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EXHIBIT 2.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT dated as of November 19, 1998 (the
"Agreement") is entered into by and between Integrated Process Equipment Corp.,
a Delaware corporation ("IPEC"), and SpeedFam International, Inc., an Illinois
corporation ("SpeedFam").
RECITALS
WHEREAS, concurrently with the execution and delivery of this
Agreement, IPEC, SpeedFam and SpeedFam, Inc., a Delaware corporation and a
wholly owned subsidiary of SpeedFam ("Sub"), are entering into an Agreement and
Plan of Merger (the "Merger Agreement"), which provides that, among other
things, upon the terms and subject to the conditions thereof, IPEC and SpeedFam
will enter into a business combination transaction to pursue their long-term
business strategies (the "Merger"); and
WHEREAS, as a condition to SpeedFam's willingness to enter into the
Merger Agreement, SpeedFam has requested that IPEC agree, and IPEC has so
agreed, to grant to SpeedFam an option to acquire shares of IPEC's Common Stock,
$.01 par value per share together with any associated rights ("IPEC Rights")
under the IPEC Preferred Share Rights Agreement dated March 5, 1997, as amended,
upon the terms and subject to the conditions set forth herein;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Merger Agreement and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. GRANT OF OPTION
IPEC hereby grants to SpeedFam an irrevocable option (the "Option") to
acquire up to a number of shares of the Common Stock, $.01 par value per share,
of IPEC ("IPEC Shares") equal to 19.9% of the issued and outstanding shares as
of the first date, if any, upon which an Exercise Event (as defined in Section
2(a) below) shall occur (the "Option Shares") (provided that the Option Shares
shall not upon timely issuance constitute more than 19.9% of the then issued and
outstanding IPEC Shares), in the manner set forth below (i) by paying cash at a
price of $10.56 per share (the "Exercise Price") and/or, at SpeedFam's election,
(ii) by exchanging therefor shares of the Common Stock, no par value, of
SpeedFam ("SpeedFam Shares") at a rate (the "Exercise Ratio"), for each Option
Share, of a number of SpeedFam Shares equal to the Exercise Price divided by the
closing sale price of SpeedFam Shares on The Nasdaq National Market for the
trading day immediately preceding the date of the Closing (as defined below) of
the particular Option exercise. All references in this Agreement to IPEC Shares
or Option Shares shall be deemed to include the associated IPEC
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Rights. Capitalized terms used in this Agreement but not defined herein shall
have the meanings ascribed thereto in the Merger Agreement.
Section 2. Exercise of Option; Maximum Proceeds
(a) The Option may be exercised by SpeedFam, in whole or in part, at
any time or from time to time, (i) immediately prior to the consummation of a
tender or exchange offer for 15% or more of any class of IPEC's capital stock,
(ii) upon the occurrence of all of the events specified in Section 7.3(b)(ii) of
the Merger Agreement, (iii) if and when the Board of Directors of IPEC shall
have withheld, withdrawn or modified in a manner adverse to SpeedFam its
recommendation that the stockholders of IPEC approve and adopt the Merger
Agreement and approve the Merger, or decides to postpone or not hold the IPEC
Stockholders' Meeting, after receipt of and in connection with an Acquisition
Proposal with respect to IPEC and at that time there shall not have occurred a
Material Adverse Effect (as defined in the Merger Agreement) on SpeedFam or (iv)
if and when the Board of Directors of IPEC recommends a IPEC Superior Proposal
to the stockholders of IPEC (any of the events specified in clauses (i), (ii),
(iii) or (iv) of this sentence being referred to herein as an "Exercise Event").
In the event SpeedFam wishes to exercise the Option, SpeedFam shall deliver to
IPEC a written notice (each an "Exercise Notice") specifying the total number of
Option Shares it wishes to acquire and the form of consideration to be paid.
Each closing of a purchase of Option Shares (a "Closing") shall occur on a date
and at a time prior to the termination of the Option designated by SpeedFam in
an Exercise Notice delivered at least two business days prior to the date of
such Closing, which Closing shall be held at the principal offices of IPEC.
