SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 2000
APPLIED FILMS CORPORATION
(Exact name of Registrant as specified in its charter)
Colorado 000-23103 84-1311581
(State or other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
9586 I-25 Frontage Road, Longmont, CO 80504
(Address of Principal Executive Offices) (Zip Code)
(303) 774-3200
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
Effective December 31, 2000, Applied Films Corporation ("Applied Films"),
through its indirect wholly owned subsidiary AFCO GmbH & Co. KG, acquired
Leybold Coating GmbH & Co. KG. ("Leybold KG"). Leybold KG was immediately prior
to the closing an indirect subsidiary of Unaxis Holding AG of Zurich,
Switzerland. Following the closing, Applied Films intends to liquidate Leybold
KG into AFCO GmbH & Co. KG.
Immediately prior to the closing of Applied Films' acquisition of Leybold
KG, Unaxis contributed to Leybold KG its Large Area Coating ("LAC") Division.
The LAC Division includes the former Display Coatings Division of Balzers
Process Systems GmbH and the Web Coating, Architectural and Container Barrier
Coatings groups of Leybold GmbH. Leybold KG is headquartered in Alzenau,
Germany, and manufactures thin film deposition equipment for four markets: flat
panel display, PET bottles, web coaters and architectural glass coaters. Applied
Films intends to continue to use the assets and business acquired for the same
purposes as such assets were used by Leybold KG.
The acquisition was effected pursuant to a Share Purchase and Exchange
Agreement dated as of October 18, 2000, as amended by an Amendment Agreement
dated December 29, 2000, by and among Applied Films Corporation, AFCO GmbH & Co.
KG, Balzers Process Systems GmbH and Unaxis Holding AG.
Pursuant to the Share Purchase and Exchange Agreement, as amended, the
purchase price to Unaxis was US$60 million in cash and 673,353 shares of Applied
Films' common stock, subject to certain post-closing adjustments based upon a
final closing balance sheet for Leybold KG. At the December 31, 2000 closing,
Applied Films paid Unaxis US$50 million in cash and delivered the 673,353 shares
of Applied Films' common stock. In addition, Applied Films paid US$4 million
into an escrow account pending resolution of the final closing balance sheet for
Leybold KG, with an obligation to make subsequent payments into the escrow
account pending the determination of the post-closing adjustments.
The sources of funds used to complete the acquisition included cash and
cash equivalents of Applied Films for the cash portion of the purchase price and
newly issued shares of Applied Films common stock for the stock portion of the
purchase price.
Pursuant to the Share Purchase and Exchange Agreement, as amended, Applied
Films has agreed to appoint a designee of Unaxis to Applied Films' board of
directors. In addition, Applied Films and Balzers Process Systems GmbH, a
subsidiary of Unaxis, have entered into a Registration Rights Agreement with
respect to the shares of the common stock of Applied Films received by Balzers
Process Systems GmbH as part of the purchase price.
The terms of the acquisition and the purchase price were arrived at as a
result of arm's length negotiations between the management of Applied Films and
the management of Unaxis. Prior to the
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consummation of the acquisition, there were no material relationships between
Applied Films and Unaxis or any of their respective affiliates, directors,
officers or associates of any such directors or officers.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. The required financial
statements for the business acquired will be filed as an amendment to this Form
8-K Report, as soon as practicable and not later than March 15, 2001.
(b) Pro Forma Financial Information. At the time of this report, it is not
practicable to provide the required pro forma financial information for the
transaction that is the subject of this Report. Such information will be filed
as an amendment to this Form 8-K Report, as soon as practicable and not later
than March 15, 2001.
(c) Exhibits.
2.1 Share Purchase and Exchange Agreement dated as of October 18,
2000, by and among Applied Films Corporation, AFCO GmbH & Co. KG,
Balzers Process Systems GmbH and Unaxis Holding AG.
2.2 Amendment Agreement dated December 29, 2000, by and among Applied
Films Corporation, AFCO GmbH & Co. KG, Balzers Process Systems
GmbH and Unaxis Holding AG.
2.3 Contribution Agreement dated December 29, 2000, by and between
Balzers Process Systems GmbH and Leybold Coating GmbH & Co. KG.
2.4 Bravo Intellectual Property License Agreement dated December 29,
2000, by and between Balzers Process Systems GmbH and Leybold
Coating GmbH & Co. KG.
2.5 Newco Intellectual Property License Agreement dated December 29,
2000, by and between Balzers Process Systems GmbH and Leybold
Coating GmbH & Co. KG.
2.6 Registration Rights Agreement dated December 31, 2000, by and
between Applied Films Corporation and Balzers Process Systems
GmbH.
99.1 Press Release dated January 2, 2001, announcing the closing of
Applied Film Corporation's acquisition of the Large Area Coating
Division of Unaxis Holding AG.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
APPLIED FILMS CORPORATION
By /s/ Lawrence D. Firestone
Lawrence D. Firestone
Chief Financial Officer
Date: January 5, 2001
::ODMA\PCDOCS\GRR\500007\2
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EXHIBIT INDEX
(c) Exhibits.
2.1 Share Purchase and Exchange Agreement dated as of October 18,
2000, by and among Applied Films Corporation, AFCO GmbH & Co. KG,
Balzers Process Systems GmbH and Unaxis Holding AG.
2.2 Amendment Agreement dated December 29, 2000, by and among Applied
Films Corporation, AFCO GmbH & Co. KG, Balzers Process Systems
GmbH and Unaxis Holding AG.
2.3 Contribution Agreement dated December 29, 2000, by and between
Balzers Process Systems GmbH and Leybold Coating GmbH & Co. KG.
2.4 Bravo Intellectual Property License Agreement dated December 29,
2000, by and between Balzers Process Systems GmbH and Leybold
Coating GmbH & Co. KG.
2.5 Newco Intellectual Property License Agreement dated December 29,
2000, by and between Balzers Process Systems GmbH and Leybold
Coating GmbH & Co. KG.
2.6 Registration Rights Agreement dated December 31, 2000, by and
between Applied Films Corporation and Balzers Process Systems
GmbH.
99.1 Press Release dated January 2, 2001, announcing the closing of
Applied Film Corporation's acquisition of the Large Area Coating
Division of Unaxis Holding AG.
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EXHIBT 2.1
NOTARIAL DEED
SHARE PURCHASE AND EXCHANGE AGREEMENT
Negotiated at Basel/Switzerland this 18th (eighteenth) day of October 2000 (two
thousand).
Before me, the undersigned Notary Public
STEPHAN CUENI
at Basel/Switzerland appeared today:
1. Mr. Thomas T. Edman, born May 20, 1962, US-citizen, with private domicile
at 4376 Park Ct., Boulder, CO 80301, USA identified by his US-passport,
2. Mr. Lawrence D. Firestone, born March 24, 1958, US-citizen, with private
domicile at 325 Roxbury Circle, CO Springs, Colorado 80906, USA, identified
by his US-passport,
Messrs. Edman and Firestone according to their declarations not acting in
their own names but
a) jointly as President and CEO (Mr. Edman) and CFO (Mr. Firestone)
respectively in the name and on behalf of
Applied Films Corporation, a Colorado Corporation having its
registered office at 9586 I-25 Frontage Rd., Longmont, CO 80504, USA,
- hereinafter referred to as "AFC" -
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b) Mr. Firestone as appointed but not yet registered managing director
(Geschaftsfuhrer) with sole representation power in the name and on
behalf of
Isartor Holding Einundzwanzigste GmbH (to be renamed AFCO Verwaltungs
GmbH), with registered head office at D-80331 Munchen, c/o Wessing,
Isartorplatz 8, registered with the Commercial Register at the Local
Court of Munich under HRB 133554, acting not for itself, but as
representative of
AFCO GmbH & Co. KG, a newly formed and not yet registered limited
partnership under German law, with business address at D-80331
Munchen, Isartorplatz 8, to be registered in the Commercial Register
at the Local Court of Munich in Section A,
- hereinafter referred to as "Alpha Subsidiary" -
3. Mr. Volker Grafe, born July 5, 1950, German citizen, with private domicile
at D-52525 Heinsberg, Rembrandtstrasse 6, identified by his German
passport,
according to his declarations not acting in his own name but in the name
and on behalf of
Balzers Process Systems GmbH, a German limited liability company having its
registered seat at D-63450 Hanau, Wilhelm-Rohn-Strasse 25, registered with
the Commercial Register at the Local Court of Hanau under HRB 5392,
presenting the attached certified copy of a registration application,
- hereinafter referred to as "BPS" -
4. Dr. Thomas Emch, born June 11, 1950, Swiss citizen, with private domicile
at CH-8914 Aeugst a.A., Im Uerenberg 10, identified by his Swiss passport,
according to his declarations not acting in his own name but in the name
and on behalf of
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Unaxis Holding AG, a Swiss stock corporation having its registered office
at CH-8047 Zurich, Hofwiesenstrasse 135, registered with the Commercial
Register of Zurich, Switzerland, under No. CH-020.3.919.027-3, presenting
the attached written power of attorney and presenting a certified extract
from the Commercial Register, a copy of which is attached hereto,
- hereinafter referred to as "Unaxis" -
The persons appeared requested that this Deed including its Annexes and Exhibits
be recorded in English. The acting notary public who is in sufficient command of
the English language and ascertained that the persons appeared are also in
command of the English language. After having been instructed by the notary
public, the persons appeared waived the right to obtain the assistance of a
certified interpreter; or a certified translation.
The acting notary explained to the persons appeared the contents of ss. 3 para.
1 (7) of the German Notarization Act (Beurkundungsgesetz). The persons appeared
confirmed to the notary that he has not been involved in the transaction within
the meaning of ss. 3 para. 1 (7) of the German Notarization Act.
The persons appeared, acting as indicated, asked for the Notarization of the
following:
SHARE PURCHASE AND EXCHANGE AGREEMENT
PREAMBLE
A. The Unaxis group is a diversified industrial group having its headquarters
in Zurich, Switzerland. The ultimate parent company of the group is Unaxis
whose shares are listed at the Zurich Stock Exchange (SWX). One of the
group's business divisions is the large area coating business consisting of
the following segments: Display Coatings, Web Coating for capacitors and
decorative and packaging applications, Architectural and Automotive Inline
Glass Coating and Diffusion Barrier for beverage bottle coating as well as
Customer Service (the "LAD Business"). The LAD Business is described in
more detail in Annex A 1. The LAD Business is
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presently operated by certain Unaxis subsidiaries listed in Annex A 2 which
also conduct other business activities.
B. The Unaxis group is in the process of a major reorganization of all of its
activities in order to focus on certain defined core businesses. In this
process, Unaxis intends to sell the LAD Business. Prior to such sale, the
LAD Business will be reorganized in order to establish a group of entities
exclusively owning and operating the LAD Business. For this purpose, all
assets and certain liabilities of the LAD Business except for the
activities in Shanghai, China, and in Singapore, if any, will be
transferred to new entities (the "New LAD Entities") as described in more
detail in the memorandum attached as Annex B (the "Reorganization
Memorandum"). The portion of the LAD Business operated in Germany will be
transferred to a newly established German KG ("NewCo KG"). BPS will be the
sole limited partner of NewCo KG and NewCo GmbH, a wholly-owned subsidiary
of BPS, will be the general partner of NewCo KG.
C. AFC is a corporation incorporated under the laws of the State of Colorado.
AFC operates a business in the area of the production of thin film coating
equipment and the production of thin film coated glass (the "AFC
Business"). AFC is the sole limited partner of Alpha Subsidiary and Alpha
Subsidiary GmbH, a wholly-owned German subsidiary of AFC, is the general
partner of Alpha Subsidiary.
D. AFC and BPS have agreed on a transaction in which Alpha Subsidiary will
acquire all shares and limited partnership interests in the New LAD
Entities and AFC or another designated subsidiary of AFC will take over the
assets and liabilities (including employments) of the LAD activities in
Shanghai, China, and in Singapore, if any. BPS will as consideration
receive a cash payment and AFC shares representing approximately 10% of
AFC's common voting stock.
NOW, THEREFORE, the Parties agree as follows:
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Article 1
Corporate Reorganization of the LAD Business
1.1 Subject to the following provisions, BPS shall ensure that the LAD
Business will be reorganized as set forth in the Reorganization
Memorandum (the "LAD Reorganization") on or prior to December 31,
2000. The LAD Reorganization will be carried out with economic effect
as of December 31, 2000 or any other date prior to December 31, 2000
approved by AFC and BPS. A preliminary contribution balance sheet of
the portion of the LAD Business operated in Germany as of June 30,
2000 is attached hereto as Annex 1.1.1, a draft contribution agreement
(Einbringungsvertrag) is attached as Annex 1.1.2 and preliminary lists
of assets, intellectual property rights and contracts and agreements
to be transferred to NewCo KG are attached hereto as Annex 1.1.3. A
preliminary list of the employments which will be transferred to the
New LAD Entities is attached as Annex 1.1.4. The preliminary
contribution balance sheet and the draft contribution agreement
(including exhibits) (collectively the "Reorganization Documentation")
as well as Schedules 1(b), 1(d), 3(c)1, 3(c)2, 3(c)3 and 15 (Part I)
of the BPS Disclosure Memorandum referred to in Article 5 hereof (the
"Preliminary Schedules") will be further developed, completed and
updated by BPS in consultation with AFC after the signing of this
Agreement in order to properly reflect the scope of the LAD Business
as operated as of the date of the effectiveness of the LAD
Reorganization, provided that prior to the consummation of the LAD
Reorganization the finalized Reorganization Documentation and any
changes of the Preliminary Schedules shall be submitted by BPS to AFC
for approval, such approval not to be unreasonably (nicht ohne
wichtigen Grund) withheld. The preliminary list of employments to be
transferred to the New LAD Entities will be updated as agreed between
BPS and AFC from time to time.
1.2 As of the Closing Date as defined in Sec. 2.4 hereof, the New LAD
Entities shall only have the following liabilities, obligations and
other legal commitments of any kind and based on whatever legal
reason, whether absolute or contingent, mature or immature, liquidated
or unliquidated, known or unknown, disclosed or undisclosed
(collectively the "Liabilities")
(a) all Liabilities to be transferred to, or to be assumed by, the
New LAD Entities in the LAD Reorganization, including, but not
limited to, Liabilities arising from any contracts or agreements
to be transferred to, or to be assumed by, the New LAD Entities,
or incurred after the LAD Reorganization by any of the New LAD
En-
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tities (i) as expressly provided for in this Agreement, (ii) with
AFC's prior consent or (iii) in the ordinary course of business
on or before the Closing Date which have not been discharged; and
(b) any Liabilities other than the Liabilities referred to in
sub-para. (a) above if they are reflected as liabilities or are
of the type and within the amount of any of the provisions
established in the Final Closing Balance Sheets as defined in
Sec. 3.5 hereof.
(the above Liabilities hereinafter "Assumed Liabilities")
On or after the Closing Date, the New LAD Entities shall not have any
Liabilities arising out of the operation of the LAD Business prior to
the Closing Date or arising out of the LAD Reorganization other than
the Assumed Liabilities.
1.3 BPS hereby agrees to indemnify from and after the Closing Date AFC,
Alpha Subsidiary and the New LAD Entities against any and all
Liabilities, including reasonable attorney's fees and disbursements of
AFC, Alpha Subsidiary or any of the New LAD Entities, as the case may
be, incurred in connection with any such Liability including, but not
limited to, Liabilities relating to tax or environmental matters,
arising out of the operation of the LAD Business prior to the Closing
Date or arising out of the LAD Reorganization, other than the Assumed
Liabilities.
Notwithstanding the foregoing provisions, BPS shall not be obligated
to indemnify AFC, Alpha Subsidiary or any of the New LAD Entities, as
the case may be, to the extent that:
(a) the aggregate claims for indemnity under the foregoing provisions
are equal to or less than US $ 100,000 (in words: one hundred
thousand), provided that if the above threshold is exceeded the
entire amount of the claim shall be indemnified (Freigrenze), or
(b) AFC fails to give notice pursuant to the provisions of Sec. 1.5
hereof of (i) claims for indemnity under the foregoing provisions
regarding tax matters within six (6) months after the relevant
administrative or court decision has become final, (ii) claims
for indemnity under the foregoing provisions regarding
environmental matters within six (6) months after the relevant
administrative or court decision has become final, however on or
before December 31, 2005 at the latest, or (iii) any other claims
for indemnity
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under the foregoing provisions on or before September 30, 2002,
or
(c) AFC, Alpha Subsidiary or the respective New LAD Entity receives
payment from an insurer or any other third party for any of such
claims, losses, damages, costs, expenses, attorney fees or
disbursements suffered by AFC, Alpha Subsidiary or any of the New
LAD Entities that are otherwise subject to indemnification under
the foregoing provisions, or
(d) the Liabilities to be indemnified hereunder have resulted in a
reduction of the Purchase Price pursuant to Article 3, or
(e) the increase of a tax liability of any of the New LAD Entities to
be indemnified hereunder would result in a decrease of the
taxable income of the respective New LAD Entity in future fiscal
years, provided that such decrease shall be discounted as per the
Closing Date at a rate of 5.5% p.a.
1.4 AFC hereby agrees to indemnify from and after the Closing Date BPS and
all affiliates of BPS as defined in ss.ss. 15 et seq. of the German
Stock Corporation Law (Aktiengesetz) against any and all Assumed
Liabilities or any Liabilities arising out of the operation of the LAD
Business after the Closing Date other than Liabilities the existence
of which constitutes a breach of any of the BPS Representations as
defined in Article 5 hereof to be compensated pursuant to Article 6
hereof, including reasonable attorney's fees and disbursements
incurred in connection with such Liabilities.
Notwithstanding the foregoing provisions, AFC shall not be obligated
to indemnify BPS or any of the affiliates of BPS, as the case may be,
to the extent that:
(a) the aggregate claims for indemnity under the foregoing provisions
are equal to or less than US $ 100,000 (in words: one hundred
thousand), provided that if the above threshold is exceeded the
entire amount of the claim shall be indemnified (Freigrenze), or
(b) BPS fails to give notice pursuant to the provisions of Sec. 1.5
hereof of claims for an indemnity against any of the Assumed
Liabilities under the foregoing provisions on or before September
30, 2002, it being understood that for claims for an indemnity
against
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any of the Liabilities arising out of the operation of the LAD
Business after the Closing Date no time limitation shall apply,
or
(c) BPS or the respective BPS affiliate receives payment from an
insurer or any other third party for any of such claims, losses,
damages, costs, expenses, attorney fees or disbursements suffered
by BPS or the respective BPS affiliate that are otherwise subject
to indemnification under the foregoing provisions.
1.5 A party against which a claim for indemnification is made pursuant to
Sec. 1.3 or 1.4 (an "Indemnifying Party") shall not be liable under
such provisions unless the following procedural rules have been
complied with:
1.5.1 Third-Party Claims
(a) Promptly and without undue delay after receipt by an entity
entitled to be indemnified under Sec. 1.3 or 1.4 (an "Indemnified
Party") of notice of the assertion of any claim or demand with
respect to any of the Liabilities referred to in Sec. 1.3 or 1.4,
such Indemnified Party will give written notice to the
Indemnifying Party of such assertion of a claim or demand and
reject the fulfillment unless otherwise agreed between the
Indemnifying and the Indemnified Party.
(b) Promptly and without undue delay after receipt by an Indemnified
Party of notice of the commencement of any legal proceedings
relating to any of the Liabilities referred to in Sec. 1.3 or 1.4
against it, such Indemnified Party will give written notice to
the Indemnifying Party of the commencement of such proceeding.
(c) If any legal proceedings are brought against an Indemnified
Party, the Indemnifying Party will, unless the claim involves
taxes (para. 1.5.2 below), be entitled to participate in such
proceeding and, to the extent that it wishes (unless (i) the
Indemnifying Party is also a party to such proceeding and the
Indemnified Party determines in good faith that joint
representation would be inappropriate or (ii) the Indemnifying
Party fails to provide reasonable assurances to the Indemnified
Party of its financial capacity to defend such proceeding and
provide indemnification with respect to such proceeding), to
assume the defense of such proceeding on behalf of the
Indemnified Party with counsel satisfactory to the In-
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demnified Party. If the Indemnifying Party assumes the defense of
a proceeding, (i) it will be conclusively established for
purposes of this Agreement that the claims made in that
proceeding are within the scope of and subject to indemnification
by the Indemnifying Party; and (ii) no compromise or settlement
of such claims may be effected by the Indemnifying Party without
the Indemnified Party's consent (such consent not to be
unreasonably withheld) unless the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party
concurrently with the compromise or settlement. If notice is
given to an Indemnifying Party of the commencement of any
proceeding and the Indemnifying Party does not within ten (10)
days give notice to the Indemnified Party of its election to
assume the defense of such proceeding, the Indemnifying Party
will be bound by any determination made in such proceeding or any
compromise or settlement effected by the Indemnified Party with
its consent (such consent not to be unreasonably withheld),
provided that the Indemnified Party shall pursue such proceeding
with the care and diligence of a prudent businessman (Sorgfalt
eines ordentlichen Kaufmanns) with counsel reasonably
satisfactory to the Indemnifying Party.
1.5.2 Tax Matters
If, in connection with the audit of any return of any of the New LAD
Entities or any predecessors with respect to the LAD Business or any
tax assessments for a period on or before Closing Date, a proposed
adjustment is asserted in writing with respect to any taxes asserted
against any of the New LAD Entities for which BPS is required to
indemnify the respective New LAD Entity pursuant to Sec. 1.3 hereof,
AFC shall notify BPS in writing of such proposed adjustment within 5
(five) business days after receipt thereof. Upon notice to BPS within
5 (five) business days after receipt of a notice of such proposed
adjustment from AFC, BPS may assume (at its own cost and expense) on
behalf of the respective New LAD Entity control of the contestation of
such proposed adjustment. Otherwise, the respective New LAD Entity
shall pursue the contestation of such proposed adjustment with the
care and diligence of a prudent businessman.
1.5.3 The parties will make available to each other and each other's
personnel, agents, accountants and other professional advisors all of
the relevant documents, books and records and provide all necessary
information relating to any matters for which an indemnity is claimed
under Sec. 1.3, 1.4 or
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1.5 and each party will render to the other assistance as may be
reasonably required in order to insure the proper and adequate defense
in such matters.
1.6 After the Closing, NewCo KG will implement the transfer of the LAD
facilities currently located in Hanau to the new site in Alzenau as
described in detail in Annex 1.6 (the "Restructuring Program") in its
own name and for its own account.
BPS shall reimburse NewCo KG for the costs and expenses incurred in
the implementation of the Restructuring Program in accordance with the
following provisions provided that Alpha Subsidiary shall cause NewCo
KG to comply with the following requirements:
1.6.1 Any contracts to perform any of the work to be conducted by
third-party contractors as specified in Part II of Annex 1.6
("Restructuring Contracts") which NewCo KG intends to conclude with
any third party contractors regarding the implementation of the
Restructuring Program must be submitted by NewCo KG to BPS at least
four (4) weeks prior to their execution for review and approval, such
approval not to be unreasonably withheld. If BPS does not respond to
NewCo KG within four (4) weeks after it has received the full
documentation of the Restructuring Contracts, BPS shall be deemed to
give such approval, provided that NewCo KG shall immediately provide
to BPS any additional information regarding the Restructuring
Contracts as reasonably requested by BPS from time to time.
NewCo KG shall submit to BPS monthly accounts showing all payments to
be made by NewCo KG in the respective period under the Restructuring
Contracts executed in accordance with the foregoing provisions
including invoices issued by the respective contractors, acceptance
protocols (Abnahmeprotokolle), if any, and other auditable evidence
for review and approval, such approval not to be unreasonably
withheld. If BPS does not respond to NewCo within two (2) weeks after
it has received the full documentation, BPS shall be deemed to give
such approval, provided that NewCo KG shall immediately provide to BPS
any additional information regarding such payments as reasonably
requested by BPS from time to time. Any payments shall only be made by
NewCo KG upon review and approval by BPS, such approval not to be
unreasonably withheld (the "Approved Restructuring Payments"). NewCo
KG shall submit to BPS appropriate proof of payment for any Approved
Restructuring Payments which have been made.
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1.6.2 NewCo KG shall submit to BPS at least two (2) weeks prior to the
commencement of the implementation of the restructuring measures to be
carried out by NewCo KG employees as specified in Part II of Annex 1.6
("Restructuring Measures") a schedule for the implementation of such
Restructuring Measures setting out the nature of such Restructuring
Measures, the employees assigned to the implementation of the
Restructuring Measures, their hourly salary rates and pro-rata fringe
benefits according to their employment contracts, the number of hours
projected for such assignments and the dates for which the
Restructuring Measures are scheduled ("Measure Schedule") for review
and approval, such approval not to be unreasonably withheld. If BPS
does not respond to NewCo KG within two (2) weeks after it has
received the Measure Schedule, BPS shall be deemed to give such
approval, provided that NewCo KG shall immediately provide to BPS any
additional information as reasonably requested by BPS from time to
time.
NewCo KG shall ensure that the Restructuring Measures are implemented
in accordance with the Measure Schedule and submit to BPS monthly
accounts showing the status of the implementation of the Restructuring
Measures, the amount of hours actually spent by the assigned employees
in such period and the amount of the accrued internal employee cost
(hourly salary rates and pro-rata fringe benefits) for review and
approval, such approval not to be unreasonably withheld (the labor
cost shown in the monthly accounts as approved by BPS is referred to
as "Approved Labor Cost"). If the amount of hours and/or the internal
labor cost projected in the Measures Schedule are exceeded by more
than ten percent (10 %), NewCo KG shall give detailed explanations on
the reasons to allow BPS to make a proper evaluation of the situation
and take the appropriate measures to comply with the Measure Schedule.
1.6.3 In the implementation of the Restructuring Program, NewCo KG shall act
with the care and diligence of a prudent businessman (Sorgfalt eines
ordentlichen Kaufmanns).
NewCo KG shall instruct NewCo KG's auditors to audit and confirm to
BPS all details given by NewCo KG to BPS regarding the implementation
of the Restructuring Program, the Restructuring Contracts, the
Approved Restructuring Payments, the Restructuring Measures and the
Approved Labor Cost.
BPS is entitled to review the status of the implementation of the
Restructuring Program at any time and participate in the acceptance
(Abnahme) of all measures from the respective contractors. For the
purpose of such review, NewCo KG shall give BPS and its personnel,
agents, accountants and other professional
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advisors access to all relevant business sites, allow the inspection
of all relevant documents, books and records and provide all relevant
information.
1.6.4 Upon completion of the Restructuring Program in accordance with the
provisions of this Sec. 1.6, BPS shall reimburse to NewCo KG any
Approved Restructuring Payments and Approved Labor Costs incurred in
the implementation of the Restructuring Program to the extent that
they exceed the reserve for the implementation of the Restructuring
Program established in the Final Closing Balance Sheets against
submission of appropriate proof of payment.
Article 2
Purchase and Sale of the Shares, the Foreign Shares
and the Foreign Assets and Liabilities
2.1 BPS sells to Alpha Subsidiary with effect as of the Closing, which
accepts such sale
(a) the limited partnership interest in the amount of EURO 100,000
(in words: one hundred thousand) in NewCo KG (the "KG Interest"),
and
(b) the share in the nominal amount of EURO 25,000 (in words:
twenty-five thousand) in NewCo GmbH (the "GmbH Share") (the KG
Interest and the GmbH Share hereinafter collectively referred to
as the "Shares").
