<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) JUNE 11, 1998
------------------------------
ULTRATECH STEPPER, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 0-22248 94-3169580
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3050 ZANKER ROAD, SAN JOSE, CALIFORNIA 95134
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 321-8835
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On June 11, 1998, Ultratech Stepper, Inc., a Delaware corporation
("Ultratech"), through its wholly-owned subsidiary, Ultratech Acquisition Sub,
Inc. ("Ultratech Sub") purchased substantially all of the assets and assumed
certain liabilities of Integrated Solutions, Inc., a Delaware corporation,
("ISI") and ISI's wholly-owned subsidiary Integrated Acquisition Corp., a
Delaware corporation ("IAC") (the "Asset Purchase") pursuant to an Asset
Purchase Agreement, by and among Ultratech, Ultratech Sub, ISI and IAC dated as
of May 19, 1998.
The assets acquired in the Asset Purchase include (1) machinery,
equipment, instruments, computer hardware and software, tooling, furniture,
fixtures, motor vehicles, supplies, repair and maintenance parts,
demonstration units, and other fixed assets, together with manufacturer or
vendor warranties associated therewith; (2) inventory; (3) rights under
agreements, contracts, licenses, leases, franchises, instruments, documents,
purchase and sale orders and other executory commitments; (4) interests in
real property and all buildings, facilities, and other improvements located
thereon; (5) all right, title and interest to intellectual property; (6) all
accounts and notes receivable and prepaid expenses of ISI as of June 11,
1998; (7) all original books or duplicates thereof of account, general
ledgers, sales invoices, purchase orders, accounts payable and payroll
records, tax returns and supporting schedules, drawings, files, papers, and
all other records; (8) all rights under express or implied warranties from
suppliers of ISI; (9) certain of ISI's causes of action, judgments, and
claims or demands of whatever kind or description; (10) goodwill; (11)
leasehold interests; (12) insurance policies; (13) certain assets of ISI on
the balance sheet of ISI as of June 11, 1998; (14) all issued and outstanding
capital stock of ISI Korea Ltd., a corporation organized under the laws of
South Korea ("Korea Sub") and Integrated Semiconductor Solutions, Ltd., a
corporation organized under the laws of the United Kingdom ("UK Sub"); and
(15) all assets of any subsidiary of ISI other than the Korea Sub and the UK
Sub. Certain assets of ISI and IAC have been excluded from the transaction.
ISI's primary facilities were located in Tewksbury, Massachusetts. The
consideration for the purchase consisted of certain assumed liabilities and a
payment of Twenty Million Dollars ($20,000,000) to Bank One, Texas, N.A., a
national banking association, Banc One Leasing Corporation, a Texas
corporation and Imperial Bank, a California bank, for the benefit of ISI.
The source of the cash consideration was working capital. The amount of
consideration was determined by arms-length negotiation among the parties.
The acquisition will be accounted for by Ultratech using the purchase method
of accounting. Ultratech expects to recognize a charge for acquired
in-process research and development for the quarter ending June 30, 1998. The
description of this agreement set forth herein does not purport to be
complete and is qualified in its entirety to the provisions of the definitive
agreement which is filed as Exhibit 7(c)(2.1) of this report and is
incorporated herein by reference.
(b) Prior to the Asset Purchase, ISI was mainly in the business of
manufacturing i-line and deep ultra violet (UV) reduction lithography systems.
Ultratech intends to continue to manufacture reduction lithography systems.
2.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. As of the date of filing
of this Form 8-K, there are no audited financial statements available relating
to ISI and IAC that would meet the rules required by this form. KPMG, together
with the assistance of Ernst & Young LLP, is currently preparing audited
financial statements of ISI and IAC for Ultratech. These audited financials
will be filed as an amendment to this Form 8-K as soon as practicable.
(b) PRO FORMA FINANCIAL INFORMATION. Pro forma financial information is
currently being prepared and will be filed as an amendment to this Form 8-K as
soon as practicable.
(c) EXHIBITS. The following documents are filed as exhibits to this
report:
1. Exhibit 7(c)(2.1) - Asset Purchase Agreement, dated May 19, 1998,
by and among Ultratech, Ultratech Sub, ISI and IAC (all exhibits and
schedules are immaterial and have been excluded; such exhibits and
schedules will be furnished supplementally upon request by the Securities
and Exchange Commission).
2. Exhibit 7(c)(99.1) - Press Release, dated May 19, 1998, issued by
Ultratech announcing the execution of the Asset Purchase Agreement.
3. Exhibit 7(c)(99.2) - Press Release, dated June 11, 1998, issued
by Ultratech announcing the completion of Ultratech's acquisition of ISI
and IAC.
3.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Ultratech Stepper, Inc.
(Registrant)
Date: June 26, 1998 By: /s/ William G. Leunis, III
-----------------------------------
Name: William G. Leunis, III
---------------------------------
Title: Senior Vice President Finance and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial and
Accounting Officer)
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EXHIBIT INDEX
EXHIBIT
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2.1 Asset Purchase Agreement, dated May 19, 1998, by and
among Ultratech, Ultratech Sub, ISI and IAC (all exhibits
and schedules are immaterial and have been excluded; such
exhibits and schedules will be furnished supplementally
upon request by the Securities and Exchange Commission).
99.1 Press Release, dated May 19, 1998, issued by Ultratech
announcing the signing of the Asset Purchase Agreement.
99.2 Press Release, dated June 11, 1998, issued by Ultratech
announcing the completion of Ultratech's acquisition of
ISI and IAC.
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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
<PAGE>
EXHIBIT 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
by and among
Ultratech Stepper, Inc., a Delaware corporation,
Ultratech Acquisition Sub, Inc., a Delaware corporation,
Integrated Solutions, Inc., a Delaware corporation, and
Integrated Acquisition Corp.
Dated as of May 19, 1998
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Description of Assets to be Acquired . . . . . . . . . . . . . 1
Section 1.2 Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3 Non-Assignment or Subcontracting of Certain Assets . . . . . . 3
Section 1.4 U.K. Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II LIABILITIES OF SELLER. . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1 Assumption of Liabilities. . . . . . . . . . . . . . . . . . . 4
Section 2.2 Liabilities Not Assumed. . . . . . . . . . . . . . . . . . . . 4
ARTICLE III PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.1 Consideration. . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2 Payment of Purchase Price. . . . . . . . . . . . . . . . . . . 5
Section 3.3 Allocation of Purchase Price . . . . . . . . . . . . . . . . . 5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ULTRATECH AND
PURCHASER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER. . . . . . . . . . . . . . . . 6
Section 5.1 Organization; Good Standing; Power . . . . . . . . . . . . . . 6
Section 5.2 Authorization of Seller and IAC. . . . . . . . . . . . . . . . 6
Section 5.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . 7
Section 5.4 Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.5 Absence of Certain Changes and Events. . . . . . . . . . . . . 7
Section 5.6 Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . 9
Section 5.7 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.8 Accounts and Notes Receivable. . . . . . . . . . . . . . . . . 9
Section 5.9 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.11 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 11
Section 5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.13 Products . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.14 Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.15 Restrictive Documents or Orders. . . . . . . . . . . . . . . . 14
Section 5.16 Contracts and Commitments. . . . . . . . . . . . . . . . . . . 15
Section 5.17 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.18 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.19 Product Warranties and Product Liability . . . . . . . . . . . 16
Section 5.20 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.21 No Conflict or Default . . . . . . . . . . . . . . . . . . . . 16
Section 5.22 Seller Financial Condition . . . . . . . . . . . . . . . . . . 17
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Section 5.23 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.24 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 18
Section 5.25 Brokers' and Finders' Fees/Contractual Limitations . . . . . . 18
Section 5.26 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 19
Section 5.27 Certain Payments . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.28 Books and Records. . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.29 Complete Disclosure. . . . . . . . . . . . . . . . . . . . . . 20
Section 5.30 Backlog. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.31 Customers and Suppliers. . . . . . . . . . . . . . . . . . . . 20
Section 5.32 Breach of Representations and Warranties . . . . . . . . . . . 20
Section 5.33 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.1 Maintenance of Business. . . . . . . . . . . . . . . . . . . . 21
Section 6.2 Access to Information. . . . . . . . . . . . . . . . . . . . . 21
Section 6.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.4 Releases and Waivers . . . . . . . . . . . . . . . . . . . . . 22
Section 6.5 Meeting of Stockholders. . . . . . . . . . . . . . . . . . . . 22
Section 6.6 HSR Act Filings. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.7 Employment Offers. . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.8 COBRA; 401(k) Plan . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.9 Other Discussions. . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.10 Bulk Transfer Laws . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.11 Mail and Receivables Payments. . . . . . . . . . . . . . . . . 24
Section 6.12 Notification of Certain Matters. . . . . . . . . . . . . . . . 24
Section 6.13 Further Action . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.14 Covenants Against Disclosure . . . . . . . . . . . . . . . . . 24
Section 6.15 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.16 Cooperation by Seller. . . . . . . . . . . . . . . . . . . . . 24
Section 6.17 Dissolution of Seller and Certain Subsidiaries; Stock of
Korea Sub . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.18 Indemnification of Seller Officers and Directors . . . . . . . 25
ARTICLE VII CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.1 Time of Closing. . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . 25
Section 7.3 Deliveries by Purchaser and Ultratech. . . . . . . . . . . . . 26
Section 7.4 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VIII SETTLEMENT AND GENERAL RELEASE . . . . . . . . . . . . . . . . . . . 27
Section 8.1 Settlement and General Release . . . . . . . . . . . . . . . . 27
ii.
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ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS. . . . . . . . . . . . . . . . . . 28
Section 9.1 Conditions to Obligations of Purchaser and Ultratech . . . . . 28
(a) Representations and Warranties. . . . . .. . . . . . . . . . . 28
(b) Performance of Agreement. . . . . . . . . . . . . . . . . . . .28
(c) No Material Adverse Change. . . . . . . . . . . . . . . . . . .28
(d) Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(e) Absence of Governmental Objection . . . . . . . . . . . . . . 28
(f) Evidence of Title . . . . . . . . . . . . . . . . . . . . . . 28
(g) Certificate of President. . . . . . . . . . . . . . . . . . . 29
(h) Approval of Documentation . . . . . . . . . . . . . . . . . . 29
(i) Execution of Related Agreements . . . . . . . . . . . . . . . 29
(j) Release and Waivers . . . . . . . . . . . . . . . . . . . . . 29
(k) Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(l) HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(m) Assignment of Contracts . . . . . . . . . . . . . . . . . . . 29
(n) Approval of the Lenders and Citicorp. . . . . . . . . . . . . 29
(o) Employment of Employees . . . . . . . . . . . . . . . . . . . 29
(p) Side Letter with Bank . . . . . . . . . . . . . . . . . . . . 29
(q) Disclosure Letter and Schedules . . . . . . . . . . . . . . . 30
Section 9.2 Conditions to Obligations of Seller. . . . . . . . . . . . . . 30
(a) Representations and Warranties. . . . . . . . . . . . . . . . 30
(b) Execution of Related Agreements . . . . . . . . . . . . . . . 30
(c) Absence of Governmental Objection . . . . . . . . . . . . . . 30
(d) HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(e) Performance of Agreement. . . . . . . . . . . . . . . . . . . 30
(f) Certificate of President. . . . . . . . . . . . . . . . . . . 30
(g) Approval of Documentation.. . . . . . . . . . . . . . . . . . 31
(h) Approval of the Lenders and Citicorp. . . . . . . . . . . . . 31
ARTICLE X INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.1 Survival of Representations, Warranties, Covenants
and Agreements. . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.3 Procedure for Indemnification with Respect to Third-Party
Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 10.4 Procedure For Indemnification with Respect to Non-Third
Party Claims. . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10.5 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XI TERMINATION AND ABANDONMENT. . . . . . . . . . . . . . . . . . . . . . 33
Section 11.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 11.2 Procedure and Consequences of Termination. . . . . . . . . . . 34
iii.
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ARTICLE XII MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 34
Section 12.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 12.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 35
Section 12.3 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . 35
Section 12.4 Expenses of Transaction; Taxes . . . . . . . . . . . . . . . . 35
Section 12.5 Waiver; Consent. . . . . . . . . . . . . . . . . . . . . . . . 35
Section 12.6 Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . . 36
Section 12.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 12.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 12.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 12.10 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . 36
Section 12.11 Cooperation and Records Retention. . . . . . . . . . . . . . . 36
Section 12.12 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
iv.
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EXHIBITS
<TABLE>
<S> <C>
4.2(a)(i) and (ii) Form of Employment Agreements for Ellery Buchanan and
Larry Thompson
7.2(a) Bill of Sale for the Assets
7.2(b) Opinion of Stroock & Stroock & Lavan LLP
7.2(d) Affidavit of Foreign Status
7.3(c) Opinion of Brobeck, Phleger & Harrison LLP
7.3(d) Assignment and Assumption Agreement
8.1 Form of Release
</TABLE>
SCHEDULES
<TABLE>
<S> <C>
1.1(a) List of Equipment
1.1(b) List of Inventory
1.1(c) List of Contracts
1.1(d) List of Real Property
1.1(e) List of Proprietary Rights
1.1(f) List of Accounts, Notes Receivable and Prepaid Expenses
1.1(k) List of Leasehold Interests
1.1(l) List of Insurance Policies
1.2 List of Excluded Assets
2.1 Assumed Liabilities
5.6 List of Creditors and Employees
5.12 Consents
6.4 Releases and Waivers of Creditors and Employees
</TABLE>
ATTACHMENT
Disclosure Letter
v.
<PAGE>
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is dated as of May 19, 1998 by and among Ultratech
Stepper, Inc., a Delaware corporation ("Ultratech"), Ultratech Acquisition Sub,
Inc., a Delaware corporation ("Purchaser"), Integrated Solutions, Inc., a
Delaware corporation ("ISI" or "Seller") and Integrated Acquisition Corp., a
Delaware corporation ("IAC").
