EXHIBIT 10.31
ETEC SYSTEMS, INC.
INTEL CORPORATION
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INVESTOR AGREEMENT
THIS INVESTOR AGREEMENT (this "Agreement") is made and entered into as of
the 28th day of June, 1996, by and among ETEC SYSTEMS, INC. a Nevada corporation
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(the "Company"), and INTEL CORPORATION, a Delaware corporation (the "Investor").
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RECITALS:
A. Contemporaneously with the execution and delivery hereof, the Investor
is purchasing from the Company, and the Company is selling to the Investor, five
hundred thousand (500,000) shares of the Company's Common Stock (as defined in
Section 1 below) pursuant to the Common Stock Purchase Agreement (as defined in
Section 1 below), and the Company is at the same time issuing the Warrants (as
defined in Section 1 below) to the Investor.
B. In connection with the Investor's acquisition of Common Stock and the
Warrants, the Investor and the Company are entering into this Investor Agreement
to provide for certain rights and obligations with respect thereto.
SECTION 1
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Definitions
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1.1 Certain Definitions. As used in this Agreement, the following terms
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shall have the meanings set forth below:
(a) "Affiliate" shall have the meaning specified in Rule 12b-2 under the
Exchange Act, as such rule is currently in effect.
(b) "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
(c) "Common Stock" shall mean the Common Stock, par value $.01 per share,
of the Company.
(d) "Common Stock Purchase Agreement" shall mean that certain Common Stock
Purchase Agreement dated as of May 23, 1996 by and between the Company and the
Investor.
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(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(f) "Holder" shall mean the Investor, so long as the Investor holds
Registrable Securities, and any holder of Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in
compliance with Section 5 hereof.
(g) "Initial Public Offering" shall mean the initial sale of Common Stock
of the Company to the public which is effected pursuant to a registration
statement filed with, and declared effective by, the SEC under the Securities
Act.
(h) "Other Shareholders" shall mean persons other than Holders who, by
virtue of agreements with the Company, are entitled to include their securities
in certain registrations.
(i) "Registrable Securities" shall mean (i) shares of Common Stock
purchased by the Investor from the Company pursuant to the Common Stock Purchase
Agreement, (ii) any shares of Common Stock issued or issuable upon complete or
partial exercise of the Warrants, and (iii) any shares of Common Stock issued as
a dividend or other distribution with respect to or in exchange for or in
replacement of the shares referenced in (i) and (ii) above, provided, however,
that Registrable Securities shall not include any shares of Common Stock which
have previously been registered or which have been sold to the public.
(j) The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
(k) "Registration Expenses" shall mean all expenses incurred in effecting
any registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and expenses of any regular or special audits incident to or required by any
such registration, but shall not include Selling Expenses and fees and
disbursements of counsel for the Holders (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the
Company).
(l) "Rule 144" shall mean Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
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(m) "Rule 145" shall mean Rule 145 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(n) "Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations thereunder,
all as the same shall be in effect from time to time.
(o) "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and fees and
disbursements of counsel for the Holder (other than the fees and disbursements
of counsel included in Registration Expenses).
(p) "Subsidiary" of any party shall mean any corporation, partnership,
joint venture, association or other business entity of which such party now or
hereafter owns, directly or indirectly, securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other governing body thereof.
(q) "Voting Securities" shall mean any securities of the Company (unless
the context specifically contemplates another issuer) having the ordinary power
to vote, in the absence of contingencies, in the election of directors of the
Company and any securities convertible, exchangeable or exercisable for such
securities (whether or not presently so convertible, exchangeable or
exercisable).
(r) "Warrants" shall mean the Warrants dated the date hereof issued by the
Company to the Investor.
SECTION 2
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"Lock-Up" Agreement
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The Investor agrees that it will not sell, exchange or transfer for value
any shares of Common Stock purchased pursuant to the Common Stock Purchase
Agreement in a public market transaction, other than shares of Common Stock
which are issued to the Investor pursuant to the exercise of the Warrants,
during the period extending from the date hereof until the second anniversary of
the date hereof. The foregoing shall not preclude any private sale or other
private disposition of such shares of Common Stock or any transfer of shares
from the Investor to a Subsidiary of the Investor, provided that in any such
case the transferee assumes the obligations of the Investor under this Section
2, as provided in Section 5 hereof.
