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Exhibit 4.2
STOCKHOLDER AGREEMENT
By and Among
INTERNATIONAL BUSINESS MACHINES CORPORATION,
SVG LITHOGRAPHY, INC.
and
SILICON VALLEY GROUP, INC.
Dated: March 18, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I - CERTAIN DEFINITIONS......................... 5
ARTICLE II - RIGHT OF FIRST REFUSAL ON NEW ISSUANCES..... 16
2.1 Issuance of Voting Securities of SVGL........ 16
2.2 Exclusions From Right of First Refusal....... 16
2.3 Notice....................................... 17
2.4 Permitted Issuance........................... 18
ARTICLE III - RIGHT OF FIRST OFFER....................... 19
3.1 Notice....................................... 19
3.2 Election to Purchase......................... 19
3.3 Calculation of Pro Rata Share................ 20
3.4 Exclusions................................... 20
ARTICLE IV - IBM OPTION TO PURCHASE OR SELL UPON
SVG CHANGE IN CONTROL.................... 21
4.1 SVG Change of Control........................ 21
4.2 Closing...................................... 23
ARTICLE V - SPECIAL COVENANTS AND AGREEMENTS SOLELY
FOR THE BENEFIT OF IBM................. 23
5.1 Merger; Sale of Assets....................... 23
5.2 Liquidation.................................. 24
5.3 Priority Transactions........................ 24
ARTICLE VI - AFFIRMATIVE COVENANTS OF THE COMPANY........ 26
6.1 Accounting System............................ 26
6.2 Periodic Reports; Budgets.................... 26
6.3 Certificates of Noncompliance................ 29
6.4 Other Reports and Inspection................. 30
6.5 Insurance.................................... 30
6.6 Business and Properties...................... 31
6.7 Material Changes............................. 31
6.8 Agreements with Employees.................... 32
6.9 Compliance with Applicable Laws.............. 33
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ARTICLE VII - BOARD OF DIRECTORS......................... 34
7.1 IBM Observer................................. 34
7.2 Notice of Meetings........................... 34
7.3 No Observer Fees or Expense.................. 35
7.4 Precedence................................... 35
ARTICLE VIII - LEGEND ON SHARE CERTIFICATES.............. 35
8.1 Legend....................................... 35
8.2 No Transfer.................................. 36
ARTICLE IX - AGREEMENT BY SUBSEQUENT PURCHASERS.......... 36
ARTICLE X - MISCELLANEOUS................................ 37
10.1 Assignment................................... 37
10.2 Consent to Jurisdiction...................... 38
10.3 Amendments; Waivers.......................... 38
10.4 Notices; Consents and Approvals.............. 39
10.5 Interpretation............................... 41
10.6 Counterparts................................. 41
10.7 Entire Agreement............................. 41
10.8 Severability................................. 41
10.9 Governing Law................................ 42
10.10 Specific Enforcement; Injunctive Relief...... 42
10.11 Governmental Approval........................ 42
10.12 SVG Pledge................................... 43
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STOCKHOLDERS AGREEMENT dated as of March 18, 1997, by and among
International Business Machines Corporation, a New York corporation ("IBM"), SVG
Lithography, Inc., a New York corporation ("SVGL"), and Silicon Valley Group,
Inc., a Delaware corporation ("SVG").
RECITALS
A. SVG, IBM, SVGL, and The Xxxxxx-Xxxxx Corporation, a New York
Corporation entered into an Asset Transfer and Common Stock Purchase Agreement
dated May 15, 1990 (the "Asset and Stock Agreement") pursuant to which, inter
alia, IBM purchased 600,000 shares of Common Stock from SVGL, and a Stockholders
Agreement dated May 15, 1990 (the "Previous Stockholders Agreement") whereby
each party obtained certain rights.
B. SVG, IBM and SVGL have entered into a Stock Purchase and Registration
Rights Agreement dated as of March 18, 1997 (the "Stock Purchase Agreement"),
pursuant to which SVG will purchase IBM's 600,000 shares of Common Stock of SVGL
for three million dollars ($3,000,000).
C. IBM is a current shareholder of 489,296 shares of Common Stock of SVG.
D. SVG, IBM, and SVGL desire to provide for certain matters concerning the
ownership and transfer of equity
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securities of SVG and SVGL, management of SVGL, registration rights and the
other matters set forth herein.
E. Execution of this Stockholders Agreement is a condition to the
obligations of the parties under the Stock Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing recitals and the
agreements and covenants set forth herein, the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Actual Voting Power" of any Person which is a corporation shall mean the
total number of votes which may be cast in the election of directors of such
Person at any meeting of stockholders of such Person if all shares of common
stock and other securities of such Person entitled to vote generally in the
election of directors of such Person were present and voted at such meeting,
other than votes that may be cast only by one class or series of stock (other
than common stock and any other class or series of stock of such Person to the
extent that such class
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or series of stock is entitled to vote together as one class with the common
stock) or upon the happening of a contingency. In determining the percentage of
the Actual Voting Power of any issuing Person represented by Voting Securities
of such issuing Person beneficially owned by any other Person, any such
securities not outstanding which are subject to outstanding options, warrants or
rights beneficially owned by such other Person shall be deemed to be outstanding
for the purpose of computing the percentage of Actual Voting Power of the
issuing Person represented by Voting Securities of the issuing Person
beneficially owned by such other Person, and any securities not outstanding
which are subject to outstanding options, warrants or rights not beneficially
owned by such other Person shall not be deemed to be outstanding for the purpose
of computing the percentage of the Actual Voting Power of the issuing Person
represented by Voting Securities of the issuing Person beneficially owned by
such other Person.
"Affiliate" shall mean as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person.
"Affiliate Transferee" shall mean, with respect to a Stockholder, an
Affiliate of such Stockholder to whom Voting
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Securities of SVGL have been transferred and continue to be owned by such
Affiliate, unless such transfer was made in compliance with the provisions of
Article III (but was not made pursuant to Section 3.5(v)) or in compliance with
the provisions of Article IV.
"Average Market Price" of the common stock of any issuer shall mean the
average of the daily market price of such common stock for the twenty
consecutive trading days immediately prior to the day in question. The "daily
market price" of such common stock is the price per share of such common stock
on the relevant day, determined on the basis of the last reported sale price,
regular way, of such common stock as reported on the composite tape, or similar
reporting system, for issues listed or admitted for trading on the New York
Stock Exchange (or if such common stock has not been so listed or admitted for
trading, on the principal national securities exchange on which such common
stock is then listed or admitted for trading) or, if there is no such reported
sale on the day in question, then the average of the closing bid and asked
quotations as so reported or, if such common stock is not then listed or
admitted for trading on any national securities exchange, then the closing price
for a share of such common stock on such day as reported on NASDAQ or, if such
closing prices shall not be reported on NASDAQ, then the average of the high bid
and low asked quotations on the day in
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question in the over-the-counter market as reported by NASDAQ, or if not so
quoted, as reported by the National Quotation Bureau, Incorporated, or a similar
organization. A "trading day" with respect to such common stock is a day on
which the principal national securities exchange on which such common stock is
listed or admitted to trading is open for the transaction of business or, if
such common stock is not listed or admitted to trading on any national
securities exchange, a business day.
