adverse Effect; (ii)
result in the violation of any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or the Subsidiary or their respective
properties or assets; (iii) result in the imposition of any lien, encumbrance,
charge or claim upon any assets of the Company or of the Subsidiary; or (iv)
except under the Consulting Agreement and except for the Required Severance
Payments (as defined in Section 4.1(d)), entitle any employee to severance or
other payments by the Company or create any other obligation to an employee,
including an increase in benefits. Except for the approval by the Stockholders
of the Merger, including, without limitation, the filing with the Securities and
Exchange Commission (the "SEC") of preliminary and definitive forms of proxy
statement, the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware, the filing of a Form 15 with the SEC, the filing of a
Form 8-K with the SEC and such filings as may be required pursuant to the rules
and regulations of the American Stock Exchange, no consent or approval by, or
notification to or filing with, any court, governmental authority or third
party, including without limitation, any filing under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, is required in connection with
the execution, delivery and performance of this Agreement by the Company
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or the consummation of the transactions contemplated hereby. Without limiting
the generality of the foregoing, neither the provisions of Section 203 of the
DGCL, nor Chapter 110E or Chapter 110F of the Massachusetts General Laws, nor
any other antitakeover or similar statute or regulation applies to or purports
to apply to the transactions contemplated by this Agreement.
(e) SEC FILINGS; FINANCIAL STATEMENTS.
(i) Since January 1, 1998, the Company has filed all
forms, reports and documents required to be filed by it (collectively,
the "SEC Reports") with the SEC. As of the respective dates they were
filed, (A) the SEC Reports were prepared in accordance with the
applicable requirements of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the
"Securities Act"), or the Securities Exchange Act of 1934, as amended
(together with the rules and regulations promulgated thereunder, the
"Exchange Act"), as the case may be, and (B) none of the SEC Reports
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(ii) Each of the financial statements (including, in
each case, any notes and schedules thereto) contained in the SEC
Reports complied as to form with the applicable accounting requirements
and rules and regulations of the SEC and was prepared in accordance
with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods indicated (except
as may be indicated in the notes thereto), and each presented fairly,
in all material respects, the financial position of the Company as at
the respective dates thereof and its results of operations and cash
flows for the respective periods indicated therein, all in accordance
with GAAP (except as otherwise indicated therein and subject, in the
case of unaudited statements included in the Company's quarterly report
on Form 10-Q for the quarter ended June 30, 2001, to normal and
recurring year-end adjustments which were not and would not,
individually or in the aggregate, have a Material Adverse Effect).
(iii) The Company has heretofore made available to
KLA-Tencor complete and correct copies of (i) all agreements, documents
and other instruments not yet filed by the Company with the SEC but
that are currently in effect and that the Company expects to file with
the SEC after the date of this Agreement and (ii) all amendments and
modifications that have not been filed by the Company with the SEC but
that are currently in effect to all agreements, documents and other
instruments that previously had been filed by the Company with the SEC
and are currently in effect.
(f) NO UNDISCLOSED LIABILITIES; NO DEALINGS WITH SECURITY
HOLDERS, OFFICERS, DIRECTORS OR EMPLOYEES. Except for (i) liabilities and
obligations reflected or reserved against on the Company's balance sheet as of
June 30, 2001, as filed with the SEC (the "Balance Sheet") (all of which
liabilities and obligations are set forth on the Disclosure Schedule), (ii)
liabilities and obligations disclosed in SEC Reports filed prior to the date of
this Agreement and (iii) other liabilities and obligations incurred in the
ordinary course of business since June 30, 2001 and that
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would not, individually or in the aggregate, have a Material Adverse Effect,
neither the Company nor the Subsidiary has any liabilities or obligations. As
used in this Agreement, the term "liability" includes any indebtedness, claim,
loss, damage, deficiency (including deferred income tax), cost, expense,
guaranty or responsibility, absolute, accrued, contingent or otherwise, and
whether due or to become due. The Disclosure Schedule sets forth a list of each
outstanding commitment by the Company or the Subsidiary to make a capital
expenditure, capital additions or capital improvements involving an amount in
excess of $10,000. Except for the Consulting Agreement, the Voting Agreement and
severance payments to employees, neither the Company nor the Subsidiary has any
contractual arrangement with, or commitment to or from, any of their respective
security holders, officers, management, directors, employees or their family
members (other than such as may have been entered into in the normal course of
employment or in the ordinary course of business with holders of less than 5% of
the Company's outstanding securities), including, without limiting the
generality of the foregoing, any contractual arrangement or commitment whereby
any of such persons are directly or indirectly a joint investor or coventurer
with respect to, or owner, lessor, lessee, licensor or licensee of, any real or
personal property, tangible or intangible, owned or used by, or a lender to or
debtor of, the Company or of the Subsidiary.
(g) TAX MATTERS.
(i) For purposes of this Agreement, "Tax" means any
federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including without limitation Taxes
under Internal Revenue Code of 1986, as amended (the "Code") Section
59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax or other fiscal
charges of any kind whatsoever, including without limitation any
interest, penalty, or addition relating thereto, whether disputed or
not.
(ii) For purposes of this Agreement, "Tax Return"
means any return, declaration, report, or information return or
statement relating to Taxes, including without limitation any schedule
or attachment thereto, and any amendment thereof.
(iii) The Company and the Subsidiary have in all
material respects accurately prepared and duly and timely filed all Tax
Returns that they were required to file. All such Tax Returns were
correct and complete in all material respects. Except as set forth on
the Disclosure Schedule since March 31, 1996, all Taxes owed by the
Company and the Subsidiary (whether or not reflected on any Tax
Returns) have been paid when due, other than those being contested in
good faith and where adequate reserves have been established therefor.
Except as set forth on the Disclosure Schedule, neither the Company nor
the Subsidiary is currently the beneficiary of any extension of time
within which to file any Tax Return. Since March 31, 1996, no claim or
inquiry with respect to any material amount of Taxes has ever been made
by an authority in a jurisdiction where the Company or the Subsidiary
did not file Tax Returns that the Company or the Subsidiary is or may
be subject to any Tax by that jurisdiction for any
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period ending on or before the Effective Date. There are no liens or
other security interests on any of the assets of the Company or the
Subsidiary that arose in connection with any failure (or alleged
failure) to pay any Tax.
(iv) For all periods beginning subsequent to March
31, 1996, neither the Company nor the Subsidiary has ever filed a
consolidated return with a company other than the Company and the
Subsidiary.
(v) The Company has delivered or made available to
KLA-Tencor true and complete copies of the income, franchise, excise,
sales, use, property and employment tax returns filed by the Company
and the Subsidiary with any federal, state, local or foreign
governmental authority since January 1, 1998, together with all
examination reports and statements of deficiencies assessed, proposed
in writing to be assessed against, or agreed to by the Company or the
Subsidiary.
(vi) All Taxes of the Company and the Subsidiary
attributable to Tax periods or portions thereof ending on or prior to
the date of this Agreement, including Taxes that may become payable by
the Company or the Subsidiary in future periods in respect of any
transactions or sales occurring on or prior to the date of this
Agreement, that have not yet been paid have, in the aggregate, been
adequately reflected as a liability on the books of the Company and the
Subsidiary in accordance with GAAP, except as otherwise indicated on
such books. All Taxes of the Company and the Subsidiary attributable to
Tax periods or portions thereof ending on or prior to the Effective
Date, including Taxes that may become payable by the Company and the
Subsidiary in future periods in respect of any transactions or sales
occurring on or prior to the Effective Date, that have not yet been
paid will, in the aggregate, be adequately reflected as a liability on
the books of the Company and the Subsidiary as of the Effective Date in
accordance with GAAP, except as otherwise indicated on such books.
(vii) Without limiting the generality of the
foregoing, the Company and the Subsidiary have withheld or collected
and duly paid all Taxes required to have been withheld or collected and
paid in connection with payments to foreign persons, sales and use Tax
obligations, and amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other person.
(viii) Except as set forth on the Disclosure
Schedule, none of the Tax Returns of the Company or the Subsidiary have
been or, to the Company's knowledge, are being currently audited or
examined by any governmental authority, nor have any deficiencies for
any Tax been asserted against the Company or the Subsidiary.
(ix) There are no outstanding agreements or waivers
extending the statute of limitations applicable to any Tax Return of
the Company or the Subsidiary for any period.
(x) Neither the Company nor the Subsidiary has filed
a consent under Code Section 341(f) concerning collapsible
corporations. Neither the Company nor the
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Subsidiary has made any payments, is obligated to make any payments, or
is a party to any agreement that could obligate it to make any payments
that will be an "excess parachute payment" under Code Section 280G.
Neither the Company nor the Subsidiary has been a United States real
property holding corporation within the meaning of Code Section
897(c)(2) during the applicable period specified in Code Section
897(c)(1)(A)(ii). Neither the Company nor the Subsidiary is a party to
any Tax allocation or sharing agreement. Neither the Company nor the
Subsidiary has any liability for any Taxes of any person (other than
any of the Company and the Subsidiary) under Treas. Reg. Section
1.1502-6 (or any similar provision of federal, state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.
(h) PROPERTIES. Except as set forth in the Disclosure
Schedule, the Company and the Subsidiary have good and marketable title to, or a
valid and continuing leasehold interest in, all properties and assets, real and
personal, reflected on the Balance Sheet or acquired by the Company or the
Subsidiary since the date of the Balance Sheet (except personal property leases
terminated, or personal property sold or otherwise disposed of, in the ordinary
course of business since the date of the Balance Sheet), and all such assets
(including the Intangibles (as defined in Section 3.2(m)) are free and clear of
all mortgages, liens, attachments, pledges, encumbrances or security interests
of any nature whatsoever, except for liens for Taxes not yet due and the rights
of any lessor under any lease to which the Company or the Subsidiary is a party.
Neither the Company nor the Subsidiary has ever owned any real estate. Except as
set forth on the Disclosure Schedule, all leases pursuant to which the Company
or the Subsidiary leases real or personal property are in good standing, and are
valid and in full force and effect in accordance with their respective terms.
There are no defaults under any such leases attributable to the Company or the
Subsidiary, and no event has occurred that (whether or not with notice, lapse of
time or both) would constitute a default attributable to the Company or the
Subsidiary. To the knowledge of the Company, all buildings, improvements,
machinery, equipment, vehicles and items of tangible personal property used in
connection with the operations of the Company are structurally sound, are in
good operating condition and repair, are adequate for the uses to which they are
being put and are not in need of maintenance or repairs except for ordinary,
routine maintenance, subject only to ordinary wear and tear.
(i) ENVIRONMENTAL, HEALTH AND SAFETY MATTERS. Neither the
Company nor the Subsidiary is or has been in violation in any material respect
of any law, regulation or ordinance relating to respective properties or
facilities (including without limitation, any law, regulation or ordinance
relating to pollution or protection of the environment or relating to building,
health code, zoning, land use or similar matters). To the Company's knowledge,
no real property currently or previously leased by the Company or the Subsidiary
is or has been polluted or contaminated, nor has any real property currently or
previously leased by the Company or the Subsidiary ever been the subject of
environmental clean-up or remediation. Except as set forth on the Disclosure
Schedule, to the Company's knowledge, no real property currently or previously
leased by the Company or the Subsidiary contains any Hazardous Material (as
defined below), nor has any Hazardous Material been discharged or spilled
thereon. Neither the Company nor the Subsidiary has ever owned or operated a
petroleum or hazardous waste landfill or any petroleum or other hazardous waste
treatment, storage or disposal facility. Neither the Company nor the Subsidiary
has caused any past or present events, conditions, circumstances,
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activities, practices, incidents or actions which will give rise to any common
law or legal liability, or otherwise form the basis of any claim, action, suit,
proceeding, hearing, or investigation, based on or related to the disposal,
storage, handling, manufacture, processing, distribution, use, treatment, or
transport, or the emission, discharge, release or threatened release into the
environment, of any pollutant or waste. To the Company's knowledge, there are no
proceedings pending or threatened affecting any real property currently or
previously leased by the Company or by the Subsidiary which could have a
Material Adverse Effect. To the Company's knowledge, no real property currently
or previously leased by the Company or by the Subsidiary at any time is or has
been on any federal or state "Superfund" list or on EPA's Comprehensive
Response, Compensation and Liability Information System (CERCLIS) list or on any
analogous state environmental agency list.