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SECTION 3
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"Standstill" Agreement
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3.1 Standstill Obligation. Subject to Section 3.2 and other provisions
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hereof, from the date hereof until the second anniversary of the date hereof,
the Investor covenants to and agrees with the Company that, unless the Investor
is specifically invited in writing to do so by the Company, the Investor shall
not, and shall cause each of its Subsidiaries not to, directly or indirectly:
(i) in any way acquire or agree to acquire beneficial ownership of
any securities or any direct or indirect rights or options to acquire
beneficial ownership of any securities of the Company, if the aggregate
percentage (calculated by voting power) of the Voting Securities
beneficially owned by the Investor and its Subsidiaries after giving effect
to such acquisition would equal or exceed 20% (the "Percentage Limitation")
of the aggregate Voting Securities then outstanding, measured by ordinary
voting power, and assuming the conversion, exchange or exercise of all
securities then outstanding which may be (at that time or at a later time
or upon the occurrence of one or more contingencies);
(ii) make any public announcement with respect to, or submit to the
Company or any of its directors, officers, representatives, employees,
attorneys, advisers, agents or Affiliates (whether publicly or otherwise)
any proposal for, the acquisition of Voting Securities not permitted by
subsection (a) above or for or with respect to any merger, consolidation or
business combination involving the Company or its Affiliates or for or with
respect to any purchase of a substantial portion of the assets of the
Company or its Affiliates, whether or not any parties other than the
Investor and its Affiliates are involved, and whether or not such proposal
might require the making of a public announcement by the Investor;
provided, however, that the foregoing shall not be deemed to preclude the
Investor from making any filing or public announcement required in order to
comply with applicable law as a result of purchases by the Investor of
shares of Common Stock which do not result in a breach by the Investor of
subsection (a) above;
(iii) make, or in any way participate in, any "solicitation" of
"proxies" to vote any Voting Securities or become a "participant" in any
"election contest" (as such terms are defined or used in Regulation 14A
under the Exchange Act, as such Regulation is currently in effect),
provided that the
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Investor shall not be deemed to be a "participant" by reason of exercise of
its ordinary voting rights;
(iv) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to any Voting
Securities of the Company;
(v) grant any proxy with respect to any Voting Securities to any
Person not approved by the Company;
(vi) deposit any Voting Securities in a voting trust or subject any
Voting Securities to any arrangement or agreement with respect to the
voting of such Voting Securities or other agreement having similar effect;
(vii) take any action which would be reasonably likely to require the
Company or the Investor to make a public announcement regarding any of the
matters specified in this Section 3;
(viii) enter into any negotiations, arrangements or understandings
with any third party with respect to any of the foregoing, or any
discussions designed to advise, assist or encourage any third party in
connection with any of the foregoing;
(ix) disclose publicly any intention, plan or arrangement
inconsistent with the foregoing; or
(x) otherwise act, alone or in concert with others, to seek to
control or influence the management, Board of Directors or policies of the
Company, other than through the exercise of ordinary voting rights.
