SECOND AMENDMENT TO STRATEGIC BUSINESS COMBINATION AGREEMENT
THIS SECOND AMENDMENT TO STRATEGIC BUSINESS COMBINATION AGREEMENT (the
"Second Amendment"), dated as of November 5th, 2001, is entered into by and
among STEAG Electronic Systems, AG, an Aktiengesellschaft organized and
existing under the laws of the Federal Republic of Germany ("STEAG"), and
Xxxxxxx Technology, Inc., a Delaware corporation ("Xxxxxxx").
RECITALS
X. Xxxxxxx and STEAG have entered into that certain Strategic Business
Combination Agreement, dated as of June 27, 2000, as amended December 15,
2000 (the "Agreement").
X. Xxxxxxx has caused Silicon Valley Bank to amend the terms of that
certain Standby Letter Of Credit No. SVB00IS3367, dated December 29, 2000,
as amended September 20, 2001 (the "Letter of Credit").
C. STEAG and Xxxxxxx desire to amend the Agreement as set forth below.
NOW, THEREFORE, in consideration of the agreements, and subject to the
satisfaction or waiver of the conditions herein contained, the parties
hereby agree as follows:
1. Definitions. Unless otherwise defined herein or the context
otherwise requires, capitalized terms used in the Second Amendment shall
have the respective meanings ascribed to such terms in the Agreement. Upon
the effectiveness of the Second Amendment, the terms defined in the Second
Amendment shall be incorporated into the Agreement as if such terms were
originally defined therein.
2. Second Amendment Closing. The closing of the transactions
contemplated hereby shall take place, and the amendments to the Agreement
contained herein shall become effective, upon a closing (the "Second
Amendment Closing") which shall take place upon November 5th, 2001 (or on
such other date as the parties agree, the "Second Amendment Closing Date"),
at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx Xxxxx, Xxxx Xxxx, XX 00000, or at such other location as
the parties agree.
3. Post Closing Adjustments. Section 2.9 of the Agreement shall be
amended with the addition of the following paragraphs immediately after
Section 2.9(d) of the Agreement:
"(e) Agreement on Amounts Due. Notwithstanding the foregoing
provisions of this Section 2.9(d): (i) the amount of fiscal year 2000
profit due to STEAG from STEAG RTP Systems GmbH (the predecessor in
interest to Xxxxxxx Thermal Products GmbH, or "MTP"), is agreed and
stipulated by the parties to be DM 19,747,143.03 (the "MTP Profit");
(ii) the amount of fiscal year 2000 profit due to STEAG from STEAG
MicroTech GmbH (the predecessor in interest to Xxxxxxx Wet Products
GmbH or "MWP") is agreed and stipulated by the parties to be DM
3,478,184.72 (the "MWP Profit"); (iii) the difference between such
aggregate profit payments and the Year 2000 Profit Estimate due to
STEAG from Xxxxxxx pursuant to Section 2.9(d) (the "Profit
Differential Payment") is agreed and stipulated to by DM
13,757,682.70; and (iv) the date on which each of the MTP Profit, MWP
Profit and the Profit Differential Payment shall bear interest from
April 1, 2001 at the rate of six percent (6%) per annum until the
earliest of (A) the payment to STEAG by MTP, MWP, or Xxxxxxx of such
amounts or (B) the execution and delivery of the Profits Note (as
defined below).
(f) Method of Payment. Not later than the Second Amendment
Closing, MTP, MWP and Xxxxxxx shall pay amounts equal to the MTP
Profit, the MWP Profit and the Profit Differential Payment,
respectively, in cash by wire transfer to STEAG; provided, that
Xxxxxxx may, at its option by written notice to STEAG, cause STEAG to
offset the Profit Differential Payment against the proceeds of the
STEAG Loan. With respect to interest payments due with respect to the
MTP Profit, the MWP Profit, and the Profit Differential Payment,
Xxxxxxx may, at its option by written notice to STEAG, cause STEAG to
offset such interest accrued for the period from July 2, 2001 to the
Second Amendment Closing Date against the proceeds of the STEAG
Loan).(1)
-------------------
(1) Interest accrued for the period from April 1, 2001, to July 1, 2001,
will be capitalized and added to the principal balance of the Profits
Note, while interest accrued for the period from July 2, 2001 will be
paid in cash at the Second Amendment Closing, either in the form of a
cash payment by MTP or MWP to STEAG, or by an offset against the
proceeds of the STEAG loan.