A Person shall be deemed the "beneficial owner" of, and shall be deemed to
"beneficially own", any securities (a) which such Person or any of its
Affiliates is deemed to "beneficially own" within the meaning of Rule 13d-3
under the Exchange Act or (b) which such Person or any of its Affiliates has the
right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or understanding or
upon the exercise of any right of conversion or exchange, warrant, option or
otherwise.
"Collateral" shall have the meaning set forth in Section 10.12.
"Common Stock" shall mean the Common Stock, par value $.01 per share, of
SVGL.
"Competitor of IBM" shall mean any Person that develops or has developed,
manufactures and sells any product (including a
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wafer) which incorporates a semiconductor die, which die (or wafer) has been
manufactured by such Person.
"Control Transaction" shall mean (i) any sale, lease, exchange or other
disposition (whether in one transaction or a series of related transactions) of
forty percent (40%) or more of the assets of SVG or SVGL, as the case may be,
(ii) any other transaction or series of transactions which results in or would
result in the holders of the Voting Securities of SVG or SVGL, as the case may
be, immediately prior to the first of such transactions continuing beneficially
to own Voting Securities of SVG or SVGL, as the case may be, (or the successor
or surviving entity) representing less than 70% of the Total Voting Power of SVG
or SVGL, as the case may be, (or the successor or surviving entity) immediately
after any of such transactions or (iii) entering into any agreement providing
for any of the foregoing; provided, however, that neither the pledge by SVG of
Collateral to any Lender in accordance with Section 10.12, the foreclosure by
any such Lender on its interest in such Collateral in accordance with Section
10.12 nor the disposition of the Collateral in accordance with Section 10.12
shall be deemed to effect a Control Transaction.
As used otherwise in this Agreement, "control" (including its correlative
meanings "controlled by" and "under common control with") shall mean possession,
directly or indirectly, of
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power to direct or cause the direction of management or policies (whether
through ownership of securities or other ownership interests, by contract or
otherwise).
"Eligible Stockholder" shall mean IBM, so long as IBM, together with all
its Affiliate Transferees, beneficially owns the applicable Minimum Equity
whether or not it has held such Minimum Equity continuously; provided, however,
that if IBM, together with all its Affiliate Transferees, fails to own
beneficially the applicable Minimum Equity for a period of 24 consecutive
months, then IBM shall not thereafter be an Eligible Stockholder, whether or not
IBM again owns beneficially the applicable Minimum Equity after such period of
24 consecutive months.
"Employee Shares" shall mean shares of Common Stock (i) issued to
employees, directors or individual consultants of SVGL and still outstanding or
(ii) issuable upon exercise of options approved by SVGL's Board of Directors or
any duly authorized committee thereof and granted to employees, directors or
individual consultants of SVGL. For purposes of determining the number of
Employee Shares outstanding at any time, (a) shares of Common Stock issuable
upon exercise of outstanding options at the time of determination shall be
deemed outstanding, (b) shares of Common Stock which were previously issued to
employees, directors or individual consultants of SVGL and which have been
repurchased
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by SVGL at the per share price originally paid therefor shall not be deemed
outstanding and (c) shares which were previously subject to outstanding options,
but which have been returned to the stock plan unexercised upon the termination
of such options, shall not be deemed outstanding.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Fair Market Value" of any Voting Securities of SVGL shall mean (i) if
such Voting Securities of SVGL are then publicly traded, the Average Market
Price of such Voting Securities of SVGL or (ii) if such Voting Securities of
SVGL are not publicly traded, (x) the price mutually determined by SVGL, SVG and
IBM or (y) if SVGL, SVG and IBM do not agree on such a price, the price
established by an independent, nationally recognized investment banking firm
acceptable to SVGL, SVG and IBM. Such Fair Market Value shall be adjusted
following the date of determination thereof for any stock split, stock dividend,
reverse stock split, recapitalization or other similar event occurring after
such date and or prior to the relevant date of purchase of such Voting
Securities.
"First Offer Notice" shall have the meaning set forth in Section 3.1.
"Governmental Authority" shall mean any court, administrative agency or
commission or other governmental
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authority or instrumentality, domestic or foreign, of competent jurisdiction.
"Law" or "Laws" means all laws, treaties, statutes, ordinances, rules,
regulations, judgments, injunctions, stipulations, decrees and orders of any
Governmental Authority.
"Lender" shall have the meaning set forth in Section 10.12.
"Loan Agreement" shall have the meaning set forth in Section 10.12
"Minimum Equity" shall mean any Voting Securities in SVG or SVGL. It is
understood that any shares of Common Stock or other Voting Securities acquired
or reacquired by IBM after March 18, 1997 will, upon such acquisition or
reacquisition, be deemed to be owned beneficially by IBM for the purpose of
determining whether IBM holds the applicable Minimum Equity.
"NASDAQ" shall mean the National Association of Securities Dealers
Automated Quotations System.
"Offered Securities" shall have the meaning set forth in Section 3.1.
"Person" shall mean any individual, partnership, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
Person.
The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the
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declaration or ordering of the effectiveness of such registration statement.
"Related Company" of any Person shall mean a corporation, company, or
other entity (i) more than 20% of whose outstanding shares or securities
(representing the right to vote for the election of directors or other managing
authority) are, or (ii) which does not have outstanding shares or securities (as
may be the case in a partnership, joint venture, or other unincorporated
association), but more than 20% of whose ownership interest representing the
right to make decisions for, or designating the managing authority of, such
other entity is, owned or controlled, directly or indirectly, by such Person at
the time in question, but such corporation, company or other entity shall be
deemed to be a Related Company only for so long as such ownership or control
exists.
"SEC" shall mean the Securities and Exchange Commission or any successor
commission or agency having similar powers.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"sell" or "transfer" or any variation thereof shall mean, for purposes of
this Agreement, to issue, assign, pledge, transfer otherwise dispose of.
"Seller" shall mean any Stockholder who proposes to sell any Voting
Securities of SVGL.
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"Stockholder" shall mean SVG and any Person who acquires beneficial
ownership of any Voting Securities of SVGL (other than a Person who acquires
ownership of any Voting Securities of SVGL pursuant to the exercise of an
employee stock option) and signs the agreement required by Article IX below.
"Subsidiary" of any Person shall mean a corporation, company, or other
entity (i) more than 50% of whose outstanding shares or securities (representing
the right to vote for the election of directors or other managing authority are,
or (ii) which does not have outstanding shares or securities (as may be the case
in a partnership, joint venture, or other unincorporated association), but more
than 50% of whose ownership interest representing the right to make decisions
for, or designating the managing authority of, such other entity is, owned or
controlled, directly or indirectly, by such Person at the time in question, but
such corporation, company or other entity shall be deemed to be a Subsidiary
only for so long as such ownership or control exists.