The Investor may acquire Voting Securities without regard to the foregoing
limitations, and such limitations shall be suspended, but not terminated, if and
for so long as (A) a tender or exchange offer is made and is not withdrawn or
terminated by another person or group to purchase or exchange for cash or other
consideration any Voting Securities which, if accepted or if otherwise
successful, would result in such person or group beneficially owning or having
the right to acquire Voting Securities representing twenty percent (20%) or more
of the aggregate outstanding Voting Securities measured by ordinary voting
power, and assuming the conversion, exchange or exercise of all securities then
outstanding which may be (at that time or at a later time or upon the occurrence
of one or more contingencies), and such offer is not withdrawn or terminated
prior to the Investor making an offer to acquire Voting Securities or acquiring
Voting Securities, or (B) another person or group hereafter acquires Voting
Securities which results in such person or group beneficially owning or having
the right to
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acquire Voting Securities representing twenty percent (20%) or more of the
aggregate outstanding Voting Securities measured by ordinary voting power, and
assuming the conversion, exchange or exercise of all securities then outstanding
which may be (at that time or at a later time or upon the occurrence of one or
more contingencies) and such person or group would be required to file a
Schedule 13D (under the rules promulgated under Section 13(d) of the Exchange
Act as such rules are in effect on the date hereof) indicating pursuant to Item
4 of such Schedule 13D that the purpose of such acquisition is other than for
investment; provided, however, that the foregoing limitation regarding purchases
of Voting Securities shall be reinstated, in the case of (A) above, once any
such tender or exchange offer is withdrawn or terminated, or, in the case of (B)
above, once the Voting Securities beneficially owned by such other person falls
below twenty percent (20%) of the aggregate outstanding Voting Securities
measured by ordinary voting power, and assuming the conversion, exchange or
exercise of all securities then outstanding which may be (at that time or at a
later time or upon the occurrence of one or more contingencies).
3.2 "Standstill" Obligation Limitations. The Investor shall not be
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obligated to dispose of any Voting Securities if the aggregate percentage of
Voting Securities owned by the Investor and its Subsidiaries equals or exceeds
the Percentage Limitation, measured by ordinary voting power, and assuming the
conversion, exchange or exercise of all securities then outstanding which may be
(at that time or at a later time or upon the occurrence of one or more
contingencies) (a) as a result of any transaction approved by the Board of
Directors of the Company, (b) as a result of any acquisition of Voting
Securities made during the period when the Investor's "standstill" obligations
may be suspended pursuant to Section 3.1, (c) as a result of any equity index
transaction, provided that the Investor shall not vote or give a proxy with
respect to any Voting Securities acquired in connection with such transaction,
or (d) as part of a transaction on behalf of the Investor's Defined Benefit
Pension Plan, Profit Sharing Retirement Plan 401(k) Savings Plan, Sheltered
Employee Retirement Plan and Sheltered Employee Retirement Plan Plus, or any
successor plans thereto or additional retirement plans (collectively, the
"Retirement Plans") where the Company's shares held by such Retirement Plans are
voted by a trustee independent of the Investor or otherwise are voted in the
same percentages as all other shares voting.
3.3 Retirement Plans. For purposes of this Section 3, the Investor shall
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be deemed not to have beneficial ownership of any Voting Securities held by any
Retirement Plan if the Investor does not have the power to control the
investment decisions or voting of such Retirement Plan.
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SECTION 4
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Registration Rights
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4.1 Demand Registration.
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(a) Demand for Registration. If the Company shall receive from the Holder
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at any time not earlier than (I) as to Registrable Securities issuable upon
exercise of the Warrants, the dates as of which the Warrants become exercisable
in accordance with the conditions therefor specified in each Section 1 thereof,
and (II) as to any other Registrable Securities, the second anniversary of the
date hereof, a written request that the Company effect any registration with
respect to all or a part of the Registrable Securities the Company will, as soon
as practicable, use its best efforts to effect such registration (including,
without limitation, filing post-effective amendments, appropriate qualifications
under applicable blue sky or other state securities laws, and appropriate
compliance with the Securities Act) and as would permit or facilitate (subject
to Section ___ hereof) the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request. The Company shall not
be obligated to effect, or to take any action to effect, any such registration
pursuant to this Section 4.1(a):
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting
such registration, qualification, or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act;
(B) Subject to the proviso in clause (A)(y) of Section 4.3 hereof,
after the Holder has initiated one such registration pursuant to this
Section 4.1(a);
(C) During the period starting with the date sixty (60) days prior
to the Company's good faith estimate of the date of filing of, and ending
on a date one hundred eighty (180) days after the effective date of, a
Company-initiated registration; provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective;
(D) If the Holder proposes to dispose of shares of Registrable
Securities which may be immediately registered on Form S-3 pursuant to a
request made under Section 4.4 hereof;
(E) If the Holders do not request that such offering be firmly
underwritten by one or more underwriters selected by the Holder (subject to
the consent of the Company, which consent will not be unreasonably
withheld); or
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(F) If the Company and the Holder are unable to obtain the
commitment of the underwriter described in clause (E) above to firmly
underwrite the offer.