WHEREAS, Seller is engaged in, among other things, the business of
designing, manufacturing, marketing, selling and servicing reduction stepper
photolithography equipment and other non-lithography assets, principally prober
and tracker assets, for the semiconductor and related industries (the
"Business"); and
WHEREAS, Purchaser desires to acquire from Seller and IAC and Seller
and IAC desire to transfer to Purchaser the Assets set forth on the Schedules
described under Section 1.1 below (which assets, properties and rights
constitute substantially all of the assets of Seller and its subsidiaries), upon
the terms and conditions of this Agreement;
WHEREAS, Ultratech and Purchaser believe that the combination of
Seller's technology and assets with the technology, assets, intellectual
property and personnel resources of Ultratech and Purchaser will create certain
synergies that will facilitate the success of such combined assets and
technologies in the marketplace;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
SECTION 1.1 DESCRIPTION OF ASSETS TO BE ACQUIRED. Upon the terms
and subject to the conditions set forth in this Agreement, at the Time of
Closing (as defined in Section 7.1), Seller and IAC agree to convey, sell,
transfer, assign, and deliver to Purchaser, and Purchaser shall purchase from
Seller and IAC, all right, title, and interest of Seller, IAC and Seller's
other subsidiaries at the Time of Closing in and to the assets, properties, and
rights of the Business of every kind, nature, and description, personal,
tangible and intangible, known or unknown, wherever located, including, without
limiting the generality of the foregoing (but excluding the "Excluded Assets,"
as such term is defined in Section 1.2 below):
(a) All interests in machinery, equipment, instruments, computer
hardware and software, tooling, furniture, fixtures, motor vehicles, supplies,
repair and maintenance parts, demonstration units, and other fixed assets,
together with manufacturer or vendor warranties associated therewith, including,
without limitation, those interests listed on SCHEDULE 1.1(a) hereto;
<PAGE>
(b) All inventories of raw materials (together with any manufacturer
or vendor warranties associated therewith), works-in-process, finished goods and
supplies, including scrapwork and rework, including, without limitation, those
listed on SCHEDULE 1.1(b) hereto (collectively, the "Inventory");
(c) All claims and rights under those agreements, contracts,
licenses, leases, franchises, instruments, documents, purchase and sale orders
and other executory commitments, and all permits, consents, and certificates of
any regulatory, administrative or other governmental agency or body listed on
SCHEDULE 1.1(c) hereto (collectively, the "Contracts");
(d) All interests in the real property listed on SCHEDULE 1.1(d)
hereto, and all buildings, facilities, and other improvements located thereon
(including construction in progress), together with all related rights,
easements and uses which benefit or burden any such property (collectively, the
"Real Property");
(e) All right, title and interest to trademarks, trademark rights,
service marks, service mark rights, copyrights, trade names, trade name rights,
fictitious business names, works of authorship, inventions, industrial models,
industrial designs, utility models and certificates of invention, designs,
emblems and logos, trade secrets, know-how, manufacturing formulae, technical
information, patents, patent applications, mask work registrations, inventions,
franchises, franchise rights, customer and supplier lists together with the
goodwill associated therewith and other proprietary rights (collectively, the
"Proprietary Rights"), including without limitation those listed on
SCHEDULE 1.1(e) hereto;
(f) All accounts and notes receivable and prepaid expenses of Seller
as of the Time of Closing listed on SCHEDULE 1.1(f) hereto (collectively, the
"Accounts"), including any tax receivable of Seller or any of its subsidiaries
based on current and prior operating losses or otherwise (collectively, the "Tax
Receivable");
(g) All original books or duplicates thereof of account, general
ledgers, sales invoices, purchase orders, accounts payable and payroll records,
tax returns and supporting schedules, drawings, files, papers, and all other
records (the "Records");
(h) All rights under express or implied warranties from suppliers of
Seller;
(i) All of Seller's causes of action, judgments, and claims or
demands of whatever kind or description arising out of or relating to the
Business;
(j) All goodwill of the Business (the "Goodwill");
(k) All leasehold interests of Seller listed on SCHEDULE 1.1(k)
hereto ("Leasehold Interests");
2.
<PAGE>
(l) The insurance policies of Seller, together with all proceeds
thereof and rights thereunder listed on SCHEDULE 1.1(l) hereto;
(m) The current assets of Seller as of the Time of Closing in the
categories that appear on the most recent balance sheet of Seller in form
substantially similar to the balance sheet of Seller as of March 28, 1998,
including, without limitation, all cash, lease and rent deposits, prepaid
expenses, prepaid taxes, bank accounts and all other current assets of Seller
(the "Current Assets");
(n) All issued and outstanding shares of the capital stock of ISI
Korea Ltd., a corporation organized under the laws of South Korea (the "Korea
Sub") and subject to Section 1.4, all issued and outstanding shares of capital
stock of Integrated Semiconductor Solutions Ltd., a corporation organized under
the laws of the United Kingdom (the "U.K. Sub"); and
(o) All the assets of any subsidiary of Seller.
The assets, properties, and rights to be conveyed, sold, transferred,
assigned, and delivered to Purchaser pursuant to this Section 1.1 are sometimes
hereinafter collectively referred to as the "Assets."
SECTION 1.2 EXCLUDED ASSETS. Notwithstanding the provisions of
Section 1.1 hereof, the assets to be transferred to Purchaser pursuant to this
Agreement shall not include those assets specifically listed on SCHEDULE 1.2
(collectively, the "Excluded Assets").
SECTION 1.3 NON-ASSIGNMENT OR SUBCONTRACTING OF CERTAIN ASSETS.
Notwithstanding anything to the contrary in this Agreement, to the extent that
the assignment or subcontracting hereunder of any of the Assets shall require
the consent of any other party (or in the event that any of the same shall be
nonassignable or unable to be subcontracted), neither this Agreement nor any
action taken pursuant to its provisions shall constitute an assignment or
subcontract or an agreement to assign or subcontract if such assignment or
subcontract or attempted assignment or subcontract would constitute a breach
thereof or result in the loss or diminution thereof; provided, however, that in
each such case, Seller shall use its best efforts to obtain the consent of such
other party to an assignment to Purchaser. If such consent is not obtained by
the Time of Closing, Seller shall cooperate with Purchaser in any arrangement
designed for Purchaser to perform Seller's obligations with respect to such
Asset after the Time of Closing and for Purchaser to receive the benefits under
any such Asset after the Time of Closing, which arrangements may include
enforcement, for the account and benefit of Purchaser, of any and all rights of
Seller against any other person arising out of the breach or cancellation by
such other person or otherwise, all of such actions of Seller to be at the
direction and expense of Purchaser.
SECTION 1.4 U.K. SUB. Notwithstanding anything to the contrary in
this Agreement, Seller and Purchaser hereby agree that prior to the Time of
Closing, Purchaser may
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in its sole discretion elect not to purchase the shares of the U.K. Sub, so
that such shares shall not be considered "Assets" under this Agreement.
Regardless of whether Purchaser elects to purchase such shares, Seller will
remain obligated to cause the U.K. Sub to convey its assets to Purchaser at
the Time of Closing pursuant to Section 1.1 hereof.
ARTICLE II
LIABILITIES OF SELLER
SECTION 2.1 ASSUMPTION OF LIABILITIES. At the Time of Closing
subject to Section 9.1(q), Purchaser hereby agrees to assume, satisfy, or
perform when due only those liabilities and obligations of Seller specifically
identified on SCHEDULE 2.1 attached hereto and those written contractual
commitments arising after the Time of Closing (but not based on events, acts or
omissions arising or accruing or being incurred prior to the Time of Closing) as
specifically set forth in the written contracts specifically listed on
SCHEDULE 1.1(C) hereto (collectively, the "Assumed Liabilities").
SECTION 2.2 LIABILITIES NOT ASSUMED. Other than the Assumed
Liabilities of Seller listed on SCHEDULE 2.1 hereto, notwithstanding anything in
Section 1.1 of this Agreement to the contrary, at the Time of Closing Purchaser
shall not assume, nor shall Purchaser or any affiliate (including Ultratech), or
any officer, director, employee, stockholder or agent of Purchaser, any
affiliate of Purchaser or of Ultratech, be deemed to have assumed or guaranteed,
any liabilities, obligations, litigation, disputes, debts, payables,
counterclaims, rights of set-off or return, or commitments or claims, whether
such liabilities are contingent or otherwise, or known or unknown by Purchaser,
Ultratech or Seller, or direct or indirect, of Seller in existence on or prior
to or after the Time of Closing or otherwise or based on any events, facts or
circumstances in existence prior to or in connection with or after the sale of
the Assets or in connection with or arising from any activities of Seller or the
failure by Seller to discharge, settle or pay any debts or other liabilities or
any services provided by or goods or assets sold by or products delivered to
Seller including post-Time of Closing liability for the obligations arising and
accruing from Seller's actions or inactions after the date hereof that have any
basis for liability from the actions or inactions of Seller or any third party
arising, occurring or accruing, or deemed to arise, occur or accrue, prior to,
or concurrently with, or subsequent to, the Time of Closing (collectively, the
"Excluded Liabilities").
ARTICLE III
PURCHASE PRICE
SECTION 3.1 CONSIDERATION. Upon the terms and subject to the
conditions contained in this Agreement, in consideration for the Assets and in
full payment therefor,
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Purchaser will pay, or cause to be paid, the purchase price set forth in
Section 3.2 to Seller and IAC or on behalf of Seller and IAC as provided below.
SECTION 3.2 PAYMENT OF PURCHASE PRICE. The purchase price
("Purchase Price") to be paid or payable by Purchaser to Bank One, Texas, N.A.,
a national banking association, Banc One Leasing Corporation, a Texas
corporation and Imperial Bank, a California bank (collectively, the "Lenders")
for the benefit of Seller upon the Closing shall consist of cash in the amount
of Twenty Million Dollars ($20,000,000).
SECTION 3.3 ALLOCATION OF PURCHASE PRICE. The Purchase Price
shall be allocated using the allocation methods and principles set forth in
Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code")
and the Treasury Regulations promulgated thereunder. Any revisions shall be
determined in accordance with the allocation methods and principles prescribed
by Code Section 1060 and the Treasury Regulations promulgated thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ULTRATECH AND PURCHASER
Ultratech and Purchaser, to the extent applicable, each hereby
represents to Seller that:
SECTION 4.1 ORGANIZATION. Each of Ultratech and Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware.
SECTION 4.2 AUTHORIZATION. Each of Ultratech and Purchaser, as
the case may be, has full corporate power and authority to enter into this
Agreement, the employment agreements for Ellery Buchanan and Larry Thompson in
the form attached hereto as EXHIBIT 4.2(a)(i) AND (ii), respectively (the
"Employment Agreements"), the Release Agreement attached as EXHIBIT 8.1 hereto
(the "Release") and a license assignment and related agreements among
Purchaser, Seller and IAC regarding the General Signal intellectual property
(the "License Assignment") in form satisfactory to Purchaser and Ultratech (the
Employment Agreements and the License Assignment are referred to herein as the
"Related Agreements"), to perform their respective obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and thereby.
Ultratech and Purchaser, as the case may be, have taken all necessary and
appropriate corporate action with respect to the execution and delivery of this
Agreement and the Related Agreements, and each of this Agreement and the
Related Agreements constitutes valid and binding obligations of Ultratech and
Purchaser, enforceable in accordance with their respective terms: (i) except
as limited by applicable bankruptcy, insolvency, moratorium, reorganization, or
other laws affecting creditors' rights and remedies generally, (ii) general
principals of equity regardless of whether such enforcement is considered
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in a proceeding in equity or at law; and (iii) except as the indemnification
provisions contained in this Agreement may be limited by principles of public
policy.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in a letter specifically referring to this Article
V (the "Disclosure Letter") delivered by Seller to Ultratech and Purchaser and
attached hereto which disclosures shall be deemed representations and warranties
hereunder, Seller hereby represents and warrants to Purchaser and Ultratech
that:
SECTION 5.1 ORGANIZATION; GOOD STANDING; POWER. Seller and each of
its U.S. subsidiaries (the "Subsidiaries") are corporations duly organized,
validly existing and in good standing under the laws of their respective state
of organization, and have the corporate power and authority to own, lease and
operate their properties and to carry on their businesses as the same are now
being conducted. Seller (including each of its Subsidiaries) is qualified as a
foreign corporation and is in good corporate standing in such other
jurisdictions in which the conduct of its business or its ownership or leasing
of its property requires such qualification except where the failure to so
qualify would not be materially adverse to the business of Seller taken as a
whole. Seller does not own, directly or indirectly, any equity or other
ownership interest in or control any corporation, partnership, joint venture or
other entity, except those subsidiaries set forth in the Disclosure Letter.
Seller owns one hundred percent (100%) of the shares of capital stock or other
proprietary interests in each of its subsidiaries.
SECTION 5.2 AUTHORIZATION OF SELLER AND IAC. Each of Seller and
IAC has full power and authority to enter into this Agreement and the Related
Agreements to which it is a party, to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and thereby,
including, without limitation, the execution and delivery of this Agreement,
general conveyances, bills of sale, assignments, and other documents and
instruments evidencing the conveyance of the Assets or delivered in accordance
with Section 7.2 hereunder (the "Closing Documents") and the Related Agreements
to which it is a party. Seller and IAC have taken all necessary and appropriate
corporate action with respect to the execution and delivery of this Agreement,
the Closing Documents, and the Related Agreements to which it is a party. No
other corporate proceedings on the part of Seller or IAC are necessary to
authorize this Agreement and the Related Agreements or to consummate the
transactions so contemplated hereby and thereby, except the approval by the
Lenders, Citicorp Mezzanine Partners, L.P., a Delaware limited partnership
("Citicorp"), and with respect to the sale of Assets, the approval and adoption
of this Agreement by the holders of a majority of the outstanding shares of
Seller's capital stock in accordance with Delaware law and such stockholder
approval as shall be required by Seller's charter documents, all of which
approvals and consents shall be obtained prior to the Closing. This Agreement
and the Related Agreements to which Seller and IAC are parties constitute valid
and binding obligations of Seller and IAC, enforceable in accordance with their
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terms except as limited by applicable bankruptcy, insolvency, moratorium,
reorganization, or other laws affecting creditors' rights and remedies
generally, and except as the indemnification provisions contained in this
Agreement may be limited by principles of public policy or general principals of
equity regardless of whether such enforcement is considered in a proceeding in
equity or at law.