For purposes of this Agreement, "Hazardous Material" means any
petroleum product or any flammable, explosive or radioactive material, or any
hazardous or toxic waste, substance or material, including substances defined as
"hazardous substances", "hazardous materials", "solid waste" or "toxic
substances" under any applicable laws, rules and regulations relating to
hazardous or toxic materials and substances, air pollution (including noise and
odors), water pollution, liquid and solid waste, pesticides, drinking water,
community and employee health, environmental land use management, stormwater,
sediment control, nuisances, radiation, wetlands, endangered species,
environmental permitting and petroleum products.
(j) ACCOUNTS RECEIVABLE. Except as set forth on the Disclosure
Schedule, all accounts and notes receivable shown on the Balance Sheet and all
accounts and notes receivable acquired by the Company or the Subsidiary
subsequent to the date of the Balance Sheet to the date hereof are valid and
enforceable, have arisen in the ordinary course of business and have either (i)
been collected or, (ii) to the Company's knowledge, (A) are in the process of
collection, (B) are collectible in the ordinary course of business and in any
event within six months from the Effective Date and (C) are not subject to any
defense, set-off, counterclaim or claim for refund, less the applicable
allowances reflected on the Balance Sheet with respect to accounts and notes
receivable shown thereon, or set up consistent with past practice on the books
of the Company with respect to the accounts and notes receivable acquired
subsequent to the date of the Balance Sheet.
(k) PURCHASE AND SALE COMMITMENTS. No outstanding purchase
commitments by the Company or the Subsidiary are in excess of the normal,
ordinary and usual requirements of the business of the Company. No outstanding
commitment obligates the Company or the Subsidiary to sell any product or
service at a price below the sum of direct materials and direct labor incurred
by the Company or the Subsidiary to produce and deliver such product or to
perform such service.
(l) GOVERNMENTAL AUTHORIZATIONS. Set forth on the Disclosure
Schedule is a complete and accurate list of all governmental permits, licenses,
franchises, concessions, zoning variances and other approvals, authorizations
and orders which have been obtained in connection with the conduct of the
business now being conducted by the Company and by the Subsidiary, the failure
of which to so obtain would have a Material Adverse Effect. Such permits,
licenses, franchises, concessions, zoning variances, approvals, authorizations
and orders constitute all
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governmental permits, licenses, franchises, concessions, zoning variances,
approvals, authorizations and orders which are required under all applicable
local, state, federal or foreign laws and regulations for the operation of the
business being conducted by the Company and the Subsidiary as it has been
heretofore conducted. All such governmental permits, licenses, franchises,
concessions, zoning variances, approvals, authorizations and orders are
presently in full force and effect, the Company and the Subsidiary are in
compliance with the requirements thereof (except for minor violations that could
not result in a suspension or forfeiture thereof), no suspension or cancellation
of any of them is, to the knowledge of the Company, threatened, and the filing
of the Certificate of Merger and the consummation of the Merger will not
adversely affect the validity or effectiveness of, and will not require, for
retention thereof after such change of ownership, the consent or approval of any
party to, or any governmental agency having jurisdiction of, any such permit,
license, franchise, concession, zoning variance, approval, authorization or
order. The Company has no knowledge of any fact or circumstance which would
prevent, limit or restrict the Company and the Subsidiary from continuing to
operate the Company's business in the present manner, except for facts or
circumstances that would not, individually or in the aggregate, have a Material
Adverse Effect, and to the Company's knowledge no new material requirements
pertaining to the manner of operating its specific business (not businesses in
general) have been issued or announced by any governmental authority during the
past year, nor are there any disputes pending between the Company (or the
Subsidiary) and any governmental authority about the operations of the Company
or the Subsidiary as presently being conducted.
(m) PATENTS; TRADEMARKS. Except as set forth on the Disclosure
Schedule, the Company owns or has the right to use, free and clear of any
obligation of payment, encumbrance, lien or claim, all patents, patent and
know-how licenses, trademarks, trade names, service marks, brand names and
copyrights, and registrations and applications therefor, used in the conduct of
its business or the use of which is necessary for its business as now being
conducted (the "Intangibles"). Set forth on the Disclosure Schedule is a
complete list of all patents, patent applications, registered trademarks or
service marks or applications for such registration and registered copyrights or
applications for such registration included within the Intangibles, and
licenses, sublicenses or other rights entered into or granted by or to the
Company or the Subsidiary with respect thereto (other than licenses by the
Company entered into in the ordinary course of business or licenses to the
Company of commercially available software pursuant to perpetual licenses
providing for up-front payments not exceeding $5,000 in any individual case). To
its knowledge, the Company owns or possesses adequate rights to use, free and
clear of any obligation of payment, encumbrance, lien or claim, all inventions,
technology, technical know-how, processes, designs, trade secrets, vendor and
customer lists and other confidential information required for or used in its
business. Neither the Company nor the Subsidiary has directly or, to the
Company's knowledge, indirectly provided any trade secrets, know how, or
proprietary data to the U.S. Government. To the extent that the Company or the
Subsidiary has provided to any third party, other than the U.S. Government, any
trade secrets, know how, or proprietary data, such information has been provided
subject to an adequate non-disclosure agreement. No person has made any claim or
demand upon the Company or the Subsidiary pertaining to, and no proceeding is
pending or, to the Company's knowledge, threatened, which challenges (i) the
rights of the Company in respect of any Intangibles or (ii) the rights of the
Company to any confidential information or trade secrets used in the conduct of
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its business. No Intangible owned or to the Company's knowledge used by the
Company or the Subsidiary is subject to any order, ruling, decree, judgment or
stipulation by or with any court, arbitrator or administrative agency which is
materially adverse to the business of the Company or the Subsidiary. Except as
set forth on the Disclosure Schedule, no person has made any claim or demand
alleging that the Company or the Subsidiary has, nor does the Company have any
knowledge that the Company or the Subsidiary has, infringed, or engaged in the
unauthorized use of, any patent, trademark, trade name, service xxxx, brand name
or copyright, or any invention, technology, technical know-how, process, design,
trade secret or other intellectual property of another. The Company has no
knowledge of any infringement or unauthorized use by a third party of any
patent, trademark, trade name, service xxxx, brand name or copyright, or any
invention, technology, technical know-how, process, design, trade secret or
other intellectual property owned by the Company or used by the Company pursuant
to an exclusive license or other exclusive arrangement. Since March 31, 1996,
each employee of the Company and of the Subsidiary has executed an Employee
Patent and Confidential Information Agreement or similar agreement, copies of
which have been made available to KLA-Tencor.
(n) INSURANCE. Except as set forth on the Disclosure Schedule,
neither the Company nor the Subsidiary is in default with respect to any
provisions of any policy of general liability, fire, title or other form of
insurance held by it, except where such default would not, individually or in
the aggregate, have a Material Adverse Effect. The Company and the Subsidiary
are current in the payment of all premiums due or has reserved for such premiums
due on such insurance, and have not failed to give any notice or present any
claim thereunder in due and timely fashion, except for claims that are
immaterial in both the nature of the claim and in the amount of such claim. All
policies of insurance held by the Company and the Subsidiary are listed on the
Disclosure Schedule. To the Company's knowledge, no basis exists which would
jeopardize the coverage under any such insurance. Except as set forth on the
Disclosure Schedule, under the terms of the policy relating thereto, no such
insurance will be automatically terminated or canceled by reason of the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby. The Disclosure Schedule sets forth a list of
all claims pending under the insurance policies listed on the Disclosure
Schedule (including, in their aggregate amount, employee benefit claims other
than health or dental insurance claims and workers' compensation claims in
excess of $5,000 per year).
(o) EMPLOYEE MATTERS AND BENEFIT PLANS.
(i) DEFINITIONS. For purposes of this Section 3.2(o),
the following terms shall have the meanings set forth below:
(A) "AFFILIATE" shall mean any other person
or entity under common control with the Company within the
meaning of Section 414(b), (c), (m) or (o) of the Code and the
regulations issued thereunder (including without limitation
the Subsidiary);
(B) "COBRA" shall mean the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended;
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(C) "COMPANY EMPLOYEE PLAN" shall mean any
plan, program, policy, practice, contract, agreement or other
arrangement providing for compensation, severance, termination
pay, deferred compensation, performance awards, stock or
stock-related awards, fringe benefits or other employee
benefits or remuneration of any kind, whether written or
unwritten or otherwise, funded or unfunded, including without
limitation, each "employee benefit plan," within the meaning
of Section 3(3) of ERISA which is or has been maintained,
contributed to, or required to be contributed to, by the
Company or any Affiliate for the benefit of any Employee, or
with respect to which the Company or any Affiliate has or may
have any liability or obligation;
(D) "DOL" shall mean the United States
Department of Labor;
(E) "EMPLOYEE" shall mean any current or
former or retired employee, officer or director of the Company
or any Affiliate;
(F) "EMPLOYMENT AGREEMENT" shall mean each
management, employment, severance, relocation, repatriation,
expatriation, visas, work permit or other agreement, contract
or understanding currently in force and effect between the
Company or any Affiliate and any Employee;
(G) "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended;
(H) "FMLA" shall mean the Family Medical
Leave Act of 1993, as amended;
(I) "INTERNATIONAL EMPLOYEE PLAN" shall mean
each Company Employee Plan that has been adopted or maintained
by the Company or any Affiliate, whether informally or
formally, or with respect to which the Company or any
Affiliate will or may have any liability, for the benefit of
Employees who perform services outside the United States;
(J) "IRS" shall mean the Internal Revenue
Service;
(K) "MULTIEMPLOYER PLAN" shall mean any
"Pension Plan" (as defined below) which is a "multiemployer
plan," as defined in Section 3(37) of ERISA; and
(L) "PENSION PLAN" shall mean each Company
Employee Plan which is an "employee pension benefit plan,"
within the meaning of Section 3(2) of ERISA.
(ii) SCHEDULE. Schedule 3.2(o)(ii) of the Disclosure
Schedule contains an accurate and complete list of each Company
Employee Plan, International Employee Plan, and each Employment
Agreement. The Company does not have any plan or
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commitment to establish any new Company Employee Plan, International
Employee Plan, or Employment Agreement, to modify any Company Employee
Plan or Employment Agreement (except to the extent required by law or
to conform any such Company Employee Plan or Employment Agreement to
the requirements of any applicable law, in each case as previously
disclosed to KLA-Tencor in writing, or as required by this Agreement),
or to adopt or enter into any Company Employee Plan, International
Employee Plan, or Employment Agreement.
(iii) DOCUMENTS. The Company has provided to
KLA-Tencor correct and complete copies of: (A) all agreements or other
contracts embodying each Company Employee Plan, International Employee
Plan, and each Employment Agreement including (without limitation) all
amendments thereto and all related trust documents, administrative
service agreements, group annuity contracts, group insurance contracts,
and policies pertaining to fiduciary liability insurance covering the
fiduciaries for each Plan; (B) the most recent annual actuarial
valuations, if any, prepared for each Company Employee Plan; (C) the
three most recent annual reports (Form Series 5500 and all schedules
and financial statements attached thereto), if any, required under
ERISA or the Code in connection with each Company Employee Plan; (D) if
the Company Employee Plan is funded, the most recent annual and
periodic accounting of Company Employee Plan assets; (E) the most
recent summary plan description together with the summary(ies) of
material modifications thereto, if any, required under ERISA with
respect to each Company Employee Plan; (F) all IRS determination,
opinion, notification and advisory letters, and all applications and
correspondence to or from the IRS or the DOL with respect to any such
application or letter; (G) all communications material to any Employee
or Employees relating to any Company Employee Plan and any proposed
Company Employee Plans, in each case, relating to any amendments,
terminations, establishments, increases or decreases in benefits,
acceleration of payments or vesting schedules or other events which
would result in any material liability to the Company; (H) all material
correspondence to or from any governmental agency relating to any
Company Employee Plan; (I) copies of all material COBRA forms and
related notices (or such forms and notices as required under comparable
law) specifically addressed to the Company Employee Plan; (J) the three
most recent plan years discrimination tests for each Company Employee
Plan; and (K) all registration statements, annual reports (Form 11-K
and all attachments thereto) and prospectuses prepared in connection
with each Company Employee Plan.