2.2 Subject to the conditions precedent set forth in Article 8 and subject
to the further condition that the cash payments pursuant to Sec. 3.2
para. 3.2.1 and 3.2.3, the delivery of shares of AFC voting common
stock pursuant to Sec. 3.2 para. 3.2.2 and the repayment of the IKB
Loan, if required pursuant to Sec. 4.2, are made in accordance with
such provisions, BPS hereby assigns the KG Interest (subject to
registration in the Commercial Register) and the GmbH Share as of the
Closing Date to Alpha Subsidiary which accepts such assignment (such
assignment hereinafter the "Closing").
2.3 Alpha Subsidiary hereby agrees to indemnify from and after the Closing
BPS against any liability as limited partner of NewCo KG
(Kommanditistenhaftung)
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resulting from any repayments of limited partnership capital
(Einlagenruckgewahr) after the Closing.
2.4 The last day of the month during which all of the conditions precedent
set forth in Article 8 have been satisfied or waived in accordance
with Article 8 shall be the "Closing Date" as referred to herein, or
such other date as the parties may mutually agree.
2.5 Unaxis and AFC agree that the shares in the New LAD Entities other
than NewCo KG and NewCo GmbH (the "Foreign Shares") as well as the
assets and liabilities (including employments) of the LAD Business
located in Shanghai, China, and in Singapore, if any, (the "Foreign
Assets and Liabilities") shall be sold to AFC or its designated
subsidiary and, subject to the conditions referred to in Sec. 2.2
above, transferred to AFC or its designated subsidiary on the Closing
Date. Such sales and transfers shall be made on the basis of separate
agreements and/or transfer documents to be executed in due form as
required in the respective jurisdictions by the respective
subsidiaries of Unaxis holding the Foreign Shares and the Foreign
Assets and Liabilities on the one hand and AFC or its designated
subsidiary on the other hand without undue delay after the signing of
this Agreement, it being understood that any sellers' representations
and warranties, indemnities or covenants relating to the Foreign
Shares and the Foreign Assets and Liabilities shall be exclusively
stipulated in this Agreement.
Article 3
Consideration
3.1 Subject to the adjustments set forth in Sec. 3.4 below, the aggregate
consideration owed by Alpha Subsidiary for the acquisition of the
Shares and by AFC or its designated subsidiary for the Foreign Shares
and the Foreign Assets and Liabilities shall be equal to (a) US $
60,000,000 (in words: sixty million) (the "Cash Component") and (b)
673,353 (in words: six hundred seventy-three thousand three hundred
fifty-three) no par value shares of AFC voting common stock (the
"Stock Component"). The Cash Component and the Stock Component,
subject to adjustment pursuant to this Agreement, are collectively
referred to herein as the purchase price (the "Purchase Price").
3.2 The Purchase Price shall be paid by AFC (also on behalf of Alpha
Subsidiary for the Shares and its designated subsidiary, if any, for
the Foreign Shares and the Foreign Assets and Liabilities) as follows:
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3.2.1 A cash payment of US $ 50,000,000 (in words: fifty million) shall be
paid by Alpha Subsidiary on the Closing Date by wire transfer of
immediately available funds at AFC's expense to such account(s) as BPS
may specify in writing to AFC at least three business days prior to
the Closing Date.
3.2.2 673,353 shares of AFC voting common stock shall be delivered by Alpha
Subsidiary on the Closing Date to BPS.
3.2.3 A cash payment in EURO in the amount of US $ 10,000,000 (in words: ten
million), converted into EURO at the average exchange rate as
officially quoted by the Frankfurt Foreign Currency Exchange
(amtlicher Mittelkurs) on the last business day immediately preceding
the Closing Date, (the "Adjustment Escrow Cash Amount") will be paid
by Alpha Subsidiary on the Closing Date to a joint bank account of BPS
and Alpha Subsidiary to be opened with Deutsche Bank, Frankfurt, prior
to the Closing Date.
3.3 The Adjustment Escrow Cash Amount plus interest thereon as accrued
shall be released by Deutsche Bank only in accordance with joint
written instructions of BPS and AFC upon final resolution of the
post-closing adjustments pursuant to Sec. 3.5.
3.4 The Purchase Price owed by Alpha Subsidiary and AFC or its designated
subsidiary pursuant to Sec. 3.1 shall be subject to a post-closing
adjustment determined in accordance with the following provisions and
BPS and AFC shall give joint written instructions to Deutsche Bank to
disburse the Adjustment Escrow Amount plus interest thereon as accrued
as follows:
3.4.1 If the aggregate sum of net equity (bilanzielles Reinvermogen) of the
New LAD Entities and of the operations of the LAD Business in
Shanghai, China and in Singapore, if any, as of the Closing Date as
defined for each of the New LAD Entities in Annex 3.4.1 and determined
on a non-consolidated basis on the basis of the Final Closing Balance
Sheets in accordance with the provisions of Sec. 3.5 ("LAD Net
Equity") is equal to, or in excess of, zero, then Deutsche Bank shall
disburse the entire Adjustment Escrow Cash Amount plus interest
thereon as accrued to BPS within five (5) business days after
determination of the Final Closing Balance Sheets pursuant to Sec.
3.5. In addition, Alpha Subsidiary shall pay by wire transfer of
immediately available funds at AFC's expense within such five (5)
business-day period to BPS's account referred to in para. 3.2.1 the
EURO amount by which the LAD Net Equity exceeds zero plus interest
thereon as from the Closing Date in the amount of 6.0% p.a.
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3.4.2 If the LAD Net Equity is lower than zero, then the Purchase Price
shall be reduced by the "Adjustment Amount" where the "Adjustment
Amount" is a positive number equal to the amount in EURO by which the
LAD Net Equity is lower than zero. The Adjustment Amount, if any,
shall be paid to Alpha Subsidiary within five (5) business days after
determination of the Final Closing Balance Sheet pursuant to Sec. 3.5
as follows:
(a) If the Adjustment Amount reduced by the Assignment Consideration
as defined in Sec. 4.1, if any, is equal to or less than the
Adjustment Escrow Cash Amount, then Deutsche Bank shall pay to
Alpha Subsidiary that portion of the Adjustment Escrow Cash
Amount equal to the Adjustment Amount reduced by the Assignment
Consideration as defined in Sec. 4.1, if any, plus interest
thereon as accrued and disburse the remaining portion of the
Adjustment Escrow Cash Amount, if any, plus interest thereon as
accrued to BPS.
(b) If the Adjustment Amount reduced by the Assignment Consideration
as defined in Sec. 4.1, if any, exceeds the Adjustment Escrow
Cash Amount, then Deutsche Bank shall pay to AFC the entire
Adjustment Escrow Cash Amount plus interest thereon as accrued
and, in addition, BPS shall pay to Alpha Subsidiary by wire
transfer within five (5) business days after demand by Alpha
Subsidiary the EURO amount by which the Adjustment Amount reduced
by the Assignment Consideration as defined in Sec. 4.1, if any,
exceeds the Adjustment Escrow Cash Amount plus interest thereon
as from the Closing Date at a rate of 6.0 % p.a.
3.4.3 Any payments made by Alpha Subsidiary or Deutsche Bank to BPS in
accordance with the provisions of Sec. 3.2 and 3.4 (including any
set-off of the Assignment Consideration, if any, pursuant to para.
3.4.2 (a) or (b)) are made with full release effect (schuldbefreiende
Wirkung) for Alpha Subsidiary and AFC or its designated subsidiary
vis-a-vis Unaxis, BPS and the Unaxis subsidiaries selling the Foreign
Shares and the Foreign Assets and Liabilities and BPS will receive the
payments also on behalf of Unaxis and/or such Unaxis subsidiaries and
be responsible for the disbursement of the received amounts as
internally agreed. Any payments made by BPS or Deutsche Bank to Alpha
Subsidiary in accordance with the provisions of Sec. 3.2 and 3.4 are
made with full release effect for BPS vis-a-vis Alpha Subsidiary and
AFC or its designated subsidiary and Alpha Subsidiary will
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receive the payments also on behalf of AFC and its designated
subsidiary, if any, and be responsible for the disbursement of the
received amounts as internally agreed.
3.5 The Final Closing Balance Sheets, the LAD Net Equity and the
Adjustment Amount, if any, will be determined as follows:
(a) Within sixty (60) days after the Closing Date, AFC shall
ensure the preparation of (i) balance sheets of each of the
New LAD Entities and of the operations of the LAD Business
in Shanghai, China and Singapore, if any, (pro-forma), as of
the Closing Date (the "Proposed Closing Balance Sheets"),
denominated in Deutsche Mark and prepared in accordance with
IAS accounting principles and the principles of the Unaxis
Reporting Manual as applicable as of the date hereof and the
principles set forth in Annex 3.5 (a), and (ii) a report
(the "AFC Report") calculating the LAD Net Equity and the
Adjustment Amount, if any, and provide a copy of the
Proposed Closing Balance Sheets and the AFC Report to BPS.
At all times during the preparation of the Proposed Closing
Balance Sheets and the AFC Report, AFC and its personnel,
agents, accountants and other professional advisors involved
in the preparation thereof shall, and AFC shall cause NewCo
KG and its personnel, agents, accountants and other
professional advisors involved to cooperate with and permit
BPS and its personnel, agents, auditors, accountants and
other professional advisors and allow them to observe such
preparation.
(b) BPS shall have thirty (30) days after receipt of the
Proposed Closing Balance Sheets and the AFC Report to review
such documents and determine whether it agrees with AFC's
Proposed Closing Balance Sheets and determination of the
Adjustment Amount. During such period of time and in order
to further enable BPS to conduct such review, AFC shall make
available to BPS and its personnel, agents, accountants and
other professional advisors (i) the books and records
(including relevant workpapers) used in the preparation of
the Proposed Closing Balance Sheets and (ii) AFC's
personnel, agents, auditors or accountants responsible for
the preparation of the Proposed Closing Balance Sheets and
the AFC Report. In the event that BPS disagrees with the
Proposed Closing Balance Sheet or the AFC Report as to the
determination of the
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Adjustment Amount, BPS shall notify AFC in writing of such
disagreement within such 30 day period.
(c) If BPS and AFC disagree on the Proposed Closing Balance
Sheets or the AFC Report, then BPS and AFC shall attempt to
resolve such disagreement by meeting and conferring in good
faith during the 15-day period following BPS's written
notification to AFC of its disagreement.
If BPS and AFC are unable to resolve their disagreement
within such 15-day period, BPS and AFC agree to retain the
Frankfurt office of KPMG Deutsche Treuhandgesellschaft
Aktiengesellschaft Wirtschaftsprufungsgesellschaft (the
"Accounting Mediator") to mediate the dispute. The
Accounting Mediator shall conduct such mediation as expert
arbitrator (Schiedsgutachter). The Accounting Mediator shall
render a decision, if possible within a three months period,
regarding the disputed Adjustment Amount, which decision
shall be final and binding, and judgment upon the decision
rendered by the Accounting Mediator may be entered by any
court of competent jurisdiction. The Accounting Mediator
shall also decide on the allocation of the costs of the
mediation procedure in accordance with ss.ss. 91 et seq. of
the German Civil Procedure Rules (Zivilprozessordnung).
(d) The Proposed Closing Balance Sheets shall be the "Final
Closing Balance Sheets" unless BPS notifies AFC of its
disagreement in accordance with sub-para. (b). If BPS timely
notifies AFC of its disagreement, the Proposed Closing
Balance Sheets as adjusted as a result of the foregoing
dispute resolution process set forth in sub-para. (c) shall
be the "Final Closing Balance Sheets".
Article 4
Assignment of Intercompany Loans;
Repayment of IKB Loan
4.1 On the date on which the payments set forth in Para. 3.4.1 or 3.4.2
are made, Unaxis shall assign to Alpha Subsidiary which shall accept
such assignment all claims of Unaxis against NewCo KG for repayment of
any intercompany loans owed by NewCo KG to Unaxis as of the Closing
Date
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as reflected in the Final Closing Balance Sheets plus any interest
accrued thereon after the Closing Date against payment of an amount
equal to the principal amount of such intercompany loans and any
interest accrued thereon (the "Assignment Consideration"). To the
extent that the Assignment Consideration is not fully discharged by a
set-off pursuant to Sec. 3.4.2(a) or (b), if any, it shall be paid by
Alpha Subsidiary by wire transfer of immediately available funds at
Alpha Subsidiary's expense on the date of assignment to an account of
Unaxis as specified at least three business days in advance.
4.2 On the Closing Date, Alpha Subsidiary shall repay, on behalf and for
the account of NewCo KG, the loan granted by IKB Deutsche Industrie
Bank AG ("IKB") to BPS on the basis of the credit facility dated
November 3, 1998 and transferred to NewCo KG in the LAD Reorganization
in the amount outstanding as of the Closing Date plus any interest
accrued thereon (the "Outstanding IKB Loan"), provided that such
repayment shall be made as a loan granted by Alpha Subsidiary to NewCo
KG. The Outstanding IKB Loan shall be reflected as liability of NewCo
KG in the Final Closing Balance Sheets. Alpha Subsidiary is not
obligated to repay the Outstanding IKB Loan if IKB has effectively
waived and released the mortgage on the Hanau site securing the
Outstanding IKB Loan by written declaration on or before the Closing
Date.
Article 5
Representations and Warranties
Except as disclosed in the BPS Disclosure Memorandum (Annex 5 A) as
updated in accordance with Article 1 hereof, BPS represents and
warrants in the form of an independent guarantee that the statements
set forth in Annex 5 A are true and correct as of the date hereof and
as of the Closing Date or such other date as expressly provided in
Annex 5 A ("BPS Representations"), provided that the BPS
Representations are made to AFC or the designated AFC subsidiary
(Section 2.5) to the extent that they relate to the Foreign Shares and
Foreign Assets and Liabilities and to Alpha Subsidiary in all other
respects. Except as disclosed in the AFC Disclosure Memorandum (Annex
5 B), AFC represents and warrants in the form of an independent
guarantee to BPS that the statements set forth in Annex 5 B are true
and correct as of the date hereof and as of the Closing Date or such
other date as expressly provided in Annex 5 B ("AFC Representations")
(each AFC the designated AFC subsidiary or Alpha Subsidiary as the
case may be and BPS with respect to the representations and warranties
given by it hereinafter referred to as the "Representing Party" and
with re-
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spect to the representations and warranties given by the respective
other party hereinafter referred to as "Claimant").
Except as set forth in Annex 5 B or Annex 5 A, any representations and
warranties of BPS or AFC, respectively, shall be excluded.
Article 6
Breach of Representations and Warranties
6.1 In case of a breach of any of the representations and warranties set
forth in Article 5 which has not been cured on or prior to the Closing
Date, the Representing Party shall attempt to remedy the breach. If
the Representing Party fails to remedy the breach within a reasonable
period, such period not to exceed two (2) months after the
Representing Party has received written notification of the breach by
the Claimant, the following provisions shall apply.
6.2 In case of a breach of any of the representations and warranties set
forth in Article 5 which has not been cured on or before the Closing
Date, the Representing Party shall, subject to the provisions in
sub-para. (a) or (b), respectively, and the limitations set forth in
Sec. 6.3 below, be obligated to compensate the Claimant (i) in case of
a breach of the BPS Representations in an amount equal to the damages
suffered by AFC Subsidiary or the damages suffered by any of the New
LAD Entities as a result of the breach or (ii) in case of a breach of
the AFC Representations in an amount equal to the damages suffered by
BPS. In case of a breach of any of the AFC Representations set forth
in Sec. 3 of Annex 5 A, damages owed by AFC to BPS shall be calculated
according to the measure of damages for misrepresentations and
omissions determined pursuant to Rule 10b-5 of the United States
Securities Exchange Act of 1934, as amended, as determined pursuant to
the laws of the United States. In case of a breach of any of the other
AFC Representations or any of the BPS Representations, any liability
for loss of profit, any value reductions due to lost earnings or
damages not directly relating to the ownership of the Shares, the
Foreign Shares or the AFC voting common shares issued pursuant to
Article 3 hereof, respectively, or to the LAD Business or the AFC
Business, respectively shall be excluded and the legal principles as
to the calculation of damages, mitigation of damages and offsetting of
losses by advantages due to the damaging event (Schadensberechnung,
Schadensminderung, Vorteilsausgleichung) pursuant toss.ss. 249 et seq.
of the German Civil Code shall apply.
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The compensation owed by the Representing Party pursuant to the
foregoing provisions shall be made as follows:
(a) In case of a breach of any of the BPS Representations, BPS shall
make a cash payment equal to the compensation owed by BPS
pursuant to the above provisions to Alpha Subsidiary
(b) In case of a breach of any of the AFC Representations, AFC shall
make a cash payment equal to the compensation owed by AFC
pursuant to the above provisions to BPS.
6.3 Any liability of the Representing Party hereunder shall be excluded to
the extent that the claims of the Claimant or the underlying
circumstances are (i) covered by payments received from insurance
companies or any other third parties, or (ii) covered by any other
indemnity provisions under this Agreement. Any liability of BPS
hereunder shall be further excluded to the extent (i) that the claims
of AFC or the underlying circumstances are reflected as liabilities or
of the type and within the amount of any of the provisions (reserves)
in any of the Final Closing Balance Sheets or have otherwise resulted
in a reduction of the Purchase Price pursuant to Article 3, or (ii)
that any liability is fully discharged or satisfied below the amount
at which it is reflected in any of the Final Closing Balance Sheets,
or (iii) that any provisions in any of the Final Closing Balance
Sheets have become unnecessary or excessive, or (iv) of any amount
recovered in respect of any accounts receivable written off in any of
the Final Closing Balance Sheets.
Any claims of the Representing Party shall be excluded to the extent
that such claims or the underlying circumstances have been disclosed
to the Claimant or any of its officers, directors, employees, agents,
accountants or other professional advisors in any of the documents
listed in Annex 6.3. A complete set of copies of the documents listed
in Annex 6.3 is deposited with the certifying notary and will be kept
by the notary until AFC and BPS jointly instruct him to release the
documents, but at the latest after ten years after the signing.
The Claimant may assert any claims for breach of any of the
representations and warranties given in Article 5 only if (i) the
value of each claim exceeds an amount of US $ 5,000 (in words: US $
five thousand) and (ii) the value of the aggregate of all claims
exceeds an amount of US $ 100,000 (in words: one hundred thousand)
(Freigrenze). All claims of AFC, Alpha Subsidiary and the New LAD
Entities for a breach of any of the BPS Representations are limited to
a maximum aggregate amount of US $ 15,000,000 (in words: fifteen
million) (the
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"BPS Overall Liability Limitation"), provided that BPS's liability for
the compensation of any Failed Expenses as defined hereinafter shall,
within the BPS Overall Liability Limitation, be limited to an amount
of US $ 7,500,000 (in words: seven million five hundred thousand).
Failed Expenses shall mean any specific costs and expenses of any of
the New LAD Entities actually incurred for which no value has been
received due to an interruption of the business operations resulting
from a breach of any of the BPS Representations. All claims of BPS for
a breach of any of the AFC Representations are limited to a maximum
amount of US $ 2,500,000 (in words: two million five hundred
thousand).
6.4 In case of a breach of the representation and warranty set forth in
Sec. 1b of Annex 5 A or Sec. 2 of Annex 5 B relating to the transfer
of unrestricted ownership of the Shares or the AFC voting common
shares, respectively, and if the Claimant would be entitled to a
compensation pursuant to Sec. 6.1-6.3 above, the Claimant has the
option to rescind this Agreement prior to the Closing in lieu of
asserting a claim for compensation. If the rescission right is
exercised,ss.ss. 346 et seq. of the German Civil Code shall apply. The
rescission right may only be exercised prior to the Closing within one
month after the Claimant has obtained knowledge of its rescission
right, however, at the latest until the end of the respective
limitation period set forth in Sec. 6.6 below.
6.5 Any liability of the Representing Party for a breach of any of the
representations and warranties given in Article 5 other than as set
forth in Sec. 6.1-6.4 above shall be excluded. Furthermore, any other
rights or claims of a party based on any legal grounds other than a
breach of any of the representations and warranties given in Article 5
(whether or not relating to factual circumstances covered by any of
the representations and warranties given in Article 5), including
claims for damages, reduction of purchase price (Minderung),
cancellation (Wandlung), rescission (Rucktritt) or challenge
(Anfechtung) of this Agreement or any other release from this
Agreement, be it based on contract, tort, negligence in the
pre-signing phase (culpa in contrahendo) or after signing (positive
Vertragsverletzung) or otherwise, shall be excluded unless based on
fraudulent, willful or grossly negligent conduct (Arglist, Vorsatz,
grobe Fahrlassigkeit) of the respective other party or in case of a
breach of covenants expressly provided for in this Agreement.
6.6 Any claims under this Article 6 relating to the breach of any
representations and warranties set forth in Sec. 1b of Annex 5 A or
Sec. 2 of Annex 5 B shall be time-barred five (5) years after the
Closing Date and any claims under this Arti-
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cle 6 relating to the breach of any of the other representations and
warranties set forth in Annex 5 A and Annex 5 B shall be time-barred
on September 30, 2002.
6.7 In the event that a party asserts claims against the other party for
compensation, damages or otherwise, the other party will ensure that
the party asserting the claim and its personnel, agents, accountants
and other professional advisors are given access to the relevant
business sites and are allowed to inspect all relevant documents,
books and records and obtain all relevant information from the
officers, directors, personnel, agents, accountants and other
professional advisors of the other party or the respective subsidiary
of the other party.
Article 7
Covenants prior Closing
7.1 Prior to the Closing Date, BPS shall, and shall cause its affiliates
to, ensure the following:
7.1.1 The LAD Business will be conducted and the properties related to the
LAD Business will be maintained in the usual and ordinary course in
accordance with past practice except as otherwise expressly
contemplated by this Agreement or with the prior written consent of
AFC, such consent not to be unreasonably withheld, and all reasonable
efforts shall be taken to maintain its rights and preserve its
relationships with customers, suppliers and others having business
dealings with it;
7.1.2 BPS will promptly (once any officer or director or any other employee
of BPS has knowledge thereof) inform AFC in writing if BPS shall
discover any breach of any of the BPS Representations and Warranties
or of any covenant hereunder by BPS;
7.1.3 BPS will, and will cause its affiliates to, cooperate with AFC and
Alpha Subsidiary and use their best efforts to give all notices and to
obtain all governmental, third party, or other consents, transfers,
approvals, orders, qualifications and waivers necessary for the
consummation of the transactions contemplated hereby, and to cause the
other conditions to AFC's obligation to close to be satisfied
(including, without limitation, the execution and delivery of all
agreements contemplated hereunder to be so executed and delivered).
BPS will promptly complete and file any required document and
information required in connection with any governmental or agency
filings
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for any pre-merger approvals required by the EU Commission, the German
Federal Cartel Office, the Federal Trade Commission or, if mandatory,
any other authority and will pay, without attorneys' fees, one-half of
all filing fees associated with such filings for approval of the
transactions contemplated in this Agreement;
7.1.4 BPS will confer on a regular and frequent reasonable basis with
representatives of AFC to report on operational matters and the
general status of ongoing operations and will use reasonable best
efforts to take all actions necessary, and to cause its Affiliates to
take all actions necessary to consummate the transactions contemplated
in this Agreement;
7.1.5 BPS shall (i) preserve intact the business organization and good will
of the LAD Business, keep available the services of its officers and
employees as a group and maintain satisfactory relationships with
suppliers, distributors, customers and others having business
relationships with it, (ii) not take any action which would render, or
which reasonably may be expected to render, any of the BPS
Representations and Warranties untrue, and (iii) notify AFC of any
emergency or other change in the normal course of the LAD Business or
in the operation of the properties of the LAD Business and of any
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated) if such
emergency, change, complaint, investigation or hearing would be
material, individually or in the aggregate, to the business,
operations or financial condition of the New LAD Entities and the LAD
Business or to BPS's or AFC's ability to consummate the transactions
contemplated by this Agreement;
7.1.6 BPS shall maintain commercially reasonable and appropriate insurance
coverage for the LAD Business consistent with past practice;
7.1.7 BPS shall give AFC the opportunity to meet with BPS's customers
together with representatives of BPS.
7.1.8 BPS and NewCo KG shall, subject to the prior approval of Alpha
Subsidiary, such approval not to be unreasonably withheld, enter into
intercompany service agreements relating to the use of the Hanau
casino by LAD employees and the joint use of certain facilities in
Japan, Hongkong, South Korea, USA and Taiwan on commercially
reasonable terms and conditions.
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7.2 Prior to the Closing Date, BPS will not, and ensure that the entities
operating the LAD Business from time to time will not, except as
otherwise expressly contemplated by this Agreement:
7.2.1 take any action that would materially adversely affect the ability of
any party to this Agreement to consummate the transactions
contemplated by this Agreement or to perform its covenants and
agreements under this Agreement;
7.2.2 incur any additional debt or other obligation for borrowed money
relating to the LAD Business except in the ordinary course of
business;
7.2.3 sell, merge or consolidate any material portion of the LAD Business to
or with a third party or agree to do any of the foregoing or have any
discussions or negotiations regarding the foregoing or provide any
information to anyone in connection with the foregoing;
7.2.4 grant any increase in compensation or benefits to the employees
belonging to the LAD Business, or pay any severance, termination or
bonus payment except in the ordinary course of business consistent
with past practice, or as required by usual business practice
(betriebliche Ubung), law or contracts in effect prior to the date of
this Agreement;
7.2.5 except in the ordinary course of business and consistent with past
practice or with the prior written consent of AFC, such consent not to
be unreasonably withheld (i) enter into, modify, amend or terminate
any material contract regarding the LAD Business, (ii) waive, release,
or compromise or assign any material rights or claims regarding the
LAD Business, or (iii) incur or contract for any material capital
expenditures, obligations or liabilities regarding the LAD Business.
7.3 Prior to the Closing Date, AFC and Alpha Subsidiary will ensure the
following:
7.3.1 The AFC Business will be conducted and the properties related to the
AFC Business will be maintained in the usual and ordinary course in
accordance with past practice except as otherwise expressly
contemplated by this Agreement and all reasonable efforts shall be
taken to maintain its rights and preserve its relationships with
customers, suppliers and other having business dealings with it;
7.3.2 AFC and Alpha Subsidiary will promptly (once any officer or director
or any other employee has knowledge thereof) inform BPS in writing if
AFC
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or Alpha Subsidiary shall discover any breach of any of the AFC
Representations and Warranties or of any breach of any covenant
hereunder by AFC;
7.3.3 AFC and Alpha Subsidiary will cooperate with BPS and use their
reasonable best efforts to give all notices and to obtain all
governmental, third party or other consents, transfers, approvals,
orders, qualifications and waivers necessary for the consummation of
the transactions contemplated hereby and to cause the other conditions
to BPS's obligations to close to be satisfied (including, without
limitation, the execution and delivery of all agreements contemplated
hereunder to be so executed and delivered). AFC will promptly complete
and file any required document and information required in connection
with any governmental or agency filings for any pre-merger approvals
required by the EU Merger Control Commission, the German Cartel Office
or the Hart-Scott-Rodino Act, and will pay one-half of all filing fees
associated with such filings for approval of the transactions
contemplated in this Agreement without attorneys' fees;
7.3.4 AFC and Alpha Subsidiary will use reasonable best efforts to take all
actions necessary to consummate the transactions contemplated by this
Agreement;
7.3.5 AFC and Alpha Subsidiary will (i) use their best efforts to preserve
intact their business organization and good will, keep available the
services of their officers and employees as a group and maintain
satisfactory relationships with suppliers, distributors, customers and
others having business relationships with them; (ii) not take any
action which would render, or which reasonably may be expected to
render, any of the AFC Representations and Warranties untrue and (iii)
notify BPS of any emergency or other change in the normal course of
its business or in the operation of its properties and of any
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated) if such
emergency, change, complaint, investigation or hearing would be
material, individually or in the aggregate, to the business,
operations or financial condition of AFC or to BPS's or AFC's ability
to consummate the transactions contemplated by this Agreement; and
7.3.6 AFC will execute an agreement with BPS regarding the registration of
the AFC common voting stock received by BPS as Stock Component in the
form attached hereto as Annex 7.3.6 (the "Registration Rights
Agreement").