"SVG Change in Control" shall mean (a) (i) any sale, lease, exchange or
other disposition (whether in one transaction or a series of related
transactions) of forty percent (40%) or more of the assets of SVG (without
regard to the assets of SVGL which may be included in the consolidated balance
sheet of SVG or the Voting Securities of SVGL owned by SVG) to one or more
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Competitors of IBM or (ii) any other transaction or series of transactions with
one or more Persons which results in, or would result in, one or more
Competitors of IBM, beneficially owning, in the aggregate, Voting Securities of
SVG (or the successor or surviving entity) representing 40% or more of the Total
Voting Power of SVG (or the successor or surviving entity), (b) the failure of
SVG to own beneficially all the Voting Securities and other equity interests of
any Affiliate Transferee of SVG (except for directors' qualifying shares) or (c)
entering into agreement providing for any of the foregoing.
"Tax" or "Taxes" shall mean all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts
and any obligations under any agreements or arrangements with any other person
with respect to such amounts.
"Total Voting Power" of any Person shall mean the total number of votes
that may be cast in the election of directors (or similar managing authority) of
such Person at any meeting of
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stockholders (or equity owners) of such Person if all Voting Securities of such
Person (assuming full conversion, exchange or exercise of all securities
(including rights, warrants and options) convertible into, exchangeable for or
exercisable for any securities entitled to vote generally in such election) were
present and voted at such meeting, other than votes that may be cast only by one
class or series of stock (other than common stock of such Person and any other
class or series of stock to the extent that such other class or series is
entitled to vote together as one class with such common stock) or only upon the
happening of a contingency.
"Voting Securities" shall mean, with respect to any Person, the shares of
common stock (or other equity interests) and any other securities of such Person
entitled to vote generally in the election of directors (or similar managing
authority) of such Person, and any other securities (including rights, warrants,
options and convertible debt) convertible into, exchangeable for or exercisable
for any common stock or other securities refereed to above (whether or not
presently convertible, exchangeable or exercisable).
ARTICLE II
RIGHT OF FIRST REFUSAL ON NEW ISSUANCES
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2.1 Issuance of Voting Securities of SVGL. SVGL hereby grants to IBM the
right of first refusal to purchase all (or any part) of IBM's pro rata share of
any Voting Securities of SVGL that SVGL may from time to time propose to sell or
issue. IBM's pro rata share, for purposes of this Section 2.1, shall be the
greater of: (a) the ratio of (X) the voting power represented by all Voting
Securities of SVG (whether or not then outstanding) beneficially owned by IBM
and its Affiliate Transferees immediately prior to such sale or issuance to (Y)
the Actual Voting Power of SVG; and (b) the ratio of (X) the voting power
represented by all Voting Securities of SVGL (whether or not then outstanding)
beneficially owned by IBM and its Affiliate Transferees immediately prior to
such sale or issuance to (y) the Actual Voting Power of SVGL.
2.2 Exclusions From Right of First Refusal. The right of first refusal set
forth in this Article II shall not apply to the following sales or issuances of
Voting Securities by SVGL:
(a) Employee Shares or options to acquire Employee Shares;
(b) Shares of Common Stock issued upon conversion of any convertible
securities issued by SVGL in compliance with this Article II;
(c) Voting Securities of SVGL offered to the public pursuant to a
registration statement filed under the Securities
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Act (so long as the distribution pursuant to such registration statement
represents a bona fide offer to the public.)
(d) Voting Securities of SVGL issued to a Person that is neither a
Competitor of IBM nor an Affiliate of a Competitor of IBM;
(e) Voting Securities of SVGL issued pro rata to all holders of
SVGL's equity securities in connection with any stock split, stock dividend,
recapitalization or similar event by SVGL.
2.3 Notice. In the event that SVGL proposes to undertake a sale or
issuance of Voting Securities of SVGL subject to Section 2.1 which is not
excluded from IBM's right of first refusal pursuant to Section 2.2, it shall
obtain a bona fide written offer from an unrelated third party with respect to
such sale or issuance and shall give IBM written notice of its intention,
describing the type and amount of Voting Securities of SVGL, the price and the
other material terms upon which SVGL proposes to sell or issue the same, the
identity of the Person or Persons to whom SVGL proposes to sell or issue the
same and a copy of such offer. IBM shall have thirty (30) days after receipt of
such notice to agree to purchase all or any part of its pro rata share of such
Voting Securities of SVGL at the price and upon the terms specified in the
notice by giving written notice to SVGL and stating therein the quantity of
Voting Securities of SVGL to be purchased. If IBM elects to purchase any of the
Voting
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Securities IBM agrees, by so electing, to make fully payment for such Voting
Securities on or before seventy-five (75) days after receipt of the notice
provided pursuant to this Section 2.3 subject to the provisions of Section 10.11
hereof. In the event IBM fails to pay the purchase price to SVGL within such
seventy-five (75) days or upon such later date as may be determined as
contemplated by Section 10.11, SVGL shall be free to sell, in accordance with
Section 2.4, those Voting Securities for which full payment has not been made.
2.4 Permitted Issuances. To the extent that IBM fails to exercise in full
the right of first refusal within the thirty (30) day period specified above,
SVGL shall have one hundred eighty (180) days thereafter (subject to Section
10.11) to sell the Voting Securities of SVGL respecting that portion as to which
IBM's rights were not exercised and purchased to the Person or Persons
identified in the notice specified in Section 2.3 at a price and upon terms no
more favorable to such Person or Persons than the terms specified in the SVGL's
notice. In the event SVGL has not sold such Voting Securities of SVGL to such
Person or Persons within such one hundred eighty (180) day (or longer, subject
to Section 10.11) period, SVGL shall not thereafter issue or sell any Voting
Securities of SVGL without first offering such Voting Securities of SVGL to IBM
in the manner provided above. No such sale shall have the effect of waiving or
diminishing any
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rights SVGL may have against IBM if IBM fails to pay for Voting Securities which
IBM agreed to purchase pursuant to this Article II.
ARTICLE III
RIGHT OF FIRST OFFER
Before any Seller may transfer any Voting Securities of SVGL to a
Competitor of IBM, such Voting Securities shall first be offered by such Seller
to IBM as set forth in this Article III.
3.1 Notice. The Seller shall deliver a notice (the "First Offer Notice")
to IBM and SVGL stating (i) the Seller's bona fide intention to sell or transfer
such Voting Securities of SVGL, (ii) the number of Voting Securities of SVGL to
be sold or transferred (the "Offered Securities") and (iii) the price and other
material terms on which the Seller proposes to offer to sell or transfer such
Voting Securities of SVGL.
3.2 Election to Purchase. IBM may elect to purchase all (but not less than
all) of the Offered Securities referenced in the First Offer Notice by
delivering to the Seller within thirty (30) days after receipt of the First
Offer Notice a written notice stating that IBM elects to purchase such Offered
Securities. If IBM fails to deliver such a written notice within such thirty
(30) days, IBM shall be deemed to have elected not to purchase any of the
Offered Securities. If IBM elects to
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purchase the Offered Securities, IBM agrees, by so electing, to make full
payment for such Offered Securities on or before seventy-five (75) days after
receipt of the First Offer Notice, subject to the provisions of Section 10.11
hereof. In the event IBM fails to pay the purchase price to the Seller within
such seventy-five (75) days or upon such later date as may be determined as
contemplated by Section 10.11, the Seller shall be free to sell, in accordance
with Section 3.3, the Offered Securities. No such sale shall have the effect of
waiving or diminishing any rights the Seller may have against IBM if IBM fails
to pay for Offered Securities which IBM agreed to purchase pursuant to this
Article III.