(b) Deferral. Subject to the foregoing clauses (i) through (vi) of
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subsection 4.1(a) above, the Company shall file a registration statement
covering the Registrable Securities so requested to be registered as soon as
practicable after receipt of the request or requests of the Holders; provided,
however, that if (i) in the good faith judgment of the Board of Directors of the
Company, such registration would be seriously detrimental to the Company and the
Board of Directors of the Company concludes, as a result, that it is essential
to defer the filing of such registration statement at such time, and (ii) the
Company shall furnish to the Holder a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company for such registration
statement to be filed in the near future and that it is, therefore, essential to
defer the filing of such registration statement, then the Company shall have the
right to defer such filing for the period during which such disclosure would be
seriously detrimental, provided that (except as provided in clause (iii) of
subsection 4.1(a) above) the Company may not defer the filing for a period of
more than one hundred eighty (180) days after receipt of the request of the
Holder, and, provided further, that the Company shall not defer its obligation
in this manner more than once in any twelve-month period. The registration
statement filed pursuant to the request of the Holder may, subject to the
provisions of Section 4.3 hereof, include other securities of the Company.
(c) Procedures and Cutbacks. If the Company shall request inclusion of
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other securities in any registration or underwriting pursuant to Section 4.1(a),
such securities shall be included in such registration and underwriting, subject
to the terms and conditions hereof. In such event the Company shall (together
with the Holder and other persons proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
such underwriting by the Holder, which underwriter or underwriters are
reasonably acceptable to the Company. If a person who has requested inclusion
in such registration as provided above does not agree to the terms of any such
underwriting agreement, such person shall be excluded therefrom by written
notice from the Company, the underwriter or the Holders. The securities so
excluded shall also be withdrawn from registration. Notwithstanding any other
provision of this Section 4.1, if the representative of the underwriters advises
the Holder in writing that marketing factors require a limitation on the number
of shares to be underwritten, the number of shares to be included in the
underwriting or registration shall be allocated as set forth in Section 4.3
hereof.
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4.2 Piggyback Registration . (a) If the Company shall propose, at any
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time not earlier than (I) as to Registrable Securities issuable upon exercise of
the Warrants, the dates as of which the Warrants may become exercisable in
accordance with the conditions therefor specified in each Section 1 thereof, and
(II) as to any other Registrable Securities, the second anniversary of the date
hereof, to register any of its securities under the Securities Act for sale for
cash for its own account or for the account of investors exercising their
respective registration rights (otherwise than in connection with the
registration of securities issuable pursuant to an employee stock option, stock
purchase or similar plan or pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the Securities Act), or a
registration is requested by other holders of securities issued by the Company
exercising their respective registration rights, the Company shall give the
Holder notice of such proposed registration at least 20 days prior to the filing
of a registration statement. At the written request of the Holder delivered to
the Company within 15 days after the receipt of the notice from the Company,
which request shall state the number of Registrable Securities that the Holder
wishes to sell or distribute publicly under the registration statement proposed
to be filed by the Company, the Company shall use its best efforts, subject to
Section 4.3 hereof, to register under the Securities Act such Registrable
Securities (the "Piggyback Registration"). The Company shall not be obligated to
so use its best efforts more than two (2) times.
(b) Procedures and Cutbacks. If a Piggyback Registration is to be an
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underwritten offering, the Company shall so advise the Holders as a part of the
written notice given pursuant to Section 4.2(a). In such event, the right of
the Holder to registration pursuant to Section 4.2(a) shall be conditioned upon
the Holder's participation in such underwriting and the inclusion of the
Holder's Registrable Securities in the underwriting to the extent provided
herein. If the Holder intends to distribute its securities through such
underwriting, the Holder shall (together with the Company and the other holders
of securities of the Company with registration rights to participate therein
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company. Notwithstanding any other
provision of this Section 4.1, if the representative of the underwriters advises
the Holder in writing that marketing factors require a limitation on the number
of shares to be underwritten, the number of shares to be included in the
underwriting or registration shall be allocated as set forth in Section 4.3
hereof.