SECTION 5.3 FINANCIAL STATEMENTS.
(a)The consolidated financial statements (including, in each case, any
related notes thereto) contained in Seller's financial statements dated as of
March 28, 1998 provided to Ultratech and Purchaser, and the financial statements
of any subsidiary of Seller provided to Purchaser or Ultratech (collectively,
the "Seller Financial Statements") were prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved and each fairly present the consolidated financial position of
Seller and its Subsidiaries, or of such subsidiary, as at the respective dates
thereof and the consolidated results of its operations and cash flows for the
periods indicated but do not include footnotes. Seller's or such subsidiary's
revenue recognition policies with respect to financial statements have been made
in accordance with generally accepted accounting principles. Seller and its
subsidiaries maintain a standard system of accounting in accordance with
generally accepted accounting principles. All of Seller's general ledgers,
books and records are located at Seller's principal places of business.
SECTION 5.4 PROXY STATEMENT. The information supplied by Seller
for inclusion in the proxy statement to be sent to the stockholders of Seller in
connection with the meeting of Seller's stockholders to consider and approve the
sale of the Assets (the "Seller Stockholders' Meeting") (such proxy statement as
amended or supplemented is referred to herein as the "Proxy Statement"), shall
not, on the date the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to stockholders, at the time of Seller's Stockholders'
Meeting and at the Time of Closing, contain any statement which, at such time
and in light of the circumstances under which it shall be made, is false or
misleading with respect to any material fact, or shall omit to state any
material fact necessary in order to make the statements made therein, not false
or misleading; or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for Seller's Stockholders' Meeting which has become false or
misleading. If at any time prior to the Closing, any event relating to Seller
or any of its respective affiliates, officers or directors should be discovered
by Seller which should be set forth in a supplement to the Proxy Statement,
Seller shall promptly inform Ultratech and Purchaser in writing.
SECTION 5.5 ABSENCE OF CERTAIN CHANGES AND EVENTS. There is not
currently in existence or effect:
(a) Any event, including, without limitation, shortage of materials
or supplies available in the marketplace, fire, explosion, accident, requisition
or taking of property by any governmental agency, flood, drought, earthquake, or
other natural event, riot, act of God
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or a public enemy, or damage, destruction, or other casualty, whether covered
by insurance or not, which has a material adverse effect on Seller or the
Assets or any such event which reasonably could be expected to have such an
effect on Seller or the Assets;
(b) Any material transaction relating to or involving Seller (other
than the transactions contemplated herein) which was entered into or carried
out by Seller other than in the ordinary and usual course of business and
consistent with past practice;
(c) Any change made by Seller in its method of operating the
Business or, after March 28, 1998, its accounting practices relating thereto;
(d) Any mortgage, pledge, lien, security interest, hypothecation,
charge, or other encumbrance imposed or agreed to be imposed on or with respect
to the Assets other than liens arising with respect to current taxes not
delinquent, liens imposed by operation of law and liens incurred in the
ordinary course of business;
(e) Any sale, lease, or disposition of, or any agreement to sell,
lease, or dispose of any of the Assets, other than sales, leases, or
dispositions in the usual and ordinary course of business and consistent with
prior practice;
(f) Any modification, waiver, change, amendment, release,
rescission, accord and satisfaction, or termination of, or with respect to, any
term, condition, or provision of any contract, agreement, license, or other
instrument to which Seller is a party and relating to or affecting the Business
or the Assets, other than any satisfaction by performance in accordance with
the terms thereof in the usual and ordinary course of business and consistent
with prior practice or as made in writing and provided to Purchaser;
(g) Any labor disputes or disturbances materially affecting in an
adverse manner the Business or financial condition of Seller, including,
without limitation, the filing of any petition or charge of unfair labor
practices with the National Labor Relations Board;
(h) Any written notice from any current employee of Seller that such
employee has terminated, or intends to terminate, such employee's employment
with Seller;
(i) Any adverse relationships or conditions with vendors or customers
that may have a material adverse effect on the Assets;
(j) Any waivers of any rights of substantial value by Seller in an
aggregate amount exceeding $50,000;
(k) Any other event or condition of any character which materially
adversely affects, or may reasonably be expected to so affect the Assets;
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(l) Any purchase or lease of or any agreements to purchase or lease
capital assets by Seller.
SECTION 5.6 UNDISCLOSED LIABILITIES. There are no debts,
liabilities or obligations with respect to Seller or to which the Assets are
subject, liquidated, unliquidated, accrued, absolute, contingent, or otherwise
(each a "Debt"), that are not specifically identified in Seller Financial
Statements or the Disclosure Letter. SCHEDULE 5.6 sets forth a list of all
persons, corporations, partnerships and other entities holding or with any
right to any Debt, including parties to any contract or agreement to which
Seller or the Assets are subject ("Creditors") and a description of such Debt
and of all employees of Seller (the "Employees").
SECTION 5.7 INVENTORY. All Inventory of Seller is valued using
the first-in, first-out (FIFO) method, in accordance with generally accepted
accounting principles consistently applied.
SECTION 5.8 ACCOUNTS AND NOTES RECEIVABLE. All accounts and notes
receivable (the "Accounts") reflected on Seller Financial Statements are (i)
valid, genuine and existing and (ii) subject to no known defenses, setoffs or
counterclaims. No person other than the Lenders has any lien on such Accounts
or any part thereof; no agreement for deduction, free goods, discount or other
deferred price or quantity adjustment has been made with respect to any of such
Accounts; and, to Seller's knowledge, no customer of Seller with an Account
balance is involved in voluntary or involuntary bankruptcy proceedings or is
otherwise insolvent or has notified Seller in writing that such customer will
not pay its Account.
SECTION 5.9 PROPERTIES. Seller has good, valid and indefeasible
title to all property and Assets, tangible and intangible, purported to be owned
by it, including the property and Assets reflected on Seller Financial
Statements. All such property and Assets purported to be owned by Seller are
free and clear of all mortgages, liens, charges, security interests or other
encumbrances of any nature whatsoever except as reflected in Seller Financial
Statements and except for liens for current taxes not delinquent, liens imposed
by operation of law and liens incurred in the ordinary course of business. All
property and Assets, including machinery and equipment, owned, leased or
otherwise used by Seller are in good operating condition and repair, reasonable
wear and tear excepted, and are suitable and adequate for use in the ordinary
course of business and conform in all material respects to all applicable laws.
All leases are binding, valid and enforceable in accordance with their terms
subject to the effect, if any, of (i) applicable bankruptcy and other similar
laws affecting the rights of creditors generally, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies,
and there are no current defaults or events which have occurred with which the
giving of notice or lapse of time or both would constitute a material default
under any lease. After the Time of Closing, Purchaser will be entitled to the
continued use and possession of the property leased by it, for the terms
specified in such leases and for the purposes for which such property is used.
To Seller's knowledge, there is no pending or threatened condemnation or
similar proceeding affecting any of the real property owned or leased by
Seller.
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SECTION 5.10 TAXES.
(a) All Taxes (as hereinafter defined) due or payable by Seller, and
all interest and penalties thereon, whether disputed or not, other than Taxes
which are not yet due and payable, have been paid in full. All Tax returns,
statements, reports, forms and other documents required to be filed in
connection therewith have been duly and timely filed (and no extension of any
filing date applicable thereto has been requested or granted) and were correct
and complete in all material respects. All deposits required by law to be made
by Seller with respect to employees' withholding taxes have been duly made.
Seller is not delinquent in the payment of any Tax, assessment or governmental
charge or deposit, and Seller does not have any Tax deficiency or claim
currently pending, outstanding or asserted against it, and, to Seller's
knowledge, there is no basis for any such Tax deficiency or claim. There is no
audit currently pending regarding any Taxes and Seller has not extended the
period in which any Tax could be assessed or collected.
(b) No tax is required to be withheld pursuant to Section 1445 of the
Code as a result of the transfers contemplated by this Agreement, and Seller is
not a person other than a United States person within the meaning of the Code.
(c) There are no liens for Taxes upon the Assets except liens for
current Taxes not yet due. The unpaid Taxes of Seller do not exceed the reserve
for Taxes established on the books and records of Seller. No governmental
entity (a "Taxing Authority") responsible for the imposition of any Tax
(domestic or foreign), has asserted that any Taxes are due from Seller.
(d) When Seller files its tax return (the "Tax Return") for the
fiscal year ended March 28, 1998 and IRS Form 1139, the Tax Receivable will be
valid, due and owing in an amount of at least $3,800,000 and there are no
conditions, contingencies or other actions known to Seller that must be taken or
requirements that must be met or satisfied in order for Purchaser to receive
such Tax Receivable. The Tax Return will indicate that the address of Seller to
which the Tax Receivable shall be remitted is care of Ultratech at the address
set forth in Section 12.1 hereof. The Tax Return and any other instrument shall
instruct the IRS to make such amounts payable to Purchaser.
(e) For purposes of this Agreement, "Tax" (and, with correlative
meaning, "Taxes" and "Taxable") means (i) any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any Taxing Authority responsible
for the imposition of any such tax (domestic or foreign), (ii) any liability for
the payment of any amounts of the type described in (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group for any Taxable
period and (iii) any liability for the payment of any amounts of the type
described in (i) or (ii) as a result of any express or implied obligation to
indemnify any other person; provided
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that the amount of Tax could be imposed upon or collected from Purchaser or
constitutes or could constitute a lien upon the Assets.
SECTION 5.11 COMPLIANCE WITH LAWS. Each of Seller and its
Subsidiaries has complied and is in compliance with all applicable foreign,
federal, state, and local laws, statutes, licensing requirements, rules, and
regulations, and judicial or administrative decisions applicable to the
Business where the failure to so comply could have a material adverse effect on
the current results of operations or financial condition of Seller, the
Business or the Assets. Each of Seller and its Subsidiaries has been granted
all licenses, permits (temporary and otherwise), authorizations, and approvals
from foreign, federal, state, and local government regulatory bodies necessary
to carry on the Business as currently conducted, all of which are currently
valid and in full force and effect, except where the failure to obtain any such
licenses, permits, authorizations or approvals would not be materially adverse
to Seller's business taken as a whole. All such licenses, permits,
authorizations, and approvals shall be transferred to Purchaser effective as of
the Time of Closing, and shall be valid and in full force and effect to the
same extent as if Seller were continuing operation of the Business. To the
best of Seller's knowledge, there is no order issued, investigation, or
proceeding pending or threatened, or notice served with respect to any
violation of any law, ordinance, order, writ, decree, rule, or regulation
issued by any federal, state, local, or foreign court or governmental agency
or instrumentality applicable to the Business.
SECTION 5.12 CONSENTS. The execution and delivery of this
Agreement by Seller do not, and the performance of this Agreement and the
Related Agreements by Seller shall not (including the ability by Seller to
transfer the assets free and clear of all liens and encumbrances of any kind
or nature whatsoever), require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, or any other third party, including lessors,
licensors and lenders, except for the consent of the Lenders and of Citicorp
and the parties listed on SCHEDULE 5.12, and except for applicable
requirements, if any, of bulk sales laws, and the notification requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"). Seller has complied with, or will comply with prior to the
Closing, all applicable bulk sales laws under the laws of the states of
Massachusetts, Texas or otherwise.
SECTION 5.13 PRODUCTS.
(a) There are no known defects in the design or technology embodied
in any product which Seller currently markets, or has marketed in the past,
that impair or are likely to impair the intended use of the product or damage
any consumer of the product or third party (or their business, assets or
property), except for warranty claims that may arise in the normal course of
business, for products shipped prior to the Time of Closing.
(b) None of the products and services sold, licensed, rendered, or
otherwise provided by Seller (or by any of its subsidiaries) in the conduct of
their respective businesses will malfunction, will cease to function, will
generate materially incorrect data or will produce
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materially incorrect results and will not cause any of the above with respect
to the property or business of third parties using such products or services
when processing, providing or receiving (i) date-related data from, into and
between the Twentieth (20th) and Twenty-First (21st) centuries or (ii)
date-related data in connection with any valid date in the Twentieth (20th)
and Twenty-First (21st) centuries, causing a material adverse effect on Seller,
the Assets, the Business or the property or business of any third parties using
such products or services.
(c) Neither Seller nor any subsidiary has made any other
representations or warranties specifically relating to the ability of any
product or service sold, licensed, rendered, or otherwise provided by Seller
(or by any of its subsidiaries) in the conduct of their respective businesses
to operate without malfunction, to operate without ceasing to function, to
generate correct data or to produce correct results when processing, providing
or receiving (i) date-related data from, into and between the Twentieth (20th)
and Twenty-First (21st) centuries and (ii) date-related data in connection
with any valid date in the Twentieth (20th) and Twenty-First (21st) centuries.
SECTION 5.14 PROPRIETARY RIGHTS.
(a) SCHEDULE 1.1(e) sets forth all of the Proprietary Rights (i)
which are used in the business of Seller, (ii) which are owned by Seller or
IAC, or (iii) to which Seller or IAC otherwise have rights to license or use.
Any of the Proprietary Rights that require the execution and filing with an
appropriate governmental agency or the consent of a third party to be
transferred to Purchaser have been so indicated on SCHEDULE 1.1(e).
(b) SCHEDULE 1.1(e) sets forth a true and complete list of all
contracts, licenses and other agreements to which Seller or IAC is a party,
which affect any item of Seller or IAC Proprietary Rights and which are
material to the business of Seller as conducted except commercially available
(i.e., off-the-shelf) software. SCHEDULE 1.1(e) specifically designates all
such contracts, licenses or other agreements (i) pursuant to which Seller or
IAC is a licensor or licensee of Proprietary Rights, (ii) under which Seller or
IAC has granted or been granted exclusive rights, or (iii) under which Seller
or IAC is obligated to pay in excess of (or under which the consideration is
reasonably expected to exceed) $50,000 in any one year period.