3.3 Sales of Unsubscribed Voting Securities of SVGL. To the extent that
IBM fails to exercise the right to purchase the Offered Securities or fails to
purchase the Offered Securities as agreed, the Seller shall have one hundred
eighty (180) days thereafter to sell the Offered Securities at a price and upon
terms no more favorable to the purchaser thereof than specified in the notice;
provided, that if the Seller has concluded an agreement within such one hundred
eighty (180) day period to sell such Offered Securities, but such sale is
subject to approval by any Governmental Authority, the one hundred eighty (180)
day period within which the sale must be completed shall be extended in
accordance with Section 10.11. Subject to such Section 10.11,
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in the event that the Seller has not sold such Offered Securities within such
one hundred eighty (180) day period, the Seller shall not thereafter sell the
Offered Securities without first offering such Offered Securities to IBM in the
manner provided above.
3.4 Exclusions. The provisions of Sections 3.1, 3.2, and 3.3 shall not
apply to a transfer of any of Voting Securities of SVGL by a Seller (i) to the
public pursuant to a registration statement declared effective under the
Securities Act (so long as the distribution pursuant to such registration
statement represents a bona fide offering to the public), (ii) through a broker
(so long as such sale is through an ordinary "broker's transactions" as such
term is defined in Rule 144 under the Securities Act or a transaction with a
"market maker" as such term is defined in Section 3(a)(38) of the Exchange Act)
when the Seller does not know the identity of the purchaser and does not direct
the purchase, (iii) if the Seller is SVG, to an employee of SVG or SVGL, (iv) in
a transaction effected in compliance with Section 5.1, (v) if such Seller is IBM
or SVG, to any Affiliate of such Seller that is directly or indirectly wholly
owned by such Seller, provided such Affiliate complies with the provisions of
Article IX hereof by signing the document referred to in such Article or (vi) to
any Person who is not a Competitor of IBM.
ARTICLE IV
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IBM OPTION TO PURCHASE SVGL UPON SVG CHANGE IN CONTROL
4.1 SVG Change of Control. In the event that an SVG Change in Control
should occur at a time when IBM is an Eligible Stockholder, SVG shall give IBM
written notice of such SVG Change in Control (the "Change in Control Notice").
The Change in Control Notice shall specify the identity of the relevant
Competitor of IBM and the percentage of Voting Securities of SVG owned by such
Competitor of IBM following the SVG Change in Control. Promptly after IBM
delivers a notice that it is exercising its appraisal rights hereunder, IBM and
SVG shall mutually select a nationally recognized, independent investment
banking firm acceptable to SVGL which shall determine the value of the
outstanding Voting Securities of SVGL beneficially owned by SVG (together with
its Affiliate Transferees). Such determination shall be set forth in writing and
delivered to IBM, SVGL and SVG. For a period of 60 days following the
determination of such value, IBM shall have the right to purchase all, but not
less than all, Voting Securities of SVGL then beneficially owned by SVG (and its
Affiliate Transferees) for a cash price equal to such value. Such investment
banking firm shall take into account, and give appropriate valuation to, a
control premium, if any, for the Voting Securities of SVGL held by SVG (and its
Affiliate Transferees). SVGL shall cooperate fully in assisting any such
investment banking firm in making its
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determinations, including giving such firm full access to the books and records
of SVGL and providing it with such other information as such firm may reasonably
request in connection with such determination. Each party hereto shall be free
to make written presentations to such investment banking firm to assist it in
making its determinations, as long as such party provides a copy of any such
written presentation to the other parties. SVG and IBM shall each pay that
fraction of the fees and expenses of any such investment banking firm as equals
the fraction determined by dividing the voting power represented by the
outstanding Voting Securities of SVGL then beneficially owned by such party by
the voting power represented by all outstanding Voting Securities of SVGL then
beneficially owned by IBM and SVG.
4.2 Closing. If IBM exercises its right to purchase all Voting Securities
of SVGL held by SVG (and its Affiliate Transferees) following an SVG Change in
Control, it shall give written notice of its election to SVG within 60 days
following delivery of the investment banking firm's written determination of
value pursuant to Section 4.1 and SVG (and its Affiliate Transferees) shall be
obligated to sell all Voting Securities of SVGL held by them to IBM. The closing
of such purchase and sale shall take place on a date mutually acceptable to IBM
and SVG, which date shall be no more than 80 days following delivery of the
investment banking firm's written determination of value
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pursuant to Section 4.1, subject to the provisions of Section 10.11 hereof.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SOLELY FOR THE BENEFIT OF IBM
5.1 Merger; Sale of Assets. So long as IBM is an Eligible Stockholder,
without the prior written consent of IBM, SVGL shall not (a) become a party to
any merger, consolidation or other reorganization with any Competitor of IBM,
(b) sell, lease or otherwise dispose of (whether in one transaction or series of
transactions) more than 5% of its assets to any Competitor of IBM or any of its
Affiliates (other than the sale, lease or license of products to customers in
the ordinary course of business) (c) enter into any other transaction or series
of transactions with one or more Persons which results in or would result in one
or more Competitors of IBM owning, in the aggregate, Voting Securities of SVGL
representing 30% or more of the Total Voting Power of SVGL or (d) enter into any
agreement providing for any of the foregoing.
5.2 Liquidation. So long as IBM is an Eligible Stockholder, without the
prior written consent of IBM, SVGL shall not voluntarily dissolve, liquidate or
wind up SVGL, carry out any partial liquidation of SVGL, file or consent to the
filing of any
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petition in bankruptcy, consent to the appointment of a receiver for it or any
substantial part of its assets, make any general assignment for the benefit of
its creditors or take any similar action. For purposes of this Section 5.2 only,
if SVGL has complied with Section 5.1 hereof, the sale of SVGL through any
merger of consolidation of SVGL with or into any other corporation, or the
acquisition by any other Person of SVGL through any merger of any other
corporation or corporations into SVGL, or a sale of all or substantially all of
the assets of SVGL shall not be deemed a violation of this Section 5.2.