(b) Notwithstanding the foregoing, upon the commencement of a tender or
exchange offer for 15% or more of any class of IPEC's capital stock (and/or
during any time which such a tender or exchange offer remains open), SpeedFam
may deliver to IPEC an Exercise Notice (a "Conditional Exercise Notice")
specifying that it wishes to exercise and close a purchase of Option Shares
immediately prior to the consummation of such tender or exchange offer. Unless
the Conditional Exercise Notice is withdrawn by SpeedFam, the Closing of a
purchase of Option Shares specified in a Conditional Exercise Notice shall take
place immediately prior to the consummation of such tender or exchange offer. In
the event that such tender or exchange offer is not consummated prior to
termination of the Option, such Conditional Exercise Notice shall be void and of
no further force and effect.
(c) The Option shall terminate upon the earliest of (i) the Effective
Time, (ii) 180 days following the termination of the Merger Agreement pursuant
to Article VII thereof if an Exercise Event shall have occurred on or prior to
the date of such termination, (iii) 12 months following the date on which the
Merger Agreement is terminated pursuant to Article VII thereof if (x) there
shall have been an IPEC Negative Vote and (y) prior to such IPEC Negative Vote
there shall have occurred an Acquisition Proposal with respect to IPEC which
shall have been publicly disclosed and not withdrawn, (iv) 12 months following
the date on which the Merger Agreement is terminated pursuant to Article VII
thereof if prior thereto there shall have commenced a tender or exchange offer
for 15% or more of any class of IPEC's capital stock and (v) the date on which
the Merger Agreement is terminated if
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neither an Exercise Event, nor both of the events specified in subclauses (x)
and (y) of clause (iii), nor the commencement of a tender or exchange offer for
15% or more of any class of IPEC's capital stock shall have occurred on or prior
to such date of termination; provided, however, that if the Option cannot be
exercised by reason of any applicable government order or because the waiting
period related to the issuance of the Option Shares under the HSR Act shall not
have expired or been terminated, then the Option shall not terminate until the
tenth business day after such impediment to exercise shall have been removed or
shall have become final and not subject to appeal. Notwithstanding the
foregoing, the Option may not be exercised if (i) SpeedFam shall have breached
in any material respect any of its covenants or agreements contained in the
Merger Agreement or (ii) the representations and warranties of SpeedFam
contained in the Merger Agreement shall not have been true and correct in all
material respects on and as of the date when made.
(d) If SpeedFam receives in the aggregate pursuant to Section 7.3(b) of
the Merger Agreement together with proceeds in connection with any sales or
other dispositions of Option Shares and any dividends received by SpeedFam
declared on Option Shares, more than the sum of (x) $6,000,000 plus (y) the
Exercise Price multiplied by the number of IPEC Shares purchased by SpeedFam
pursuant to the Option, then all proceeds to SpeedFam in excess of such sum
shall be remitted by SpeedFam to IPEC.
SECTION 3. CONDITIONS TO CLOSING
The obligation of IPEC to issue Option Shares to SpeedFam hereunder is
subject to the conditions that (a) any waiting period under the HSR Act
applicable to the issuance of the Option Shares hereunder shall have expired or
been terminated; (b) all material consents, approvals, orders or authorizations
of, or registrations, declarations or filings with, any Federal, state or local
administrative agency or commission or other Federal, state or local
governmental authority or instrumentality, if any, required in connection with
the issuance of the Option Shares hereunder shall have been obtained or made, as
the case may be; and (c) no preliminary or permanent injunction or other order
by any court of competent jurisdiction prohibiting or otherwise restraining such
issuance shall be in effect. It is understood and agreed that at any time during
which the Option is exercisable or if SpeedFam shall have delivered to IPEC a
Conditional Exercise Notice, the parties will use their respective best efforts
to satisfy all conditions to Closing, so that a Closing may take place as
promptly as practicable, and in any event, prior to consummation of a tender or
exchange offer for shares of IPEC capital stock; provided that neither IPEC nor
SpeedFam nor any subsidiary or affiliate thereof will be required to agree to
any divestiture by itself or any of its affiliates of shares of capital stock or
of any business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or to own
or exercise control of such assets, properties and stock.