(c) Except in each case as set forth in SCHEDULE 1.1(e):
(i) Seller or IAC either owns or has the exclusive right to use,
sell, license and dispose of, to bring actions for the infringement of and
otherwise exercise all Proprietary Rights, including Proprietary Rights
which comprise trade secret rights, to the extent permitted by law
(hereinafter, "Trade Secrets"), free and clear of all encumbrances.
(ii) Seller and IAC have taken all appropriate actions and made
all applicable applications and filings pursuant to applicable laws to
perfect or protect its interests in all Proprietary Rights, except where
the failure to take such actions or make such applications or filings would
not have a material adverse effect on Seller's business
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or materially interfere with the use or enforcement of such Proprietary
Rights in the ordinary course of its business.
(iii) The execution, delivery and performance of this
Agreement and the Related Agreements and the consummation of the
transactions contemplated hereby and thereby will not (A) breach, violate
or conflict with any instrument or agreement governing any Proprietary
Right, (B) cause the forfeiture or termination or give rise to a right of
forfeiture or termination of any Proprietary Right, or (C) in any way
impair the right of Purchaser to use, sell, license or dispose of or to
bring any action for the infringement of, any Proprietary Right or any
products or technology designed, developed, manufactured, sold or serviced
by the Business (collectively, "Products").
(iv) To Seller's knowledge (after diligent inquiry), the
manufacture, marketing, license, sale or use of any Products anywhere in
the world does not or would not (A) violate any license or agreement with
any third party, (B) infringe on any non-patent Proprietary Right of any
third party or (C) infringe any third party patent rights. Neither Seller
nor any of its employees has misappropriated any third party trade
secrets. There is no claim or litigation pending or, to Seller's
knowledge, threatened, contesting the validity, ownership or right to use,
sell, license or dispose of any Proprietary Right, nor is there any basis
for any such claim.
(v) To Seller's knowledge (after diligent inquiry), no third
party is infringing on any Proprietary Right where such infringement could
materially limit the protection afforded by the Proprietary Rights to the
use, sale, license, sublicense or disposition of the Products or prevent
the future enforcement of such Proprietary Right.
(vi) Seller has taken all steps reasonably necessary or
appropriate (including, without limitation, entering into appropriate
confidentiality, invention assignment and nondisclosure agreements, the
forms of which have been delivered to Ultratech or its counsel, with all
(A) current officers, directors and employees of Seller), (B) all past or
present consultants to licensees of, performing technical services for
Seller, (C) all past officers, and (D) all past employees engaged in
sales, marketing, research or development activities for Seller to
safeguard and maintain the secrecy and confidentiality of, and the
proprietary rights in, all Proprietary Rights.
(vii) To Seller's knowledge, all Trade Secrets have not been
used, divulged or appropriated for the benefit of any person other than
Seller or to the detriment of Seller.
(d) Except in each case as set forth in SCHEDULE 1.1(e):
(i) Each of the licenses and agreements listed or required
to be listed in SCHEDULE 1.1(e) is in full force and effect and is a valid
and enforceable obligation against Seller (to the extent it is a party
thereto), and against the other party thereto in
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accordance with its terms, subject to limitations imposed on the rights or
creditors generally and rules regarding specific performance and general
equitable principles.
(ii) Each of Seller and IAC has in all material respects
performed, or is now performing, its obligations, and neither Seller nor
IAC is in default in any material respect (or would by the lapse of time
or the giving of notice or both be in default in any material respect),
under any license or agreement listed or required to be listed in
SCHEDULE 1.1(e). To Seller's knowledge, no other party to such licenses
and agreements is in default in any material respect (or would by the
lapse of time or the giving of notice or both, be in default in any
material respect) thereunder or has breached in any material respect any
terms or provisions thereof.
(iii) No third party has notified Seller of any claim,
dispute or controversy with respect to any of the licenses or agreements
which is listed or required to be listed in SCHEDULE 1.1(e). Seller has
not received written notice or warning or has knowledge of any other
written communication (internal or otherwise prepared with respect to a
potential or threatened third party claim or allegation) of alleged
nonperformance, delay in delivery or other noncompliance by Seller with
respect to its obligations under any such licenses or agreements.
SECTION 5.15 RESTRICTIVE DOCUMENTS OR ORDERS. Neither Seller nor
IAC is a party to or bound under any agreement, contract, order, judgment, or
decree, or any similar restriction not of general application which materially
adversely affects, or reasonably could be expected to materially adversely
affect (i) the continued operation by Purchaser of the Business after the Time
of Closing on substantially the same basis as said business was theretofore
operated, or (ii) the consummation of the transactions contemplated by this
Agreement.
SECTION 5.16 CONTRACTS AND COMMITMENTS.
(a) Set forth in the Disclosure Letter is a list of all outstanding
agreements, whether or not in writing, to which Seller is a party or to which
any of the Assets are subject that may: (i) involve obligations (contingent or
otherwise) of, or payments to Seller in excess of $25,000; (ii) involve written
agreements with suppliers and customers of Seller; (iii) contain provisions
restricting and/or affecting the development, manufacture, or distribution of
Seller's products or services; (iv) relate to any aspect of the Business of
Seller in which any other person who was or is an officer, director or employee
of Seller (or, with respect to officers and directors of the Company, any
person, firm, partnership, trust, or corporation affiliated with any such
persons or any immediate family members of such persons) have a material
interest; or (v) involve written agreements on which the Business is materially
dependent.
(b) Seller has performed all of its obligations (except those not yet
due) under the terms of each agreement listed, referred to or incorporated by
reference in the Disclosure Letter to which it is a party, and is not in default
thereunder, where such default could have a material adverse impact on the
results of operations or financial condition or prospects of Seller,
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the Business or the Assets. No event or omission has occurred which but for the
giving of notice or lapse of time or both would constitute a default by any
party thereto under any such agreement, where such default by any party could
have a material adverse impact on the results of operations or financial
condition or prospects of Seller, the Business or the Assets. Each such
agreement is valid and binding on all parties thereto and in full force and
effect. Seller has received no notice of default, cancellation, or termination
in connection with any such agreement.
(c) The Contracts set forth on SCHEDULE 1.1(c) constitute all
agreements to which the Company is a party or by which the Assets are bound
which are material to the Assets or the Business or are likely to materially
affect Purchaser's or Ultratech's ability to operate the Business or use the
Assets after the Time of Closing, in the same manner in which such Business is
currently operated or the Assets are used by Seller.
SECTION 5.17 ASSETS. The Assets (excluding the Excluded Assets)
include all intellectual property, inventory and all other property in which
Seller has any right, title and interest. The Assets (excluding the Excluded
Assets) include all the assets necessary to operate the Business in the same
manner as the Business was operated by Seller prior to the Time of Closing. The
Assets are suitable for the purpose or purposes for which they are being used,
are in good operating condition and in reasonable repair, reasonable wear and
tear excepted and free from any known defects, except such minor defects as do
not interfere with the continued use thereof. Subject to normal wear and tear,
such plants, facilities, machinery, and equipment are capable of and are
producing sound and merchantable products.
SECTION 5.18 INSURANCE. SCHEDULE 1.1(l) lists all insurance
policies and fidelity bonds covering the assets, business, equipment,
properties, operations, employees, officers and directors of Seller and its
Subsidiaries. There is no claim by Seller or any of its Subsidiaries pending
under any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds. All premiums
payable under all such policies and bonds have been paid and Seller and its
Subsidiaries are otherwise in full compliance with the terms of such policies
and bonds (or other policies and bonds providing substantially similar insurance
coverage). Seller does not know of any threatened termination of or material
premium increase with respect to, any of such policies. Purchaser shall be
entitled to the benefit of each such policy upon the consummation of the
transactions contemplated hereby.
SECTION 5.19 PRODUCT WARRANTIES AND PRODUCT LIABILITY. Seller has
delivered to Ultratech copies of its warranty policies and all outstanding
warranties or guarantees relating to any of Seller's products other than
warranties or guarantees implied by law. Seller has not received written notice
of any claim asserting (a) any damage, loss or injury caused by any Product, or
(b) any breach of any express or implied product warranty or any other similar
claim with respect to any Product other than standard warranty obligations (to
replace, repair or refund) made by Seller in the ordinary course of business,
except for those claims that, if adversely determined against the Business,
would not have a material adverse change on the results of operations or
financial condition of the Business.
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SECTION 5.20 LITIGATION. There is no claim, investigation,
litigation, action, suit, or proceeding, administrative or judicial, pending or
threatened against Seller or IAC or any officer or director of Seller or IAC
relating to the business of Seller or IAC or involving the Assets at law or in
equity, before any federal, state, local, or foreign court, or regulatory
agency, or other governmental authority, including, without limitation, any
unfair labor practice or grievance proceedings or otherwise. Seller has not
received any written complaints from any of its customers or suppliers within
the last six months, which complaints could reasonably be expected individually
or in the aggregate, to have a potential adverse effect on the Business, Assets,
prospects, operations, employee relations, rights or condition of Seller.
SECTION 5.21 NO CONFLICT OR DEFAULT. Neither the execution and
delivery of this Agreement or the Related Agreements, nor compliance with the
terms and provisions hereof and thereof, including without limitation, the
consummation of the transactions contemplated hereby and thereby, will violate
any statute, regulation, or ordinance of any governmental authority, or conflict
with or result in the breach of any term, condition, or provision of Seller or
IAC's Certificate of Incorporation or Bylaws, as presently in effect, or of any
agreement, deed, contract, mortgage, indenture, writ, order, decree, legal
obligation, or instrument to which Seller or IAC is a party or by which either
of them or any of the Assets are or may be bound, or constitute a default (or
an event which, with the lapse of time or the giving of notice, or both, would
constitute a default) thereunder.
SECTION 5.22 SELLER FINANCIAL CONDITION. Except with respect to
obligations to the Lenders or obligations not assumed by Purchaser hereunder,
upon consummation of the transactions contemplated hereby, Seller will be
generally able to pay its debts as they become due and in a position where
Seller has reasonably sufficient working capital compared to Seller's business,
plans, needs and expectations. In making this representation and warranty,
Seller acknowledges that it is using such terms and financial standards in
every sense in which such terms and standards are used in the Bankruptcy Code
(Title 11 of the United States Code) and in the Uniform Fraudulent Transfer or
Conveyance Act, as in effect in each applicable jurisdiction. Seller believes
that the consideration to be received by Seller at the Closing (including the
assumption by Purchaser of the Assumed Liabilities) is fair consideration and
reasonably equivalent to the value of the Assets and the obligations of Seller
to Purchaser in this transaction. Seller has received no notice, knowledge or
reason for inquiry from Purchaser (or, to the best of Seller's knowledge and
belief, anyone else) of any information, fact, condition, event or matter
contrary to such representations or otherwise inconsistent with Purchaser's
good faith belief that Purchaser is paying in the ordinary and normal course of
business a fair and reasonable price for such Assets and obligations of Seller
on a going concern basis. Without limiting the generality of the foregoing,
Seller acknowledges that Purchaser did not unduly or unfairly take advantage of
Seller's desire to sell the Assets. Seller has no knowledge that Purchaser has
not conducted itself in good faith and consistent with commercially reasonable
standards for buyers in regularly conducted and commercially reasonable sales.
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SECTION 5.23 LABOR RELATIONS.
(a) With respect to the Business, Seller has not failed to comply in
any material respect with Title VII of the Civil Rights Act of 1964, as
amended, the Fair Labor Standards Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, all applicable federal, state, and local laws,
rules, and regulations relating to employment or employment termination, and
all applicable laws, rules and regulations governing payment of minimum wages
and overtime rates, and the withholding and payment of taxes from compensation
of employees.
(b) There are no labor controversies pending or threatened between
Seller and any of its employees or former employees or any labor union or other
collective bargaining unit representing any of the employees.
(c) Seller has never entered into a collective bargaining agreement
or other labor union contract relating to the Business and applicable to the
employees.
(d) There are no written employment or separation agreements, or
oral employment or separation agreements other than those establishing an
"at-will" employment relationship between Seller and any of its employees.
SECTION 5.24 EMPLOYEE BENEFIT PLANS.
(a)Seller's Disclosure Letter lists all employee benefit plans (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) and all bonus, stock option, stock purchase, incentive,
deferred compensation, supplemental retirement, severance and other similar
fringe or employee benefit plans, programs or arrangements, and any current
employment or executive compensation or severance agreements, written or
otherwise, for the benefit of, or relating to, any employee of Seller, any
trade or business (whether or not incorporated) which is a member or which is
under common control with Seller (an "ERISA Affiliate") within the meaning of
Section 414 of the Code or any Subsidiary of Seller (together, the "Employee
Plans"), and a copy of each such Employee Plan has been provided to Ultratech.
(b)(i) None of the Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person; (ii) there has been no
"prohibited transaction," as such term is defined in Section 406 of ERISA and
Section 4975 of the Code, with respect to any Employee Plan, which could result
in any material liability of Seller or any of its Subsidiaries; (iii) all
Employee Plans are in compliance in all material respects with the requirements
prescribed by any and all statutes (including ERISA and the Code), orders, or
governmental rules and regulations currently in effect with respect thereto
(including all applicable requirements for notification to participants or the
Department of Labor, Internal Revenue Service or Secretary of the Treasury),
and Seller and each of its Subsidiaries have performed all material obligations
required to be performed by them under, are not in any material respect in
default under or violation of, and have no knowledge of any default or
violation by any other party to, any of the
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Employee Plans; (iv) each Employee Plan intended to qualify under Section
401(a) of the Code and each trust intended to qualify under Section 501(a)
of the Code does so qualify and a favorable determination letter with respect
to each such Employee Plan and trust has been received from the Internal
Revenue Service (the "IRS"), and nothing has occurred which may reasonably be
expected to cause the loss of such qualification or exemption; (v) all
contributions required to be made to any Employee Plan pursuant to Section 412
of the Code, the terms of the Employee Plan or any collective bargaining
agreement, have been made on or before their due dates and a reasonable amount
has been accrued for contributions to each Employee Plan for the current plan
years; (vi) with respect to each Employee Plan, no "reportable event" within
the meaning of Section 4043 of ERISA (excluding any such event for which the
thirty (30) day notice requirement has been waived under the regulations to
Section 4043 of ERISA) nor any event described in Section 4062, 4063 or 4041
of ERISA has occurred; and (vii) no Employee Plan is covered by, and neither
Seller nor any Subsidiary has incurred or expects to incur any liability
under, Title IV of ERISA or Section 412 of the Code.