5.3 Priority Transactions. In the event that SVG and/or SVGL contemplates
entering into any transaction(s) with any Person(s) which has or will have the
effect of granting any Person(s) priority with respect to receipt of tools which
are intended to be made generally available to SVGL's customers, SVG and/or
SVGL, as the case may be, will offer IBM the opportunity to participate in the
transaction(s) on terms and conditions which are equivalent to the most
favorable terms and conditions offered to the other Person(s) participating in
the transaction(s).
a. Notice. In the event that SVG and/or SVGL contemplates entering into a
transaction of the type described in Section 5.3, it or they will give IBM
written notice of its intention, describing the material terms of the
transaction and identity of
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the proposed other Person(s). IBM shall have thirty (30) days after receipt of
such notice to provide SVG and SVGL with notice of IBM interest in participating
in the transaction. If IBM indicates such an interest, SVG and/or SVGL, as the
case may be, agrees to include IBM in the negotiations of such transactions and
allow IBM to participate in the transaction as provided in Section 5.3. In the
event IBM fails to provide notice of such interest, SVG and/or SVGL shall be
free to proceed with the transaction without IBM's participation as provided in
Section 5.3(b).
b. Permitted Transactions. To the extent that IBM fails to provide notice
as specified above, SVG and/or SVGL shall have one hundred eighty (180) days
thereafter (subject to Section 10.11) to conclude the proposed transaction with
the Person(s) specified in SVG and/or SVGL's notice, upon terms no more
favorable to such Person or Persons than the terms specified in the such notice.
In the event SVG and/or SVGL, as the case may be, has not concluded the propose
transaction with such Person(s) within such one hundred eighty (180) day (or
longer, subject to Section 10.11) period, neither SVG nor SVGL shall thereafter
enter into such a transaction without first offering IBM the ability to
participate therein in the manner provided above.
ARTICLE VI
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AFFIRMATIVE COVENANTS OF THE COMPANY
For purposes of this Article VI, SVGL shall cause each of its
Subsidiaries to comply with the obligations of SVGL (except in respect of
Sections 6.2 and 6.3).
6.1 Accounting System. SVGL shall maintain all its financial records in
accordance with generally accepted accounting principles consistently applied.
6.2 Periodic Reports; Budgets.
(a) SVGL shall furnish to IBM as soon as practicable and in any
event within 60 days after the end of each fiscal year of SVGL, beginning with
the fiscal year ending on September 30, 1997, an annual report of SVGL,
including an audited balance sheet as of the end of such fiscal year and the
related audited statements of operations, stockholders' equity and cash flows
for such fiscal year (similar statements if the foregoing statements change as
the result of changes in generally accepted accounting principles) setting forth
in each case in comparative form the corresponding figures for the preceding
fiscal year and for the budget the fiscal year just completed (provided,
however, that information as to the budgeted figures need not be audited), all
of which shall fairly present the financial condition of SVGL as of the dates
shown and the results of its operations for the periods then ended. Such
financial statements shall be accompanied by the report thereon of nationally
recognized
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independent public accountants to the effect that such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a basis consistent with prior years (except as otherwise specified in
such report). SVGL shall conduct its business so that such report of the
independent public accountants shall not contain any qualifications as to the
scope of the audit or with respect to SVGL's compliance with generally accepted
accounting principles consistently applied, except for changes in methods of
accounting in which such accountants concur. SVGL shall also include with such
financial statements a calculation of primary and, if applicable, fully diluted
earnings per share and a schedule of sales or repurchases of securities of SVGL
showing the amount and type of, the price paid for and the conversion prices of,
with respect to convertible securities, such security and the seller and
purchaser.
(b) SVGL shall furnish to IBM as soon as practicable and in any
event within 30 days after the end of each calendar quarter, a quarterly report
of SVGL consisting of an unaudited balance sheet as of the end of such quarter
and the related unaudited statements of operations and cash flows for quarter
and for the fiscal year to date, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year and for the budget for
the current fiscal year. All
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such reports shall be certified by SVGL's chief financial officer as fairly
presenting the financial condition of SVGL as of the date shown and its results
of operations for the periods then ended and to have been prepared in conformity
with generally accepted accounting principles consistently applied, except for
normal, recurring year-end audit adjustments.
(c) SVGL shall furnish to IBM, as soon as practicable and in any
event within 30 days after the end of each calendar month, a monthly report of
SVGL consisting of an unaudited balance sheet as of the end of such month and
the related unaudited statements of operations and cash flows for such month and
the fiscal year to date, setting forth in each case in comparative form the
corresponding figures for the budget for the current fiscal year. The reports
for each calendar month shall include a narrative discussion prepared by SVGL
describing the business operations of SVGL during such calendar period.
(d) SVGL shall furnish to IBM, for so long as IBM is an Eligible
Stockholder, as soon as practicable and in any event not less than 30 days prior
to the commencement of each fiscal year of SVGL (A) an annual operating budget
for SVGL, approved by the Board of Directors of SVGL, for the succeeding fiscal
year, containing projections of profit and loss, cash flow and ending balance
sheets for each quarter and each month of such fiscal year, (B) an annual
summary budget for the three fiscal years
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following the next fiscal year, containing projections of profit and loss for
each of such years, and (C) a business plan for SVGL relating to the succeeding
fiscal year setting forth a development plan, financial plan, marketing plan and
budgeted and projected figures. Promptly upon preparation thereof, SVGL shall
furnish to IBM, for as so long as IBM is an Eligible Stockholder, any other
operating budgets or business plans that SVGL may prepare and which are
submitted to or approved by the Board of Directors and any revisions of such
previously furnished budgets or business plans so approved.
(e) SVGL's obligations pursuant to Section 6.2 (a) and (b) shall be
suspended for so long as the Common Stock is registered pursuant to Section 12
of the Exchange Act of SVGL is required to file reports with the SEC pursuant to
Section 15(d) of the Exchange Act; provided that SVGL timely files its Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q and provides a copy
thereof to each Stockholder.
6.3 Certificates of Noncompliance. SVGL covenants that promptly after the
occurrence of any material default (with or without notice or lapse of time or
both) under, or material breach of, this Agreement or any material agreement or
obligation, it shall deliver to IBM for so long as IBM is an Eligible
Stockholder, a certificate of an officer of SVGL specifying in detail the nature
and period of existence thereof
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and what actions SVGL has taken and proposes to take with respect thereto.
6.4 Other Reports and Inspection. SVGL shall furnish promptly to IBM (i)
copies of any financial statements or financial or other reports or compliance
certificates prepared by SVGL for or otherwise furnished to or filed with its
stockholders or any lender to SVGL of the SEC and (ii) such other documents,
reports, financial data and other information as IBM may reasonably request.
SVGL shall, upon reasonable prior notice, make available to IBM or its
representatives or designees all properties, assets, books of accounts,
corporate records and contracts (subject to the confidentiality provisions of
such contracts) of SVGL reasonably requested by IBM, and any other material
reasonably requested by IBM, for inspection and shall use its best efforts to
make available to IBM, the directors, officers, employees, customers,
independent accountants and vendors of SVGL for interviews at reasonable times
to verify all information furnished and otherwise to become familiar with SVGL
and its business, operations, properties and assets.
6.5 Insurance. SVGL shall maintain valid policies of workers'
compensation, fire and casualty, liability and other forms of insurance with
financially sound and reputable insurers, in such amounts, with such deductibles
and against such risk and losses as are reasonable for the business and assets
of SGL, and
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SVGL shall maintain such other insurance as may be required by law. The
activities and operations of SVGL shall be conducted in a manner so as to
conform in all material respects to all applicable provisions of such insurance
policies.