4.3 Allocation of Registration Opportunities. If a registration is to be
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an underwritten registration and the managing underwriters thereof advise the
Company in writing that in their opinion the number of securities requested to
be included in the registration (including all shares desired to be
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included by the Company or by any other party holding demand or piggyback
registration rights) exceeds the number which can be sold in the offering, then:
(A) if the registration is initiated by the Holder under Section 4.1(a) hereof,
then the Company shall include in the registration (x) first, any securities the
Company proposes to sell; and (y) second, the Registrable Securities the Holder
proposes to sell, together as one group with any securities proposed to be sold
by any other party then having piggyback registration rights but not any demand
registration rights, pro rata according to the total number of Voting Securities
owned by each such party (provided, however, that if as a result of the
Company's registration of any securities the Company proposes to sell, the
Holder is unable to register all of the Registrable Securities the Holder
proposes to sell pursuant to the notice by which such registration was
initiated, then the Holder shall have the right to initiate an additional
registration under Section 4.1(a) hereof); and (z) third, the shares proposed to
be sold by any other party having piggyback registration rights, together as one
group pro rata according to the total Voting Securities owned by each; or (B) if
the registration is initiated by the Company, then the Company shall include in
the registration (y) first, the securities the Company proposes to sell and (z)
second, the shares proposed to be sold by the Holder and any other party having
piggyback registration rights, together as one group pro rata according to the
total Voting Securities owned by each; or (C) if the registration is initiated
by a party other than the Holder or the Company, then the Company shall include
in the registration (x) first, any securities the Company proposes to sell, and
(y) second, the shares proposed to be sold by the party exercising its demand
registration right, together as one group with any shares proposed to be sold by
any party then having piggyback registration rights but not any demand
registration rights, pro rata according to the total number of Voting Securities
owned by each such party, and (z) third, any shares proposed to be sold by the
Holder and any other party having registration rights, pro rata according to the
total number of Voting Securities owned by each such party. Registrable
Securities not included in a registration pursuant to the foregoing shall be
withdrawn therefrom, and the Company shall have no obligation to register such
Registrable Securities.
4.4 Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to
Sections 4.1, 4.2 and 4.5 hereof, and the reasonable fees of one counsel for the
selling shareholders in the case of a registration pursuant to Section 4.1 shall
be borne by the Company.
4.5 Registration on Form S-3.
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(a) The Company shall use its best efforts to qualify for registration on
Form S-3 or any comparable or successor form or forms. After the Company has
qualified for the use of Form S-3,
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in addition to the rights contained in Sections 4.1 and 4.2, the Holders of
Registrable Securities shall have the right to request registrations on Form S-3
(such requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended methods of disposition
of such shares by the Holder), provided, however, that the Company shall not be
obligated to effect any such registration if (i) the Holder, together with the
holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities
(if any) on Form S-3 at an aggregate price to the public of less than
$1,000,000, or (ii) in the event that the Company shall furnish the
certification described in paragraph 4.1(b) (but subject to the limitations set
forth therein) or (iii) in a given twelve-month period, after the Company has
effected one (1) such registration in any such period.
(b) If a request complying with the requirements of subsection (a) above
is delivered to the Company, the provisions of Section 4.1(b) hereof shall apply
to such registration.