(iv) EMPLOYEE PLAN COMPLIANCE. (A) the Company has
performed in all material respects all obligations required to be
performed by it under, is not in default or violation of, and has no
knowledge of any default or violation by any other party to, each
Company Employee Plan, and each Company Employee Plan has been
established and maintained in all material respects in accordance with
its terms and in material compliance with all applicable laws,
statutes, orders, rules and regulations, including but not limited to
ERISA or the Code; (B) each Company Employee Plan intended to qualify
under Section 401(a) of the Code and each trust intended to qualify
under Section 501(a) of the Code has either received or is the subject
of a favorable determination, opinion, notification or advisory letter
from the IRS with respect to each such Company Employee
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Plan as to its qualified status under the Code, including all
amendments to the Code effected by the Tax Reform Act of 1986 and
subsequent legislation, or has remaining a period of time under
applicable Treasury regulations or IRS pronouncements in which to apply
for such a letter and make any amendments necessary to obtain a
favorable determination as to the qualified status of each such Company
Employee Plan; (C) no "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not
otherwise exempt under Section 4975 of the Code or Section 408 of ERISA
(or any administrative class exemption issued thereunder), has occurred
with respect to any Company Employee Plan; (D) there are no actions,
suits or claims pending, or, to the knowledge of the Company,
threatened (other than routine claims for benefits) against any Company
Employee Plan or against the assets of any Company Employee Plan, and,
to the Company's knowledge, no basis for any such actions, suits or
claims exists; (E) each Company Employee Plan (other than any stock
option plan) can be amended, terminated or otherwise discontinued after
the Effective Time, without material liability to the KLA-Tencor,
Company or any of its Affiliates (other than ordinary administration
expenses and such obligations as may exist under applicable federal,
state and local laws); (F) there are no audits, inquiries or
proceedings pending or, to the knowledge of the Company, threatened by
the IRS or DOL with respect to any Company Employee Plan; and (G)
neither the Company nor any Affiliate is subject to any penalty or Tax
with respect to any Company Employee Plan under Section 502(i) of ERISA
or Sections 4975 through 4980 of the Code.
(v) PENSION PLAN. Neither the Company nor any
Affiliate has ever maintained, established, sponsored, participated in,
or contributed to, any Pension Plan which is subject to Title IV of
ERISA or Section 412 of the Code.
(vi) COLLECTIVELY BARGAINED, MULTIEMPLOYER AND
MULTIPLE EMPLOYER PLANS. At no time has the Company or any Affiliate
contributed to or been obligated to contribute to any Multiemployer
Plan. Neither the Company, nor any Affiliate has at any time ever
maintained, established, sponsored, participated in, or contributed to
any multiple employer plan, or to any plan described in Section 413 of
the Code.
(vii) NO POST-EMPLOYMENT OBLIGATIONS. No Company
Employee Plan provides, or reflects or represents any liability to
provide retiree health to any person for any reason, except as may be
required by COBRA or other applicable statute.
(viii) HEALTH CARE COMPLIANCE. Neither the Company
nor any Affiliate has, in any material respect, violated any of the
health care continuation requirements of COBRA, the requirements of
FMLA, the requirements of the Health Insurance Portability and
Accountability Act of 1996, the requirements of the Women's Health and
Cancer Rights Act of 1998, the requirements of the Newborns' and
Mothers' Health Protection Act of 1996, or any amendment to each such
act, or any similar provisions of state law applicable to its
Employees.
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(ix) EFFECT OF MERGER.
(A) Except as set forth on Schedule 3.2(o)(ix)
of the Disclosure Schedule, the execution of this Agreement
and the consummation of the transactions contemplated hereby
will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under
any Company Employee Plan, Employment Agreement, trust or
loan that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Employee.
(B) Except as set forth on Schedule 3.2(o)(ix)
of the Disclosure Schedule, no payment or benefit which will
or may be made by the Company or its Affiliates with respect
to any Employee will be characterized as a "parachute
payment," within the meaning of Section 280G(b)(2) of the
Code.
(x) EMPLOYMENT MATTERS. The Company and the
Subsidiary: (A) are in compliance in all material respects with all
applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with
respect to Employees; (B) have withheld and reported all amounts
required by law or by agreement to be withheld and reported with
respect to wages, salaries and other payments to Employees; (C) has
received no notice, and has no reason to believe, that it is liable for
any arrears of wages or any Taxes or any penalty for failure to comply
with any of the foregoing; and (D) are not liable for any payment to
any trust or other fund governed by or maintained by or on behalf of
any governmental authority, with respect to unemployment compensation
benefits, social security or other benefits or obligations for
Employees (other than routine payments to be made in the ordinary
course of business). There are no pending or threatened claims or
actions against the Company or the Subsidiary under any worker's
compensation policy or long-term disability policy; and, to the
Company's knowledge, no basis for any such claims or actions which,
individually or in the aggregate, would have a Material Adverse Effect
exists.
(xi) LABOR. No work stoppage or labor strike against
the Company or the Subsidiary is pending or, to the Company's
knowledge, threatened. The Company does not know of any activities or
proceedings of any labor union to organize any Employees. There are no
actions, suits, claims, labor disputes or grievances pending, or, to
the knowledge of the Company, threatened, relating to any labor, safety
or discrimination matters involving any Employee, including, without
limitation, charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would, individually or in
the aggregate, result in any material liability to the Company, and no
basis for any such actions, suits, claims, labor disputes or grievances
exists. Neither the Company nor any of its subsidiaries has engaged in
any unfair labor practices within the meaning of the National Labor
Relations Act. Neither the Company nor the Subsidiary is presently, nor
has either of them been in the past, party to, or bound by, any
collective bargaining agreement or union contract with respect to
Employees and no
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collective bargaining agreement is being negotiated by the Company or
by the Subsidiary.
(xii) INTERNATIONAL EMPLOYEE PLANS. Neither the
Company nor the Subsidiary does now, nor has either of them ever had
the obligation to, maintain, establish, sponsor, participate in, or
contribute to any International Employee Plan.
(xiii) EMPLOYEES; LOANS. Set forth on Schedule
3.2(o)(xiii) of the Disclosure Schedule are accurate and complete lists
of (i) the names, titles and location of all Employees as of the date
hereof, including such Employees' current compensation (including
bonus) arrangements and the last date of any increase in such
Employees' compensation prior to the date hereof, and the names of any
of such Employees on leave of absence or who are collecting disability
payments; and (ii) all loans to Employees, including amount due,
interest, term and collateral as of the date hereof.
(p) AGREEMENTS AND DOCUMENTS. The Company has previously
furnished or made available to KLA-Tencor true, correct and complete copies of
each document that is referred to in this Section 3.2(p), all of which are
listed in the Disclosure Schedule:
(i) each document related to interests in real
property owned, leased or otherwise used or claimed by the Company or
by the Subsidiary;
(ii) (A) except as set forth on the Disclosure
Schedule, each agreement of the Company which involves aggregate future
payments by the Company or the Subsidiary of more than $10,000 (other
than with respect to the purchase of inventory in the ordinary course
of business) in any calendar month or any agreement whose term extends
beyond one year after the date hereof and as to which the Company or
the Subsidiary has ongoing obligations thereunder (other than routine
maintenance agreements); and (B) each agreement containing any covenant
restricting the freedom of the Company or the Subsidiary to compete in
any line of business or with any person;
(iii) all Employment Agreements or similar
compensation agreements of the Company or the Subsidiary which may not
be terminated by the Company without penalty within 45 days after the
Closing;
(iv) all bonus, incentive compensation, deferred
compensation, profit-sharing, stock option, retirement, pension,
severance, indemnification, employee insurance, death benefit or other
fringe benefit plans, agreements or arrangements of the Company or the
Subsidiary (or applying to the Company or the Subsidiary) in effect, or
under which any amounts remain unpaid, on the date hereof or to become
effective after the date hereof;
(v) each agreement or other instrument or arrangement
defining the terms on which any indebtedness of the Company or the
Subsidiary (or a guarantee by the Company or the Subsidiary of
indebtedness) is or may be issued, other than with respect to accounts
payable incurred in the ordinary course of business;
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(vi) the names and addresses of all banks in which
the Company or the Subsidiary has accounts or lines of credit, and with
respect to each such account or line of credit, the account numbers
thereof and the names of all persons authorized to drawn thereon;
(vii) all agency, distributor, sales representative
and similar agreements relating to the business of the Company or the
Subsidiary under which the Company or the Subsidiary has any further
obligation or liability;
(viii) all licenses or similar agreements of the
Company or the Subsidiary with respect to patents, trademarks,
copyrights, or other intellectual property; and
(ix) all non-competition, inventions assignment and
non-disclosure agreements with the current and employees of the Company
or the Subsidiary.
Neither the Company nor the Subsidiary is a party to any oral
contract or agreement which would be required to have been furnished or made
available to KLA-Tencor under this Section 3.2(p) had such contract or agreement
been committed to writing.
There is no default or breach, or claimed or purported or
alleged default or breach on the part of the Company or the Subsidiary, or, to
the knowledge of the Company, on the part of any other party thereto or basis on
which with notice or lapse of time or both, a default or breach would exist, in
any obligation to be performed under any lease, contract, plan, policy or other
instrument or arrangement referred to in this Section 3.2(p), except for such
breaches as would not, individually or in the aggregate, result in a Material
Adverse Effect.
(q) NO CHANGES. Since the date of the Balance Sheet, except
for the execution of this Agreement and the other agreements contemplated
hereby and the taking of actions contemplated hereby, there has not been:
(i) any Material Adverse Effect, other than
continuing operating losses and losses attributable to the abandonment
of leasehold improvements that will result when the Company vacates its
premises in connection with the termination of the lease for its
current space at 00 Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000;
(ii) any damage, destruction or loss (whether or not
covered by insurance) to property which could reasonably be expected to
have a Material Adverse Effect;
(iii) any declaration, setting aside or payment of
any dividend, or other distribution, in respect of the capital stock of
the Company or the Subsidiary, or any direct or indirect redemption,
purchase or other acquisition of such stock;
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(iv) except as set forth on the Disclosure Schedule,
any option, warrant or right to purchase the capital stock of the
Company or of the Subsidiary granted to any person, or any employment
or deferred compensation agreement entered into between the Company or
the Subsidiary and any of their respective officers, directors or
consultants;
(v) any issuance or sale by the Company or by the
Subsidiary of any stock (other than upon the exercise of stock
options), bonds or other corporate securities, or any partial or
complete formation, acquisition, disposition or liquidation of the
Company or of the Subsidiary;
(vi) any labor union trouble (including without
limitation any negotiation, or request for negotiation, with respect to
any union representation or any labor contract) respecting the Company
or the Subsidiary;
(vii) to the Company's knowledge, any statute, rule
or regulation, or any government policy, adopted which pertains
particularly to the Company's business (and not businesses in general)
and which may materially and adversely affect the business or assets of
the Company;
(viii) any mortgage, lien, attachment, pledge,
encumbrance or security interest created on any asset, tangible or
intangible, of the Company or of the Subsidiary, or assumed, either by
the Company or by others, with respect to any such asset, except for
liens for taxes not yet due, and for equipment leases and purchase
money security interests entered into in the ordinary course of
business;
(ix) any indebtedness or other liability or
obligation (whether absolute, accrued, contingent or otherwise)
incurred, or other transaction (except that reflected in this Agreement
or attributable to the obligations of the Company under this Agreement
or the preparation thereof) engaged in, by the Company or by the
Subsidiary, except those in the ordinary course of business;
(x) any obligation or liability discharged or
satisfied by the Company or by the Subsidiary, except items included in
current liabilities shown on the Balance Sheet and current liabilities
incurred since the date of the Balance Sheet in the ordinary course of
business;
(xi) any sale, assignment, lease, transfer or other
disposition of any tangible asset of the Company or of the Subsidiary,
except in the ordinary course of business, or any sale, assignment,
lease, transfer or other disposition of any of its patents, trademarks,
trade names, brand names, copyrights, licenses or other intangible
assets, except pursuant to license agreements entered into in the
ordinary course of business;
(xii) any amendment, termination or waiver of any
material right belonging to the Company or to the Subsidiary;
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(xiii) any increase in the compensation or benefits
payable or to become payable by the Company or by the Subsidiary to any
of its officers or employees except for ordinary increases for
non-management employees in accordance with prior practice;
(xiv) except as set forth on the Disclosure Schedule,
any transaction or contract with a director or officer of the Company
or of the Subsidiary (whether executive officer or division officer) or
a member of any such director's or officer's family, including a loan,
change of employment conditions, change of pension rights or bonus, not
approved in writing by KLA-Tencor; or
(xv) any audit of any Tax.