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7.3.7 As promptly as practicable after the signing of this Agreement, AFC
shall prepare and file with the United States Securities and Exchange
Commission (the "SEC") a proxy statement and any amendment or
supplement thereto (the "Proxy Statement") to be sent to the
stockholders of AFC in connection with the meeting of AFC's
stockholders to consider the transactions contemplated herein (the
"AFC Stockholders' Meeting"). Copies of the Proxy Statement shall be
provided to NASDAQ in accordance with its rules. AFC shall use all
reasonable efforts to cause the Proxy Statement to be delivered to the
AFC's stockholders as soon as it becomes definitive. AFC or BPS, as
the case may be, shall furnish all information concerning AFC or the
LAD Business as the other party may reasonably request in connection
with such actions and the preparation of the Proxy Statement. AFC
shall cause the Proxy Statement and all other documents that AFC is
responsible for filing with the SEC in connection with the
transactions contemplated herein to comply as to form and substance in
all material respects with the applicable requirements of (i) the
United States Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (ii) the rules and regulations of the NASDAQ National
Market, (iii) the Securities Act and (iv) the Colorado General
Corporation Law (the "CGCL").
The Proxy Statement shall include the approval and the declaration of
advisability of this Agreement and the transactions contemplated
herein and the recommendation of the Board of Directors of AFC to
AFC's stockholders that they vote in favor of the adoption of this
Agreement.
7.3.8 Subject to the receipt of a letter from Broadview International LLC
dated not more than five days prior to the date of the Proxy Statement
(the "Updated Fairness Opinion"), updating its fairness opinion issued
prior to the date hereof that, in its opinion, the Purchase Price is
fair from a financial point of view to the shareholders of AFC, AFC
shall call and hold the AFC Stockholders' Meeting as promptly as
practicable, for the purpose of voting upon the approval of this
Agreement and the transactions contemplated hereby. AFC shall use all
reasonable efforts to solicit from its shareholders proxies in favor
of the adoption of this Agreement pursuant to the Proxy Statement and
shall take all other action necessary or advisable to secure the vote
or consent of shareholders required by the CGCL or applicable stock
exchange requirements to obtain such approval.
7.3.9 At the signing of this Agreement, AFC shall submit to BPS a written
confirmation by one or more banks to the effect that as per the
signing funds of
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at least US $ 55,000,000 (in words: fifty-five million) in form of
free deposits, credit facilities or commitment letters are immediately
available to AFC and could be used for payment of the Cash Portion. In
the period between the signing of this Agreement and the Closing, AFC
shall submit to BPS at the end of each month further written
confirmations by one or more banks to the effect that as per such
dates funds of at least US $ 60,000,000 (in words sixty million) in
form of free deposits, credit facilities or commitment letters are
immediately available to AFC and could be used for payment of the Cash
Portion.
7.4 Prior to the Closing, AFC and Alpha Subsidiary will not, except as
otherwise expressly contemplated by this Agreement:
7.4.1 take any actions that would materially adversely affect the ability of
any Party to this Agreement to consummate the transactions
contemplated by this Agreement or to perform its covenants and
agreements under this Agreement;
7.4.2 sell, merge or consolidate any material portion of the AFC Business to
or with a third party or acquire by purchase, merger or otherwise any
material assets or business or agree to any of the foregoing;
7.4.3 call a shareholders' meeting for the purpose of adopting shareholders'
resolutions regarding capital increases or capital reductions, any
changes of the Articles of Incorporation or the distribution of
profits except as contemplated by this Agreement; or
7.4.4 issue any shares or other securities including, but not limited to,
convertible bonds or stock options or create any rights or claims for
the issuance of any such shares or other securities or redeem or
cancel any shares or other securities of AFC except in connection with
financing this transaction or in connection with AFC's stock option
and stock purchase plans in place at the time of the signing of this
Agreement.
7.5 Each of the parties hereto will use all reasonable efforts and will
take all actions necessary to consummate the transactions contemplated
by this Agreement and to cause all the conditions to the transactions
set forth in Article 8 to be satisfied.
7.6 AFC, Alpha Subsidiary and BPS shall cooperate in good faith and use
their best efforts to obtain as promptly as possible the consents to
the transfer of the con-
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tracts listed in Annex 7.6 to NewCo KG in the LAD Reorganization from
the respective contractual parties. AFC and Alpha Subsidiary shall
provide all necessary assurances to such contractual parties as
reasonably requested by them as a precondition for granting their
consent.
Article 7A
General Condition Precedent
This Agreement is entered into subject to the condition precedent, that the
parties hereto will agree on the Annexes referred to herein and on the Schedules
referred to in Annexes 5A and 5B hereto in accordance with Section 12.6. hereof.
This Agreement shall not be deemed executed and is not complete unless the
execution of one or more additional Notarial Deeds containing all the Annexes
and Schedules.
Article 8
Conditions Precedent for Consummation
The consummation (Vollzug) of this Agreement is subject to the satisfaction of
each of the following conditions precedent:
8.1 all consents of, filings and registrations with, and notifications to,
all regulatory authorities required by EU Merger Control, German
cartel law or the U.S. Antitrust Improvement Act shall have been
obtained or made and shall be in full force and effect and all waiting
periods required by applicable law shall have expired. In case the
release of any of the transactions contemplated hereby shall be
granted by any of the merger control authorities only subject to the
fulfillment of conditions, the parties hereto shall be obliged to
fulfill such conditions if this is economically acceptable for the
parties.
8.2 The respective contractual parties to the contracts listed in Annex
7.6 have given their written consent to the transfer of such contracts
to NewCo KG.
8.3 No court or governmental authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any law, order
or injunction (whether temporary, preliminary or permanent) or taken
any other action that prohibits, restricts or makes illegal the
consummation of the transactions contemplated by this Agreement or
cause such transactions to be rescinded on or
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prior to the day immediately preceding the day which will otherwise be
the Closing Date.
8.4 NewCo KG has a valid lease agreement with BuL Vermietungsgesellschaft
mbH regarding the Hanau site substantially in the form as attached
hereto as Annex 8.4.1, but providing for monthly rent reductions
commensurate with the reduced use of space by NewCo at the end of the
respective months, and a valid lease agreement with Victoria Mathias
Verwaltungsgesellschaft/Lahmeyer Grundbesitz GmbH & Co. KG regarding
the Alzenau site substantially in the form as attached hereto as Annex
8.4.2
8.5 The shareholders of AFC shall have approved this Agreement and the
transactions contemplated by this Agreement in the AFC Stockholders'
Meeting.
8.6 NewCo KG has a valid commercialization agreement with The Coca-Cola
Company, Atlanta and with Krones AG, Neutraubling, substantially in
the form as attached hereto as Annex 8.6.
8.7 The LAD Reorganization shall have become effective in accordance with
the LAD Reorganization Memorandum.
8.8 AFC and BPS shall have executed the Registration Rights Agreement.
The conditions specified in Sec. 8.1 and 8.3 may be waived by BPS and
AFC, the conditions specified in Sec. 8.2, 8.4, 8.5, 8.6 and 8.7 may
be waived by AFC and the condition specified in Sec. 8.8 may be waived
by BPS, provided that no such waiver will be effective unless it is
set forth in writing by the respective parties. If the condition set
forth in Sec. 8.5 is waived by AFC in accordance with the preceding
provision, Sec. 7.3.7, 7.3.8, 9.1(d) (ii) and 11.6 shall be
unapplicable
Article 9
Termination
9.1 Notwithstanding any other termination or rescission pursuant to
applicable law, this Agreement may be terminated at any time prior to
the Closing:
(a) by mutual written consent of AFC (also on behalf of Alpha
Subsidiary) and BPS (also on behalf of Unaxis);
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(b) by either AFC (also on behalf of Alpha Subsidiary) or BPS (also
on behalf of Unaxis) if there has been a material breach on the
part of the other party of the representations and warranties or
covenants or obligations set forth in this Agreement, which is
not cured within thirty (30) days of a notice to the breaching
party except when such breach cannot be expected to have,
individually or in the aggregate, a material adverse effect on
the economic, financial or earnings position (Vermogens-, Finanz-
oder Ertragslage) of the LAD Business or the AFC Business,
respectively, taken as a whole; or
(c) by either AFC (also on behalf of Alpha Subsidiary) or BPS (also
on behalf of Unaxis) if there has been a material adverse change
in the economic, financial or earnings position (Vermogens-,
Finanz-oder Ertragslage) of the LAD Business or the AFC
Business, respectively, taken as a whole which has occurred after
the signing of this Agreement; or
(d) by either AFC (also on behalf of Alpha Subsidiary) or BPS (also
on behalf of Unaxis) if (i) events (other than referred to in
sub-para (ii) hereof) have occurred which have made it impossible
to satisfy a condition precedent under Article 8 which has not
been waived in accordance with Article 8, or (ii) the AFC
Stockholders' Meeting is not held (unless AFC waives the
condition set forth in Sec. 8.5 in accordance with Article 8 and
proceeds towards Closing as contemplated by this Agreement), in
particular due to the failure of Broadview International LLC to
give the Updated Fairness Opinion, or the shareholders of AFC do
not give their approval to this Agreement and the transactions
contemplated herein in the AFC Stockholders' Meeting, provided
that AFC may not terminate the Agreement pursuant to this Sec.
9.1 para. (d) without paying the Termination Fee (as defined in
Sec. 11.6) concurrently with such termination, or (iii) the
Closing has not occurred on or prior to July 1, 2001 by reason of
the failure of any other condition precedent under Article 8
which has not been waived in accordance with Article 8; provided
that neither AFC nor BPS will be entitled to terminate this
Agreement pursuant to this Sec. 9.1(d) if such party's breach of
this Agreement has prevented satisfaction of the conditions or
the consummation of the transactions contemplated hereby;
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(e) by BPS, if AFC fails to submit after the signing of this
Agreement any of the written bank confirmations required pursuant
to Sec. 7.3 para. 7.3.9 and such failure remains uncured for five
(5) days after notice to AFC by BPS. If BPS terminates this
Agreement pursuant to this Sec. 9.1 (e), AFC shall pay to BPS an
amount of US $ 2,000,000 (in words: two million).
9.2 The termination rights set forth hereunder must be exercised by the
respective party by written declaration to the other party or parties
within a period of fifteen (15) days after the respective party has
obtained knowledge of its right to terminate this Agreement.
9.3 In the event of termination of this Agreement by either AFC or BPS as
provided above, this Agreement will forthwith become void and there
will be no liability on the part of any party to this Agreement to any
other party, except for the obligation of the parties in Sec. 9.1(d)
(ii), 9.1 (e), 11.6 and Article 12, and except that nothing herein
will relieve any party from any breach of this Agreement prior to such
termination.
Article 10
Non-competition
For a period of two (2) years after the Closing Date, BPS and Unaxis agree
10.1 without the prior written consent of AFC not to engage, directly or
indirectly, in any business anywhere in the world that develops,
manufactures or supplies products of the kind developed, manufactured
or supplied by the business as described in Annex 10.1, it being
understood that the scope of this non-compete obligation is
exclusively determined on the basis of Annex 10.1 and the contents of
Annex A.1 are not relevant for the determination of the scope of this
non-compete obligation, and
10.2 not to own an interest in, manage, operate, control or participate in
or be connected with, any person that competes with AFC in the LAD
Business, without the prior written consent of AFC, provided, however,
that, for the purposes of this Sec. 10.2, ownership of securities
having not more than five (5) percent of the outstanding voting power
of any competitor which is a listed company on any stock exchange or
traded actively on any over-the-counter market shall not
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be deemed to be in violation of this Sec. 10.2, so long as BPS has no
other connection or relationship with such competitor,
10.3 not to negotiate or start collaboration with The Coca-Cola Company or
Krones AG regarding diffusion barriers for beverage bottles.
(the obligations contained in Sec. 10.1 and 10.2 and 10.3 above
referred to as the "BPS Non-Competition Obligation"),
Unaxis shall ensure and guarantees that the BPS Non-Competition
Obligation will be observed and complied with also by its subsidiaries
in the meaning of Sec. 15 et seq. German Stock Corporation Law.
Article 11
Additional Agreements
11.1 No press releases related to this Agreement and the transactions
contemplated herein, or other announcements to the employees,
customers or suppliers of the AFC Business or the LAD Business will be
issued without the mutual approval of all parties hereto, except any
public disclosure which any party in good faith believes, based upon
the written opinion of counsel, is required by law or regulation (in
which case the disclosing party shall notify the other parties of the
form of the release and discuss changes thereto in good faith at least
three business days prior to such disclosure).
11.2 AFC shall ensure that immediately after the Closing Date a person
nominated by BPS is appointed to AFC's Board of Directors. For the
period during which BPS continues to own 10 % or more of AFC's
outstanding voting common stock or purchases additional shares
pursuant to sub-para. (a) below, a person nominated by BPS for the
Board of Directors of AFC will be proposed to AFC Stockholders'
Meeting for election. If BPS sells any of its AFC shares and
subsequently owns less than ten percent (10 %) of AFC's outstanding
stock for any reason, including because of additional shares issued by
AFC before or after its sale of stock, its right to a board seat will
be lost immediately. If BPS has not sold any of the AFC shares and
falls below ten percent (10 %) of the total outstanding shares of AFC
common stock because AFC issues additional shares or takes other
corporate actions:
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(a) BPS will be permitted to purchase additional shares either from
AFC (pursuant to Sec. 11.3 or otherwise) or in the open market to
keep its ownership at or above 10%.
(b) If BPS does not purchase enough shares to restore its ownership
of AFC common stock to 10 % or more of the total outstanding
common stock, it will lose its right to board seat immediately,
subject to paragraph (c) below
(c) If BPS has spent U.S. $2 million to purchase AFC common stock
pursuant to paragraph (a) above, and still owns less than 10 % of
AFC's outstanding common stock, BPS will nonetheless retain its
right to an AFC board seat until one year after the date of
Closing.
At such time as BPS loses its right to a board seat of AFC, BPS will
cause the director nominated by it to resign within ten (10) days.
Thereafter, AFC shall have no further obligation to nominate BPS's
designee to AFC's Board of Directors, even if BPS's ownership of AFC
common stock later increases above 10% of AFC's total outstanding
common stock.
11.3 If after Closing, AFC issues any common stock for cash in a public
offering or private placement and BPS is entitled to purchase
additional shares pursuant to Sec. 11.2(a) above, BPS shall have the
right to purchase in such offering that number of shares of AFC common
voting stock which is required to maintain the percentage ownership of
AFC common voting stock that BPS had immediately prior to such
offering. Any purchase by BPS of AFC common voting stock pursuant to
this provision shall be at the same price and on the same terms
offered to other investors in such offering. AFC shall notify BPS in
writing at least thirty (30) days prior to an issuance of AFC common
stock for cash in a public offering or private placement (the "AFC
Offering Notice"). The AFC Offering Notice shall contain a description
of the type of offering and the expected price per share. If BPS
desires to participate in such offering, then BPS shall provide to AFC
written notice of such election within twenty (20) days of receiving
the AFC Offering Notice and such election shall specify the number of
shares that BPS elects to purchase pursuant to this provision.
11.4 BPS agrees not to sell, transfer or otherwise dispose of the AFC
common stock which it has acquired as part of the Stock Component as
defined in Sec. 3.1 for a period of nine (9) months following the
Closing Date.
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11.5 Until this Agreement is terminated by its terms, BPS will not (and BPS
will not cause or permit any director, officer, employee or agent of
BPS, the New LAD Entities or their affiliates) to, (a) solicit,
initiate or encourage the submission of any proposal or offer from any
person or entity (including any of them) relating to any (i)
liquidation, dissolution or re-capitalization of, (ii) merger or
consolidation with or into, (iii) acquisition or purchase of assets of
any equity interest in, or (iv) similar transaction or business
combination involving the LAD Entities or any part of the LAD
Business, or (b) participate in any negotiations regarding, furnish
any information with respect to, assist or participate in any other
manner any effort or attempt by any other person to do or seek any of
the foregoing. Until this Agreement is terminated by its terms, BPS,
the LAD Entities and their affiliates shall notify AFC immediately if
any person makes any proposal, offer, inquiry or contact with respect
to any of the foregoing without disclosing such person's identity.
11.6 If the AFC Stockholders' Meeting is not held or if the shareholders of
AFC do not give their approval to this Agreement and the transactions
contemplated herein at the AFC Stockholders' Meeting and this
Agreement is terminated as a result thereof, AFC shall pay to BPS an
amount of US $ 2,000,000 (in words: two million) (the "Termination
Fee") promptly following such termination or concurrent with
termination by AFC under the terms of Sec. 9.1(d).
11.7 BPS agrees that, except for shares of AFC common voting stock to be
acquired pursuant to the terms of this Agreement, BPS will not and
will cause its affiliates not to acquire additional shares of AFC
common voting stock before the Closing and after the Closing for so
long as a nominee of BPS is a member of the board of AFC and a period
of six months after the BPS nominee has resigned pursuant to Sec.
11.2, however at least for a period of two (2) years after the
Closing, in open market transactions or otherwise, without the prior
written consent of AFC.
11.8 Unaxis hereby irrevocably and unconditionally guarantees (as an
independent guarantee) to AFC the due and punctual performance of all
of BPS's obligations arising out of, or in connection with, this
Agreement. In case of a default by BPS with regard to any of such
obligations, Unaxis shall, upon demand by AFC, indemnify AFC or the
New LAD Entities, as applicable, against all losses, damages, costs
and expenses arising out of such default and will perform such
obligations as if Unaxis were substituted for BPS as primary debtor
under such obligation.
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11.9 AFC hereby irrevocably and unconditionally guarantees (as an
independent guarantee) to BPS the due and punctual performance of all
of Alpha Subsidiary's obligations arising out of, or in connection
with, this Agreement. In case of a default by Alpha Subsidiary with
regard to any of such obligations, AFC shall, upon demand by BPS,
indemnify BPS against all losses, damages, costs and expenses arising
out of such default and will perform such obligations as if AFC were
substituted for Alpha Subsidiary as primary debtor under such
obligation.
AFC shall ensure that Alpha Subsidiary shall immediately after the
date hereof take all additional steps necessary for a valid entry into
this Agreement by Alpha Subsidiary, if any, and submit to the
certifiing Notary proper evidence thereof. AFC and BPS agree that if
and as long as Alpha Subsidiary has not become a party to this
agreement AFC will assume the position of Alpha Subsidiary under this
Agreement in all respects.
Article 12
Miscellaneous
12.1 Costs
Each of the parties shall pay all of its expenses (including fees and
expenses of legal counsel, financial advisors or other representatives
or consultants) incurred by it in connection with the preparation,
negotiation, execution and implementation of this Agreement except as
otherwise provided herein. The costs of the notarization of this Deed
shall be born by BPS and AFC to equal shares.
12.2 Amendment of Agreement
This Agreement may be amended by the parties at any time provided that
any such amendments will be binding only if set forth in writing
executed by each of the parties unless notarization is required by
law.
12.3 Notices
All notices, demands and other communications given or delivered under
this Agreement will be in writing and will be deemed to have been
given when personally delivered or delivered by express courier
service or telecopied. Notices, demands and communications to the
Parties will, unless another address is specified in writing, be sent
to the address indicated below:
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Notices to Unaxis:
Unaxis-Management Ltd
Hofwiesenstrasse 135
P.O. Box 2409
8021 Zurich
Switzerland
Attn.: Thomas Emch, General Counsel
Facsimile: (+41) 1-360 96 94
Notices to BPS:
Balzers Process System GmbH
Wilhelm-Rohn-Strasse 25
63450 Hanau
Germany
Attn.: Rechtsabteilung
Facsimile: (+49) 6181 34 11 06
with a copy to
Unaxis
and in both cases
with a copy to
Shearman & Sterling
Mainzer Landstrasse 16
60325 Frankfurt am Main
Germany
Attn.: Dr. Thomas Konig
Facsimile: (+49) 69-9711 1100
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Notices to AFC or Alpha Subsidiary:
Applied Films Corporation
9586 I-25 East Frontage Road Longmont, CO
80504 U.S.A.
Attn.: Lawrence Firestone
Facsimile: (+1) 303-774 3251
with a copy to:
Varnum, Riddering, Schmidt & Howlett LLP
333 Bridge Street, N.W,
P.O. Box 352
Grand Rapids,
Michigan 49501-0352
Attn.: Daniel C. Molhoek
Facsimile: (+1) 616-336 7000
12.4 Binding Agreement; Assignment
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted
assignees. This Agreement or any rights or obligations hereunder shall
not be assignable by either party except with the prior written
consent of the other party, except that AFC may assign all of its
rights hereunder to a direct or indirect subsidiary of AFC, it being
understood that in such case AFC shall remain fully liable for all of
AFC's obligations arising out of, or in connection with, this
Agreement.
12.5 Invalid or Unenforceable Provisions
If any of the provisions of this Agreement is or becomes invalid or
unenforceable, the remaining provisions of this Agreement shall remain
unaffected. The invalid or unenforceable provision shall be replaced
by the parties by a valid or enforceable provision which comes as
close as possible to the commercial purpose of the invalid or
unenforceable provision.
12.6 Entire Agreement, Exhibits, Annexes and Schedules
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12.6.1 This Agreement and its Annexes and Exhibits contain the entire
agreement between the parties and supersede any prior understandings,
agreements or representations by or between the parties, written or
oral, which may have related to the subject matter hereof in any way.
12.6.2 The Annexes as well as the Schedules to Annexex 5A and 5B, which are
not contained in this present Notarial Deed shall be agreed upon in
one or more separate Notarial Deeds. These separate Notarial Deeds
shall refer to this present Deed and shall form part of this Agreement
(and any references to this Agreement shall also include the Notarial
Deeds containing the Annexes and Schedules) and the Agreement shall be
deemed executed only and when the separate Notarial Deeds are executed
and the parties hereto confirm in the last of such additional Notarial
Deeds that the parties have agreed on all the Annexes and Schedules
and that therefore the Agreement shall be complete. The Notary is
hereby instructed to execute and deliver any Authentic Copy
("Ausfertigungen") of this present Deed only together with Authentic
Copies of the other Deeds forming part of the Agreement.
12.6.3 Each of the parties hereto hereby grants power of attorney to
- Dr. Astrid Boos-Hersberger, CH-8057 Zurich, In der Hub 26,
- lic.iur. Alexandra Schwank, CH-4102 Binningen, Oberwilerstr. 100,
- Dr. Jennifer Wetterwald, CH-4056 Basel, Klingelbergstrasse 93,
- lic.iur. Nadja Lifschitz, CH-4055 Basel, Spalenring 71,
- lic.iur. Reto Kuhne, CH-4102 Binningen, Ob dem Hugliacker 83,
- Dr.iur. Christoph Meyer, CH-4001 Basel, Gerbergasse 45,
each of them individually, each of them released from the restrictions
imposed by ss. 181 of the German Civil Code or similar restrictions
under other applicable jurisdictions, and each of them with the right
to grant substitute power of attorney, to set forth and to agree upon
the content of the Annexes and Schedules and to confirm that the
Annexes and Schedules so set forth are all the Annexes and Schedules
and that therefore the Agreement will be
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completed, and hereby instruct the above persons to proceed in such
manner promptly after the present Notarial Deed has been signed.
12.7 Choice of Law
This Agreement, its interpretation and all questions arising out of,
or in connection with, this Agreement, shall be governed by German
law, except the UN Convention on Contracts for the Sale of Goods,
without giving effect to any choice of law or conflict of law
provisions or rules, provided that all corporate actions to be
conducted pursuant to this Agreement by AFC with respect to the
issuance and delivery of the shares constituting the Stock Component
shall be governed by the law of the State of Colorado.
12.8 Settlement of Disputes
Any differences, questions or disputes arising out of or in connection
with this Agreement shall be attempted to be settled by an amicable
effort on the part of the Parties. Such effort shall be referred to
the Chief Executive Officers of the Parties if no agreement has been
achieved within three weeks from the date the first request for an
amicable settlement is raised by one of the Parties. The effort shall
be considered to have failed, if within two weeks after reference to
the Chief Executive Officers they have not resolved the matter
amicably.
If an attempt for a settlement has failed, the differences, questions
or disputes arising out of or in connection with the Agreement,
including those regarding the breach, termination or validity of the
Agreement, shall be finally settled by arbitration in accordance with
ICC rules with three arbitrators, the place of arbitration in
Brussels, Belgium, and the language being English, without recourse to
the ordinary courts of law. The appointing authority shall be the
International Chamber of Commerce, Paris (ICC).
12.9 Nothing in this Agreement, express or implied, is intended to confer
on any person other than the parties and their respective successors
and assigns any rights or remedies under or by virtue of this
Agreement.
(continued on next page)
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::ODMA\PCDOCS\GRR\520856\1
<PAGE>
IN WITNESS THEREOF this Notarial Deed has been read aloud to the persons
appearing and was confirmed and approved by the persons appearing. The persons
appearing then signed this Deed. All this was done at the day herebelow written
in the presence of me, the Notary Public, who also signed this Deed and affixed
my official Seal.
Basel, this 18th (eighteenth) day of October 2000 (two thousand)
<PAGE>
ANNEX 5 A
1. Corporate Status
(a) Each of the New LAD Entities is duly incorporated and validly existing
under the laws of the relevant jurisdiction. Each of the New LAD
Entities has the power to own its properties and to carry on the LAD
Business. Except as described in Schedule 1 (a) of the BPS Disclosure
Memorandum, the character of the property owned or leased by the New
LAD Entities and the nature of the LAD Business transacted or to be
transacted by them does not require that either be qualified to do
business in any other jurisdiction.
(b) The New LAD Entities have a limited partnership capital or share
capital (including the number of the shares and the respective nominal
value of each share) as shown in Schedule 1 (b) of the BPS Disclosure
Memorandum as updated pursuant to Sec. 1.1 of this Agreement and the
KG Interest, the GmbH Share and the Foreign Shares are validly issued,
fully paid, not repaid and non-assessable. The KG Interest, the GmbH
Share and the Foreign Shares are owned by BPS or the other Unaxis
subsidiaries as reflected in Schedule 1 (b) of the Disclosure
Memorandum as updated pursuant to Sec. 1.1 of this Agreement free and
clear of any security interests, claims, liens, pledges, options,
encumbrances, charges, voting trusts or other restrictions or
limitations of any kind, except as provided in the respective articles
of association of the New LAD Entities. There are no outstanding
subscriptions, options, warrants or rights to acquire any capital
stock of any of the New LAD Entities or any agreements to which any of
the New LAD Entities is a party or by which it is bound to issue any
interests or shares of its capital stock. The KG Interest, the GmbH
Share and the Foreign Shares are the only outstanding securities of
the New LAD Entities.