4.6 Registration Procedures. In the case of a registration effected by
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the Company pursuant to Section 4.1, 4.2 or 4.5, the Company will keep the
Holder advised in writing as to the initiation of the registration and as to the
completion thereof. At its expense, the Company will use its best efforts to:
(a) Keep such registration effective for a period of one hundred twenty
(120) days or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs; provided, however, that (i) such 120-day period shall be extended for a
period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company; and (ii) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 120-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 145, or any successor rule
under the Securities Act, permits an offering on a continuous or delayed basis,
and provided further that applicable rules under the Securities Act governing
the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment that (I) includes any prospectus required by Section
10(a)(3) of the Securities Act or (II) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be included
in (I) and (II) above to be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Exchange Act in the registration statement;
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(b) Prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;
(c) Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as the
Holder from time to time may reasonably request;
(d) Notify the Holder at any time when a prospectus relating to
Registrable Securities being sold is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing, and at the request
of the Holder, prepare and furnish to the Holder a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such shares, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances then
existing;
(e) Cause all such Registrable Securities registered pursuant hereunder to
be listed on each securities exchange on which similar securities issued by the
Company are then listed;
(f) Provide a transfer agent and registrar for all Registrable Securities
registered pursuant to such registration statement and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration; and
(g) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 4.1 or 4.2 hereof, the Company
will enter into an underwriting agreement reasonably necessary to effect the
offer and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions and provided further that if the underwriter
so requests the underwriting agreement will contain customary contribution
provisions.
4.7 Indemnification.
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(a) The Company will indemnify the Holder, each of its officers, directors
and partners, legal counsel, and accountants and each person controlling the
Holder within the meaning of
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Section 15 of the Securities Act, with respect to which registration,
qualification, or compliance has been effected pursuant to this Section 4, and
each underwriter, if any, and each person who controls within the meaning of
Section 15 of the Securities Act any underwriter, against all expenses, claims,
losses, damages, and liabilities (or actions, proceedings, or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular, or other document (including any related registration statement,
notification, or the like) incident to any such registration, qualification, or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act,
the Securities Exchange Act of 1934 or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification, or compliance,
and will reimburse the Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling the Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability, or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by the Holder or underwriter and stated to be specifically for use
therein. It is agreed that the indemnity agreement contained in this Section
4.7(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent has not been unreasonably withheld).
(b) The Holder will, if Registrable Securities are included in the
securities as to which such registration, qualification, or compliance is being
effected, indemnify the Company, each of its directors, officers, partners,
legal counsel, and accountants and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, each Other Shareholder, and each of their officers, directors,
and partners, and each person controlling such Other Shareholder, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular, or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and such Other
Shareholders, directors, officers, partners, legal counsel, and
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accountants, persons, underwriters, or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability, or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by the Holder and
stated to be specifically for use therein; provided, however, that the
obligations of the Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of the
Holder (which consent shall not be unreasonably withheld).
(c) Each party entitled to indemnification under this Section 4.7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 4.7, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 4.7 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with
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the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control as among the parties to the underwriting agreement.
4.8 Information by Holder. The Holder shall furnish to the Company such
---------------------
information regarding the Holder and the distribution proposed by the Holder as
the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification, or compliance
referred to in this Section 4.
4.9 Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission that may permit the sale of the
Restricted Securities to the public without registration, the Company agrees to
use its best efforts to:
(a) Make and keep public information regarding the Company available as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times from and after ninety (90) days following the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements;
(c) So long as the Holder owns any Restricted Securities, furnish to the
Holder forthwith upon written request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 (at any time from and
after ninety (90) days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed as the Holder may reasonably request in
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availing itself of any rule or regulation of the Commission allowing the Holder
to sell any such securities without registration.
4.10 Delay of Registration. The Holder shall not have any right to take
---------------------
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 4.
4.11 Expiration of Rights. All rights of the Investor under this Section 4
--------------------
shall expire on the tenth anniversary of the date hereof.
SECTION 5
Transfer of Shares
------------------
If prior to the expiration of the period provided in Section 2 hereof, the
Holder transfers shares of Common Stock to a Subsidiary as provided therein, the
Holder may transfer or assign to such Subsidiary the rights to cause the Company
to register Registrable Securities under Section 4 hereof, provided that the
Company is given written notice at the time of or within a reasonable time after
such transfer or assignment, stating the name and address of the transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned, and, provided further, that the
transferee or assignee of such rights assumes all of the obligations of the
Holder under this Agreement and no such assignment or transfer shall operate to
release the Holder from any of its obligations or liabilities hereunder. If, at
any time, the Holder sells or otherwise transfers the Warrants, or if, after the
expiration of the period provided in Section 2 hereof, the Holder sells or
otherwise transfers shares of Common Stock, then, in connection therewith, the
Holder may also transfer or assign the rights to cause the Company to register
securities under Section 4 hereof, provided that the Company is given written
notice at the time of or within a reasonable time after such transfer or
assignment, stating the name and address of the transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and, provided further, that the transferee or
assignee of such rights assumes the obligations of the Holder under this
Agreement other than Sections 2 and 3 hereof.