(r) LITIGATION OR PROCEEDINGS. Neither the Company nor the
Subsidiary is engaged in, or a party to, or to the Company's knowledge
threatened with, any claim or legal action or other proceeding before any court,
any arbitrator of any kind or any administrative agency, or to its knowledge any
governmental investigation, or any suspension or debarment proceeding, nor, to
the knowledge of the Company, does any basis for any claim or legal action or
other proceeding or governmental investigation or any suspension or debarment
proceeding that could, individually or in the aggregate, have a Material Adverse
Effect exist. There are no orders, rulings, decrees, judgments or stipulations
to which the Company or the Subsidiary is a party by or with any court,
arbitrator or administrative agency affecting the Company, its business or its
properties.
(s) COMPLIANCE WITH LAWS. Except in any case that has not
resulted in, and would not, individually or in the aggregate, a Material Adverse
Effect, the Company and the Subsidiary (i) have complied in all respects with
all applicable building, zoning, occupational safety and health, pension, export
control, environmental control and other federal, state, local and foreign laws,
ordinances, regulations, rules, orders and governmental policies applicable to
their plants, structures or equipment or the operation thereof, and any
employment, equal opportunity or similar laws, ordinances, regulations, rules,
orders and governmental policies, and all other laws, ordinances, regulations,
rules, orders and governmental policies applicable to them, their business or
their respective assets; (ii) have not received any complaint from any
governmental authority, and to the Company's knowledge none is threatened,
alleging that the Company or the Subsidiary has violated any such law,
ordinance, regulation, order or policy; (iii) have not received any notice from
any governmental authority of any pending proceedings to take all or any part of
the properties of the Company or of the Subsidiary (whether leased or owned) by
condemnation or right of eminent domain and, to the Company's knowledge, no such
proceeding is threatened; and (iv) are not party to any agreement or instrument,
or subject to any charter or other corporate restriction or judgment, order,
writ or injunction, which has resulted in, or which might reasonably be expected
to result in, a Material Adverse Effect.
(t) CORPORATE PRACTICES. Since March 31, 1996, neither the
Company nor the Subsidiary has ever, directly or indirectly: (i) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees, or to foreign or
domestic political parties or campaigns, from corporate funds; (iii) violated
any
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provisions of the Foreign Corrupt Practices Act of 1977; (iv) established or
maintained any unlawful or unrecorded fund of monies or other assets; (v) made
any false or fictitious entry on its books or records; (vi) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any
person; (vii) made any bribe, kickback, finder's fee, commission, or other
payment or compensation of a similar or comparable nature, whether lawful or
not, to any person or entity, private or public, regardless of form, whether in
money, property or services, to obtain favorable treatment in securing business
or to obtain special concessions, or to pay for favorable treatment for business
secured or for special concessions already obtained; (viii) submitted, or caused
to be submitted, any false claims against the U.S. Government or (ix) made, or
caused to be made, any false statements to the U.S. Government.
(u) BROKERS AND FINDERS. Neither the Company nor the
Subsidiary has employed any broker, agent or finder or incurred any liability on
behalf of the Company or the Subsidiary for any brokerage fees, agents'
commissions or finders' fees in connection with the transactions contemplated
hereby.
(v) POWERS OF ATTORNEY. Neither the Company nor the Subsidiary
has any powers of attorney or similar authorizations outstanding, other than
those granted in the ordinary course of business, all of which are listed on the
Disclosure Schedule.
(w) PRODUCT WARRANTIES. Copies of the terms and conditions of
sale with respect to each product sold by the Company or the Subsidiary have
been made available to KLA-Tencor. Except as set forth on the Disclosure
Schedule, neither the Company nor the Subsidiary will have any contractual
obligation with regard to any warranty claims after the first anniversary of the
date of any such warranty which is currently in effect. To the Company's
knowledge, the reserve established on Balance Sheet for the satisfaction of
claims which may be made under product warranties in effect as of the Effective
Date is adequate in amount to satisfy all product warranty claims which may be
made with respect to any products sold by the Company or by the Subsidiary prior
to the Effective Date.
(x) BOARD APPROVAL. The Board of Directors of the Company has,
as of August 16, 2001, unanimously (i) determined that the Merger is fair to,
and in the best interests of the Company and its Stockholders, (ii) approved and
deemed advisable, subject to Stockholder approval, this Agreement and the
transactions contemplated hereby and (iii) subject to the provisions of Section
4.6(b), determined to recommend that the Stockholders approve and adopt this
Agreement and approve the Merger.
(y) RESTRICTION ON BUSINESS ACTIVITIES. There is no agreement,
commitment, judgment, injunction, order or decree binding upon the Company or
the Subsidiary or to which the Company or the Subsidiary is a party which has or
could reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of the Company, any acquisition of property by
the Company or the conduct of business by the Company as currently conducted.
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(z) COMPLETE COPIES OF MATERIALS. The Company has delivered or
made available true and complete copies of each document (or summaries of same)
that has been requested by KLA-Tencor or its counsel.
(aa) STATEMENTS TRUE AND CORRECT. This Agreement (including
the Exhibits and any documents delivered pursuant hereto) does not contain any
untrue statement of a material fact or omit any material fact required to be
stated herein or therein or necessary to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
Section 3.3. REPRESENTATIONS AND WARRANTIES OF KLA-TENCOR AND MERGER
SUB. KLA-Tencor and Merger Sub represent and warrant to the Company that:
(a) ORGANIZATION AND QUALIFICATION. KLA-Tencor is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate and other power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted except where the failure to do so would not,
individually or in the aggregate, have a material adverse effect on the
financial condition, assets (including intangible assets), liabilities, earnings
or business of KLA-Tencor and its subsidiaries, taken together as a whole.
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to carry on its business at it is now being
conducted. Each of KLA-Tencor and Merger Sub is duly qualified to do business as
a foreign corporation, and is in good standing, in each jurisdiction in which
the character of the properties owned, operated or leased by the respective
corporation or the nature of the respective corporation's activities is such
that such qualification is required by applicable law, except where the failure
to be so duly qualified and in good standing that would not, individually or in
the aggregate, have a material adverse effect on the financial condition, assets
(including intangible assets), liabilities, earnings or business of KLA-Tencor
and its subsidiaries, taken together as a whole.
(b) AUTHORITY. Each of KLA-Tencor and Merger Sub has the
corporate power and authority to execute, deliver and perform this Agreement, to
execute, deliver and file the Certificate of Merger and to consummate the
transactions contemplated hereby and thereby. This Agreement has been duly and
validly authorized by all necessary corporate action on the part of KLA-Tencor
and Merger Sub. This Agreement has been duly and validly executed and delivered
by KLA-Tencor and Merger Sub and constitutes the valid and legally binding
obligation of KLA-Tencor and Merger Sub, enforceable against them in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
Neither the execution, delivery and performance of this Agreement, the filing of
the Certificate of Merger nor the consummation of the transactions contemplated
hereby will (i) conflict with or result in a violation, breach or termination or
acceleration of, or default under (or would result in a violation, breach,
termination, acceleration or default with the giving of notice or passage of
time or both) any of the terms, conditions or provisions of the respective
charter documents or Bylaws of KLA-Tencor or Merger Sub, as amended, or of any
note, bond, mortgage, indenture, license, agreement or other instrument or
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obligation to which KLA-Tencor or Merger Sub is a party, or by which KLA-Tencor
or Merger Sub or any of their properties or assets may be bound or affected,
except where such conflict, violation, breach, termination, acceleration or
default would not, individually or in the aggregate, have a material adverse
effect on the financial condition, assets, liabilities, earnings, business or
prospects of KLA-Tencor and its subsidiaries, taken together as a whole, other
than any effect resulting from conditions generally affecting KLA-Tencor's
industry or the economy as a whole, (ii) result in the violation of any order,
writ, injunction, decree, statute, rule or regulation applicable to KLA-Tencor
or Merger Sub, or their properties or assets or (iii) result in the imposition
of any lien, encumbrance, charge or claim upon any of KLA-Tencor's assets. No
consent or approval by, or notification to or filing with, any court,
governmental authority or third party is required in connection with the
execution, delivery and performance of this Agreement by KLA-Tencor or Merger
Sub or the consummation of the transactions contemplated hereby, except for the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware.
(c) BROKERS AND FINDERS. Neither KLA-Tencor nor Merger Sub has
employed any broker, agent or finder or incurred any liability for any brokerage
fees, agents' commissions or finders' fees in connection with the transactions
contemplated hereby.
(d) PROXY MATERIALS. None of the information supplied or to be
supplied by KLA-Tencor and/or Merger Sub for inclusion in or incorporation by
reference into the Proxy Statement (as defined in Section 4.4(a)) will, on the
date the Proxy Statement is first mailed to the Stockholders or at the time of
the Company's meeting of Stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(e) FINANCING. KLA-Tencor has sufficient funds on hand or
available to it under bank lines of credit to fully satisfy all of KLA-Tencor's
and Merger Sub's obligations under this Agreement, including, without
limitation, the obligation to pay the Purchase Price in cash on the Effective
Date and to pay all fees and expenses incurred by them in connection with the
Merger.
(f) ACTIONS AND PROCEEDINGS. There are no actions, suits or
claims or legal, administrative or arbitration proceedings pending or, to the
knowledge of KLA-Tencor, threatened against KLA-Tencor and/or Merger Sub that
individually or in the aggregate could reasonably be expected to interfere with
the ability of KLA-Tencor and/or Merger Sub to consummate the transactions
contemplated hereby.
ARTICLE 4
ADDITIONAL COVENANTS AND AGREEMENTS
Section 4.1. ACTS OF THE COMPANY. The Company agrees that, from the
date hereof to the Closing, except to the extent that KLA-Tencor shall otherwise
give its written consent, which
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consent shall not be unreasonably withheld if consistent with the planned
cessation of the Company's business, or as described below:
(a) BUSINESS IN ORDINARY COURSE. The Company will, and will
cause the Subsidiary to, operate its business only in the ordinary course and
consistent with past practice, and, to the extent of and consistent with such
operation, except as otherwise provided herein, it will use its commercially
reasonable efforts to preserve intact its present business organization and,
except as otherwise provided herein, to preserve its relationships with
employees and persons having business dealings with it.
(b) MAINTAIN PROPERTIES. The Company will, and will cause the
Subsidiary to, maintain all of its properties in customary repair, order and
condition, reasonable wear and use and damage by unavoidable casualty excepted,
and take all steps reasonably necessary to maintain its Intangibles. The Company
will not, and will cause the Subsidiary not to, sell, lease or exchange, or
enter into any agreement to sell, lease or exchange, all or any portion of its
assets other than respect to sales of inventory or licenses of software in the
ordinary course of business.
(c) MAINTAIN MANAGEMENT. The Company will not, and will cause
the Subsidiary not to, initiate or cause any changes in the persons serving as
management of the Company other than as specifically contemplated by Section
4.1(d), below.
(d) COMPENSATION. The Company will not, and will cause the
Subsidiary not to, (i) grant any increase in compensation or any bonus to any
employee or member of management, or (ii) enter into or amend or alter any
bonus, incentive compensation, deferred compensation, profit sharing, stock
option, retirement, severance, indemnification, pension, insurance, death
benefit or other fringe benefit plan, agreement or arrangement, or any
employment or consulting agreement. Notwithstanding the foregoing, the Company
may, prior to the Closing, pay the amounts set forth to the Company's employees
as set forth in Schedule 4.1(d) hereto in satisfaction of (x) all of the
obligations the Company would have to such persons as if such persons were
terminated contemporaneously with or following the change in control resulting
from the Merger and (y) all other obligations to such employees in accordance
with the Company's existing severance policy as of the date of this Agreement or
under applicable laws (all such payments, collectively, the "Required Severance
Payments").
(e) NO RELATED PARTY TRANSACTIONS. Other than in the ordinary
course of business, the Company will not, and will cause the Subsidiary not to,
enter into any transaction or contract with, or (except as expressly
contemplated by this Agreement) make any other payment or commitment to, any of
its security holders, officers, management, directors or employees or their
family members, including the lending of any monies.
(f) INDEBTEDNESS. The Company will not, and will cause the
Subsidiary not to, create, incur, assume, guarantee, or otherwise become liable
with respect to any indebtedness other than in the ordinary course of business.