6.6 Business and Properties. SVGL shall obtain, preserve, renew and keep
in full force and effect all rights, licenses, permits, patents, copyrights,
trademarks, trade names and other authorizations which shall be necessary in any
material respect to the conduct of its business; provided that SVGL shall not be
deemed to be in breach of this Section 6.6 with respect to any such rights,
licenses, permits, patents, copyrights, trademarks and trade names which are not
in full force and effect but are contested diligently and in good faith by SVGL.
SVGL shall maintain and preserve all property material to the conduct of its
business and keep such property in good repair, working order and condition and
from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times.
6.7 Material Changes. SVGL shall promptly notify IBM, so long as IBM is an
Eligible Stockholder, of (i) any material adverse change in the business,
properties, assets, condition (financial or otherwise), operations or prospects
of SVGL, and
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(ii) any lawsuit, claim, proceeding or investigation, pending or, to the best
knowledge of SVGL, threatened, or any judgment, order or decree involving SVGL
and which, if the result were adverse to SVGL, might have a material effect on
the business, properties, assets, condition (financial or otherwise) operations
or prospects of the SVGL.
6.8 Agreements with Employees. The Board of Directors shall cause all
members of management and all professional employees of SVGL to enter into
agreements as the Board of Directors determines from time to time, relating to
(A) nondisclosure of confidential information; (B) assignment of patents,
trademarks and copyrights to SVGL; and (C) noncompetition.
6.9 Compliance with Applicable Laws. SVGL shall comply in all material
respects with all applicable statutes, laws, ordinances, rules and regulations
of any Governmental Authority (whether now in effect or hereafter enacted) and
any filing requirements relating thereto. Such obligation shall include
complying in all material respects with the applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, and filing in a
timely manner (within any applicable extension periods) all material returns,
reports and forms required to be filed under the Internal Revenue Code of 1986,
as amended, or under applicable state, local or foreign laws
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relating to taxes and timely paying all taxes required to be paid in respect of
the periods covered by such returns, reports and forms, except to the extent
such statues, laws, ordinances, rules, regulations or filing requirements are
being contested diligently and in good faith by SVGL (or in the case of taxes,
adequate reserves for payment thereof have been set up and if SVGL receives an
assessment for additional taxes from any taxing authority, such taxes are being
contested diligently and in good faith). SVGL shall do all things necessary to
preserve, renew and keep in full force and effect and in good standing its
corporate existence and authority necessary to continue its business.
Notwithstanding the foregoing, this Section 6.9 does not apply with respect to:
(i) any environmental matter which is defined in the Environmental Matters
Agreement as Specified Environmental Permits and Specified Environmental
Actions, or which constitutes a breach of representation and warranty contained
in the Environmental Matters Agreement, or (ii) any matter (other than any
environmental matter) to the extent it represents a substantial continuation (or
would represent a substantial continuation but for the passage of time) of the
state of affairs, activities or conduct (or the consummation of transactions or
events) that existed, occurred, or was contemplated prior to the May 15, 1990
(but not to the extent a matter formerly in compliance becomes noncompliant by
reason of a
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change in the law). For the purposes of this Section 6.9, the term
"Environmental Matters Agreement" has the meaning set forth in the Asset and
Stock Agreement. SVGL agrees to use its reasonable best efforts to correct
expeditiously any noncompliance with law existing immediately following March
18, 1997. This Section 6.9 shall in no way affect the rights and remedies of the
parties pursuant to the Environmental Matters Agreement and any other written,
executed agreements in place between the parties.
ARTICLE VII
BOARD OF DIRECTORS
7.1 IBM Observer. IBM shall be entitled to designate a nonvoting observer
who shall be entitled to attend all SVGL Board of Directors and committee
meetings. IBM acknowledges and agrees that the observer nominated by IBM will be
under an obligation to IBM not to disclose to any Person outside of IBM, or use
in other than IBM's business, any confidential information or material relating
to the business of IBM or its Subsidiaries and therefore no such information or
material will be disclosed SVGL even if such disclosure would be of interest or
value to SVGL.
7.2 Notice of Meetings. For so long as IBM has the right to designate a
nonvoting observer entitled to attend all SVGL Board and Committee meetings, it
shall have the right to receive
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reasonable prior notice of (with such notice to be sent to the address provided
in Section 10.4 below if it has not designated a specific individual), and have
its observer, attend, all meetings of the Board of Directors of SVGL or any
committee thereof and SVGL will promptly deliver to the observer designated, by
IBM copies of all minutes and other records of action by, and all written
information furnished to, the Board or such committee; provided that SVGL may,
to the extent permitted by applicable law, withhold specific information
regarding proprietary technology of SVGL which would (in the good faith opinion
of the Board of Directors of SVGL) if disclosed to IBM, result in a competitive
disadvantage to SVGL.
7.3 No Observer Fees or Expense. SVGL will not reimburse any observer sent
by IBM or IBM for expenses incurred in connection with attending any meeting of
SVGL's Board of Directors.
7.4 Precedence.
To the extent, if any, that any provision of this Article VII is
inconsistent with the provisions of Section 10.12, the provisions of Section
10.12 shall control.
ARTICLE VIII
LEGEND ON SHARE CERTIFICATES
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8.1 Legend. Each certificate representing Voting Securities of SVGL owned
by any Stockholder or any transferee shall bear the following legends (in
addition to any legends required under applicable state securities laws), except
that such certificate shall not be required to bear the first such restrictive
legend if the Stockholder shall provide to SVGL a legal opinion of such
Stockholder's counsel, in form and substance reasonably satisfactory to counsel
for SVGL, to the effect that such legend is not required in order to establish
compliance with any provisions of the Securities Act or any applicable state
securities or Blue Sky laws, and shall not bear the second such restrictive
legend to the extent no longer required under this Agreement.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR STATE SECURITIES LAWS (COLLECTIVELY
"SECURITIES LAWS") AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A STOCKHOLDERS AGREEMENT, DATED AS OF MARCH 18, 1997, BY
AND AMONG SVG LITHOGRAPHY, INC., ("SVGL") SILICON VALLEY GROUP, INC., AND
INTERNATIONAL BUSINESS MACHINES CORPORATION AND MAY NOT BE SOLD OR
TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH. A COPY OF SUCH AGREEMENT IS ON
FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF SVGL, AND SVGL WILL FURNISH A
COPY OF SUCH AGREEMENT TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN
REQUEST AND WITHOUT CHARGE.
8.2 No Transfer. SVGL agrees not to register the transfer of any
certificate so legended if SVGL has not received a
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certificate from the transferring party as to compliance with all provisions of
this Agreement (or if SVGL knows that such provisions have not been (or after
giving effect to such transfer would not be) complied with). The holder of each
certificate bearing the second of such legends by acceptance thereof agrees to
comply in all respects with the provisions of this Agreement. No holder will
offer to sell or otherwise dispose of Voting Securities of SVGL or any other
security of SVGL other than pursuant the registration requirements of the
Securities Act or an exemption therefrom.