(g) Waiver. The agreements and stipulations contained in
Section 2.9(e) as to the amounts due under Section 2.9 of the
Agreement shall be final and irrevocable, and in consideration of the
payment of the MTP Profit, the MWP Profit, and the Profit
Differential Payment, and subject to the making of the STEAG Loan,
each party hereby waives any right to dispute or contest the amounts
set forth herein, either pursuant to the terms of the Agreement or
otherwise."
4. STEAG Loan. A new Section 2.10 of the Agreement shall be added which
shall read in its entirety as follows:
"2.10 STEAG Loan. Upon the satisfaction of the conditions to the
obligations of STEAG to consummate the Second Amendment Closing,
including but not limited to the receipt by STEAG of the MTP Profit
and the MWP Profit and the execution and delivery to STEAG by Xxxxxxx
of a promissory note (the "Profits Note") in the form attached as
Exhibit A to the Second Amendment, dated as of the Second Amendment
Closing Date, and in a principal amount equal to [Thirty Seven Million
Five Hundred Thirty-Seven Thousand Seven Hundred Fifty-Five 61/100
Deutsche Marks (DM 37,537,755.61)] (the "Profits Note Principal
Amount"),(2) STEAG shall make a loan (the "STEAG Loan") to Xxxxxxx of
the Profits Note Principal Amount. Upon the Second Amendment Closing,
STEAG shall pay to Xxxxxxx the Profits Note Principal Amount, in cash
by wire transfer to Xxxxxxx, net of any offset with respect to the
Profit Differential Payment or interest accrued for the period from
July 2, 2001 to the Second Amendment Closing Date."
-------------------
(2) The Profits Note Principal Amount assumes the treatment of interest
set forth in Footnote 1, above.
5. Additional Covenants of Xxxxxxx. A new Section 6.24 shall be added to
the Agreement to read in its entirety as follows:
"6.24 Additional Covenants of Xxxxxxx. From the date of the
Second Amendment until the Xxxxxxx Secured Note (as may be amended
from time to time) and the Profits Note have been repaid in full,
except as expressly contemplated or permitted by this Agreement or to
the extent STEAG shall otherwise consent in writing, neither Xxxxxxx
nor any of its subsidiaries shall:
(a) acquire or agree to acquire by merging or consolidating
with, or by purchasing all or a substantial equity interest in or
all or a substantial portion of the assets of, any business or
any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any assets other than assets acquired in the ordinary
course of business which are immaterial in nature or amount (any
of such transaction, an "Acquisition Transaction"); provided,
however, that Xxxxxxx or its subsidiaries may agree to, or
consummate, an Acquisition Transaction, provided that (i) the
consideration to be paid by Xxxxxxx in such Acquisition
Transaction shall consist solely of newly issued shares of
Xxxxxxx Common Stock, (ii) in the event of a merger or
consolidation, Xxxxxxx is the surviving corporation upon
consummation of such Acquisition Transaction, and (iii) the
holders of Xxxxxxx Common Stock immediately prior to such
Acquisition Transaction shall, immediately following such
Acquisition Transaction, own more than 50% of the Xxxxxxx Common
Stock outstanding after such Acquisition Transaction, and (iv)
neither the consummation of such Acquisition Transaction, nor any
of the agreements relating to such Acquisition Transaction, would
impair or limit the ability of Xxxxxxx to repay any amounts due
under the Profits Note or the Prolongation Note; and provided,
further; that Xxxxxxx or its subsidiaries may enter into
intercompany consolidation or merger transactions if such
transactions would not otherwise impair or limit the ability of
Xxxxxxx to repay any amounts due under the Profits Note or the
Prolongation Note;
(b) (i) declare, set aside or pay any dividends on or make
other distributions in respect of any of its capital stock, (ii)
split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock or
(iii) directly or indirectly repurchase, redeem or otherwise
acquire, any shares of its capital stock;
(c) incur any indebtedness for money borrowed or issue any
debt securities; assume, guarantee, or otherwise become liable or
responsible for the obligations of any other person; or make any
loans or capital contributions to, or investments in, any other
person, except for Authorized New Debt. For the purposes of this
Agreement, "Authorized New Debt" means (i) a credit line with
Tokyo Mitsubishi Bank, not to exceed (Y)900 million in principal
amount; (ii) a credit line with Silicon Valley Bank, not to
exceed US $20 million in principal amount; (iii) an offering of
subordinated debt securities to the public or to Qualified
Institutional Buyers (as defined in rules promulgated under the
Securities Act) not to exceed US $100 million in principal
amount; or (iv) a syndicated bank loan, not to exceed US $50
million in principal amount; or
(d) agree in writing to do any of the foregoing."