(c) BPS has furnished AFC with drafts of the articles of association of
each of the New LAD Entities being complete and correct, in all
material respects, as of the Closing Date.
(d) The execution, delivery and performance of this Agreement by BPS and
Unaxis and the consummation of the transactions contemplated hereby
have been, as of signing of this Agreement and will be so as of
Closing Date, duly and validly authorized and approved by all
necessary corporate action and, when executed and delivered, this
Agreement shall be legally binding on and
<PAGE>
enforceable against BPS and Unaxis in accordance with its terms. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated in this Agreement do not violate the
articles of association of BPS or Unaxis or of any of the New LAD
Entities nor will the consummation of the transactions contemplated in
this Agreement result in any breach, violation, default or
acceleration of the performance (" Interfering Event") of any
obligations of any of the New LAD Entities existing as of the Closing
Date under any material judgment, decree, mortgage, agreement,
indenture or other instrument applicable to any of the New LAD
Entities as of the Closing Date or to which BPS or any of the New LAD
Entities is a party or to which any of their properties are subject as
of the Closing Date. Except as described in Schedule 1 (d) of the BPS
Disclosure Memorandum as updated pursuant to Sec. 1.1 of this
Agreement, no material consent, approval or authorization of any third
party or government authority is required for the consummation of the
transactions contemplated by this Agreement.
(e) Except as set forth in Schedule 1 (e) of the BPS Disclosure
Memorandum, neither of the New LAD Entities owns any interest in any
corporation, partnership, joint venture or other business entity.
2. Financial Information
Schedule 2 (a) of the BPS Disclosure Memorandum includes reviewed pro-forma
balance sheets as of December 31, 1998 and December 31, 1999 of the LAD
Business and the reviewed combined income statements (to EBIT only) of the
LAD Business for the years ended December 31, 1998 and December 31, 1999
(collectively the "Reviewed Financial Statements"). Schedule 2 (a) of the
BPS Disclosure Memorandum also includes copies of the reviewed pro-forma
balance sheets of the LAD Business as of June 30, 2000 and the reviewed
combined income statement (to EBIT only) for the six months' period ended
June 30, 2000 (collectively the "Reviewed Interim Financial Statements").
The Reviewed Financial Statements and the Reviewed Interim Financial
Statements are consistent with the information contained in the books and
records of the LAD Business and have been prepared in accordance with the
IAS accounting principles throughout the periods indicated (except as
indicated in the notes thereto) and, based on the actual knowledge of the
individuals listed in Schedule 2 (b) and the knowledge of a prudent
businessman and the definition of the LAD Business as of the date of review
and taking into account lAS accounting principles, fairly present the
financial condition of the LAD Business
<PAGE>
as of the dates thereof and the results of operations (to EBIT only) of the
LAD Business for the periods referred to therein.
3. Assets and Business
(a) As of each respective day on which the LAD Reorganization becomes
legally effective in each of the jurisdictions ("Reorganization
Effective Date") and at the Closing Date, the LAD Business to be
transferred to the New LAD Entities pursuant to this Agreement and the
Reorganization Memorandum comprises and will comprise the fixed assets
that will be reflected in the respective contribution balance sheets
as updated pursuant to Article 1 of this Agreement or acquired by them
after the respective balance sheet date, except for fixed assets (i)
which are subject to the retention of title (Eigentumsvorbehalt) (a)
granted in the ordinary course of business or (b) relating to
liabilities which are reflected in any of the Final Closing Balance
Sheets, (ii) which have been disposed of in the ordinary course of
business, or (iii) which have been disposed of outside the ordinary
course of business with AFC's prior written consent, such consent not
to be unreasonably withheld ("LAD Assets"). As of the Reorganization
Effective Date and the Closing Date, the LAD Assets are free of any
liens, pledges or other encumbrances or any other third party rights
except (a) granted in the ordinary course of business or (b) granted
with respect to liabilities or reserves which are reflected in any of
the Final Closing Balance Sheets. No real property are owned by any of
the New LAD Entities and rights equivalent to real property
(grundstucksgleiche Rechte);
(b) As of the Reorganization Effective Date and the Closing Date, Schedule
3 (b) of the BPS Disclosure Memorandum contains a list of all leases
for real property comprised in the LAD Business and such leases are in
full force and effect.
(c) As of the Reorganization Effective Date and the Closing Date, the New
LAD Entities are the owners of all patents, trade and service marks
and all applications for any of the foregoing ("Assigned Intellectual
Property Rights") identified in Schedule 3 (c) 1 of the BPS Disclosure
Memorandum as updated pursuant to Article 1 of this Agreement and all
registrations, other filings or fees payable for such Assigned
Intellectual Property Rights have been made, filed or paid when due;
all such Assigned Intellectual Property Rights are valid and
enforceable. As of the Reorganization Effective Date and the Closing
Date, the Assigned Intellectual Property Rights identified in Schedule
3 (c) 1
<PAGE>
of the BPS Disclosure Memorandum as updated pursuant to Article 1 of
this Agreement are owned by NewCo KG free of security rights, pledges,
beneficial interest or other encumbrances or licenses, rights to use
or option rights of third parties except as set out in Schedule 3 (c)
2 of the BPS Disclosure Memorandum as updated pursuant to Article I of
this Agreement.
With regard to the patents, trade and service marks and all
applications for any of the foregoing identified in Schedule 3 (c) 3
of the BPS Disclosure Memorandum as updated pursuant to Article 1 of
this Agreement (the "Licensed Intellectual Property Rights"), BPS owns
such rights and the licenses thereof to the LAD Business are valid
license agreements.
To the best knowledge of BPS as of the signing of this Agreement and
as of the Relevant Date as defined hereinafter;"(i)'the use of the
Assigned and Licensed Intellectual Property Rights in the LAD Business
does not infringe, nor is claimed to infringe, the rights of any third
party, and (ii) no party infringes upon any of such Assigned and
Licensed Intellectual Property Rights. "Relevant Date" shall be the
Closing Date or, if the Closing Date is delayed after January 31, 2001
solely as a result of the non-occurrence of the condition set forth in
Sec. 8.5 of this Agreement on or prior to January 31, 2001, January
31, 2001.
4. Litigation and Other Proceedings
As of the signing of this Agreement, in the LAD Business no proceedings,
except proceedings reflected in Schedule 4 of the BPS Disclosure
Memorandum, before any courts, authorities or arbitration bodies with a
value in dispute in excess of US $ 10,000 (in words: US Dollar ten
thousand) are pending and, to the best knowledge of BPS, such proceedings
are not threatened. The LAD Business is not affected by any judgment,
decree or settlement in any legal or administrative proceeding that
materially restricts or impairs it in certain business measures, in the
acquisition or disposition of assets, in competition or in its operation.
5. Contracts and Agreements
As of the Reorganization Effective Date, all agreements and contracts
transferred to the New LAD Entities in the course of the LAD Reorganization
are in full force and effect and have been economically or legally
transferred to the New LAD Entities in accordance with the provisions in
the respective contribution agreements and as of the Closing Date, such
agreements and contracts are in full force and effect (except for
<PAGE>
contracts which have expired or been terminated by the respective parties
in accordance with their terms or have been agreed to be terminated by the
parties with the prior consent of AFC, such consent not be unreasonably
withheld) and the New LAD Entities are not in default of any material
contractual obligations arising thereunder.
6. Employment Matters
(a) Schedule 6 (a) of the BPS Disclosure Memorandum contains a list of all
works agreements (Betriebsvereinbarungen) (including social plans) and
tariff agreements (Tarifvertrage) that are allocated to the LAD
Business or which are relevant for the LAD Business Closing, and
neither BPS nor the New LAD Entities are in material breach of or in
default under any of such agreements.
(b) Schedule 6 (b) of the BPS Disclosure Memorandum contains a list of all
individual pension commitments and pension schemes (Betriebliche
Altersversorgung) for officers and employees comprised in the LAD
Business, and neither BPS nor the New LAD Entities are in material
breach of or in default under any such pension commitments or pension
schemes, and BPS and the New LAD Entities have complied in all
material respects with all laws, rules and regulations applicable to
such pension commitments and pension schemes.
(c) Provisions for all existing pension commitments and pension schemes
for officers and employees comprised in the LAD Business have been
made in the accounts of the New LAD Entities on the basis of actuarial
opinions (versicherungsmathematische Gutachten) in the amount equal to
the maximum amounts permitted pursuant to ss. 6 a EStG (in Germany) or
such amounts as required under the relevant other jurisdictions.
(d) BPS and the New LAD Entities have complied in all material respects
with all applicable labor, employment and immigration laws, rules and
regulations applicable to the employees comprised in the LAD Business.
(e) All wages, bonuses, commissions, benefits and other monies owed to all
employees comprised in the LAD Business transferred to the New LAD
Entities in the LAD Reorganization have been paid when due.
<PAGE>
7. Tax
All tax returns with respect to the LAD Business to be filed on or before
the Closing Date have been duly filed in time and all due taxes, tax
pre-payments, social security contributions and other public dues owed by
any of the New LAD Entities with respect to the operation of the LAD
Business on or before the Closing Date have been paid and/or withheld when
due or are reflected as provisions in the Final Closing Balance Sheets.
8. Insurance
As of the Reorganization Effective Date, the insurance contracts
transferred to the New LAD Entities according to the LAD Reorganization are
in full force and effect, all premiums due up to the Reorganization
Effective Date have been paid and the insurance contracts transferred to
the New LAD Entities according to the LAD Reorganization have been
economically and legally transferred to the New LAD Entities in accordance
with the provisions in the respective contribution agreements.
9. Permits and Licenses
As of the Reorganization Effective Date and as of the Relevant Date, to the
best knowledge of BPS, the New LAD Entities have all material public
permits and licenses required for the LAD Business as operated as of the
Reorganization Effective Date, and, to the best knowledge of BPS, as of the
signing of this Agreement there are no indications for a withdrawal,
revocation, restriction or amendment of these permits and licenses.
10. Adverse Changes
In the period between July 1, 2000 and the Signing Date, the LAD Business
has been operated in the ordinary course and consistent with past practice
and no events have occurred which would have a material adverse effect on
the economic, financial and earning situation ( Vermogens-, Finanz- und
Ertragslage) of the LAD Business taken as a whole except as disclosed in
Schedule 10 of the BPS Disclosure Memorandum or as contemplated in this
Agreement.
11. Accounts Receivable
The overall portion of the accounts receivable reflected in the Final
Closing Balance Sheets which is not collectible for reasons other than an
agreed settlement with, or waiver by, the respective New LAD Entity (the
"Uncollectible Portion") will not
<PAGE>
exceed the aggregate amount of individual write-offs
(Einzelwertbericbtigungen) and lump-sum write-offs
(Pauschalwertberichtigungen) made with respect to such accounts receivables
in the Final Closing Balance Sheets or as identified in the underlying
notes or working papers, provided that BPS shall only be liable for a
breach of this representation to the extent that the Uncollectible Portion
and all rights and claims relating thereto are assigned to BPS.
12. Customers
As of the signing of this Agreement, no customer of the LAD Business has
cancelled or terminated, or to the knowledge of the New LAD Entities,
threatened to cancel or otherwise terminate, any purchases that customer is
contractually obligated to make. As of the signing of this Agreement, the
New LAD Entities have not received notice that any such material customer
intends to cancel or otherwise modify in any material adverse manner its
relationship with the New LAD Entities.
13. Affiliate Transactions
Schedule 13 of the BPS Disclosure Memorandum discloses all purchasing,
selling and other relationships between the New LAD Entities and Unaxis (or
Unaxis' affiliates), except for such relationships established after the
signing of this Agreement with the prior written consent of AFC, such
consent not to be unreasonably withheld.
14. Adequacy
The New LAD Entities have all assets (including inventory), rights,
intellectual property, contracts and permits necessary to continue to
operate the LAD Business described in Annex A.1 and Schedule 14 consistent
with past practice.
<PAGE>
15. Warranty
Part I of Schedule 15 of the BPS Disclosure Memorandum as updated pursuant
to Sec. 1.1 of this Agreement or, if executed after the signing of this
Agreement, prior to the Closing Date discloses the term of all product
warranties issued by BPS and the New LAD Entities in connection with the
LAD Business which are not expired or time-barred as of the Closing Date.
True and complete copies of the contracts listed in Part I of Schedule 15
as updated pursuant to Sec. 1.1 of this Agreement have been made available
to AFC for review prior to the signing of this Agreement or, if executed
after the signing of this Agreement, prior to the Closing Date. Except as
described in Part II of Schedule 15 of the BPS Disclosure Memorandum, as of
the signing of this Agreement, there (a) have been no material product or
service warranty claims asserted against BPS, the New LAD Entities or their
affiliates since January 1, 1997 related to the LAD Business, and (b) there
have been no product recalls by BPS, the New LAD Entities or their
affiliates related to the LAD Business.
With respect to the projects identified in Part III of Schedule 15, any
claims for damages of the respective customers against NewCo KG based on a
breach of warranty or non-fulfillment (Nichterfullung) ("Customer Warranty
Claims") are not in excess of the reserves established with regard thereto
in the Final Closing Balance Sheets ("Specific Warranty Reserves"),
provided that
(a) BPS shall not be liable for a breach of this representation unless the
procedural rules set forth in Sec. 1.5 para. 1.5.1 (as applied mutatis
mutandis) have been complied with by NewCo KG; and
(b) Alpha Subsidiary shall refund to BPS the amount by which the Specific
Warranty Reserves exceed the aggregate amount of the Customer Warranty
Claims as finally settled and/or adjudicated.
16. Compliance with Laws
BPS (with respect to the operation of the LAD Business) and the New LAD
Entities are in compliance in all material respects with all laws, rules
and regulations applicable to the LAD Business, including, but not limited
to, labor, employment and pension laws and regulations and laws and
regulations related to the protection of the environment.
<PAGE>
17. Environmental Matters
Except as described in Schedule 17 of the BPS Disclosure Memorandum:
(a) BPS and the New LAD Entities have complied in all material respects
and are in compliance in all material respects with all such
Environmental and Safety Requirements applicable to the LAD Business
which would in case of noncompliance impose a material environmental
liability of any of the New LAD Entities.
(b) BPS and the New LAD Entities have obtained and complied in all
material respects with and are in compliance in all material respects
with all material permits, licenses and other authorizations that are
required pursuant to Environmental and Safety Requirements for the
occupation and operation of the facilities comprised in the LAD
Business and the operation of the LAD Business.
(c) As of the signing of this Agreement, neither BPS nor the New LAD
Entities has received any notice or report regarding any liabilities
or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or
corrective obligations, arising under Environmental and Safety
Requirements.
As used in this Agreement, the term "Environmental and Safety Requirements"
shall mean all federal, state, and local statutes, regulations, ordinances
and similar provisions having the force of effect of law, all judicial and
administrative orders and determinations, all contractual obligations and
all common law concerning public health and safety, worker health and
safety, and pollution or protection of the environment in effect at or
prior to the Closing Date, including without limitation all those relating
to the presence use, production, generation, handling, transport,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any
hazardous or otherwise regulated materials, substances or wastes, chemical
substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation.
<PAGE>
18. Knowledge
For the purpose of this Agreement, only the knowledge of the individuals
listed in Schedule 18 of the BPS Disclosure Memorandum shall be deemed to
be of knowledge of BPS or any of the New LAD Entities.
19. Accredited Investor
BPS is an "accredited investor" within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act. BPS is experienced in
financial and business matters and is capable of evaluating the risks
associated with the acquisition by it of the AFC Common Stock comprising
the Stock Component. BPS is capable of bearing the economic risks of its
investment in the Stock Component, including a complete loss of its
investment. The Stock Component is being acquired for BPS's own account,
and BPS has no present intention to sell or distribute AFC Common Stock.
<PAGE>
Annex 5B
AFC Representations and Disclosures
<PAGE>
ANNEX 5 B
AFC Representations and Warranties
1. Corporate Status
(a) As of Closing Date, each of AFC and Alpha Subsidiary will be duly
incorporated and validly existing under the laws of the relevant
jurisdiction. As of Closing Date, each of AFC and Alpha Subsidiary
will have the power to own its respective properties and to carry on
their respective businesses. As of Closing Date the character of the
property owned or leased by AFC and Alpha Subsidiary and the nature of
their respective businesses will not require that either be qualified
to do business in any other jurisdiction.
(b) As of Closing Date, AFC and Alpha Subsidiary have a capitalization as
shown in Schedule 1 (b) of the AFC Disclosure Memorandum and their
respective outstanding shares are validly issued, fully paid and
non-assessable.
(c) The execution, delivery and performance of this Agreement by AFC and
Alpha Subsidiary and the consummation of the transactions contemplated
hereby have been, as of the signing of this Agreement and will be as
of Closing Date, duly and validly authorized and approved by all
necessary corporate action and, when executed and delivered, this
Agreement shall be legally binding on and enforceable against AFC and
Alpha Subsidiary in accordance with its terms. As of the signing of
this Agreement the execution and delivery of this Agreement do not and
as of Closing Date will not, and the consummation of the transactions
contemplated in this Agreement will not, violate the governing
documents of AFC or Alpha Subsidiary nor will the consummation of the
transactions contemplated in this Agreement result in any breach,
violation, default or acceleration of the performance ("Interfering
Event") of any obligations of AFC or Alpha Subsidiary under any
judgment, decree, mortgage, agreement, indenture or other instrument
applicable to AFC or Alpha Subsidiary or to which AFC or Alpha
Subsidiary is a party or to which any of their properties are subject
as of the Closing Date. Except as described in Schedule 1(c) of the
AFC Disclosure Memorandum, no consent, approval or authorization of
any third party or government authority is
<PAGE>
required for the consummation of the transactions contemplated by this
Agreement.
(d) Except as set forth in Schedule 1(d) of the AFC Disclosure Memorandum,
neither of AFC or Alpha Subsidiary owns any interest in any
corporation, partnership, joint venture or other business entity.
2. The shares of AFC common stock comprising the Stock Component will be, when
issued according to the terms of this Agreement, duly authorized, fully
paid, validly issued and non-assessable and will be free and clear of any
security interests, claims, liens, pledges, options, encumbrances, charges,
voting trusts or other restrictions or limitations of any kind, except as
provided in the respective governing documents of AFC and Alpha Subsidiary.
3. SEC Filings and Financial Statements.
(a) AFC has filed all forms, reports, statements and documents required to
be filed with the United States Securities and Exchange Commission
(the "SEC") since the date of its initial public offering of AFC
common stock (collectively, the "AFC SEC Reports"). The AFC SEC
Reports, as well as all forms, reports and documents to be filed by
AFC, as the case may be, with the SEC after the date hereof and prior
to the Closing, (i) were or will be prepared in accordance with the
requirements of the US Securities Act of 1933, as amended, and the US
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
the case may be, and the rules and regulations thereunder, (ii) did
not at the time they were filed, or will not at the time they are
filed, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, and (iii)
did not at the time they were filed, or will not at the time they are
filed, omit any documents required to be filed as exhibits thereto. No
subsidiary of AFC is subject to the periodic reporting requirements of
the Exchange Act.
(b) All of the financial statements included in the AFC SEC Reports and
each of the financial statements to be filed by AFC with the SEC after
the date hereof and prior to the Closing, in each case including any
related notes thereto, as filed with the SEC (collectively, the "AFC
Financial Statements"), have been or will be prepared in accordance
with U.S. GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto and subject,
in the case of the unaudited statements, to normal, recurring audit
adjustments) and each fairly present the consolidated
<PAGE>
financial position of AFC and its subsidiaries at the respective date
thereof and the consolidated results of its operations and changes in
cash flows for the periods indicated in accordance with U.S. GAAP.
4. Litigation and Other Proceedings
As of the signing of this Agreement, in the AFC Business no proceedings,
except proceedings reflected in Schedule 4 of the AFC Disclosure
Memorandum, before any courts, authorities or arbitration bodies are
pending that, if determined adversely to AFC, would have a material adverse
effect on the economic, financial and earning situation of the AFC Business
taken as a whole and, to the best knowledge of AFC, such proceedings are
not threatened. The AFC Business is not affected by any judgment, decree or
settlement in any legal or administrative proceeding that materially
restricts or impairs it in certain business measures, in the acquisition or
disposition of assets, in competition or in its operation.
5. Adverse Changes
In the period between July 1, 2000 and the signing of this Agreement, the
AFC Business has been operated in the ordinary course and consistent with
past practice and no events have occurred which would have a material
adverse effect on the economic, financial and earning situation
(Vermogens-, Finanz- und Ertragslage) of the AFC Business taken as a whole
except as contemplated in this Agreement.
::ODMA\PCDOCS\GRR\521650\1
<PAGE>
EXHIBIT 2.2
NOTARIAL DEED
Negotiated
at
Hanau
on
December 29th, 2000.
Before me, the undersigned notary
Dr. Frank Bansch
in the district of the higher regional court of Frankfurt (Germany)
appeared today the following persons:
1. Mr. Lawrence D. Firestone, born March 24, 1958, US-citizen, with private
domicile at 325 Roxbury Circle, CO Springs, Colorado 80906, USA, identified
by his US-passport, according to his declarations not acting in his own
name, but as authorized representative of
a) Applied Films Corporation ("AFC"), a Colorado Corporation having its
registered office in Longmont, Colorado, on the basis of a power of
at-
/2
<PAGE>
torney dated December 20th, 2000, a certified copy of which is
attached to this Deed, and
b) AFCO Verwaltungs GmbH, a German limited liability company having its
registered seat in Munich, Germany (County Court Munich, HRB 133554),
acting not for itself, but as general partner of AFCO GmbH & Co. KG
("Alpha Subsidiary"), a newly formed and not yet registered German
limited partnership having its seat in Munchen, Germany,
2. Dr. Thomas Emch, born June 11, 1950, Swiss citizen, with private domicile
at CH-8914 Aeugst a. A., Im Uerenberg 10, personally known, according to
his declarations not acting in his own name, but as authorized
representative of
a) Balzers Process Systems GmbH ("BPS"), a German limited liability
company having its registered seat in Hanau, Germany (County Court
Hanau, HRB 5392), on the basis of a power of attorney dated december
20th, 2000, a certified copy of which is attached to this Deed;
b) Unaxis Holding AG ("Unaxis"), a Swiss stock corporation having its
registered office in Zurich, Switzerland, on the basis of a power of
attorney dated december 20th, 2000, a certified copy of which is
attached to this Deed.
The persons appeared requested that this Deed including its Annexes and Exhibits
be recorded in English. The acting notary who is in sufficient command of the
English language and ascertained that the persons appeared are also in command
of the English language. After having been instructed by the notary, the persons
appeared waived the right to obtain the assistance of a certified interpreter.
The acting notary explained to the persons appeared the contents of ss. 3 para.
1 (7) of the German Notarization Act (Beurkundungsgesetz). The persons appeared
confirmed to the notary that he has not been involved in the transaction within
the meaning of ss. 3 para. 1(7) of the German Notarization Act.
The persons appeared, acting as stated above, requested the notarization of the
following:
/3
<PAGE>
AMENDMENT AGREEMENT
TO THE SHARE PURCHASE AND EXCHANGE AGREEMENT (NOTARIAL DEED
DATED AS OF OCTOBER 18, 2000, A. PROT. 2000/308 OF THE NOTARY
STEPHEN CUENI, BASEL)
Preamble
A. On October 18, 2000, the Parties entered into a Share Purchase and Exchange
Agreement (Notarial Deed A. Prot. 2000/308 of the notary Stephan Cueni,
Basel, Switzerland) attached hereto (without appendices) as Appendix A (the
"Share Purchase and Exchange Agreement") providing for the sale and
transfer of the LAD Business of the Unaxis group to AFC and certain of its
subsidiaries subject to a reorganization of the LAD group as described in
detail in a Reorganization Memorandum attached to the Share Purchase and
Exchange Agreement.
B. Sec. 1.1 of the Share Purchase and Exchange Agreement provides that the LAD
Reorganization will be carried out on the basis of a reorganization
Documentation as defined therein which is attached in a preliminary form to
the Share Purchase and Exchange Agreement and which is to be further
developed, completed and updated by BPS in consultation with AFC.
Furthermore, Sec. 1.1 of the Share Purchase and Exchange Agreement provides
that certain disclosure schedules attached in a preliminary form to the
Share Purchase and Exchange Agreement will also be further developed,
completed and updated by BPS in consultation with AFC.
C. The Parties have agreed upon certain amendments to the Share Purchase and
Exchange Agreement, including certain modifications in the LAD
Reorganization, and have completed the Reorganization Documentation and the
Preliminary Schedules.
NOW, THEREFORE, the Parties agree as follows:
/4
<PAGE>
Article 1
Appendix 1 hereto contains updated and completed versions of all parts of the
Reorganization Documentation as well as the completed list of employments as
agreed between the Parties.
Article 2
Appendix 2 hereto contains updated and completed versions of the Preliminary
Schedules as agreed between the Parties.
Article 3
3.1 Annex B to the Share Purchase and Exchange Agreement shall be replaced
by a modified Reorganization Memorandum attached hereto as Appendix 3.
3.2 Sec. B, 3rd sentence of the Preamble of the Share Purchase and
Exchange Agreement shall be deleted and replaced by the following
provision:
"For this purpose, all assets and certain liabilities (including
employments) of the LAD Business operated in Germany, Belgium and
Korea will be transferred to new entities (the "New LAD
Entities") as described in more detail in the memorandum attached
as Annex B (the "Reorganization Memorandum")."
3.3 Sec. D, first sentence of the Preamble of the Share Purchase and
Exchange Agreement shall be deleted and replaced by the following
provision:
"AFC and BPS have agreed on a transaction in which Alpha
Subsidiary will acquire all shares and limited partnership
interests in the New LAD Entities in Germany, and AFC or other
designated subsidiaries of AFC will acquire all shares in the
other New LAD Entities, and take over the assets and liabilities
(including employments) of the LAD activities in USA, Hongkong,
China, Japan and Taiwan (the "Foreign Assets and Liabilities").
/5
<PAGE>
Article 4
Sec. 1.1, fourth sentence of the Share Purchase and Exchange Agreement shall be
deleted and replaced by the following provision:
"A preliminary list of the employments which will be transferred
to the New LAD Entities or to AFC or its designated subsidiary
is attached as Annex 1.1.4."
Article 5
5.1 Sec. 2.2 of the Share Purchase and Exchange Agreement shall be deleted
and replaced by the following provision:
"Subject to the conditions precedent set forth in Article 8 and
subject to the further condition that the cash payment pursuant
to Sec. 3.3 para. 3.3.1, the delivery of shares of AFC voting
common stock pursuant to Sec. 3.3 para. 3.3.2, the repayment of
the IKB Loan, if required pursuant to Sec. 4.4, and the cash
payment in the amount of US $ 4,000,000 (in words: four million)
pursuant to Sec. 4A.1, first sentence is made in accordance with
such provisions, BPS hereby assigns the KG Interest (subject to
registration in the Commercial Register) and the GmbH Share as
of the Closing Date to Alpha Subsidiary which accepts such
assignment (such assignment hereinafter the "Closing")."
5.2 Sec. 2.5 first sentence of the Share Purchase and Exchange Agreement
shall be deleted and replaced by the following provision:
"Unaxis and AFC agree that the shares in the New LAD Entities
other than NewCo KG and NewCo GmbH (the "Foreign Shares") as
well as the Foreign Assets and Liabilities shall be sold to AFC
or its designated subsidiaries and, subject to the conditions
referred to in Sec. 2.2 above, transferred to AFC or its
designated subsidiaries on (and with
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<PAGE>
respect to Taiwan and China as soon as legally permissible after)
the Closing Date."