(g) MAINTAIN BOOKS. The Company will, and will cause the
Subsidiary to, maintain its books, accounts and records in its usual, regular
and ordinary manner.
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(h) NO AMENDMENTS. The Company will not amend its Certificate
of Incorporation or Bylaws and will cause the Subsidiary not to amend its
charter or similar governing instruments; and the Company will, and will cause
the Subsidiary to, maintain its corporate existence and powers and, except as
set forth on the Disclosure Schedule, its qualifications as a foreign
corporation in each jurisdiction where it is so qualified.
(i) PAY TAXES. The Company will, and will cause the
Subsidiary to, file all Tax Returns and pay all Taxes as they become due.
(j) NO DISPOSITION OR ENCUMBRANCES. The Company will refrain
from, and will cause the Subsidiary to refrain from, disposing of or encumbering
any of its properties and assets other than in the ordinary course of business.
(k) INSURANCE. The Company will, and will cause the Subsidiary
to, maintain insurance upon its properties and insurance in respect of the kinds
of risks currently insured against, in accordance with its current practice.
(l) NO MERGERS. Subject to the provisions of Section 4.6(b),
the Company will not merge or consolidate with any other corporation, or acquire
any stock, or, except in the ordinary course of business, any business, property
or assets of any other person, firm, association, corporation or other business
organization.
(m) NO SECURITIES ISSUANCE. The Company will not, and will
cause the Subsidiary not to, issue any shares of capital stock except pursuant
to Company Options and Warrants outstanding as of the date hereof, or enter into
any commitment or agreement, or grant any option, warrant or right, calling for
the issuance of any shares of stock, and will not create or issue any securities
convertible into any such shares or convertible into securities in turn so
convertible, or enter into any commitment or agreement, or grant any option,
warrant or right, calling for the issuance of any such convertible securities or
split, combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock.
(n) DIVIDENDS; REPURCHASES. The Company will not declare any
dividends on or in respect of shares of capital stock; nor will it redeem,
repurchase or otherwise acquire any shares of stock.
(o) CONTRACTS. Except in the ordinary course of business or as
set forth on the Disclosure Schedule, the Company will not, and will cause the
Subsidiary not to, enter into, assume or cancel any material contract,
agreement, obligation, lease, license or commitment, and it will not do any act
or omit to do any act which would cause a material breach of or default under
any material contract, commitment or obligation of the Company.
(p) ADVICE OF CHANGE. The Company will promptly advise
KLA-Tencor in writing of the occurrence of any Material Adverse Effect, other
than continuing operating losses or the termination of revenue.
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(q) DUE COMPLIANCE. The Company will, and will cause the
Subsidiary to, duly comply in all material respects with all laws, rules and
regulations applicable to it and to the conduct of its business.
(r) NO WAIVERS OF RIGHTS. The Company will not, and will
cause the Subsidiary not to, amend, terminate or waive any material right.
(s) CAPITAL COMMITMENTS. The Company will not, and will
cause the Subsidiary not to make or commit to make any capital expenditure,
capital addition or capital improvement of more than $10,000 individually, or in
the aggregate.
(t) NO BREACHES. The Company will not, and will cause the
Subsidiary not to, take any action that would constitute or result in a breach
of any representation or warranty herein, either as of the date made or on the
Effective Date.
(u) CONFIDENTIAL INFORMATION. The Company shall not, and shall
cause the Subsidiary not to, except as required by law or by agreements existing
on the date hereof, disclose to any third person, and shall preserve and
maintain and prevent the disclosure or publication of, any proprietary
information or trade secrets belonging to the Company or the Subsidiary, except
in the ordinary course of business.
(v) OBJECTIONS TO THE MERGER. The Company will promptly advise
KLA-Tencor of any written objection to the Merger from any of its security
holders.
(w) MATERIAL TAX ELECTION. The Company will not, and will
cause the Subsidiary not to, make any material Tax election or settle or
compromise any material federal, state, local or foreign Tax liability or agree
to an extension of a statute of limitations except to the extent the amount of
any such settlement has been reserved for on the Balance Sheet.
(x) DISCHARGE OF LIABILITIES. The Company will not, and will
cause the Subsidiary not to, pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected or reserved against on the Balance
Sheet and liabilities arising after the date of the Balance Sheet in the
ordinary course of business.
(y) REVALUATION OF ASSETS. The Company will not undertake any
revaluation of 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 in accordance with GAAP consistently applied.
(z) ACCOUNTING CHANGES. The Company will not take any action
to change accounting policies or procedures (including, without limitation,
procedures with respect to revenue recognition, payments of accounts payable and
collection of accounts receivable),
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except as required by concurrent changes in GAAP or federal securities law
applicable to companies generally.
(aa) INTELLECTUAL PROPERTY. The Company will not, and will
cause the Subsidiary not to, license any of its Intangibles to any third party,
other than in the ordinary course of business.
(bb) EXPENSE ACCOUNT. The Company will not, and will cause the
Subsidiary not to, reimburse or otherwise pay its directors, officers or
employees for any expenses or other costs incurred by such individuals and
entities in the course of providing service to the Company (i) in excess of
$10,000 individually or $20,000 in the aggregate from the date hereof through
October 31, 2001, and (ii) in excess of $10,000 individually or $10,000 in the
aggregate in each calendar month beginning October 31, 2001 through the Closing
if the Closing does not occur by October 31, 2001 due to SEC review of the Proxy
Statement, except reasonable and customary expenses (A) for travel as may be
contemplated by Section 4.8 of this Agreement, (B) directly related to
attendance at Company Board of Director meetings called for purposes directly
related to the transactions contemplated by this Agreement, (C) incurred by
Company employees providing field service (which costs will be billed to clients
in receipt of any such service), (D) incurred by the Company in the course of
providing service in accordance with the terms of its warranty obligations to
the customers listed on Section 3.2(w) of the Disclosure Schedule , and (E) in
connection with Diskcon and XXXXX of up to $5,000 per show.
Except as specifically provided in this Section 4.1, nothing contained
in this Agreement shall give KLA-Tencor, directly or indirectly, the right to
control or direct the Company's operations prior to the Effective Date. Prior to
the Effective Date, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its
operations.
Section 4.2. SATISFACTION OF CONDITIONS PRECEDENT. The parties hereby
agree, subject to the terms and conditions provided in this Agreement, to use
their reasonable efforts to take, or cause to be taken, all action, and to do,
or cause to be done, all things necessary, appropriate or desirable under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement, including the satisfaction of the conditions precedent contained
in Article 5 hereof. Each party will use their respective reasonable efforts to
obtain consents of all third-parties and governmental authorities necessary,
appropriate or desirable for the consummation of the transactions contemplated
by this Agreement, including without limitation the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware in accordance with
the DGCL.
Section 4.3. ACCESS TO RECORDS AND PROPERTIES. KLA-Tencor may, prior to
the Closing, through its employees, agents and representatives, make or cause to
be made such investigation as it deems necessary or advisable of the assets and
business of the Company, but such investigation shall not affect the
representations and warranties under Section 3.2 hereof. The Company agrees to
permit KLA-Tencor and its employees, agents and representatives to have full
access on reasonable notice and during regular business hours to its properties,
books, records, contracts and other documents, to furnish to KLA-Tencor such
financial and operating
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data and other information with respect to its business and properties as
KLA-Tencor shall from time to time reasonably request, and to authorize the
Company's employees, agents and representatives to discuss the Company's affairs
with employees, agents and representatives of KLA-Tencor. Without limiting the
generality of the foregoing, the Company agrees to use its best efforts to cause
Xxxxxx Xxxxxxxx LLP and Xxxxx Xxxxxxxx Xxxxx & Xxxxxxxxxx, LLP, to permit
KLA-Tencor and its employees, agents and representatives to have full access on
reasonable notice and during regular business hours to their work papers with
respect to audits of the Company's financial statements.
Section 4.4. SEC FILING; DISTRIBUTION OF PROXY STATEMENT; WARRANT
NOTICE; OPTION NOTICE; STOCKHOLDER APPROVAL; AMENDMENTS.
(a) SEC FILING. As promptly as practicable after the execution
of this Agreement, the Company will prepare and file with the SEC a proxy
statement relating to the terms of the Merger and this Agreement, the Company
and its business operations, and the material facts concerning all payments
which are "Parachute Payments" as defined in Section 280G(b)(2) of the Code
which require stockholder approval, in form and substance reasonably
satisfactory to KLA-Tencor and its counsel, to satisfy all requirements of
applicable state and federal securities laws, the rules of the American Stock
Exchange and the DGCL (the "Proxy Statement"). The Company will respond to any
comments of the SEC and will cause the Proxy Statement to be mailed to its
Stockholders at the earliest practicable time. The Company will notify
KLA-Tencor promptly upon the receipt of any comments from the SEC or its staff
in connection with the Proxy Statement and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or for additional
information and will supply KLA-Tencor with copies of all correspondence between
the Company or any of its representatives, on the one hand, and the SEC, or its
staff on the other hand, with respect to the Proxy Statement.
(b) DISTRIBUTION. The Company shall take all action reasonably
necessary in accordance with applicable law to convene a meeting of the
Stockholders to be held at the earliest practicable time after the date of this
Agreement for the purpose of approving and adopting this Agreement (including
the transactions contemplated hereby). Without limiting the generality of the
foregoing, as promptly as practicable after the execution of this Agreement, (i)
the Company will submit to the Stockholders the Proxy Statement; (ii) the
Company will submit to the holders of the Redeemable Warrants the notice (the
"Warrant Notice") required by Section 15 of that certain Warrant Agreement dated
October 23, 1996 between the Company and American Securities Transfer & Trust,
Inc. (the "Warrant Agreement"); (iii) the Company will submit to the holders of
the Representative's Warrants the notice (the "Representative's Notice")
required by Section F of that certain Warrant Agreement dated October 23, 1996
between the Company and Xxxxxxxxx Securities, Inc. (the "Representative's
Agreement"); and (iv) the Company will submit to the holders of all Company
Options the notice (the "Option Notice") required by Section (f) of the standard
form of option grant agreement issued pursuant to the Company's 1996 Stock
Option Plan and the Company's 1996 Formula Stock Option Plan stating that all
Company Options not exercised within 30 days of receipt of the Option Notice
will be terminated upon the Closing of the Merger on the Effective Date. Neither
the Proxy Statement, when mailed or at the time of the meeting of Stockholders
to approve the Merger, nor the Warrant Notice, when mailed to the holders of the
Redeemable Warrants, nor the
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Representative's Notice, when mailed to the holders of the Representative's
Warrant, nor the Option Notice, when mailed to the holders of the Company
Options, shall contain any 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, at the time in light of the circumstances under which they
were made, not misleading; provided, however, that the Company shall not be
deemed to be deemed to have breached this Section 4.4(b) to with respect to any
information provided, or required to be provided, by or on behalf of KLA-Tencor.
The Company shall submit the Proxy Statement to the Stockholders, and its Board
of Directors shall recommend to the Stockholders the adoption of this Agreement
and the approval of the Merger and such other matters referred to above;
provided, however, that the Company's Board of Directors may, at any time prior
to the Effective Time, withdraw, modify or change such recommendation in
accordance with the provisions of Section 4.6(b). The Company's obligation to
call, give notice of, convene and hold a meeting of the Stockholders in
accordance with this Section 4.4 shall not be limited or otherwise affected by
the commencement, disclosures, announcement or submission by the Company of any
Acquisition Proposal (as defined in Section 4.6(a) below), or by any withdrawal,
amendment or modification of the recommendation by the Company's Board of
Directors with pursuant to Section 4.6(b).
(c) STOCKHOLDER APPROVAL. The Company shall, at such meeting
of the Stockholders, present this Agreement and the other matters for adoption
by its Stockholders. Subject to the provisions of Section 4.6(b), the Company
shall use all reasonable efforts (including without limitation, if requested by
KLA-Tencor, promptly engaging a professional proxy solicitor reasonably
acceptable to KLA-Tencor) to obtain all votes and approvals of the Stockholders
necessary for the approval and adoption of this Agreement and the Merger under
the DGCL, the applicable rules of the American Stock Exchange and the Company's
Certificate of Incorporation and Bylaws.
