-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rs+EFmV7nlE0EpwVAY0adg/11aiI2XBNNH0ICHAp282Aq/TNeO8wCdQRxkM+EqlD vTnMBSA21FvkU1nRuYkPWw== /in/edgar/work/20000906/0000950153-00-001236/0000950153-00-001236.txt : 20000922 0000950153-00-001236.hdr.sgml : 20000922 ACCESSION NUMBER: 0000950153-00-001236 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000906 FILED AS OF DATE: 20000906 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASM INTERNATIONAL N V CENTRAL INDEX KEY: 0000351483 STANDARD INDUSTRIAL CLASSIFICATION: [3559 ] IRS NUMBER: 980101743 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 000-13355 FILM NUMBER: 717548 BUSINESS ADDRESS: STREET 1: JAN VAN EYCKLAAN 10 STREET 2: 3723 BC BILTHOVEN CITY: THE NETHERLANDS STATE: P7 MAIL ADDRESS: STREET 1: JAN VAN EYCKLAAN 10 STREET 2: 3723 BC BILTHOVEN CITY: NETHERLANDS FORMER COMPANY: FORMER CONFORMED NAME: ADVANCED SEMICONDUCTOR MATERIALS INTERNATIONAL N V DATE OF NAME CHANGE: 19950530 6-K 1 p63730e6-k.txt 6-K 1 FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REPORT OF FOREIGN PRIVATE ISSUER Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 September 6, 2000 ASM INTERNATIONAL N.V. (Translation of registrant's name into English) JAN VAN EYCKLAAN 10 3723 BC BILTHOVEN THE NETHERLANDS (Address of principal executive offices) [Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.] Form 20-F X Form 40-F [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.] Yes ______ No X [If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-____________________.] 2
Table of Contents: Page Capitalization ......................................................................................... 3 Selected Consolidated Financial Data ................................................................... 4 Consolidated Balance Sheets as of December 31, 1999 and June 30, 2000 (unaudited) ................................................................. 5 Consolidated Statements of Operations for the Quarter and Six-Month Periods ended June 30, 1999 and 2000 (unaudited) ...................................................... 6 Consolidated Statements of Comprehensive Income for the Quarter and Six-Month Periods ended June 30, 1999 and 2000 (unaudited) .............................................. 7 Consolidated Statement of Shareholders' Equity for the Six-Month Period ended June 30, 2000 (unaudited) ............................................................... 7 Consolidated Statement of Cash Flows for the Quarter and Six-Month Periods ended June 30, 1999 and 2000 (Unaudited) ............................................................ 8 Notes to Financials .................................................................................... 9 Management's Discussion and Analysis of Financial Condition and Results of Operations ......................................................................... 18 Market Risk Disclosure ................................................................................. 24 Cautionary Factors ..................................................................................... 25 Incorporation by Reference ............................................................................. 27 Exhibit List ........................................................................................... 28 Signatures
As used in this report, the terms "we," "us," "our" and "ASM International" mean ASM International N.V. and its subsidiaries, unless the context indicates otherwise. 2 3 CAPITALIZATION The following table shows our cash and cash equivalents and our capitalization as of June 30, 2000 on an actual basis and as adjusted to reflect the US$75 million loan we received of which US$69 million was taken down, after deducting fees and expenses.
JUNE 30, 2000 ----------------------------------------- ACTUAL AS ADJUSTED ---------- ----------- (EUROS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Cash and cash equivalents (1) (euro) 77,085 (euro) 148,162 ============= ============== Total debt: Notes payable to banks............................................ (euro) 12,304 (euro) 12,304 Current portion of long-term debt................................. 5,610 31,683 Current portion of subordinated debt.............................. 1,361 1,361 Long-term debt.................................................... 11,070 57,422 Subordinated debt................................................. - - Total debt................................................. 30,345 102,770 Stockholders' equity: Common shares: Nlg. 0.01 par value; 60,000,000 shares authorized 48,758,946 issued and outstanding, actual and outstanding, as adjusted (2)........................................ 221 221 Additional paid-in capital............................................ 253,506 253,506 Retained earnings................................................ 3,806 3,806 Cumulative other comprehensive (loss) income..................... (1,519) (1,519) Total stockholders equity............................................. 256,014 256,014 -------------- -------------- Total capitalization....................................... (euro) 286,359 (euro) 358,784 ============== ==============
(1) Cash and cash equivalents of ASM Pacific Technology, are restricted to use in the operations of ASM Pacific Technology only. At June 30, 2000, such restricted cash and cash equivalents amounted to (euro) 47.8 million (actual) and (euro) 47.8 million (as adjusted) (2) The actual share number is based on common shares outstanding as of June 30, 2000 but excludes: - 1,469,695 common shares issuable upon exercise of outstanding options with a weighted average exercise price of $7.32 per common share; and - 200,000 common shares issuable upon exercise of outstanding warrants, with an exercise price of $9.81375 per share. (3) The net proceeds have been converted into Euros at the noon buying rate in New York City on April 6, 2000 for cable transfers payable in Euros as certified for customs purposes by the Federal Reserve Bank of New York, which was 0.9580 United States dollars per Euro. 3 4 SELECTED CONSOLIDATED FINANCIAL DATA You should read the following selected financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the notes thereto included elsewhere in this report. The following data, insofar as they relate to each of the years 1995 through 1999, have been derived from audited consolidated financial statements not included in this report.
YEAR ENDED DECEMBER 31, ----------------------- 1995 1996 1997 1998 -------------- -------------- -------------- -------------- (Euros in thousands, except per share data) (1) CONSOLIDATED STATEMENT OF OPERATIONS DATA: Net sales......................................... (euro)304,419 (euro)298,695 (euro)321,582 (euro)288,111 Costs of sales ................................... (168,102) (164,833) (182,259) (179,326) ----------- ------------ ------------- ------------ Gross profit ..................................... 136,317 133,862 139,323 108,785 Operating expenses: Selling, general and administrative ............ (59,645) (62,744) (74,675) (60,017) Research and development, net .................. (20,357) (26,137) (39,000) (36,277) Litigation settlement .......................... -- -- (79,669) -- ----------- ------------ ------------- ------------ Total operating expenses .................... (80,002) (88,881) (193,344) (96,294) ----------- ------------ ------------- ------------ Earnings (loss) from operations .................. 56,315 44,981 (54,021) 12,491 ----------- ------------ ------------- ------------ Net interest and other financial income (expenses) ..................................... (6,242) (3,236) (3,239) (5,350) Income taxes ..................................... (2,996) (2,032) (2,761) (648) Minority interest in net earnings of subsidiaries ................................... (13,689) (8,674) (10,455) (6,261) ----------- ------------ ------------- ------------ Net earnings (loss) .............................. (euro)33,388 (euro)31,039 (euro)(70,476) (euro)232 =========== ============ ============= ============ Basic net earnings (loss) per share .............. (euro)1.06 (euro)0.98 (euro)(2.12) (euro)0.01 =========== ============ ============= ============ Diluted net earnings (loss) per share ............ (euro)0.98 (euro)0.92 (euro)(2.12) (euro)0.01 =========== ============ ============= ============ Basic weighted average number of shares ......................................... 31,428 31,566 33,232 33,794 Diluted weighted average number of shares ......................................... 33,966 33,717 33,232 34,743
SIX MONTHS ENDED JUNE 30, ------------------------- 1999 1999 2000 -------------- -------------- --------- (Euros in thousands, except per share data) (1) CONSOLIDATED STATEMENT OF OPERATIONS DATA: unaudited unaudited Net sales.............................................. (euro)414,495 (euro)149,287 (euro)420,919 Costs of sales ........................................ (244,485) (90,278) (237,700) --------------- --------------- -------------- Gross profit .......................................... 170,010 59,009 183,219 Operating expenses: Selling, general and administrative ................. (83,510) (34,453) (68,975) Research and development, net ....................... (47,145) (19,837) (32,081) Litigation settlement ............................... -- -- -- --------------- --------------- -------------- Total operating expenses ......................... (130,655) (54,290) (101,056) --------------- --------------- -------------- Earnings (loss) from operations ....................... 39,355 4,719 82,163 --------------- --------------- -------------- Net interest and other financial income (expenses) .......................................... (8,608) (5,475) (562) Income taxes .......................................... (1,274) (290) (10,511) Minority interest in net earnings of subsidiaries ........................................ (18,374) (5,048) (31,830) --------------- --------------- -------------- Net earnings (loss) ................................... (euro)11,099 (euro)(6,094) (euro)39,260 ============== ============== ============== Basic net earnings (loss) per share ................... (euro)0.30 (euro)(0.17) (euro)0.88 =============== =============== ============== Diluted net earnings (loss) per share ................. (euro)0.29 (euro)(0.17) (euro)0.83 =============== =============== ============== Basic weighted average number of shares .............................................. 37,301 36,143 44,814 Diluted weighted average number of shares .............................................. 40,664 36,143 47,500
DEC 31, JUNE 30, JUNE 30, ------- -------- -------- 1995 1996 1997 1998 1999 1999 2000 ------- ------- ------- ------- ------- ------- ------- (Euros in thousands) -------------------- CONSOLIDATED BALANCE SHEET DATA: unaudited unaudited Cash and cash equivalents 26,683 26,028 27,446 11,724 14,153 7,190 77,085 Total assets ............ 233,911 277,704 328,589 282,950 425,035 324,556 624,735 Total debt .............. 77,569 80,145 167,417 148,756 119,893 144,137 30,345 Total shareholders equity 33,386 80,807 16,019 20,464 65,552 25,938 256,014
(1) The noon buying rate in New York City for cable transfers payable in Euros as certified for customs purposes by the Federal Reserve Bank of New York was 1.0070 per United States dollar on December 31, 1999. See "Notes to the Unaudited Consolidated Interim Financial Statements." 4 5 ASM INTERNATIONAL N.V. CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------------------------------------------------------------------- (thousands except share data) In Euro - ----------------------------------------------------------------------------------------------------------------------------------- December 31, June 30, - ----------------------------------------------------------------------------------------------------------------------------------- Assets 1999 2000 - ----------------------------------------------------------------------------------------------------------------------------------- (note A) UNAUDITED Cash and cash equivalents 14,153 77,085 Marketable securities 5,709 5,593 Accounts receivable, net 149,115 230,316 Inventories, net, (note B) 107,280 128,668 Other current assets 15,844 20,976 - ----------------------------------------------------------------------------------------------------------------------------------- Total current assets 292,101 462,638 Property, plant and equipment, net (note C) 127,176 152,566 Intangible assets, net (note D) 5,758 9,531 - ----------------------------------------------------------------------------------------------------------------------------------- Total Assets 425,035 624,735 =================================================================================================================================== Liabilities and Shareholders' Equity - ----------------------------------------------------------------------------------------------------------------------------------- Notes payable to banks (note E) 22,667 12,304 Accounts payable 108,922 152,751 Accrued expenses 48,566 59,861 Advance payments from customers 4,595 11,469 Income taxes 3,887 13,343 Current portion of long-term debt (note F) 36,944 5,610 Current portion of subordinated debt (note G) 52,285 1,361 - ----------------------------------------------------------------------------------------------------------------------------------- Total current liabilities 277,866 256,699 Long-term debt (note F) 7,997 11,070 Deferred income taxes 3,490 3,637 - ----------------------------------------------------------------------------------------------------------------------------------- Total Liabilities 289,353 271,406 Minority interest in subsidiary 70,130 97,315 Shareholders' Equity: Common shares Authorized 60,000,000 shares, par value Nlg .01, issued and outstanding 40,107,784 and 48,758,946 shares 182 221 Financing preferred shares, issued none -- -- Preferred shares, issued none -- -- Capital in excess of par value 103,443 253,506 Retained (deficit) earnings (35,454) 3,806 Accumulated other comprehensive loss (2,619) (1,519) - ----------------------------------------------------------------------------------------------------------------------------------- Total Shareholders' Equity 65,552 256,014 - ----------------------------------------------------------------------------------------------------------------------------------- Total Liabilities and Shareholders' Equity 425,035 624,735 ===================================================================================================================================
See "Notes to the Unaudited Consolidated Interim Financial Statements." 5 6 ASM INTERNATIONAL N.V. CONSOLIDATED STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------------- (thousands, except per share data) In Euro - ----------------------------------------------------------------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, - ----------------------------------------------------------------------------------------------------------------------------------- 1999 2000 1999 2000 - ----------------------------------------------------------------------------------------------------------------------------------- UNAUDITED UNAUDITED UNAUDITED UNAUDITED Net sales 96,550 255,387 149,287 420,919 Cost of sales (56,458) (143,503) (90,278) (237,700) - ----------------------------------------------------------------------------------------------------------------------------------- Gross profit 40,092 111,884 59,009 183,219 Operating expenses: Selling, general and administrative costs (15,156) (39,942) (34,453) (68,975) Research and development (10,931) (18,215) (19,837) (32,081) - ----------------------------------------------------------------------------------------------------------------------------------- Total operating expenses (26,087) (58,157) (54,290) (101,056) - ----------------------------------------------------------------------------------------------------------------------------------- Earnings from operations 14,005 53,727 4,719 82,163 Net interest and other financial (expenses) income (2,912) 471 (5,475) (562) - ----------------------------------------------------------------------------------------------------------------------------------- Earnings (loss) before income taxes and minority interest in net earnings of subsidiary 11,093 54,198 (756) 81,601 Income taxes (456) (6,549) (290) (10,511) - ----------------------------------------------------------------------------------------------------------------------------------- Earnings (loss) before minority interest in net earnings of subsidiary 10,637 47,649 (1,046) 71,090 Minority interest in net earnings of subsidiary (5,012) (20,661) (5,048) (31,830) - ----------------------------------------------------------------------------------------------------------------------------------- Net earnings (loss) 5,625 26,988 (6,094) 39,260 =================================================================================================================================== Net earnings (loss) per share: Basic 0.15 0.56 (0.17) 0.88 Diluted (1) 0.14 0.54 (0.17) 0.83 - ----------------------------------------------------------------------------------------------------------------------------------- Weighted average number of shares (note K) Basic 36,208 48,238 36,143 44,814 Diluted (1) 41,790 49,763 36,143 47,500 - -----------------------------------------------------------------------------------------------------------------------------------
(1) The calculation of diluted net earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in earnings of the Company. Only instruments that have a dilutive effect on net earnings are included in the calculation. The assumed conversion results in adjustment in the weighted average number of common shares and net earnings due to the related impact on interest expense. The calculation is done for each reporting period individually (see note K). See "Notes to the Unaudited Consolidated Interim Financial Statements." 6 7 ASM INTERNATIONAL N.V. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
- ------------------------------------------------------------------------------------------------------------------- (thousands, except per share data) In Euro - ------------------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, - ------------------------------------------------------------------------------------------------------------------- 1999 2000 1999 2000 - ------------------------------------------------------------------------------------------------------------------- UNAUDITED UNAUDITED UNAUDITED UNAUDITED Net earnings (loss) 5,625 26,988 (6,094) 39,260 Other comprehensive income: Exchange rate changes for the period 2,125 1,031 4,622 1,100 - ------------------------------------------------------------------------------------------------------------------- Total other comprehensive income 2,125 1,031 4,622 1,100 - ------------------------------------------------------------------------------------------------------------------- Comprehensive income (loss) 7,750 28,019 (1,472) 40,360 - -------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------ (thousands, except for number of common shares) In Euro - ------------------------------------------------------------------------------------------------------------------------------------ Accumulated Total Number of Capital in Retained other com- Share- common Common excess of earnings prehensive holders' shares shares par value (deficit) income (loss) Equity - ------------------------------------------------------------------------------------------------------------------------------------ UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED UNAUDITED Balance December 31, 1999 40,107,784 182 103,443 (35,454) (2,619) 65,552 Issuance of common shares: For stock options 863,205 4 2,999 -- -- 2,999 Exercise of warrants 3,537,957 16 27,514 -- -- 27,530 Public offering 4,250,000 19 119,554 -- -- 119,573 Net earnings -- -- -- 39,260 -- 39,260 Exchange rate changes for the period -- -- -- -- 1,100 1,100 - ----------------------------------------------------------------------------------------------------------------------------------- Balance June 30, 2000 48,758,946 221 253,506 3,806 (1,519) 256,014 - -----------------------------------------------------------------------------------------------------------------------------------
See "Notes to the Unaudited Consolidated Interim Financial Statements." 7 8 ASM INTERNATIONAL N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS
- ----------------------------------------------------------------------------------------------------------------------------------- (thousands) In Euro In Euro - ----------------------------------------------------------------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, - ----------------------------------------------------------------------------------------------------------------------------------- 1999 2000 1999 2000 - ----------------------------------------------------------------------------------------------------------------------------------- UNAUDITED UNAUDITED UNAUDITED UNAUDITED Cash flows from operating activities: Net (loss) earnings 5,625 26,988 (6,094) 39,260 Depreciation and amortization 6,763 9,598 12,252 16,831 Deferred income taxes 142 418 475 147 Minority interest in net earnings of subsidiary 5,012 20,661 5,048 31,830 Changes in other assets and liabilities (15,498) (25,005) (13,248) (36,267) - ----------------------------------------------------------------------------------------------------------------------------------- Net cash (used in) provided by operating activities 2,044 32,660 (1,567) 51,801 - ----------------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Net capital expenditures (3,247) (23,575) (4,897) (37,185) Acquisitions -- (4,601) -- (4,601) Proceeds from sale of marketable securities 1,854 -- 1,854 -- - ----------------------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (1,393) (28,176) (3,043) (41,786) - ----------------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Proceeds from issuance of shares 14 119,869 14 126,547 Repayment of long-term debt and subordinated debt (3,932) (59,925) (5,601) (62,754) Other financing activities (5,961) (20,799) (1,306) (14,021) - ----------------------------------------------------------------------------------------------------------------------------------- Net cash (used in) provided by financing activities (9,879) 39,145 (6,893) 49,772 Exchange rate effects 2,915 257 6,968 3,145 - ----------------------------------------------------------------------------------------------------------------------------------- Net (decrease) increase in cash and cash equivalents (6,313) 43,886 (4,535) 62,932 - ----------------------------------------------------------------------------------------------------------------------------------- Supplemental disclosures of cash flow information Cash paid during the period for: Interest 2,820 822 5,709 3,172 Income taxes (201) (1,027) (591) (908) - ----------------------------------------------------------------------------------------------------------------------------------- Non cash financing activities: Exercise of warrants and subsequent conversion of subordinated notes into common shares -- -- 6,737 23,555 - -----------------------------------------------------------------------------------------------------------------------------------
See "Notes to the Unaudited Consolidated Interim Financial Statements." 8 9 ASM INTERNATIONAL N.V. NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (amounts in thousands of Euros, except per share and other data, unless otherwise stated) NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ASM International N.V. ("ASMI"or "the Company") is a corporation domiciled in the Netherlands with principal operations in Europe, the United States, Southeast Asia and Japan. The accompanying condensed financial statements (hereinafter referred to as the "Interim Financial Statements") have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Interim Financial Statements are unaudited but include all adjustments (consisting of normal recurring adjustments) which the Company's management considers necessary for a fair presentation of the financial position as of such dates and the operating results and cash flows for those periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The results of operations for the three months ended June 30, 2000 and six months ended June 30, 2000 may not necessarily be indicative of the operating results that may be incurred for the entire fiscal year. The December 31, 1999 balance sheet was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These Interim Financial Statements should be read in conjunction with the consolidated balance sheets of ASM International N.V. as of December 31, 1999 and 1998, and the related consolidated statements of operations, comprehensive income, cash flows and changes in shareholders' equity for each of the three years in the period ended December 31, 1999. New Accounting Pronouncements - In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements," which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. In June 2000, the SEC issued SAB 101B, "Second Amendment: Revenue Recognition in Financial Statements." SAB 101B delays the implementation of SAB101 until no later than the fourth quarter of the fiscal years beginning after December 15, 1999. The Company is currently assessing the impact of the statements on its financial position, results of operations and cash flows. 9 10 NOTE B: INVENTORIES
Dec. 31, 1999 June 30, 2000 ------------- ------------- Components and raw materials 41,052 54,975 Work in process 50,612 54,960 Finished goods 15,616 18,733 - -------------------------------------------------------------------------------- Inventories 107,280 128,668 - --------------------------------------------------------------------------------
NOTE C: PROPERTY, PLANT & EQUIPMENT
Total ----- At cost: Balance January 1, 2000 276,119 Capital expenditure 39,061 Retirements and sales (7,352) Translation effect 8,395 - ------------------------------------------------------------------------------- Balance June 30, 2000 316,225 - ------------------------------------------------------------------------------- Accumulated depreciation: Balance January 1, 2000 148,943 Depreciation 15,143 Retirements and sales (5,255) Translation effect 4,828 - ------------------------------------------------------------------------------- Balance June 30, 2000 163,659 - ------------------------------------------------------------------------------- Property, plant & equipment, net: January 1, 2000 127,176 June 30, 2000 152,566 Useful lives in years: Buildings and improvements 25 years Machinery and equipment 2-10 years Furniture and fixtures 2-10 years
10 11 NOTE D: INTANGIBLE ASSETS
Goodwill at cost January 1, 2000 6,202 Acquired 4,231 Translation effect (23) - -------------------------------------------------------------------------------- Balance June 30, 2000 10,410 - -------------------------------------------------------------------------------- Accumulated amortization goodwill at January 1, 2000 444 Amortization 435 - -------------------------------------------------------------------------------- Balance June 30, 2000 879 - -------------------------------------------------------------------------------- Goodwill, net January 1, 2000 5,758 June 30, 2000 9,531
Following the issuance of common shares under the ASM Pacific Technology Ltd. Employee Incentive Scheme in March 2000, the Company's shareholding in ASM Pacific Technology Ltd. ("ASMPT") dropped slightly below 50%. In various transactions in April and June, the Company acquired 0.3% of the outstanding common shares of ASMPT, thereby restoring its total share holding in that company to over 50%. Throughout this entire period, the Company maintained control over ASMPT. The amortization period for the acquired goodwill is 10 years. NOTE E: NOTES PAYABLE TO BANKS
Dec. 31, 1999 June 30, 2000 ------------- ------------- The Netherlands 12,223 -- Japan 10,274 12,218 Hong Kong 170 86 - -------------------------------------------------------------------------------- 22,667 12,304 - --------------------------------------------------------------------------------
11 12 NOTE F: LONG-TERM DEBT
Dec. 31, 1999 June 30, 2000 ------------- ------------- Term Loans: The Netherlands, 5.16-6.75%, due 2000 24,958 -- Japan, 3.3%, due 2005 - 2006 800 3,736 Hong Kong, 7.3-7.5%, due 2000 10,975 4,191 Finland, 1.0-3.0%, due 2004 - 2005 2,545 3,386 Mortgage loans: The Netherlands, 5.35-6.75%, due 2007 - 2026 2,121 1,997 Japan, 2.625%, due 2005 - 2006 3,232 3,027 Lease commitments, 5.75-9.23%, due 2002 310 343 ==================================================================================================================================== 44,941 16,680 Current portion 36,944 5,610 ==================================================================================================================================== 7,997 11,070 - ---------------------------------------------------------------------------------------------
The long-term facilities offered by the Japanese banks to ASM Japan are collateralized by the real estate and other assets of ASM Japan, with guarantees provided by the Company. In Hong Kong, ASMPT's term loan is collateralized by the machinery it covers. ASMPT is precluded to provide loans and advances other than trade receivables in the normal course of business, to other ASM units under the rules of the Stock Exchange of Hong Kong. There are no guarantees from ASMPT to secure indebtedness of the Company; nor does the Company provide guarantees for the borrowings of ASMPT. In the U.S.A., the long-term obligations relate to lease commitments on property, equipment and machines. NOTE G: SUBORDINATED DEBT
Dec. 31, 1999 June 30, 2000 ------------- ------------- Current: Subordinated loans: De Nationale Investeringsbank N.V ("NIB") 2,042 1,361 Related party 1,361 -- Applied Materials Inc. 33,744 -- 6% zero-coupon debentures 15,138 -- ============================================================================================== 52,285 1,361 - -----------------------------------------------------------------------------------------
The subordinated loan from NIB carries interest at 8.25%. Repayments on the outstanding balance of NLG 3.0 million ((euro) 1.4 million) will be in equal bi-annual installments of NLG 1.5 million ending December 31, 2000. 12 13 On October 1, 1999, the Company issued US$20 million, five-year, zero-coupon debentures. The debentures were discounted at 6% annual interest; the Company received net proceeds of US$14.9 million. As part of the debenture agreement, the investors received 2,037,957 non-detachable warrants and 200,000 supplemental warrants on common shares of the Company with an exercise price of US$9.81 per share, a premium to market at the date of issuance of 20%. In February 2000, the Company called the exercise of the 2,037,957 warrants and cancelled the debentures in partial payment of the exercise price of the warrants. The remaining portion of the exercise price of the warrants was fulfilled by the investors contributing US$4.8 million in cash. In March 2000, Applied Materials exercised 1,500,000 warrants to purchase commons shares in ASM. The proceeds of the warrants were used to reduce the outstanding balance of the subordinated loan. The remaining balance was repaid on April 12, 2000 (see note J). NOTE H: RESTRUCTURING During the first quarter of 1999, the Company decided to close its manufacturing activities for wafer processing equipment in the United States and in combination therewith to outsource to third parties the manufacturing of substantially all parts previously manufactured in-house. Concurrently, the United States assembly and test activities were combined with those in Europe. This resulted in a reduction in the Company's number of employees in the United States by approximately 75 and in the vacation of certain facilities. Approximately 50 new positions were created in Europe. The Company incurred a one-time restructuring charge, covering employee terminations, write-offs and occupancy costs of (euro) 3.9 million associated with these decisions. In the first half of 2000, the global demand for wafer processing equipment and, as a consequence, the assembly and final testing of such equipment, increased sharply when compared to the same period in 1999. The Company's European facilities and the Company's third party subcontractors had difficulty in coping with the much higher volumes. Consequently, the Company decided to partially reverse its earlier decision and reopened facilities that were vacated under the 1999 restructuring program. The Company is in the process of hiring staff in the United States to do final assembly and testing. As a consequence, part ((euro) 1.6 million) of the restructuring provision balance as of June 30, 2000 ((euro) 2.4 million) was taken into the Consolidated Statement of Operations for the three months and the six months ended June 30, 2000. The remaining balance of (euro) 0.8 million relates primarily to asset write-offs. NOTE I: DISCLOSURES ABOUT SEGMENTS AND RELATED INFORMATION The Company organizes its activities in two operating segments, Front-End and Back-End. The Front-End segment manufactures and sells equipment used in wafer processing, encompassing the fabrication steps in which silicon wafers are layered with semiconductor devices. The segment is a product driven organizational unit comprised of manufacturing, service, and sales operations in Europe, the United States, Japan and Southeast Asia. 13 14 The Back-End segment manufactures and sells equipment and materials used in assembly and packaging, encompassing the processes in which silicon wafers are separated into individual circuits and subsequently assembled, packaged and tested. The segment is organized in ASM Pacific Technology Ltd., in which the Company holds as of July 6, 2000 a majority of 54.9% interest. The remaining shares are listed on the Stock Exchange of Hong Kong. The segment's main operations are located in Hong Kong, Singapore and the People's Republic of China.