Article 6
Article 3 of the Share Purchase and Exchange Agreement shall be deleted in its
entirety and replaced by the following provision:
"Article 3
Consideration
3.1 Subject to the adjustments set forth in Sec. 3.2 below, the aggregate
consideration owed by (i) Alpha Subsidiary for the acquisition of the
Shares and (ii) AFC or its designated subsidiary for the acquisition
of the Foreign Shares and the Foreign Assets and Liabilities shall be
equal to (a) US $ 60,000,000 (in words: sixty million) adjusted as set
forth below (the "Cash Component") and (b) 673,353 (in words: six
hundred seventy-three thousand three hundred fifty-three) no par value
shares of AFC voting common stock (the "Stock Component"). The Cash
Component, subject to the adjustment pursuant to Sec. 3.2, and the
Stock Component are collectively referred to herein as the purchase
price (the "Purchase Price").
3.2 The Cash Component shall be adjusted as follows:
If the aggregate sum of net equity (bilanzielles Reinvermogen) of the
New LAD Entities and of the Foreign Assets and Liabilities as of the
Closing Date as defined in Annex 3.4.1 and determined on a
non-consolidated basis on the basis of the Final Closing Balance
Sheets in accordance with the provisions of Sec. 3.5 (the "LAD Net
Equity") is in excess of zero, then the Cash Component shall be
increased by the amount of such excess (the "Excess Amount") and if
the LAD Net Equity is lower than zero, then the Cash Component shall
be reduced by the amount of such shortfall (the "Shortfall Amount").
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3.3 The Purchase Price shall be paid by AFC (also on behalf of Alpha
Subsidiary for the Shares and its designated subsidiaries, if any, for
the Foreign Shares and the Foreign Assets and Liabilities) as follows:
3.3.1 A cash payment of US $ 50,000,000 (in words: fifty million) shall be
made by AFC on the Closing Date by wire transfer of immediately
available funds at AFC's expense to such account(s) as BPS may specify
in writing to AFC at least three business days prior to the Closing
Date.
3.3.2 673,353 shares of AFC voting common stock shall be delivered by Alpha
Subsidiary on the Closing Date to BPS.
3.3.3 The portion of the Cash Component as adjusted pursuant to Sec. 3.2
exceeding an mount of US $ 50,000,000 (in words: fifty million), if
any, plus interest thereon in the amount of 6.0 % p.a. as from the
Closing Date ("Deferred Payment") less the amount of any disbursements
by Deutsche Bank to BPS pursuant to Sec. 4A.2.1 or 4A2.2 shall be paid
by AFC within five (5) business days after the determination of the
Final Closing Balance Sheets pursuant to Sec. 3.5 (the "Determination
Date") in the same manner as set forth in Sec. 3.3.1. If the Cash
Component as adjusted pursuant to Sec. 3.2 is lower than US $
50,000,000 (in words: fifty million) an amount equal to such shortfall
plus interest thereon in the amount of 6.0 % p.a. as from the Closing
Date less the amount of the Assignment Consideration, if any, the
Transfer Consideration and any Indemnification Claims which are not
covered by disbursements by Deutsche Bank to BPS pursuant to Sec.
4A.2.3 (a) shall be paid by BPS within five (5) business days after
the Determination Date by wire transfer of immediately available funds
at BPS's expense to such account(s) as AFC may specify in writing to
BPS within two (2) business days after the Determination Date.
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3.4 Any payments made by AFC to BPS in accordance with the foregoing
provisions or on behalf of AFC in accordance with Art. 4A are made
with full release effect (schuldbefreiende Wirkung) for Alpha
Subsidiary and AFC or its designated subsidiaries vis-a-vis Unaxis,
BPS and the Unaxis subsidiaries selling the Foreign Shares and the
Foreign Assets and Liabilities and BPS will receive the payments also
on behalf of Unaxis and/or such Unaxis subsidiaries and be responsible
for the disbursement of the received amounts as internally agreed. Any
payments made by BPS to AFC in accordance with the foregoing
provisions or on behalf of BPS in accordance with Art. 4A are made
with full release effect for BPS vis-a-vis Alpha Subsidiary and AFC or
its designated subsidiaries and AFC will receive the payments also on
behalf of Alpha Subsidiary and the designated subsidiaries of AFC, if
any, and be responsible for the disbursement of the received amounts
as internally agreed.
3.5 The Final Closing Balance Sheets, the LAD Net Equity and the Excess
Amount or the Shortfall Amount, if any, will be determined as follows:
(a) Within sixty (60) days after the Closing Date, AFC shall ensure
the preparation of (i) balance sheets of each of the New LAD
Entities and the Foreign Assets and Liabilities (pro-forma) as of
the Closing Date (the" Proposed Closing Balance Sheets"),
denominated in Deutsche Mark and prepared in accordance with IAS
accounting principles and the principles of the Unaxis Reporting
Manual as applicable as of the date hereof and the principles set
forth in Annex 3.5 (a), and (ii) a report (the "AFC Report")
calculating the LAD Net Equity and the Excess Amount or the
Shortfall Amount, if any, and provide a copy of the Proposed
Closing Balance Sheets and the AFC Report to BPS. At all times
during the preparation of the Proposed Closing Balance Sheets and
the AFC Report, AFC and its personnel, agents, accountants and
other professional advisors involved in the preparation thereof
shall, and AFC shall cause NewCo KG and
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<PAGE>
its personnel, agents, accountants and other professional
advisors involved to cooperate with and permit BPS and its
personnel, agents, auditors, accountants and other professional
advisors and allow them to observe such preparation.
(b) BPS shall have thirty (30) days after receipt of the Proposed
Closing Balance Sheets and the AFC Report to review such
documents and determine whether it agrees with AFC's Proposed
Closing Balance Sheets and determination of the Excess Amount or
the Shortfall Amount, if any. During such period of time and in
order to further enable BPS to conduct such review, AFC shall
make available to BPS and its personnel, agents, accountants and
other professional advisors (i) the books and record (including
relevant workpapers) used in the preparation of the Proposed
Closing Balance Sheets and (ii) AFC's personnel, agents, auditors
or accountants responsible for the preparation of the Proposed
Closing Balance Sheets and the AFC Report. In the event that BPS
disagrees with the Proposed Closing Balance Sheet or the AFC
Report as to the determination of the Excess Amount or the
Shortfall Amount, if any, BPS shall notify AFC in writing of such
disagreement within such 30 day period.
(c) If BPS and AFC disagree on the Proposed Closing Balance Sheets or
the AFC Report, then BPS and AFC shall attempt to resolve such
disagreement by meeting and conferring in good faith during the
15-day period following BPS's written notification to AFC of its
disagreement.
If BPS and AFC are unable to resolve their disagreement within
such 15-day period, BPS and AFC agree to retain the Frankfurt
office of KPMG Deutsche Treuhandgesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft (the "Accounting Mediator") to
mediate the dispute. The Accounting Mediator shall conduct such
mediation as ex-
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<PAGE>
pert arbitrator (Schiedsgutachter). The Accounting Mediator shall
render a decision, if possible within a three months period,
regarding the disputed Adjustment Amount, which decision shall be
final and binding, and judgment upon the decision rendered by the
Accounting Mediator may be entered by any court of competent
jurisdiction. The Accounting Mediator shall also decide on the
allocation of the costs of the mediation procedure in accordance
with ss.ss. 91 et seq. of the German Civil Procedure Rules
(Zivilprozessordnung).
(d) The Proposed Closing Balance Sheets shall be the "Final Closing
Balance Sheets" unless BPS notifies AFC of its disagreement in
accordance with sub-para. (b). If BPS timely notifies AFC of its
disagreement, the Proposed Closing Balance Sheets as adjusted as
a result of the foregoing dispute resolution process set forth in
sub-para. (c) shall be the "Final Closing Balance Sheets".
Article 7
7.1 In Sec. 4.1 first sentence, the words "On the date on which the
payments set forth in para. 3.4.1 or 3.4.2 are made" shall be deleted
and replaced by the words "Within five (5) days after the
Determination Date".
The last sentence of Sec. 4.1 of the Share Purchase and Exchange
Agreement shall be deleted and replaced by the following provision:
"Subject to Sec. 4.3, the Assignment Consideration shall be paid by
Alpha Subsidiary by wire transfer of immediately available funds at
Alpha Subsidiary's expense on the date of assignment to an account of
Unaxis as specified at least three business days in advance".
7.2 The following new Sec. 4.2 shall be added in Article 4 of the Share
Purchase and Exchange Agreement after Sec. 4.1:
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<PAGE>
"4.2 Within five (5) days after the Determination Date, Alpha
Subsidiary shall pay to BPS the purchase prices owed by the New LAD
Entities in Korea and Belgium for the acquisition of the assets and
liabilities related to the LAD Business in their respective countries
in the LAD Reorganization in accordance with the asset purchase
agreements to be entered into by such New LAD Entities and the
respective subsidiaries of Unaxis plus interest thereon in an amount
of 6 % p.a. as from the Closing Date (the "Transfer Consideration").
Such payment shall be made subject to Sec. 4.3 in the same manner as
set forth in Sec. 4.1, last sentence. The payment shall be made on
behalf of, and with full release effect for, the New LAD Entities in
Korea and Belgium and BPS will receive such payment on behalf of the
respective Unaxis subsidiaries and be responsible for the disbursement
of the received amount as internally agreed."
7.3 The following new Sec. 4.3 shall be added in Article 4 of the Share
Purchase and Exchange Agreement after Sec. 4.2:
"4.3 The aggregate amount of payments to be made by Alpha Subsidiary
pursuant to Sec. 4.1 and 4.2 shall be reduced by the amount of any
disbursements by Deutsche Bank to BPS pursuant to Sec. 4A.2.3 (a) or
by the reduction of BPS's payment obligation pursuant to Sec. 3.3.3,
second sentence, if any."
7.4 The old Sec. 4.2 shall become Sec. 4.4.
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<PAGE>
Article 8
After Art. 4, the following new Article 4A shall be inserted:
"Article 4A
Security for BPS Claims
The Parties agree that BPS's claims to collect (i) the Deferred Payment referred
to in Sec. 3.3.3, if any, (ii) the Assignment Consideration referred to in Sec.
4.1, if any, (iii) the Transfer Consideration referred to in Sec. 4.2 and (iv)
any indemnification payments from AFC, Alpha Subsidiary or NewCo KG in the event
that any of the outstanding payment guarantees and sureties issued by certain
banks to LAD customers or other beneficiaries with regard to existing
performance obligations to be transferred to NewCo KG in the LAD Reorganization
as listed in Annex 4A.1 are called by the respective beneficiaries (the
"Indemnification Claims") shall be secured as follows:
4A.1 On the Closing Date, AFC shall make a cash payment in EURO in the
amount of US $ 4,000,000 (in words: four million) converted into EURO
at the average exchange rate as officially quoted by the Frankfurt
Foreign Currency Exchange (amtlicher Mittelkurs) on the last business
day immediately preceding the Closing Date (the "Conversion Rate") to
a joint bank account of BPS and Alpha Subsidiary (the "Joint Bank
Account") to be opened with Deutsche Bank, Frankfurt, prior to the
Closing Date. Furthermore, two additional cash payments in EURO, each
in the amount of US $ 2.000.000.-- (in words: Two million) converted
into EURO at the Conversion Rate, shall be made by AFC on January 31,
2001 and February 28, 2001, respectively, to the Joint Bank Account.
The sum of all cash payments made by AFC into the Joint Bank Account
pursuant to the following provisions is referred to herein as
"Adjustment Escrow Cash Amount".
4A.2 The Adjustment Escrow Cash Amount plus interest thereon as accrued
shall be released by Deutsche Bank only in accordance with joint
written instructions of BPS and AFC. BPS and AFC shall give the
following instructions to Deutsche Bank:
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<PAGE>
4A.2.1 If the Deferred Payment (converted into EURO at the Conversion Rate)
is equal to, or in excess of, the Adjustment Escrow Cash Amount plus
interest thereon as accrued, then Deutsche Bank shall disburse to BPS
the entire Adjustment Escrow Cash Amount plus interest thereon as
accrued within five (5) business days after the Determination Date and
AFC's obligation pursuant to Sec. 3.3.3 shall be deemed fulfilled to
the extent that such disbursement is made. Any excess obligation of
AFC pursuant to Sec. 3.3.3 shall remain unaffected.
4A.2.2 If the Deferred Payment (converted into EURO at the Conversion Rate)
is lower than the Adjustment Escrow Cash Amount plus interest thereon
as accrued, then Deutsche Bank shall disburse to BPS that portion of
the Adjustment Escrow Cash Amount plus interest thereon as accrued
equal to the Deferred Payment (converted into EURO at the Conversion
Rate) within five (5) business days after the Determination Date and
AFC's obligation pursuant to Sec. 3.3.3 shall be deemed fulfilled to
the extent that such disbursement is made.
4A.2.3 Any portion of the Adjustment Escrow Cash Amount plus interest thereon
as accrued remaining on the Joint Bank Account after the disbursement
pursuant to Sec. 4A.2.2 (the "Remaining Escrow Cash Amount") shall be
disbursed by Deutsche Bank as follows:
(a) To the extent that the Assignment Consideration, if any, the
Transfer Consideration or any Indemnification Claims are not paid
by AFC, Alpha Subsidiary or NewCo KG, respectively, as and when
due, Deutsche Bank shall disburse to BPS that portion of the
Remaining Escrow Cash Amount plus interest thereon as accrued
equal to such unpaid amounts plus interest thereon in an amount
of 6 % p.a. as from the respective due dates reduced by any
Shortfall Payment Amount payment due from BPS pursuant to Sec.
3.3.3 (the "Not Outstanding Amount"), provided that BPS's
obligation pursuant to Sec. 3.3.3 shall be deemed fulfilled to
the extent that such deduction is made. If the Remaining Escrow
Cash Amount is lower than the Not Outstanding Amount, BPS shall
be enti-
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<PAGE>
tled to allocate the disbursement actually received to the
Assignment Consideration, the Transfer Consideration or the
Indemnification Claims. The obligations of AFC, Alpha Subsidiary
or NewCo KG regarding the Assignment Consideration, the Transfer
Consideration or Indemnification Claim shall be deemed fulfilled
to the extent that such disbursement (as allocated by BPS) is
made and any excess obligations shall remain unaffected.
(b) Any portion of the Remaining Escrow Cash Amount plus interest
thereon as accrued not disbursed to BPS pursuant to para. (a)
shall be disbursed by Deutsche Bank to AFC as soon as the
performance obligations covered by payment guarantees and
sureties listed in Annex 4A.1 have been validly transferred to
NewCo KG.
Article 9
9.1 Sec. 7.1.6 of the Share Purchase and Exchange Agreement shall be
deleted and replaced by the following provision:
"BPS shall maintain commercially reasonable and appropriate insurance
coverage for the LAD Business consistent with past practice, provided
that BPS and Alpha Subsidiary will attempt to have such insurances
transferred to the New LAD Entities, AFC or its designated
subsidiaries with effect as from the Closing."
9.2 Sec. 7.1.8 of the Share Purchase and Exchange Agreement shall be
deleted and replaced by the following provision:
"7.1.8 The New LAD Entities, AFC or its designated subsidiaries, as
the case may be, on the one hand, and BPS or any other
company of the Unaxis Group currently operating the LAD
Business on the other hand, shall, subject to the prior
approval of AFC, such approval not to be unreasonably
withheld, enter into intercompany service agreements
relating to the joint use of certain facilities on
commercially reasonable
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<PAGE>
terms and conditions. BPS shall ensure that the employees of
NewCo KG which will be working at the Hanau site until the
completion of the Restructuring Program as defined in Sec.
1.6 will be allowed to use the Hanau casino on the same
terms and conditions as applicable as of the Closing Date.
Alpha Subsidiary shall reimburse to BPS on a pro rata basis
the portion of the payment made by BPS to the caterer
operating the Hanau casino corresponding to the number of
NewCo KG's employees working at the Hanau site as compared
to the overall number of employees working at the Hanau site
and entitled to use the Hanau casino from time to time."
9.3 The following new provision shall be added in Article 7 of the Share
Purchase and Exchange Agreement as new Sec. 7.1.9:
"With respect to letters of credit issued in favor of BPS which
are to be transferred to NewCo KG as part of the LAD Business in
the LAD Reorganization and which are not amended or reissued in
favor of NewCo KG on or prior to the Closing, BPS shall use its
best efforts to enable NewCo KG to obtain all payments covered
by such letters of credit in accordance with the terms and
conditions of such letters of credit."
9.4 Sec. 7.6, first sentence, of the Share Purchase and Exchange Agreement
shall be deleted and replaced by the following provision:
"AFC, Alpha Subsidiary and BPS shall cooperate in good faith and
use their best efforts to obtain as promptly as possible the
consents to the transfer of the contracts and other legal
relationships to be transferred to NewCo KG or the other New LAD
Entities in the LAD Reorganization and to AFC or its designated
subsidiaries, if any, as part of the Foreign Assets and
Liabilities, from the respective contractual parties."
9.5 The following new provision shall be added in Article 7 of the Share
Purchase and Exchange Agreement as new Sec. 7.7:
"7.7 The Parties shall cooperate in good faith and use their best
efforts to transfer the activities of the LAD Business
located in Taiwan ("LAD Taiwan") and the LAD Business
located in China
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<PAGE>
("LAD China") as promptly as permitted by law after the
Closing to AFC or its designated subsidiaries. Until such
transfers become effective, AFC or its designated
subsidiaries shall in all respects be put into a position as
if LAD Taiwan and LAD China had already been transferred
and, in particular, bear the economic burden and receive the
economic benefit of LAD Taiwan and LAD China.
Article 10
10.1 Sec. 8.2 of the Share Purchase and Exchange Agreement including Annex
7.6 shall be deleted.
10.2 Sec. 8.4 of the Share Purchase and Exchange Agreement shall be amended
to read as follows:
"8.4 NewCo KG has a valid lease agreement with BuL
Vermietungs-gesellschaft mbH & Co. KG regarding the Hanau
site substantially in the form as attached hereto as Annex
8.4.1, but providing for monthly rent reductions
commensurate with the reduced use of space by NewCo KG at
the end of the respective months."
10.3 Sec. 8.7 of the Share Purchase and Exchange Agreement shall be amended
to read as follows:
"8.7 The LAD Reorganization with respect to the LAD Business in
Germany shall have become effective in accordance with Sec.
1 of the Reorganization Memorandum."
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<PAGE>
Article 11
Annex 10.1 of the Share Purchase and Exchange Agreement shall be replaced by a
new version of Annex 10.1 attached hereto as Appendix 4.
Article 12
Sec. 3 (c) third sentence of Annex 5 A to the Share Purchase and Exchange
Agreement shall be deleted and replaced by the following sentence:
"With regard to the patents, trade and service marks and all applications
for any of the foregoing identified in Schedule 3 (c) 3 of the BPS
Disclosure Memorandum as updated pursuant to Article 1 of this Agreement
(the "Licensed Intellectual Property Rights"), BPS owns such rights or
has a valid license or sublicenses thereof and the licenses and
sublicenses thereof to the LAD Business are valid license agreements."
Article 13
Alpha Subsidiary shall procure that NewCo KG obtains as soon as possible the
approval of the competent authorities or the relevant third parties to the
transfer of public subsidy relationships which are to be transferred to NewCo KG
as part of the LAD Business. Furthermore, Alpha Subsidiary shall ensure that
NewCo KG complies with the terms and conditions applicable to the granting of
such subsidies until such approval has been given and AFC and Alpha Subsidiary
shall provide all necessary assurances as reasonably requested by the competent
authorities or relevant third parties for giving their approval.
Article 14
Neither AFC, Alpha Subsidiary, nor any of the New LAD Entities shall be entitled
to use the name "Leybold" as a company name or as trademark or as part thereof
or in any other way, provided that Alpha Subsidiary shall ensure that NewCo KG
and NewCo GmbH delete "Leybold" from their company names as promptly as possible
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<PAGE>
after the Closing and NewCo KG and NewCo GmbH are entitled to use the name
"Leybold" as company name for such interim period after the Closing Date and
shall discontinue to use the name "Leybold" in any respect thereafter.
Article 15
15.1 All capitalized terms not otherwise defined herein shall have the same
meaning in this Agreement as assigned thereto in the Share Purchase
and Exchange Agreement.
15.2 Costs
Each of the parties shall pay all of its expenses (including fees and
expenses of legal counsel, financial advisors or other representatives
or consultants) incurred by it in connection with the preparation,
negotiation, execution and implementation of this Agreement except as
otherwise provided herein. The costs of the notarization of this Deed
shall be borne by BPS and AFC to equal shares. The costs of the
establishment of branch offices or representative offices of ACF or
any of its subsidiaries, as the case may be, in China, Taiwan and
Japan in connection with the transfer of the LAD Business pursuant to
the Share Purchase and Exchange Agreement, as amended, shall be borne
by BPS.
15.3 Amendment of Agreement
This Agreement may be amended by the parties at any time provided that
any such amendments will be binding only if set forth in writing
executed by each of the parties unless notarization is required by
law.
15.4 Notices
All notices, demands and other communications given or delivered under
this Agreement will be in writing and will be deemed to have been
given when personally delivered or delivered by express courier
service or telecopied. No-
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<PAGE>
tices, demands and communications to the Parties will, unless another
address is specified in writing, be sent to the address indicated
below:
Notices to Unaxis:
Unaxis-Management Ltd
Hofwiesenstrasse 135
P.O. Box 2409
8021 Zurich
Switzerland
Attn.: Thomas Emch, General Counsel
Facsimile: +41-1-360 9694
Notices to BPS:
Balzers Process Systems GmbH
Wilhem-Rohn-Strasse 25
63450 Hanau
Germany
Attn.: Rechtsabteilung
Facsimile: +49-6181 34 1106
with a copy to Unaxis and in both cases with a copy to:
Shearman & Sterling
Mainzer Landstrasse 16
60325 Frankfurt am Main
Germany
Attn.: Dr. Thomas Konig
Facsimile: (+49) 69-9711 1100
Notices to AFC or Alpha Subsidiary:
Applied Films Corporation
9586 I-25 East Frontage Road
Longmont, CO 80504
U.S.A.
Attn.: Lawrence Firestone
Facsimile: (+1) 303-774 3251
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<PAGE>
with a copy to:
Varnum, Riddering, Schmidt & Howlett LLP
333 Bridge Street, N.W,
P.O. Box 352
Grand Rapids,
Michigan 49501-0352
Attn.: Daniel C. Molhoek
Facsimile: (+1) 616-336 7000
15.5 Invalid or Unenforceable Provisions
If any of the provisions of this Agreement is or becomes invalid or
unenforceable, the remaining provisions of this Agreement shall remain
unaffected. The invalid or unenforceable provision shall be replaced
by the parties by a valid or enforceable provision which comes as
close as possible to the commercial purpose of the invalid or
unenforceable provision.
15.6 Choice of Law
This Agreement, its interpretation and all questions arising out of,
or in connection with, this Agreement, shall be governed by German
law, except the UN Convention on Contracts for the Sale of Goods,
without giving effect to any choice of law or conflict of law
provisions or rules, provided that all corporate actions to be
conducted pursuant to this Agreement by AFC with respect to the
issuance and delivery of the shares constituting the Stock Component
shall be governed by the law of the State of Colorado.
15.7 Each of the Parties hereto hereby grants power of attorney to
- Doris Schott with office domicile at Nu(beta)allee 24, 63450 Hanau, Germany,
- Marion Klemm-Dombrowski, with office domicile at Nu(beta)allee 24, 63450
Hanau, Germany
- Melanie Joh, with office domicile at Nu(beta)allee 24, 63450 Hanau,
Germany
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<PAGE>
each of them individually, each of them released from the restrictions
imposed by ss. 181 of the German Civil Code or similar restrictions
under other applicable jurisdictions, and each of them with the right
to grant substitute power of attorney to notarice, to set forth and to
agree upon the content of the Annexes Appendices and Schedules and to
confirm that the Annexes, Appendices and Schedules so set forth are
all the Annexes, Appendices and Schedules and that therefore the
Agreement will be completed, and and/or to sign them hereby instruct
the above persons to proceed in such manner promptly after the present
Notarial Deed has been signed.
15.8 Any provisions of the Share Purchase and Exchange Agreement not
especially amended herein shall remain unaffected.
The above Deed has been read to the persons appeared in the presence of the
notary, approved by them and signed by them and by the notary as follows.
The other Annexes, Appendices and Exhibits were presented to the Parties and but
not signed by them, but by Miss Melanie Joh instead of them. On this behalf the
notary informed the Parties that the Annexes, Appendices and Schedules that
consist of an inventory of things, rights or legal relationships which are
already in existence do not have to be read to the Parties according to ss. 14
of the German Notarization Act (Beurkundungsgesetz) but are nevertheless part of
the notarial deed and this part of the agreement. After the Parties were
instructed accordingly they waived the reading of the above mentioned documents
but not the attachment of the alone mentioned documents to this notarial record.
sign. Thomas Emch
sign. Lawrence D. Firestone
sign. Dr. Frank Bansch, Notar L. S.
::ODMA\PCDOCS\GRR\521315\1
<PAGE>
EXHIBIT 2.3
CONTRIBUTION AGREEMENT
between
Balzers Process Systems GmbH
Registered Office: Hanau
- hereinafter referred to as "BPS" -
and
Leybold Coating GmbH & Co. KG
Registered Office: Alzenau
- hereinafter referred to as "Leybold Coating" -
dated December 29, 2000
<PAGE>
Preamble
A. BPS, an indirect subsidiary of Unaxis Holding AG having its registered
office in Zurich ("Unaxis"), is the sole limited partner of Leybold
Coating, formed as of 22.11.2000, registered in the Commercial Register of
the local court of Aschaffenburg under HRA 3707 with a capital interest
subject to liability registered in the Commercial Register to EUR 90,000.
Leybold Coating GmbH having its registered office in Hanau and registered
in the Commercial Register of the local court of Hanau under HRB 6605 is
sole general partner of Leybold Coating without capital interest.
B. Unaxis and BPS on the one hand and Applied Films Corporation, Longmount,
Colorado ("AFC") and a German subsidiary of AFC ("Alpha Subsidiary"), on
the other hand, entered into a Share Purchase and Exchange Agreement dated
Oktober 18, 2000 (notarial deed A.Prot. 2000/308 of the public notary
Stephan Cueni in Basel) ("Main Agreement") providing for the sale of the
business area Large Area Coating (defined therein as LAD Business) of
Unaxis to AFC Subsidiary.
In the Main Agreement BPS undertook, inter alia, to spin-off the German
activities of the LAD Business to Leybold Coating; subsequently, the shares
in Leybold Coating GmbH and the limited partnership interests in Leybold
Coating shall be transferred to Alpha Subsidiary. For the transfer of the
non-German parts of the LAD Business to AFC or its designated subsidiary
individual sale agreements - upon implementation of an internal
reorganization - shall be concluded. The parties agree that all
indemnifications, all representations and warranties, covenants and
liability regarding the sold business division are exclusively stipulated
in the Main Agreement.