(d) AMENDMENTS AND SUPPLEMENTS. If, at any time prior to the
Effective Date, any event or circumstance relating to the Merger, the Company,
or the Company's officers or directors should be discovered by the Company which
should be set forth in an amendment or a supplement to the Proxy Statement, the
Company shall promptly inform KLA-Tencor, and the Company shall, in consultation
with its independent legal counsel, promptly amend or supplement the Proxy
Statement. The Company shall deliver a copy of the amendment or supplement, as
the case may be, to KLA-Tencor prior to its filing with the SEC. The form and
substance of any such amendment or supplement shall be subject to the prior
approval of KLA-Tencor, which approval shall not be unreasonably withheld or
delayed.
Section 4.5. CERTAIN EMPLOYEE MATTERS.
(a) TERMINATION OF EMPLOYEES AND CONSULTANTS. As of the
Closing, Company shall have taken all steps necessary to terminate effective
upon the Closing all employees and consultants of Company or of the Subsidiary
(to the extent not earlier terminated) in accordance with all applicable laws.
(b) NOTICES TO EMPLOYEES. The Company shall be responsible and
assume all liability for all notices, benefits or payments due to any employees
or consultants, and all notices,
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payments, fines or assessments due to any government authority pursuant to any
applicable foreign, federal, state or local law, common law, statute, rule or
regulations with respect to the employment, discharge or layoff of employees or
consultants by the Company or by the Subsidiary, including but not limited to
the Worker Adjustment and Retraining Notification Act, the Code, COBRA and any
rules and regulations thereunder; provided, however, that KLA-Tencor shall
provide or cause its insurance carrier to provide COBRA continuation coverage to
all Company employees and their eligible dependents and any other individual who
becomes an M&A qualified beneficiary (as defined by Treasury Regulation Section
54.4980B-9, Q&A-4) as a result of the transactions contemplated by this
Agreement). The Company shall provide prior to the Closing all information
necessary or appropriate for KLA-Tencor to offer continuation coverage to such
employees.
(c) TERMINATION OF 401(k) AND SEVERANCE PLANS. Effective as of
the day immediately preceding the Effective Date, the Company and its
Affiliates, as applicable, shall each terminate any and all Company Employee
Plans, including without limitation, any and all plans intended to include a
Code Section 401(k) arrangement (unless KLA-Tencor has previously provided
written notice to the Company that such 401(k) plans shall not be terminated).
Unless KLA-Tencor provides such written notice to the Company, no later than
three business days prior to the Effective Date, the Company shall provide
KLA-Tencor with evidence that such Company Employee Plans will be terminated
(effective as of the day immediately preceding the Effective Date) pursuant to
resolutions of the Company's Board of Directors. The form and substance of such
resolutions shall be subject to review and approval of KLA-Tencor. The Company
also shall take such other actions in furtherance of terminating each such
Company Employee Plan as KLA-Tencor may reasonably require.
(d) PAYMENT OF SEVERANCE PAYMENTS. Immediately prior to the
Closing, the Company shall pay all of the Required Severance Payments (set forth
on Schedule 4.1(d) hereto); provided, however, that to the extent the Company
will have a negative Net Cash Position after the payment of such Required
Severance Payments, then the Company may defer the payment of an amount equal to
the Permissible Shortfall (as defined in Section 5.1(r)) until after Closing and
promptly, but in any event within seven calendar days after the Closing
KLA-Tencor shall pay, or cause the Surviving Corporation to pay, any amount
still owed under such Required Severance Payments to each respective recipient
who has submitted to the Company a full settlement and release of any and all
claims against the Company and KLA-Tencor (but in no event shall the aggregate
amount paid by KLA-Tencor, or the Surviving Corporation, as the case may be,
exceed the Permissible Shortfall amount). Each scheduled recipient of a Required
Severance Payment who shall not provide a full settlement and release of any and
all claims against the Company and KLA-Tencor shall receive payments according
to the timing schedule which would otherwise apply under the terms of the
applicable original agreement providing for such severance.
Section 4.6 NO SOLICITATIONS.
(a) NO SOLICITATION OF TRANSACTIONS. Subject to Section
4.6(b), the Company agrees that: neither it nor any of its directors, officers
or other representatives shall, directly or indirectly: (i) initiate, solicit,
encourage or otherwise facilitate (including, except as otherwise
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provided in Section 4.6(b), by way of furnishing information) any inquiries or
the making of any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving, or any purchase or
sale of all or any significant portion of the assets or any equity securities
of, the Company (any such proposal or offer other than the Merger contemplated
by this Agreement being hereinafter referred to as an "Acquisition Proposal");
(ii) have any discussion with or provide any confidential information or data to
any person or entity relating to an Acquisition Proposal or engage in any
negotiations concerning an Acquisition Proposal, or otherwise facilitate any
effort or attempt to make or implement an Acquisition Proposal or accept an
Acquisition Proposal; (iii) endorse or recommend any Acquisition Proposal; or
(iv) enter into any letter of intent or similar document or any contract,
agreement or commitment contemplating or otherwise relating to any Acquisition
Proposal; provided, however, that after receipt of an unsolicited, written, bona
fide Acquisition Proposal that the Board of Directors of the Company reasonably
concludes may constitute a Superior Proposal (as defined below), the Company may
submit to the party making such Acquisition Proposal a written list of
questions, the sole purpose of which is to elicit clarifications as to the
material terms of the Acquisition Proposal so as to enable the Board of
Directors of the Company to make a determination whether such Acquisition
Proposal is in fact a Superior Proposal (it being agreed that any correspondence
with such party shall be limited to questions and such questions shall be
limited to the purpose of clarifying the material terms of such Acquisition
Proposal and shall not solicit or encourage any new Acquisition Proposal or any
change to the Acquisition Proposal, and it being further agreed that the Company
shall provide KLA-Tencor with a copy of any correspondence delivered pursuant to
this Section 4.6(a) simultaneously with the delivery of such correspondence to
any third party). The Company further agrees that it will immediately cease and
cause to be terminated (as of the date of this Agreement) any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any Acquisition Proposal. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the preceding two
sentences by (x) any investment banker, attorney or other advisor or
representative of the Company in accordance with the instructions of the Company
or with the knowledge of the Company, or (y) any officer or director of the
Company in accordance with the instructions of the Company or with the knowledge
of the Company shall be deemed to be a breach of this Section 4.6(a) by the
Company.
In addition to the obligations of the Company set forth above in this
Section 4.6(a), the Company as promptly as practicable shall advise KLA-Tencor
orally and in writing of any inquiry, Acquisition Proposal or request for
non-public information which the Company reasonably believes would lead to an
Acquisition Proposal, the material terms and conditions of such inquiry,
Acquisition Proposal or request, and the identity of the person or group making
any such inquiry, Acquisition Proposal or request. The Company will keep
KLA-Tencor informed as promptly as practicable in all material respects of the
status and details (including material amendments or proposed material
amendments) of any such inquiry, Acquisition Proposal or request.
(b) EXCEPTIONS. Nothing contained in Section 4.6(a) shall
prevent the Company or the Company's Board of Directors from (i) complying with
the requirements of Rule 14e-2(a) under the Exchange Act with respect to an
Acquisition Proposal (to the extent applicable) and any other applicable
statutory requirement; (ii) engaging in any discussions or
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negotiations with, or providing any information to, any person or entity in
response to an unsolicited bona fide written Acquisition Proposal by any such
person or entity; or (iii) recommending such an unsolicited bona fide written
Acquisition Proposal to the Company's Stockholders if and only to the extent
that (A) such Board of Directors concludes in good faith (after consultation
with its independent legal counsel and financial advisers) that such Acquisition
Proposal is reasonably capable of being completed, taking into account all
legal, financial, regulatory and other relevant aspects of the Acquisition
Proposal and the person or entity making the Acquisition Proposal, and would, if
consummated, result in a transaction more favorable to the Company's
Stockholders than the transaction contemplated by this Agreement (any such more
favorable Acquisition Proposal being referred to in this Agreement as a
"Superior Proposal") (provided, however, that no such Acquisition Proposal shall
be deemed to be a Superior Proposal if any financing required to consummate the
transaction contemplated by such Acquisition Proposal is not committed), (B)
such Board of Directors determines in good faith after consultation with its
independent legal counsel that such action is consistent with the satisfaction
of its fiduciary duties under applicable law, (C) prior to providing any
information or data to any person or entity in connection with a Superior
Proposal, such Board of Directors receives from such person or entity an
executed confidentiality agreement, (D) prior to providing any information or
data to any person or entity or entering into discussions or negotiations with
any person or entity, such Board of Directors notifies KLA-Tencor promptly of
such inquiries, proposals or offers received by, any such information requested
from, or any such discussions or negotiations sought to be initiated or
continued with, the Company or any of its directors, officers or other
representatives indicating, in connection with such notice, the name of such
person or entity and the material terms and conditions of any proposals or
offers (the "Notice of Superior Proposal") and (E) KLA-Tencor shall not have,
within five business days of KLA-Tencor's receipt of the Notice of Superior
Proposal, made an offer that the Company's Board of Directors by a majority vote
determines in its good faith judgment (after consultation with a financial
adviser) to be at least as favorable to the Company's Stockholders as such
Superior Proposal (it being agreed that the Company Board shall convene a
meeting to consider any such offer by KLA-Tencor promptly following the receipt
thereof).
Section 4.7. INDEMNIFICATION.
(a) Subject to the occurrence of the Closing, KLA-Tencor
agrees that all rights to indemnification or exculpation now existing in favor
of each present and former director and officer of the Company (the "Indemnified
Parties") as provided in the Company's Certificate of Incorporation or By-Laws
as in effect as of the date hereof shall survive and remain in full force and
effect for a period of three years after the Closing.
(b) KLA-Tencor understands and agrees that, prior to the
Effective Time, the Company intends to obtain a "tail" insurance policy that
provides coverage substantially similar to the coverage provided under the
Company's directors and officers insurance policy in effect on the date of this
Agreement for the individuals who are directors and officers of the Company on
the date of this Agreement for events occurring prior to the Effective Time;
provided, however, that KLA-Tencor shall be provided with at least five business
days to review the terms (including without limitation, applicable policy
thresholds and deductibles) of any such insurance policy prior to the time the
Company incurs any obligation with respect thereto; and
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provided, further, that the Company shall not pay more than $60,000 to purchase
such policy without KLA-Tencor's prior written consent.
Section 4.8. KOBE STEEL. As soon as practicable after the execution of
this Agreement, the Company shall request a meeting with representatives of Kobe
Steel USA Holdings, Inc. ("Kobe Steel") (which meeting shall be coordinated with
and include Xxxxxxx X. Xxxx of KLA-Tencor, or another representative appointed
by KLA-Tencor) to discuss the transactions contemplated by this Agreement. The
Company shall use reasonable efforts to persuade Kobe Steel to become a party
to, and to be bound by, a voting agreement with respect to the shares held by
Kobe Steel.
Section 4.9. PATENT LIEN. As soon as practicable after the execution of
this Agreement, the Company shall use its best efforts to cause State Street
Bank and Trust Company to release the security interest held by it, and any
other claims made by it, with respect to the Company's United States patent
number 5602401.
ARTICLE 5
CONDITIONS TO OBLIGATIONS OF
KLA-TENCOR, MERGER SUB AND THE COMPANY
Section 5.1. CONDITIONS TO OBLIGATIONS OF KLA-TENCOR AND MERGER SUB.
The obligations of KLA-Tencor and Merger Sub to consummate the transactions
contemplated hereby are subject to the satisfaction, on or before the Closing,
of the following conditions (unless waived in writing by KLA-Tencor and Merger
Sub in the manner provided in Section 6.2 hereof):
(a) REPRESENTATIONS, WARRANTIES AND PERFORMANCE OF THE
COMPANY. The representations and warranties of the Company set forth in Section
3.2 hereof that are qualified as to materiality shall be accurate on and as of
the date hereof, and on and as of the Effective Date as though made on and as of
the Effective Date except for those that speak as of a particular date which
shall be accurate as of such date, except as set forth on the Disclosure
Schedule, and the representations and warranties of the Company set forth in
Section 3.2 hereof that are not so qualified shall be accurate in all material
respects on and as of the Effective Date as though made on and as of the
Effective Date except for those that speak as of a particular date which shall
be accurate in all material respects as of such date, except as set forth on the
Disclosure Schedule; and the Company shall have performed in all material
respects all obligations and complied with in all material respects all
covenants required to be performed or to be complied with by it under this
Agreement prior to the Closing. Since the date of this Agreement, there shall
not have occurred any Material Adverse Effect, other than continuing operating
losses and losses attributable to the abandonment of leasehold improvements that
will result when the Company vacates its premises in connection with the
termination of the lease for its current space at 00 Xxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000.