SECTION 6
Miscellaneous
-------------
6.1 Governing law. This Agreement shall be governed in all respects by
-------------
the laws of the State of Delaware.
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6.2 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
6.3 Entire Agreement; Amendment; Waiver. This Agreement constitutes the
-----------------------------------
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof. Neither this Agreement nor any term hereof may
be amended, waived, discharged or terminated, except by a written instrument
signed by the Company and the holders of all of the Registrable Securities and
any such amendment, waiver, discharge or termination shall be binding on all
such holders, but in no event shall the obligation of any such holder hereunder
be materially increased, except upon the written consent of such holder.
6.4 Notices, etc. All notices required or permitted hereunder shall be in
-------------
writing and shall be deemed effectively given (a) upon personal delivery to the
party notified, (b) three days after deposit with the United States Post Office,
by registered or certified mail, postage prepaid, return receipt requested, (c)
one day after deposit with a nationally recognized air courier service such as
DHL or Federal Express for next day delivery, or (d) on the day of facsimile
transmission, with confirmed transmission, to the facsimile number shown below
(or to such other facsimile number as the party to be notified may indicate by
ten (10) days' advance written notice to the other party in the manner herein
provided), provided that notice is also given under clauses (a), (b) or (c)
above; in any such case addressed to the party to be notified at the address
indicated below for that party, or at such other address as that party may
indicate by ten (10) days' advance written notice to the other party in the
manner herein provided.
6.5 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to the Holder, upon any breach or default of the
Company under this Agreement shall impair any such right, power or remedy of the
Holder nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default therefore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of the
Holder of any breach or default under this Agreement or any waiver on the part
of the Holder of any provisions or conditions of this Agreement must be made in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to the Holder, shall be cumulative and not alternative.
6.6 Rights; Separability. Unless otherwise expressly provided herein, the
--------------------
Holder's rights hereunder are several
-17-
rights, not rights jointly held with any of the other Holders. In case any
provision of the Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
6.7 Information Rights. The Company shall, so long as the Investor holds
------------------
shares of Common Stock purchased pursuant to the Common Stock Purchase Agreement
dated as of May __, 1996 by and between the Company and the Investor, or the
Warrants, or shares issued pursuant to the exercise of the Warrants, furnish the
Investor with a copy of all reports (including annual reports on Form 10-K and
quarterly reports on Form 10-Q) filed under the Exchange Act or otherwise mailed
to shareholders generally.
6.8 Information Confidential. The Holder and the Company each acknowledge
------------------------
to the other that the information received from the other party pursuant hereto
may be confidential and for the use of the recipient only. Unless and until
such information is made available to the public generally, the recipient will
not use such confidential information in violation of the Exchange Act or
reproduce, disclose or disseminate such information to any other person (other
than its employees or agents having a need to know the contents of such
information, and its attorneys), except in connection with the exercise of
rights under this Agreement, disclosure of such information is required by law
or legal process, in which event the party required to disclose such information
shall notify the other party in advance of such disclosure and shall cooperate
to give the other party a reasonable opportunity to seek a protective order or a
designation of "confidential treatment" or other action or designation whereby
such information will not be disclosed to the public generally.
6.9 Titles and Subtitles. The titles of the paragraphs and subparagraphs
--------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
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6.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Investor
Agreement effective as of the day and year first above written.
ETEC SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Title: Chief Executive Officer
-----------------------------
HOLDER:
INTEL CORPORATION
By: /s/ Xxxx Xxxx
--------------------------------
Title: Assistant Treasurer
-----------------------------
Addresses and facsimile numbers for notices:
Etec Systems, Inc.
00000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
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