SECTION 5.25 BROKERS' AND FINDERS' FEES/CONTRACTUAL LIMITATIONS.
Seller is not obligated to pay any fees or expenses of any broker or finder in
connection with the origin, negotiation, or execution of this Agreement or in
connection with any transactions contemplated hereby. Neither Seller, nor any
officer, director, employee, agent or representative of Seller (collectively
"Representatives") are or have been subject to any agreement, letter of intent,
or understanding of any kind which prohibits, limits, or restricts Seller or
the Representatives from negotiating, entering into and consummating this
Agreement, the Related Agreements and the transactions contemplated hereby and
thereby.
SECTION 5.26 ENVIRONMENTAL MATTERS. Seller and each of the
Subsidiaries (i) has obtained all applicable permits, licenses and other
authorizations which are required under foreign, federal, state or local laws
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, or hazardous or toxic materials or wastes into ambient air,
surface water, ground water, or land or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic materials or wastes
by Seller its Subsidiaries (or their respective agents); (ii) are in material
compliance with all terms and conditions of such required permits, licenses and
authorization, and also are in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in such laws or contained in any regulation,
code, plan, order, decree, judgement, notice or demand letter issued, entered,
promulgated or approved thereunder; (iii) have no knowledge nor have received
notice of any current event, condition, circumstance, activity, practice,
incident, action or plan which is reasonably likely to interfere with or
prevent continued compliance or which would give rise to any common law or
statutory liability, or otherwise form the basis of any claim, action, suit
or proceeding, based on or resulting from Seller's or any Subsidiary's (or any
of their respective agents') manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the emission,
discharge, or release into the environment, of any pollutant, contaminant, or
hazardous or toxic material waste; (iv) have taken all actions necessary under
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applicable requirements of Federal, state or local laws, rules or regulations
to register any products or materials required to be registered by Seller or
its Subsidiaries (or any of their respective agents) thereunder; and (v) have
no knowledge of any contaminated soil or groundwater at any of the properties
owned or operated, leased or previously owned or leased by Seller or its
Subsidiaries. Seller has disclosed to Ultratech and Purchaser in the Disclosure
Letter (i) all permits relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, or hazardous or toxic materials or wastes
into ambient air, surface water, ground water, or land or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes by Seller or its Subsidiaries (or their respective agents)
its holds as of the date hereof, and (ii) all documents relating to tests
previously conducted or to be conducted in the future by Seller or such
Subsidiary for potential contamination at any of Seller's or such Subsidiaries'
facilities, whether owned or leased, including soil and water tests.
SECTION 5.27 CERTAIN PAYMENTS. In connection with the Business,
Seller has not, and to Seller's knowledge, no person directly or indirectly on
behalf of Seller has made or received any payment that was not legal to make or
receive.
SECTION 5.28 BOOKS AND RECORDS. The books and records of Seller to
which Purchaser, Ultratech and their accountants and attorneys have been given
access are the true books and records of Seller and truly and fairly reflect
the underlying facts and transactions in all material respects.
SECTION 5.29 COMPLETE DISCLOSURE. The copies of all instruments,
agreements, other documents and written information delivered by Seller to
Purchaser or Ultratech or their counsel are and will be complete and correct in
all material respects as of the date of delivery thereof. No representations
or warranties made by it in this Agreement, nor any document, written
information, statement, financial statement, certificate or exhibit prepared
and furnished or to be prepared and furnished by Seller or its representatives
to the Purchaser pursuant hereto or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact necessary to make
the statements or facts contained herein or therein not misleading. There is
no presently existing event, fact or condition that materially adversely
affects the Assets, or that could reasonably be expected to do so, which has
not been set forth in this Agreement or the exhibits hereto or otherwise
disclosed by Seller to the Purchaser in writing at the Time of Closing.
SECTION 5.30 BACKLOG. The Disclosure Letter sets forth the backlog
of orders that Seller is to ship and contract work to be performed as of
March 28, 1998. Seller has sufficient lead times in order to produce and ship
such backlog in accordance with its schedule shipping date.
SECTION 5.31 CUSTOMERS AND SUPPLIERS. Seller has not received
written notice that any of Seller's ten largest customers and ten largest
suppliers during the twelve months
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ended December 31, 1997 (determined on the basis of both revenues and bookings
during such period) has terminated, or intends to materially reduce or
terminate, the amount of its business with Seller, and Seller has no reason to
believe that such termination or alteration would occur as a result of the
consummation of this Agreement.
SECTION 5.32 BREACH OF REPRESENTATIONS AND WARRANTIES. Neither
Seller nor IAC shall take any action that would breach or cause to be
inaccurate in any material respect any of the representations and warranties
set forth in Article V. Promptly after becoming aware of the occurrence of or
the pending or threatened occurrence of any event that would cause or
constitute such a breach or inaccuracy, Seller shall give detailed written
notice thereof to Purchaser and shall use its diligent efforts to prevent or
remedy such breach or inaccuracy promptly.
SECTION 5.33 CONSENTS. Seller shall promptly apply for or
otherwise seek, and use its diligent efforts to obtain, all consents and
approvals required for the consummation of the transactions set forth hereby,
including but not limited to the consents of the Lenders and Citicorp and
Seller's stockholders and the consents of any other party which may be required
for the consummation of the transactions contemplated hereby.
ARTICLE VI
COVENANTS
SECTION 6.1 MAINTENANCE OF BUSINESS.
(a) During the period from the date hereof through the Time of
Closing, Seller shall carry on and use its reasonable efforts to preserve the
Business and the Assets, maintain all equipment and machinery in good working
order, reasonable wear and tear excepted, discharge and maintain current
obligations with respect to any employee withholding taxes, preserve
inventories of necessary supplies at proper levels, keep available the services
of present officers and key employees and preserve relationships with
customers, suppliers and others having dealings with the Business or the
Assets. Seller shall not, except as expressly permitted herein and except as
set forth in the Disclosure Letter delivered as of the date hereof, (i) enter
into agreements or contracts of employment or terminate the employment of any
engineering or technical personnel or other key employees except for cause;
(ii) alter any employee or personnel benefits; (iii) dispose of any Assets
(other than in the ordinary course and subject to the obligation to maintain
proper inventory levels); (iv) make any capital improvements, additions or
expenditures; (v) incur any liabilities or obligations (other than in the
ordinary course of business); (vi) declare any distribution or dividends of
any kind, or (vii) repurchase or otherwise acquire any shares of its capital
stock.
(b) Seller shall take all action necessary and appropriate to provide
Purchaser or Ultratech with exclusive access to the "lock box" account at and
after the Time of Closing.
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(c) During the period from the date hereof through the Time of
Closing, Seller agrees to advise Purchaser and Ultratech of any material
operating decisions as well as the receipt of purchase orders, payment of
creditors, changes in payroll and changes in the status of employees and
consultants. Notwithstanding the foregoing, Seller acknowledges that such
operating decisions shall be made independently and Seller shall be solely
responsible for its implementation, consequences, and liabilities, if any.
(d) Seller's indebtedness under its bank line of credit with the
Lenders (including any re-advances from the Lenders) will total $17.481 million
as of the Time of Closing.
SECTION 6.2 ACCESS TO INFORMATION. Seller will give Purchaser and
Ultratech and their accountants, legal counsel and other representatives full
access, during normal business hours, to all of the properties, books,
contracts, commitments, and records relating to the Business and the Assets,
and Seller will furnish to Purchaser and Ultratech, their accountants, legal
counsel, and other representatives during such period all such information
concerning the Business or the Assets as Purchaser or Ultratech, their legal
counsel or their representatives may reasonably request; provided, that any
furnishing of such information pursuant hereto or any investigation by
Purchaser or Ultratech shall not affect Purchaser's or Ultratech's right to
rely on the representations, warranties, agreements and covenants made by
Seller in this Agreement. Seller shall use its best efforts to cause Seller's
accountants to cooperate with Ultratech and the Purchaser in auditing the
financial statements of Seller's Business, including, but not limited to,
executing any and all representation or other letters or agreements required
by Ultratech's accountants. This covenant shall survive the Time of Closing
and continue indefinitely.
SECTION 6.3 CONSENTS. Each of Seller, Purchaser and Ultratech
shall use its best efforts to obtain all consents of and authorizations by
third parties necessary for their respective performance hereunder which may be
required for the consummation of the transactions contemplated hereof and to
make all filings with and give all notices to third parties that may be
necessary or required in order to consummate the sale of the Assets, and shall
take such additional actions as Purchaser may reasonably request to cooperate
so that the transactions contemplated by this Agreement may be expeditiously
consummated.
SECTION 6.4 RELEASES AND WAIVERS. Seller shall use its best
efforts to obtain written releases and waivers in the form approved by
Purchaser and Ultratech from each creditor and Employee of Seller set forth on
SCHEDULE 6.4 hereto and shall take such other actions as Purchaser or Ultratech
may reasonably request to cooperate and obtain such documentation so that the
transactions contemplated by this Agreement may be expeditiously consummated.
SECTION 6.5 MEETING OF STOCKHOLDERS. Seller shall promptly after the date
hereof take all action necessary in accordance with Delaware Law and its
Certificate of Incorporation, Bylaws and agreements to convene the Seller's
Stockholder Meeting. The Seller shall not postpone or adjourn the Seller's
Stockholder Meeting without consent of Ultratech and Purchaser, which consent
shall not be unreasonably withheld or delayed. The Seller shall use its
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best efforts to solicit from stockholders of Seller proxies in favor of the
Agreement and the transactions contemplated herein (including a recommendation
by the Board of Directors of Seller to approve the Agreement and the
transactions contemplated herein) and shall take all other action necessary or
advisable to secure the vote or consent of stockholders required by Delaware
law or by contract or charter provision to effect the transactions contemplated
hereby.
SECTION 6.6 HSR ACT FILINGS. Each of Ultratech, Purchaser and
Seller shall make any required submissions under the HSR Act with respect to
their respective filings made under the HSR Act with respect to the sale of the
Assets, and shall cooperate with each other with respect to the foregoing. The
parties shall give each other prior notice and consult with each other prior to
any meeting with the United States Federal Trade Commission or Department of
Justice in respect their respective filings under the HSR Act or any review by
either of the foregoing agencies. Each of parties shall take all reasonable
actions necessary to cause the expiration of the waiting periods under the HSR
Act as promptly as possible. Purchaser shall be responsible for all filing
fees due under the HSR Act.
SECTION 6.7 EMPLOYMENT OFFERS. Purchaser may offer employment to
those employees of Seller as Purchaser, in it sole and absolute discretion,
shall select, such offers of employment to be contingent on the Closing. Prior
to the Time of Closing, Seller shall use its best efforts to assist Purchaser
in obtaining acceptances of employment offers from each of the employees
designated by Purchaser. Such employees will be listed on a schedule delivered
to Seller within five (5) business days following the date hereof. Purchaser
shall not be obligated, to maintain any such employment of former Seller
employees for any particular period of time and, if such offers are accepted,
all such employees will be employed on an "at will" basis; and provided
further, however, that Ultratech will be permitted to hire any employee of
Seller if the transactions contemplated hereby do not close. Ultratech shall
reserve shares to be issued under its employee stock option plan for issuance
to employees of Seller that become employees of Purchaser or Ultratech after
the Closing.
SECTION 6.8 COBRA; 401(k) PLAN. Seller shall comply with the
health care continuation coverage requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA") applicable to employees of Seller
who are terminated by Seller on or before the Time of Closing. Prior to the
Time of Closing, Seller shall provide executed copies of resolutions to
terminate the 401(k) Plan and an executed copy of an amendment to such plan
prohibiting any new participants and additional contributions to such plan.
SECTION 6.9 OTHER DISCUSSIONS. Except as Ultratech or Purchaser
may consent to in writing, from the date of execution of this Agreement until
the Time of Closing, neither Seller, the Lenders, nor any of their respective
directors, officers, employees, agents or affiliates, will, directly or
indirectly, solicit or initiate any discussions or negotiations with,
participate in any negotiations with, provide any information to or otherwise
cooperate in any other way with, or enter into any agreement with any
corporation, partnership, person or other entity or group (other than Ultratech
or Purchaser) concerning any sale of stock, merger or sale or license of the
Assets or Business. If Seller, the Lenders or any of their directors, officers,
employees, agents or affiliates receives any inquiries from another party
relating to any proposed disposition of the
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Business or the Assets following the date hereof, Seller shall promptly (a)
advise such party that Seller, subject to the fiduciary duties of its Board
of Directors, is not entitled to enter into any such discussions or
negotiations and (b) notify Purchaser and Ultratech in writing of such inquiry
(including the identity of such party and the terms of any oral or written
proposal by such party).
SECTION 6.10 BULK TRANSFER LAWS. Seller shall comply with all applicable
state bulk transfer laws, under the laws of Texas, Massachusetts or otherwise
(collectively, the "Bulk Sales Provisions") prior to the Time of Closing and
shall provide Ultratech with written documentation of such compliance.
SECTION 6.11 MAIL AND RECEIVABLES PAYMENTS. From and after the
Time of Closing, Seller shall endorse any check or any other evidence of
indebtedness or payment received by Seller on account of any Accounts or the
Tax Receivable after the Time of Closing to the order of Purchaser or take
other appropriate actions and shall promptly forward such payment to Purchaser
no later than five (5) business days after actual receipt by Seller. Purchaser
and Seller shall each provide to the other all the cooperation which the other
may reasonably request in connection with the collection of the Accounts.