SECTION 4. CLOSING
At any Closing, (a) IPEC shall deliver to SpeedFam a single certificate
in definitive form representing the number of IPEC Shares designated by SpeedFam
in its Exercise
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Notice, such certificate to be registered in the name of SpeedFam and to bear
the legend set forth in Section 10 hereof, against delivery of (b) payment by
SpeedFam to IPEC of the aggregate purchase price for the IPEC Shares so
designated and being purchased by delivery of (i) immediately available funds
and/or, at SpeedFam's election, (ii) a single certificate in definitive form
representing the number of SpeedFam Shares being issued by SpeedFam in
consideration therefor (based on the Exercise Ratio), such certificate to be
registered in the name of IPEC and to bear the legend set forth in Section 10
hereof.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF IPEC
IPEC represents and warrants to SpeedFam that (a) IPEC is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder; (b) the execution and
delivery of this Agreement by IPEC and consummation by IPEC of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of IPEC and no other corporate proceedings on the part of IPEC are
necessary to authorize this Agreement or any of the transactions contemplated
hereby; (c) this Agreement has been duly executed and delivered by IPEC and
constitutes a legal, valid and binding obligation of IPEC and, assuming this
Agreement constitutes a legal, valid and binding obligation of SpeedFam, is
enforceable against IPEC in accordance with its terms, except as enforceability
may be limited by bankruptcy and other laws affecting the rights and remedies of
creditors generally and general principles of equity; (d) except for any filings
required under the HSR Act, IPEC has taken all necessary corporate and other
action to authorize and reserve for issuance and to permit it to issue upon
exercise of the Option, and at all times from the date hereof until the
termination of the Option will have reserved for issuance, a sufficient number
of unissued IPEC Shares for SpeedFam to exercise the Option in full and will
take all necessary corporate or other action to authorize and reserve for
issuance all additional IPEC Shares or other securities which may be issuable
pursuant to Section 9(a) upon exercise of the Option, all of which, upon their
issuance and delivery in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable; (e) upon delivery of the IPEC
Shares and any other securities to SpeedFam upon exercise of the Option,
SpeedFam will acquire such IPEC Shares or other securities free and clear of all
material claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever, excluding those imposed by SpeedFam; (f) the execution and
delivery of this Agreement by IPEC do not, and the performance of this Agreement
by IPEC will not, (i) violate the Certificate of Incorporation or By-Laws of
IPEC, (ii) conflict with or violate any order applicable to IPEC or any of its
subsidiaries or by which they or any of their property is bound or affected or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give rise to
any right of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the property or assets of
IPEC or any of its subsidiaries pursuant to, any contract or agreement to which
IPEC or any of its subsidiaries is a party or by which IPEC or any of its
subsidiaries or any of their property is bound or affected, except, in the case
of clauses (ii) and (iii) above, for violations, conflicts, breaches, defaults,
rights of termination, amendment, acceleration or cancellation, liens or
encumbrances which would not,
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individually or in the aggregate, have a Material Adverse Effect on IPEC; (g)
the execution and delivery of this Agreement by IPEC does not, and the
performance of this Agreement by IPEC will not, require any consent, approval,
authorization or permit of, or filing with, or notification to, any Governmental
Entity by IPEC except pursuant to the HSR Act or to the extent required under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"); (h) the
execution and delivery of this Agreement by IPEC does not, and the performance
of this Agreement by IPEC will not, result in any change in the Preferred Stock
Conversion Rates, the Convertible Notes Conversion Price or in any adjustment in
the number of shares issuable, or the exercise price payable, upon the exercise
of any option or warrant to purchase any class of IPEC capital stock outstanding
on the date hereof; and (i) any SpeedFam Shares acquired pursuant to this
Agreement will not be acquired by IPEC with a view to the public distribution
thereof and IPEC will not sell or otherwise dispose of such shares in violation
of applicable law or this Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SPEEDFAM
SpeedFam represents and warrants to IPEC that (a) SpeedFam is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Illinois and has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder; (b) the
execution and delivery of this Agreement by SpeedFam and the consummation by
SpeedFam of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of SpeedFam and no other corporate
proceedings on the part of SpeedFam are necessary to authorize this Agreement or
any of the transactions contemplated hereby; (c) this Agreement has been duly
executed and delivered by SpeedFam and constitutes a legal, valid and binding
obligation of SpeedFam and, assuming this Agreement constitutes a legal, valid
and binding obligation of IPEC, is enforceable against SpeedFam in accordance
with its terms, except as enforceability may be limited by bankruptcy and other
laws affecting the rights and remedies of creditors generally and general
principles of equity; (d) upon delivery of SpeedFam Shares to IPEC in
consideration of any acquisition of IPEC Shares pursuant hereto, IPEC will
acquire such SpeedFam Shares free and clear of all material claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever,
excluding those imposed by IPEC; (e) the execution and delivery of this
Agreement by SpeedFam do not, and the performance of this Agreement by SpeedFam
will not, (i) violate the Articles of Incorporation or By-Laws of SpeedFam, (ii)
conflict with or violate any order applicable to SpeedFam or any of its
subsidiaries or by which they or any of their property is bound or affected or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give rise to
any right of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the property or assets of
SpeedFam or any of its subsidiaries pursuant to, any contract or agreement to
which SpeedFam or any of its subsidiaries is a party or by which SpeedFam or any
of its subsidiaries or any of their property is bound or affected, except, in
the case of clauses (ii) and (iii) above, for violations, conflicts, breaches,
defaults, rights of termination, amendment, acceleration or cancellation, liens
or encumbrances which would not, individually or in the aggregate, have a
Material Adverse Effect on SpeedFam; (f) the execution and delivery of this
Agreement by SpeedFam does not, and the performance of
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this Agreement by SpeedFam will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity by SpeedFam except pursuant to the HSR Act or the Exchange Act; and (g)
any IPEC Shares acquired upon exercise of the Option will not be acquired by
SpeedFam with a view to the public distribution thereof and SpeedFam will not
sell or otherwise dispose of such shares in violation of applicable law or this
Agreement.