C. By resolution of December 27, 2000 attached as Appendix C.1, the partners
of Leybold Coating resolved upon the contribution by BPS of the portion of
the LAD Business, which is operated by BPS as a legally non-autonomous
business division as described in Appendix C.2 (" German LAD Business"),
against increase of the compulsory contribution in the amount of EUR 90,000
by EUR 10,000 to EUR 100,000. In implementation of BPS' contributory
obligation the parties hereby agree the following:
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Article 1
Contribution of the subsidiary operation
1.1 Subject to the provisions of this agreement, BPS shall transfer the
German LAD Business to Leybold Coating with commercial and legal
effect as of December 31, 2000, 23.00 o'clock, (hereinafter referred
to as "Transfer Date") as contribution in kind, with exception of the
lease agreement between Lahmeyer Grundbesitz GmbH & Co. KG/Victoria
Mathias Verwaltungsgesellschaft mbH and BPS dated May 25/June 5, 2000
(the "Lease Agreement") which shall be transferred on signing of this
Agreement. The parties agree that BPS shall have the right to
temporarily store goods on the business premises in Alzenau after the
transfer of the Lease Agreement to Leybold Coating.
1.2 A preliminary pro-forma balance sheet according to IAS of the German
LAD-Business as of June 30, 2000 is attached as Appendix 1.2.
1.3 Leybold Coating shall take over the assets and liabilities comprised
in the German LAD Business at current book values according to German
GAAP. Any positive net book value amount shall be credited to the
reserve account of BPS.
Article 2
Scope of the Contribution in Kind
2.1 All assets that form part of the German LAD Business as of the
Transfer Date shall be contributed, in particular the following
assets:
2.1.1 Machines, technical plants and equipment (including plants under
construction), furnitures and fixtures, vehicles, assets of small
value, accessories and spare parts, situated on the properties and in
the premises specified in Appendix 2.1.1.1 as of the Transfer Date, in
particular the items specified in Appendix 2.1.1.2, unless disposed
off or eliminated in the ordinary course of business;
2.1.2 Intangible assets (patents and patent applications, trademarks),
domain names as well as know-how related to the German LAD Business
listed in Appendix 2.1.2.1, unless disposed off or eliminated in the
ordinary course of business; the intangible assets listed in Appendix
5.2.2 shall not be contributed;
2.1.3 Inventories (raw materials, auxiliary materials, operating supplies,
finished and unfinished products as well as finished product services
and in progress) that are situated on the properties or in the
premises specified in Appendix 2.1.1.1 as of the
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Transfer Date, in particular the inventories listed in Appendix 2.1.3,
unless disposed off or eliminated in the ordinary course of business;
2.1.4 Receivables for deliveries and services and other receivables as
specified in Appendix 2.1.4, unless disposed off or eliminated in the
ordinary course of business; the .1 receivables specified in Appendix
2.1.4.2 shall not be contributed (the "Retained Receivables");
2.1.5 Cheques, cash balances, Bundesbank and postal giro credit balances and
credit balances on accounts with credit institutions as specified in
Appendix 2.1.5, unless disposed off or eliminated in the ordinary
course of business;
2.1.6 Contracts (including all rights and obligations) and binding
contractual offers with suppliers and customers as specified in
Appendix 2.1.6.1, rental and lease contracts and binding contractual
offers as specified in Appendix 2.1.6.2, licensing agreements and
binding contractual offers as specified in Appendix 2.1.6.3 and other
contracts and binding contractual offers as specified in Appendix
2.1.6.4, but, however, without the Retained Receivables;
2.1.7 Books of account, business documents and other documents used
exclusively in connection with the German LAD Business. Leybold
Coating may inspect any books of account, business documents and other
documents used, inter alia, in connection with the German LAD Business
at any time upon prior notice to BPS, and these may be copied at BPS
at Leybold Coating's expense.
2.2 In addition, the liabilities, obligations and other legal commitments
(hereinafter referred to as "Liabilities") as specified in Appendix
2.2 shall be contributed; Liabilities not listed shall not be
contributed, unless transferred to Leybold Coating or to be assumed by
Leybold Coating pursuant to the provisions of this Agreement.
Article 3
Transfer of Ownership
BPS and Leybold Coating agree that title to the assets contributed pursuant to
Article 2, para. 2.1, will be transferred to Leybold Coating with effect from
the Transfer Date. On the Transfer Date, BPS shall grant Leybold Coating
effective control (unmittelbaren Besitz) to the movable assets specified in
Article 2, para. 2.1. If it is not possible to grant effective control, BPS
shall, from the Transfer Date, exercise its possession of such movable assets on
behalf of Leybold Coating on an indirect ownership basis in accordance with
Leybold Coating's instructions. In case such assets are, on the Transfer Date,
in the
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possession of third parties, BPS hereby assigns its claims for return of such
assets to Leybold Coating with effect from the Transfer Date; Leybold Coating
hereby accepts such assignment. In case of existing retention rights or pledged
property rights on the Transfer Date, BPS hereby transfers its reversionary
claims to Leybold Coating with effect from the Transfer Date.
The intangible assets described in Article 2 para. 2.1.2 shall be assigned by
BPS to Leybold Coating pursuant to the form of assignment attached hereto as
Appendix 3.
Article 4
Transfer of Contracts/Accounts receivable/Liabilities
4.1 With effect from the Transfer Date, Leybold Coating shall enter into
the contracts and binding contract offers contributed pursuant to
Article 2, para. 2.1.6 with releasing effect for BPS assume with
releasing effect the Liabilities contributed pursuant to Article 2,
para. 2.2.
4.2 BPS shall endeavour to immediately obtain the approval of its
contractual partners to the transfer of the contracts and binding
contract offers with all rights and duties and to obtain the approval
of creditors to the transfer of the Liabilities, both with full
releasing effect for BPS. Art. 7.6 of the Main Agreement remains
unaffected.
4.3 If approval has not been obtained from individual contractual partners
or creditors at the Transfer Date, Leybold Coating and BPS shall act
as if approval had been given and the contract, the binding
contractual offer or the Liability was fully transferred to Leybold
Coating. To the extent any contractual rights and obligations or any
Liabilities externally remain with BPS, BPS shall honour these rights
and obligations and Liabilities for the account and on behalf of
Leybold Coating. In particular, Leybold Coating shall indemnify BPS
from all obligations arising out of the contracts and binding
contractual offers contributed pursuant to Article 2, para. 2.1.6, any
liabilities vis-a-vis third parties which have granted securities with
respect to such obligations and from the Liabilities.
Article 5
Granting of Licenses
5.1 Leybold Coating hereby agrees to grant BPS a license according to the
specimen attached in Appendix 5.1 for the use of the intangible assets
transferred pursuant to Article 2, para. 2.1.2 (including the right to
grant sublicenses).
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5.2 BPS hereby agrees to grant Leybold Coating a license according to the
specimen attached in Appendix 5.2.1 for the use of the intangible
assets listed in Appendix 5.2.2 (including the right to grant
sublicenses).
Article 6
Transfer of Employments and Company Pension Schemes
6.1 The staff members employed in the German LAD Business on the Transfer
Date are listed in Appendix 6.1. According to Sec. 613 lit. a) German
Civil Code (BGB), Leybold Coating will enter into the existing
employment contracts for the employees involved in the German LAD
Business as their new employer, i.e. the rights and obligations
arising out of these employment contracts will be transferred to
Leybold Coating as the new employer unless employees oppose to the
transfer of operations. This also applies to the associated
obligations arising out of pension commitments. Furthermore,
Liabilities resulting from employee-inventions shall be assumed.
6.2 BPS shall indemnify Leybold Coating with respect to the fulfillment of
claims (except for pension claims) of employees listed in Appendix 6.1
covering the period before the "Closing Date" as defined in Sec. 2.4
of the Main Agreement, in particular of wage and salary claims
(including X-mas bonuses and vacation pays), leave claims, severance
pays and other payments in addition to the regular salary, unless
reflected in reserves in the "Final Closing Balance Sheets" as defined
in Sec. 3.5 (d) of the Main Agreement.
Pension rights of the employees listed on Appendix 6.1, relating to
the time period prior to the Closing Date shall be taken into account
by adequate reserves in the Final Closing Balance Sheet.
In addition, BPS shall release Leybold Coating from all taxes, social
security contributions and industry accident insurance fund
contributions payable for the employees listed in Appendix 6.1 for the
time prior to the Closing Date unless reflected in reserves in the
Final Closing Balance Sheet.
To the extent BPS effected payments to the employees listed on
Appendix 6.1 prior to the Closing Date to satisfy obligations of the
kind set out in the foregoing provisions, which also cover periods of
time after the Closing Date, Leybold Coating shall refund such
payments to BPS to the extent they are allocable to the time period
after the Closing Date. In case reserves on the Final Closing Balance
Sheet for obligations vis-a-vis employees listed on Appendix 6.1
exceed the
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actually due amounts, Leybold Coating shall refund the exceeding
amounts to BPS.
6.3 BPS shall release Leybold Coating from the fulfillment of all claims
of employees transferred to Leybold Coating at the Transfer Date
according to Sec. 613 lit. a) BGB, and not listed on Appendix 6.1,
provided that Leybold Coating terminates the employments with these
employees at the earliest possible date in compliance with the
applicable formal and time requirements as well as the requirements
under material law.
Furthermore, BPS releases Leybold Coating from all taxes, social
security contributions and contributions to the industry accident
insurance fund for employees transferred to Leybold Coating at the
Transfer Date according to Sec. 613 lit. a) BGB and not listed on
Appendix 6.1.
For the sake of clarity, BPS and Leybold Coating agree that
obligations arising out of pension commitments relating to employees
not transferred in accordance with Sec. 613 lit. a) German Civil Code
(BGB) or to former BPS employees shall remain with BPS, and shall not
be transferred.
6.4 It is contemplated to reduce the workforce listed in Appendix 6.1
within three months after the Closing by up to 9 employees for
operational reasons. BPS shall reimburse Leybold Coating the incurred
labour costs according to the following provisions against ordinary
account render and evidence:
(a) The refunded labour costs as defined in lit. (b) shall be
reimbursed subject to the condition that Leybold Coating
terminates the employments of the employees concerned (in
aggregate no more than 9 employees) for operational reasons
immediately after the Closing in compliance with all formal and
time requirements as well as the requirements under material law.
Leybold Coating shall take adequate legal remedies against
possible suits for protection against dismissal and shall pursue
the legal proceedings with the due diligence of a prudent
businessman. BPS shall reimburse Leybold Coating the costs
incurred and evidenced for the legal proceedings to an adequate
extent. Any settlements or termination agreements require the
prior approval of BPS not to be unreasonable withheld. Approval
is deemed given if BPS does not refuse approval within one (1)
week from the receipt of the respective drafts.
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(b) Upon notice of termination is given according to (a) to the
employees concerned (in aggregate no more than 9 persons), BPS
will reimburse Leybold Coating the salaries and social insurance
contributions ("Salary Payments") due for the time from the
notice of termination until the end of the employment, but,
however, until the expiration of the period of notice of
termination at the latest as well as severance pays occurring
from settlements or termination agreements concluded with the
approval of BPS ("Severance Pays") (summarizing referred to as
"Labour Cost Refunds"). To this extent, no reserves shall be set
aside in the Final Closing Balance Sheet.
(c) In addition, Labour Cost Refunds require that Leybold Coating
releases the concerned employees from work upon receipt of the
notices of termination unless a continuation of the employment is
imposed by court order. If Leybold Coating continues to employ
dismissed employees after the receipt of the notice of
termination without court order, BPS' obligation to Labour Cost
Refunds is reduced pro rata temporis to the time for the duration
of the continued employment.
(d) Any Labour Cost Refunds require evidence by presentation of the
pertinent employment contracts and notices of termination as well
as the wage tax cards and remittance vouchers. The refund shall
fall due for payment within two (2) weeks after the presentation
of the required evidence.
(e) Leybold Coating agrees to instruct its auditors to verify the
information submitted by Leybold Coating for the Labour Cost
Refunds and to confirm their accuracy to BPS.
BPS shall have the right to review the requirements for the Labour
Cost Refunds and to seek assistance of auditing companies or any other
consultants as the case may be. Leybold Coating has to grant BPS and
its employees, auditing companies and other consultants access to its
business premises and to its business documents for inspection to the
extent required for an audit and give information.
6.5 The employments of eight (8) employees listed in Appendix 6.1 are
currently suspended. After their return, Leybold Coating will consider
the possibility to continue their employment. If there are no adequate
vacancies available, the workforce can be reduced by further up to
eight (8) employees subject to Labour Cost Refunds. The provisions of
para. 6.4 lit. (a) to (e) shall apply mutatis mutandis.
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6.6 BPS will consider all possibilities to provide all employees affected
by a reduction of the workforce according to paras. 6.4 and 6.5 with
an employment at adequate conditions in the Unaxis Group.
Article 7
Collaboration following the Legal Transfer Date
7.1 Following the Transfer Date, BPS and Leybold Coating shall work
together to ensure a smooth and efficient transfer of the German LAD
Business from BPS to Leybold Coating. The parties shall do and
organize all that is necessary to secure the implementation of this
Contribution Agreement. In particular, BPS and Leybold Coating shall
make all declarations and take all actions required for a legally
valid transfer of the assets, Liabilities and contracts contributed
pursuant to Article 2.
7.2 All rental payments, leasing installments, gas, electricity and
telecommunication fees, ancillary costs and other periodic payments
for the business operation shall be borne by BPS relating to the time
period prior to the Transfer Date and relating to the time period
following the Transfer Date by Leybold Coating. BPS shall be entitled
to all periodically occurring receipts relating to the time period
before the Transfer Date and Leybold Coating relating to the time
period after the Transfer Date. Obligations for payment and
outstanding accounts allocable to the time period beginning before the
Transfer Date and ending after the Transfer Date shall be divided
among BPS and Leybold Coating pro rata temporis.
Upon the Transfer Date or shortly before or after the Transfer Date,
respectively, the meters for gas, water, electricity, heating, etc.
shall be read as basis for the allocation of costs stipulated above.
To the extent an exact allocation is impossible, such costs shall be
estimated on the basis of appropriate auxiliaries. All payments under
this para. 7.2 shall be due and payable immediately.
7.3 BPS and Leybold Coating shall pass on immediately to the other party
all payments received after the Transfer Date, as well as all
communications, information, correspondence and inquiries relating to
the German LAD Business that are owed to the other party or that
relate to the other party under the terms of this agreement.
7.4 Leybold Coating shall grant BPS and its auditors access to the
business premises of the German LAD Business and shall allow them to
inspect the documents contributed in accordance with para. 2.1.7, to
the extent required for drawing up
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BPS's annual financial statement for the fiscal year 2000 or expedient
for BPS for other reasons.
Leybold Coating undertakes to keep all documents not contributed under
para. 2.1.7 situated in the business premises of the German LAD
Business at the Legal Transfer Date in a suitable and organised
manner, free of charge, to grant BPS access to such documents at all
times, and to surrender them to BPS at any time.
Article 8
Caveat Emptor
In view of the Main Agreement, in particular in view of the claims of AFC and
Alpha Subsidiary against BPS stipulated therein, BPS and Leybold Coating agree
that apart from the claims and rights expressly set forth in this Contribution
Agreement, all claims and rights of Leybold Coating against BPS, in particular
warranty and liability claims, rights of indemnity, claims for non-performance
and other claims, shall be excluded. The provisions of the Main Agreement shall
remain unaffected.
Article 9
Final Provisions
9.1 The costs associated with the conclusion and performance of this
agreement shall be borne by Leybold Coating. Costs arising from the
transfer of, or alteration in the registration of intangible assets
shall be borne exclusively by Leybold Coating.
9.2 The appendices to this agreement shall be integral part of this
agreement.
9.3 If any provision of this agreement is held to be or becomes legally
invalid or if this agreement proves to be incomplete, the validity of
the remaining provisions in this agreement shall not be affected. In
this event the invalid or missing provision shall be replaced by a
valid provision that is as close as possible to the purpose of the
invalid provision, or that is as close as possible to what would have
been agreed by the parties, had they considered the matter in
question.
9.4 This agreement shall be governed by German law.
9.5 The place of venue for disputes arising out of, or in connection with
this Contribution Agreement, or arising out of, or in connection with
its validity, shall be Frankfurt am Main.
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For BPS:
/s/ Dr. Joachim Manke
Dr. Joachim Manke
For Leybold Coating:
/s/ Helmut Frankenburger
Helmut Frankenburger
::ODMA\PCDOCS\GRR\520904\1
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EXHIBIT 2.4
BRAVO INTELLECTUAL PROPERTY LICENSE AGREEMENT
This INTELLECTUAL PROPERTY LICENSE AGREEMENT is made on the 29th day of
December 2000 by and between Balzers Process Systems GmbH, a German limited
liability company, having its registered office in Hanau, Germany (the
"Licensor"), and Leybold Coating GmbH & Co. KG, a German limited partnership,
having its registered office in Alzenau, Germany (the "Licensee") (each a
"Party", and collectively the "Parties").
WHEREAS, pursuant to that certain Share Purchase and Exchange Agreement
dated October 18, 2000 (the "Share Purchase and Exchange Agreement"), between,
among others, Unaxis Holding AG ("Unaxis") and Applied Films Corporation
("AFC"), the parties thereto determined that it would be appropriate and
desirable for Licensor to contribute, and for Licensee to receive and assume,
directly or indirectly, substantially all of the assets and liabilities
associated with Licensor's LAD Business and the shares, investments or similar
interests currently held by Unaxis of the legal entities that conduct such
business;
WHEREAS, Licensor and Licensee are parties to a Contribution Agreement
(Einbringungsvertrag) dated on the date hereof (the "Contribution Agreement"),
pursuant to which Licensor agreed to contribute to Licensee its LAD Business (as
defined therein), including certain intellectual property rights related to the
LAD Business with effect as of December 31, 2000 (the "Effective Date").
WHEREAS, Licensor shall, pursuant to Paragraph 2.1.2 of the Contribution
Agreement, assign to Licensee such intellectual property rights, and, pursuant
to Paragraph 5.2 of the Contribution Agreement, license to Licensee certain
other intellectual property rights.
<PAGE>
NOW THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the meanings set forth
below:
1.1. "Affiliate" shall have the meaning as defined inss.ss.15 et seq. of
the German Stock Corporation Act.
1.2. "Improvements" shall mean any findings, discoveries, inventions,
additions, modifications, formulations, variations, enhancements, refinements,
derivative works, developments or changes, whether or not patentable or
copyrightable, made in connection with the Licensed Intellectual Property.
1.3. "Intellectual Property Registrations" shall mean all patents and all
applications for any of the foregoing included in the Licensed Intellectual
Property.
1.4. "Licensed Intellectual Property" shall mean the patents and the
patents issuing from patent applications listed in Schedule 1 hereto, any
reissues, continuations, divisionals, continuations in part, reexamination or
renewals thereof
1.5. "Licensee Field" shall mean the field of use as defined in Schedule 2.
1.6. "Licensor Field" shall mean the field of use as defined in Schedule 3.
1.7. "Outside Field" shall mean any field of use outside of, and not
including, the Licensee Field and the Licensor Field
1.8. "Person" shall mean and include an individual, sole proprietorship,
partnership, joint venture, corporation, limited liability company, trust,
association, organization and government authority, or any other form of entity.
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2. GRANT OF LICENSE
2.1. License Grant. Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee an irrevocable, royalty-free,
non-transferable (except as provided hereunder), perpetual, worldwide, license
(or sublicense) under the Licensed Intellectual Property to make, have made, use
lease, sell and have sold products and to make Improvements in the Licensee
Field and the Outside Field. For the avoidance of doubt, the license granted
under this Paragraph 2.1 shall not be construed to be grant of any rights in the
Licensor Field, whether by implication or otherwise during the first two (2)
years after the Effective Date. The license granted under this Paragraph 2.1
shall be exclusive (even as to the Licensor) in the Licensee Field and shall be
non-exclusive in the Outside Field, provided that, 2 (two) years after the
Effective Date, the non-exclusive portion of the license shall be expanded to
include the Licensor Field and the Outside Field, and the exclusive portion of
the license shall be non-exclusive, provided that Licensor may only grant a
license to the Licensed Intellectual Property in the Licensee Field to
Licensor's Affiliates, subcontractors and customers.
2.2. Right to Sublicense. Licensee shall have the right to grant
sublicenses of its rights under this Agreement to its Affiliates. All other
sublicenses shall require the consent of Licensor, which, except with respect to
sublicenses in the Licensor Field, shall not be unreasonably withheld.
Sublicensees shall agree in writing to be bound by the terms and conditions of
this Agreement.
3. OWNERSHIP
3.1. Ownership. Licensee acknowledges that, as between Licensee and
Licensor, Licensor owns all right, title, and interest in and to the Licensed
Intellectual Property (except in the cases where Licensor has only granted
Licensee a sublicense to the Licensed Intellectual Property).
3.2. Execution of Documents. Consistent with the terms of this Agreement,
each Party shall perform all lawful acts and execute such instruments as the
other Party may reasonably request to confirm, evidence, maintain or protect
such Party's rights to or under the Licensed Intellectual Property. If either
Party refuses or fails to perform such acts or execute such instruments, the
other Party may do so as attorney-in-fact for such purpose.
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3.3. Improvements. All right, title, and interest in and to Improvements
made by Licensor, whether or not patentable, shall be the sole and exclusive
property of Licensor or the third party which has licensed the Licensed
Intellectual Property to Licensor and no license to any such Improvements shall
be granted hereunder. All right, title, and interest in and to Improvements made
by Licensee, whether or not patentable, shall be the sole and exclusive property
of Licensee.
3.4. No Other License. Except as expressly provided in this Agreement,
nothing herein shall be construed as granting Licensee any license or other
rights under any intellectual property of Licensor.
4. REPRESENTATIONS AND WARRANTIES
4.1. Mutual Representations. Each Party, as of the date hereof, represents
and warrants to the other that such Party has the requisite legal and corporate
power and authority to execute and deliver this Agreement and to carry out and
perform all of its obligations hereunder.
4.2. Representation of Licensor. Licensor represents and warrants that it
owns and has the right to license it to the Licensee or has a license, with the
right to sublicense, to the Licensed Intellectual Property, provided that any
claim for breach of this representation can only be made pursuant to and within
the limitations of Article 6 of the Share Purchase Agreement.
4.3. Restriction of Transfer of Licensed Intellectual Property. Licensor
further warrants that it will not transfer or encumber the Licensed Intellectual
Property or its license thereto to any third party throughout the term of this
Agreement, unless such third party is an Affiliate of Licensor or another legal
entity succeeding to all or substantially all of the assets to which this
Agreement pertains, provided that such third party agrees to be bound by the
terms of this Agreement.
4.4. Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE
SHARE PURCHASE AND EXCHANGE AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY
HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, WHETHER
EXPRESS OR IMPLIED, WITH REGARD TO THE LICENSED INTELLECTUAL PROPERTY,
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INCLUDING BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OF THE LICENSED INTELLECTUAL PROPERTY, THAT THE
LICENSED INTELLECTUAL PROPERTY CAN BE SUCCESSFULLY COMMERCIALIZED, OR THAT THE
USE OF THE LICENSED INTELLECTUAL PROPERTY WILL NOT INFRINGE THE INTELLECTUAL
PROPERTY OF ANY THIRD PARTY.
4.5. Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE
THEORY OF LIABILITY), ARISING FROM ANY PROVISION OF THIS AGREEMENT, INCLUDING,
BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.
THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE
OF ANY REMEDY; EXCEPT THAT A CLAIM IS BASED UPON WILLFUL MISCONDUCT ("Vorsatz").
4.6. Indemnification. Subject to the terms and conditions of this
Agreement, each Party shall compensate the other Party in an amount equal to the
damages suffered by it as a result of the breach of representations and
warranties under this Agreement.
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5. PROSECUTION AND MAINTENANCE
5.1. Licensor to Control. Except as specifically hereafter provided,
Licensor shall prosecute and maintain all Intellectual Property Registrations in
all countries requested by Licensee. At the request of Licensor, Licensee shall
provide reasonable cooperation in connection with such prosecution or
maintenance. Licensee shall make available to the Licensor or its respective
authorized attorneys, agents or representatives such of its employees as the
Licensor in its reasonable judgment deems necessary in order to assist with the
prosecution or maintenance of the Intellectual Property Registrations. Licensee
shall sign or use its best efforts to have signed at no charge to the Licensor
all legal documents necessary in connection with such prosecution and
maintenance.
5.2. Updates on Developments. Licensor shall advise Licensee of any
substantial action or development in the prosecution and maintenance of the
Intellectual Property Registrations. Periodically, but at least annually in a
calendar year, Licensor shall advise Licensee in writing of all upcoming
deadlines in connection with the Intellectual Property Registrations. Unless
Licensor notifies Licensee as provided below with respect to taking action in a
particular Intellectual Property Registration, Licensor shall take the required
action. If Licensor fails to take a required action in connection with a
particular Intellectual Property Registration within due time, but in any event,
at least within ninety (90) business days before the non-extendable deadline for
taking such action, it shall so notify Licensee within such time period, and
Licensee shall have the right, but not the obligation, to take the required
action which, unless Licensor (or any other owner of the Licensed Intellectual
Property) has abandoned such Intellectual Property Right under Section 5.3, will
be at the cost and expense of Licensor.
5.3. Licensor Abandonment. If Licensor (or any other owner of the Licensed
Intellectual Property) intends to disclaim, dedicate, or otherwise abandon any
of the Licensed Intellectual Property in any country specified by Licensee,
Licensor shall notify Licensee thereof in writing, and upon the written request
of Licensee (to be made within thirty (30) days after receipt of Licensor's
notification), Licensor (or any other owner of the Licensed Intellectual
Property) shall assign such Licensed Intellectual Property in the specified
countries to Licensee, provided that the Licensee shall pay all transfer costs,
and Licensor (or any other owner of the Licensed Intellectual Property) shall
forfeit its rights under such intellectual property in such countries. In the
event that
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the Licensee does not make such a written request within thirty (30) days,
Licensor shall be entitled to proceed at its sole discretion.
6. ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
6.1. Infringement. In the event that either Party obtains knowledge of any
infringement or misappropriation by a third party of any of the Licensed
Intellectual Property such Party shall notify the other Party promptly of such
infringement and provide the other Party with any available evidence of such
infringement or misappropriation.
6.2. Enforcement. Licensor shall have the first right, but not the
obligation, to commence, prosecute, and settle or otherwise compromise any
dispute, action, suit, or proceeding involving or against any third party
believed to have infringed or misappropriated any Licensed Intellectual
Property, except that Licensor cannot, in any settlement, impair any of
Licensee's rights to the Licensed Intellectual Property in the Licensee Field
without approval of the Licensee; provided, however, if Licensor elects not to
commence or prosecute any action, suit, or proceeding involving or against any
third party believed to have infringed or misappropriated any Licensed
Intellectual Property within sixty (60) days from the notice provided under
Paragraph 6.1, then the Licensee may commence such action, suit or proceeding
under its own discretion and control, except that Licensee cannot, in any
settlement, impair any of Licensor's rights to the Licensed Intellectual
Property without the approval of the Licensor.
6.3. Rights and Duties. All costs and expenses of any enforcement action,
suit or proceeding hereunder ("Action") shall be borne by the Party commencing
such Action (the "Commencing Party"). The Parties agree to cooperate with each
other in any Action, in any way reasonably necessary, including being named as a
party to such Action if so requested by the Commencing Party or required by law,
and all reasonable out-of-pocket expenses incurred by the other party (the
"Non-Commencing Party") in connection therewith shall be reimbursed by the
Commencing Party. The Non-Commencing Party shall have the right to participate
and be represented in any such Action by its own counsel at its own expense. The
Non-Commencing Party shall have no claim of any kind against Commencing Party
based on or arising out of the Commencing Party's handling of or decisions
concerning any such Action, and the Non-Commencing
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Party hereby irrevocably releases the Commencing Party from any such claim
except to the extent the Commencing Party violates Section 6.2.