ARTICLE IX
AGREEMENT BY SUBSEQUENT PURCHASERS
SVGL agrees to deliver to each Stockholder, and each Stockholder agrees to
deliver to all other Stockholders of SVGL and SVGL prior to issuing or making
any transfer of Voting Securities of SVGL to any Person not a party to this
Agreement, an appropriate document duly executed and delivered by such Person in
which such Person agrees that it shall be bound by, and that its beneficial
ownership of any Voting Securities of SVGL shall be subject to, all the terms
and conditions of this Agreement applicable to (i) a Stockholder generally and
(ii) in the case of a sale to a Person who, after giving effect to such sales,
would be an Affiliate Transferee, and Affiliate
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Transferee. Upon such delivery and transfer, such Person shall become a
Stockholder will all the rights hereunder of a Stockholder generally and all
other rights hereunder, if any, assigned to it pursuant to Section 10.1.
ARTICLE X
MISCELLANEOUS
10.1 Assignment. This Agreement and the rights hereunder shall not be
assignable or transferable by any party hereto (except by operation of law in
connection with a merger, consolidation or sale of all or substantially all the
assets of such party or pursuant to Section 10.12) without the prior written
consent of the other parties hereto and any purported assignment without such
consent shall be void; provided, however, that, without such consent, subject to
compliance with the provisions of Article IX, any Stockholder may assign all or
any part of its rights and obligations hereunder to an Affiliate or to any
transferee (provided such assignment shall not relieve it of its obligations
hereunder). This Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective successors, heirs,
legatees and assigns. The assignment by any Stockholder on a nonexclusive basis
of any rights under this Agreement to any transferee of Voting Securities
acquired hereunder shall not affect or diminish
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the rights or obligations of such Stockholder under this Agreement.
10.2 Consent to Jurisdiction. The parties hereto and each other
Stockholder irrevocably submits to the exclusive jurisdiction of (i) the Supreme
Court of the State of New York, New York County, and (ii) the United States
District Court for the Southern District of New York for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby or thereby.
10.3 Amendments; Waivers. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by the parties hereto and any
other Stockholders of SVGL. Any failure of a Person to comply with any
obligation, covenant, agreement or condition contained in this Agreement may be
waived by the Person entitled to the benefits thereof only by a written
instrument signed by the Person granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure of compliance. The rights and remedies of each of
the parties hereto and any other Stockholders of SVGL hereunder are cumulative
and are not exclusive of any rights or remedies such Person would otherwise
have.
10.4 Notices; Consents and Approvals.
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(a) All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally or three days after
being mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a Person as shall be specified by like notice to the parties hereto and nay
other Stockholders of SVGL):
(i) if to IBM,
International Business Machines Corporation
Microelectronics Division
X.X. Xxx 0000
Xxxxxxxx Xxxxxxxx, XX 00000
Attention: X. X. Xxxxxxx
General Manager
with copy to:
International Business Machines Corporation
Microelectronics Division
X.X. Xxx 0000
Xxxxxxxx Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Associate General Counsel
(ii) if to SVGL,
SVG Lithography, Inc.
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attention: President
with copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
(iii) if to SVG,
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Silicon Valley Group, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: President
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx &Rosati
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
(b) Any consent or approval required to be obtained hereunder from
any party (or any action that is required hereunder to be acceptable to a party
before it may be undertaken) shall be deemed not to have been given (and such
action shall be deemed not to have been acceptable) unless such consent or
approval or acceptance is evidenced by a writing signed on behalf of such party
by one of the following officers or employees (or such other Person as shall be
specified in a written notice from such party to all other parties):
(i) In the case of IBM:
IBM Microelectronics Division General Manager or any
Vice President
(ii) In the case of SVGL:
The President
(iii)In the case of SVG:
The President or any Vice President Without limiting the
generality of the foregoing, resolutions adopted by the Board of Directors of
SVGL (whether at
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a meeting or by written consent) shall not constitute any such consent or
approval, which consent or approval must be separately obtained.
10.5 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.6 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
10.7 Entire Agreement. This Agreement and the Stock Purchase Agreement
contain the entire agreement and understanding among the parties hereto with
respect to matters covered hereby and supersede all prior agreements and
understandings, written or oral, among the parties with respect to the subject
matter hereof prior to the date hereof, except as specifically set forth in the
Stock Purchase Agreement.
10.8 Severability. If any provision of this Agreement or the application
of any such provision to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdictions,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.
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10.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such state, without regard
to the conflict of laws principles of such state, except as to matters required
by applicable law to be governed by and construed in accordance with the General
Corporation Law of the State of Delaware.
10.10 Specific Enforcement; Injunctive Relief. The parties and any other
Stockholders of SVGL acknowledge that damages would be an inadequate remedy for
any breach of the provisions of this Agreement. Therefore, the obligations of
the parties and any other Stockholders of SVGL hereunder shall be specifically
enforceable and each of SVGL, SVG and IBM and any other Stockholders of SVGL
agree that each of them shall be entitled to an injunction, restraining order or
other equitable relief from any court of competent jurisdiction, restraining any
party from committing any violations of the provisions of this Agreement.
10.11 Governmental Approval. The period of time provided in this Agreement
for the closing of the purchase of securities by any party shall be extended, at
the option of the purchaser, for a period not to exceed six months beyond the
end of the applicable exercise period, as and if necessary in order to permit
such purchaser to comply with all applicable laws, rules and regulations of any
Governmental Authority provided the
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purchaser uses its reasonable best efforts to obtain such approvals as soon as
practicable. Notwithstanding anything to the contrary herein, such purchaser may
elect not to proceed with such purchase if, in its good faith opinion, such
compliance would be burdensome or unduly expensive.