SECTION 7. CERTAIN RIGHTS
(a) SpeedFam Put. At the request of and upon notice by SpeedFam (the
"Put Notice"), at any time during the period during which the Option is
exercisable pursuant to Section 2 (the "Purchase Period") or in accordance with
subparagraph (iv) below, IPEC (or any successor entity thereof) shall purchase
from SpeedFam the Option, to the extent not previously exercised, at the price
set forth in subparagraph (i) below (as limited by subparagraph (iii) below),
and the Option Shares, if any, acquired by SpeedFam pursuant thereto, at the
price set forth in subparagraph (ii) below (as limited by subparagraph (iii)
below):
(i) The difference between the "MARKET/TENDER OFFER PRICE" for
IPEC Shares as of the date SpeedFam gives notice of its intent to
exercise its rights under this Section 7(a) (defined as the higher of
(A) the highest price per share offered as of such date pursuant to any
Acquisition Proposal which was made prior to such date and not
terminated or withdrawn as of such date and (B) the highest closing
sale price of IPEC Shares on The Nasdaq Stock Market during the twenty
(20) trading days ending on the trading day immediately preceding such
date) and the Exercise Price, multiplied by the number of IPEC Shares
purchasable pursuant to the Option, but only if the Market/Tender Offer
Price is greater than the Exercise Price. For purposes of determining
the highest price offered pursuant to any Acquisition Proposal which
involves consideration other than cash, the value of such consideration
shall be equal to the higher of (x) if securities of the same class of
the proponent as such consideration are traded on any national
securities exchange or by any registered securities association, a
value based on the closing sale price or asked price for such
securities on their principal trading market on such date and (y) the
value ascribed to such consideration by the proponent of such
Acquisition Proposal, or if no such value is ascribed, a value
determined in good faith by the Board of Directors of IPEC.
(ii) The Exercise Price paid by SpeedFam for IPEC Shares
acquired pursuant to the Option plus the difference between the
Market/Tender Offer Price and such Exercise Price (but only if the
Market/Tender Offer Price is greater than the Exercise Price)
multiplied by the number of IPEC Shares so purchased. If SpeedFam
issued SpeedFam Shares in connection with any exercise of the Option,
the Exercise Price in connection with such exercise shall be calculated
as set forth in Section 1 as if SpeedFam had exercised its right to pay
cash instead of issuing SpeedFam Shares.
(iii) Notwithstanding subparagraphs (i) and (ii) above,
pursuant to this Section 7, IPEC shall not be required to pay SpeedFam
in excess of an aggregate of (x)
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$6,000,000 plus (y) the Exercise Price paid by SpeedFam for IPEC Shares
acquired pursuant to the Option minus (z) any amounts paid to SpeedFam
by IPEC pursuant to Section 7.3(b) of the Merger Agreement.
(iv) Notwithstanding the foregoing, upon the commencement of a
tender or exchange offer for 15% or more of any class of IPEC's capital
stock (and/or during any time which such a tender or exchange offer
remains open), SpeedFam may deliver to IPEC a Put Notice (a
"Conditional Put Notice") specifying that it wishes to exercise and
close immediately prior to the consummation of such tender or exchange
offer, a sale to IPEC pursuant to this Section 7(a) of the Option, to
the extent not previously exercised, and the Option Shares, if any,
acquired by SpeedFam pursuant thereto. Unless the Conditional Put
Notice is withdrawn by SpeedFam, the Closing of any such sale specified
in a Conditional Put Notice shall take place immediately prior to the
consummation of such tender or exchange offer. In the event that such
tender or exchange offer is not consummated prior to termination of the
Option, such Conditional Put Notice shall be void and of no further
force and effect.