6.4. Withdrawal of Enforcement. If either Party brings an Action under this
Section 6 and subsequently ceases to pursue or withdraws from such Action, it
shall promptly notify the other Party and such Party may substitute itself for
the withdrawing Party under the terms of this Section 6.
6.5. Recoveries. All damages or other compensation of any kind recovered in
such Action, or from any settlement or compromise brought under this Section 6
shall be for the benefit of the Commencing Party, or in the event of a
participation of the other Party in the Action or of a withdrawal by a Party
under Paragraph 6.4 hereof, shall be allocated first to each party for specific
damages suffered by it and thereafter shall be apportioned between the Parties
in an amount proportional to the amount paid by each Party with respect to its
costs and expenses in bringing such Action.
7. INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS
7.1. Third Party Infringement. With respect to any charges by any third
party of infringement or misappropriation by Licensor or Licensee, and/or any
challenge by any third party of the ownership, validity, or enforceability of
the Licensed Intellectual Property, including cross-claims or counterclaims in
an action, suit or proceeding brought under Section 6, Licensor shall have the
first right at its option to commence, defend, prosecute, and settle or
otherwise compromise any dispute, action, suit, or proceeding involving or
against any such third party concerning such alleged infringement or such
challenge (the "Right to Defend"), and Licensee hereby agrees to be bound by the
outcome of any such action, suit or proceeding or by any settlement or other
compromise for any and all purposes, provided that no settlement shall impair
any right of Licensee in the Licensee Field. All costs and expenses of such
action, suit or proceeding shall be borne by Licensor. Licensee shall have the
right to participate at its own cost in any defense at claims made against
Licensor. Any damages or other compensation of any kind recovered in such
action, suit, or proceeding or from any settlement or compromise shall be
apportioned between the Parties as provided in Section 6.5. Licensee agrees to
cooperate with Licensor in any such action, suit or proceeding, in any way
reasonably necessary, and all reasonable out-of-pocket expenses incurred by
Licensee in connection
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therewith shall be reimbursed by Licensor. Notwithstanding any provision herein
to the contrary, neither party hereto shall be required to incur any expense of
any type in connection with the defense of any Licensed Intellectual Property.
Licensee shall have no claim of any kind against Licensor based on or arising
out of Licensor's handling of or decisions concerning any such action, suit,
proceeding, settlement, or compromise, and Licensee hereby irrevocably releases
Licensor from any such claim, except to the extent Licensor breaches this
Section 7.1.
7.2. Licensor Option. In the event that Licensor shall fail or refuse to
exercise its Right to Defend within fifteen (15) calendar days of the receipt by
Licensor of the written request of Licensee to do so, (i) Licensor's Right to
Defend shall terminate, (ii) Licensee shall thereafter have the sole Right to
Defend and Licensor agrees to cooperate in any such action, in any way
reasonably necessary, including being named as party in any litigation, (iii)
Licensor hereby agrees to be bound by the outcome of any proceeding where
Licensee exercises such Right to Defend, except that no settlement by Licensee
shall compromise the validity or enforceability of any Licensed Intellectual
Property, and (iv) all costs, disbursements and expenses of such proceeding
shall be borne by Licensee, and all recoveries shall be apportioned between the
Parties as provided in Section 6.5.
7.3. Settlement. Neither Party shall have the authority to settle any
Action against the other Party without its consent, unless such settlement is
exclusively for money damages which are paid by the Party effecting the
settlement.
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8. MISCELLANEOUS
8.1. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by overnight courier service, by telecopier, or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
Parties at the following addresses:
(i) If to Licensor:
Unaxis-Management Ltd
Hofwiesenstrasse 135
P.O. Box 2409
8021 Zurich
Switzerland
Attn.: Thomas Emch, General Counsel
Facsimile: (+41) 1 360 96 94
with a copy to:
Shearman & Sterling
Mainzer Landstrasse 16
60325 Frankfurt am Main
Germany
Attn.: Dr. Thomas Konig
Facsimile: (+49) 69-9711 1100
(ii) If to Licensee:
Applied Films Corporation 9586 I-25 East Frontage
Road Longmont, CO 80504 U.S.A.
Attn.: Lawrence Firestone
Facsimile: (+1) 303-774 3251
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with a copy to:
Varnum, Riddering, Schmidt & Howlett LLP
333 Bridge Street, N.W,
P.O. Box 352
Grand Rapids,
Michigan 49501-0352
Attn.: Daniel C. Molhoek
Facsimile: (+1) 616-336 7000
8.2. Headings. The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.3. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to either
Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
8.4. Assignment. Neither Party may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the other
Party, provided that either Party may assign this Agreement to an Affiliate or
to an entity that succeeds to all or substantially all of the assets to which
this Agreement pertains, or in connection with a merger, consolidation, or
reorganization, provided that any such assignees shall agree in writing to be
bound by the terms and conditions of this Agreement. This Agreement shall bind
and inure to the benefit of the Parties hereto and their respective successors
and permitted assigns. No assignment by the Parties permitted hereunder shall
relieve the applicable Party of its obligations under this Agreement.
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8.5. Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any third party any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
8.6. Amendment. This Agreement may not be amended or modified except by an
instrument in writing signed by, or on behalf of, the Parties hereto.
8.7. Governing Law. This Agreement shall be interpreted and governed in
accordance with the laws of Germany.
8.8. Settlement of Disputes. Any differences, questions or disputes arising
out of or in connection with this Agreement shall be attempted to be settled by
an amicable effort on the part of the Parties. Such effort shall be referred to
the Chief Executive Officers of Unaxis and AFC if no agreement has been achieved
within three weeks from the date the first request for an amicable settlement is
raised by one of the Parties. The effort shall be considered to have failed, if
within two weeks after reference to the Chief Executive Officers they have not
resolved the matter amicably.
8.9. If an attempt for a settlement has failed, the differences, questions
or disputes arising out of or in connection with the Agreement, including those
regarding the breach, termination or validity of the Agreement, shall be finally
settled by arbitration in accordance with ICC rules with three arbitrators, the
place of arbitration in Brussels, Belgium, and the language being English,
without recourse to the ordinary courts of law. The appointing authority shall
be the International Chamber of Commerce, Paris (ICC).
8.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
8.11. Waiver. The failure of either Party to enforce at any time for any
period the provisions of or any rights deriving from this Agreement shall not be
construed to be a waiver of such provisions or rights or the right of such Party
thereafter to enforce such provisions, and no waiver shall be binding unless
executed in writing by the Party making the waiver.
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8.12. Entire Agreement. This Agreement constitutes the entire agreement of
the Parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, between the Parties
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be effected
as of the date first written above by their respective duly authorized officers.
LICENSOR
By: /s/ Dr. Joachim Manke
Name: Dr. Joachim Manke
Title:
LICENSEE
By: /s/ Martin Hunstein
Name: Martin Hunstein
Title:
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SCHEDULE 1
Licensed Intellectual Property
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SCHEDULE 2
Licensee Field
i. Architectural glass coating and inline automotive glass coating
ii. Web coating for capacitors and decorative and packaging applications
iii. Diffusion barrier for bottles or containers other than containers for
IT applications
iv. Display coating systems used to coat the non-active portion of a
display, including color filter and related layers, layers used in
passive applications and counter electrode applications in the fields
of PDP, FED, OLED and of other flat panel displays. Seller/Licensor may
enter any area for the thin film transistor related layers one the
active side of the substrate, layers for the emissive elements of a
display or layers used to operate as switch or gate to control a light
passing or emitting process plus non-active layers or displays based on
APS (Advanced Plasma Source) technology.
(It is understood that the business description attached as Annex A 1
to the Share Purchase and Exchange Agreement shall not be relevant for
the Licensee Field.)
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SCHEDULE 3
Licensor Field
i. Dry etch applications such as for Semiconductors, data Storage, Displays,
Optics and ESEC
applications
ii. TFT Displays
iii. Cluster Tools
vi. Stationary Sputtering
::ODMA\PCDOCS\GRR\520880\1
16
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EXHIBIT 2.5
NEWCO INTELLECTUAL PROPERTY LICENSE AGREEMENT
This INTELLECTUAL PROPERTY LICENSE AGREEMENT is made on the 29th day of
December, 2000 by and between Leybold Coating GmbH & Co. KG, a German limited
partnership, having its registered office in Alzenau, Germany (the "Licensor"),
and Balzers Process Systems GmbH, a German limited liability company, having its
registered office in Hanau, Germany (the "Licensee") (each a "Party", and
collectively the "Parties").
WHEREAS, pursuant to that certain Share Purchase and Exchange Agreement
dated October 18, 2000 (the "Share Purchase and Exchange Agreement"), between,
among others, Unaxis Holding AG ("Unaxis") and Applied Films Corporation
("AFC"), the parties thereto determined that it would be appropriate and
desirable for Licensee to contribute, and for Licensor to receive and assume,
directly or indirectly, substantially all of the assets and liabilities
associated with Licensee's LAD Business and the shares, investments or similar
interests currently held by Unaxis in the legal entities that conduct such
business;
WHEREAS, Licensor and Licensee are parties to a Contribution Agreement
(Einbringungsvertrag) dated on the date hereof (the "Contribution Agreement"),
pursuant to which Licensee agreed to contribute to Licensor its LAD Business (as
defined therein), including certain intellectual property rights related to the
LAD Business with effect as of December 31, 2000 (the "Effective Date").
WHEREAS, Licensee shall, pursuant to Paragraph 2.1.2 of the Contribution
Agreement, assign to Licensor certain intellectual property rights used in the
LAD Business.
WHEREAS, Leybold Coating GmbH & Co. KG desires to license such assigned
intellectual property rights to Balzers Process Systems GmbH, subject to the
terms and conditions of this Agreement.
<PAGE>
NOW THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the meanings set forth
below:
1.1 "Affiliate" shall have the meaning as defined inss.ss.15 et seq. of the
German Stock Corporation Act.
1.2 "Improvements" shall mean any findings, discoveries, inventions,
additions, modifications, formulations, variations, enhancements, refinements,
derivative works, developments or changes, whether or not patentable or
copyrightable, made in connection with the Licensed Intellectual Property.
1.3 "Intellectual Property Registrations" shall mean all patents and patent
applications and all trademarks and trademark applications, included in the
Licensed Intellectual Property.
1.4 "Licensed Intellectual Property" shall mean all patents and
applications for any of the foregoing listed in Schedule 1 hereto.
1.5 "Licensor Field" shall mean the field of use defined in Schedule 2.
1.6 "Licensee Field" shall mean the field of use as defined in Schedule 3
1.7 "Outside Field" shall mean any field of use outside of, and not
including, the Licensee Field and the Licensor Field.
1.8 "Person" shall mean and include an individual, sole proprietorship,
partnership, joint venture, corporation, limited liability company, trust,
association, organization and government authority, or any other form of entity.
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2. GRANT OF LICENSE
2.1 License Grant. Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee an irrevocable, royalty-free,
non-transferable (except as provided hereunder) perpetual, worldwide, license
under the Licensed Intellectual Property to make, have made, use, lease, sell
and have sold products and to make Improvements in the Licensee Field and the
Outside Field. For the avoidance of doubt, the license granted under this
Paragraph 2.1 shall not be construed to be grant of any rights in the Licensor
Field, whether by implication or otherwise during the first two (2) years after
the Effective Date. The license granted under this Paragraph 2.1 shall be
exclusive (even as to the Licensor) in the Licensee Field and shall be
non-exclusive in the Outside Field, provided that 2 (two) years after the
Effective Date, the non-exclusive portion of the license shall be expanded to
include the Licensor Field and the Outside Field, and the exclusive portion of
the license shall be non-exclusive, provided that Licensor may only grant a
license to the Licensed Intellectual Property in the Licensee Field to
Licensor's Affiliates, subcontractors and customers.
2.2 Right to Sublicense. Licensee shall have the right to grant sublicenses
of its rights under this Agreement to its Affiliates. All other sublicenses
shall require the consent of Licensor, which, except with respect to sublicenses
in the Licensor Field, shall not be unreasonably withheld. Sublicensees shall
agree in writing to be bound by the terms and conditions of this Agreement.
3. OWNERSHIP
3.1 Ownership. Licensee acknowledges that, as between Licensee and
Licensor, Licensor owns all right, title, and interest in and to the Licensed
Intellectual Property.
3.2 Execution of Documents. Consistent with the terms of this Agreement,
each Party shall perform all lawful acts and execute such instruments as the
other Party may reasonably request to confirm, evidence, maintain or protect
such Party's rights to or under the Licensed Intellectual Property Rights. If
either Party refuses or fails to perform such acts or execute such instruments,
the other Party may do so as attorney-in-fact for such purpose.
3
<PAGE>
3.3 Improvements. All right, title, and interest in and to Improvements
made by Licensor, whether or not patentable, shall be the sole and exclusive
property of Licensor and no license to any such Improvements shall be granted
hereunder. All right, title, and interest in and to Improvements made by
Licensee, whether or not patentable, shall be the sole and exclusive property of
Licensee.
3.4 No Other License. Except as expressly provided in this Agreement,
nothing herein shall be construed as granting Licensee any license or other
rights under any intellectual property of Licensor.
4. REPRESENTATIONS AND WARRANTIES
4.1 Mutual Representations. Each Party, as of the date hereof, represents
and warrants to the other that such Party has the requisite legal and corporate
power and authority to execute and deliver this Agreement and to carry out and
perform all of its obligations hereunder.
4.2 Representation of Licensor. Licensor represents and warrants that it
owns the Licensed Intellectual Property and has the right to license it to the
Licensee, provided that any claim for breach of this representation can only be
made pursuant to and within the limitations of Article 6 of the Share Purchase
Agreement.
4.3 Restriction of Transfer of Licensed Intellectual Property Rights.
Licensor further warrants that it will not transfer or encumber the Licensed
Intellectual Property to any third party which is not an Affiliate of Licensor
throughout the term of this Agreement, unless such third party is an Affiliate
of Licensor or another legal entity succeeding to all or substantially all of
the assets to which this Agreement pertains, provided that such third party
agrees to be bound by the terms of this Agreement..
4.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE
SHARE PURCHASE AND EXCHANGE AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY
HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, WHETHER
EXPRESS OR IMPLIED, WITH REGARD TO THE LICENSED INTELLECTUAL PROPERTY, INCLUDING
BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, VALIDITY OF THE LICENSED
4
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INTELLECTUAL PROPERTY, THAT THE LICENSED INTELLECTUAL PROPERTY CAN BE
SUCCESSFULLY COMMERCIALIZED, OR THAT THE USE OF THE LICENSED INTELLECTUAL
PROPERTY WILL NOT INFRINGE THE INTELLECTUAL PROPERTY OF ANY THIRD PARTY.
4.5 Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
(EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND
REGARDLESS OF THE THEORY OF LIABILITY), ARISING FROM ANY PROVISION OF THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS
OR LOST BUSINESS. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF ANY REMEDY, EXCEPT THAT A CLAIM IS BASED UPON WILLFUL
MISCONDUCT ("Vorsatz").
4.6 Indemnification. Subject to the terms and conditions of this Agreement,
each Party shall compensate the other Party in an amount equal to the damages
suffered by it as a result of the breach of the representations and warranties
under this Agreement.
5. PROSECUTION AND MAINTENANCE
5.1 Licensor to Control. Except as specifically hereafter provided,
Licensor shall prosecute and maintain all Intellectual Property Registrations in
all countries requested by Licensee. At the request of the Licensor, the
Licensee shall provide reasonable cooperation in connection with such
prosecution or maintenance. Licensee shall make available to the Licensor or its
respective authorized attorneys, agents or representatives such of its employees
as the Licensor in its reasonable judgment deems necessary in order to assist
with the prosecution or maintenance of the Intellectual Property Registrations.
Licensee shall sign or use its best efforts to have signed at no charge to the
Licensor all legal documents necessary in connection with such prosecution and
maintenance.
5.2 Updates on Developments. Licensor shall advise Licensee of any
substantial action or development in the prosecution and maintenance of the
Intellectual Property Registrations. Periodically, but at least annually in a
calendar year, Licensor
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<PAGE>
shall advise Licensee in writing of all upcoming deadlines in connection with
the Intellectual Property Registrations. Unless Licensor notifies Licensee as
provided below with respect to taking action in a particular Intellectual
Property Registration, Licensor shall take the required action. If Licensor
fails to take a required action in connection with a particular Intellectual
Property Registration within due time, but in any event, at least within ninety
(90) business days before the non-extendable deadline for taking such action, it
shall so notify Licensee within such time period, and Licensee shall have the
right, but not the obligation, to take the required action which, unless
Licensor has abandoned such Intellectual Property Right under Section 5.3, will
be at the cost and expense Licensor.
5.3 Licensor Abandonment. If Licensor intends to disclaim, dedicate or
otherwise abandon any of the Licensed Intellectual Property in any country
specified by Licensee, Licensor shall notify Licensee thereof in writing, and
upon the written request of Licensee (to be made within thirty (30) days after
receipt of Licensor's notification), Licensor shall assign such Licensed
Intellectual Property in the specified countries to Licensee, provided that
Licensee shall pay all transfer costs, and Licensor shall forfeit its rights
under such intellectual property in such countries. In the event that the
Licensee does not make such a written request within thirty (30) days, the
Licensor shall be entitled to proceed at its sole discretion.
6. ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
6.1 Infringement. In the event that either Party obtains knowledge of any
infringement or misappropriation by a third party of any of the Licensed
Intellectual Property, such Party shall notify the other Party promptly of such
infringement and provide the other Party with any available evidence of such
infringement or misappropriation.
6.2 Enforcement. Licensor shall have the first right, but not the
obligation, to commence, prosecute, and settle or otherwise compromise any
dispute, action, suit, or proceeding involving or against any third party
believed to have infringed or misappropriated any Licensed Intellectual Property
except that Licensor cannot, in any settlement, impair any of Licensee's rights
to the Licensed Intellectual Property in the Licensee Field without approval of
the Licensee; provided, however, if Licensor elects not to commence or prosecute
any action, suit, or proceeding involving or against any
6
<PAGE>
third party believed to have infringed or misappropriated any Licensed
Intellectual Property within sixty (60) days from the notice provided under
Paragraph 6.1, then the Licensee may commence such action, suit or proceeding
under its own discretion and control, except that Licensee cannot, in any
settlement, impair any of Licensor's rights to the Licensed Intellectual
Property without approval of the Licensor.
6.3 Rights and Duties. All costs and expenses of any enforcement action,
suit or proceeding hereunder ("Action") shall be borne by the Party commencing
such Action (the "Commencing Party"). The Parties agree to cooperate with each
other in any Action, in any way reasonably necessary, including being named as a
party to such Action if so requested by the Commencing Party or required by law,
and all reasonable out-of-pocket expenses incurred by the other party (the
"Non-Commencing Party") in connection therewith shall be reimbursed by the
Commencing Party. The Non-Commencing Party shall have the right to participate
and be represented in any such Action by its own counsel at its own expense. The
Non-Commencing Party shall have no claim of any kind against Commencing Party
based on or arising out of the Commencing Party's handling of or decisions
concerning any such Action, and the Non-Commencing Party hereby irrevocably
releases the Commencing Party from any such claim except to the extent the
Commencing Party violated Section 6.2.
6.4 Withdrawal of Enforcement. If either Party brings an Action under this
Section 6 and subsequently ceases to pursue or withdraws from such Action, it
shall promptly notify the other Party and such Party may substitute itself for
the withdrawing Party under the terms of this Section 6.
6.5 Recoveries. All damages or other compensation of any kind recovered in
such Action or from any settlement or compromise brought under this Section 6
shall be for the benefit of the Commencing Party, or in the event of a
participation of the other Party in the Action or of a withdrawal by a Party
under Paragraph 6.4 hereof, shall be allocated first to each party for specific
damages suffered by it and thereafter shall be apportioned between the Parties
in an amount proportional to the amount paid by each Party with respect to its
costs and expenses in bringing such Action.
7
<PAGE>
7. INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS
7.1 Third Party Infringement. With respect to any charges by any third
party of infringement or misappropriation by Licensor or Licensee, and/or any
challenge by any third party of the ownership, validity, or enforceability of
the Licensed Intellectual Property, including cross-claims or counterclaims in
an action, suit or proceeding brought under Section 6, Licensor shall have the
first right at its option to commence, defend, prosecute, and settle or
otherwise compromise any dispute, action, suit, or proceeding involving or
against any such third party concerning such alleged infringement or such
challenge (the "Right to Defend"), and Licensee hereby agrees to be bound by the
outcome of any such action, suit or proceeding or by any settlement or other
compromise for any and all purposes, provided that no settlement shall impair
any right of Licensee in the Licensee Field. All costs and expenses of such
action, suit or proceeding shall be borne by Licensor. Licensee shall have the
right to participate at its own cost in any defense at claims against Licensor.
Any damages or other compensation of any kind recovered in such action, suit, or
proceeding or from any settlement or compromise shall be apportioned between the
Parties as provided in Section 6.5. Licensee agrees to cooperate with Licensor
in any such action, suit or proceeding, in any way reasonably necessary, and all
reasonable out-of-pocket expenses incurred by Licensee in connection therewith
shall be reimbursed by Licensor. Notwithstanding any provision herein to the
contrary, neither party hereto shall be required to incur any expense of any
type in connection with the defense of any Licensed Intellectual Property.
Licensee shall have no claim of any kind against Licensor based on or arising
out of Licensor's handling of or decisions concerning any such action, suit,
proceeding, settlement, or compromise, and Licensee hereby irrevocably releases
Licensor from any such claim, except to the extent Licensor breaches this
Section 7.1.
7.2 Licensor Option. In the event that Licensor shall fail or refuse to
exercise its Right to Defend within fifteen (15) calendar days of the receipt by
Licensor of the written request of Licensee to do so, (i) Licensor's Right to
Defend shall terminate, (ii) Licensee shall thereafter have the sole Right to
Defend and Licensor agrees to cooperate in any such action, in any way
reasonably necessary, including being named as party in any litigation, (iii)
Licensor hereby agrees to be bound by the outcome of any proceeding where
Licensee exercises such Right to Defend, except that no settlement by Licensee
shall compromise the validity and enforceability of any Licensed Intellectual
Property, and (iv) all costs, disbursements and expenses of such proceeding
shall be
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borne by Licensee, and all recoveries shall be apportioned between the parties
as provided for in Section 6.5.
7.3 Settlement. Neither Party shall have the authority to settle any Action
against the other Party without its consent, unless such settlement is
exclusively for money damages which are paid by the Party effecting the
settlement.
8. MISCELLANEOUS
8.1 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by overnight courier service, by telecopier, or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
Parties at the following addresses:
(i) If to Licensor:
Applied Films Corporation
9586 I-25 East Frontage Road
Longmont, CO 80504
U.S.A.
Attn.: Lawrence Firestone
Facsimile: (+1) 303-774 3251
with a copy to:
Varnum, Riddering, Schmidt & Howlett LLP
333 Bridge Street, N.W,
P.O. Box 352
Grand Rapids,
Michigan 49501-0352
Attn.: Daniel C. Molhoek
Facsimile: (+1) 616-336 7000
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(ii) If to Licensee:
Unaxis-Management Ltd
Hofwiesenstrasse 135
P.O. Box 2409
8021 Zurich
Switzerland
Attn.: Thomas Emch, General Counsel
Facsimile: (+41) 1 360 96 94
with a copy to:
Shearman & Sterling
Mainzer Landstrasse 16
60325 Frankfurt am Main
Germany
Attn.: Dr. Thomas Konig
Facsimile: (+49) 69-9711 1100
8.2 Headings. The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.3 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to either
Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
8.4 Assignment. Neither Party may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the other
Party, provided that either Party may assign this Agreement to an Affiliate or
to an entity that
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succeeds to all or substantially all of the assets to which this Agreement
pertains, or in connection with a merger, consolidation, or reorganization,
provided that any such assignees shall agree in writing to be bound by the terms
and conditions of this Agreement. This Agreement shall bind and inure to the
benefit of the Parties hereto and their respective successors and permitted
assigns. No assignment by the Parties permitted hereunder shall relieve the
applicable Party of its obligations under this Agreement.
8.5 Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any third party any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
8.6 Amendment. This Agreement may not be amended or modified except by an
instrument in writing signed by, or on behalf of, the Parties hereto.
8.7 Governing Law. This Agreement shall be interpreted and governed in
accordance with the laws of Germany.
8.8 Settlement of Disputes. Any differences, questions or disputes arising
out of or in connection with this Agreement shall be attempted to be settled by
an amicable effort on the part of the Parties. Such effort shall be referred to
the Chief Executive Officers of Unaxis and AFC if no agreement has been achieved
within three weeks from the date the first request for an amicable settlement is
raised by one of the Parties. The effort shall be considered to have failed, if
within two weeks after reference to the Chief Executive Officers they have not
resolved the matter amicably.
If an attempt for a settlement has failed, the differences, questions or
disputes arising out of or in connection with the Agreement, including those
regarding the breach, termination or validity of the Agreement, shall be finally
settled by arbitration in accordance with ICC rules with three arbitrators, the
place of arbitration in Brussels, Belgium, and the language being English,
without recourse to the ordinary courts of law. The appointing authority shall
be the International Chamber of Commerce, Paris (ICC).
8.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
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8.10 Waiver. The failure of either Party to enforce at any time for any
period the provisions of or any rights deriving from this Agreement shall not be
construed to be a waiver of such provisions or rights or the right of such Party
thereafter to enforce such provisions, and no waiver shall be binding unless
executed in writing by the Party making the waiver.
8.10 Entire Agreement. This Agreement constitutes the entire agreement of
the Parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, between the Parties
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be effected
as of the date first written above by their respective duly authorized officers.
LICENSOR
By: /s/ Martin Hunstein
Name: Martin Hunstein
Title:
LICENSEE
By: /s/ Dr. Joachim Manke
Name: Dr. Joachim Manke
Title:
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SCHEDULE 1
Licensed Intellectual Property
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SCHEDULE 2
Licensor Field
i. Architectural glass coating and inline automotive glass coating
ii. Web coating for capacitors and decorative and packaging applications
iii. Diffusion barrier for bottles or containers other than containers for
IT applications
iv. Display coating systems used to coat the non-active portion of a
display, including color filter and related layers, layers used in
passive applications and counter electrode applications in the fields
of PDP, FED, OLED and of other flat panel displays. Seller/Licensor may
enter any area for the thin film transistor related layers one the
active side of the substrate, layers for the emissive elements of a
display or layers used to operate as switch or gate to control a light
passing or emitting process plus non-active layers or displays based on
APS (Advanced Plasma Source) technology.
(It is understood that the business description attached as Annex A 1
to the Share Purchase and Exchange Agreement shall not be relevant for
the Licensor Field.)
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SCHEDULE 3
Licensee Field
i. Dry etch applications such as for Semiconductors, data Storage, Displays,
Optics and ESEC applications
ii. TFT Displays
iii. Cluster Tools
vi. Stationary Sputtering
::ODMA\PCDOCS\GRR\520863\1
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EXHIBIT 2.6
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
December 31, 2000 by and between APPLIED FILMS CORPORATION , a Colorado
corporation (the "Company"), and BALZERS PROCESS SYSTEMS GmbH, a German limited
liability company ("BPS").