(b) AUTHORIZATION. All action necessary to authorize the
execution, delivery and performance hereof by the Company and the consummation
of the transactions contemplated
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hereby, including the approval by the Stockholders of the execution, delivery
and performance of this Agreement in accordance with the DGCL, shall have been
duly and validly taken by the Company. The Company shall have furnished
KLA-Tencor with a copy of all resolutions adopted by the Board of Directors and
Stockholders of the Company in connection with such action, certified by the
Secretary or Assistant Secretary of the Company, together with copies of such
other instruments and documents as KLA-Tencor shall have reasonably requested.
(c) GOVERNMENTAL CONSENTS. Any governmental authority having
jurisdiction over the Company, KLA-Tencor or Merger Sub, to the extent that its
consent or approval is required by applicable law or regulation for the
performance of this Agreement or the consummation of the transactions
contemplated hereby, shall have granted any necessary consent or approval.
(d) CONTRACTUAL CONSENTS. The parties to each of the
contracts, licenses, leases and other agreements, if any, identified on SCHEDULE
5.1(D) hereto shall have consented to the consummation of the transactions
contemplated hereby or the assignment of such contract, license, lease or other
agreement, as the case may be.
(e) GOOD STANDING CERTIFICATES. The Company shall have
delivered to KLA-Tencor a long-form corporate good standing certificate from the
State of Delaware and good standing certificates from each jurisdiction in which
the Company is qualified to transact business.
(f) PRESIDENT'S CERTIFICATE. The Company shall have delivered
to KLA-Tencor a certificate executed by the President of the Company, dated the
Effective Date, certifying to the fulfillment of the conditions specified in
Section 5.1(a).
(g) DISSENTERS' RIGHTS. The holders of less than 9% of the
Company Shares shall have demanded and perfected their right to an appraisal of
their Company Shares in accordance with the DGCL.
(h) LEGAL OPINION OF COUNSEL FOR THE COMPANY. KLA-Tencor
shall have received an opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., counsel for the Company, dated the Effective Date and in the form attached
hereto as EXHIBIT G.
(i) NO LITIGATION OR PROCEEDINGS. No legal action or other
proceedings shall be pending or threatened which may materially and adversely
affect the ability of the parties to consummate of the transactions contemplated
by this Agreement, or which may reasonably be expected to result in a Material
Adverse Effect.
(j) AGREEMENTS IN FULL FORCE AND EFFECT. KLA-Tencor shall
have delivered its signature to the Consulting Agreement and the Consulting
Agreement and the Voting Agreement shall be in full force and effect.
(k) TERMINATION OF STOCK OPTIONS; WARRANT NOTICE. All Company
Options shall have been exercised or shall have expired or have been legally
terminated without liability
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to the Company. The Company shall have submitted the Warrant Notice to the
holders of the Redeemable Warrants pursuant to Section 15 of the Warrant
Agreement, and the Representative's Notice to the holders of the
Representative's Warrants pursuant to Section F of the Representative's
Agreement, as required by Section 4.4 of this Agreement.
(l) RESIGNATIONS; EXECUTIVE EMPLOYMENT AGREEMENTS. (i) The
Company shall have delivered to KLA-Tencor the written resignations of Xxxxx,
Xxx X. Xxxxxx, Xxxx Xxxxxxx, N. Xxx Xxxxxxx, Xxxxxx X. Xxxxx, Xxxxxxx and
Xxxxxxxxxx X. Xxxx from all positions with the Company and the Subsidiary, such
resignations to be effective as of the Effective Date; (ii) the executive
employment agreements between the Company and each of such individuals shall
have been legally terminated without further liability to the Company and
KLA-Tencor; (iii) all other severance agreements, retention agreements and
similar agreements to which the Company is a party or by which it is bound shall
have been legally terminated without further liability to the Company or
KLA-Tencor (except that, promptly following the Closing KLA-Tencor shall pay, or
shall cause the Surviving Corporation to pay, an amount equal to the Permissible
Shortfall in satisfaction of the remaining portion of the Company's Required
Severance Payments); and (iv) the Company shall have delivered to KLA-Tencor an
executed settlement and release from each scheduled recipient of the Required
Severance Payments in form and substance reasonably acceptable to KLA-Tencor.
(m) TERMINATION OF CONSULTING AGREEMENT. That certain
Consulting Agreement dated May 7, 2001 between the Company and Xxxxx X. Xxxxx
shall have been legally terminated without liability to the Company.
(n) DOCUMENTS SATISFACTORY. The form and substance of all
legal matters contemplated herein and of all papers used or delivered hereunder
shall be reasonably acceptable to KLA-Tencor, and KLA-Tencor shall have received
all documents that it may have reasonably requested in connection with the
transactions contemplated hereby, in form and substance reasonably satisfactory
to it.
(o) STOCKHOLDER APPROVAL. The adoption by the Stockholders of
this Agreement and the approval of the Merger in accordance with the DGCL shall
have been duly and validly obtained.
(p) COMPANY EMPLOYEE PLANS TERMINATED. All Company Employee
Plans shall have been terminated and KLA-Tencor shall have received evidence to
its reasonable satisfaction that such terminations were completed in accordance
with all applicable laws.
(q) OUTSTANDING CAPITAL STOCK. There shall be no more than
3,010,000 Company Shares issued and outstanding immediately prior to the
Effective Time (the "Closing Shares"), and KLA-Tencor shall have received a
written certification of such fact, dated as of the Closing Date, from the
Company's transfer agent with respect to the Closing Shares; notwithstanding the
foregoing, the Closing Shares may be increased by the Additional Shares.
(r) NET CASH POSITION. As of the Effective Time, the Company's
Net Cash Position shall not be less than ($365,000) (the "Permissible
Shortfall"); provided, however, that
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in the event any portion of the amount listed from the company set forth on
SCHEDULE 5.1(r) is not collected or becomes uncollectable, then the Permissible
Shortfall amount may be increased by the uncollected or uncollectable amount,
but in no event shall the Permissible Shortfall amount exceed $515,000. "Net
Cash Position" shall mean the difference between the Company's cash minus the
Company's liabilities (net of legal reserves of $125,250 and warranty reserves
of $50,000, provided, that no adjustment to such reserve accounts shall have
been made (or shall have reason to be made) prior to the Effective Time and no
payments against such reserves shall have been made (or shall have reason to be
made) prior to the Effective Time) as of the Effective Time. For purposes of
determining the Company's compliance with this Section 5.1(r) only as of the
Effective Time, the calculation of Net Cash Position immediately prior to the
Effective Time may be adjusted to the extent legal, SEC and printing fees
incurred by the Company for services directly associated with the transactions
contemplated by this Agreement, in the aggregate, exceed $120,000. In addition,
the Permissible Shortfall shall be increased by $7,000 for each calendar day
subsequent to October 31, 2001 and prior to the Effective Time.
Section 5.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations
of the Company to consummate the transactions contemplated hereby are subject to
the satisfaction, on or before the Closing, of the following conditions (unless
waived by the Company in writing in the manner provided in Section 6.2 hereof):
(a) REPRESENTATIONS, WARRANTIES AND PERFORMANCE OF KLA-TENCOR
AND MERGER SUB. The representations and warranties of KLA-Tencor and Merger Sub
set forth in Section 3.3 hereof that are qualified as to materiality shall be
accurate on and as of the date hereof, and on and as of the Effective Date as
though made on and as of the Effective Date except for those that speak as of a
particular date which shall be accurate as of such date, and the representations
and warranties of KLA-Tencor and Merger Sub set forth in Section 3.3 hereof that
are not so qualified shall be accurate in all material respects on and as of the
Effective Date as though made on and as of the Effective Date except for those
that speak as of a particular date which shall be accurate in all material
respects as of such date; and KLA-Tencor and Merger Sub shall have performed in
all material respects all obligations and complied with in all material respects
all covenants required to be performed or to be complied with by them under this
Agreement prior to the Closing.
(b) AUTHORIZATION. All action necessary to authorize the
execution, delivery and performance hereof by KLA-Tencor and Merger Sub and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Board of Directors and the stockholders of Merger Sub.
KLA-Tencor and Merger Sub shall have furnished the Company with a copy of all
resolutions adopted by the Board of Directors and the stockholders of Merger Sub
in connection with such actions, certified by the Secretary or an Assistant
Secretary of Merger Sub, together with copies of such other instruments and
documents as the Company shall have reasonably requested.
(c) GOVERNMENTAL CONSENTS. Any governmental authority having
jurisdiction over the Company, KLA-Tencor or Merger Sub, to the extent that its
consent or approval is required by applicable law or regulation for the
performance of this Agreement or the
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consummation of the transactions contemplated hereby, shall have granted any
necessary consent or approval.
(d) STOCKHOLDER APPROVAL. The adoption by the Stockholders
of this Agreement and the approval of the Merger in accordance with the
DGCL shall have been duly and validly obtained.
(e) GOOD STANDING CERTIFICATES. Each of KLA-Tencor and Merger
Sub shall deliver to the Company a long form corporate good standing
certificate from the State of Delaware.
(f) OFFICER'S CERTIFICATE. Each of KLA-Tencor and Merger Sub
shall have delivered to the Company a certificate executed by an officer of
KLA-Tencor and Merger Sub, respectively, dated the Effective Date, certifying to
the fulfillment of the conditions specified in Section 5.2(a).
(g) NO LITIGATION OR PROCEEDINGS. No legal action or other
proceedings shall be pending or threatened which may materially and adversely
affect the ability of the parties to consummate the transactions contemplated by
this Agreement.
(h) LEGAL OPINION OF COUNSEL FOR KLA-TENCOR. The Company shall
have received an opinion of Xxxxx, Xxxxxx-Xxxxx & Xxxxxxxxx, P.C., counsel for
KLA-Tencor and Merger Sub, dated the Effective Date and in the form attached
hereto as EXHIBIT H.
(i) AGREEMENT IN FULL FORCE AND EFFECT. Chase shall have
delivered his signature to the Consulting Agreement and the Consulting Agreement
shall be in full force and effect.
(j) DOCUMENTS SATISFACTORY. The form and substance of all
legal matters contemplated herein and of all papers used or delivered hereunder
shall be reasonably acceptable to counsel for the Company and the Company shall
have received all documents that such counsel may have reasonably requested in
connection with the transactions contemplated hereby, in form and substance
reasonably satisfactory to such counsel.
ARTICLE 6
MODIFICATION, TERMINATION AND WAIVER; EXPENSES
Section 6.1. MODIFICATION, AMENDMENTS AND WAIVERS. The parties may
mutually amend any provision of this Agreement at any time prior to the
Effective Date; provided, however, that any amendment effected subsequent to
Stockholder approval shall be subject to the restrictions contained in the DGCL.
No amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by all of the parties.
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Section 6.2. WAIVERS. The Company, on the one hand, and KLA-Tencor and
Merger Sub, on the other hand, may, by a written signed instrument, extend the
time for or waive the performance of any of the obligations of the other party
hereto or waive compliance by such other party with any of the covenants or
conditions contained herein.