SECTION 6.12 NOTIFICATION OF CERTAIN MATTERS. Each party shall
give prompt notice to the other of (i) the occurrence, or non-occurrence, of
any event the occurrence, or non-occurrence, of which would be likely to cause
any representation or warranty contained in this Agreement to be materially
untrue or inaccurate and (ii) any failure of Ultratech, Purchaser or Seller, as
the case may be, to comply with or satisfy any material covenant, condition or
agreement to be complied with or satisfied by it hereunder; PROVIDED, HOWEVER,
that the delivery of any notice pursuant to this Section shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 6.13 FURTHER ACTION. Upon the terms and subject to the
conditions hereto, each of the parties hereto shall use all reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
other things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, to
obtain in a timely manner all necessary waivers, consents and approvals and to
effect all necessary registrations and filings, and to otherwise satisfy or
cause to be satisfied all conditions precedent to its obligations under this
Agreement, including without limitation, all steps necessary to ensure that
Purchaser or Ultratech receives payment of the Tax Receivable.
SECTION 6.14 COVENANTS AGAINST DISCLOSURE. The parties agree to
maintain the confidentiality of the terms and conditions of this Agreement and
Related Agreements. No party shall disseminate (except to the parties to this
Agreement and their respective officers, directors and advisors) any press
release or announcement concerning the transactions contemplated by this
Agreement or the Related Agreements or the parties hereto or thereto without
the prior written consent of Seller, Purchaser and Ultratech, which consent
shall not be unreasonably withheld or delayed, unless required by applicable
laws, rules or regulations, including without
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limitation, the federal securities laws, in which case such public
dissemination shall be jointly prepared by Seller, Ultratech and Purchaser.
SECTION 6.15 TAX RETURNS. Seller shall timely file or cause to be
filed all tax returns, reports and information statements required to be filed
by it and shall provide Purchaser with a reasonable opportunity to review such
documents prior to their filing.
SECTION 6.16 COOPERATION BY SELLER. Seller agrees to use its best
efforts during the Interim Period (as defined below) to provide cooperation
between Seller's personnel in Seller's offices and Purchaser's personnel to
help assure an orderly transition of customer accounts and to provide services
to Purchaser that were provided to the Business by Seller prior to the Time of
Closing, and to help assure an orderly transition of the sale of Assets and the
continuation of the Business associated therewith. Seller agrees to use its
best efforts during the Interim Period to agree with Purchaser and Ultratech on
whether Seller will retain employees designated by Purchaser and Ultratech to
assist in transitionary matters and in the continuation of the Business, the
satisfactory resolution of which is an express condition of Closing. Seller
will assist Purchaser in transferring all Assets out of Purchaser's facilities
and agrees that Purchaser shall be entitled to move such Assets out of Seller's
facilities and shall assist Purchaser and Ultratech in securing adequate
resolution of the leased facilities in Austin and Tewksbury. Purchaser will
bear all costs for such services.
SECTION 6.17 DISSOLUTION OF SELLER AND CERTAIN SUBSIDIARIES; STOCK
OF KOREA SUB. Immediately following the Time of Closing, at the request of
Purchaser, Seller and IAC, Integrated Holdings, Inc., Integrated Solutions FSC,
Inc., Integrated Solutions GmbH, Integrated Solutions S.A. and ISI Equipment
Corp. will take all steps necessary or desirable to wind down their affairs,
transfer any remaining assets (that are not Excluded Assets") to Purchaser and
dissolve as legal entities and shall also take all such steps with respect to
each of such subsidiaries (the period between the Time of Closing and the final
dissolution of Seller to be referred to herein as the "Interim Period"). During
the Interim Period, neither Seller nor any subsidiary of Seller shall take any
action, incur any liability or enter into any contract, commitment, debt or
other obligation (written or oral) other than as is reasonably necessary to
wind down and dissolve Seller or such subsidiary or carry out its or their
obligations under this Agreement, or as otherwise approved in writing by
Ultratech.
SECTION 6.18 INDEMNIFICATION OF SELLER OFFICERS AND DIRECTORS.
(a) Seller shall extend its existing officers' and directors'
liability insurance policy for a period of one year after the Closing Date.
Seller shall use commercially reasonable efforts to increase available coverage
under such policy to $5.0 million. Purchaser or Ultratech will reimburse
Seller for the cost of the premiums of such policy for a period covering one
year following the Closing Date.
(b) Subject to Section 6.18(d) below, Purchaser and Ultratech hereby
agree with Seller that following the Closing, Purchaser and Ultratech will
indemnify, defend and hold
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harmless each of Seller's current officers and directors who have signed the
Release and Seller's former directors who have signed the Release
(collectively, "Indemnified Individuals") to the fullest extent permitted by
law (excluding actions or inactions that constitute willful misconduct, fraud,
illegal acts whether criminal or civil, bad faith or gross negligence) against
any and all reasonable losses, liabilities, damages, demands, claims, suits,
actions, judgments and causes of action, assessments, costs and expenses,
including, without limitation, reasonable costs in preparing and defending
against any litigation, commenced or threatened, and any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation
(collectively, "Indemnifiable Damages"), directly asserted against an
Indemnified Individual, directly as a result of such Indemnified Individual's
services solely as an officer or director of Seller; provided, however, that
the indemnification set forth in this Section 6.18 shall only apply to
Indemnifiable Damages incurred in connection with a claim against an
Indemnified Individual which arises out of a matter which is specifically
disclosed to Purchaser and Ultratech on the Disclosure Letter or in a Schedule
to this Agreement and which is asserted by a plaintiff other than ISI or an
Indemnified Individual or any Lender, Citicorp, Prudential or Cornerstone
(as defined below); provided further, however, that Purchaser and Ultratech
shall not be obligated to provide the indemnification in this Section 6.18
unless the Indemnified Individuals seeking indemnity hereunder have first fully
and completely exhausted any and all recoveries available under Seller's or
such Indemnified Individual's then existing officers' and directors' liability
insurance or otherwise applicable insurance policy; and provided further,
however, that the indemnification provided under this Section 6.18 shall not
extend to any losses, liabilities, damages, demands, claims, suits, actions,
judgments and causes of action, assessments, costs and expenses (including,
without limitation, costs and expenses in preparing and defending against any
litigation, pending or threatened), for which the Lenders have not released an
Indemnified Individual pursuant to the terms of the Release.
(c) In the event of a claim for which Purchaser or Ultratech is
required to indemnify any of the Indemnified Individuals pursuant to this
Section 6.18, subject to the rights of an insurer under Seller's or such
Indemnified Individual's existing or otherwise applicable insurance policies,
Purchaser and Ultratech shall have the exclusive right to undertake the
defense, compromise or settlement of such claim and to retain counsel therefor;
notwithstanding the foregoing, Purchaser and Ultratech shall only be obligated
to retain one (1) counsel for the Indemnified Individuals regardless of any
conflicts or perceived conflicts between or among the Indemnified Individuals.
(d) Notwithstanding anything to the contrary provided herein, the
amounts paid by Ultratech or Purchaser under this Section 6.18 shall be reduced
by any amounts paid or payable under any insurance policies then in effect
covering the actions of the Indemnified Individuals; provided, however, that in
the event such insurance is not available and used to cover any or all such
Indemnifiable Damages, Purchaser and Ultratech will succeed to, and have a
right of subrogation with respect to, any claim that would be available to the
Indemnified Individuals, including professional malpractice claims, in which
case (if necessary or desirable to fully pursue such claims), the Indemnified
Individuals shall pursue such claim for the benefit of Purchaser or Ultratech
as Purchaser's or Ultratech's subrogor. Without limiting the generality of
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the foregoing, Seller agrees that Purchaser and Ultratech will succeed to any
rights to cross-claim, counterclaim or the legal or equitable remedies that
may be available to such officers or directors associated with any claim for
which Purchaser or Ultratech may become obligated hereunder. In order to
qualify for indemnification hereunder, each Indemnified Individual who is a
current officer or director of Seller shall not voluntarily resign as an
officer or director of Seller without the prior written consent of Purchaser
or Ultratech prior to its dissolution and winding-up and shall execute an
agreement with Purchaser and Ultratech providing the legal representation set
forth above, and providing Purchaser or Ultratech the right to receive the
benefits of any such insurance policies, the right to succeed to the rights
of subrogation or other rights set forth in Section 6.18(d).
ARTICLE VII
CLOSING
SECTION 7.1 TIME OF CLOSING. The transactions contemplated by this
Agreement shall be completed not later than June 1, 1998 (the "Time of
Closing"), unless otherwise agreed to in writing by Ultratech and Seller. The
Closing shall take place at the offices of Brobeck, Phleger & Harrison LLP, Two
Embarcadero Place, 2200 Geng Road, Palo Alto, California 94303, or at such other
place or date as may be agreed to in writing by Ultratech and Seller. The
"Closing" shall mean the deliveries to be made by the parties hereto at the Time
of Closing in accordance with this Agreement.
SECTION 7.2 DELIVERIES BY SELLER. At the Closing, Seller shall
deliver to Purchaser and Ultratech, as the case may be, all duly and properly
executed, the following:
(a) A good and sufficient Bill of Sale for the Assets in the form
attached hereto as EXHIBIT 7.2(a), selling, delivering, transferring, and
assigning to Purchaser title to all of Seller's right, title, and interest to
the Assets, free and clear of all mortgages, pledges, liens, encumbrances,
security interests, equities, charges, and restrictions of any nature
whatsoever.
(b) An opinion of Stroock & Stroock & Lavan LLP, counsel to Seller,
dated the date of the Closing, in the form attached hereto as EXHIBIT 7.2(b).
(c) The Related Agreements including Employment Agreements for Ellery
Buchanan and Larry Thompson.
(d) An affidavit of Seller, in the form attached hereto as EXHIBIT
7.2(d), stating, under penalty of perjury, Seller's United States taxpayer
identification number and that Seller is not a foreign person, pursuant to
Section 1445(b)(2) of the Code.
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(e) Valid assignments for all rights under Contracts and other third
party consents which may be required for the consummation of the transactions
contemplated hereof or governmental consents, necessary in order for Purchaser
to operate the Business.
(f) Agreements of release and waiver executed by all parties listed
on SCHEDULE 6.4 and any other parties required for the consummation of the
transactions contemplated hereby.
(g) Resale certificates for the resale of any items of Inventory.
SECTION 7.3 DELIVERIES BY PURCHASER AND ULTRATECH. At the Closing,
Purchaser and Ultratech shall deliver, or cause to be delivered, to Seller or
the Lenders, as the case may be, all duly and properly executed, the following:
(a) (To the Lenders) The Purchase Price to be delivered at Closing
pursuant to Section 3.2 hereof;
(b) The Related Agreements;
(c) An opinion of Brobeck, Phleger & Harrison LLP, counsel to
Purchaser and Ultratech, dated as of the Closing in the form attached hereto as
EXHIBIT 7.3(c) which will provide that the Lenders are entitled to rely on such
opinion; and
(d) Assignment and Assumption Agreement attached as EXHIBIT 7.3(d).
SECTION 7.4 FURTHER ASSURANCES. At or after the Time of Closing,
each party shall each prepare, execute, and deliver, at the preparer's expense,
such further instruments of conveyance, sale, assignment, or transfer, and shall
take or cause to be taken such other or further action, as any party shall
reasonably request of any other party at any time or from time to time in order
to perfect, confirm, or evidence in Purchaser title to all or any part of the
Assets or to consummate, in any other manner, the terms and provisions of this
Agreement.
ARTICLE VIII
SETTLEMENT AND GENERAL RELEASE
SECTION 8.1 SETTLEMENT AND GENERAL RELEASE. For the consideration
set forth in Article III herein, Seller, and each of its officers, directors,
employees and stockholders, waives and releases Ultratech, Purchaser, and each
of its successors, officers, directors, affiliates, agents, employees and/or
assigns and covenants not to sue or otherwise institute or cause to be
instituted or in any way participate in (except at the request of Ultratech or
Purchaser or as required by legal process) legal or administrative proceedings
against Ultratech, Purchaser and each of its successors, officers, directors,
affiliates, agents, employees and/or agents with respect to any
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matter of any kind arising out of, relating to or connected with any Excluded
Liabilities, the Business, the Assets, this Agreement, arising under any
Contract or in any manner related to the transaction contemplated hereby.
This waiver and release extends to all claims of every nature and
kind, known or unknown, suspected or unsuspected, past, present or future,
arising from any Excluded Liabilities, the Business, the Assets, this Agreement
arising under any Contract or in any manner related to the transactions
contemplated hereby. Seller and each of its officers, directors, employees and
stockholders acknowledges that any and all rights granted to such person or
entity under Section 1542 of the California Civil Code or any analogous state
law or federal law or regulation are hereby expressly waived. Said Section 1542
of the Civil Code of the State of California reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
The above shall constitute a complete defense to any claim released
herein. Anything in this Section 8.1 to the contrary notwithstanding, the
foregoing terms and provisions of this Section 8.1 shall not be construed as
expressly or impliedly releasing Purchaser or Ultratech from its express
contractual obligations under this Agreement, nor shall the covenants not to sue
in the foregoing provisions be applicable to any such express contractual
obligations.
Seller, Citicorp, Cornerstone Equity Investors, L.L.C., on behalf of
itself and in its capacity as an investment advisor to Prudential Equity
Investors, Inc., the general partner of Prudential Private Equity Investors III,
L.P. ("Cornerstone") and certain former directors of Seller shall enter into the
Release, together with the Lenders, to the extent set forth herein. Seller
shall use commercially reasonable efforts to obtain a general release of claims
against Ultratech and Purchaser and each of Ultratech's and Purchaser's
respective Affiliates, successors, agents and assigns from the securityholders
of Seller in connection with the transactions contemplated hereby, in connection
with Seller's proxy solicitation.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS
SECTION 9.1 CONDITIONS TO OBLIGATIONS OF PURCHASER AND ULTRATECH.
Each and every obligation of Purchaser and Ultratech to be performed at the
Closing shall be subject to the satisfaction as of or before the Time of Closing
of the following conditions (unless waived in writing by Purchaser and
Ultratech):
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(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller set forth in Article V of this Agreement shall have been
true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Time of Closing as if such
representations and warranties were made as of such date and time.