Front-End Back-End Total Six months ended June 30, 1999 - ----------------------------------------------------------------------------------------------------------------------------------- Net sales to unaffiliated customers 65,612 83,675 149,287 (Loss) earnings from operations (6,648) 11,367 4,719 Net interest and other financial expense (4,496) (979) (5,475) Income tax (48) (242) (290) Minority interest 0 (5,048) (5,048) Net (loss) earnings (11,192) 5,098 (6,094) Capital expenditures 1,827 3,095 4,922 Total assets 124,291 200,265 324,556 Current portion of long term debt and subordinated debt 11,816 12,031 23,847 Long-term debt and subordinated debt 82,976 -- 82,976
Six months ended June 30, 2000 - ----------------------------------------------------------------------------------------------------------------------------------- Net sales to unaffiliated customers 157,022 263,897 420,919 Earnings from operations 13,457 68,706 82,163 Net interest and other financial (expense) income (2,888) 2,326 (562) Income tax (4,513) (5,998) (10,511) Minority interest 0 (31,830) (31,830) Net earnings 6,056 33,204 39,260 Capital expenditures 9,437 29,624 39,061 Total assets 275,236 349,499 624,735 Current portion of long-term debt and subordinated debt 2,780 4,191 6,971 Long-term debt 11,070 -- 11,070
NOTE J: MATERIAL CONTINGENCIES Effective October 31, 1997, the Company, Advanced Semiconductor Materials America, Inc. and Epsilon Technology, Inc. (collectively 'ASM') and Applied Materials, Inc. ('Applied Materials') signed an agreement that resolved all outstanding legal disputes with Applied Materials and dismissed with prejudice all pending litigation between the companies. The settlement required the Company to pay Applied Materials US$80 million in the form of a convertible note due November 2, 1998 against which the Company paid US$15 million in November 1997. Effective December 16, 1998, following the restructuring of the convertible note, ASM and 14 15 Applied Materials entered into an amended settlement agreement, the terms of which are not materially different from the agreement dated October 31, 1997. The changes included the conversion of ASM's covenants not to sue into licenses and an increase in certain TEOS related royalties. The settlement agreement provides a cross license between the parties of the patents in suit and certain other CVD and TEOS patents and requires ASM to pay an ongoing royalty on certain semiconductor equipment for epitaxial and plasma TEOS technologies. The settlement also provides covenants not to sue for patent infringement for periods up to five years from the date of the settlement for certain semiconductor systems and applications that are essentially unchanged from those commercially available on July 1, 1997. If at the end of a covenant period the product or application is no longer infringing, Applied Materials cannot recover more than a reasonable royalty from the Company retroactive to October 31, 1997. Applied Materials may not recover damages for such products that were sold prior to October 31, 1997. ASM and Applied Materials also represented and warranted that as of October 31, 1997, neither party was aware of any infringement of its patents by the other party except for the patents that were asserted in the lawsuits that were resolved by the settlement. The original settlement agreement was filed with the United States Securities Exchange Commission on a 6-K/A on November 18, 1997. The amended settlement agreement was filed on a 6-K/A on February 11, 1999. In March, 2000, Applied Materials exercised its warrants to purchase 1,500,000 common shares in ASM. The proceeds of the warrants were used to reduce the outstanding balance of the subordinated note the Company received from Applied Materials, as part of the settlement agreement. On April 12, 2000, the Company paid the outstanding balance of the note. 15 16 NOTE K: EARNINGS PER SHARE The following represents a reconciliation of net earnings and weighted average number of shares outstanding (in thousands) for purposes of calculating basic and diluted net earnings per share:
- ------------------------------------------------------------------------------------------------------------------------------------ Three months ended Six months ended June 30, June 30, - ------------------------------------------------------------------------------------------------------------------------------------ 1999 2000 1999(1) 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Net earnings used for purpose of computing basic earnings per share 5,625 26,988 (6,094) 39,260 After-tax equivalent of interest expense on convertible notes and exercisable warrants 376 30 - 372 - ------------------------------------------------------------------------------------------------------------------------------------ Net earnings used for purposes of computing diluted net earnings per share 6,001 27,018 (6,094) 39,632 - ------------------------------------------------------------------------------------------------------------------------------------ Basic weighted average number of shares outstanding at the end of period used for purpose of computing basic earnings per share 36,208 48,238 36,143 44,814 Dilutive effect of stock options 750 1,325 - 1,321 Dilutive effect of convertible notes and exercisable warrants 4,832 200 - 1,365 - ------------------------------------------------------------------------------------------------------------------------------------ Dilutive weighted average number of shares outstanding 41,790 49,763 36,143 47,500 - ------------------------------------------------------------------------------------------------------------------------------------ Net earnings per share: Basic 0.15 0.56 (0.17) 0.88 Diluted 0.14 0.54 (0.17) 0.83 - ------------------------------------------------------------------------------------------------------------------------------------
(1) 707 stock options and 4,832 stock-equivalents in convertible notes and exercisable warrants were not included in the computation of diluted earnings per share for the six months ended June 30, 1999 as the effect would be anti-dilutive. NOTE L: SUBSEQUENT EVENTS On July 6, 2000, the Company completed the purchase of approximately 4.7% of the outstanding common shares in ASMPT, its subsidiary that operates the Company's Back-End activities and in which it already owned a 50.2% majority interest. As of July 6, 2000, the shareholding in ASMPT amounts to 54.9% of the outstanding common shares. On the same date, the Company entered into two financing arrangements. Pursuant to the first such financing arrangement, the Company received a two-year credit facility of US$75 million, carrying a variable interest rate linked to Interbank Offered Rates and secured by a portion of the Company's shareholding in ASMPT; $69 million of this facility was drawn down and the funds 16 17 were used to purchase the additional shares in ASMPT referred to in the previous paragraph. The facility has a quarterly repayment schedule. Pursuant to the second facility, the Company entered into a Structured Equity Line (the "Line") with an investor, who is an affiliate of the bank providing the credit facility. Under the Line, the Company can issue, with intervals of at least five business days between two issuances, common shares to the investor in amounts not exceeding US$10 million and for a total not exceeding US$140 million. The investor has committed to purchase these shares at market price, which is defined as the volume weighted average price of five trading days preceding the date of issuance, minus a discount of 4.5%. The investor is not obligated to purchase shares if the purchase would cause the aggregate number of common shares in the Company owned by the investor, including those purchased during the previous 60 days, to exceed 9.9% of all of the issued and outstanding common shares of the Company. The investor is also under no obligation to purchase newly issued shares under the Line in the event that the effectiveness of the Company's registration statement is withdrawn, certain conditions precedent to the Line are not satisfied or certain covenants are not complied with. Under the Line, the investor has certain call rights in the event of a collateral value shortfall under the credit facility. In such case, the investor may require the Company to issue new common shares and apply the proceeds to payment of the outstanding loan under the credit facility, such that the proceeds are sufficient to cure the collateral value shortfall. 17 18 Management's Discussion and Analysis of Financial Condition and Results of Operations You should read this discussion together with the financial statements and other financial information included in this Form 6-K. This Form 6-K contains forward-looking statements that involve risks and uncertainties. Overview We are a leader in the design, manufacture and sale of equipment and solutions used to produce semiconductor devices. Our production equipment and solutions are used by both the front-end and back-end segments of the semiconductor market. We were incorporated under the laws of the Netherlands in 1968. Throughout our history, we have conducted business through subsidiaries located worldwide. We established our operations in Hong Kong in 1975, in the United States in 1976, in Japan in 1982, and in Finland in 1999 through the acquisition of Microchemistry Ltd. We completed our initial public offering in the United States in 1981 and secondary public offerings in the United States in 1983 and in the United States and the Netherlands in 2000. Our common shares are listed on the AEX-Stock Exchange in Amsterdam and the Nasdaq National Market in the United States. We conduct our back-end operations through ASM Pacific Technology, which was our wholly owned subsidiary until 1988 when we completed an initial public offering of 25% of its shares on the Stock Exchange of Hong Kong. We have since sold and purchased shares of ASM Pacific Technology on the open market, and as of July 6, 2000, we owned 54.875% of its outstanding shares. ASM Pacific Technology expanded operations with significant new production facilities in Shenzhen, China in 1989 and Singapore in 1990, and is in the process of completing new plants in China and Malaysia, which we expect will become operational during 2000. The sales cycle from quotation to shipment for our front-end equipment generally ranges from five to nine months, depending on capacity utilization and the urgency of the order. The acceptance period after installation may be as short as four to five weeks. If customers are unfamiliar with our equipment or are receiving new product models, the acceptance period may take as long as ten weeks. The sales cycle is longer for equipment which is installed at the customer's site for evaluation prior to sale. The typical trial period ranges from six months to one year after installation. The sales cycle for back-end products typically is shorter than for front-end. Generally, the majority of our back-end equipment is built in standard configurations. We build back-end products that are approximately 85% complete in anticipation of customer orders. Upon receipt of a customer's order and specifications, the remaining 15% of the manufacturing is completed. This allows us to complete the assembly of our equipment in a short period of time. We therefore require between two to six weeks for final manufacturing, testing, crating, and shipment of our back-end equipment. Our back-end customers' acceptance periods generally are shorter than those for front-end equipment are. We provide installation, training and technical support to our customers with local staff in all of our major markets. 18 19 We generally recognize revenue from the sale of products at the time of shipment following an acceptance process at our own facilities. We rarely experience equipment returns. We accrue costs for installation and warranty when we recognize corresponding sales. We recognize revenue for services when we perform the services. Our front-end sales are primarily concentrated in the United States, Europe, Japan and Southeast Asia. During 1999, equipment shipped to destinations in these regions accounted for sales of (euro)52.1 million, (euro)40.5 million, (euro)42.0 million, and (euro)47.1 million, respectively. Our back-end sales, which approximated (euro)232.8 million, are concentrated in Asia. Our ten largest customers in 1999 accounted for approximately 43% of total sales. We invested approximately (euro)32.1 million in research and development during the first six months of 2000, compared to (euro)47.1 million for the whole of 1999. As part of our research and development activities, we are engaged in various development programs with customers and institutes that allow us to develop products that meet customer requirements and to obtain access to new technology and expertise. We expense rather than capitalize our research and development expenses. The costs related to prototype and experimental models, which we subsequently sell to customers, are charged to costs of sales. Our reported research and development expenses are stated after research and development credits, which approximated (euro)1.2 million in the first six months of 2000 and (euro)3.3 million in 1999. Our Netherlands and Singapore operations receive research and development grants and credits from various governmental sources. The research and development grants we received in the Netherlands are contingent and repayable only to the extent we recognize sales of products to which the credit was related. These repayments vary and range from 1.0% to 4.0% of the realized sales, depending on the products sold, up to the amount of the grants plus interest. Our actual and contingent repayments accrue interest at rates ranging from 5.0% to 8.0% per annum. Our contingent liability related to these possible repayments approximated (euro)10.8 million as of June 30, 2000 and (euro)11.9 million as of December 31, 1999. Effective July 6, 2000, we purchased approximately 4.7% of the outstanding shares of ASM Pacific Technology Ltd., bringing our total shareholding in this company to 54.875%. The purchase price amounted, together with some smaller purchases made in April and June of this year, to approximately (euro)75 million. The purchase was financed from cash resources and from the proceeds of a $69 million two-year collateralized loan. At the same time, we entered into a $140 million structured equity line. See "Subsequent Developments" below. During the first quarter of 1999, the Company decided to close its manufacturing activities for wafer processing equipment of ASM America in the United States and in combination therewith to outsource to third parties the manufacturing of substantially all parts, previously manufactured in-house. Concurrently, the United States assembly and test activities were combined with those in Europe. This resulted in a reduction of ASM America's number of employees by approximately 75 and in the vacation of certain facilities. The Company incurred a one-time restructuring charge, covering employee terminations, write-offs and occupancy costs of (euro)3.9 million associated with these decisions. 19 20 In the first half of 2000, the global demand for wafer processing equipment and, as a consequence, the assembly and final testing of such equipment, increased sharply when compared to the same period in 1999. The Company's European facilities and the Company's third party subcontractors had difficulty in coping with the much higher volumes. Consequently, the Company decided to partially reverse its earlier decision to reduce operations in ASM America and reopened facilities that were vacated under the 1999 restructuring program. The Company is in the process of hiring staff in the United States to do final assembly and testing. As a consequence, part ((euro)1.6 million) of the restructuring provision balance as of June 30, 2000 ((euro)2.4 million) was taken into the Consolidated Statement of Operations for the three months and the six months ended June 30, 2000. The remaining balance of (euro)0.8 million relates primarily to asset write-offs. In July 1999 we purchased all of the outstanding shares of ASM Microchemistry (formerly known as Microchemistry), a company located in Finland, for approximately (euro)3.9 million payable in the form of a promissory note convertible at $10.00 per share into our common shares. Prior to our purchase, ASM Microchemistry developed the process to grow or deposit films one layer at a time by means of atomic layer chemical vapor deposition ("ALCVD"), and marketed ALCVD processes to manufacturers of flat panel displays and tape magnetic head products. Following our acquisition, ASM Microchemistry is shifting its focus to manufacturers of semiconductor devices. In December 1999, we purchased a 24% interest in NanoPhotonics AG, a German supplier of precision thin film metrology equipment. The technology supplied by NanoPhotonics allows for the integration of high-resolution, ellipsometric thin film metrology directly in a wafer-processing tool. We believe that this investment will enable us to equip our batch and single wafer equipment with integrated thin film metrology. As of December 31, 1999, we had net operating loss tax carry-forwards of (euro)275 million which we can apply against earnings reported in the United States and the Netherlands. Results of Operations Six Months Ended June 30, 2000 Compared To Six Months Ended June 30, 1999 Net sales. Continuing a trend established in mid 1999, the net sales increased in both the front-end and the back-end segment of the market in both quarters in 2000. Consolidated net sales increased by 182% in the first half of 2000 when compared to the same period in 1999. Front-end sales increased 141% from (euro)65.6 million in the first half of 1999 to (euro)157.8 million in the first half of 2000. This growth was primarily driven by our Eagle-10 and our epitaxy product lines. Our back-end sales increased by 214% from (euro)83.7 million in the 6 months ending June 30, 1999 to (euro)263.1 million in the six months ending June 30, 2000 and was mainly achieved due to increased sales of bonder equipment. Gross profit. The trend in rising gross profit margins also continued in 2000. Our consolidated gross profit was 43.5% of net sales in the first six months of 2000, compared to 39.5% of net sales in the same period of 1999. The improvement was achieved primarily by the back-end 20 21 segment, where the gross profit margin improved from 40.2% of net sales in the six months ending June 30, 1999 to 45.9% of net sales in the six months ending June 30, 2000. The gross profit margin for the front-end segment improved from 38.6% in the first six months of 1999 to 39.6% in the first six months of 2000. The improvement was achieved partially through manufacturing efficiency related to increased volumes and partly through better pricing conditions for our products. Selling, General and Administrative. We invested in the expansion of our support and our overhead departments in order to handle the increased product and order volumes. Staff levels increased from 2,400 as of December 31, 1999 to approximately 2,900 at the end of June 2000. The consolidated selling, general and administrative expenses increased from (euro)30.6 million in the first half of 1999 (excluding restructuring charges of (euro)3.9 million) to (euro)69.0 million in the first half of 2000, but declined as a percentage of net sales from 20.5% in 1999 to 16.4% in 2000. Front-end and back-end segment selling, general and administrative expenses increased from (euro)16.2 million and (euro)14.4 million in 1999 to (euro)28.1 million and (euro)40.4 million in 2000. Research and Development. In front-end, our investments in research and development concentrated on high-k dielectrics, low-k dielectrics, ALCVD and 300mm process applications while in back-end, our concentration was on performance improvements and 10 new or upgraded products have been released or are scheduled to be released in 2000. The consolidated research and development expenses amounted to (euro)32.1 million or 7.6% of net sales in 2000 compared to (euro)19.8 million or 13.3% of net sales in 1999. Although the absolute investments in research and development increased by 62%, they declined as a percentage of net sales due to the 182% increase in the net sales. Research and development comprised front-end segment costs of (euro)12.0 million in 1999 and (euro)20.9 million in 2000 and back-end segment costs of (euro)7.8 million in 1999 and (euro)11.2 million in 2000. Net Interest and Other Financial Income (Expenses). Net interest and other financial income (expenses) decreased from an expense of (euro)5.5 million in the first six months of 1999 to a net expense of (euro)0.6 million in the same period in 2000, due to the repayment of short-term loans with the proceeds of a public offering of common shares we completed in April of 2000 and with the cash flow generated from operations. Taxes. We paid (euro)10.5 million in taxes during the first half of 2000, compared to (euro)0.3 million in the first half of 1999. As of December 31, 1999, we have (euro)275 million in net operating loss carryforward, which we can apply against future earnings reported in the United States and the Netherlands. Net Earnings. Our net earnings in the first six months of 2000 were approximately (euro)39.3 million compared to a loss of (euro) 6.1 million in the same period of 1999. Our front-end operation reported net earnings of (euro)6.1 million in 2000 compared to a net loss of (euro)11.2 million in 1999, including the (euro)3.9 million restructuring charge incurred in the 1999 period in connection with moving manufacturing operations from ASM America to ASM Europe. Our portion of our back-end operation's net earnings approximated (euro)33.2 million compared to (euro)5.1 million in the first six months of 1999. 21 22 Backlog. Our backlog of orders booked increased from approximately (euro)183.7 million as of December 31, 1999 to approximately (euro)336.4 million as of June 30, 2000, of which a substantial majority is for deliveries in the third and fourth quarters of 2000. Our backlog consists of orders of products by purchase orders or letters of intent for future periods, typically for up to the next year. In markets such as Japan, it is common practice for letters of intent to be used in place of firm purchase orders. We sometimes allow customers to cancel or reschedule deliveries. In addition, purchase orders are subject to price negotiations and changes in quantities of products ordered as a result of changes in customers' requirements. Depending on the complexity of an order, we generally ship our products from one to six months after receipt of an order. We include in the backlog only orders for which a delivery schedule has been specified and to which the customer has assigned an order number. Liquidity and Capital Resources Our liquidity is affected by many factors, some of which are related to our ongoing operations and others of which are related to the semiconductor and semiconductor equipment industries and to the economies of the countries in which we operate. Although our cash requirements will fluctuate based on the timing and extent of these factors, we believe that cash generated by operations, together with the liquidity provided by our existing cash resources and the arrangements governing our current indebtedness, will be sufficient to fund working capital, capital expenditures and other ongoing business requirements. At June 30, 2000, our principal sources of liquidity consisted of (euro)77.1 million in cash and cash equivalents and (euro)80.9 million in undrawn bank lines. Approximately (euro)42.3 million of the cash and cash equivalents and (euro)63.2 million of the undrawn bank lines are restricted to use in our back-end operations. During the first six months of 2000, the net cash in flow from operating activities amounted to (euro)51.8 million, compared to a net outflow of (euro)1.6 million in the same period in 1999. The improvement was primarily driven by higher earnings. During the first half of 2000, we invested approximately (euro)37.2 million in capital equipment and facilities to increase our manufacturing and assembly capacity. In April 2000, we completed a public offering of common shares, which gave us net proceeds of approximately (euro)126.5 million. We used (euro)76.8 million of these proceeds for repayment of loans. Following the repayment, the assets securing these loans have been released from their liens. We expect to make investments in 2000 to complete new plants in Malaysia and China and to maintain front-end infrastructure. The front-end business finances its operations from the cash flows derived from its business activities and from collateralization of fixed and current assets. Back-end operations are entirely self-financed by ASM Pacific Technology. The cash resources and borrowing capacity of ASM Pacific Technology are not available to our front-end operations. We support borrowings of our front-end subsidiaries with guarantees. We have also mortgaged our land and buildings to secure our front-end borrowings. We have also pledged substantially 22 23 all of our shareholding in ASM Pacific Technology. The market value of our investment in ASM Pacific Technology at the end of June 2000 was approximately (euro)744.5 million, which is substantially higher than the market value at the end of 1999, which was approximately (euro)333.9 million. Subsequent Developments Following our sale of new common shares in April 2000, we not only paid down term loans but also our credit lines with our main Dutch bankers. In early July 2000, we acquired 4.7% of the outstanding shares of ASM Pacific Technology Ltd., our back-end subsidiary, for cash. The financing of this acquisition came from our own cash resources and from a $75 million loan facility we received from Canadian Imperial Bank of Commerce ("CIBC") of which we used $69 million. The loan is collateralized with substantially all of our shareholding in ASM Pacific Technology. In order to make these shares available, we canceled the bank facilities with our Dutch bankers, as these facilities were secured by our shareholding in ASM Pacific Technology. In connection with this $75 million loan facility, we entered into an equity line of credit with Canadian Imperial Holdings, Inc. ("CIHI"), an affiliate of the lender, pursuant to which we have the right to sell up to an aggregate of $140 million of newly issued shares to CIHI from time to time over a two year period. We are entitled, subject to certain restrictions and limitations, to sell up to $10 million in common shares to CIHI as often as every five business days, at a price based on the previous five trading days market value less a 4.5% discount. CIHI, however, is under no obligation to purchase if such a purchase would cause the aggregate number of our common shares owned by CIHI. including those purchased during the previous 60 days, to exceed 9.9% of all of our issued and outstanding common shares. We are not obligated to sell any shares unless there is an uncured collateral value shortfall under the $75 million loan facility. In that case, the lender may require that we issue shares under the equity line and apply the proceeds to repay the loan facility in an amount sufficient to cure the collateral value shortfall. Except in connection with a call on the shares due to such a collateral value shortfall, the use of proceeds of any sale of shares pursuant to the equity line is not restricted, so long as the availability under the line is not less than the outstanding balance under the loan facility. Pursuant to the equity line, we are required to register with the U.S. Securities and Exchange Commission $140 million of our common shares for offer and sale pursuant to the equity line. The registration statement must remain in effect for the duration of the equity line. CIHI is under no obligation to purchase our newly issued common shares under the equity line if effectiveness of our registration statement is withdrawn, certain conditions precedent to the equity line are not satisfied or certain covenants are not complied with. We must pay to CIHI a monthly fee of 3/4% of the outstanding loan amount if the registration statement is not effective by October 20, 2000, which fee increases to 1% per month if effectiveness is not achieved by December 4, 2000. We are currently preparing the registration statement for filing. However, we can give no assurance that the registration statement will be declared effective by October 20, 2000. Failure to obtain registration of the newly issued shares may have an adverse affect on our cash flows because of the fees we will be obligated to pay to our lender. 23 24 The sale of many newly issued shares of common stock in a short time period could have an adverse effect on the market price of our common stock. Market Risk Disclosure We are exposed to currency fluctuations, most notably fluctuations of the United States dollar, the Hong Kong dollar and the Japanese yen against the Euro. To the extent that these fluctuations affect the value of our investments in our affiliates, they are not hedged. The cumulative effect of these fluctuations is separately reported in shareholders' equity and in the first half of 2000 showed a positive movement of (euro)1.1 million. Currency. Currency fluctuations that affect operating cash flows are hedged as a policy. We view exposures on a consolidated basis and sell off or cover excess or short positions, using spot or forward contracts, which are entered into with commercial banks of good standing. The operations of our subsidiaries are generally financed with debt issued in our subsidiaries' respective functional currencies. Thus, we believe we do not have significant currency exposure related to our borrowings. Interest Rates. A considerable percentage of our outstanding debt bears interest, which is typically variable in nature. We are exposed to interest rate risk primarily through our borrowing activities. We do not enter into financial instrument transactions for trading or speculative purposes or to manage interest rate exposure. Therefore, an adverse change in the average interest rate from 7% to 8% on the portion of our debt bearing interest at variable rates would result in an annual increase in interest expense of approximately (euro)0.1 million at June 30, 2000 borrowing levels. The Netherlands, our country of domicile, is one of the countries that participates in the use of the Euro, the new currency unit that has been available since January 1, 1999. Until January 1, 2002, the participating countries will allow both the Euro and local currencies as legal tender. However, we expect that most businesses will convert sooner rather than later, stimulated by the development of a Euro denominated capital market for both public and private funding. Our European operations will therefore use the Euro as their functional currency as soon as possible after its introduction. The actual introduction is not critical for our business but will depend on availability of reliable software for accounting, payroll and other internal functions and will be achieved over a period of time, but before January 1, 2002. The introduction of the Euro will not significantly affect our currency profile or risk as the Euro has a fixed exchange rate against the Netherlands Guilder. Effective for fiscal year 1999, we changed our reporting currency from Netherlands Guilders to Euros. Prior year balances have been restated based on the fixed exchange rate of (euro)1.00 to Nlg.2.20371. The comparative balances reported in Euros depict the same trends as would have been presented if we had continued to present balances in Netherlands Guilders. Balances for periods prior to January 1, 1999 are not comparable to the balances of other companies that 24 25 report in Euros but restated amounts from a different currency than Netherlands Guilders due to the fixing of the exchange rate between the Euro and the currencies of participating countries. Cautionary Factors Some of the information in this report contains forward-looking statements within the meaning of the United States federal securities laws. These statements include, among others, statements regarding future expenditures, sufficiency of cash generated from operations, maintenance of majority interest in ASM Pacific Technology, business strategy, product development, product acceptance, market penetration, market demand, return on investment in new products, facility completion dates and product shipment dates. These statements may be found "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Market Risk Disclosure." Forward-looking statements typically are identified by use of terms such as "believe," "anticipate," "estimate," "expect," "intend," "plan," "will," "may" and similar words, although some forward-looking statements are expressed differently. You should be aware that our actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including the matters discussed below. OUR REVENUES AND OPERATING RESULTS FLUCTUATE DUE TO A VARIETY OF FACTORS, WHICH MAY RESULT IN VOLATILITY OR A DECREASE IN THE PRICE OF OUR COMMON SHARES. Our quarterly revenues and operating results have varied significantly due to a number of factors, including: - Cyclicality. The semiconductor industry is subject to sudden, extreme, cyclical variations in product supply and demand. In some cases, these cycles have lasted more than a year. - Production Capacity Constraints. We have experienced capacity constraints and expect to continue experiencing capacity constraints at our assembly and manufacturing facilities for the foreseeable future. Although we are in the process of completing a new plant in Malaysia and expanding a plant in China and are considering other alternatives to alleviate this issue, including increasing the percentage of outsourced activities to third parties, our capacity will likely remain constrained over the next few quarters until we can bring new capacity on-line. - The Length and Variability of the Sales Cycle and Implementation Periods for Our Products. Our products are technologically complex. Customers often require a significant number of product presentations and demonstrations, in some instances evaluating equipment on site, before reaching a sufficient level of confidence in the product's performance and compatibility with the customer's requirements to place an order. As a result, our sales process is often subject to delays associated with lengthy approval processes that typically accompany the design and testing of new products. The sales cycles of our products often last for many months or even years. The long sales cycle also subjects us to the risk of making expenditures for anticipated orders long into the future. 25 26 - The Timing of Customer Orders, Cancellations and Shipments. The industry's long sales cycles and the complexity of our products subject us to risks involving customers' budgetary constraints, internal acceptance reviews and cancellations. Consequently, orders expected in one quarter could shift to another because of the timing of customers' purchase decisions. - Technological Changes. The semiconductor industry and the semiconductor equipment industry are subject to rapid technological change and frequent introductions of enhancements to existing products. Technological trends have had and will continue to have a significant impact on our business. Our results of operations and ability to remain competitive are largely based upon our ability to accurately anticipate customer and market requirements. Some competitors may be further along or better funded in their research and development of new technology. - Disruptions in Sources of Supply. We are currently outsourcing a substantial majority of the manufacturing of our front-end furnace and epitaxial reactors to a single supplier. If our contractor becomes unable to deliver products, we could have a disruption of our operations. - Competition. We face competition or potential competition from companies with greater resources than ours, and if we are unable to compete effectively with these companies, our ability to fund capital requirements and our market share may decline. - Exchange Rate Fluctuations. Our assets, liabilities and operating expenses and those of our subsidiaries are to a large extent denominated in the currency of the country where each entity is established. Our financial statements are expressed in Euros. The translation exposures that result from the inclusion of financial statements of our subsidiaries that are expressed in the currencies of those subsidiaries are not hedged. As a result, our operational results are exposed to fluctuations of various exchange rates versus the Euro. WE DERIVE A SIGNIFICANT PERCENTAGE OF OUR REVENUE FROM SALES TO A SMALL NUMBER OF LARGE CUSTOMERS, AND IF WE ARE NOT ABLE TO RETAIN THESE CUSTOMERS, OR THEY RESCHEDULE, REDUCE OR CANCEL ORDERS, OUR REVENUES WOULD BE REDUCED AND OUR FINANCIAL RESULTS WOULD SUFFER. WE DEPEND ON KEY PERSONNEL, ESPECIALLY MANAGEMENT AND TECHNICAL PERSONNEL, WHO MAY BE DIFFICULT TO ATTRACT AND RETAIN IN THE CURRENT MARKET WHERE COMPETITION FOR PERSONNEL IS INTENSE. OUR OPERATIONS COULD BE NEGATIVELY AFFECTED IF WE LOSE KEY EMPLOYEES OR ARE UNABLE TO ATTRACT AND RETAIN SKILLED EMPLOYEES. WE ARE DEPENDENT UPON OUR WORLDWIDE SALES AND OPERATIONS; ECONOMIC, POLITICAL, MILITARY, REGULATORY, NATURAL DISASTER OR OTHER EVENTS IN A COUNTRY WHERE WE MAKE SIGNIFICANT SALES OR HAVE SIGNIFICANT OPERATIONS COULD INTERFERE WITH OUR SUCCESS OR OPERATIONS THERE AND HARM OUR BUSINESS. 26 27 OUR ABILITY TO COMPETE COULD BE JEOPARDIZED IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS FROM CHALLENGES BY THIRD PARTIES, PARTICULARLY IF OUR INTELLECTUAL PROPERTY RIGHTS ARE CHALLENGED UNDER THE LAW OF FOREIGN JURISDICTIONS WHICH DO NOT HAVE STRONG INTELLECTUAL PROPERTY RIGHTS LAWS. THESE TYPE OF CLAIMS COULD SERIOUSLY HARM OUR BUSINESS OR REQUIRE US TO INCUR SIGNIFICANT COSTS. OUR OPERATIONS ARE SUBJECT TO ENVIRONMENTAL LAWS THAT MAY EXPOSE US TO LIABILITIES FOR NONCOMPLIANCE. WE ARE SUBJECT TO A VARIETY OF GOVERNMENTAL REGULATIONS RELATING TO THE USE, STORAGE, DISCHARGE, HANDLING, MANUFACTURE AND DISPOSAL OF THE TOXIC OR OTHER HAZARDOUS CHEMICAL BY-PRODUCTS OF, AND WATER USED IN, OUR MANUFACTURING PROCESSES. OUR FUTURE NET INCOME AND CASH FLOW WILL BE AFFECTED BY OUR ABILITY TO APPLY OUR NET OPERATING LOSSES, WHICH TOTALED APPROXIMATELY (EURO)275.0 MILLION FOR TAX REPORTING PURPOSES AS OF DECEMBER 31, 1999, AGAINST TAXABLE Income IN FUTURE PERIODS. CHANGES IN TAX LAWS IN THE JURISDICTIONS IN WHICH WE OPERATE MAY LIMIT OUR ABILITY TO UTILIZE OUR NET OPERATING LOSSES ASM PACIFIC TECHNOLOGY IS A CONSOLIDATED SUBSIDIARY WHICH GENERATES A SIGNIFICANT PORTION OF OUR NET SALES, EARNINGS FROM OPERATIONS AND NET EARNINGS; ALTHOUGH WE CURRENTLY ARE A MAJORITY SHAREHOLDER, WE MAY NOT BE ABLE TO MAINTAIN OUR MAJORITY INTEREST, IN WHICH CASE THERE IS A SIGNIFICANT RISK THAT WE WOULD NO LONGER BE ABLE TO CONSOLIDATE ITS RESULTS OF OPERATIONS WITH OURS, WHICH WOULD HAVE A SIGNIFICANT NEGATIVE EFFECT ON OUR CONSOLIDATED EARNINGS FROM OPERATIONS. ALTHOUGH WE ARE A MAJORITY SHAREHOLDER, ASM PACIFIC TECHNOLOGY IS NOT OBLIGATED TO PAY DIVIDENDS TO US AND MAY TAKE ACTIONS OR ENTER INTO TRANSACTIONS THAT ARE DETRIMENTAL TO US. OUR AFFAIRS ARE GOVERNED BY OUR ARTICLES OF ASSOCIATION AND BY THE LAWS GOVERNING LIMITED LIABILITY COMPANIES FORMED IN THE NETHERLANDS. AS A RESULT, IT MAY BE DIFFICULT FOR INVESTORS TO SERVE PROCESS WITHIN THE UNITED STATES UPON US OR ENFORCE UNITED STATES COURT JUDGMENTS AGAINST US. Incorporation by Reference This Form 6-K is hereby incorporated by reference into the Company's Forms F-3 no. 333-11234 and 333-11502 filed with the U.S. Securities and Exchange Commission. Exhibit List