(b) Redelivery of SpeedFam Shares. If SpeedFam has acquired IPEC Shares
pursuant to exercise of the Option by the issuance and delivery of SpeedFam
Shares, then IPEC shall, if so requested by SpeedFam, in fulfillment of its
obligation pursuant to the first clause of Section 7(a)(ii) with respect to the
Exercise Price paid in the form of SpeedFam Shares only, redeliver the
certificate(s) for such SpeedFam Shares to SpeedFam, free and clear of all
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever, other than those imposed by SpeedFam.
(c) Payment and Redelivery of Option or Shares. In the event SpeedFam
exercises its rights under Sections 7(a) or (b), IPEC shall, within ten business
days after SpeedFam delivers notice pursuant to Section 7(a), pay the required
amount to SpeedFam in immediately available funds (and SpeedFam Shares, if
applicable) and SpeedFam shall surrender to IPEC the Option and the certificates
evidencing the IPEC Shares purchased by SpeedFam pursuant thereto, and SpeedFam
shall represent and warrant that such shares are then free and clear of all
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever, other than those imposed by IPEC.
(d) IPEC Call. If SpeedFam has acquired Option Shares pursuant to
exercise of the Option (the date of any Closing relating to any such exercise
herein referred to as an "Exercise Date") and no Acquisition Proposal with
respect to IPEC has been consummated at any time after the date of this
Agreement and prior to the date one year following such Exercise Date (nor has
IPEC entered into a definitive agreement or letter of intent with respect to
such an Acquisition Proposal which agreement or letter of intent remains in
effect at the end of such year), then, at any time after the date one year
following such Exercise Date and prior to the date eighteen months following
such Exercise Date, IPEC may require SpeedFam, upon delivery to SpeedFam of
written notice, to sell to IPEC any IPEC Shares held by SpeedFam as of the day
that is ten business days after the date of such notice, up to a number of
shares equal to the number of Option Shares acquired by SpeedFam pursuant to
exercise of the Option in connection with such Exercise Date. The per share
purchase price
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for such sale (the "IPEC Call Price") shall be equal to the Exercise Price plus
interest at 7% per annum, less any dividends paid on the IPEC Shares to be
purchased by IPEC pursuant to this Section 7(d). The closing of any sale of IPEC
Shares pursuant to this Section 7(d) shall take place at the principal offices
of IPEC at a time and on a date designated by IPEC in the aforementioned notice
to SpeedFam, which date shall be no more than 20 and no less than 12 business
days from the date of such notice. The IPEC Call Price shall be paid in
immediately available funds, provided that, in the event SpeedFam has acquired
Option Shares pursuant to exercise of the Option by issuance and delivery of
SpeedFam Shares, at the option of IPEC, the IPEC Call Price for part or all of
any purchase of IPEC Shares pursuant to this Section 7(d), up to a number of
such shares equal to the number of Option Shares acquired by SpeedFam by
issuance and delivery of SpeedFam Shares, shall be paid by delivery of a number
of SpeedFam Shares equal to the IPEC Call Price divided by the closing sale
price of SpeedFam Shares on The Nasdaq National Market for the trading day
immediately preceding the date of the Exercise Date on which the Option Shares
to be purchased by IPEC pursuant to this Section 7(d) were originally issued to
SpeedFam.
(e) Restrictions on Transfer. Until the expiration of the Purchase
Period, IPEC shall not sell, transfer or otherwise dispose of any SpeedFam
Shares acquired by it pursuant to this Agreement.