R E C I T A L S
A. This Agreement has been entered into by the Company pursuant to that
certain Share Purchase and Exchange Agreement dated October 18, 2000 among the
Company, BPS and certain other parties thereto (the "Purchase Agreement"). In
connection with the Purchase Agreement, the Company has agreed, upon the terms
and subject to the conditions contained therein, to issue and sell to BPS Six
Hundred Seventy-Three Thousand Three Hundred Fifty-Three (673,353) shares (the
"Shares") of common stock of the Company (the "Common Stock"), subject to
adjustment, as set forth therein.
B. To induce BPS to execute and deliver the Purchase Agreement, the Company
has agreed to provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "Securities Act"), and applicable state
securities laws.
A G R E E M E N T S
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms shall have
the following meanings:
(a) The term "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(b) The term "Holder" means BPS and any transferees or permitted
assignees who agree to become bound by the provisions of this Agreement in
accordance with Article 7.10 hereof.
(c) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and the declaration or
ordering of effectiveness of such Registration Statement by the SEC.
(d) The term "Registrable Securities" means the Shares and any shares
of capital stock or other securities issued or issuable, from time to time
(with any adjustments), on or in exchange for or otherwise with respect to
the Shares or any other Registrable Securities.
(e) The term "Registration Statement" means a registration statement
of the Company under the Securities Act pursuant to the provisions of this
Agreement.
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(f) The term "SEC" means the Securities and Exchange Commission.
(g) The term "Selling Holder" shall mean a Holder selling Registrable
Securities in accordance with the terms of this Agreement.
(h) The term "Rule 144" means Rule 144 (including Rule 144(k)) of the
SEC under the Securities Act or any similar provision promulgated
thereunder.
1.2 Capitalized Terms. Capitalized terms used herein and not otherwise
defined in this Agreement shall have the respective meanings set forth in the
Purchase Agreement.
ARTICLE II
REGISTRATION
2.1 Piggyback Registrations. Holder shall have the following piggyback
registration rights:
(a) If at any time the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering by the
Company for its own account or for the account of any of its
securityholders of Common Stock other than a registration statement on Form
S-4 or S-8 (or F-4 or F-8) (or any substitute form that may be adopted by
the SEC) or any other publicly registered offering pursuant to the
Securities Act pertaining to the issuance of shares of Common Stock or
securities exercisable therefor under any benefit plan, employee
compensation plan, or employee or director stock purchase plan or relating
to equity securities issuable in connection with any asset or business
acquisition, then the Company shall give written notice (the "Notice") of
such proposed filing to the Holders of Registrable Securities as soon as
practicable (but in no event fewer than twenty (20) days before the
anticipated filing date) of its intention to effect such a registration,
which notice shall specify the proposed offering price (if known or, if not
known, an estimate thereof), the kind and number of securities proposed to
be registered, the distribution arrangements and such other information
that at the time would be appropriate to include in such notice. Subject to
Section 2.1(b) hereof, the Company shall include in such registration all
Registrable Securities held by Holder as such Holder may request in writing
within ten (10) business days after receipt of such written notice from the
Company (which request shall specify the Registrable Securities intended to
be disposed of by such Selling Holder and the intended method of
distribution thereof) (a "Piggyback Registration"). Except as may otherwise
be provided in this Article II, Registrable Securities with respect to
which such requests for registration have been received will be registered
by the Company in a Piggyback Registration pursuant to this Article II on
the same terms and subject to the same conditions as are applicable to any
similar securities of the Company included therein.
(b) Notwithstanding anything to the contrary contained in this Section
2.1 the Company may determine not to proceed with the Registration
Statement which is the subject of such notice, provided that it has
determined, in its reasonable discretion, that a change in circumstances
has occurred to the material detriment of the Company or the proposed
offering of securities.
(c) If in any Piggyback Registration, the managing underwriter or
underwriters thereof (or in the case of a Piggyback Registration not being
underwritten, an independent underwriter, of nationally recognized standing
selected by the Company whose fees and expenses shall be borne by the
Company), shall advise the Company in writing that in its or their
reasonable opinion the number of Registrable Securities proposed to be sold
in such Piggyback Registration plus the offering by the Company exceeds the
number that can be sold in such offering without having a material adverse
effect on the success of the offering of securities to be sold in such
offering, including the price at which such
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securities can be sold the Company will be required to include in such
Piggyback Registration only the maximum amount of securities which, in the
opinion of such underwriter or underwriters, can be sold without having
such a material adverse effect on such offering (it being understood that
any reduction in Registrable Securities shall be made pro rata in
proportion to the Registrable Securities held at the time of filing of the
Registration Statement by Selling Holder and other securityholders of the
Company, but no such reduction shall be made in relation to shares to be
registered by the Company).
2.2 Restrictions on Sale by Selling Holder. Each Selling Holder whose
Registrable Securities are covered by a Registration Statement filed pursuant to
Section 2.1 (a "Piggyback Registration Statement") and are to be sold thereunder
agrees, if and to the extent reasonably requested by the managing underwriter or
underwriters in the public offering which is the subject of the Piggyback
Registration Statement, not to effect any public sale or distribution of
Registrable Securities or of securities of the Company of the same class as any
securities included in such Piggyback Registration Statement, including a sale
pursuant to Rule 144 (except as part of such underwritten offering), during the
twenty (20) day period prior to, and the ninety (90) day period beginning on the
closing date of each underwritten offering made pursuant to such Piggyback
Registration Statement, to the extent timely notified in writing by the Company
or such managing underwriter or underwriters.
ARTICLE III
OBLIGATIONS OF THE COMPANY
3.1 Obligations. With respect to any Piggyback Registration, the Company
shall:
(a) prepare and file with the SEC as soon as reasonably practicable a
Registration Statement or Registration Statements relating to the
applicable Registration on any appropriate form under the Securities Act
which shall be available for use in connection with the sale of the
Registrable Securities in accordance with the intended method or methods of
distribution thereof. The Company's obligation under Section 3.1(a) is
subject to the Company's determination, in its sole discretion to abandon
or delay the offering for any reason.
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep each
Registration Statement effective for a period of not more than ninety (90)
days after the date of its effectiveness, or such shorter period as will
terminate when all Registrable Securities covered by such Registration
Statement have been sold. The Company shall cause each prospectus required
in connection therewith (a "Prospectus") to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule
424 under the Securities Act. Furthermore, the Company shall comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable
period, in accordance with the intended method or methods of distribution
by the sellers thereof as set forth in the Registration Statement or
supplement to the Prospectus;
(c) promptly notify Selling Holder of:
(i) the date on which the Prospectus or any Prospectus supplement
or post-effective amendment to the Registration Statement has been
filed, and, with respect to the Registration Statement or any
post-effective amendment, the date on which the same has become
effective;
(ii) any written request by the SEC for amendments or supplements
to the Registration Statement or the Prospectus or for additional
information;
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(iii) the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
(iv) the receipt by the Company of any written request by any
state securities authority for additional information or written
notification with respect to the suspension of the qualification of
the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and
(v) the happening of any event which makes any material statement
made in the Registration Statement, the Prospectus or any document
incorporated therein by reference untrue in any material respect or
which requires the making of any changes in the Registration
Statement, the Prospectus or any document incorporated therein by
reference in order to make the statements therein not misleading in
the light of the circumstances under which they were made;
(d) furnish to Selling Holder, at least one signed copy of the
Registration Statement and any amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference
and, to the extent reasonable, all exhibits (including those incorporated
by reference);
(e) deliver to Selling Holder, upon request, a reasonable number of
copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto; the Company consents to the use, in
accordance with the Securities Act, of each Prospectus or any amendment or
supplement thereto by Selling Holder, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus or any
amendment or supplement thereto;
(f) in connection with any Registration of Registrable Securities and
if required by law, use its best efforts to register or qualify or
cooperate with Selling Holder in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or "blue sky" laws of such jurisdictions the managing
underwriter reasonably requests in writing and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement; provided that the Company will not be required to qualify
generally to do business in any jurisdiction where it is not then so
qualified or to take any action that would subject it to taxation in any
such jurisdiction or to submit to the general service of process in any
such jurisdiction;
(g) cooperate with Selling Holder to facilitate the timely preparation
and delivery of certificates representing the Registrable Securities to be
sold free from any restrictive legends; and cause such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters may request at least two business days prior to any
sale of Registrable Securities to the underwriters;
(h) upon the occurrence of any event contemplated by subparagraph
(ii), (iv) or (v) of paragraph (c) of this Section 3.1, prepare any
required supplement or post effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, the Prospectus
will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(i) no later than the effective date of the applicable Registration
Statement, provide a CUSIP number for all Registrable Securities;
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(j) enter into such agreements (including, as applicable, an
underwriting agreement) and take all such other actions in connection
therewith which are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities, and, in such connection,
whether or not an underwriting agreement is entered into and whether or not
the Registration is an underwritten Registration: (i) obtain "cold comfort"
letters and updates thereof from the Company's accountants addressed to the
underwriters, or if not underwritten, to Selling Holder, such letters to be
in customary form and covering matters of the type customarily covered in
"cold comfort" letters received by underwriters in connection with primary
underwritten offerings; and (ii) deliver such opinions, documents and
certificates as may be reasonably requested by Selling Holder to evidence
compliance with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company. The above shall
be done at each closing under such underwriting or similar agreement as and
to the extent required thereunder;
(k) secure the inclusion to listing of such Registrable Securities on
the NASDAQ National Market or any securities exchange on which the Common
Stock is then listed;
(l) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by each Registration Statement not
later than the effective date thereof and the Company shall cause legal
counsel selected by the Company to comply with any reasonable request of
the transfer agent for the Registrable Securities as promptly as
practicable; and
(m) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, but not later than eighteen (18) months
after the effective date of the Registration Statement, an earnings
statement covering the period of at least twelve (12) months beginning with
the first full month after the effective date of such registration
statement, which earnings statements shall satisfy the provisions of
Section 11(a) of the Securities Act.
3.2 Limitations to Obligations. Subject to the next sentence of this
Section 3.2, the Company shall be entitled to postpone, for a reasonable period
of time, the filing of, or suspend the effectiveness of, any Registration
Statement or amendment thereto, or suspend the use of any Prospectus and shall
not be required to amend or supplement the Registration Statement, any related
Prospectus or any document incorporated therein by reference (other than an
effective Registration Statement being used for an underwritten offering if the
Company in its reasonable judgment believes it may possess material non-public
information on the disclosure of which at that point in time in its reasonable
judgment would have a material adverse effect on the Company or interfere with
any material transaction then being pursued by the Company); provided; that (i)
the duration of such postponement or suspension (a "Suspension Period") may not
exceed more than sixty (60) consecutive days or more than sixty (60) days in the
aggregate in any twelve-month period and (ii) the Company may not effect any
suspension under this Section 3.2 more than three times in any twelve-month
period. Such Suspension Period may be effected only if the Company's board of
directors determines in its good faith that such suspension is in the best
interest of the Company or its shareholders. If the Company shall so postpone
the filing of a Registration Statement it shall, as promptly as possible, notify
the Selling Holders as to such determination, and Selling Holders shall (i) have
the right, in the case of a postponement of the filing or effectiveness of a
Registration Statement, upon the affirmative vote of Selling Holders of not less
than a majority of the Registrable Securities to be included in such
Registration Statement, to withdraw the request for registration by giving
written notice to the Company within ten (10) days after receipt of such notice
or (ii) in the case of a suspension of the right to make sales, receive an
extension of the registration period equal to the number of days of the
suspension.
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3.3 Selling Holders' Obligations. The Company's obligations shall be
subject to the obligations of the Selling Holders, which the Selling Holders
acknowledge, to furnish to the Company in writing and/or orally as the Company
may request in writing, such information regarding such Selling Holder and the
proposed distribution of such Registrable Securities by such Selling Holder as
the Company or any underwriter may from time to time reasonably require or is
otherwise required by law and shall be subject to execution of the Registration
Statement and amendments thereto by the Selling Holder.
3.4 Underwritten Registrations. No Holder of Registrable Securities may
participate in any underwritten registration pursuant to a Registration
Statement filed under this Agreement unless such Holder (a) agrees to (i) sell
such Holder's Registrable Securities on the basis provided in and in compliance
with any underwriting arrangements approved by the Holders of not less than a
majority of the Registrable Securities to be sold thereunder and (ii) comply
with Rules 101, 102 and 104 of Regulation M under the Exchange Act and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
3.5 Rule 144 Information. With a view to making available the benefits of
certain rules and regulations of the SEC which may at any time permit the sale
of the Registrable Securities to the public without registration, at all times
after ninety (90) days after any registration statement covering a public
offering of securities of the Company under the Securities Act shall have become
effective, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act.
(b) use its best efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities
Act and the Exchange Act; and
(c) furnish to each Holder of Registrable Securities forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as
such Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing such Holder to sell any Registrable
Securities without registration.
ARTICLE IV EXPENSES OF REGISTRATION
All expenses incident to the Company's performance of or compliance with
this Agreement ("Registration Expenses"), but excluding fees and expenses of any
law firm(s) retained by the Selling Holder, will be borne by the Company.
Registration Expenses shall include, without limitation, all registration and
filing fees, the fees and expenses of the counsel and accountants for the
Company, all other costs and expenses of the Company incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement (and all amendments and supplements thereto), the costs and expenses
incurred by the Company in connection with the qualification of the Registrable
Securities under the state securities or "blue sky" laws of various
jurisdictions (if any), and all other costs and expenses incurred by the Company
in connection with any Registration hereunder. Notwithstanding the preceding
sentence, Registration Expenses shall not include the costs and expenses of
Selling Holder for underwriters' commissions and discounts, fees and expenses of
any law firm(s) retained by the Selling Holder, brokerage fees and income taxes
with respect to Registrable Securities to be transferred pursuant to the
Registration, all of which shall be paid by Selling Holder.
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ARTICLE V
INDEMNIFICATION AND CONTRIBUTION
In the event any Registrable Securities are included in a Registration
Statement under this Agreement, the parties shall be entitled to indemnity and
contribution in connection with Registrations, as follows:
(a) the Company agrees to indemnify Selling Holder, its directors,
officers, employees and its agents, each person who participates in the
offering of such Registrable Securities, including underwriters (as defined
in the Securities Act) and each person who (within the meaning of the
Securities Act) controls Selling Holder or participating person and hold
them harmless against, all losses, claims, damages, liabilities and
expenses to which they may become subject under the Securities Act or
otherwise, (which, subject to the limitations herein contained, shall
include reasonable attorneys' fees) resulting from (i) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any amendment or
supplement thereto or based upon 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 under which they were
made, not misleading (except insofar as the same are caused by any such
untrue statement or alleged untrue statement or omission or alleged
omission being based upon or contained in any information relating to
Selling Holder furnished in writing to the Company by Selling Holder or its
representatives expressly for use therein, or (ii) the Company's failure to
perform its obligations under this Article V;
(b) in connection with any Registration in which Selling Holder is
participating, Selling Holder will furnish to the Company in writing such
information with respect to Selling Holder as the Company reasonably
requires for use in connection with any Registration Statement or
Prospectus or any amendment or supplement thereto, and Selling Holder shall
indemnify the Company, its directors and officers, each underwriter and
each person who (within the meaning of the Securities Act) controls the
Company or any such underwriter, and hold them harmless, against any
losses, claims, damages, liabilities and expenses to which they may become
subject under the Securities Act or otherwise (which, subject to the
limitations herein contained, shall include reasonable attorneys' fees)
resulting from (i) any untrue statement or alleged untrue statement of a
material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements in the Registration
Statement or Prospectus or preliminary Prospectus or any amendment or
supplement thereto, in light of the circumstances under which they were
made, not misleading, to the extent (but only to the extent) that such
untrue statement or omission is contained in any information relating to
Selling Holder so furnished in writing by Selling Holder or its
representative specifically for inclusion therein, or (iii) Selling
Holder's failure to perform its obligations under this Article V; provided,
however, that the liability of the Selling Holder hereunder shall be
limited to the proportion of any such loss, claim, damage, liability and
expense which is equal to the proportion that the net proceeds from the
sale of the Registrable Securities sold by Selling Holder under such
Registration Statement bears to the total net proceeds from the sale of all
securities sold thereunder, but not in any event to exceed the net proceeds
received by Selling Holder from the sale of Registrable Securities covered
by such Registration Statement. The Company and Selling Holder shall be
entitled to receive customary indemnities from underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, with respect to information with respect
to such persons so furnished in writing by such persons or their
representatives specifically for inclusion in any Prospectus or
Registration Statement;
(c) any Person entitled to indemnification hereunder will:
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(i) give prompt written notice to the indemnifying party after
the receipt by the indemnified party of a written notice of the
commencement of any action, suit, proceeding or investigation or any
threat thereof made in writing for which such indemnified party will
claim rights of indemnification or contribution pursuant to this
Article V; provided, however, that the failure of any indemnified
party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under paragraphs (a) and (b)
next above, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice; and
(ii) unless in such indemnified party's reasonable judgment a
conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such
indemnifying party to unconditionally (but subject to the exceptions
herein contained) assume the defense of and settle such claim with
counsel reasonably satisfactory to the indemnified party.
If the defense is so assumed by the indemnifying party, the indemnifying party
shall lose its right to defend and settle the claim if it fails to proceed
diligently and in good faith with the defense of the claim. If the defense of
the claim is not so assumed by the indemnifying party, or if the indemnifying
party shall lose its right to defend and settle the third party claim as
provided in the previous sentence, the indemnified party shall have the right to
defend and settle the claim provided that the indemnified party gives the
indemnifying party not less than ten (10) days prior written notice of any
proposed settlement. If the defense is assumed by the indemnifying party and is
not lost as provided above, subject to the provisions of the following sentence,
the indemnifying party shall have the right to defend and settle the claim.
Notwithstanding the preceding sentence, in connection with any settlement
negotiated by a party pursuant to this Article V(c) (a "Settling Party"), the
Settling Party shall not (x) enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
other party and the Company of a release from all liability in respect of such
claim or litigation, (y) enter into any settlement that attributes by its terms
liability to the other party and the Company, or (z) consent to the entry of any
judgment that does not include as a term thereof a full dismissal of the
litigation or proceeding with prejudice. An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel in any one
jurisdiction for all parties indemnified by such indemnifying party with respect
to such claim;
(d) if for any reason the rights of indemnification provided for in
paragraphs (a) and (b) of this Article V are unavailable to an indemnified
party as contemplated by such paragraphs (a) and (b), then the indemnifying
party in lieu of indemnification shall contribute to the amount paid or
payable by the indemnified party (which, subject to the limitation provided
in paragraph (c) next above, shall include legal fees and expenses paid) as
a result of such loss, claim, damage, liability or expense (i) in such
proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party as well as other equitable
considerations, or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnified party
and the indemnifying party, but also the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant equitable
considerations;
(e) the Company and Selling Holder agree that it would not be just and
equitable if contribution pursuant to paragraph (d) next above were
determined by pro rata allocation or other method of allocation which does
not take account of equitable considerations. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person not
guilty of such misrepresentation; and
(f) if indemnification is available under this Article V, the
indemnifying parties shall indemnify each indemnified party to the full
extent provided in paragraphs (a) and (b) hereof without
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regard to (x) the relative fault of, and the relative benefit received by,
the indemnifying party or indemnified party or (y) any other equitable
considerations.
ARTICLE VI
AMENDMENT OF REGISTRATION RIGHTS
Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with written consent of the Company and BPS.
ARTICLE VII MISCELLANEOUS
7.1 A person or entity is deemed to be a Holder (or a holder in interest)
of Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
7.2 All notices and other communications given to or made upon any party
hereto in connection with this Agreement shall, except as otherwise expressly
herein provided, be in writing (including telexed or telecopied communication)
and mailed, telexed, telecopied or delivered by hand or by reputable overnight
courier service to the respective parties, as follows:
If to the Company: Applied Films Corporation
9586 I-25 Frontage Road
Longmont, CO 80504
Attn: Thomas T. Edman, President and CEO
Telecopy: (303) 678-8275
With a copy to: Varnum, Riddering, Schmidt & Howlett LLP
333 Bridge Street, N.W.
Grand Rapids, MI 49501 (49504 for overnight)
Attn: Daniel C. Molhoek, Esq.
Telecopy: (616) 336-7000
If to the Holder: Balzers Process Systems
Holwlesenstrasse 135
P.O. Box 2309
CH-8021
Zurich
Attn: Thomas Emch
Telecopy: _________
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With a copy to: Mainzer Landstrasse 16
60325 Frankfurt am Main
Federal Republic of Germany
Attn: Thomas Koenig
Telecopy: (49 69) 9711 1100
or in accordance with any subsequent written direction from the recipient party
to the sending party or, if to a Holder other than BPS, at such address as such
Holder shall have provided in writing to the Company. All such notices and other
communications shall, except as otherwise expressly herein provided, be
effective upon delivery if delivered by hand; when deposited with a reputable
courier service, delivery charges prepaid; when deposited in the mail, postage
prepaid; or in the case of electronic mail, telex or telecopy, when sent with
confirmation.
7.3 Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
7.4 THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE DEEMED TO BE CONTRACTS UNDER THE LAWS OF THE STATE OF
COLORADO AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF
COLORADO OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF COLORADO.
THE COMPANY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF COLORADO AND AGREES THAT ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS.
THE COMPANY ACCEPTS THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY. THE COMPANY DESIGNATES AND APPOINTS THE CORPORATION
SERVICE COMPANY, AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY THE
COMPANY WHICH IRREVOCABLY AGREES IN WRITING PURSUANT TO AN APPOINTMENT OF AGENT
AGREEMENT TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY THE COMPANY TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL
TO THE COMPANY AT THE ADDRESS STATED IN SECTION 8.2; PROVIDED, HOWEVER, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY THE COMPANY
REFUSES TO ACCEPT SERVICE, THE COMPANY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF BPS TO
BRING PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER JURISDICTION.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER IN CONTRACT, TORT
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OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT. EACH OF
THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF TRIAL BY JURY.
7.5 This Agreement (including all schedules and exhibits thereto and all
certificates and opinions required thereby) constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
7.6 This Agreement shall inure to the benefit of and be binding upon the
successors and any permitted assigns of each of the parties hereto.
7.7 The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
7.8 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto, by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
7.9 Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
7.10 The registration rights of Holder under this Agreement with respect to
any Registrable Securities may be transferred; provided, however, that (i) the
transferring Holder shall give the Company written notice at or prior to the
time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights under this Agreement
are being transferred; (ii) such transferee shall agree in writing, in form and
substance reasonably satisfactory to the Company, to be bound as Holder by the
provisions of this Agreement; and (iii) immediately following such transfer the
further disposition of such securities by such transferee is restricted under
the Securities Act. Except as set forth in this Section 7.10, no transfer of
Registrable Securities shall cause such Registrable Securities to lose such
status.
7.11 In the event Holder shall sell or otherwise transfer any of such
Holder's Registrable Securities, each transferee shall be allocated a pro rata
portion of the number of Registrable Securities included on a Registration
Statement for such transferor.
7.12 Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law in any jurisdiction, such provision shall be ineffective only to
the extent such prohibition or invalidity, without invalidating any other
provision of this Agreement.
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
BALZERS PROCESS SYSTEMS GmbH
By: /s/ Dr. Joachim Manke
Name: Dr. Joachim Manke
Its:
Applied Films Corporation
By: /s/ Lawrence D. Firestone
Lawrence D. Firestone
Its: Chief Financial Officer
::ODMA\PCDOCS\GRR\520907\1
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EXHIBIT 99.1
Applied Films Corporation Completes Acquisition Of the Large Area Coatings
Division of Unaxis Holding Ltd
LONGMONT, Colo., Jan. 2 /PRNewswire/ -- Applied Films Corporation (Nasdaq:
AFCO), today announced the completion of its acquisition of the Large Area
Coatings (LAC) Division of Unaxis Holding Ltd. on December 31, 2000.
Based in Alzenau, Germany, the LAC Division is a market leader in thin film
deposition equipment in four distinct and independent markets including flat
panel display, PET bottles, web coaters and architectural glass coaters. The
transaction includes both cash and stock is expected to be accretive in Applied
Films fiscal year ended June 2001. The purchase price for the LAC Division was
$60 million in cash and 673,353 shares of Applied Films common stock, subject to
certain post-closing adjustments.
Thomas Edman, Chief Executive Officer of Applied Films Corporation, stated, "The
LAC acquisition strengthens our ability to address the entire flat panel display
market with thin film coating solutions. It also brings us tremendous
opportunities in web coater, barrier coating and glass coating equipment
markets. We are particularly excited about the Bestpet(TM) barrier coating
project between LAC, Coca-Cola and Krones. This project involves the sale of
equipment for the coating of barrier layers on PET plastic bottles for use in
soda, beer and other packaging applications to prolong shelf life. This
improvement of barrier performance opens up markets for PET plastic packaging in
hotter climates as a replacement for glass. The Bestpet(TM) application is one
of many examples of the true technological strength which LAC brings to Applied
Films."
"The acquisition underscores our commitment to growth in the equipment side of
our business by adding over 110 technical people with advanced degrees, access
to over 200 patents, critical mass in worldwide service and support and a large
equipment backlog to Applied Films. We will now have approximately 550 employees
worldwide, with 350 of those located in Germany." About Applied Films
Corporation
Applied Films Corporation is a leading supplier of thin film coated glass and
physical vapor deposition (PVD) equipment to the information technology
industry, particularly the flat panel display (FPD) industry, roll coaters for
use in the deposition of capacitor and barrier films and large glass coaters for
the production of thin films used in the architectural and automotive
industries. Flat panel displays are found in a wide variety of consumer and
industrial products, including cellular telephones, calculators, pagers, video
games, office products, and laptop computers. FPDs have also been identified as
a potential replacement for the CRT in televisions and computer monitors.
Founded in 1976, the Company currently has approximately 550 employees at its
headquarters in Longmont, Colorado, and operations in Alzenau and Hanau Germany;
Brussels, Belgium; Hong Kong and Shanghai, China; Seoul, Korea; Tokyo and Osaka,
Japan; and Taipei, Taiwan. For more information, access Applied Films' web site
at http://www.appliedfilms.com. Safe Harbor Statement
This press release contains forward-looking statements that involve substantial
risks and uncertainties. Typically, these statements contain words such as
"anticipate," "believe," "could," "estimate," "expect," "intend," "may,"
"should," "will" and "would" or similar words. You should read statements that
contain these words carefully because they discuss our future expectations,
contain projections of our future results of operations or of our financial
position or state other "forward-looking" information. You are cautioned that
forward-looking statements, including statements regarding intent, belief or
current expectations of the Company or its management are not guaranties of
future performance. Actual results may differ materially from such expectations.
There may be events in the future that we are not able to predict or control.
Such risks and uncertainties include the effect of changing worldwide economic
conditions, including those in Asia, the effect of overall market conditions,
product demand and market acceptance risks, risks associated with dependencies
on suppliers, the impact of competitive products and pricing, technological and
product development risks and other risk factors. As a result, the Company's
operating results may fluctuate, especially when measured on a quarterly basis.
For further information, refer to the Company's Securities and Exchange
Commission filings, including the Company's Registration Statement on Form S-1,
Form 10-K and Forms 10-Q.
For more information, access Applied Films' web site at
http://www.appliedfilms.com
/CONTACT: Thomas Edman, President, Chief Executive Officer, or Lawrence
Firestone, Chief Financial Officer of Applied Films Corporation, 303-774-3246/