Exhibit No. Description Incorporated by Filed Herewith - ----------- ----------- --------------- -------------- Reference to: - ----------------------------------------------------------------------------------------------------------------- 23.1 Equity Financing Agreement X - ----------------------------------------------------------------------------------------------------------------- 23.2 Credit Agreement X - ----------------------------------------------------------------------------------------------------------------- 23.3 Registration Rights Agreement X - ----------------------------------------------------------------------------------------------------------------- 23.4 Security Agreement X - -----------------------------------------------------------------------------------------------------------------
27 28 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, thereunto duly authorized. ASM INTERNATIONAL N.V. Date: September 6, 2000 By: /s/ Arthur H. del Prado ----------------------------- Arthur H. del Prado President and CEO 28 29 Exhibit Index
Exhibit No. Description Incorporated by Filed Herewith - ----------- ----------- --------------- -------------- Reference to: - ----------------------------------------------------------------------------------------------------------------- 23.1 Equity Financing Agreement X - ----------------------------------------------------------------------------------------------------------------- 23.2 Credit Agreement X - ----------------------------------------------------------------------------------------------------------------- 23.3 Registration Rights Agreement X - ----------------------------------------------------------------------------------------------------------------- 23.4 Security Agreement X - -----------------------------------------------------------------------------------------------------------------
29 EX-23.1 2 p63730ex23-1.txt EX-23.1 1 ------------------------------------------------------------------------ ASM INTERNATIONAL N.V. U.S.$140,000,000 EQUITY LINE FINANCING AGREEMENT July 6, 2000 CANADIAN IMPERIAL HOLDINGS INC. as Investor ------------------------------------------------------------------------ 2 TABLE OF CONTENTS
Page I. CERTAIN DEFINITIONS........................................................................................ 1 SECTION 1.1. Defined Terms.................................................................................. 1 II. PURCHASE AND SALE OF COMMON STOCK.......................................................................... 7 SECTION 2.1. Investments.................................................................................... 7 SECTION 2.2. Limitations on Investment Amounts.............................................................. 7 SECTION 2.3. Mechanics of Notification...................................................................... 8 SECTION 2.4. Closings....................................................................................... 8 SECTION 2.5. Termination, Suspension and Modification of Investment Obligation.............................. 9 III. CONDITIONS PRECEDENT...................................................................................... 10 SECTION 3.1. Conditions Precedent to the Obligation of the Company to Issue and Sell Common Stock........... 10 SECTION 3.2. Conditions Precedent to the Obligation of the Investor to Purchase Common Stock................ 10 SECTION 3.3. Due Diligence Review........................................................................... 13 IV. REPRESENTATIONS AND WARRANTIES OF INVESTOR................................................................. 15 SECTION 4.1. Authority...................................................................................... 15 SECTION 4.2. No Brokers..................................................................................... 16 SECTION 4.3. Not an Affiliate............................................................................... 16 SECTION 4.4. Organization and Standing...................................................................... 16 SECTION 4.5. Absence of Conflicts........................................................................... 16 SECTION 4.6. Disclosure: Access to Information.............................................................. 16 SECTION 4.7. No Hedging or Short Selling.................................................................... 16 SECTION 4.8. Compliance with Securities Laws................................................................ 17 V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................... 17 SECTION 5.1. Corporate Organization......................................................................... 17 SECTION 5.2. Capitalization................................................................................. 17 SECTION 5.3. Subsidiaries................................................................................... 18 SECTION 5.4. Authorization.................................................................................. 18 SECTION 5.5. No Violation, Consents......................................................................... 19 SECTION 5.6. Compliance With Applicable Law................................................................. 19 SECTION 5.7. Litigation..................................................................................... 20 SECTION 5.8. SEC Documents, Financial Statement............................................................. 20 SECTION 5.9. No Undisclosed or Contingent Liabilities....................................................... 21 SECTION 5.10. Taxes......................................................................................... 21 SECTION 5.11. Employee Benefit Plan......................................................................... 21 SECTION 5.12. Absence of Certain Charges.................................................................... 22 SECTION 5.13. Environmental Matters......................................................................... 23 SECTION 5.14. Material Contracts............................................................................ 23 SECTION 5.15. Properties, Encumbrances...................................................................... 24 SECTION 5.16. Insurance..................................................................................... 24 SECTION 5.17. Employee Claims; Labor Matters................................................................ 24 SECTION 5.18. Material Disclosure........................................................................... 24 SECTION 5.19. Intellectual Property......................................................................... 25
i 3
SECTION 5.20. No Undisclosed Events or Circumstances........................................................ 25 SECTION 5.21. No Broker..................................................................................... 25 SECTION 5.22. No Violation of Covenants..................................................................... 25 VI. COVENANTS OF THE COMPANY................................................................................... 25 SECTION 6.1. Registration Rights............................................................................ 25 SECTION 6.2. Reservation of Common Stock.................................................................... 25 SECTION 6.3. Listing of Common Stock........................................................................ 26 SECTION 6.4. Exchange Act Reporting......................................................................... 26 SECTION 6.5. Legends........................................................................................ 26 SECTION 6.6. Corporate Existence............................................................................ 26 SECTION 6.7. Additional SEC Documents....................................................................... 26 SECTION 6.8. "Blackout Period".............................................................................. 26 VII. OTHER ISSUANCES OF COMMON STOCK........................................................................... 27 SECTION 7.1. Equity Offering Adjustment to Purchase Price................................................... 27 SECTION 7.2. Other Adjustments to Purchase Price............................................................ 27 VIII. GOVERNING LAW AND JURISDICTION........................................................................... 27 SECTION 8.1. GOVERNING LAW.................................................................................. 27 SECTION 8.2. Jurisdiction................................................................................... 27 SECTION 8.3. Waiver of Sovereign Immunity................................................................... 28 IX. ASSIGNMENT, ENTIRE AGREEMENT, AMENDMENT, TERMINATION....................................................... 28 SECTION 9.1. Assignment..................................................................................... 28 SECTION 9.2. Entire Agreement; Amendment.................................................................... 28 SECTION 9.3. Publicity...................................................................................... 28 SECTION 9.4. Termination.................................................................................... 28 X. NOTICES, COSTS AND EXPENSES., RIGHT OF FIRST REFUSAL, INDEMNIFICATION....................................... 29 SECTION 10.1. Notices....................................................................................... 29 SECTION 10.2. Costs and Expenses............................................................................ 30 SECTION 10.3. Right of First Refusal........................................................................ 30 SECTION 10.4. Indemnification............................................................................... 30 SECTION 10.5. Contribution.................................................................................. 33 SECTION 10.6. General Indemnification....................................................................... 34 SECTION 10.7. Indemnification of Accountant................................................................. 34 XI. MISCELLANEOUS.............................................................................................. 34 SECTION 11.1. Counterparts.................................................................................. 34 SECTION 11.2. Survival; Severability........................................................................ 34 SECTION 11.3. Title and Subtitles........................................................................... 34 SECTION 11.4. Effectiveness of the Agreement................................................................ 34
EXHIBIT A - FORM OF OPINION OF U.S. COUNSEL EXHIBIT B - DISCLOSURE SCHEDULE ii 4 EQUITY LINE FINANCING AGREEMENT dated as of July _, 2000 (the "Agreement"), between CANADIAN IMPERIAL HOLDINGS INC., a Delaware corporation (the "Investor") and ASM INTERNATIONAL N.V., a corporation organized under the laws of the Kingdom of the Netherlands (the "Company"). W I T N E S S E T H : WHEREAS, the parties desire that the Company may Issue to the Investor, and, upon the terms and subject to the conditions contained herein, the Investor shall purchase from the Company, from time to time as provided herein, shares of the Company's common shares, Nlg. 0.01 par value per share (the "Common Stock"), for a maximum aggregate Purchase Price of $140,000,000 (the "Maximum Offering Amount"); and WHEREAS, contemporaneous with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement (the "Registration Rights Agreement"), pursuant to which the Company has agreed to provide to the Investor certain registration rights thereunder and under the Securities Act, the rules and regulations promulgated thereunder and applicable state securities laws; and WHEREAS, contemporaneous with the execution and delivery of this Agreement, the Company and Canadian Imperial Bank of Commerce, an Affiliate of the Investor (the "Lender"), are executing and delivering a Credit Agreement (the "Credit Agreement"), pursuant to which the Lender has agreed to provide to the Company amortizing term loans of up to $75,000,000, collectively. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows: I. CERTAIN DEFINITIONS SECTION 1.1. Defined Terms. As used in this Agreement (including the recitals above), the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Affiliate" shall mean, with respect to a specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person. "Applicable Quantity" shall mean, with respect to each purchase of Common Stock on a Closing Date pursuant to this Agreement, the number of shares of Common Stock that is purchased by the Investor, rounded up or down to the nearest whole number of shares. "Balance Sheet" shall mean the unaudited consolidated balance sheet of the Company as of March 31, 2000. "Benefit Plan" shall have the meaning set forth in Section 5.11 hereof. 5 "Blocking Event" shall have the meaning set forth in Section 2.5(a) hereof. "Blocking Notice" shall have the meaning set forth in Section 4 of the Registration Rights Agreement. "Bloomberg" shall mean Bloomberg Financial Press. "Blue Sky Laws" shall mean the United States state securities and takeover laws. "Calculation Date" shall mean the fifth Trading Day following a Notice Date. "Capital Stock" shall mean any and all shares, interests, participations or other equivalents (however designated) of corporate stock or any and all equivalent ownership interests in a Person (other than a corporation). "Closing" shall mean the consummation of each purchase and sale of Common Stock pursuant to Section 2.4 hereof. "Closing Date" shall mean a date that is at least five Business Days following a Notice Date. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Commitment Period" shall mean the period commencing on the date hereof and expiring on the earliest to occur of (a) the election by the Company or the Investor to terminate this Agreement pursuant to Section 9.4 herein, (b) the date on which the Investor shall have made purchases of Common Stock pursuant to this Agreement in an aggregate Purchase Price of $140,000,000 or such lesser maximum purchase amount as determined pursuant to Section 2.2, (c) the date this Agreement is terminated pursuant to Section 2.5, and (d) the date occurring 24 months (subject to extension as provided by Section 2.5(a)(ii) after the date of this Agreement. "Common Stock" shall have the meaning set forth in the first recital of this Agreement. "Company Assets" shall have the meaning set forth in Section 5.15 hereof. "Company Put Amount" shall have the meaning set forth in Section 2.1(a) hereof. "Company Put Notice" shall have the meaning set forth in Section 2.3(a) hereof. "Compensation Plans" shall mean any stock or option or similar equity-based compensation plans. "Condition Satisfaction Date" shall have the meaning set forth in Section 3.2 hereof. "Credit Agreement" has the meaning set forth in the third recital of the Agreement. 2 6 "Disclosure Schedule" shall mean a disclosure schedule, delivered by the Company to the Investor on the date of this Agreement and attached hereto as Exhibit B, concerning the representations and warranties of the Company set forth in Article V of this Agreement. "Dollars," "$" or "U.S.$" shall mean United States dollars. "Effective Date" shall mean such date as all of the three following conditions shall have occurred: (i) the Company shall have delivered the fully executed Registration Rights Agreement, and any other documents required to be delivered pursuant to the terms of this Agreement, (ii) the Company shall have indicated to the Investor in writing that the Exhibits to this Agreement are in final form and delivered such Exhibits to the Investor, and (iii) the Registration Statement shall have become effective. "Environmental Laws" shall mean all federal, state, local and foreign laws and regulations primarily relating to pollution or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), including, without limitation, laws and regulations primarily relating to emissions, discharges, releases or threatened releases of Materials of Environmental Concern, or otherwise primarily relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern. "Equity Offering" shall mean the issuance and sale by the Company, (a) in a registered public offering or (b) in a transaction exempt from or not subject to the registration requirements of the Securities Act, of any shares of Common Stock or securities which are convertible into or exchangeable for the Company's Common Stock or any warrants, options or other rights to subscribe for or purchase Common Stock or any such convertible or exchangeable securities (other than securities issued or issuable to any present or future or former (at the time of issuance) employee, officer, director or consultant of the Company or its Subsidiaries pursuant to any Compensation Plans), upon the conversion or exchange of convertible or exchangeable securities or upon the exercise of warrants, or other rights, or upon the issuance of any shares of Common Stock issued upon exercise of options, conversion or exchange of convertible or exchangeable securities, warrants or other rights outstanding on the date of execution and delivery of this Agreement, but other than (i) those listed or described in the SEC Documents, (ii) shares of Common Stock which may be issued upon exercise of options or other rights granted under the Compensation Plans, and (iii) shares of Common Stock or securities which are convertible into or exchangeable for Common Stock or any warrants, options or other rights to subscribe for or purchase Common Stock or any such convertible or exchangeable securities, in each case which are issued in strategic partnering transactions that do not result in an acquisition of a business or a change in control of the Company. "Equity Offering Purchase Price" shall mean the lowest effective purchase price per share of the Common Stock (or other securities as described in the definition of "Equity Offering," determined on a common stock equivalent basis and including any exercise or conversion price) in an Equity Offering, expressed as a percentage of the simple average of the 3 7 daily weighted average price of the Common Stock for the five Trading Days prior to the date of the Equity Offering, as reported on Bloomberg. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder. "GAAP" shall have the meaning set forth in Section 5.8(a). "Governmental Entity" shall mean any federal, state, local or foreign legislative body, court, government, department or instrumentality, or governmental, administrative or regulatory authority or agency. "Investment Amount" shall mean, with respect to any purchase of shares of Common Stock on a Closing Date under this Agreement, the product of the Purchase Price and the Applicable Quantity. "Investor Call Amount" shall have the meaning set forth in Section 2.1(b) hereof. "Investor Call Notice" shall have the meaning set forth in Section 2.3(b) hereof "Knowledge of the Company" shall mean the actual knowledge, without independent inquiry, of any of the executive officers of the Company. "Knowledge of the Investor" shall mean the actual knowledge, without independent inquiry, of any of the persons executing this agreement on behalf of the Investor. "Lender" shall mean the Canadian Imperial Bank of Commerce, in its capacity as a lender under the Credit Agreement. "Liens" shall have the meaning set forth in Section 5.15 hereof. "Loan Amount" shall mean, as of any specified date, the aggregate principal amount of loans outstanding under the Credit Agreement. "Loan Reduction Amount" shall have the meaning set forth in Section 2.4(a)(i)(B)(1) hereof. "Margin Call Event" has the meaning set forth in Section 9.10(b) of the Credit Agreement. "Material Adverse Effect" shall mean any effect on the business, operations, properties or financial condition of the Company which is material and adverse to the Company or to the Company and any other entities controlled by the Company, taken as a whole, or any condition or situation which could prohibit, impair or otherwise interfere with the ability of the Company to enter into and perform its obligations under this Agreement, the Registration Rights Agreement or the Credit Agreement. 4 8 "Materials of Environmental Concern" shall mean hazardous substances as defined under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601, et seq. and hazardous wastes as defined under the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901, et seq. and petroleum and petroleum products and such other chemicals, materials or substances as are listed as "hazardous wastes", "hazardous materials", "toxic substances", or words of similar import under any similar federal, state, local or foreign laws. "Maximum Offering Amount" shall have the meaning set forth in the first recital of this Agreement. "NASD" shall mean the National Association of Securities Dealers, Inc. "Notice Date" shall mean, with respect to each purchase and sale of Common Stock pursuant to this Agreement, a Trading Day (which shall be at least five Business Days following the previous Notice Date, if any) on which either (i) the Company delivers to the Investor a Company Put Notice or (ii) the Investor delivers to the Company an Investor Call Notice. "Outstanding Commitment Amount" shall have the meaning set forth in Section 2.2(b) hereof. "Payment Date" shall mean the third Business Day following a Closing Date. "Person" shall mean an individual, partnership, corporation, limited liability company, trust or unincorporated organization, or a government or agency or subdivision thereof. "Principal Market" shall mean the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market, or any similar organization or agency succeeding such market or exchange's functions of reporting prices, whichever is at the time the principal U.S. trading exchange or market for the Common Stock. "Prospectus" shall mean the prospectus included in any Registration Statement, as amended or supplemented by any Prospectus supplement, including post-effective amendments, and all material incorporated by reference in such Prospectus. "Purchase Price" shall have the meaning set forth in Section 2.4(c) hereof. "Registration Rights Agreement" shall have the meaning set forth in the second recital of this Agreement. "Registration Statement" shall have the meaning set forth in Section 3.2(a) hereof. "Representative" shall have the meaning set forth in Section 3.3(a) hereof. "SEC" shall mean the Securities and Exchange Commission. 5 9 "SEC Documents" shall have the meaning set forth in Section 5.8 hereof. "Securities Act" shall have the meaning set forth in the recitals above. "Securities Intermediary" means CIBC World Markets Corp., as securities intermediary under the Security Agreement. "Security Agreement" shall mean that Security Agreement, dated as of July 6, 2000, among Advanced Semiconductor Materials (Netherlands Antilles) N.V., as Grantor and the Lender. "Stock Price" on a given Trading Day shall mean the volume-weighted average trading price for the Common Stock on the Principal Market during such Trading Day as reported by Bloomberg. "Subsidiary" shall mean, with respect to any Person, any corporation, limited or general partnership, trust, association or other business entity of which 50% or more of the outstanding Capital Stock or other interests entitled to vote in the election of the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency), managers, trustees or other controlling persons, or an equivalent controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person. "Tax Return" shall mean any report, return, information statement or other information required to be supplied to any federal, state, local or foreign taxing authority, or any election permitted to be made, in connection with Taxes. "Taxes" shall mean all taxes, charges, fees, levies, duties or other assessments, including without limitation all net income, gross income, gross receipts, franchise, value added, sales, use, property, ad valorem, transfer, withholding, profits, license, employee, payroll, social security, unemployment, excise, estimated, severance and any other taxes, duties, withholdings, fees, assessments or charges of any kind whatsoever, including any interest, penalties or additional amounts attributable thereto, imposed by any federal, state, local or foreign taxing authority. "Trading Day" shall mean any day during which the Principal Market shall be open for business and on which trading of the Common Stock on the Principal Market shall not have been suspended or limited. "Volume Limit" shall mean, with respect to each purchase and sale of Common Stock pursuant to a Company Put Notice, that number of shares equal to 25% of the reported trading volume of the Common Stock, as reported by Bloomberg, for the week immediately preceding the week during which the Company delivers to the Investor a Company Put Notice. 6 10 II. PURCHASE AND SALE OF COMMON STOCK SECTION 2.1. Investments. Subject to the terms and conditions set forth herein (including, without limitation, the provisions of Article III hereof), during the Commitment Period: (a) Company Put. If the Company elects to deliver a Company Put Notice to the Investor during the Commitment Period in accordance with Section 2.3(a) hereof, then upon the delivery of such Company Put Notice, the Investor shall be obligated to purchase from the Company shares of Common Stock (not to exceed the Volume Limit) on the Closing Date specified therein for an Investment Amount specified therein, which Investment Amount shall not exceed $10,000,000 (the "Company Put Amount"). (b) Investor Call. In the event that a Margin Call Event shall have occurred and be continuing during the Commitment Period, the Investor may deliver an Investor Call Notice to the Company in accordance with Section 2.3(b) hereof. Upon delivery of such Investor Call Notice, the Company shall be obligated to sell shares of Common Stock to the Investor on the Closing Date specified therein for the Investment Amount specified therein (the "Investor Call Amount"). The Investor Call Amount shall be that amount which, when applied as a reduction in the Loan Amount, shall be sufficient to cure any Margin Call Event occurring under the Credit Agreement. The Investor Call Amount shall be calculated by the Investor and acknowledged by the Company, provided, however, that, the calculation by the Investor shall be deemed correct absent manifest error. SECTION 2.2. Limitations on Investment Amounts. (a) Overall Maximum. In no event shall the aggregate dollar amount of the purchases of Common Stock made by the Investor at Closings pursuant to Section 2.1 exceed the Maximum Offering Amount. (b) Commitment Period Limits. Notwithstanding the obligation of the Investor to purchase shares of Common Stock pursuant to Section 2.1(a), the difference between the Maximum Offering Amount and the aggregate Investment Amount of all purchases of Common Stock under this Agreement during the Commitment Period (such difference, the "Outstanding Commitment Amount") at any time shall not be less than the Loan Amount. (c) 4.9% Limit. Notwithstanding anything to the contrary, the Investor shall not be required or entitled to purchase shares of Common Stock pursuant to an Investor Call Notice to the extent such purchase, when aggregated with all other shares of Common Stock then beneficially owned or deemed beneficially owned by the Investor and all purchases of Common Stock pursuant to this Agreement or otherwise within the previous sixty days, would result in the Investor or any Affiliate of the Investor beneficially owning more than 4.9% of all the issued and outstanding Common Stock on such Closing Date. (d) 9.9% Limit. Notwithstanding anything herein to the contrary, the Investor shall not be required or entitled to purchase shares of Common Stock pursuant to this Agreement 7 11 on any Closing Date to the extent such purchase, when aggregated with all other shares of Common Stock then beneficially owned or deemed beneficially owned by the Investor and all purchases of Common Stock pursuant to this Agreement or otherwise within the previous sixty days, would result in the Investor or any Affiliate of the Investor beneficially owning more than 9.9% of all the issued and outstanding Common Stock on such Closing Date. SECTION 2.3. Mechanics of Notification. (a) Company Put Notice. On any Notice Date, unless otherwise agreed by the parties to this Agreement, the Chief Executive Officer or the Chief Financial Officer of the Company (or such other person as designated by either in writing) may, at the Company's sole discretion, deliver a written notice to the Investor (each such notice being a "Company Put Notice") which specifies the Company Put Amount and the Calculation Date for determining the Applicable Quantity to be purchased by the Investor on the Closing Date specified therein. (b) Investor Call Notice. In the event that a Margin Call Event shall have occurred and be continuing during the Commitment Period, the Investor may, at its sole discretion, deliver a written notice to the Company (an "Investor Call Notice") which specifies the Investor Call Amount and the Calculation Date for determining the Applicable Quantity to be issued by the Company on the Closing Date specified therein. An Investor Call Notice shall be irrevocable. (c) Date of Delivery of Notices. (i) Notices to the Investor. A Company Put Notice or any other notice sent by the Company to the Investor shall be deemed to be delivered on the Trading Day it is transmitted by facsimile with confirmation of acceptance or otherwise received in writing via courier, hand delivery or first-class mail (return receipt requested) by the Investor, or, if received on any day which is not a Trading Day, shall be deemed to be delivered on the immediately succeeding Trading Day. (ii) Notices to the Company. An Investor Call Notice or any other notice sent by the Investor to the Company shall be deemed to be delivered on the Trading Day it is transmitted by facsimile with confirmation of acceptance or otherwise received in writing via courier, hand delivery or first-class mail (return receipt requested) by the Company, or, if received on any day which is not a Trading Day, shall be deemed to be delivered on the immediately succeeding Trading Day. SECTION 2.4. Closings. (a) Deliveries at Closings. (i) On each Closing Date pursuant to a Company Put Notice (A) the Company shall deliver to the Investor one or more certificates representing the Applicable Quantity registered in the name of the Investor or, at the Investor's option, deposit such certificate(s) into such account or accounts previously designated by the Investor, and (B) the Investor shall deliver to the Company the Company Put