Section 6.3. TERMINATION. At any time prior to the Closing, this
Agreement may be terminated and the Merger and the other transactions
contemplated by this Agreement may be abandoned, notwithstanding any requisite
approval and adoption of this Agreement and the transactions contemplated by
this Agreement, as follows:
(a) by mutual written consent of KLA-Tencor and the Company;
or
(b) by KLA-Tencor, upon a breach of any representation,
warranty, covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall have become
untrue, in either case such that the conditions set forth in Section 5.1(a)
would not be satisfied, or if the Company has more than 3,010,000 shares of
Common Stock outstanding immediately prior to the Closing (not including any
Additional Shares) (as the case may be, a "Terminating Company Breach");
provided, however, that, if such Terminating Company Breach is curable by the
Company and for so long as the Company continues to exercise all reasonable
efforts to cure such Terminating Company Breach, KLA-Tencor and Merger Sub may
not terminate this Agreement under this Section 6.3(b); or
(c) by the Company, upon a breach of any representation,
warranty, covenant or agreement on the part of KLA-Tencor or Merger Sub set
forth in this Agreement, or if any representation or warranty of KLA-Tencor or
Merger Sub shall have become untrue, in either case such that the conditions set
forth in Section 5.2(a) would not be satisfied (a "Terminating KLA-Tencor
Breach"); provided, however, that, if such Terminating KLA-Tencor Breach is
curable by KLA-Tencor and for so long as KLA-Tencor continues to exercise all
reasonable efforts to cure such Terminating KLA-Tencor Breach, the Company may
not terminate this Agreement under this Section 6.3(c); or
(d) by KLA-Tencor or the Company, and without further
liability to either KLA-Tencor or the Company if (i) any court of competent
jurisdiction or other governmental entity shall have issued any order or taken
any other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order or other action
shall have become final and nonappealable; or (ii) there shall be any action
taken, or any statute, rule, regulation or order enacted, promulgated, issued or
deemed applicable to this Agreement, by a governmental entity that would make
consummation of this Agreement illegal; or
(e) by KLA-Tencor or the Company if (i) the Board of Directors
of the Company withdraws, modifies or changes its recommendation of this
Agreement or the transactions contemplated hereby in a manner adverse to
KLA-Tencor or shall have resolved to do so, or (ii) the Board of Directors of
the Company shall, at a time when there is an Acquisition Proposal, fail to
reaffirm such approval or recommendation upon the reasonable request of
KLA-Tencor, or (iii) the Board of Directors of the Company shall have
recommended to the
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Stockholders an Acquisition Proposal or shall have resolved to do so or (iv) a
tender offer or exchange offer for 10% or more of the outstanding shares of
capital stock of the Company is commenced, and the Board of Directors of the
Company fails, within ten days after such commencement, to recommend against
acceptance of such tender offer or exchange offer by its Stockholders (including
by taking no position with respect to the acceptance of such tender offer or
exchange offer by the Stockholders); or
(f) by KLA-Tencor or the Company, if the Stockholders
disapprove any matter submitted to them pursuant to Section 4.4 of this
Agreement; provided, however, that the right to terminate this Agreement under
this Section 6.3(f) shall not be available to the Company where failure to
obtain approval shall have been caused by the Company's breach of this
Agreement; or
(g) by KLA-Tencor or the Company, if the Closing does not
occur by October 31, 2001 or, if the SEC reviews the Proxy Statement, the date
determined by adding to October 31, 2001 the total number of calendar days
included in the period commencing on the date that the SEC determines to review
the Company's filings through and including the date that the SEC notifies the
Company that it has completed its review (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 6.3(g)
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
Closing to occur on or before the Termination Date.
Section 6.4. EFFECT OF TERMINATION. If this Agreement shall be
terminated as provided in Section 6.3, this Agreement shall forthwith become
void and there shall be no liability under this Agreement on the part of
KLA-Tencor, Merger Sub or the Company or any of their respective officers or
directors and all rights and obligations of each party hereto shall cease,
except (i) as provided in Sections 6.5 and 7.2 and (ii) nothing herein shall
relieve any party from liability for any willful breach hereof.
Section 6.5. EXPENSES; TERMINATION FEES.
(a) Except as set forth in this Section 6.5, all Expenses (as
defined below) incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, whether or not the Merger or any other transaction is consummated. As
used in this Agreement, "Expenses" shall include all out-of-pocket expenses
(including, without limitation, all fees and expenses of counsel, accountants,
experts and consultants to a party hereto and its affiliates) incurred by a
party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Proxy Statement, the
solicitation of Stockholder approvals and all other matters related to the
closing of the Merger and the other transactions contemplated by this Agreement.
(b) The Company agrees that, if KLA-Tencor shall terminate
this Agreement pursuant to Section 6.3(b), (e), (f) or (g) and, prior to any
such termination pursuant to Section 6.3(g), there shall exist a Superior
Proposal, then the Company shall pay to KLA-Tencor an amount equal to $250,000
(the "KLA-Tencor Termination Fee").
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(c) KLA-Tencor agrees that, if the Company shall terminate
this Agreement pursuant to Section 6.3(c), then KLA-Tencor shall pay the Company
an amount equal to the sum of $250,000 (the "Company Termination Fee").
(d) Each of KLA-Tencor, Merger Sub and the Company agrees that
the payments provided for in Sections 6.5(b) and (c) shall be the sole and
exclusive remedies of the parties upon a termination of this Agreement pursuant
to Sections 6.3(b), (c), (e), (f) and (g), as the case may be, and such remedies
shall be limited to the sums stipulated in Sections 6.5(b) and (c), regardless
of the circumstances giving rise to such termination. The KLA-Tencor Termination
Fee and the Company Termination Fee are intended by the parties to be liquidated
damages to reimburse the Company or KLA-Tencor, as the case may be, for the
Expenses incurred by it and to compensate the Company or KLA-Tencor, as the case
may be, for its opportunity costs in pursuing the Merger; the parties agree that
it will be difficult or impossible to quantify such opportunity costs, and,
having considered the size of each of the KLA-Tencor Termination Fee and the
Company Termination Fee in absolute terms and in relation to the value of the
transactions contemplated by this Agreement, agree that such fees are reasonable
approximations of the Expenses and opportunity costs the parties will incur
pursuing the Merger.
(e) Any payment of a KLA-Tencor Termination Fee or a Company
Termination Fee required to be made pursuant to this Section 6.5 shall be made
not later than two business days after the termination of this Agreement. Any
such payment shall be made by wire transfer of immediately available funds to an
account designated by the party entitled to payment.
(f) In the event that either party shall fail to pay any
amount payable pursuant to this Section 6.5, when due, such party shall be
liable for all costs and expenses actually incurred or accrued by the other
party (including, without limitation, fees and expenses of counsel) in
connection with the collection under and enforcement of this Section 6.5,
together with interest on such unpaid amount, commencing on the date that such
amount became due, at a rate equal to the "prime rate" of announced by The Wall
Street Journal from time to time, plus 2.00%.
ARTICLE 7
GENERAL
Section 7.1. NOTICES. All notices, requests, demands, consents and
other communications which are required or permitted hereunder shall be in
writing, and shall be deemed given when actually received or if earlier, (i)
immediately upon sending by telecopy if the telecopier produces a legible record
of such notice, (ii) one business day after deposit with a nationally recognized
overnight courier, charges prepaid, or (iii) five days after deposit in the U.S.
mail by certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to KLA-Tencor or Merger Sub:
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KLA-Tencor Corporation
000 Xxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Vice President, Mergers & Acquisitions
Telecopy Number: 000-000-0000
With copies to:
KLA-Tencor Corporation
000 Xxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Vice President and General Counsel
Telecopy Number: 000-000-0000
and
Xxxxx, Xxxxxx-Xxxxx & Xxxxxxxxx, P.C.
Reservoir Place
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy Number: 000-000-0000
If to the Company, to:
QC Optics, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Telecopy Number: 000-000-0000
With a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopy Number: 617-542-2241
or to such other address as any party hereto may designate in writing to the
other parties, specifying a change of address for the purpose of this Agreement.
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Section 7.2. NON-SURVIVAL OF REPRESENTATIONS. The representations,
warranties and agreements in this Agreement shall terminate upon the Closing or
upon the termination of this Agreement pursuant to Section 6.3, as the case may
be, except that (a) those covenants and agreements that by their terms apply or
are to be performed in whole or in part after the Effective Time and this
Article 7 shall survive the Effective Time for the respective periods set forth
therein or, if no such period is specified, for six years and (b) the
representations, warranties and agreements set forth in Section 6.5 and this
Article 7 shall survive termination for the respective periods set forth therein
or, if no such period is specified, for six years.
Section 7.3. ENTIRE AGREEMENT. This Agreement and the agreements
specifically referred to herein supersede any and all oral or written agreements
or understandings heretofore made relating to the subject matter hereof and
constitute the entire agreement of the parties relating to the subject matter
hereof, except for the Non-Disclosure Agreement dated February 21, 2001 executed
by KLA-Tencor and the Company, attached hereto as EXHIBIT I (the "Non-Disclosure
Agreement") which Non-Disclosure Agreement shall remain in full force and
effect.
Section 7.4. NO IMPLIED RIGHTS OR REMEDIES. Except as otherwise
expressly provided herein, nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any person, firm or corporation,
other than the parties hereto, any rights or remedies under or by reason of this
Agreement.
Section 7.5. HEADINGS. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning hereof.
Section 7.6. SEVERABILITY. If any provision of this Agreement shall be
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision shall not be affected thereby. The parties
hereto further agree to replace such void or enforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the mutual economic, business and other purposes of such void
or unenforceable provision.
Section 7.7. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 7.8. ARBITRATION; RELIEF.
(a) Except as set forth in Section 7.8(b), any controversy,
dispute or claim arising out of or in connection with this Agreement, or the
breach, termination or validity hereof, shall be settled by final and binding
arbitration to be conducted by an arbitration tribunal in City of Boston,
Massachusetts, pursuant to the rules of the American Arbitration Association.
The arbitration tribunal shall consist of three arbitrators. The party
initiating arbitration shall nominate one arbitrator in the request for
arbitration and the other party shall nominate a second in the answer thereto
within 30 days of receipt of the request. The two arbitrators so named will then
jointly appoint the third arbitrator. If the answering party fails to nominate
its arbitrator
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within the thirty 30-day period, or if the arbitrators named by the parties fail
to agree on the third arbitrator within 60 days, the office of the American
Arbitration Association in City of Boston, Massachusetts shall make the
necessary appointments of such arbitrator(s). The decision or award of the
arbitration tribunal (by a majority determination, or if there is no majority,
then by the determination of the third arbitrator, if any), including any award
of fees and/or expenses, shall be final, and judgment upon such decision or
award may be entered in any competent court or application may be made to any
competent court for judicial acceptance of such decision or award and an order
of enforcement. In the event of any procedural matter not covered by the
aforesaid rules, the procedural law of the Commonwealth of Massachusetts shall
govern.
(b) Notwithstanding the provisions of, and in addition to the
rights set forth in, Section 7.8(a), in the event of a breach of the provisions
of this Agreement by a party to this Agreement prior to the Closing, the
non-breaching party shall have the right to specific performance and injunctive
relief, without the necessity of posting any bond or other security, it being
acknowledged and agreed that money damages will not provide an adequate remedy.
(c) In the event litigation is maintained by a party to this
Agreement against any other party to enforce an arbitration award rendered under
Section 7.8(a) or to seek specific performance of injunctive relief under
Section 7.8(b), then the party prevailing in such litigation shall be entitled
to recover from the non-prevailing party reasonable attorneys' fees and costs of
suit.
Section 7.9. EXHIBITS AND SCHEDULES. The Exhibits and Schedules
attached hereto and referred to in this Agreement are a part of this Agreement
for all purposes.
Section 7.10. ASSIGNMENT. This Agreement and the rights and duties
hereunder shall be binding upon and inure to the benefit of the successors,
assigns, heirs and legal and personal representatives of the parties hereto, but
shall not be assignable or delegable by any party without the prior written
consent of the other parties and any purported assignment without such prior
written consent shall be null and void, except that KLA-Tencor and Merger Sub
may assign this Agreement, or rights and duties hereunder, after the Closing.
Section 7.11. FURTHER ASSURANCES. Each party will execute and furnish
to the other all documents and will do or cause to be done all other things that
the other party may reasonably request from time to time in order to give full
effect to this Agreement and to effectuate the intent of the parties.
Section 7.12. GENDER. In this Agreement, unless the context requires
otherwise the singular includes the plural, the plural the singular, the
masculine gender includes the neuter, masculine and feminine genders and vice
versa.
Section 7.13. PUBLIC ANNOUNCEMENT. The content and timing of any public
announcement pertaining to this Agreement shall be subject to the prior
agreement and approval of KLA-Tencor and the Company; provided, however, that
such approval shall not be unreasonably withheld or delayed.
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Section 7.14. GOVERNING LAW. This Agreement shall be governed by the
law of the Commonwealth of Massachusetts applicable to agreements made and to be
performed wholly within such jurisdiction, without regard to the conflicts of
laws provisions thereof.
[The remainder of this page has intentionally been left blank.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed under seal as of the date first written above.
KLA-TENCOR CORPORATION
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Xxxx Xxxxxxx
Chief Financial Officer
KATMANDU ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx
President
QC OPTICS, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx
President
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