(b) PERFORMANCE OF AGREEMENT. All covenants, conditions, and other
obligations under this Agreement and the Related Agreements which are to be
performed or complied with by Seller, including Board of Directors and
stockholder approval, shall have been fully performed and complied with in all
material respects at or prior to the Time of Closing, including the delivery of
the instruments and documents in accordance with Section 7.2 hereof.
(c) NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change including any material diminution in value, in the Assets, in the
reasonable determination of Ultratech.
(d) SUITS. There shall be no suit, or written threat thereof, by any
third party, including without limitation, any creditor of Seller or any other
party to any agreement with Seller, against Ultratech or Purchaser or affecting
the Business or the Assets.
(e) ABSENCE OF GOVERNMENTAL OBJECTION. There shall be no pending or
threatened lawsuit challenging the transaction by any body or agency of the
federal, state, or local government, and the consummation of the transaction
shall not have been enjoined by a court of competent jurisdiction as of the Time
of Closing and any applicable waiting period under any applicable federal law
shall have expired.
(f) EVIDENCE OF TITLE. Purchaser shall have received evidence, at or
prior to the Time of Closing, reasonably satisfactory to it of the termination
of the security agreement among the Lenders and Seller and of Seller's title to
all of the Assets and right to fully convey all Assets free and clear of any
lien, encumbrances or restrictions on transfer.
(g) CERTIFICATE OF PRESIDENT. Seller shall have delivered to
Purchaser and Ultratech a certificate executed by its President, dated the
date of the Closing, to the effect that the conditions set forth in
subsections (a)-(e) and (j) of this Section 9.1, have been satisfied.
(h) APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments, opinions, and other documents delivered or to be
delivered to Purchaser and Ultratech under this Agreement shall be satisfactory
to Purchaser and Ultratech and their counsel.
(i) EXECUTION OF RELATED AGREEMENTS. Purchaser and Ultratech shall
have received fully executed copies of the Related Agreements, including the
Employment Agreements with Ellery Buchanan and Larry Thompson, an executed copy
of the Release and such other documentation from the Lenders as Purchaser and
Ultratech shall in their discretion deem necessary and appropriate with respect
to additional agreements among such persons.
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(j) RELEASE AND WAIVERS. Purchaser and Ultratech shall have received
duly executed release and waiver agreements in form and substance satisfactory
to Ultratech in its sole discretion, from each party set forth on SCHEDULE 6.4
and other creditors of Seller and amendments to contracts specifically
identified thereon.
(k) LICENSES. Purchaser shall have received all licenses or
assignment of existing licenses from all appropriate governmental agencies or
third parties, including without limitation, General Signal Corporation, to
operate the Business in the same manner as Seller operated the Business prior to
the Time of Closing.
(l) HSR ACT. Any waiting period (and any extension thereof)
applicable to the consummation of the sale of Assets under the HSR Act shall
have expired or been terminated.
(m) ASSIGNMENT OF CONTRACTS. Purchaser shall have received
assignments, in form and substance satisfactory to Ultratech and Purchaser in
their sole discretion, of all rights under Contracts.
(n) APPROVAL OF THE LENDERS AND CITICORP. Seller shall have received
the approval of the Lenders and Citicorp as to the Agreement, the Related
Agreements and the terms and conditions therein.
(o) EMPLOYMENT OF EMPLOYEES. Purchaser and Ultratech shall be
satisfied, in their sole discretion, that at least 75% of all Seller employees
in field service and otherwise to whom offers of employment are made by
Purchaser or Ultratech shall have agreed, subject to the Closing, to become
employees of Purchaser or Ultratech.
(p) SIDE LETTER WITH BANK. Seller shall have delivered to
Purchaser and Ultratech a copy of a letter from the Lenders as to the amount
of outstanding indebtedness under Seller's bank line of credit (including
re-advances) being $17.481 million as of the Time of Closing.
(q) DISCLOSURE LETTER AND SCHEDULES. At the Time of Closing, Seller
shall deliver to Purchaser and Ultratech revised versions of Schedules
(including attachments) 1.1(c), 2.1 and 5.6., updated as of the most recent
practicable date prior to the Time of Closing, which shall as of the Time of
Closing become attachments to this Agreement, and which shall be true and
correct as of the date thereof. The Schedules so delivered shall be in a form
reasonably acceptable to Purchaser, Ultratech and its counsel. Should the
amount of any liabilities or other obligations to be assumed by Purchaser under
such schedules, as updated, be unacceptable to Purchaser or Ultratech in their
sole discretion, this Agreement may be terminated by Purchaser and Ultratech
without liability pursuant to Section 11.2 hereof.
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SECTION 9.2 CONDITIONS TO OBLIGATIONS OF SELLER. Each and every
obligation of Seller to be performed at the Time of Closing shall be subject to
the satisfaction as of or before such time of the following conditions (unless
waived in writing by Seller):
(a) REPRESENTATIONS AND WARRANTIES. Purchaser's and Ultratech's
representations and warranties set forth in Article IV of this Agreement shall
have been true and correct when made and shall be true and correct in all
material respects at and as of the Time of Closing as if such representations
and warranties were made as of such time and date.
(b) EXECUTION OF RELATED AGREEMENTS. Seller shall have received
fully executed copies of the Related Agreements and the Release.
(c) ABSENCE OF GOVERNMENTAL OBJECTION. There shall be no pending or
threatened lawsuit challenging the transaction by any body or agency of the
federal, state, or local government, and the consummation of the transaction
shall not have been enjoined by a court of competent jurisdiction as of the Time
of Closing.
(d) HSR ACT. Any waiting period (and any extension thereof)
applicable to the consummation of the sale of Assets under the HSR Act shall
have expired or been terminated.
(e) PERFORMANCE OF AGREEMENT. All covenants, conditions and other
obligations under this Agreement and the Related Agreements which are to be
performed or complied with by the Purchaser and Ultratech, including Board of
Directors approval, shall have been fully performed and complied with in all
material respects at or prior to the Time of Closing, including the delivery of
the instruments and documents in accordance with Section 7.2 hereof.
(f) CERTIFICATE OF PRESIDENT. Ultratech and Purchaser shall have
delivered to Seller certificates executed by their respective Presidents, dated
the date of the Closing, to the effect that the conditions set forth in
subsections (a)-(e) of this Section 9.1 have been satisfied.
(g) APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments, opinions and other documents delivered or to be
delivered to Seller under this Agreement shall be satisfactory to Seller and its
counsel.
(h) APPROVAL OF THE LENDERS AND CITICORP. Seller shall have received
the approval of the Lenders and Citicorp as to the Agreement, the Related
Agreements and the terms and conditions therein.
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ARTICLE X
INDEMNIFICATION
SECTION 10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS.
(a) Notwithstanding any investigation conducted at any time with
regard thereto by or on behalf of any party to this Agreement, all
representations, warranties, agreements and covenants of each party in this
Agreement shall not survive the consummation of the sale of the Assets, except
that the provisions of Articles I, II, VI, VII, VIII, X and XII of this
Agreement shall survive the Closing. No investigation made by or on behalf of
Ultratech or Purchaser with respect to Seller shall be deemed to affect
Ultratech's or Purchaser's reliance on the representations, warranties,
covenants and agreements (to the extent they survive) made by Seller contained
in this Agreement and shall not be a waiver of Ultratech's or Purchaser's rights
to indemnity as herein provided for the breach or inaccuracy of or failure to
perform or comply with any of Seller's representations, warranties, covenants or
agreements under this Agreement (to the extent they survive). All
representations and warranties of each party set forth in this Agreement shall
be deemed to have been made again by such party at and as of the Time of
Closing.
(b) As used in this Article X, any reference to a representation,
warranty, or covenant contained in any section of this Agreement shall include
the specifically referenced Schedules, Exhibits and/or disclosure in the
Disclosure Letter acceptable to Purchaser and Seller.
(c) Nothing in this Agreement, including survivability, shall be
construed as limiting in any way the remedies that may be available to a party
in the event of fraud, bad faith, civil or criminal misconduct, gross negligence
or willful misconduct relating to the representations, warranties, agreements or
covenants made by any other party in this Agreement.
SECTION 10.2 INDEMNIFICATION. Seller hereby agrees to indemnify,
defend and hold harmless Purchaser and Ultratech and each of their respective
officers, directors, employees, stockholders and other affiliates
("Affiliates") against any and all losses, liabilities, damages, demands,
claims, suits, actions, judgments, and causes of action, assessments, costs,
and expenses, including, without limitation, interest, penalties, reasonable
attorneys' fees, any and all expenses incurred in investigating, preparing,
and defending against any litigation, commenced or threatened, and any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "Damages"), asserted against, resulting from,
imposed upon, or incurred or suffered by Purchaser or Ultratech and each of
their respective affiliates, directly or indirectly, as a result of or
arising from or in connection with any provision in Articles I, II, VI, VII,
VIII, X and XII of this Agreement (all of which shall also be referred to as
"Identifiable Claims").
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SECTION 10.3 PROCEDURE FOR INDEMNIFICATION WITH RESPECT
TO THIRD-PARTY CLAIMS.
(a) If Purchaser, Ultratech or any of the Affiliates determines to
seek indemnification under this Article X with respect to the existence of a
claim giving rise to Damages resulting from the assertion of liability by third
parties, Purchaser or Ultratech shall give notice to Seller within 60 days of
Purchaser or Ultratech becoming aware of any such Identifiable Claim or of facts
upon which any such Identifiable Claim will be based; the notice shall set forth
such material information with respect thereto as is then reasonably available
to Purchaser or Ultratech. In case any such liability is asserted against
Purchaser or Ultratech, and Purchaser or Ultratech notifies Seller thereof,
Seller will be entitled, if it so elects by written notice delivered to
Purchaser or Ultratech within 20 days after receiving Purchaser's or Ultratech's
notice, to assume the defense thereof with counsel satisfactory to Purchaser or
Ultratech. Notwithstanding the foregoing, (i) Purchaser and Ultratech shall
also have the right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of Purchaser and Ultratech
unless Purchaser and Ultratech shall reasonably determine that there is a
conflict of interest between or among Purchaser or Ultratech, and/or Seller with
respect to such Identifiable Claim or there are or may be legal defenses
available to Purchaser, Ultratech or any Affiliate which are different from or
additional to those available to Seller or a difference of position or potential
difference of position exists between Seller and Purchaser, Ultratech or any
Affiliate that would make such separate representation advisable in the
reasonable opinion of counsel to Purchaser, Ultratech or any Affiliate, in which
case the fees and expenses of such counsel will be borne by Seller, (ii)
Purchaser and Ultratech shall not have any obligation to give any notice of any
assertion of liability by a third party unless such assertion is in writing, and
(iii) the rights of Purchaser and Ultratech to be indemnified hereunder in
respect of Identifiable Claims resulting from the assertion of liability by
third parties shall not be adversely affected by its failure to give notice
pursuant to the foregoing unless, and, if so, only to the extent that, Seller is
materially prejudiced thereby. With respect to any assertion of liability by a
third party that results in an Identifiable Claim, the parties hereto shall make
available to each other all relevant information in their possession material to
any such assertion.
(b) In the event that Seller, within 20 days after receipt of the
aforesaid notice of an Identifiable Claim, fails to assume the defense of
Purchaser or Ultratech against such Identifiable Claim, Purchaser and Ultratech
shall have the right to undertake the defense, compromise, or settlement of such
action on behalf of and for the account, expense, and risk of Seller.
(c) Notwithstanding anything in this Article X to the contrary,
Purchaser and Ultratech shall have the right to participate in such defense,
compromise, or settlement and Seller shall not, without Purchaser's and
Ultratech's written consent (which consent shall not be unreasonably withheld),
settle or compromise any Identifiable Claim or consent to entry of any judgment
in respect thereof unless such settlement, compromise, or consent includes as an
unconditional term thereof the giving by the claimant or the plaintiff to
Purchaser, Ultratech and any Affiliate a release from all liability in respect
of such Identifiable Claim.
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SECTION 10.4 PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO NON-THIRD
PARTY CLAIMS. In the event that Purchaser, Ultratech or any Affiliate asserts
the existence of a claim giving rise to Damages (but excluding claims resulting
from the assertion of liability by third parties), it shall give written notice
to Seller. Such written notice shall state that it is being given pursuant to
this Section 10.4, specify the nature and amount of the claim asserted and
indicate the date on which such assertion shall be deemed accepted and the
amount of the claim deemed a valid claim (such date to be established in
accordance with the next sentence). If Seller, within sixty (60) days after the
mailing of notice by Purchaser or Ultratech, shall not give written notice to
Purchaser and Ultratech announcing its intent to contest such assertion of
Purchaser or Ultratech, such assertion shall be deemed accepted and the amount
of claim shall be deemed a valid claim. In the event, however, that Seller
contests the assertion of a claim by giving such written notice to Purchaser and
Ultratech within said period, then the parties shall act in good faith to reach
agreement regarding such claim. In the event that arbitration shall arise with
respect to any such claim, the prevailing party shall be entitled to
reimbursement of costs and expenses incurred in connection with such arbitration
including reasonable attorneys' fees, if the parties hereto, acting in good
faith, cannot reach agreement with respect to such claim within ten (10) days
after such notice.
SECTION 10.5 ARBITRATION. Any dispute arising under this Article X
shall be resolved by arbitration in accordance with Section 12.12 hereof.