SECTION 8. REGISTRATION RIGHTS
(a) Following the termination of the Merger Agreement, each party
hereto (a "Holder") may by written notice (a "Registration Notice") to the other
party (the "Registrant") request the Registrant to register under the Securities
Act all or any part of the shares acquired by such Holder pursuant to this
Agreement (the "Registrable Securities") in order to permit the sale or other
disposition of such shares pursuant to a bona fide firm commitment underwritten
public offering in which the Holder and the underwriters shall effect as wide a
distribution of such Registrable Securities as is reasonably practicable and
shall use reasonable efforts to prevent any person or group from purchasing
through such offering shares representing more than 1% of the outstanding shares
of Common Stock of the Registrant on a fully diluted basis (a "Permitted
Offering"); provided, however, that any such Registration Notice must relate to
a number of shares equal to at least 2% of the outstanding shares of Common
Stock of the Registrant on a fully diluted basis and that any rights to require
registration hereunder shall terminate with respect to any shares that may be
sold pursuant to Rule 144(k) under the Securities Act. The Registration Notice
shall include a certificate executed by the Holder and its proposed managing
underwriter, which underwriter shall be an investment banking firm of nationally
recognized standing (the "Manager"), stating that (i) the Holder and the Manager
have a good faith intention to commence a Permitted Offering and (ii) the
Manager in good faith believes that, based on the then prevailing market
conditions, it will be able to sell the Registrable Securities at a per share
price equal to at least 80% of the per share average of the closing sale prices
of the Registrant's Common Stock on The Nasdaq National Market for the twenty
trading days immediately preceding the date of the Registration Notice. The
Registrant shall thereupon have the option exercisable by written notice
delivered to the Holder within ten business days after the receipt of the
Registration Notice, irrevocably to agree to purchase all or any part
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of the Registrable Securities for cash at a price (the "Option Price" equal to
the product of (i) the number of Registrable Securities so purchased and (ii)
the per share average of the closing sale prices of the Registrant's Common
Stock on The Nasdaq National Market for the twenty trading days immediately
preceding the date of the Registration Notice. Any such purchase of Registrable
Securities by the Registrant hereunder shall take place at a closing to be held
at the principal executive offices of the Registrant or its counsel at any
reasonable date and time designated by the Registrant in such notice within 10
business days after delivery of such notice. The payment for the shares to be
purchased shall be made by delivery at the time of such closing of the Option
Price in immediately available funds.
(b) If the Registrant does not elect to exercise its option to purchase
pursuant to Section 8(a) with respect to all Registrable Securities, the
Registrant shall use all reasonable efforts to effect, as promptly as
practicable, the registration under the Securities Act of the unpurchased
Registrable Securities requested to be registered in the Registration Notice;
provided, however, that (i) neither party shall be entitled to more than an
aggregate of two effective registration statements hereunder and (ii) the
Registrant will not be required to file any such registration statement during
any period of time (not to exceed 40 days after a Registration Notice in the
case of clause (A) below or 90 days after a Registration Notice in the case of
clauses (B) and (C) below) when (A) the Registrant is in possession of material
non-public information which it reasonably believes would be detrimental to be
disclosed at such time and, in the written opinion of counsel to such
Registrant, such information would have to be disclosed if a registration
statement were filed at that time; (B) such Registrant is required under the
Securities Act to include audited financial statements for any period in such
registration statement and such financial statements are not yet available for
inclusion in such registration statement; or (C) such Registrant determines, in
its reasonable judgment, that such registration would interfere with any
financing, acquisition or other material transaction involving the Registrant.
If consummation of the sale of any Registrable Securities pursuant to a
registration hereunder does not occur within 180 days after the filing with the
SEC of the initial registration statement therefor, the provisions of this
Section 8 shall again be applicable to any proposed registration, it being
understood that neither party shall be entitled to more than an aggregate of two
effective registration statements hereunder. The Registrant shall use all
reasonable efforts to cause any Registrable Securities registered pursuant to
this Section 8 to be qualified for sale under the securities or blue sky laws of
such jurisdictions as the Holder may reasonably request and shall continue such
registration or qualification in effect in such jurisdictions; provided,
however, that the Registrant shall not be required to qualify to do business in,
or consent to general service of process in, any jurisdiction by reason of this
provision.
(c) The registration rights set forth in this Section 8 are subject to
the condition that the Holder shall provide the Registrant with such information
with respect to such Holder's Registrable Securities, the plan for distribution
thereof, and such other information with respect to such Holder as, in the
reasonable judgment of counsel for the Registrant, is necessary to enable the
Registrant to include in a registration statement all material facts required to
be disclosed with respect to a registration hereunder.
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(d) A registration effected under this Section 8 shall be effected at
the Registrant's expense, except for underwriting discounts and commissions and
the fees and expenses of counsel to the Holder, and the Registrant shall provide
to the underwriters such documentation (including certificates, opinions of
counsel and "comfort" letters from auditors) as are customary in connection with
underwritten public offerings and as such underwriters may reasonably require.