Amount, provided, however that, if such acquisition of Common Stock by the Investor would cause the Outstanding Commitment 8 12 Amount to be less than the Loan Amount, the Investor shall: (1) cause the Lender to reduce the Loan Amount by the difference between the Loan Amount and the Outstanding Commitment Amount (the "Loan Reduction Amount") and (2) deliver to the Company the difference between the Company Put Amount and the Loan Reduction Amount. (ii) On each Closing Date pursuant to an Investor Call Notice (A) the Company shall deliver to the Investor one or more certificates representing the Applicable Quantity registered in the name of the Investor or, at the Investor's option, deposit such certificate(s) into such account or accounts previously designated by the Investor and (B) the Investor shall cause the Lender to reduce the Loan Amount (in the manner determined by the Investor in its sole discretion after consultation with the Lender) by an amount equal to the Investor Call Amount as of the Closing Date, such that any Margin Call Event, as of the relevant Notice Date, shall have been cured. (b) On or prior to each Closing Date, each of the Company and the Investor shall deliver all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein. (c) Purchase Price Per Share. The purchase price per share of the Company's Common Stock (the "Purchase Price") shall be determined on the Calculation Date as an amount equal to 95.5% of the simple average of the daily weighted average price of the Common Stock for the five previous Trading Days, as reported on Bloomberg. SECTION 2.5. Termination, Suspension and Modification of Investment Obligation. (a) Blocking Events. The Investor may, but shall not be required to, purchase any shares of Common Stock from the Company on any Closing Date pursuant to a Company Put Notice or an Investor Call Notice delivered at any time during the Commitment Period when there shall exist any one or more of the following: (A) the withdrawal of the effectiveness of the Registration Statement, (B) the Company's failure to satisfy the requirements of Section 3.2 or 3.3, or (C) any failure or interruption in the compliance by the Company with the covenants provided in Article VI (each of (A), (B), and (C), a "Blocking Event"). (b) Additional Events of Termination of Investor Obligation. The obligation of the Investor to purchase shares of Common Stock under this Agreement may, if the Investor in its sole and absolute discretion so elects, be terminated in the event that (i) there shall occur any stop order or suspension of the effectiveness of the Registration Statement, or any withdrawal of the effectiveness of the Registration Statement for a period greater than twenty (20) Trading Days for any reason other than as a result of subsequent corporate developments which would require such Registration Statement to be amended to reflect such event in order to maintain its compliance with the disclosure requirements of the Securities Act; or (iii) the Company shall at any time fail to comply with the requirements of Section 6.2, 6.3, 6.4, 6.5 or 6.6 and the Company shall fail to cure such noncompliance within (A) (1) if the noncompliance relates to a failure to comply with the provisions of Section 6.3, 6.4, 6.5 or 6.6, thirty (30) calendar days 9 13 after receipt of notice from the Investor of its election to terminate this Agreement or (2) if the noncompliance relates to a failure to comply with the provisions of Section 6.2, ninety (90) calendar days after receipt of notice from the Investor of its election to terminate this Agreement, provided in either case that the Investor has been notified by the Company of such noncompliance within five (5) Trading Days of the Chief Executive Officer, Chief Financial Officer or Treasurer of the Company having become aware of the occurrence of such noncompliance or, if the noncompliance relates to a failure of the Company to comply with the provisions of Section 6.6, the Investor otherwise becomes aware of such noncompliance or (B) otherwise within five (5) Trading Days of the Chief Executive Officer, Chief Financial Officer or Treasurer of the Company having become aware of the occurrence of such noncompliance; provided, however, that notwithstanding the foregoing, the Investor may, in its sole and absolute discretion, terminate this Agreement if the Company shall fail to maintain the listing of the Common Stock on a Principal Market, or if trading of the Common Stock on a Principal Market shall have been suspended for a period of ten (10) consecutive Trading Days. III. CONDITIONS PRECEDENT SECTION 3.1. Conditions Precedent to the Obligation of the Company to Issue and Sell Common Stock. The obligation hereunder of the Company to issue and sell Common Stock to the Investor incident to each Closing is subject to the satisfaction, at or before each such Closing, of each of the conditions set forth below, which conditions cannot be waived without the prior written consent of the Company. (a) Accuracy of the Investor's Representations and Warranties. The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all material respects as of the date of each such Closing as though made at each such time. (b) Performance by the Investor. The Investor shall have performed, satisfied and compiled in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Investor at or prior to such Closing. (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits or adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced which would be reasonably likely to have the effect of prohibiting or adversely affecting any of the transactions contemplated by this Agreement. SECTION 3.2. Conditions Precedent to the Obligation of the Investor to Purchase Common Stock. The obligation of the Investor to purchase pursuant to a Company Put Notice and the right of the Company to deliver a Company Put Notice and the obligation of the Investor hereunder to acquire and pay for Common Stock incident to a Closing is subject to the satisfaction, on the date of delivery of a Company Put Notice, and on the applicable Closing Date (each a "Condition Satisfaction Date") of each of the following conditions, which conditions may be waived with the prior written consent of the Investor. 10 14 (a) Registration of the Common Stock with the SEC. The Company shall have filed with the SEC a registration statement on Form F-3, any successor form thereto or other appropriate form (the "Registration Statement") for the registration of the resale of the Common Stock to be acquired pursuant to this Agreement, under the Securities Act, in accordance with the terms of the Registration Rights Agreement. Furthermore, the Company shall have filed (i) with the applicable state securities commissions such blue sky filings as shall have been reasonably requested by the Investor in accordance with the terms of the Registration Rights Agreement, and (ii) any required filings with the NASD or exchange or market where the Common Stock is traded. (b) Effective Registration Statement. The Registration Statement shall be in effect and shall remain effective on each Condition Satisfaction Date and (i) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to the Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened to do so, and (ii) no other suspension of the use of the Registration Statement or related Prospectus shall exist. (c) Accuracy of the Company's Representations and Warranties. The representations and warranties of the Company as set forth in this Agreement, the Registration Rights Agreement and the Credit Agreement shall be true and correct in all material respects as of each Condition Satisfaction Date as though made at each such time (except for representations and warranties made as of a specific date). (d) Performance by the Company. The Company shall have performed, satisfied and complied with in all material respects all covenants, agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company at or prior to each Condition Satisfaction Date. (e) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits or adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced which may have the effect of prohibiting or adversely affecting any of the transactions contemplated by this Agreement. (f) Adverse Changes. Since March 14, 2000, the date through which the most recent quarterly report of the Company on Form 6-K has been prepared and filed with the SEC, no event which had or is reasonably likely to have a Material Adverse Effect has occurred, except as disclosed in the SEC Documents or Company press releases subsequent to such date. (g) No Suspension of Trading In or Delisting of Common Stock. The trading of the Common Stock shall not have been suspended by the SEC, the Principal Market or the NASD, and the Common Stock shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market. The issuance of shares of Common Stock with 11 15 respect to the applicable Closing, if any, shall not violate the shareholder approval requirements of the Principal Market. (h) Legal Opinions. The Company shall have caused to be delivered to the Investor, within five (5) Trading Days following (i) the effective date of the Registration Statement and (ii) the delivery by the Company of a Company Put Notice or the delivery by the Investor of an Investor Call Notice, a letter of the Company's independent counsel containing the opinions and statements set forth in Exhibit A hereto, addressed to the Investor and stating, inter alia, that, without independently checking the accuracy of or completeness of, or otherwise verifying any statements of fact contained in the Registration Statement, no facts have come to such counsel's attention that has caused it to believe that the Registration Statement (as amended, if applicable), contains an untrue statement of material fact or omits a material fact required to make the statements contained therein, not misleading or that the underlying Prospectus (if applicable, as so amended or supplemented) contains an untrue statement of material fact or omits a material fact required to make the statements contained therein, in light of the circumstances in which they were made, not misleading; provided, however, that in the event that such a letter cannot be delivered by the Company's independent counsel to the Investor, the Company shall promptly notify the Investor and promptly revise the Registration Statement, and the Company shall not deliver a Company Put Notice or, if a Company Put Notice shall have been delivered in good faith without knowledge by the Company that a letter of independent counsel cannot be delivered as required, shall postpone, if necessary, any pending Closing Date (including a Closing Date with respect to an Investor Call Notice) for a period of up to five (5) Trading Days until such a letter is delivered to the Investor (or such Closing shall otherwise be canceled). In the event of such a postponement, the Purchase Price of the Common Stock to be issued at such Closing as determined pursuant to Section 2.4 shall be the lower of such Purchase Price as calculated as of the originally scheduled Closing Date or calculated as of the actual Closing Date. (i) Accountant's Letter. (i) The Company shall have furnished to the Investor a comfort letter of its independent auditors in customary form, including a statement to the effect that they have performed the procedures in accordance with the provisions of Statement on Auditing Standards No. 71, as amended, as agreed to by the parties hereto, and reports thereon as shall have been reasonably requested by the Investor with respect to certain financial information contained in the Registration Statement and shall have delivered to the Investor a report addressed to the Investor, (x) within five (5) Trading Days following the effective date of the Registration Statement and (y) within ten (10) Trading Days following the filing with the SEC of each SEC Document containing unaudited financial statements of the Company which is deemed to be incorporated by reference in the Registration Statement; provided, however, that no "agreed upon procedures" report shall be required to be delivered pursuant to this Section 3.2(i) unless and until the Company delivers a Company Put Notice. (ii) In the event that the Investor shall have requested delivery of an "agreed upon procedures" report pursuant to Section 3.3, the Company shall engage its independent auditors to perform certain agreed upon procedures and report thereon as shall have 12 16 been reasonably requested by the Investor with respect to certain financial information of the Company and the Company shall deliver to the Investor a copy of such report addressed to the Investor. (iii) In the event that a report required by this Section 3.2 cannot be delivered by the Company's independent auditors, the Company shall, if necessary, promptly revise the Registration Statement and the Company shall not deliver a Company Put Notice or, if a Company Put Notice shall have been delivered in good faith without knowledge by the Company that a report of its independent auditors cannot be delivered as required, postpone such Closing Date for a period of up to five (5) Trading Days until such a report is delivered (or such Closing shall otherwise be canceled). In the event of such a postponement, the Purchase Price of the Common Stock to be issued at such Closing as determined pursuant to Section 2.4 shall be the lower of such Purchase Price as calculated as of the originally scheduled Closing Date and as of the actual Closing Date. (j) Officer's Certificate. The Company shall have delivered to the Investor, on each Closing Date, a certificate in form and substance reasonably acceptable to the Investor, executed by an executive officer of the Company, to the effect that all the conditions to such Closing shall have been satisfied as at the date of each such certificate. (k) Due Diligence. No dispute between the Company and the Investor shall exist pursuant to Section 3.3 as to the adequacy of the disclosure contained in the Registration Statement. SECTION 3.3. Due Diligence Review. (a) Availability of Information. The Company shall make available, during normal business hours, for inspection and review by the Investor and its Affiliates, external legal advisors and independent accountants (which counsel and accountants shall be reasonably acceptable to the Company and, together with the Affiliates of the Investor, are referred to herein as "Representatives"), all financial and other records, all SEC Documents and other filings with the SEC, and all other corporate documents and properties of the Company as may be reasonably necessary for the purpose of such review, and cause the Company's officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested by the Investor or any of its Representatives in connection with such Registration Statement (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of enabling the Investor and such Representatives to conduct initial and ongoing due diligence with respect to the Company and the accuracy of the Registration Statement. Notwithstanding the foregoing, the Investor and its Representatives shall be allowed to disclose the information described above to any U.S., Canadian or other securities regulator in connection with an examination by such regulator of the Investor. (b) Nonpublic Information. (i) The Company shall not disclose nonpublic information to the Investor, advisors to or representatives of the Investor unless prior to disclosure of such information the Company identifies such information as being nonpublic 13 17 information and provides the Investor, such advisors and representatives with the opportunity to accept or refuse to accept such nonpublic information for review. The Company may, as a condition to disclosing any nonpublic information hereunder, require the Investor's advisors and representatives to enter into a confidentiality agreement (including an agreement with such advisors and representatives prohibiting them from trading in Common Stock during such period of time as they are in possession of nonpublic information) in form reasonably satisfactory to the Company and the Investor. (ii) Nothing herein shall require the Company to disclose nonpublic information to the Investor or its advisors or representatives, and the Company represents that it does not disseminate nonpublic information to any investors who purchase stock in the Company in a public offering, to money managers or to securities analysts, provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided, immediately notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting nonpublic information (whether or not requested of the Company specifically or generally during the course of due diligence by any such persons or entities), which, if not disclosed in the Prospectus included in the Registration Statement, would cause such Prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements therein, in light of the circumstances in which they were made, not misleading. Nothing contained in this Section 3.3 shall be construed to mean that such persons or entities other than the Investor (without the written consent of the Investor prior to disclosure of such information) may not obtain nonpublic information in the course of conducting due diligence in accordance with the terms of this Agreement; provided, however, that in no event shall the Investor's advisors or representatives disclose to the Investor the nature of the specific event or circumstances constituting any nonpublic information discovered by such advisors or representatives in the course of their due diligence without the written consent of the Investor prior to disclosure of such information. The Investor's advisors or representatives shall make complete disclosure to the investor's independent counsel of all events or circumstances constituting nonpublic information discovered by such advisors or representatives in the course of their due diligence upon which such advisors or representatives form the opinion that the Registration Statement contains an untrue statement of a material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in the light of the circumstances in which they were made, not misleading. Upon receipt of such disclosure, the Investor's independent counsel shall consult with the Company's independent counsel in order to address the concern raised as to the existence of a material misstatement or omission and to discuss appropriate disclosure with respect thereto; provided, however, that such consultation shall not constitute the advice of the Company's independent counsel to the Investor as to the accuracy of the Registration Statement and related Prospectus. In the event after such consultation the Investor's independent counsel reasonably believes that the Registration Statement contains an untrue statement of a material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading, (A) the Company shall file with the SEC an amendment to the Registration Statement responsive to such alleged untrue 14 18 statement or omission and provide the Investor, as promptly as practicable, with copies of the Registration Statement and related Prospectus, as so amended, (B) if the Company disputes the existence of any such material misstatement or omission, and (1) the dispute relates to information other than financial statements, schedules and other financial or statistical information included or incorporated by reference therein, the Company's independent counsel shall provide the Investor's independent counsel with a letter (customary in form and scope as provided to an underwriter in an underwritten public offering) stating that, without independently checking the accuracy or completeness of, or otherwise verifying, any statements of fact contained in the Registration Statement, nothing has come to their attention that would lead them to believe that the Registration Statement or the related Prospectus, as of the date of such letter, contains an untrue statement of a material fact or omits a material fact required to be stated in the Registration Statement or the related Prospectus or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading or (2) in the event the dispute relates to the adequacy of financial disclosure and the Investor shall reasonably request, the Company's independent auditors shall provide to the Company a letter outlining the performance of such "agreed upon procedures" as shall be reasonably requested by the Investor and the Company shall provide the Investor with a copy of such letter, or (C) if the Company disputes the existence of any such material misstatement or omission, and the dispute relates to the timing of disclosure of a material event and the Company's independent counsel is unable to provide the letter referenced in clause (B)(1) above to the Investor, then this Agreement shall be suspended for a period of up to thirty (30) days (or if a Blocking Notice has occurred and is occurring at the end of such period, such period shall be extended until the date of the expiration of such Blocking Notice) and, at the end of which, if the dispute still exists between the Company's independent counsel and the Investor's independent counsel, either (x) the Company shall amend the Registration Statement as provided above or provide to the Investor the Company's independent counsel letter or a copy of the letter of the Company's independent auditors referenced above, as applicable, or (y) the obligation of the Investor to purchase shares of Common Stock pursuant to this Agreement shall terminate. IV. REPRESENTATIONS AND WARRANTIES OF INVESTOR The Investor represents and warrants to the Company as follows: SECTION 4.1. Authority. The Investor has full power and authority to execute and deliver this Agreement and the Registration Rights Agreement, and to consummate the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Investor. No other proceedings on the part of Investor are necessary to approve and authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby in accordance with the terms hereof. This Agreement has been validly executed and delivered by the Investor and is a valid and binding agreement of the Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application. 15 19 SECTION 4.2. No Brokers. The Investor has taken no action that would give rise to any claim by any person (other than the Investor as set forth in Section 10.2 hereof) for brokerage commission, finder's fees or similar payments by the Company relating to this Agreement or the transactions contemplated hereby. SECTION 4.3. Not an Affiliate. The Investor is not an officer, director or Affiliate of the Company. SECTION 4.4. Organization and Standing. The Investor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite power and authority as a corporation to carry on its business as now being conducted, and is duly qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it makes such qualifications necessary, except where the failure to be so qualified or in good standing would not reasonably be expected to have a material adverse effect. SECTION 4.5. Absence of Conflicts. The execution and delivery of this Agreement and any other document or instrument executed in connection herewith, and the consummation of the transactions contemplated hereby and thereby, and compliance with the requirements hereof and thereof, will not violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor, or the provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, or result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any third party, or require the approval of any third party (which has not been obtained) pursuant to any material contract, agreement, instrument, relationship or legal obligation to which the Investor is subject or to which any of its assets, operations or management may be subject. SECTION 4.6. Disclosure: Access to Information. The Investor has received all documents, records, books and other information pertaining to the Investor's investment in the Company that have been requested by the Investor. The Investor further acknowledges that it understands that the Company is subject to the periodic reporting requirements of the Exchange Act, and the Investor has reviewed or received copies of any such reports that have been requested by it and that it considers necessary or appropriate for deciding whether to enter into this Agreement and perform its obligations hereunder. The Investor further represents that it had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the purchase of the Common Stock and the business, properties, prospects and financial condition of the Company. SECTION 4.7. No Hedging or Short Selling. (a) During the period sixty (60) days prior to the date of this Agreement the Investor has not engaged in any short sales or hedging of any kind in anticipation of this Agreement, and (b) during the term of this Agreement the Investor may make sales in anticipation of Company Put Notices, but may not make any sales with the intention of reducing the price of the Common Stock to Investor's benefit. 16 20 SECTION 4.8. Compliance with Securities Laws. The Investor acknowledges and agrees that any transactions in the Common Stock effected by the Investor shall comply with all applicable securities laws, including, without limitation, if applicable, Regulation M promulgated under the Exchange Act. V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as disclosed in the SEC Documents, Company press releases or in the Disclosure Schedule delivered by the Company to the Investor on the date hereof, the Company represents and warrants to the Investor as follows: SECTION 5.1. Corporate Organization. The Company and each of its Subsidiaries is a corporation duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of incorporation, and has all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as now being conducted, and is duly qualified to do business and in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect. The Company has made available to the Investor or its agents complete and correct copies of the Certificate of Incorporation, as amended, and by-laws of the Company as in effect on the date hereof. SECTION 5.2. Capitalization. (a) The authorized Capital Stock of the Company consists of (i) 60,000,000 shares of Common Stock, (ii) 6,900 shares of preferred stock, Nlg. 100 par value per share (the "Preferred Stock") and (iii) 900 financing preferred shares, Nlg. 100 par value per share (the "Financing Preferred Stock"). As of the date of this Agreement, there were (i) 48,758,946 shares of Common Stock issued, all of which are duly authorized and validly issued, fully paid and nonassessable, (ii) no shares of Common Stock owned by the Company in its treasury and (iii) 430,100 shares of Common Stock reserved for issuance pursuant to stock options granted or which may be granted under the Compensation Plans. As of the same date, there were no shares of Preferred Stock or Financing Preferred Stock outstanding. The Company has not issued any Common Stock since June 30, 2000, except pursuant to the exercise of stock options or pursuant to the Company's Compensation Plans, nor has the Company since such date repurchased or redeemed or acquired any such shares. No shares of Capital Stock of the Company are entitled to preemptive rights. (b) Except as set forth in Section 5.2(a) above and in Schedule 5.2(b), the Company does not have outstanding any Capital Stock or securities convertible into or exchangeable for any shares of Capital Stock or any options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company is a party or otherwise obligating the Company to issue or sell or entitling any Person to acquire from the Company, and the Company is not a party to any agreement, arrangement or commitment obligating it to repurchase, redeem or otherwise acquire, any shares of its Capital Stock or securities convertible into or exchangeable for any of its Capital Stock. 17 21 (c) Upon issuance of the Common Stock, and payment of the Purchase Price therefor, pursuant to a purchase and sale in accordance with the terms of this Agreement, the Company will transfer to the Investor good and valid title to the Common Stock, free and clear of any material Lien, other than Liens, if any, created by the Investor and such Common Stock will be duly authorized, fully paid and nonassessable. SECTION 5.3. Subsidiaries. (a) The Company does not have any Subsidiaries that own material assets or are subject to material liabilities, other than those listed on Schedule 5.3(a) of the Disclosure Schedule. Except as set forth in Schedule 5.3(a), each Subsidiary is, directly or indirectly, wholly owned by the Company. (b) Except as set forth in Schedule 5.3(b), (i) all the outstanding stock or other equity or ownership interests of each Subsidiary is owned free and clear of all material Liens and is validly issued and (ii) there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which any Subsidiary is a party or otherwise obligating any Subsidiary to issue or sell, or entitling any Person to acquire from any Subsidiary, and no Subsidiary is a party to any agreement, arrangement or commitment obligating it to repurchase, redeem or otherwise acquire, any shares of the Capital Stock or any securities convertible into or exchangeable for the Capital Stock of any such Subsidiary. SECTION 5.4. Authorization. The Company has full corporate power and authority to execute and deliver this Agreement and the Registration Rights Agreement, to issue the Common Stock pursuant to this Agreement, and to consummate the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the Registration Rights Agreement, and the issuance of the Common Stock issuable upon a Closing, and the consummation of the transactions contemplated hereby and thereby have been duly authorized by the Board of Directors of the Company. To the Knowledge of the Company, no other corporate proceedings on the part of the Company are necessary to approve and authorize the execution and delivery of this Agreement and the Registration Rights Agreement, and the issuance of the Common Stock issuable upon a Closing, and the consummation of the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof. This Agreement and the Registration Rights Agreement have been duly executed and delivered by the Company, and the Common Stock issuable in accordance with the terms of this Agreement, upon the payment of the purchase price therefor in accordance with the terms hereof and thereof, will be duly and validly issued, fully paid and nonassessable. Each of this Agreement and the Registration Rights Agreement constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application. 18 22 SECTION 5.5. No Violation, Consents. (a) Assuming the making or receipt of all filings, notices, registrations, consents, approvals, permits and authorizations described in this Section 5.5, the execution and delivery of this Agreement and the Registration Rights Agreement, and the consummation of the transactions contemplated hereby and by the Registration Rights Agreement., the compliance by the Company with any of the provisions hereof or of the Registration Rights Agreement, will not (i) conflict with, violate or result in any breach of the Certificate of Incorporation, as amended, or by-laws of the Company or its Subsidiaries, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default or give rise to any right of termination, cancellation or acceleration under, or result in the creation of any Lien on or against any of the properties of the Company or any of its Subsidiaries pursuant to any of the terms or conditions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which the Company or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound, or (iii) violate any statute, law, rule, regulation, writ, injunction, judgment, order or decree of any Governmental Entity, binding on the Company or any of its Subsidiaries or any of their properties or assets, excluding from the foregoing clauses (i), (ii) and (iii) conflicts, violations, breaches, defaults, rights of termination, cancellation or acceleration, and liens which, individually or in the aggregate, would not have a Material Adverse Effect, would not prevent or materially delay consummation of the transactions contemplated hereby and would not affect the validity of the issuance of the Common Stock. (b) Except for (i) applicable requirements, if any, under Blue Sky Laws, (ii) the filing of additional listing applications with Nasdaq, and (iii) the filing of the Registration Statement, no filing, consent, approval, permit, authorization, notice, registration or other action of or with any Governmental Entity is required to be made or obtained by or with respect to the Company or any of its Subsidiaries in connection with the execution and delivery of this Agreement and the Registration Rights Agreement, the issuance of the Common Stock or the consummation by the Company of the transactions contemplated hereby and thereby. SECTION 5.6. Compliance With Applicable Law. The businesses of the Company are not being conducted in violation of any law, ordinance, rule, regulation, judgment, decree or order of any Governmental Entity, except for possible violations which, individually or in the aggregate, would not have a Material Adverse Effect. The Company and each of its Subsidiaries possess all domestic and foreign governmental licenses, permits, authorizations and approvals and have made all registrations and given all notifications required under federal, state, local or foreign law to carry on in all respects their businesses as currently conducted, except as otherwise disclosed in writing by the Company to the Investor on or prior to the date hereof, and except where the failure to have any such licenses, permits, authorizations or approvals, individually or in the aggregate, would not have a Material Adverse Effect. No investigation or review by any Governmental Entity with respect to the Company or any of its Subsidiaries is pending or, to the knowledge of the Company, threatened, other than those the outcome of which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. 19 23 SECTION 5.7. Litigation. There is no claim, action or proceeding (including any condemnation proceeding) pending or, to the Knowledge of the Company, threatened against or relating to the Company or any of its Subsidiaries by or before any Governmental Entity or arbitrator that if adversely determined, individually or in the aggregate, would have a Material Adverse Effect, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company or any of its Subsidiaries that has had, or would reasonably be expected in the future to have, a Material Adverse Effect or which reasonably could be expected to materially adversely affect the transactions contemplated by this Agreement. SECTION 5.8. SEC Documents, Financial Statements. (a) The Common Stock is registered pursuant to Section 12(g) of the Exchange Act and the Company has filed all reports, schedules, forms, statements and other documents, together with all exhibits, financial statements and schedules thereto required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) thereof (all of the foregoing, and all other documents and registration statements, whether heretofore or hereafter filed by the Company with the SEC since January 1, 1996, and the Registration Statement, when declared effective, being hereinafter referred to as the "SEC Documents"). The Common Stock is currently listed or quoted on the Principal Market, which is, as of the date hereof, the Nasdaq National Market. The Company has delivered or made available to the Investor true and complete copies of the SEC Documents through the date hereof. The Company has not provided to the Investor any material information which, according to applicable law, rule or regulation, should have been disclosed publicly by the Company but which has not been so disclosed, other than with respect to the transactions contemplated by this Agreement. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act or the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated herein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the date of delivery by the Investor of the Prospectus contained in the Registration Statement in connection with sales of Common Stock by the Investor, such Prospectus will comply in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC promulgated thereunder, and other federal, state and local laws, rules and regulations applicable to such Prospectus, absent a Blocking Notice in effect on such date. The financial statements of the Company included (or incorporated by reference) in the SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material 20 24 respects the consolidated financial position of the Company and its Subsidiaries as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). (b) During the three (3) years preceding the date hereof, the SEC has not issued an order preventing or suspending the use of any prospectus relating to the offering of any shares of Common Stock or instituted proceedings for that purpose. SECTION 5.9. No Undisclosed or Contingent Liabilities. Neither the Company nor any of its Subsidiaries has any claims, liabilities or obligations of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due) that would be required to be reflected or reserved against on a consolidated balance sheet of the Company and its consolidated Subsidiaries under GAAP, except for claims, liabilities or obligations (i) reflected or reserved against on the Balance Sheet, (ii) disclosed in the Company's most recent Form 20-F or any SEC Document filed subsequent to such Form 20-F or (iii) incurred by the Company or any of its Subsidiaries since March 31, 2000 in the ordinary course of business and consistent with past practice and that, individually or in the aggregate, would not have a Material Adverse Effect. SECTION 5.10. Taxes. The Company and its Subsidiaries have timely filed all necessary Tax Returns and notices and have paid all federal, state, county, local and foreign taxes of any nature whatsoever for all the tax years through December 31, 1999 indicated on such Tax Returns as being due and payable, to the extent such taxes have become due (other than taxes which are being challenged in good faith by the Company and have been adequately reserved for by the Company), except where any failure to file or pay would not have a Material Adverse Effect. There are no tax deficiencies which would reasonably be expected to have a Material Adverse Effect; the Company and its Subsidiaries have paid all Taxes which have become due and payable by the Company (other than Taxes that are being challenged in good faith or have been adequately reserved for by the Company), whether pursuant to any assessments, or otherwise, except where any failure to pay would not have a Material Adverse Effect, and there is no further liability (whether or not disclosed on such returns) or assessments for any such Taxes, and no interest or penalties accrued or accruing with respect thereto; the amounts currently set up as provisions for Taxes or otherwise by the Company and its Subsidiaries on their books and records are sufficient in all material respects for the payment of all their unpaid federal, foreign, state, county and local taxes accrued through the dates as of which they speak, except where such insufficiency would not have a Material Adverse Effect, and for which the Company and its Subsidiaries may be liable in their own right, or as transferee of the assets of, as successor to any other corporation, association, partnership, joint venture or other entity. SECTION 5.11. Employee Benefit Plan. All employee benefit plans and other benefit arrangements covering the employees of the Company and its Subsidiaries (the "Benefit Plans") have been operated and administered in all material respects in compliance with their terms and applicable law, and there are no claims, liabilities or obligations of any kind whatsoever relating to the Benefit Plans which individually or in the aggregate would have a Material Adverse Effect. 21 25 SECTION 5.12. Absence of Certain Charges. Since March 31, 2000, the business of the Company and its Subsidiaries has been conducted in the ordinary course consistent with past practices and there has not been: (i) to the Knowledge of the Company, any event, occurrence, development or state of circumstances or facts which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect, (ii) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of Capital Stock of the Company or any repurchase, redemption or other acquisition by the Company or any Subsidiary of any outstanding shares of Capital Stock or other securities of, or other ownership interests in, the Company or any Subsidiary; (iii) any amendment of any material term of any outstanding security of the Company or any Subsidiary; (iv) any incurrence, assumption or guarantee by the Company or any Subsidiary of any indebtedness for borrowed money, other than (i) working lines of credit or borrowings under existing lines of credit or floor plan financing arrangements, (ii) any license fees and royalties and (iii) pursuant to any lease; (v) any creation or assumption by the Company or any Subsidiary of any Lien on any material asset other than in the ordinary course of business consistent with past practice; (vi) any making of any loan, advance or capital contributions to or investment in any Person in excess of $500,000 other than loans, advances or capital contributions to or investments in wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice; (vii) any damage, destruction or other casualty loss (whether or not covered by insurance) affecting the business or assets of the Company or any Subsidiary which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect; (viii) any transaction or commitment made, or any contract or agreement entered into, by the Company or any Subsidiary relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Company or any Subsidiary of any contract or other right, in any such case, material to the Company and the Subsidiaries, taken as a whole, other than transactions and commitments in the ordinary course of business consistent with past practice and those contemplated by this Agreement; or (ix) any material change in any method of accounting or accounting practice by the Company or any Subsidiary. 22 26 SECTION 5.13. Environmental Matters. (a) The Company and its Subsidiaries have obtained all permits, licenses and other authorizations, and have made all registrations and given all notifications, that are required with respect to the operation of their respective businesses under all applicable Environmental Laws other than those permits, licenses, other authorizations, registrations and notifications the failure of which to obtain or make, individually or in the aggregate, would not have a Material Adverse Effect. (b) The Company and its Subsidiaries are in compliance in all material respects with all terms and conditions of the required permits, licenses and other authorizations referred to in subsection (a) of this Section 5.13, and also in compliance in all material respects with any other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in the Environmental Laws or contained in any regulation, code, plan, order, decree, judgment, injunction, settlement agreement, notice or demand letter issued, entered, promulgated or approved thereunder, other than where the failure to be in such compliance, individually or in the aggregate, would not have a Material Adverse Effect. (c) There is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter (collectively, "Actions") pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries relating in any way to Environmental Laws or any regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder other than Actions that, if determined adversely to the Company or such Subsidiaries, would not reasonably be expected to have a Material Adverse Effect. SECTION 5.14. Material Contracts. (a) Except as filed as an exhibit to or incorporated by reference in the Company's registration statement on Form F-3, which became effective on April 7, 2000, as of the date hereof neither the Company nor any Subsidiary is a party to or is bound by any agreement or arrangement that is required to be filed in accordance with the terms of Item 601(b)(10) of Regulation S-K under the Securities Act ("Material Contracts"). (b) Each Material Contract is in full force and effect and constitutes a legal, valid and binding obligation of the Company or the Subsidiary party thereto and, to the Knowledge of the Company, each other party thereto, and is enforceable against the Company or its Subsidiaries and, to the Knowledge of the Company, each other party thereto in accordance with its terms, except to the extent that such enforceability is limited by (i) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity, and neither the Company nor any of Its Subsidiaries, nor, to the Knowledge of the Company, any other party thereto is in conflict therewith or in violation or breach thereof or default thereunder, except for such conflicts, violations, breaches and defaults which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. 23 27 SECTION 5.15. Properties, Encumbrances. Subject to the next succeeding sentence, each of the Company and its Subsidiaries has good and valid title, and in the case of real property, insurable title, to all material properties and assets which it purports to own (real, personal and mixed, tangible and intangible, including all forms of goodwill, rights, intellectual property and intellectual property rights) (collectively, the "Company Assets"), including, without limitation, all the material properties and assets reflected on the Balance Sheet (except for (i) real and personal property sold since the date of the Balance Sheet or which was obsolete or no longer useful in connection with the businesses of the Company and its Subsidiaries and (ii) capital leases reflected on the Balance Sheet), and all material properties and assets purchased by the Company and its Subsidiaries since the date of the Balance Sheet. All Company Assets are free and clear of all liens, mortgages, claims, interests, charges, security interests or other encumbrances or adverse interests of any nature whatsoever and other title or interest retention arrangements ("Liens") except (A) as reflected on the Balance Sheet, (B) as set forth on Schedule 1 to the Credit Agreement, (C) statutory Liens of carriers, warehousemen, mechanics, workmen and materialmen for liabilities and obligations incurred in the ordinary course of business consistent with past practice that are not yet delinquent or being contested in good faith, (D) such defects, irregularities, encumbrances and other imperfections of title as normally exist with respect to property similar in character and that, individually or in the aggregate together with all other such exceptions, do not have a Material Adverse Effect, (E) Liens for Taxes and (F) Liens that do not interfere with the present use of the property subject to the Lien. SECTION 5.16. Insurance. All current primary, excess and umbrella policies of insurance owned or held by or on behalf of or providing insurance coverage to the Company or any of its Subsidiaries are in full force and effect. With respect to all such insurance policies purchased by the Company or any of its Subsidiaries, no premiums are in arrears and no notice of cancellation or termination has been received with respect to any such policy, other than notices of cancellation or termination routinely sent at the end of a policy term. To the Knowledge of the Company, the insurance coverage of the Company and its Subsidiaries is consistent with the coverage generally maintained by corporations of similar size and engaged in similar lines of business. SECTION 5.17. Employee Claims; Labor Matters. There are no claims or actions pending or, to the Knowledge of the Company, threatened between the Company or any of its Subsidiaries and any of their respective employees, unions, or former employees that would be reasonably likely to, individually or in the aggregate, have a Material Adverse Effect. The Company and each of its Subsidiaries have no collective bargaining agreements covering employees of the Company or any Subsidiary. SECTION 5.18. Material Disclosure. To the Knowledge of the Company, there is no fact, transaction or development which the Company has not disclosed to the Investor in writing (including pursuant to the SEC Documents filed prior to the date hereof) which would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. This Agreement (including any Exhibit or Schedule hereto) and any written statements, documents or certificates furnished to the Investor by the Company or its Subsidiaries prior to the date hereof in connection with the transactions contemplated hereby, taken as a whole, do not and will not contain any untrue statement of a material fact or omit to state a material fact required to be 24 28 stated herein or therein or necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. SECTION 5.19. Intellectual Property. The Company and its Subsidiaries own or possess adequate patent rights or licenses or other rights to use patent rights, inventions, trademarks, service marks, trade names and copyrights material to the general business now operated by them and neither the Company nor any of its Subsidiaries has received any notice of infringement or conflict with asserted rights of others with respect to any patent, patent rights, inventions, trademarks, service marks, trade names or copyrights which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. SECTION 5.20. No Undisclosed Events or Circumstances. To the Knowledge of the Company, since March 31, 2000, no event or circumstance has occurred or exists with respect to the Company or its Subsidiaries or their respective businesses, properties, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company. SECTION 5.21. No Broker. The Company has taken no action which would give rise to any claim by any Person for brokerage commissions, finder's fees or similar payments by the Investor relating to this Agreement for the transactions contemplated hereby. SECTION 5.22. No Violation of Covenants. To the Knowledge of the Company, no event of default has occurred and is continuing (or event which with the lapse of time or notice or both would constitute such an event) which has not otherwise been waived under any revolving credit facility, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument for money borrowed or any other material agreement to which the Company or any of its Subsidiaries is bound, or to which any of the property or assets of the Company or any of its Subsidiaries is subject, and in any case, which the failure to cure or obtain a waiver with respect to such default would have a Material Adverse Effect. VI. COVENANTS OF THE COMPANY SECTION 6.1. Registration Rights. The Company shall comply in all respects with the terms of the Registration Rights Agreement. SECTION 6.2. Reservation of Common Stock. Except as disclosed in the SEC Documents, the Company has reserved and will continue to reserve and keep available at all times during the Commitment Period, the number of shares of Common Stock, free of preemptive rights, set forth below: (a) on the Effective Date, a number of shares equal to or greater than the result of (i) S140,000,000 divided by (ii) the Purchase Price on the Effective Date, rounded up to the nearest whole integer; and (b) on each Trading Day following the Effective Date, a number of shares equal to or greater than the result of (i) an amount equal to 120% of the Loan Amount on such Trading 25 29 Day divided by (ii) the Purchase Price on such Trading Day, rounded up to the nearest whole integer. Notwithstanding the foregoing, the number of shares so reserved from time to time shall be adjusted proportionally to reflect stock splits, dividends, distributions, redenominations, combinations and similar transactions involving the Company's Common Stock. SECTION 6.3. Listing of Common Stock. During the term of this Agreement, the Company hereby agrees to maintain the listing of the Common Stock on a Principal Market, and as soon as reasonably practicable but in any event no later than the Effective Date to list the shares of Common Stock issuable under this Agreement, subject to the terms of the Registration Rights Agreement. The Company further agrees that, if the Company applies to have the Common Stock traded on any other Principal Market, it will include in such application the Common Stock issuable under this Agreement, and will take such other action as is necessary or desirable to cause the Common Stock to be listed on such other Principal Market as promptly as possible. If the Principal Market is the Nasdaq National Market, the Company shall maintain sufficient net tangible assets to satisfy the requirements of the NASD for the listing of the Common Stock on the Nasdaq National Market. SECTION 6.4. Exchange Act Reporting. During the term of this Agreement, the Company will comply in all respects with its reporting and filing obligations under the Exchange Act, and will not take any action or file any document (whether or not permitted by the Exchange Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act. If required, the Company will take all action to continue the listing and trading of its Common Stock on the Principal Market and will comply in all material respects with the Company's reporting, filing and other obligations under the bylaws or rules of the NASD and the Principal Market. SECTION 6.5. Legends. The Company shall instruct the applicable transfer agent to remove all legends or stop transfer or other restrictions from the certificates representing shares of Common Stock to be sold by the Investor pursuant to the Registration Statement. SECTION 6.6. Corporate Existence. During the term of this Agreement, the Company will take all steps necessary to preserve and continue the corporate existence of the Company; provided, however, that nothing herein shall be construed to limit the ability of the Company to partake in any merger, asset sale or acquisition transaction involving the Company, subject to the Company complying with the terms of this Agreement. SECTION 6.7. Additional SEC Documents. During the term of this Agreement, the Company will notify the Investor as and when all SEC Documents are submitted to the SEC for filing. SECTION 6.8. "Blackout Period". During the term of this Agreement, the Company will immediately notify the Investor upon the occurrence of any 26 30 of the events described in Section 3(d) of the Registration Rights Agreement. During the period in which any of the events described therein has occurred and is continuing, the Investor shall not be obligated to purchase any shares of Common Stock pursuant to a Company Put Notice. VII. OTHER ISSUANCES OF COMMON STOCK SECTION 7.1. Equity Offering Adjustment to Purchase Price. In the event that the Company makes an Equity Offering of or in excess of 100,000 shares during the Commitment Period or during the period in which any portion of the Loan Amount is outstanding, then notwithstanding anything herein to the contrary, the Purchase Price of Common Stock following the consummation of the Equity Offering shall be the lower of (a) the Equity Offering Purchase Price and (b) the Purchase Price determined hereunder with respect to purchases of Common Stock by the Investor. SECTION 7.2. Other Adjustments to Purchase Price. The daily weighted average selling price of the Common Stock for any Trading Day used to calculate the Purchase Price shall be adjusted proportionally to reflect any stock splits, stock dividends, reclassifications, redenominations, combinations and similar transactions involving the Company's Common Stock. VIII. GOVERNING LAW AND JURISDICTION SECTION 8.1. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. SECTION 8.2. Jurisdiction. The parties hereby agree that all actions or proceedings arising directly or indirectly from or in connection with this Agreement shall, at the option of either party, be litigated only in the United States District Court for the Southern District of New York located in New York County, New York, unless such District Court declines jurisdiction, in which case such actions or proceedings shall be litigated only in the state court located in New York County, New York. Each party hereto irrevocably waives, to the fullest extent permitted by applicable law, any objection which it might now or hereafter have to the laying of venue of any proceeding in the United States District Court for the Southern District of New York or the courts of the State of New York in New York County, and any claim that any proceeding brought in any such court has been brought in an inconvenient forum. The Company agrees that it shall at all times have an authorized agent in New York County, New York, upon whom process may be served in connection with any proceeding hereunder, and the Company has appointed Corporation Service Company, which currently maintains an office at Two World Trade Center, Suite 8746, New York, NY 10048, as its agent for such purposes. If for any reason such person shall cease to act as agent for the service of process, the Company shall promptly appoint another such agent, and shall forthwith notify the Investor of such appointment. The submission to jurisdiction reflected in this paragraph shall not (and shall not be construed so as to) limit the right of any person to commence proceedings in any court of competent jurisdiction, nor shall the commencement of proceedings in any one or more jurisdictions preclude the commencement of proceedings in any other jurisdiction (whether 27 31 concurrently or not) if and to the extent permitted by law. The parties hereto waive any right to a jury trial in connection with any litigation pursuant to this Agreement. SECTION 8.3. Waiver of Sovereign Immunity. The Company irrevocably waives, to the fullest extent permitted by law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, attachment (both before and after judgment) and execution to which it might otherwise be entitled in any action or proceeding in any court relating in any way to this Agreement and agrees that it will not raise or claim or cause to be pleaded any such immunity at or in respect of such action or proceeding. IX. ASSIGNMENT, ENTIRE AGREEMENT, AMENDMENT, TERMINATION SECTION 9.1. Assignment. Neither this Agreement nor any rights of the Investor or the Company hereunder may be assigned by either party to any other person. Notwithstanding the foregoing, the Investor's rights and obligations under this Agreement may be assigned at any time, in whole, to any Affiliate of the Investor (a "Permitted Transferee"), provided, however, that any such assignment shall not release the Investor from its obligations hereunder. The rights and obligations of the Investor under this Agreement shall inure to the benefit of, and be enforceable by and against, any such Permitted Transferee. SECTION 9.2. Entire Agreement; Amendment. This Agreement, the Registration Rights Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth in this Agreement or therein. Except as expressly provided in this Agreement, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. SECTION 9.3. Publicity. Each of the Company and the Investor agrees that it will not disclose, and will not include in any public announcement, the name of the other without its prior consent, unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. Except as may be required by law, each of the Company and the Investor shall not issue any press release or make any public statement with respect to this Agreement prior to consultation with the other party. SECTION 9.4. Termination. (a) The Company and the Investor may, by mutual written consent, at any time, terminate this Agreement and any obligation by the Investor to purchase any Investment Amount for the remainder of the Commitment Period. (b) The Investor may terminate this Agreement as a result of (i) a breach by the Company of any material representation, warranty, covenant or other obligation in this Agreement or the Registration Rights Agreement or (ii) if the Investor reasonably determines, in 28 32 its sole discretion, at any time that the adoption of, or change in, or any change in the interpretation or application of, any law, regulation, rule, guideline or treaty (including, but not limited to, changes of capital adequacy) makes it illegal or materially impractical for the Investor to fulfill its commitment pursuant to this Agreement, but in the case of either (i) or (ii) above, the Investor may terminate this Agreement only after a 60-day period in which the parties negotiate in good faith, in the case of (i), a reasonable substitute for such provision or, in the case of (ii), a reasonable alternative manner not illegal or impossible for the Investor to fulfill its commitment pursuant to this Agreement. X. NOTICES, COSTS AND EXPENSES, RIGHT OF FIRST REFUSAL, INDEMNIFICATION SECTION 10.1. Notices. All notices, demands, requests, consents, approvals or other communications required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served or deposited in the mail, registered or certified, return receipt requested, postage prepaid, or delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice: If to the Company, to: ASM International N.V. Jan Van Eycklaan 10 3723 Bilthoven The Netherlands Attn: Rinse de Jong Tel: (31) 30-229-8540 Fax: (31) 30-228-7469 With a copy (which shall not constitute notice) to: Quarles & Brady LLP One East Camelback Road, Suite 400 Phoenix, Arizona 85012-1649 Attn: Bob Moya Tel: (602) 230-5500 Fax: (602) 230-5598 If to the Investor, to Canadian Imperial Holdings Inc. C/o CIBC World Markets Corp. 425 Lexington Ave. New York, NY 10017 Attn: Paul Flynn or Jeff Haas 29 33 Tel: (212) 856-6506 Fax: (212) 856-4054 With a copy (which shall not constitute notice) to: Mayer, Brown & Platt 1675 Broadway New York, NY 10019 Attn: David K. Duffee Tel: (212) 506-2630 Fax: (212) 262-1910 Subject to Section 2.3(c), notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile during normal business hours of the recipient. Notice otherwise sent as provided herein shall be deemed given on the third (3rd) business day following the date mailed or on the second business day following the date of deposit for delivery of such notice with a reputable air courier service. SECTION 10.2. Costs and Expenses. (a) Out-of-pocket Costs. The Company shall be responsible for the Investor's reasonable out-of-pocket costs and expenses, including fees and expenses of its legal counsel, in connection with the performance of its obligations hereunder up to a maximum amount of $70,000. The Company agrees to pay the Investor the amounts due under this clause no later than the Agreement Date. (b) Commitment Fee. The Company shall pay to the investor a fee of $1,250,000 on the date of the execution of this Agreement, provided, however, that if prior to the ninetieth (90th) day following the execution of this Agreement, this Agreement shall have been terminated and the Loan Amount shall have been zero, the Investor shall repay to the Company the sum of $400,000. SECTION 10.3. Right of First Refusal. In consideration for the Investor to engage in the transactions contemplated by this Agreement, the Company hereby grants to CIBC World Markets, an Affiliate of the Investor, a right of first refusal to lead any public or private financing transaction for as long as the Loan Amount shall exceed $5,000,000. CIBC World Markets shall have the right to assign this right of first refusal to any of its Affiliates, subject to the prior consent of the Company, which consent shall not be unreasonably withheld. This right of first refusal shall not (and shall not be construed so as to) limit the right of the Investor, CIBC World Markets, or any of their respective Affiliates to exercise any other right of refusal granted to such entities by the Company. SECTION 10.4. Indemnification. 30 34 (a) Indemnification of Investor. The Company agrees to indemnify and hold harmless the Investor and each person, if any, who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows: (i) against any and all loss, liability, claim, damage and reasonable expense whatsoever, as incurred, arising out of any untrue statement of a material fact contained in the Registration Statement (or any amendment thereto) or the Prospectus, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statement therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and reasonable expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 10.3(d) below) any such settlement is effected with the written consent of the Company; and (iii) against any and all reasonable expenses whatsoever, as incurred (including the fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened in writing, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above, provided, however, that no indemnity obligation of the Company shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor expressly for use in the Revised Statement (or any amendment thereto), including the Prospectus (or any amendment or supplement thereto). (b) Indemnification of Company. The Investor agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in clause (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Prospectus (or any amendment or supplement thereto), in reliance upon and in conformity with information furnished to the Company by or on behalf of the Investor expressly for use in the Registration Statement (or any amendment or supplement thereto) or the Prospectus. (c) Action against Parties, Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced 31 35 against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder, in any case, to the extent it is not prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent it may elect by written notice delivered to the indemnified party reasonably promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its own counsel in any such case but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by the indemnifying party in connection with the defense of such action at the expense of the indemnifying party, (ii) the indemnifying party shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there are fundamental defenses available to it or them which are inconsistent with those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified parties), in any of which events such reasonable fees and expenses of one additional counsel shall be borne by the indemnifying party. In no event shall the indemnifying party be liable for fees and expenses of more than one counsel (in addition to one local counsel) separate from its own counsel for the indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 10.4 or Section 10.5 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each such nonconsenting indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any such nonconsenting indemnified party. (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for the fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 10.4(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. 32 36 SECTION 10.5. Contribution. If the indemnification provided for in Section 10.4 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses to the extent provided for herein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred (a) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Investor on the other hand from the offering of the Common Stock pursuant to this Agreement or (b) if the allocation provided by clause (a) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (a) above but also the relative fault of the Company on the one hand and of the Investor on the other hand and in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Investor on the other hand in connection with the offering of the Common Stock pursuant to this Agreement shall be deemed to be in the same respective portions as the total proceeds from the offering of the Common Stock pursuant to this Agreement received by the Company from the Investor, on the one hand, and the total profits received by the Investor upon the sale of such Common Stock issuable hereunder, on the other hand bear to the aggregate public offering price of the Common Stock. The relative fault of the Company on the one hand and the Investor on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Investor and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Investor agree that it would not be just and equitable if contribution pursuant to this Section 10.5 were determined on a pro-rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 10.5. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 10.5 shall be deemed to include any reasonable legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 10.5, the Investor shall not be required to contribute any amount in excess of the amount by which the total price at which the Common Stock purchased by it and resold to the public exceeds the amount of any damages which the Investor has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. 33 37 No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 10.5, each person, if any, who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Investor, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company. SECTION 10.6. General Indemnification. Each party shall indemnify the other against any material loss, cost or damages (including reasonable attorney's fees and expenses) incurred as a result of such party's breach of any representation, warranty, covenant or agreement in this Agreement. SECTION 10.7. Indemnification of Accountant. The Investor hereby agrees to hold harmless the Company's independent auditors from any liability that may arise out of the delivery of an "agreed upon procedures" letter pursuant to Section 3.3(b)(ii) hereof. XI. MISCELLANEOUS SECTION 11.1. Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute one instrument. SECTION 11.2. Survival; Severability. The representations, warranties, covenants and agreements of the parties hereto shall survive each Closing hereunder. The indemnity and contribution agreements contained in Sections 11.3 and 11.4 hereof shall survive and remain operative and in full force and effect regardless of (i) any termination of this Agreement or of the Commitment Period, (ii) any investigation made by or on behalf of any indemnified party or by or on behalf of the Company, and (iii) the consummation of the sale or successive resales of the Common Stock. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party. SECTION 11.3. Title and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. SECTION 11.4. Effectiveness of the Agreement. This Agreement shall be effective as of the Effective Date. 34 38 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date hereof.