ARTICLE XI
TERMINATION AND ABANDONMENT
SECTION 11.1 TERMINATION. This Agreement may be terminated and the
transactions herein contemplated may be abandoned at any time notwithstanding
Board or stockholder approval, but not later than the Time of Closing:
(a) by Ultratech, Purchaser or Seller, if there has been a breach of
any representation, warranty, covenant or agreement set forth in this Agreement
and the breaching party fails to cure within five (5) business days after notice
thereof is given (except that no cure period shall be provided for a breach by
Seller which by its nature cannot be cured);
(b) by Ultratech or Purchaser, if the required approval of the
stockholders of Seller contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required consents or proxies
within thirty (30) days from the solicitation of such consents or proxies;
(c) by Ultratech, Purchaser or Seller, if any permanent injunction or
other order of a court or other competent authority preventing the sale of
Assets shall have become final and nonappealable or, in Purchaser's, Ultratech's
or Seller's reasonable good faith judgment,
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shall render unlikely within a reasonable period of time the consummation of
the sale of Assets on the terms contemplated hereby; or
(d) by Ultratech, Purchaser or Seller if any governmental or
administrative agency shall have issued a temporary restraining order,
preliminary injunction or permanent injunction or other order preventing the
consummation of the sale of Assets or any litigation shall be pending, the
ultimate resolution of which is likely to (i) result in the issuance of such an
order or injunction, or the imposition against Ultratech, Purchaser or Seller,
of substantial damages if the sale of Assets is consummated, (ii) prohibit
Ultratech's or Purchaser's ownership or operation of all or a material portion
of the business rights of Seller and its Subsidiaries taken as a whole or
Ultratech or Purchaser taken as a whole, or to compel Purchaser or Seller to
dispose of or hold separate all or a material portion of the business or assets
of Purchaser or Seller and its Subsidiaries taken as a whole, as a result of the
sale of Assets, (iii) materially limit or restrict Purchaser's conduct or
operation of the Business after the Time of Closing, or (iv) render Ultratech,
Purchaser or Seller unable to consummate the sale of Assets. In the event any
such order or injunction shall have been issued, each party agrees to use its
reasonable efforts to have any such injunction lifted.
SECTION 11.2 PROCEDURE AND CONSEQUENCES OF TERMINATION. In the
event of termination pursuant to Section 11.1 hereof, written notice thereof
shall forthwith be given to the other party and this Agreement shall terminate
and the transactions contemplated hereby shall be abandoned without further
action. If this Agreement is terminated as provided herein, neither party
hereto shall have any further obligation or liability to the other party except
as stated in the mutual nondisclosure agreements dated May 3, 1998.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1 NOTICE. All notices and other communications required
or permitted under this Agreement shall be delivered to the parties at the
address set forth below their respective signature blocks, or at such other
address that they designate by notice to all other parties in accordance with
this Section 11.1. Any party delivering notice to Seller shall deliver a copy
to Integrated Solutions, Inc., 9715 Burnet Road, Bldg. 5, Building 6, Suite 500,
Austin, TX 78758, Attention: President; and Stroock & Stroock & Lavan LLP, 100
Federal Street, Boston, Massachusetts 02110, Attention: Paul D. Broude, Esq.
Any party delivering notice to Purchaser or Ultratech shall deliver a copy to:
3050 Zanker Road, San Jose, California 95134, Attention: President; and Brobeck,
Phleger & Harrison LLP, Two Embarcadero Place, 2200 Geng Road, Palo Alto,
California 94303, Attention: Timothy R. Curry, Esq. All notices and
communications shall be deemed to have been received: (i) in the case of
personal delivery, on the date of such delivery; (ii) in the case of telex or
facsimile transmission, on the date on which the sender receives confirmation by
telex or facsimile transmission that such notice was received by the addressee,
provided that a copy of such transmission is additionally sent by mail
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as set forth in (iv) below; (iii) in the case of overnight air courier, on
the second business day following the day sent, with receipt confirmed by the
courier; and (iv) in the case of mailing by first class certified or
registered mail, postage prepaid, return receipt requested, on the fifth
business day following such mailing.
SECTION 12.2 ENTIRE AGREEMENT. This Agreement, the exhibits and
schedules hereto, and the documents referred to herein embody the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supersede all prior and contemporaneous agreements and
understandings among Seller, Purchaser and Ultratech, oral or written, relative
to said subject matter, except paragraphs 6 and 7 of the letter agreement dated
April 2, 1998, as amended, which shall remain in effect pursuant to a side
letter agreement among the Lenders, Ultratech and Purchaser.
SECTION 12.3 BINDING EFFECT; ASSIGNMENT. This Agreement and the
various rights and obligations arising hereunder shall inure to the benefit of
and be binding upon Seller, its successors and permitted assigns, and Purchaser
and Ultratech and their successors and permitted assigns. Neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
transferred or assigned (by operation of law or otherwise) by either of the
parties hereto without the prior written consent of the other party.
SECTION 12.4 EXPENSES OF TRANSACTION; TAXES. Each party shall bear
its own costs and expenses in connection with this Agreement and the
transactions contemplated hereby. Seller shall pay all applicable sales, use,
excise, transfer, documentary and any other similar taxes arising out of the
purchase and sale of the Assets.
SECTION 12.5 WAIVER; CONSENT. This Agreement may not be changed,
amended, terminated, augmented, rescinded, or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented thereto. Except to the extent that a party hereto may have otherwise
agreed in writing, no waiver by that party of any condition of this Agreement or
breach by the other party of any of its obligations or representations hereunder
or thereunder shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or representation
by the other party, nor shall any forbearance by the first party to seek a
remedy for any noncompliance or breach by the other party be deemed to be a
waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
SECTION 12.6 THIRD-PARTY BENEFICIARIES. Except as otherwise
expressly provided for in this Agreement, nothing herein, expressed or implied,
is intended or shall be construed to confer upon or give to any person, firm,
corporation, or legal entity, other than the parties hereto, any rights,
remedies, or other benefits under or by reason of this Agreement.
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SECTION 12.7 COUNTERPARTS. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 12.8 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
SECTION 12.9 GOVERNING LAW. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of California
as applied to agreements among California residents entered into and to be
performed entirely within the State of California. Each of the parties to the
Agreement agree to submit to the exclusive jurisdiction of the California courts
to determine any issues with regard to the subject matter of this Agreement.
SECTION 12.10 ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement or to protect the
rights obtained hereunder the prevailing party shall be entitled to its
reasonable attorneys' fees, costs, and disbursements in addition to any other
relief to which it may be entitled.
SECTION 12.11 COOPERATION AND RECORDS RETENTION. Seller, Purchaser
and Ultratech shall (i) each provide the other with such assistance as may
reasonably be requested by them in connection with the preparation of any Tax
return, statement, report, form or other document (hereinafter collectively a
"Tax Return"), or in connection with any audit or other examination by any
taxing authority or any judicial or administrative proceedings relating to
liability for Taxes, (ii) each retain and provide the other, with any records or
other information which may be relevant to any such Tax Return, audit or
examination, proceeding or determination, and (iii) each provide the other with
any final determination of any such audit or examination, proceeding or
determination that affects any amount required to be shown on any Tax Return of
the other for any period. Without limiting the generality of the foregoing,
Seller, Purchaser and Ultratech shall retain, until the applicable statute of
limitations (including any extensions) have expired, copies of all Tax Returns,
supporting work schedules and other records or information which may be relevant
to such Tax Returns for all tax periods or portions thereof ending before or
including the Time of Closing and shall not destroy or otherwise dispose of any
such records without first providing the other party with a reasonable
opportunity to review and copy the same. Purchaser shall keep the original
copies of the records at its facilities in California and elsewhere, if
applicable, and, at Seller's expense, shall provide copies of the Records to
Seller upon Seller's request.
SECTION 12.12 ARBITRATION. The parties hereby covenant, stipulate
and agree that any controversy or claim arising out of, or relating to this
Agreement, or breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association in San Mateo or Santa Clara County, California. Such arbitration
shall be conducted by three (3) arbitrators, one (1) of which shall be selected
by each
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of the parties to such dispute with the third selected by the two (2)
arbitrators so selected. The parties agree that the arbitrators must support
their judgment with written findings of fact and conclusions of law and any such
judgment must be based upon the terms of this Agreement and applicable law and
may award equitable relief and/or damages. Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
(The remainder of this page intentionally left blank.)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
SELLER:
INTEGRATED SOLUTIONS, INC.
By: /s/ Ellery Buchanan
-----------------------------------------
Title: President
--------------------------------------
INTEGRATED ACQUISITION CORP.
By: /s/ Ellery Buchanan
-----------------------------------------
Title: President
--------------------------------------
SIGNATURE PAGE FOR ASSET PURCHASE AGREEMENT
39.
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PURCHASER:
ULTRATECH ACQUISITION SUB, INC.
By: /s/ Arthur Zafiropoulo
-----------------------------------------
Title: Chairman of the Board,
Chief Executive Officer & President
--------------------------------------
ULTRATECH:
By: /s/ Arthur Zafiropoulo
-----------------------------------------
Title: Chairman of the Board,
Chief Executive Officer & President
--------------------------------------
SIGNATURE PAGE FOR ASSET PURCHASE AGREEMENT
40.
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EXHIBIT 99.1
PRESS RELEASE DATED MAY 19, 1998
<PAGE>
EXHIBIT 99.1
[ULTRATECH STEPPER LETTERHEAD]
ULTRATECH STEPPER ANNOUNCES EXECUTION OF DEFINITIVE AGREEMENT
TO ACQUIRE THE ASSETS OF INTEGRATED SOLUTIONS, INC.
SAN JOSE, CA -- May 19, 1998 -- Ultratech Stepper, Inc. (NASDAQ/NM
Symbol: Ultratech Stepper, Inc. (NASDAQ:UTEK) today announced it has signed a
definitive agreement to acquire the assets of Integrated Solutions, Inc.
("ISI"), a privately held manufacturer of i-line and deep ultra violet (UV)
reduction lithography systems based in Tewksbury, Massachusetts and Austin,
Texas. Terms of the agreement were not disclosed. The acquisition is expected
to close within 30 days.
Arthur W. Zafiropoulo, Chairman and Chief Executive Officer, stated,
"The acquisition of ISI's assets positions Ultratech to offer customers a
broader range of lithography solutions, including our patented 1X and e-beam
technologies, and now i-line and deep UV reduction steppers. ISI's
lithography products are an outstanding addition to our portfolio, as they
offer the combination of productivity and cost-effectiveness that is the
cornerstone of Ultratech's corporate strategy."
"We expect to focus the reduction stepper products acquired on disk
drive and selected semiconductor market applications," Zafiropoulo continued.
The acquired products were developed under an R&D grant from Sematech, a
consortium of semiconductor device companies with US government funding,
which led the development of leading-edge lithographic process equipment.
The reduction stepper product line will continue to operate in the
Massachusetts location, which has experienced technical personnel to support
the growth of this operation.
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<PAGE>
ULTRATECH STEPPER
PAGE 2
PROFILE
Founded in 1979, Ultratech Stepper, Inc. designs, manufactures and
markets photolithography equipment used worldwide in the fabrication of
integrated circuits, micromachining devices, thin film heads for disk drives,
and photomasks for the semiconductor industry. The company produces products
that substantially reduce the cost of ownership for manufacturers in the
electronics industry. The company's home page on the World Wide Web is
located at WWW.ULTRATECH.COM.
Certain of the statements contained herein may be considered
forward-looking statements that involve risks and uncertainties, such as the
failure to close the acquisition of ISI in a timely manner, ability to
integrate operations as a result of an acquisition, ability to volume produce
systems and meet customer requirements, dependence on new product
introductions and commercial success of any new products, pricing pressures
and extended payment terms, manufacturing inefficiencies and absorption
levels, inventory obsolescence, economic and political conditions in Asia,
risks associated with introducing new technologies, competition, and changes
in technologies. Such risks and uncertainties are set forth in the Company's
SEC reports including the Company's Annual Report on Form 10-K for the period
ended December 31, 1997. Results of operations in any past period should not
be considered indicative of the results to be expected for future periods.
###
<PAGE>
[ULTRATECH STEPPER LETTERHEAD]
ULTRATECH STEPPER COMPLETES ACQUISITION OF
THE ASSETS OF INTEGRATED SOLUTIONS, INC.
SAN JOSE, CA -- June 11, 1998 -- Ultratech Stepper, Inc. (NASDAQ; UTEK)
today announced the acquisition of selected assets and certain liabilities of
Integrated Solutions, Inc. ("ISI"), has been consummated. ISI was a privately
held manufacturer of i-line and deep ultra violet (UV) reduction lithography
systems based in Tewksbury, Massachusetts and Austin, Texas. Although
specific financial terms were not disclosed, the acquisition was a cash
transaction and will be accounted for under the purchase method of accounting.
"This acquisition is an exceptional example of Ultratech's opportunistic
acquisition strategy in a consolidating industry," stated Arthur Zafiropoulo,
Chairman and Chief Executive Officer of Ultratech Stepper. "Ultratech has
added advanced i-line reduction and deep ultraviolet (DUV) lithography
technology, which complements our existing, proprietary 1X stepper and e-beam
technologies. We have also added engineering depth in SCALPEL
(Scattering-angle limited projection electron-beam lithography) and advanced
reticle stage technology. The sum total of the combined technologies is very
exciting and positions Ultratech to compete more effectively in our served
markets today and in the future."
Several of ISI's senior management, sales, engineering and manufacturing
personnel plan to remain with Ultratech and its subsidiary that purchased
the ISI assets. The acquired sales, engineering and manufacturing
organizations will continue to operate in the Massachusetts location, while
the sales and support offices will be integrated into Ultratech's existing
infrastructure worldwide. The administrative and financial organizations will
also be integrated into the existing Ultratech organization.
-more-
<PAGE>
ULTRATECH STEPPER
PAGE 2
PROFILE
Founded in 1979, Ultratech Stepper, Inc. designs, manufactures and
markets photolithography equipment used worldwide in the fabrication of
integrated circuits, micromachining devices, thin film heads for disk drives,
and photomasks for the semiconductor industry. The company produces products
that substantially reduce the cost of ownership for manufacturers in the
electronics industry. The company's home page on the World Wide Web is
located at WWW.ULTRATECH.COM.
Certain of the statements contained herein may be considered forward-looking
statements that involve risks and uncertainties, such as the acquisition
accounting of the acquisition as it relates to goodwill amortization and its
impact on the Company's financial statements, the failure to develop and
commercialize the ISI products, ability to integrate operations as a result
of the acquisition, ability to volume produce new systems and meet customer
requirements, dependence on new product introductions and commercial success
of any new products, inventory obsolescence, risks associated with
introducing new technologies, competition, assumption of contingent and other
liabilities of the acquired business, and changes in technologies. Such risks
and uncertainties are set forth in the Company's SEC reports including the
Company's Quarterly Report on Form 10-Q for the period ended March 31, 1998.
###