In connection with any registration, the Holder and the Registrant agree to
enter into an underwriting agreement reasonably acceptable to each such party,
in form and substance customary for transactions of this type with the
underwriters participating in such offering.
(e) Indemnification. (i) The Registrant will indemnify the Holder, each
of its directors and officers and each person who controls the Holder within the
meaning of Section 15 of the Securities Act, and each underwriter of the
Registrant's securities, with respect to any registration, qualification or
compliance which has been effected pursuant to this Agreement, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, 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, in light of the circumstances in which they were made,
not misleading, or any violation by the Registrant of any rule or regulation
promulgated under the Securities Act applicable to the Registrant in connection
with any such registration, qualification or compliance, and the Registrant will
reimburse the Holder and each of its directors and officers and each person who
controls the Holder within the meaning of Section 15 of the Securities Act, and
each underwriter for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Registrant 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 or alleged
untrue statement or omission, made in reliance upon and in conformity with
written information furnished to the Registrant by such Holder or director or
officer or controlling person or underwriter seeking indemnification.
(ii) The Holder will indemnify the Registrant, each of its directors
and officers and each underwriter of the Registrant's securities covered by such
registration statement and each person who controls the Registrant within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, 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, or any violation by the Holder of any rule or regulation
promulgated under the Securities Act applicable to the Holder in connection with
any such registration, qualification or compliance, and will reimburse the
Registrant, such directors, officers or control persons or
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underwriters for any legal or any other expenses reasonably incurred in
connection with investigating, preparing 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 Registrant by the Holder for use therein, provided that in no
event shall any indemnity under this Section 8(e) exceed the gross proceeds of
the offering received by the Holder.
(iii) Each party entitled to indemnification under this Section 8(e)
(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 any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, 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; provided, however, that the Indemnifying Party shall pay such
expense if representation of the Indemnified Party by counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by such
counsel in such proceeding, 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 8(e) unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action. 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 which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnifying Party shall be required to indemnify any Indemnified
Party with respect to any settlement entered into without such Indemnifying
Party's prior consent (which shall not be unreasonably withheld).
(f) Contribution. If the indemnification from the Indemnifying Party
provided for in Section 8(e) is found, pursuant to a final judicial
determination not subject to appeal, to be unavailable to an Indemnified Party
hereunder or insufficient in respect of any claims, losses, damages and
liabilities incurred by such Indemnified Party, then each Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the claims,
losses, damages and liabilities paid or payable by such Indemnified Party in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and the Indemnified Party in connection with the actions or
omissions that resulted in such claims, losses, damages and liabilities, as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action or omission in question, including any
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties'
relative intent, knowledge, access to information and
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opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the claims, losses, damages and liabilities referred to
above shall be deemed to include any legal or other expenses reasonably incurred
by such party in connection with any investigation or proceeding.
SECTION 9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; RIGHTS PLANS
(a) In the event of any change in the IPEC Shares by reason of stock
dividends, stock splits, reverse stock splits, mergers (other than the Merger),
recapitalizations, combinations, exchanges of shares and the like, the type and
number of shares or securities subject to the Option, the Exercise Ratio and the
Exercise Price shall be adjusted appropriately, and proper provision shall be
made in the agreements governing such transaction so that SpeedFam shall
receive, upon exercise of the Option, the number and class of shares or other
securities or property that SpeedFam would have received in respect of the IPEC
Shares if the Option had been exercised immediately prior to such event or the
record date therefor, as applicable.
(b) At any time during which the Option is exercisable, and at any time
after the Option is exercised (in whole or in part, if at all), SpeedFam shall
not adopt a shareholders rights plan (a so-called "poison pill"), and IPEC shall
not amend the IPEC Rights Plan or adopt a new shareholders rights plan, that
contains provisions for the distribution of rights thereunder as a result of the
other party being the beneficial owner of shares of the first party by virtue of
the Option being exercisable or having been exercised (or as a result of such
other party beneficially owning shares issuable in respect of any Option
Shares). It is understood, however, that following termination (if any) of the
Merger Agreement, a party may adopt (or in the case of IPEC, adopt and/or amend)
a shareholders rights plan, that contains provisions for the distribution of
rights thereunder as a result of the other party being the beneficial owner of
shares of the first party in addition to those that may be beneficially owned by
virtue of the Option being exercisable or having been exercised (or as a result
of such other party beneficially owning shares issuable in respect of any Option
Shares).