6. Fees and Expenses. A new Section 6.25 shall be added to the Agreement
to read in its entirety as follows:
"6.25 Fees and Expenses. At the Second Amendment Closing, Xxxxxxx
shall pay to STEAG an amount in cash equal to STEAG's out of pocket
expenses (including legal fees and disbursements), not to exceed
$30,000, incurred through the Second Amendment Closing Date in
connection with the preparation, negotiation, and execution of the
Second Amendment and the transactions contemplated hereby (the "STEAG
Expenses")."
7. Prolongation Note. A new subsection (m) shall be added to Section 7.3
of the Agreement to read in its entirety as follows:
"(m) Prolongation Note. At the Second Amendment Closing, Xxxxxxx
shall make and deliver to STEAG an amendment and restatement of the
Xxxxxxx Secured Note in the form attached as Exhibit B to the Second
Amendment (the "Prolongation Note")."
8. Tax Indemnification. The following sentence is hereby added after the
first sentence of Section 9.1(b) of the Agreement:
"Notwithstanding the foregoing, any Damages arising from a breach
of Section 3.13 that relate to the STEAG Subsidiaries, and the
subsequent obligation of STEAG to indemnify Xxxxxxx for Damages
resulting therefrom, shall be subject to offset by any refunds for
overpayment of taxes, or other similar gains or payments, made to or
recognized by any STEAG Subsidiary that relates to tax periods prior
to the Closing. For the avoidance of doubt, by way of example and
without limitation, in the event that STEAG RTP Systems, Inc. (or its
successor in interest) shall be liable to the State of California for
any Taxes for any tax period ending on or before the Closing Date (the
amount of such liability, the "California Tax Liability"), and in the
event that STEAG RTP Systems GmbH (or its successor in interest) shall
be eligible to receive a credit for the overpayment of Taxes in the
Federal Republic of Germany for any tax period ending on or before the
Closing Date (the amount of such credit, the "German Tax Credit"),
then STEAG shall not be obligated to indemnify Xxxxxxx under this
Section 3.13 unless the California Tax Liability shall exceed the
German Tax Credit, and then STEAG's liability for indemnification
shall be limited to the amount by which the California Tax Liability
shall exceed the German Tax Credit."
9. Conditions to Second Amendment Closing. The obligations of STEAG to
consummate the Second Amendment Closing shall be subject to the satisfaction,
or the waiver by STEAG, of the following conditions:
(a) Profits Note. Xxxxxxx shall have made and delivered to
STEAG the Profits Note, and shall not, as of the Second Amendment
Closing Date, have suffered an Event of Default (as defined in
the Profits Note) under the Profits Note, nor shall there exist
any facts or circumstances which would constitute (with or
without notice or lapse of time or both) and Event of Default
thereunder.
(b) Profit Payments. MTP and MWP shall have delivered the
payment of the MTP Profit and the MWP Profit, respectively, and
shall have paid the Accrued Interest thereon, in cash, by
execution of the Profits Note, or a permitted combination
thereof.
(c) Globalzession. Xxxxxxx shall have executed and delivered
the "Globalzession" in the form attached as Exhibit C hereto, and
such Globalzession shall remain in full force and effect.
(d) Prolongation Note. Xxxxxxx shall have made and delivered
to STEAG the Prolongation Note, and shall not, as of the Second
Amendment Closing Date, have suffered an Event of Default (as
defined in the Prolongation Note) under the Prolongation Note,
nor shall there exist any facts or circumstances which would
constitute (with or without notice or lapse of time or both) an
Event of Default thereunder.
(e) Letter of Credit. The Letter of Credit, as amended, shall
remain in full force and effect.
(f) Amendment to Stockholder Agreement. Xxxxxxx and Xxxx
Xxxxxxx shall have executed and delivered to STEAG an amendment
to the Stockholder Agreement in the form attached as Exhibit D
hereto, and such amendment shall remain in full force and effect.
(g) Fees and Expenses. Xxxxxxx shall have paid to STEAG in
immediately available funds an amount equal to the amount of the
STEAG Expenses.
IN WITNESS WHEREOF, STEAG and Xxxxxxx have caused this Second
Amendment to be signed by their respective officers thereunto duly
authorized as of the date first written above.
XXXXXXX TECHNOLOGY, INC.
By: /s/ Ludger Viefhues
------------------------
STEAG ELECTRONIC SYSTEMS, AG
By: /s/ Xxxxxxx Xxxxxxxx
------------------------