ASM INTERNATIONAL N.V. CANADIAN IMPERIAL HOLDINGS INC. By: By: -------------------- --------------------------- Name: Name: Title: Title:
39 EXHIBIT A [LETTERHEAD OF U.S. COUNSEL TO THE COMPANY] [Date] Canadian Imperial Holdings Inc. C/o CIBC World Markets Corp. 425 Lexington Ave. New York, NY 10017 ASM International N.V. Ladies and Gentlemen: We have acted as U.S. counsel for ASM International N.V., a company organized under the laws of the Kingdom of the Netherlands (the "Company"), in connection with the preparation and filing with the U.S. Securities and Exchange Commission (the "SEC") of a Registration Statement on Form F-3 (as amended from time to time, the "Registration Statement"), relating to the issuance from time to time of up to [ ] shares of the Company's common stock, par value Nlg. 0.01 per share (the "Common Stock"), to you pursuant to the terms of the Equity Line Financing Agreement (the "Financing Agreement") and the Registration Rights Agreement (the "Rights Agreement"), each dated as of July 6, 2000, between you and the Company. This opinion is being delivered to you pursuant to Section 3.2(h)[(i)-(v)](1) of the Financing Agreement. Capitalized terms used but not defined herein have the meanings assigned to such terms in the Financing Agreement. In rendering the opinions expressed below, we examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or appropriate, including the Financing Agreement, the Rights Agreement and the Registration Statement. Based on the foregoing, we are of the opinion that: 1. The Registration Statement has been declared effective by the SEC, and, as of the date hereof, no stop order or restraining order has been issued in connection with the Registration Statement, no withdrawal or suspension of the effectiveness of the Registration Statement has occurred and is continuing, and, to our knowledge, no investigation, proceeding or litigation has been commenced or threatened before the SEC or any other agency of the United States with respect to the making or consummation of the transactions contemplated by the Registration Statement, the Financing Agreement and the Registration Rights Agreement. - -------- (1) Select applicable provision. 40 2. [The Common Stock, when issued and delivered in accordance with the terms of the Financing Agreement, will be duly authorized, validly issued, fully paid and non-assessable .](2) 3. [The Common Stock subject to the Company Put Notice, dated _________, a copy of which is attached hereto, when issued and delivered in accordance with the terms of the Financing Agreement, will be duly authorized, validly issued, fully paid and non-assessable.](3) 4. [The Common Stock subject to the Investor Call Notice, dated _________, a copy of which is attached hereto, when issued and delivered in accordance with the terms of the Financing Agreement, will be duly authorized, validly issued, fully paid and non-assessable.](4) We have acted as U.S. counsel to the Company in connection with the execution and delivery of the Financing Agreement and the Rights Agreement and the preparation and filing of the Registration Statement. In the course of this, we have participated in certain teleconferences with representatives of the Company and you in which conferences the contents of the Registration Statement and the related prospectus were discussed. Although we have not independently checked the accuracy or completeness of, or otherwise verified any statement of fact contained in, the Registration Statement (including the Prospectus and any document incorporated by reference therein, in the course of foregoing representation no facts have come to the attention of the attorneys in our firm who participated in such representation which have caused us to believe that the Registration Statement (including the Prospectus and any document incorporated by reference therein, but excluding any financial statements contained or incorporated by reference therein) contains any untrue statement of material fact or omits a material fact required to make the statements contained therein, in light of the circumstances under which they were made, not misleading. [To the extent the law of the Kingdom of the Netherlands may be relevant to the opinions expressed in paragraph [3, 4 or 5], we have, without having made any independent investigation with respect thereto, relied upon and assumed the correctness of the opinion of [name of Netherlands counsel], a copy of which is attached hereto].(5) At the request of the Company, this opinion is being delivered to you pursuant to Section 3.2(h)[(i)-(v)](6) of the Financing Agreement and may not be relied upon by any Person for any purpose other than in connection with the transactions contemplated by the Registration - -------- (2) Include if opinion is being delivered as a result of any of the events set forth in Section 3.2(h)(i)-(iv) of the Financing Agreement. (3) Include if opinion is being delivered pursuant to a Company Put Notice under Section 3.2(h)(v) of the Financing Agreement. (4) Include if opinion is being delivered pursuant to an Investor Call Put Notice under Section 3.2(h)(v) of the Financing Agreement. (5) Include if necessary to provide the opinions in paragraphs 2,3 or 4. (6) Select applicable provision. 41 Statement, the Financing Agreement and the Registration Rights Agreement without, in each instance, our prior written consent. Very truly yours, 42 EXHIBIT B 43 DISCLOSURE SCHEDULE 44 SCHEDULE 5.2(b) ASM International NV has issued a warrant to purchase 200,000 (two hundred thousand) common shares with an initial exercise price of $ 9.81375 per share. The warrants expire October 2, 2004. The (Supplemental) warrants have been issued in conjunction with zero-coupon bonds and Common Stock Purchase Warrants in October 1999. The bonds have since been redeemed with the proceeds of the exercised Common Stock Purchase Warrants. 45 Schedule 5.3(a): Legal structure as at July 3, 2000 All Subsidiaries are 100% held, except where indicated otherwise*
Share capital issued and outstanding ----------- (x 000) ASM International N.V. Bilthoven, the Netherlands NLG 445 ASM Netherlands Antilles N.V. USD 6 Curacao, Netherlands Antilles ASM Pacific Technology Ltd (54.875%) Hong Kong see separate sheet ASM America Inc (Delaware Corporation) USD 3 Phoenix, AZ, U.S.A. ASM Pacific Assembly Products Inc USD 0 Phoenix, AZ, U.S.A. ASM Japan KK JPY 2,900,000 Tokyo, Japan ASM Microchemistry FIM 1,000 Espoo, Finland ASM Belgium* (euro) 62.5 Leuven, Belgium NanoPhotonics (24%) DEM 100 Mainz, Germany ASM Europe BV NLG 25 Bilthoven, the Netherlands ASM France SARL* FFR 19,000 Montpellier, France ASM United Kingdom Sales BV* GBP 6 Wokingham, UK ASM Germany Sales BV* DEM 27 Haar, Germany ASM Wafer Process Equipment LTD* HKD 0 Hong Kong ASM Far East Marketing Ltd* TWD 2,760 Taiwan ASM Korea Ltd* WON 250,000 Seoul, Korea ASM Wafer Processing Equipment Singapore Ltd* SGD 2 Singapore
46
Share capital issued and outstanding ----------- (x 000) ASM International N.V. Bilthoven, the Netherlands ASM Netherlands Antilles N.V. Curacao 54.875%* ASM Pacific Technology Ltd Hong Kong HKD 38,000 ASM Asia Ltd* HKD 1 Hong Kong ASM Assembly Automation Ltd HKD 1 Hong Kong ASM Assembly Materials Ltd HKD 10 Hong Kong ASM Assembly Equipment Bangkok Ltd* Baht 7,000 Thailand ASM Assembly Equipment (M) Sdn. Bnd* MYR 10 Thailand ASM Assembly Equipment Trading* US$ 200 (Shanghai) Co Ltd, PRC ASM Assembly Products B.V.* NLG 40 Bilthoven, the Netherlands ASM Assembly Technology Co, Ltd* JPY 10,000 Tokyo, Japan ASM Pacific International Marketing Ltd* HKD 100 Cayman Islands ASM Pacific (Bermuda) Ltd* USD 120 Cayman Islands ASM Pacific Investments Ltd.* HKD 2 Hong Kong ASM Pacific KOR Ltd* HKD 500,000 Hong Kong ASM Pacific STJ Ltd* HKD 1 Guernsey, Channel Islands ASM Technology Singapore Pte, Ltd SGD 10,000 Singapore ASM Technology (M) Sdn. Bhd. MYR 2 Malaysia Capital Equipment Distribution Ltd* HKD 1 Guernsey, Channel Islands Shenzhen ASM Micro Electronic see Note 1 Technology Co. Ltd (**) Shenzhen, People's Republic of China Shenzhen ASM Precision see Note 2 Machinery Manufactory Ltd (**) Shenzhen, People's Republic of China
47 (**) Annual Report ASM Pacific Technology Ltd, page 49, note 1 + note 2 13 INTEREST IN SUBSIDIARIES Note 1: Under a joint venture agreement, the Group has contributed 100% of the registered capital of HK$155,000,000 in Shenzhen ASM Micro Electronic Technology Co., Limited ("MET"), a co-operative joint venture company established in the People's Republic of China ("PRC") with a term of 10 years commencing from October 1994. At December 31, 1999, the Group has paid up approximately HK$123,119,000 as registered capital of MET. The Group is to bear the entire risk and liabilities of MET and, other than a fixed annual amount attributable to assets contributed by the PRC joint venture partner, is entitled to the entire profit or loss of MET. On cessation of the joint venture company, the Group will be entitled to all assets other than those contributed by the PRC joint venture partner and those irremovable building improvements. Note 2: Under a joint venture agreement, the Group has contributed 88% of the registered capital of HK$45,224,000 in Shenzhen ASM Precision Machinery Manufactory Limited, an equity joint venture company in the PRC with a term of 10 years commencing from October 1990. However, under the joint venture agreement, the Group will be entitled to 100% of the joint venture company's profit after deducting a fixed annual amount attributable to assets contributed by the PRC joint venture partner. On cessation of the joint venture company, the Group will be entitled to all assets other than those contributed by the PRC joint venture partner and those irremovable building improvements. NOTE The subsidiaries marked with * represent subsidiaries that do not own material assets or are not subject to material liabilities. In addition, 5 dormant companies have been omitted from the above structure, as follows: * Hamilcar B.V. Rembrandt Lease & Finance B.V. CVTR Development B.V. Ingebel B.V. ASM Ion Implant B.V. July 3, 2000/ RdJ 48 SCHEDULE 5.3(b) ASM Pacific Technology Ltd operates an Employee Share Incentive Scheme. A new Scheme was approved by the Extraordinary General Meeting of Shareholders on June 25, 1999 for a term of 10 years under which 5% of the issued share capital can be subscribed for or purchased under Directives of the Trustees of the Scheme. EX-23.2 3 p63730ex23-2.txt EX-23.2 1 ************************************************************ ASM INTERNATIONAL N.V. and ADVANCED SEMICONDUCTOR MATERIALS (NETHERLANDS ANTILLES) N.V. ----------------------------- CREDIT AGREEMENT Dated as of July 6, 2000 ------------------------------ CANADIAN IMPERIAL BANK OF COMMERCE ************************************************************ 2 TABLE OF CONTENTS This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience of reference only.
Page ---- Section 1. Definitions and Accounting Matters................................................................... 1 1.01 Certain Defined Terms............................................................................. 1 1.02 Accounting Terms and Determinations............................................................... 6 Section 2.0 Commitments, Loans, Notes and Prepayments........................................................... 6 2.01 Loans............................................................................................. 6 2.02 Borrowings........................................................................................ 6 2.03 Commitment Reductions and Termination............................................................. 6 2.04 Lending Offices................................................................................... 6 2.05 Notes............................................................................................. 7 2.06 Optional Prepayments.............................................................................. 7 Section 3. Payments of Principal and Interest................................................................... 7 3.01 Repayment of Loans................................................................................ 7 3.02 Interest.......................................................................................... 7 Section 4. Payments; Pro Rata Treatment; Computations; Etc...................................................... 7 4.01 Payments.......................................................................................... 7 4.02 Computations...................................................................................... 8 4.03 Minimum Amounts................................................................................... 8 4.04 Certain Notices................................................................................... 8 4.05 Set-off............................................................................................ 8 Section 5. Yield Protection, Etc................................................................................ 8 5.01 Additional Costs.................................................................................. 8 5.02 Alternative Interest Rate......................................................................... 10 5.03 Illegality........................................................................................ 10 5.04 Taxes............................................................................................. 11 5.05 Compensation...................................................................................... 11 Section 6. Guarantee............................................................................................ 12 6.01 The Guarantee..................................................................................... 12 6.02 Obligations Unconditional......................................................................... 12 6.03 Reinstatement..................................................................................... 13 6.04 Subrogation....................................................................................... 13 6.05 Remedies.......................................................................................... 13 6.06 Continuing Guarantee.............................................................................. 13 Section 7. Conditions Precedent................................................................................. 13 7.01 Initial Loan...................................................................................... 13 7.02 Initial and Subsequent Loans...................................................................... 14 Section 8. Representations and Warranties....................................................................... 15 8.01 Corporate Existence............................................................................... 15 8.02 Financial Condition............................................................................... 15 8.03 Litigation........................................................................................ 15 8.04 No Breach......................................................................................... 15 8.05 Action............................................................................................ 16 8.06 Approvals......................................................................................... 16 8.07 Margin Regulation.................................................................................. 16 8.08 Legal Form........................................................................................ 16 8.09 Ranking........................................................................................... 16 8.10 Taxes............................................................................................. 16
(i) 3
8.11 Commercial Activity; Absence of Immunity.......................................................... 16 8.12 Material Agreements and Liens..................................................................... 16 8.13 True and Complete Disclosure...................................................................... 17 Section 9. Covenants of the Obligors............................................................................ 17 9.01 Financial Statements Etc.......................................................................... 17 9.02 Litigation........................................................................................ 18 9.03 Existence, Etc.................................................................................... 18 9.04 Insurance......................................................................................... 18 9.05 Prohibition of Fundamental Changes................................................................ 18 9.06 Governmental Approvals............................................................................. 19 9.07 Use of Proceeds.................................................................................... 19 9.08 Certain Obligations Regarding Collateral........................................................... 19 Section 10. Events of Default................................................................................... 19 Section 11. Miscellaneous....................................................................................... 22 11.01 Waiver........................................................................................... 22 11.02 Notices.......................................................................................... 23 11.03 Expenses......................................................................................... 23 11.04 Indemnification.................................................................................. 23 11.05 Amendments, Etc.................................................................................. 23 11.06 Successors and Assigns........................................................................... 23 11.07 Assignments and Participations................................................................... 23 11.08 Survival......................................................................................... 24 11.09 Captions......................................................................................... 24 11.10 Counterparts..................................................................................... 24 11.11. Judgment Currency............................................................................... 24 11.12 Governing Law.................................................................................... 25 11.13 Jurisdiction; Service of Process; Venue.......................................................... 25 11.14 No Immunity...................................................................................... 25 11.15 Waiver of Jury Trial............................................................................. 26 11.16 Use of English Language.......................................................................... 26 11.17 Public Information............................................................................... 26
(ii) 4
Page ---- SCHEDULE I - Material Agreements and Liens EXHIBIT A - Form of Note EXHIBIT B - Form of Security Agreement EXHIBIT C - Form of Financing Agreement EXHIBIT D - Form of Registration Rights Agreement EXHIBIT E-1 - Form of Opinion of Netherlands Counsel to the Obligors EXHIBIT E-2 - Form of Opinion of Netherlands Antilles Counsel to the Obligors EXHIBIT E-3 - Form of Opinion of Cayman Islands Counsel to the Obligors EXHIBIT E-4 - Form of Opinion of New York Counsel to the Lender
(iii) 5 CREDIT AGREEMENT dated as of July 6, 2000 among: (a) ASM INTERNATIONAL N.V., a company duly organized and validly existing under the laws of the Kingdom of the Netherlands (the "Company"); (b) ADVANCED SEMICONDUCTOR MATERIALS (NETHERLANDS ANTILLES) N.V., a company duly organized and validly existing under the laws of the Netherlands Antilles (the "Guarantor" and, collectively with the Company, the "Obligors"); and (c) CANADIAN IMPERIAL BANK OF COMMERCE, a bank duly organized and validly existing under the laws of Canada, acting through its New York agency (the "Lender"). The Obligors have requested that the Lender make loans to the Company in an aggregate principal amount not exceeding U.S.$75,000,000, the Lender is willing to make such loans on the terms and conditions of this Agreement and, accordingly, the parties hereto agree as follows: Section 1. Definitions and Accounting Matters. 1.01 Certain Defined Terms. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa): "Additional ASM Pacific Shares" shall mean 82,427,500 ASM Pacific Shares. "ASM Pacific" shall mean ASM Pacific Technology Limited, a Cayman Islands company. "ASM Pacific Collateral Value" shall mean, with respect to any ASM Pacific Share for any day occurring in any period set forth below, the percentage set forth below opposite such period of the ASM Pacific Market Value:
Period Percentage The Closing Date to (but excluding) 26.67% the first Principal Payment Date The first Principal Payment Date to 23.67% (but excluding) the second Principal Payment Date The second Principal Payment Date to 20.67% (but excluding) the third Principal Payment Date The third Principal Payment Date to 17.67% (but excluding) the fourth Principal Payment Date The fourth Principal Payment Date to 14.67%
6
(but excluding) the fifth Principal Payment Date The fifth Principal Payment Date to 11.67% (but excluding) the sixth Principal Payment Date The sixth Principal Payment Date to 8.67% (but excluding) the seventh Principal Payment Date The seventh Principal Payment Date 5.67% and all times thereafter
"ASM Pacific Market Value" shall mean, with respect to any ASM Pacific Shares for any day, the price per share of ASM Pacific Shares, as reported by Bloomberg as the average weighted price for such day. "ASM Pacific Shares" shall mean shares of common stock of ASM Pacific. "Basic Documents" shall mean, collectively, this Agreement, the Notes, the Security Documents and the Equity Line Documents. "Bloomberg" shall have the meaning given to that term in the Financing Agreement. "Business Day" shall mean (a) any day on which commercial banks are not authorized or required to close in New York City and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, or an Interest Period for, a Loan or a notice by the Company with respect to any such borrowing, payment, prepayment or Interest Period, any day on which dealings in Dollar deposits are carried out in the London interbank market. "Capital Lease Obligations" shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. "Closing Date" shall mean the date upon which the initial Loan is made. "Commitment" shall mean the obligation of the Lender to make one or more Loans in an aggregate amount up to but not exceeding U.S.$75,000,000 (as the same may be reduced from time to time pursuant to Section 2.03 hereof). "Commitment Termination Date" shall mean October 6, 2000. "Common Stock" shall have the meaning given to that term in the Financing Agreement "Company Put Notice" shall have the meaning given to that term in the Financing Agreement. "Control Agreement" shall mean a Control Agreement among the Guarantor, the Lender and the Securities Intermediary, in form and substance satisfactory to the Lender. 7 "Default" shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default. "Default Interest Period" shall mean, during any period while any principal of a Loan, interest thereon or any other amount owing hereunder is in default, each successive period as the Lender shall from time to time choose; provided that (a) no such period shall exceed three months, and (b) the first such period shall commence as of the date on which such principal, interest or other amount became due and each succeeding such period shall commence upon the expiry of the immediately preceding such period. "Dollars" and "U.S.$" shall mean lawful money of the United States of America. "Equity Line Documents" shall mean the Registration Rights Agreement and the Financing Agreement. "Eurodollar Rate" shall mean, with respect to any Loan for any Interest Period or Default Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) reported, at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on the date two Business Days prior to the first day of such Interest Period or Default Interest Period, on Telerate Access Service Page 3750 (British Bankers Association Settlement Rate) as the London interbank offered rate for Dollar deposits having a term comparable to the duration of such Interest Period and an in amount equal to or greater than U.S.$1,000,000. "Event of Default" shall have the meaning assigned to such term in Section 10 hereof. "Financing Agreement" shall mean an Equity Line Financing Agreement between the Company and the Investor, substantially in the form of Exhibit C hereto, as the same may be modified and supplemented and in effect from time to time. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect on December 31, 1999. "Guarantee" shall mean a guarantee, an endorsement, a contingent agreement to purchase or to furnish funds for the payment or maintenance of, or otherwise to be or become contingently liable under or with respect to, the Indebtedness, other obligations, net worth, working capital or earnings of any Person, or a guarantee of the payment of dividends or other distributions upon the stock or equity interests of any Person, or an agreement to purchase, sell or lease (as lessee or lessor) Property, products, materials, supplies or services primarily for the purpose of enabling a debtor to make payment of such debtor's obligations or an agreement to assure a creditor against loss, and including, without limitation, causing a bank or other financial institution to issue a letter of credit or other similar instrument for the benefit of another Person, but excluding endorsements for collection or deposit in the ordinary course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative meaning. "Indebtedness" shall mean, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) Capital Lease Obligations of such Person; and (f) Indebtedness of others Guaranteed by such Person. 8 "Initial ASM Pacific Shares" shall mean 125,000,000 shares of ASM Pacific Stock. "Interest Period" shall mean, with respect to any Loan, each period commencing on the date such Loan is made or the last day of the next preceding Interest Period for such Loan and ending on the numerically corresponding day in the third calendar month thereafter, except that (a) each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month, and (b) the last day of the initial Interest Period for any Loan made subsequent to the Closing Date shall be last day of the initial Interest Period for the Loans made on the Closing Date. Notwithstanding the foregoing, each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day). "Interest Rate Protection Agreement" shall mean, for any Person, an interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more financial institutions providing for the transfer or mitigation of interest risks either generally or under specific contingencies. "Investor" shall have the meaning given to that term in the Financing Agreement. "Investor Call Notice" shall have the meaning given to that term in the Financing Agreement. "Lender's Account" shall mean account no. 890-0331-046 of the Lender maintained at The Bank of New York (ABA No. 021-000-018) (Attn: Atlanta Operations, Reference: ASM International N.V.), or such other account at such other bank as the Lender shall specify from time to time to the Company. "Lending Office" shall mean the "Lending Office" of the Lender (or of an affiliate of the Lender) designated on the signature pages hereof or such other office of the Lender (or of an affiliate of the Lender) as the Lender may from time to time specify to the Company as the office at which its Loans are to be made and maintained. "Lien" shall mean, with respect to any Property, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such Property. For purposes of this Agreement and the other Basic Documents, a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property. "Loans" shall mean the loans provided for by Section 2.01 hereof. "Margin" shall mean 1.85% per annum. "Margin Call Event" shall have the meaning given to that term in Section 9.10(b) hereof. "Margin Stock" shall mean "margin stock" within the meaning of Regulations U. "Market Capitalization Decline" shall mean that for five consecutive Trading Days the aggregate market value of all shares of capital stock of the Company shall be less than U.S.$1,000,000,000. For this purpose, the "market value" on any Business Day of any share of capital stock of the Company shall be the weighted average price for such day as reported by Bloomberg. "Material Adverse Effect" shall mean a material adverse effect on (a) the Property, business, operations, financial condition, prospects, liabilities or capitalization of the Company, (b) the ability of any Obligor to perform its obligations under any of the Basic Documents to which it is a party, (c) the validity or enforceability of any of -4- 9 the Basic Documents, (d) the rights and remedies of the Lender under any of the Basic Documents or (e) the timely payment of the principal of or interest on the Loans or other amounts payable in connection therewith. "Netherlands" shall mean the Kingdom of the Netherlands. "Netherlands Antilles" shall mean the Netherlands Antilles. "Notes" shall mean the promissory note provided for by Section 2.05 hereof and all promissory notes delivered in substitution or exchange therefor, in each case as the same shall be modified and supplemented and in effect from time to time. "Person" shall mean any individual, corporation, company, voluntary association, partnership, joint venture, trust, unincorporated organization or government (or any agency, instrumentality or political subdivision thereof). "Post-Default Rate" shall mean, in respect of any principal of any Loan, interest thereon or any other amount owing hereunder that is not paid when due (whether at stated maturity, by acceleration, by optional or mandatory prepayment or otherwise), a rate per annum for each Default Interest Period equal to (x) 2% plus (y) the Margin plus (z) the Eurodollar Rate for such Default Interest Period. "Principal Payment Dates" shall mean April 6, July 6, October 6 and January 6 of each year, commencing with October 6, 2000; provided that if any such day is not a Business Day, then such Quarterly Date shall be the next succeeding Business Day (unless such Business Day falls in a subsequent calendar month, in which event such Quarterly Date shall be the next preceding Business Day). "Process Agent" has the meaning given to that term in Section 11.13(b) hereof. "Property" shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. "Purchase Price" shall have the meaning given to that term in the Financing Agreement "Registration Rights Agreement" shall mean a Registration Rights Agreement between the Company and the Investor, substantially in the form of Exhibit D hereto, as the same may be modified and supplemented and in effect from time to time. "Regulations A, D and U" shall mean, respectively, Regulations A, D and U of the Board of Governors of the Federal Reserve System of the United States of America (or any successor), as the same may be modified and supplemented and in effect from time to time. "Regulatory Change" shall mean, with respect to the Lender, any change after the date of this Agreement in law or regulations (including, without limitation, Regulation D) or the adoption or making after such date of any interpretation, directive or request applying to a class of financial institutions including the Lender of or under any law or regulations (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any court or governmental or monetary authority charged with the interpretation or administration thereof. "Security Agreement" shall mean a Security Agreement between the Guarantor and the Lender, Substantially in the form of Exhibit B hereto, as the same may be modified and supplemented and in effect from time to time. "Security Documents" shall mean, collectively, the Security Agreement and the Control Agreement. -5- 10 "Securities Intermediary" shall mean CIBC World Markets Corp. "Subsidiary" shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person, provided that Subsidiaries of the Company shall be deemed to be only those Subsidiaries of the Company that, from time to time, constitute "significant subsidiaries" of the Company within the meaning of Rule 1-02(w) of Regulation S-X under the United States Securities Act of 1933. "Taxes" shall mean all present and future income, stamp, registration and other taxes and levies, imposts, deductions, charges, compulsory loans and withholdings whatsoever, and all interest, penalties or similar amounts with respect thereto, now or hereafter imposed, assessed, levied or collected by the Netherlands or the Netherlands Antilles or any political subdivision or taxing authority thereof or therein, or by any federation or association of or with which the Netherlands or the Netherlands Antilles may be a member or associated, on or in respect of this Agreement, the Loans, the Notes, the other Basic Documents, the recording, registration, notarization or other formalization of any thereof, the enforcement thereof or the introduction thereof in any judicial proceedings, or on or in respect of any payments of principal, interest, premiums, charges, fees or other amounts made on, under or in respect of any thereof. "Trading Day" shall have the meaning given to that term in the Financing Agreement. 1.02 Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Lender hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with that used in the audited consolidated financial statements of the Company and its consolidated Subsidiaries referred to in Section 8.02 hereof (except for changes concurred with by the Company's independent public accountants). Section 2.0 Commitments, Loans, Notes and Prepayments. 2.01 Loans. The Lender severally agrees, on the terms and conditions of this Agreement, to make one or more term loans to the Company in Dollars on or before the Commitment Termination Date in an aggregate principal amount up to but not exceeding the amount of the Commitment. 2.02 Borrowings. The Company shall give the Lender notice of each borrowing hereunder as provided in Section 4.04 hereof. Not later than 1:00 p.m. New York time on the date specified for each borrowing hereunder, the Lender shall, subject to the terms and conditions of this Agreement, be made available to the Company by depositing the same, in immediately available funds, in an account of the Company maintained at a bank in New York City designated by the Company. 2.03 Commitment Reductions and Termination. The Company shall have the right at any time or from time to time to terminate or reduce the unused amount of the Commitment; provided that (x) the Company shall give notice of each such termination or reduction as provided in Section 4.04 hereof and (y) each partial reduction shall be in an aggregate amount at least equal to U.S.$5,000,000 (or a larger multiple of U.S.$1,000,000). 2.04 Lending Offices. The Loans shall be made and maintained at the Lending Office. -6- 11 2.05 Notes. The Loans shall be evidenced by a single promissory note of the Company substantially in the form of Exhibit A hereto, dated the date hereof, payable to the Lender in a principal amount equal to the amount of the Commitment and otherwise duly completed. 2.06 Optional Prepayments. Subject to Section 4.03 hereof, the Company shall have the right to prepay Loans at any time or from time to time, provided that: (a) the Company shall give the Lender notice of each such prepayment as provided in Section 4.04 hereof (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder); (b) except for payments made in the manner contemplated by Section 4.01(b) hereof, Loans may be prepaid only on the last day of an Interest Period for such Loans; and (c) prepayments of the Loans shall be applied to the installments of the Loans in the inverse order of their maturities. Section 3. Payments of Principal and Interest. 3.01 Repayment of Loans. The Company hereby promises to pay to the Lender the principal of the Loans in eight installments payable on the Principal Payment Dates as follows:
Principal Payment Date Amount of Installment First U.S.$ 6,000,000 Second U.S.$ 6,000,000 Third U.S.$ 6,000,000 Fourth U.S.$ 9,000,000 Fifth U.S.$ 9,000,000 Sixth U.S.$ 9,000,000 Seventh U.S.$ 9,000,000 Eighth U.S.$21,000,000
If the Company does not borrow the full amount of the Commitment on or before the Commitment Termination Date, the shortfall shall be applied to reduce the foregoing installments ratably. 3.02 Interest. The Company hereby promises to pay to the Lender interest on the unpaid principal amount of each Loan for the period from and including the date of such Loan to but excluding the date such Loan shall be paid in full, at a rate per annum, for each Interest Period relating thereto, equal to the Eurodollar Rate for such Loan for such Interest Period plus the Margin. Notwithstanding the foregoing, the Company hereby promises to pay to the Lender interest at the applicable Post-Default Rate on any principal of any Loan and on any other amount payable by the Company hereunder or under the Notes that shall not be paid in full when due (whether at stated maturity, by acceleration, by mandatory prepayment or otherwise) for the period from and including the due date thereof to but excluding the date the same is paid in full. Accrued interest on each Loan shall be payable (i) on the last day of each Interest Period therefor, and (ii) upon the payment or prepayment thereof (but only on the principal amount so paid or prepaid), except that interest payable at the Post-Default Rate shall be payable from time to time on demand. Promptly after the determination of any interest rate provided for herein or any change therein, the Lender shall give notice thereof to the Company. Section 4. Payments; Pro Rata Treatment; Computations; Etc. 4.01 Payments. -7- 12 (a) Except to the extent provided in Section 4.01(b) hereof, all payments of principal, interest and other amounts to be made by the Company under this Agreement and the Notes, and, except to the extent otherwise provided therein, all payments to be made by the Obligors under any other Basic Document, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Lender at the Lender's Account, not later than 1:00 p.m. New York time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). (b) In addition to making payments as provided in Section 4.01(a) hereof, to the extent that, on any Business Day, any shares of Common Stock are issued to the Investor pursuant to Section 2.4 of the Financing Agreement, the Company shall have been deemed to have made a payment of principal hereunder (and each reference in this Agreement to a "payment" shall be deemed to include such a payment deemed to have been made as contemplated by this Section 4.01(b)) on such Business Day in an amount equal to the Loan Reduction Amount, if any, or the Investor Call Amount, as applicable. (c) The Company shall, at the time of making each payment under this Agreement or any Note, specify to the Lender the Loans or other amounts payable by the Company hereunder to which such payment is to be applied (and in the event that the Company fails to so specify, or if an Event of Default has occurred and is continuing, the Lender may apply such payment as it may determine to be appropriate). (d) If the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension. 4.02 Computations. Interest on Loans shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. 4.03 Minimum Amounts. Each borrowing and partial prepayment of principal of Loans shall be in an aggregate amount at least equal to U.S.$5,000,000 or a larger multiple of U.S.$1,000,000. 4.04 Certain Notices. Notices by the Company to the Lender of terminations or reductions of the Commitments, of borrowings and optional prepayments of Loans shall be irrevocable and shall be effective only if received by the Lender not later than 10:00 a.m. New York time three Business Days prior to the date of the relevant termination, reduction, borrowing or prepayment. Each such notice of borrowing or optional prepayment shall specify the amount (subject to Section 4.03 hereof) of each Loan to be borrowed or prepaid and the date of borrowing or optional prepayment (which shall be a Business Day). 4.05 Set-off. Each of the Obligors agrees that, in addition to (and without limitation of) any right of set-off, banker's lien or counterclaim the Lender may otherwise have, the Lender shall be entitled, at its option, to offset balances held by it for account of either of the Obligors at any of its offices, in Dollars or in any other currency, against any principal of or interest on the Loans or any other amount payable to the Lender hereunder that is not paid when due (regardless of whether such balances are then due to such Obligor), in which case it shall promptly notify the Company thereof, provided that the Lender's failure to give such notice shall not affect the validity thereof. Section 5. Yield Protection, Etc. 5.01 Additional Costs. (a) The Company shall pay directly to the Lender from time to time such amounts as the Lender may determine to be necessary to compensate the Lender for any costs that the Lender determines are attributable to its -8- 13 making or maintaining of any Loans or its obligation to make any Loans hereunder, or any reduction in any amount receivable by the Lender hereunder in respect of any Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "Additional Costs"), resulting from any Regulatory Change that: (i) shall subject the Lender (or its Lending Office) to any tax, duty or other charge in respect of such Loans or its Notes or changes the basis of taxation of any amounts payable to the Lender under this Agreement or its Notes in respect of Loans (excluding changes in the rate of tax on the overall net income of the Lender or of such Lending Office by the jurisdiction in which the Lender has its principal office or such Lending Office); or (ii) imposes or modifies any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, the Lender (including, without limitation, any of such Loans or any deposits referred to in the definition of "Eurodollar Rate" in Section 1.01 hereof), or any commitment of the Lender (including, without limitation, the Commitment of the Lender hereunder); or (iii) imposes any other condition affecting this Agreement or its Notes (or any of such extensions of credit or liabilities) or its Commitment. (b) Without limiting the effect of the foregoing provisions of this Section 5.01 (but without duplication), the Company shall pay directly to the Lender from time to time on request such amounts as the Lender may determine to be necessary to compensate the Lender (or, without duplication, the bank holding company of which the Lender is a subsidiary) for any costs that it determines are attributable to the maintenance by the Lender (or any Lending Office or such bank holding company), pursuant to any law or regulation or any interpretation, directive or request (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) of any court or governmental or monetary authority (i) following any Regulatory Change or (ii) implementing any risk-based capital guideline or other requirement (whether or not having the force of law and whether or not the failure to comply therewith would be unlawful) heretofore or hereafter issued by any government or governmental or supervisory authority implementing at the national level the Basle Accord, of capital in respect of its Commitments or Loans (such compensation to include, without limitation, an amount equal to any reduction of the rate of return on assets or equity of the Lender (or any Lending Office or such bank holding company) to a level below that which the Lender (or any Lending Office or such bank holding company) could have achieved but for such law, regulation, interpretation, directive or request). For purposes of this Section 5.01(b), "Basle Accord" shall mean the proposals for risk-based capital framework described by the Basle Committee on Banking Regulations and Supervisory Practices in its paper entitled "International Convergence of Capital Measurement and Capital Standards" dated July 1988, as amended, modified and supplemented and in effect from time to time or any replacement thereof. (c) The Lender shall notify the Company of any event occurring after the date of this Agreement entitling the Lender to compensation under paragraph (a) or (b) of this Section 5.01 as promptly as practicable, but in any event within 45 days, after the Lender obtains actual knowledge thereof; provided that (i) if the Lender fails to give such notice within 45 days after it obtains actual knowledge of such an event, the Lender shall, with respect to compensation payable pursuant to this Section 5.01 in respect of any costs resulting from such event, only be entitled to payment under this Section 5.01 for costs incurred from and after the date 45 days prior to the date that the Lender does give such notice and (ii) the Lender will designate a different Lending Office for the Loans of the Lender if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of the Lender, be disadvantageous to the Lender, except that the Lender shall have no obligation to designate a Lending Office located in the United States of America. The Lender will furnish to the Company a certificate setting forth the basis and amount of each request by the Lender for compensation under paragraph (a) or (b) of this Section 5.01. Determinations and allocations by the Lender for purposes of this Section 5.01 of the effect of any Regulatory Change pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect of capital -9- 14 maintained pursuant to paragraph (b) of this Section 5.01, on its costs or rate of return of maintaining Loans or its obligation to make Loans, or on amounts receivable by it in respect of Loans, and of the amounts required to compensate the Lender under this Section 5.01, shall be conclusive, provided that such determinations and allocations are made on a reasonable basis. 5.02 Alternative Interest Rate. Anything herein to the contrary notwithstanding, if, on or prior to the determination of any Eurodollar Rate for any Interest Period or Default Interest Period: (a) the Lender determines, which determination shall be conclusive, that quotations of interest rates for the relevant deposits referred to in the definition of "Eurodollar Rate" in Section 1.01 hereof are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for Loans as provided herein; or (b) the Lender determines, which determination shall be conclusive, that the relevant rates of interest referred to in the definition of "Eurodollar Rate" in Section 1.01 hereof upon the basis of which the rate of interest for Loans for such Interest Period or Default Interest Period is to be determined are not likely to adequately cover the cost to the Lender of making or maintaining Loans for such Interest Period or Default Interest Period; then the Lender shall give the Company prompt notice thereof and: (a) during the 15-day period next succeeding the date of any such notice (the "Negotiation Period"), the Lender and the Company will negotiate in good faith for the purpose of agreeing upon an alternative, mutually acceptable basis (the "Substitute Basis") for determining the rate of interest to be applicable to the Loans for such Interest Period; (b) if at the expiry of the Negotiation Period, the Lender and the Company have agreed upon a Substitute Basis and the Lender has received confirmation from its Netherlands counsel that such Substitute Basis has received all necessary governmental approvals and consents, the Substitute Basis shall be retroactive to, and take effect from, the beginning of such Interest Period or Default Interest Period; (c) if at the expiry of the Negotiation Period, a Substitute Basis shall not have been agreed upon as aforesaid or the Lender shall not have received the above mentioned confirmation as to requisite governmental approvals or consents, within five Business Days thereafter, the Lender shall notify the Company of the cost to the Lender (as determined by it in good faith) of funding and maintaining such Loan for such Interest Period or Default Interest Period; and the interest payable to the Lender on such Loan for such Interest Period shall be interest at a rate per annum equal to the Margin plus the cost to the Lender of funding and maintaining such Loan for such Interest Period or Default Interest Period as so notified by the Lender (or, as to any principal of such Loan or other amount payable to the Lender on or in respect of such Loan which is then past due, 2% plus the Margin plus such cost); and (d) the procedures specified in clauses (a), (b) and (c) above shall apply to each Interest Period or Default Interest Period succeeding the first Interest Period or Default Interest Period to which they were applied unless and until the Lender shall determine that the conditions referred to in clause (i) or clause (ii) above no longer exist and so notifies the Company and the Lender, whereupon interest on such Loans shall again be determined in accordance with the provisions of Section 3.02 hereof commencing on the first day of the Interest Period or Default Interest Period next succeeding the date of such notice. 5.03 Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for the Lender or its Lending Office to honor its obligation to make or maintain any of its Loans hereunder (and, in the sole opinion of the Lender, the designation of a different Lending Office would either not avoid such unlawfulness or would be disadvantageous to the Lender), then the Lender shall promptly notify the Company -10- 15 thereof and the Lender's obligation to make Loans shall be suspended until such time as the Lender may again make and maintain Loans and, if any of the Lender's Loans are then outstanding, the Company shall, upon the request of the Lender, promptly prepay the principal of such Loans together with accrued interest thereon. 5.04 Taxes. (a) All payments on account of the principal of and interest on the Loans, fees and all other amounts payable hereunder by the Obligors to or for the account of the Lender, including, without limitation, amounts payable under clause (b) of this Section 5.04, shall be made free and clear of and without reduction or liability for Taxes. The Obligors will pay all Taxes for their own respective accounts, prior to the date on which penalties attach thereto, except for any Taxes (other than Taxes imposed on or in respect of any amount payable hereunder, under the Notes or under any other Basic Document) the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained, so long as no claim for such Taxes is made on the Lender. (b) Each of the Obligors shall indemnify the Lender against, and reimburse the Lender on demand for, any Taxes and any loss, liability, claim or expense, including interest, penalties and legal fees, which the Lender may incur at any time arising out of or in connection with any failure of any Obligor to make any payment of Taxes when due. (c) In the event that any Obligor is required by applicable law, decree or regulation to deduct or withhold Taxes from any amounts payable on, under or in respect of this Agreement or the Loans (including, without limitation, the income taxes referred to in clause (e) of this Section 5.04), such Obligor shall promptly pay the Person entitled to such amount such additional amounts as may be required, after the deduction or withholding of Taxes to enable such Person to receive from such Obligor, on the due date thereof, an amount equal to the full amount stated to be payable to such Person under this Agreement. (d) Each Obligor shall furnish to the Lender, upon the request of the Lender, together with sufficient certified copies for distribution to each Lender requesting the same original official tax receipts in respect of each payment of Taxes required under this Section 5.04, within 30 days after the date such payment is made, and the Obligors shall promptly furnish to the Lender at its request or at the request of the Lender any other information, documents and receipts that the Lender may reasonably require to establish to its satisfaction that full and timely payment has been made of all Taxes required to be paid under this Section 5.04. (e) Each Obligor represents and warrants to the Lender that, on and as of the date of this Agreement, none of this Agreement, any other Basic Document, or the execution or delivery by any Obligor of this Agreement or any other Basic Document, is subject to any Taxes, and no payment to be made by any Obligor under this Agreement is subject to any Taxes, and no payment to be made by any Obligor under this Agreement is subject to any Taxes. 5.05 Compensation. The Company shall pay to the Lender, upon the request of the Lender, such amount or amounts as shall be sufficient (in the reasonable opinion of the Lender) to compensate it for any loss, cost or expense that the Lender determines is attributable to: (a) any payment or mandatory or optional prepayment of a Loan made by the Lender for any reason (including, without limitation, the acceleration of the Loans pursuant to Section 10 hereof) on a date other than the last day of an Interest Period for such Loan; or (b) any failure by the Company for any reason (including, without limitation, the failure of any of the conditions precedent specified in Section 7 hereof to be satisfied) to borrow a Loan from the Lender on the date for such borrowing specified in the relevant notice of borrowing given pursuant to Section 2.02 hereof. -11- 16 Without limiting the effect of the preceding sentence, such compensation shall include an amount equal to the excess, if any, of (i) the amount of interest that otherwise would have accrued on the principal amount so paid, prepaid, or not borrowed for the period from the date of such payment, prepayment, or failure to borrow to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan that would have commenced on the date specified for such borrowing) at the applicable rate of interest for such Loan provided for herein over (ii) the amount of interest that otherwise would have accrued on such principal amount at a rate per annum equal to the interest component of the amount the Lender would have bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such period (as reasonably determined by the Lender). Section 6. Guarantee. 6.01 The Guarantee. The Guarantor hereby guarantees to the Lender and its successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Loans and all other amounts from time to time owing to the Lender by the Company under this Agreement and under the Notes and by any Obligor under any of the other Basic Documents, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the "Guaranteed Obligations"). The Guarantor hereby further agrees that if the Company shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor will promptly pay the same, upon demand, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. 6.02 Obligations Unconditional. The obligations of the Guarantor under Section 6.01 hereof are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Company under this Agreement, the Notes or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 6.02 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantor hereunder, which shall remain absolute and unconditional as described above: (i) at any time or from time to time, without notice to the Guarantor, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived; (ii) any of the acts mentioned in any of the provisions of this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be done or omitted; (iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or (iv) any lien or security interest granted to, or in favor of, the Lender as security for any of the Guaranteed Obligations shall fail to be perfected. -12- 17 The Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Lender exhaust any right, power or remedy or proceed against the Company under this Agreement or the Notes or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations. 6.03 Reinstatement. The obligations of the Guarantor under this Section 6 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Company in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise and the Guarantors jointly and severally agree that they will indemnify the Lender on demand for all reasonable costs and expenses (including, without limitation, fees of counsel) incurred by the Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law. 6.04 Subrogation. The Guarantor hereby agrees that until the payment and satisfaction in full of all Guaranteed Obligations and the expiration and termination of the Commitment it shall not exercise any right or remedy arising by reason of any performance by it of its guarantee in Section 6.01 hereof, whether by subrogation or otherwise, against the Company or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations. 6.05 Remedies. The Guarantor agrees that, as between the Guarantor and the Lender, the obligations of the Company under this Agreement and the Notes may be declared to be forthwith due and payable as provided in Section 10 hereof (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 10) for purposes of Section 6.01 hereof notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Company and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Company) shall forthwith become due and payable by the Guarantor for purposes of said Section 6.01. 6.06 Continuing Guarantee. The guarantee in this Section 6 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising. Section 7. Conditions Precedent. 7.01 Initial Loan. The obligation of the Lender to make its initial Loan hereunder is subject to the conditions precedent that (i) such Loan shall be made on or before July 7, 2000 and (ii) the Lender shall have received the following documents, each of which shall be satisfactory to the Lender in form and substance: (a) Corporate Documents. The following documents: (i) for each Obligor, a copy of its organizational documents, as amended and in effect, of such Obligor; and (ii) for each Obligor, the resolutions of its board of directors (or similar body) authorizing the execution and delivery of such of the Basic Documents to which such Obligor is or is intended to be a party. (b) Officer's Certificate. A certificate of a senior officer of the Company, dated the Closing Date, to the effect set forth in the first sentence of Section 7.02 hereof. -13- 18 (c) Opinion of Netherlands Counsel to the Obligors. An opinion, dated the Closing Date, of Stibbe Simont Monahan Duhot, counsel to the Obligors, substantially in the form of Exhibit E-1 hereto and covering such other matters as the Lender may reasonably request (and each Obligor hereby instructs such counsel to deliver such opinion to the Lender). (d) Opinion of Netherlands Antilles Counsel to the Obligors. An opinion, dated the Closing Date, of Smeets Thesseling, counsel to the Obligors, substantially in the form of Exhibit E-2 hereto and covering such other matters as the Lender may reasonably request (and each Obligor hereby instructs such counsel to deliver such opinion to the Lender). (e) Opinion of Cayman Islands Counsel to the Obligors. An opinion, dated the Closing Date, of Conyers, Dill & Pearman, counsel to the Obligors, substantially in the form of Exhibit E-3 hereto and covering such other matters as the Lender may reasonably request (and each Obligor hereby instructs such counsel to deliver such opinion to the Lender). (f) Opinion of Special New York Counsel to the Lender. An opinion, dated the Closing Date, of Mayer, Brown & Platt, special New York counsel to the Lender, substantially in the form of Exhibit E-4 hereto. (g) Notes. The Notes, duly completed and executed. (h) Equity Line Documents. Each of the Equity Line Documents, duly executed and delivered by the Company and the Investor. (i) Security Documents. The following: (i) the Security Agreement, duly executed and delivered by the Guarantor and the Lender; (ii) the Control Agreement, duly executed and delivered by the Guarantor, the Lender and the Securities Intermediary, (iii) a certification from the Securities Intermediary that the Initial ASM Pacific Shares have been credited to the securities account that is subject to the Control Agreement, and that the Securities Intermediary has received the certificates representing the Initial ASM Pacific Shares together with stock powers duly executed in blank relating thereto, and (iv) evidence that the ASM Pacific Collateral Value of the Initial ASM Pacific Shares is at least equal the amount of the initial Loan hereunder. (j) Process Agent. A written acceptance by the Process Agent of its appointment under Section 11.13(b) hereof. (k) Other Documents. Such other documents as the Lender or special New York counsel to the Lender may reasonably request. 7.02 Initial and Subsequent Loans. The obligation of the Lender to make any Loan to the Company upon the occasion of each borrowing hereunder (including the initial borrowing) is subject to the further conditions precedent that, both immediately prior to the making of such Loan and also after giving effect thereto and to the intended use thereof: (a) no Default shall have occurred and be continuing; (b) the representations and warranties made by the Obligors in Section 8 hereof, and by each Obligor in each of the other Basic Documents to which it is a party, shall be true and complete on and as of the date of the making of such Loan with the same force and effect as -14- 19 if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), and (c) the ASM Pacific Collateral Value of the Initial ASM Pacific Shares shall be at least equal to the aggregate principal amount of the Loans. Each notice of borrowing by the Company hereunder shall constitute a certification by the Company to the effect set forth in the preceding sentence (both as of the date of such notice and, unless the Company otherwise notifies the Lender prior to the date of such borrowing, as of the date of such borrowing). Section 8. Representations and Warranties. Each of the Obligors represents and warrants to the Lender that: 8.01 Corporate Existence. Each of the Obligors, and each of their respective Subsidiaries, (a) is a corporation, partnership or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b) has all requisite corporate or other power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted; and (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could (either individually or in the aggregate) have a Material Adverse Effect. 8.02 Financial Condition. The Obligors have heretofore furnished to the Lender a consolidated balance sheet of the Company and its Subsidiaries as at December 31, 1999 and the related consolidated statements of income, retained earnings and cash flow of the Company and its Subsidiaries for the fiscal year ended on said date, with the opinion thereon of Deloitte & Touche, and the unaudited consolidated balance sheet of the Company and its Subsidiaries as at March 31, 2000 and the related consolidated statements of income, retained earnings and cash flow of the Company and its Subsidiaries for the three-month period ended on such date. All such financial statements are complete and correct and fairly present the consolidated financial condition of the Company and its Subsidiaries as at said dates and the consolidated results of their operations for the fiscal year and three-month period ended on said dates (subject, in the case of such financial statements as at March 31, 2000, to normal year-end audit adjustments), all in accordance with generally accepted accounting principles and practices applied on a consistent basis. None of the Obligors nor any of their respective Subsidiaries has on the date hereof any material contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in said balance sheets as at said dates. Since December 31, 1999, there has been no material adverse change in the consolidated financial condition, operations, business or prospects taken as a whole of the Company and its Subsidiaries from that set forth in said financial statements as at said date. 8.03 Litigation. There are no legal or arbitral proceedings, or any proceedings by or before any governmental or regulatory authority or agency, now pending or (to the knowledge of any Obligor) threatened against any of the Obligors or any of their respective Subsidiaries that, if adversely determined could (either individually or in the aggregate), could reasonably be expected to have a Material Adverse Effect. 8.04 No Breach. None of the execution and delivery of this Agreement and the Notes and the other Basic Documents, the consummation of the transactions herein and therein contemplated or compliance with the terms and provisions hereof and thereof will conflict with or result in a breach of, or require any consent under, the organizational documents of any Obligor, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which any of the Obligors or any of their Subsidiaries is a party or by which any of them or any of their Property is bound or to which any of them is subject, or constitute a default under any such agreement or instrument, or (except for the Liens created pursuant to the Security Documents) result in the creation or imposition of any Lien upon any Property of any of the Obligor or any of their respective Subsidiaries pursuant to the terms of any such agreement or instrument. -15- 20 8.05 Action. Each Obligor has all necessary corporate power, authority and legal right to execute, deliver and perform its obligations under each of the Basic Documents to which it is a party; the execution, delivery and performance by each Obligor of each of the Basic Documents to which it is a party have been duly authorized by all necessary corporate action on its part (including, without limitation, any required shareholder approvals); and this Agreement has been duly and validly executed and delivered by each Obligor and constitutes, and each of the Notes and the other Basic Documents to which it is a party when executed and delivered by such Obligor (in the case of the Notes, for value) will constitute, its legal, valid and binding obligation, enforceable against each Obligor in accordance with its terms. 