10.12 SVG Pledge. (a) Notwithstanding anything herein to the contrary, SVG
may pledge all, or any portion of, its right, title and interest in the Common
Stock, Voting Securities or other equity interest in SVGL now owned or hereafter
acquired and, in connection therewith, may assign its right, title and interest
in and to this Agreement and/or the Stock Purchase Agreement (collectively, the
"Collateral") to any commercial bank lender of group of lenders to SVG
(individually and collectively, a "Lender"), to secure (along with a security
interest in substantially all of SVG's other assets) SVG's obligations under a
loan agreement (the "Loan Agreement") between SVG and any such Lender, provided,
however, that any such Lender shall agree in a writing in substantially the form
attached hereto as Exhibit A that (i) the Lender's respective rights in the
Collateral (and those of any subsequent transferee of the Collateral) shall be
subject to all of the rights and obligations of the Stockholders under this
Stockholders Agreement, except that the Lender (or such transferee) shall have
no obligation to make any payment required by this Agreement or to purchase any
further interest in
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SVGL, (ii) the Lender will take action to foreclose its interest in the
Collateral only concurrently with or subsequent to other action to generally
foreclose upon other collateral held by the Lender securing the Loan Agreement
(i.e., concurrently with or subsequent to actions such as foreclosure upon the
share of other Subsidiaries of SVG or its successor, providing notices to the
obligors on accounts receivable to make payments directly to the Lender,
institution of proceedings to foreclose on equipment, providing notices to
bailees of cash equivalent accounts to hold funds, and the like), except to the
extent that so to do would, in the Lender's reasonable judgment, impair or
threaten to impair the Lender's interest in any material item of Collateral as a
result of any legal consequences arising from the order in which the Collateral
shall be realized upon (iii) all votes to be taken by the Stockholders following
the Lender's acquisition of voting power with respect to the Collateral shall be
required to be unanimous among the Stockholders before the subject action shall
be deemed approved except that the Lender will be entitled to elect one director
to SVGL's board of directors, such nominee to be subject to the prior written
consent of IBM, which consent shall not be unreasonably withheld, (iv) if the
Lender shall, upon any default, propose to retain the Collateral in satisfaction
of the obligations secured thereby or determine to purchase the Collateral at
any public or private sale or
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otherwise acquires the Collateral, such retention, purchase or other acquisition
and any subsequent disposition by such Lender shall not be subject to the
provisions of Article III for a period of five years from the date such Lender
so acquires the Collateral, (v) the Lender agrees to grant IBM the option
(exercisable by IBM by written notice to the Lender and all Stockholders) to
purchase for cash (without recourse to the transferor) all but not less than all
of the Collateral acquired by the Lender in any foreclosure or otherwise, at any
time and from time to time following such acquisition, the purchase price for
the purchase of such Collateral being the appraised value determined in
accordance with Section 4.1 of this Agreement as if an SVG Change in Control had
occurred, except that the Lender shall act in the stead of SVG for purposes of
selecting the investment banking firm referred to therein, the closing of such
purchase to take place within 15 days following such determination (subject to
10.11 hereof), and if any such notice exercising such option shall be given by
IBM, then the other shall have 30 days (and no more than 30 days) from receipt
of such notice by the party exercising such option, to exercise its option to
purchase the Collateral hereunder and the pro rata share to be purchase by IBM
in such event shall be determined pursuant to Section 3.3 hereof, (vi) the
Lender shall agree to a confidentiality agreement pertaining to SVGL
substantially in the
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form furnished by SVG to the other parties hereto concurrently herewith and each
Lender shall also agree that it will not transfer any interest in the Collateral
(whether by sale, participation or otherwise) to any other Person who shall not
have entered into such a confidentiality agreement and (vii) the Lender shall
not have access to any information which in the reasonable judgment of the SVGL
or IBM is proprietary technological or other nonfinancial operation information
of SVGL or IBM. The agent acting on behalf of the Lender with respect to the
Collateral shall at all times not be a Competitor of IBM (determined without
reference to the last proviso of the definition of such term).
(b) IBM agrees that (i) the pledge by SVG to any Lender of the
Collateral pursuant to the terms hereof and (ii) the retention, purchase or
other acquisition by any Lender (but no other Person) of any of the Collateral
foreclosed upon by any Lender and (iii) the subsequent disposition by the Lender
of any of the Collateral to another Person in a transaction in which IBM has
been afforded by the Lender a right of first refusal to purchase such
Collateral, but has not elected to purchase the same, shall not, by virtue of
(X) such foreclosure or (Y) any Lender or any other such Person so obtaining
beneficial ownership of such Collateral, give rise to the right of IBM to
terminate the Environmental Matters Agreement. The right of first refusal
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described in the preceding sentence shall be effected by a written notice from
the Lender to IBM specifying the identity of the proposed purchaser of the
Collateral and the price and other material terms on which the Lender proposes
to sell or transfer such Collateral, after receipt of which notice IBM shall
have 30 days to elect, by written notice to the Lender, to purchase all, but not
less than all, of such Collateral at the price and on the terms described in
such notice from the Lender, the closing of such purchase to occur within 15
days of the Lender's receipt of IBM's notice of election to purchase such
Collateral, subject to the provisions of Section 10.11 hereof. In the event that
IBM shall fail to deliver such a written notice to the Lender within such 30 day
period, or, if IBM has delivered such notice, but shall fail to tender the
required purchase price for the Collateral within such 15 day period, subject to
Section 10.11 hereof, then the Lender shall be fee to sell the Collateral in the
transaction described in the original notice from the Lender. This Section
10.12(b), however, shall not affect or diminish IBM's other rights or remedies
under any other agreement or otherwise or, except as set forth in the preceding
sentence, limit or act as a waiver of IBM's rights or remedies under any other
agreement or otherwise, nor shall it affect IBM's rights under this Agreement
with respect to any Collateral which shall be transferred by any Lender to
another Person.
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(c) SVG consents to the grant of the option by any Lender
contemplated to be granted pursuant to Section 10.12(a) and the purchase price
for the Collateral contemplated thereby.
(d) Each Stockholder agrees that the provisions of Article III shall
not apply to the grant of the option by any Lender referred to in Section
10.12(a) or to the exercise by IBM of its or their rights in respect thereof.
IN WITNESS WHEREOF, the parties have caused this Stockholders
Agreement to be duly executed as of the date first written above.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
Manager of Business Alliance and
Headquarter Operations
March 18, 1997
SVG LITHOGRAPHY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
Vice President and Chief
Financial Officer
March 18, 1997
SILICON VALLEY GROUP, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
Vice President and Chief
Financial Officer
March 18, 1997
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Exhibit A
LETTER AGREEMENT
FROM: [LENDER]
TO: International Business Machines Corporation
RE: Stockholders Agreement dated as of March __, 1990 (the "Stockholders
Agreement"), among SVG Lithography, Inc. (the "Company"), Silicon
Valley Group, Inc. ("SVG"), and International Business Machines
Corporation ("IBM"). Capitalized terms used herein and not defined
herein have the meanings assigned in the Stockholders Agreement.
DATE: ________________
Dear Sirs:
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We hereby agree with IBM as follows:
1. We agree that our interest in the Collateral shall be subject to the
terms and provisions of Paragraph 10.12(a) of the Stockholders Agreement, which
are, mutatis mutandis, hereby incorporated herein by reference.
2. We hereby confirm the grant to IBM of the option in respect of the
Collateral described in Paragraph 10.12(a) of the Stockholders Agreement.
3. We agree, effective upon our acquisition of ownership of the Collateral
pursuant to a foreclosure or otherwise of all or any part of the Collateral, to
be bound by, and that the ownership of such Collateral shall be subject to, all
the terms and conditions of the Stockholders Agreement applicable to a
Stockholder generally, but in no event shall we have any obligation to make any
payment required by the Agreement or to purchase any further interest in the
Company.
4. All notices and communications under this Letter Agreement shall be in
writing, mailed by registered or certified mail (return receipt requested),
postage prepaid to the party at its address (or at such other addresses as shall
be specified in a like notice to the other party) set forth below its signature.
5. The provisions of Sections 10.7, 10.8, 10.9 and 10.10 of the
Stockholders Agreement are, mutatis mutandis, hereby incorporated herein by
reference.
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Very truly yours,
[LENDER]
By:_____________________
Title:
Address:
Accepted and Agreed as of
the date first above written:
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By:____________________________
Title:
Address:
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