SECTION 10. RESTRICTIVE LEGENDS
Each certificate representing Option Shares issued to SpeedFam
hereunder, and each certificate representing SpeedFam Shares delivered to IPEC
at a Closing, if any, shall include a legend in substantially the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR
SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS
ON TRANSFER AS SET FORTH IN THE STOCK OPTION
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AGREEMENT DATED AS OF NOVEMBER 19, 1998, A COPY OF WHICH MAY BE
OBTAINED FROM THE ISSUER.
SECTION 11. LISTING AND HSR FILING
IPEC, upon the request of SpeedFam, shall promptly file an application
to list the IPEC Shares to be acquired upon exercise of the Option for quotation
on The Nasdaq National Market and shall use its best efforts to obtain approval
of such listing as soon as practicable. SpeedFam, upon the request of IPEC,
shall promptly file an application to list the SpeedFam Shares issued and
delivered to IPEC pursuant to Section 4, if any, for quotation on The Nasdaq
National Market and shall use its best efforts to obtain approval of such
listing as soon as practicable. Promptly after the date hereof, each of the
parties hereto shall promptly file with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice all required
premerger notification and report forms and other documents and exhibits
required to be filed under the HSR Act to permit the acquisition of the IPEC
Shares subject to the Option at the earliest possible date.
SECTION 12. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Nothing
contained in this Agreement, express or implied, is intended to confer upon any
person other than the parties hereto and their respective successors and
permitted assigns any rights or remedies of any nature whatsoever by reason of
this Agreement. Any shares sold by a party in compliance with the provisions of
Section 8 shall, upon consummation of such sale, be free of the restrictions
imposed with respect to such shares by this Agreement and any transferee of such
shares shall not be entitled to the rights of such party. Certificates
representing shares sold in a registered public offering pursuant to Section 8
shall not be required to bear the legend set forth in Section 10.
SECTION 13. SPECIFIC PERFORMANCE
The parties recognize and agree that if for any reason any of the
provisions of this Agreement are not performed in accordance with their specific
terms or are otherwise breached, immediate and irreparable harm or injury would
be caused for which money damages would not be an adequate remedy. Accordingly,
each party agrees that in addition to other remedies the other party shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement. In the event that any action shall be brought
in equity to enforce the provisions of the Agreement, neither party will allege,
and each party hereby waives the defense, that there is an adequate remedy at
law.
SECTION 14. ENTIRE AGREEMENT
This Agreement and the Merger Agreement (including the appendices
thereto) constitute the entire agreement between the parties with respect to the
subject matter hereof
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and supersede all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
SECTION 15. FURTHER ASSURANCES
Each party will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
SECTION 16. VALIDITY
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect. In the event any
Governmental Entity of competent jurisdiction holds any provision of this
Agreement to be null, void or unenforceable, the parties hereto shall negotiate
in good faith and shall execute and deliver an amendment to this Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision.
SECTION 17. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service,
or sent via telecopy (receipt confirmed) to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy numbers for
a party as shall be specified by like notice):
(1) if to IPEC, to: Integrated Process Equipment Corp.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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(2) if to SpeedFam, to: SpeedFam International Inc.
000 X. 00xx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000-0000
Attention: ____________________
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxx and Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
SECTION 18. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois applicable to agreements made and to be
performed entirely within such State.
SECTION 19. COUNTERPARTS
This Agreement may be executed in two counterparts, each of which shall
be deemed to be an original, but both of which, taken together, shall constitute
one and the same instrument.
SECTION 20. EXPENSES
Except as otherwise expressly provided herein or in the Merger
Agreement, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
SECTION 21. AMENDMENTS; WAIVER
This Agreement may be amended by the parties hereto and the terms and
conditions hereof may be waived only by an instrument in writing signed on
behalf of each of the parties hereto, or, in the case of a waiver, by an
instrument signed on behalf of the party waiving compliance.
SECTION 22. ASSIGNMENT
Neither of the parties hereto may sell, transfer, assign or otherwise
dispose of any of its rights or obligations under this Agreement or the Option
created hereunder to any other person, without the express written consent of
the other party, except that the rights and
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obligations hereunder shall inure to the benefit of and be binding upon any
successor of a party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
INTEGRATED PROCESS EQUIPMENT CORP.
By /s/ Xxxxx X. XxXxxxxx
--------------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief Executive Officer
SPEEDFAM INTERNATIONAL, INC.
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
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