8.06 Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any governmental or regulatory authority or agency, or any securities exchange, are necessary for the execution, delivery or performance by any Obligor of the Basic Documents to which it is a party or for the legality, validity or enforceability thereof. 8.07 Margin Regulation. Neither the Company nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any Loan hereunder will be used to buy or carry Margin Stock. None of the ASM Pacific Shares constitute Margin Stock. 8.08 Legal Form. This Agreement and each other Basic Document is in proper legal form under the law of the Netherlands, the Netherlands Antilles and the Cayman Islands for the enforcement thereof against each Obligor under such law, and if this Agreement and each other Basic Document were stated to be governed by such law, they would constitute legal, valid and binding obligations of each Obligor under such law, enforceable in accordance with their respective terms. All formalities required in the Netherlands, the Netherlands Antilles and the Cayman Islands for the validity and enforceability of this Agreement and each other Basic Document (including, without limitation, any necessary registration, recording or filing with any court or other authority in the Netherlands, the Netherlands Antilles or the Cayman Islands) have been accomplished, and no Taxes are required to be paid and no notarization is required, for the validity and enforceability thereof. 8.09 Ranking. This Agreement and each other Basic Document and the obligations evidenced hereby and thereby are and will at all times be direct and unconditional general obligations of each Obligor and rank and will at all times rank in right of payment and otherwise at least pari passu with all other unsecured Indebtedness of each Obligor, whether now existing or hereafter outstanding. 8.10 Taxes. The Company and each of its Subsidiaries have filed all tax returns that are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company or any of its Subsidiaries. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of the Company, adequate. 8.11 Commercial Activity; Absence of Immunity. Each Obligor is subject to civil and commercial law with respect to its obligations under each of the Basic Documents to which it is a party. The execution, delivery and performance by each Obligor of each Basic Document to which it is a party constitute private and commercial acts rather than public or governmental acts. None of the Obligors, nor any of their respective Properties or revenues, is entitled to any right of immunity in any jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the obligations of such Obligor under any of the Basic Documents to which it is a party. 8.12 Material Agreements and Liens. (a) Part A of Schedule I hereto is a complete and correct list, as of the date of this Agreement, of each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness or any extension of credit (or commitment for any extension -16- 21 of credit) to, or guarantee by, the Company or any of its Subsidiaries, and the aggregate principal or face amount outstanding or that may become outstanding under each such arrangement is correctly described in Part A of said Schedule I. (b) Part B of Schedule I hereto is a complete and correct list, as of the date of this Agreement, of each Lien securing Indebtedness of any Person covering any Property of the Company or any of its Subsidiaries, and the aggregate Indebtedness secured (or that may be secured) by each such Lien and the Property covered by each such Lien is correctly described in Part B of said Schedule I. 8.13 True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of the Obligors to the Lender or the Lender in connection with the negotiation, preparation or delivery of this Agreement and the other Basic Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by the Company and its Subsidiaries to the Lender in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to any Obligor that could have a Material Adverse Effect that has not been disclosed herein, in the other Basic Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to the Lenders for use in connection with the transactions contemplated hereby or thereby. Section 9. Covenants of the Obligors. The Company covenants and agrees with Lender that, so long as any Commitment or Loan is outstanding and until payment in full of all amounts payable by the Company hereunder: 9.01 Financial Statements Etc. The Company shall deliver to the Lender: (a) as soon as available and in any event within 45 days after the end of each quarterly fiscal period of each fiscal year of the Company, a consolidated statement of income, retained earnings and cash flow of the Company and its Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated balance sheet of the Company and its Subsidiaries as at the end of such period, setting forth in each case in comparative form the corresponding consolidated figures for the corresponding periods in the preceding fiscal year, accompanied by a certificate of a senior financial officer of the Company, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Company and its Subsidiaries in accordance with generally accepted accounting principles, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments); (b) as soon as available and in any event within 90 days after the end of each fiscal year of the Company, a consolidated statement of income, retained earnings and cash flow of the Company and its Subsidiaries for such fiscal year and the related consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year, setting forth in each case in comparative form the corresponding consolidated figures for the preceding fiscal year, and accompanied by an opinion thereon of independent certified public accountants of recognized international standing, which opinion shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Company and its Subsidiaries as at the end of, and for, such fiscal year in accordance with generally accepted accounting principles, and a certificate of such accountants stating that, in making the examination necessary for their opinion, they obtained no knowledge, except as specifically stated, of any Default; -17- 22 (c) promptly upon their becoming available, copies of all registration statements and regular periodic reports, if any, that the Company shall have filed with the Securities and Exchange Commission (or any governmental agency substituted therefor) or any national securities exchange; (d) promptly after the Company knows or has reason to believe that any Default has occurred, a notice of such Default describing the same in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that the Company has taken or proposes to take with respect thereto; and (e) from time to time such other information regarding the financial condition, operations, business or prospects of the Company or any of its Subsidiaries as the Lender may reasonably request. 9.02 Litigation. The Company will promptly give to each Lender notice of all legal or arbitral proceedings, and of all proceedings by or before any governmental or regulatory authority or agency, and any material development in respect of such legal or other proceedings, affecting the Company or any of its Subsidiaries, except proceedings that, if adversely determined, would not (either individually or in the aggregate) have a Material Adverse Effect. 9.03 Existence, Etc. The Company will, and will cause each of its Subsidiaries to: (a) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises; (b) comply with the requirements of all applicable laws, rules, regulations and orders of governmental or regulatory authorities if failure to comply with such requirements could (either individually or in the aggregate) have a Material Adverse Effect; (c) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; (d) maintain all of its Properties used or useful in its business in good working order and condition, ordinary wear and tear excepted; (e) keep adequate records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied; and (f) permit representatives of the Lender, during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by the Lender. 9.04 Insurance. The Company will, and will cause each of its Subsidiaries to, maintain insurance with financially sound and reputable insurance companies, and with respect to Property and risks of a character usually maintained by corporations engaged in the same or similar business similarly situated, against loss, damage and liability of the kinds and in the amounts customarily maintained by such corporations. 9.05 Prohibition of Fundamental Changes. Neither of the Obligors will enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). The Company will not, nor will it permit any of its Subsidiaries to, convey, sell, lease, transfer or -18- 23 otherwise dispose of, in one transaction or a series of transactions, all or substantially all of its business or Property, whether now owned or hereafter acquired. 9.06 Governmental Approvals. Each of the Obligors agrees that it will promptly obtain from time to time at its own expense all such governmental licenses, authorizations, consents, permits and approvals as may be required for it to (a) comply with its obligations, and preserve its rights under, each Basic Document and (b) maintain the existence, priority and perfection of the Liens purported to be created under the Security Documents. 9.07 Use of Proceeds. The Company will use the proceeds of the Loans hereunder solely to purchase ASM Pacific Shares (in compliance with all applicable legal and regulatory requirements); provided that the Lender shall not have any responsibility as to the use of any of such proceeds. 9.08 Certain Obligations Regarding Collateral. (a) The Lender agrees that it will not take any action to realize against any of the Additional ASM Pacific Shares at any time prior to a Market Capitalization Decline. At all times after any Market Capitalization Decline, the Lender may take action, under and pursuant to the Security Agreement, to realize on the Additional ASM Pacific Shares. (b) If at any time the ASM Pacific Collateral Value of the Initial ASM Pacific Shares, together with any cash held by the Lender subject to the Lien of the Security Agreement, is less than the aggregate principal amount of the Loans (a "Margin Call Event"), the Company shall, no later than the fourth Business Day thereafter, either: (i) prepay the Loans pursuant to Section 4.01(a) hereof in an amount such that, after giving effect thereto, the ASM Pacific Collateral Value of the Initial ASM Pacific Shares, together with any cash held by the Lender subject to the Lien of the Security Agreement, is at least equal to 110% of the aggregate principal amount of the Loans; or (ii) deposit cash with the Lender, subject to the Lien of the Security Agreement, in an amount such that, after giving effect thereto, the ASM Pacific Collateral Value of the Initial ASM Pacific Shares, together with the aggregate amount of cash held by the Lender subject to the Lien of the Security Agreement, is at least equal to 110% of the aggregate principal amount of the Loans; or (iii) give a Company Put Notice with respect to Common Stock with an aggregate Purchase Price such that, after giving effect to the issuance of such Common Stock to the Investor and the payment hereunder resulting therefrom as provided in Section 4.01(b) hereof, the ASM Pacific Collateral Value of the Initial ASM Pacific Shares, together with the aggregate amount of any cash held by the Lender subject to the Lien of the Security Agreement, is at least equal to 110% of the aggregate principal amount of the Loans. (c) No later than ten days after the Closing Date the Company shall (i) deliver to the Lender the certificates representing the Additional ASM Pacific Shares (to the extent not so delivered on the Closing Date), together with duly executed stock powers relating thereto, and (ii) execute and deliver to the Lender a supplement to the Security Agreement describing such Additional ASM Pacific Shares and confirming that they are subject to the Lien of the Security Agreement. Section 10. Events of Default. If one or more of the following events (herein called "Events of Default") shall occur and be continuing: -19- 24 (a) The Company shall: (i) default in the payment of any principal of any Loan when due (whether at stated maturity or at mandatory or optional prepayment) and, if: (A) the Company shall have delivered a Company Put Notice or shall have received an Investor Call Notice pursuant to which the issuance of Common Stock by the Company would occur within five Trading Days of the date on which an Event of Default would otherwise have occurred under this Section 10(a)(i), and (B) the "payment" (as provided in Section 4.01(b) hereof) that would occur pursuant to such Company Put Notice or such Investor Call Notice (as the case may be) is equal to or greater than the amount of such defaulted payment, such default shall continue unremedied beyond the closing date set forth on such Company Put Notice of such Investor Call Notice (as the case may be); or (ii) default in the payment of any interest on any Loan, any fee or any other amount payable by it hereunder or under any other Basic Document when due and such default shall have continued unremedied for three or more Business Days and, if: (A) the Company shall have delivered a Company Put Notice or shall have received an Investor Call Notice pursuant to which the issuance of Common Stock by the Company would occur within five Trading Days of the date on which an Event of Default would otherwise have occurred under this Section 10(a)(ii), and (B) the "payment" (as provided in Section 4.01(b) hereof) that would occur pursuant to such Company Put Notice or such Investor Call Notice (as the case may be) is equal to or greater than the amount of such defaulted payment, such default shall continue unremedied beyond the closing date set forth on such Company Put Notice of such Investor Call Notice (as the case may be); or (b) The Company or any of its Subsidiaries shall default in the payment when due of any principal of or interest on any of its other Indebtedness aggregating U.S.$500,000 (or the equivalent in other currencies) or more, or in the payment when due of any amount under any Interest Rate Protection Agreement for a notional principal amount exceeding U.S.$100,000 (or the equivalent in other currencies) absent a valid dispute in which the Company in good faith believes such amounts are not payable; or any event specified in any note, agreement, indenture or other document evidencing or relating to any such Indebtedness or any event specified in any Interest Rate Protection Agreement shall occur if the effect of such event is to cause, or (with the giving of any notice or the lapse of time or both) to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, such Indebtedness to become due, or to be prepaid in full (whether by redemption, purchase, offer to purchase or otherwise), prior to its stated maturity or, in the case of an Interest Rate Protection Agreement, to permit the payments owing under such Interest Rate Protection Agreement to be liquidated; or (c) Any representation, warranty or certification made or deemed made herein or in any other Basic Document (or in any modification or supplement hereto or thereto) by any Obligor, or any certificate furnished to the Lender pursuant to the provisions hereof or thereof, shall prove to have been false or misleading as of the time made or furnished in any material respect; or -20- 25 (d) The Company shall default in the performance of any of its obligations under Section 9 hereof; or any Obligor shall default in the performance of any of its other obligations in this Agreement or any other Basic Document and such default shall continue unremedied for a period of 30 or more days after notice thereof to the Company by the Lender; or (e) The Company or any of its Subsidiaries shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or (f) The Company or any of its Subsidiaries shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its Property, (ii) make a general assignment for the benefit of its creditors, (iii) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or readjustment of debts, or (iv) take any corporate action for the purpose of effecting any of the foregoing; or (g) A proceeding or case shall be commenced, without the application or consent of the Company or any its Subsidiaries, in any court of competent jurisdiction, seeking (i) its reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of the Company or such Subsidiary or of all or any substantial part of its Property, or (iii) similar relief in respect of the Company or such Subsidiary under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 90 or more days; or (h) A final judgment or judgments for the payment of money in excess of U.S.$500,000 (or the equivalent in other currencies) in the aggregate shall be rendered by one or more courts, administrative tribunals or other bodies having jurisdiction against the Company or any of its Subsidiaries and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof and the Company or such Subsidiary shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or (i) The Liens created by the Security Documents shall at any time not constitute a valid and perfected Lien on the collateral intended to be covered thereby in favor of the Lender, free and clear of all other Liens, or, except for expiration in accordance with its terms, any of the Security Documents shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by any Obligor; or (j) The Company shall, or any of its Subsidiaries shall, create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except: (i) Liens created pursuant to the Security Documents; (ii) Liens in existence on the date hereof and listed in Part B of Schedule I hereto; (iii) Liens imposed by any governmental authority for taxes, assessments or charges not yet due or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Company or the affected Subsidiaries, as the case may be, in accordance with GAAP; -21- 26 (iv) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith and by appropriate proceedings and Liens securing judgments but only to the extent for an amount and for a period not resulting in an Event of Default under Section 10(h) hereof; (v) pledges or deposits under worker's compensation, unemployment insurance and other social security legislation; (vi) deposits to secure the performance of bids, trade contracts (other than for Indebtedness), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (vii) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, easements, licenses, restrictions on the use of Property or minor imperfections in title thereto that, in the aggregate, are not material in amount, and that do not in any case materially detract from the value of the Property subject thereto or interfere with the ordinary conduct of the business of the Company or any of its Subsidiaries; and (viii) Liens securing Indebtedness permitted to be incurred under Sections 10(k)(iii)-(iv). (k) The Company shall, or any of its Subsidiaries shall, create, incur or suffer to exist any Indebtedness except: (i) Indebtedness to the Lender hereunder; (ii) Indebtedness outstanding on the date hereof and listed in Part A of Schedule I hereto (including Indebtedness incurred after the date hereof under the credit facilities listed in Part A of said Schedule, up the maximum principal amount set forth on such schedule); (iii) additional Indebtedness of ASM America, Inc. in an aggregate principal amount up to but not exceeding U.S.$5,000,000 at any one time outstanding; and (iv) additional Indebtedness of the Company and its Subsidiaries in an aggregate principal amount at any one time outstanding up to but not exceeding the sum of (x) U.S.$2,000,000 and (y) the aggregate amount of payments of principal of the Loans theretofore made. THEREUPON: the Lender may, by notice to the Company, terminate the Commitment and/or declare the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Obligors hereunder and under the Notes (including, without limitation, any amounts payable under Section 5.05 hereof) to be forthwith due and payable, whereupon such amounts shall be immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by each Obligor. Section 11. Miscellaneous. 11.01 Waiver. No failure on the part of the Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement or any Note shall operate as a waiver -22- 27 thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement or any Note preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 11.02 Notices. All notices, requests and other communications provided for herein and under the Security Documents (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including, without limitation, by facsimile) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof (below the name of the Company, in the case of the Guarantor); or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by facsimile or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. 11.03 Expenses. The Company agrees to pay or reimburse each of the Lender for: (a) all fees and expenses described in Section 10.2(a) of the Financing Agreement; (b) all reasonable out-of-pocket costs and expenses of the Lender (including, without limitation, the reasonable fees and expenses of legal counsel) in connection with (i) any Default and any enforcement or collection proceedings resulting therefrom, including, without limitation, all manner of participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory proceedings and (z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated) and (ii) the enforcement of this Section 11.03; and (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any of the other Basic Documents or any other document referred to herein or therein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Basic Document or any other document referred to therein. 11.04 Indemnification. The Company hereby agrees to indemnify the Lender and its directors, officers, employees, attorneys and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages or expenses incurred by any of them (including, without limitation, any and all losses, liabilities, claims, damages or expenses incurred by the Lender, whether or not the Lender is a party thereto) arising out of or by reason of any investigation or litigation or other proceedings (including any threatened investigation or litigation or other proceedings) relating to the Loans hereunder or any actual or proposed use by the Company or any of its Subsidiaries of the proceeds of any of the Loans hereunder, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified). 11.05 Amendments, Etc. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by the Company and the Lender. 11.06 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 11.07 Assignments and Participations. -23- 28 (aviii) No Obligor may assign any of its rights or obligations hereunder or under the Notes without the prior consent of the Lender. (b) The Lender may assign to one or more Persons (other than Persons that compete directly with the Company in one of its principal lines of business) all or any portion of its Loan, its Note and its Commitment, provided that the Lender shall act as agent on behalf of itself and all such Persons. (c) The Lender may sell or agree to sell to one or more other Persons (other than Persons that compete directly with the Company in one of its principal lines of business) a participation in all or any part of any Loan or the Commitment. (d) In addition to the assignments and participations permitted under the foregoing provisions of this Section 11.07, the Lender may (without notice to the Company) (i) assign and pledge all or any portion of its Loans and its Note to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank and (ii) assign all or any portion of its rights under this Agreement and its Loans and its Note to an affiliate. No such assignment shall release the Lender from its obligations hereunder. (e) A Lender may furnish any information concerning the Company or any of its Subsidiaries in the possession of the Lender from time to time to assignees and participants (including prospective assignees and participants). 11.08 Survival. The obligations of the Company under Sections 5.01, 5.04, 5.05 and 11.03 hereof, and the obligations of the Guarantor under Section 6.03 hereof, shall survive the repayment of the Loans and the termination of the Commitment. In addition, each representation and warranty made, or deemed to be made by a notice of any Loan, herein or pursuant hereto shall survive the making of such representation and warranty, and the Lender shall not be deemed to have waived, by reason of making any Loan, any Default that may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding that the Lender may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time such Loan was made. 11.09 Captions. The table of contents and captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 11.10 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 11.11. Judgment Currency. This is an international loan transaction in which the specification of Dollars and payment in New York City is of the essence, and the obligations of the Obligors under this Agreement to make payment to (or for the account of) the Lender in Dollars shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any other currency or in another place except to the extent that such tender or recovery results in the effective receipt by the Lender in New York City of the full amount of Dollars payable to the Lender under this Agreement. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency (in this Section 11.11 called the "judgment currency"), the rate of exchange that shall be applied shall be that at which in accordance with normal banking procedures the Lender could purchase such Dollars at its New York City office with the judgment currency on the Business Day next preceding the day on which such judgment is rendered. The obligation of the Obligors in respect of any such sum due from it to the Lender hereunder or under any Basic Document shall, notwithstanding the rate of exchange actually applied in rendering such judgment, be discharged only to the extent that on the Business Day following receipt by the Lender of any sum adjudged to be due hereunder in the judgment currency the Lender may in accordance with normal banking procedures purchase and transfer Dollars to New York -24- 29 City with the amount of the judgment currency so adjudged to be due; and each of the Obligors hereby, as a separate obligation and notwithstanding any such judgment, agrees to indemnify the Lender against, and to pay the Lender on demand, in Dollars, the amount (if any) by which the sum originally due to the Lender in Dollars hereunder exceeds the amount of the Dollars so purchased and transferred. 11.12 Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the law of the State of New York, United States of America. 11.13 Jurisdiction; Service of Process; Venue. (a) Each Obligor hereby agrees that any suit, action or proceeding with respect to this Agreement, any Note, any other Basic Document or any judgment entered by any court in respect of any thereof may be brought in the Supreme Court of the State of New York, County of New York or in the United States District Court for the Southern District of New York, as the party commencing such suit, action or proceeding may elect in its sole discretion; and each Obligor hereby irrevocably submits to the jurisdiction of such courts for the purpose of any suit, action, proceeding or judgment. (b) Each Obligor hereby agrees that service of all writs, process and summonses in any such suit, action or proceeding brought in the State of New York may be made upon Corporation Service Company, presently located at Two World Trade Center, Suite 8746, New York, NY 10048 (the "Process Agent"), and each Obligor hereby confirms and agrees that the Process Agent has been duly and irrevocably appointed as its agent and true and lawful attorney-in-fact in its name, place and stead to accept such service of any and all such writs, process and summonses, and agrees that the failure of the Process Agent to give any notice of any such service of process to such Obligor shall not impair or affect the validity of such service or of any judgment based thereon. Each Obligor hereby further irrevocably consents to the service of process in any suit, action or proceeding in said courts by the mailing thereof by the Lender by registered or certified mail, postage prepaid, at its address set forth beneath its signature hereto (below the signature of the Company in the case of the Guarantor). (c) Nothing herein shall in any way be deemed to limit the ability of the Lender to serve any such writs, process or summonses in any other manner permitted by applicable law or to obtain jurisdiction over any Obligor in such other jurisdictions, and in such manner, as may be permitted by applicable law. (d) Each Obligor hereby irrevocably waives any objection that it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement, the Notes or any other Basic Document brought in the Supreme Court of the State of New York, County of New York or in the United States District Court for the Southern District of New York, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. (e) Each Obligor irrevocably waives, to the fullest extent permitted by applicable law, any claim that any action or proceeding commenced by the Lender relating in any way to this Agreement should be dismissed or stayed by reason, or pending the resolution, of any action or proceeding commenced by any Obligor relating in any way to this Agreement whether or not commenced earlier. To the fullest extent permitted by applicable law, the Obligors shall take all measures necessary for any such action or proceeding commenced by the Lender to proceed to judgment prior to the entry of judgment in any such action or proceeding commenced by any Obligor. 11.14. No Immunity. To the extent that any Obligor may be or become entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to this Agreement or any other Basic Document, to claim for itself or its Property any immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, execution of a judgment or from any other legal process or remedy relating to its obligations under this Agreement or any other Basic Document, and to the extent that in any such jurisdiction there may be attributed such an immunity (whether or not claimed), each of the Obligors hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity to the fullest extent permitted by the -25- 30 laws of such jurisdiction and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for purposes of such Act. 11.15 Waiver of Jury Trial. EACH OF THE OBLIGORS AND THE LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 11.16 Use of English Language. This Agreement has been negotiated and executed in the English language. All certificates, reports, notices and other documents and communications given or delivered pursuant to this Agreement shall be in the English language, or accompanied by a certified English translation thereof. Except in the case of laws of, or official communications of, the Netherlands, in the case of any document originally issued in a language other than English, the English language version of any such document shall for purposes of this Agreement, and absent manifest error, control the meaning of the matters set forth therein. 11.17 Public Information. The Company hereby agrees to furnish to the Investor copies of each of the Company's SEC filings, press releases and other publicly-disseminated information, promptly after the release of such information but in no event later than 30 days thereafter. -26- 31 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. ASM INTERNATIONAL N.V. By: Title: Address for Notices: Jan Van Eycklaan 10 3723 Bilthoven The Netherlands Attention: Rinse de Jong Facsimile No.:(31) 30-228-7469 Telephone No.: (31) 30-229-8540 ADVANCED SEMICONDUCTOR MATERIALS (NETHERLANDS ANTILLES) N.V. By: Title: CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY By: Title: Lending Office: 425 Lexington Avenue New York, New York 10017 Address for Notices: 425 Lexington Avenue New York, New York 10017 Attention: Paul Flynn or Jeff Haas Facsimile No.: (212) 856-4054 Telephone No.: (212) 856-6506 -27- 32 With a copy to: Canadian Imperial Bank of Commerce Two Places West 2727 Paces Ferry Road Suite 1200 Atlanta, Georgia Attn: Ken Auchter -28- 33 SCHEDULE I Material Agreements and Liens [See Sections 8.12 and 10(j)(ii)] Part A - Material Agreements Part B - Liens EX-23.3 4 p63730ex23-3.txt EX-23.3 1 EXECUTION COPY - -------------------------------------------------------------------------------- ASM INTERNATIONAL N.V. U.S.$140,000,000 REGISTRATION RIGHTS AGREEMENT July 6, 2000 CANADIAN IMPERIAL HOLDINGS INC. as Investor 2 TABLE OF CONTENTS
PAGE ---- 1. Certain Definitions..................................................................................... 1 2. Registration Requirements............................................................................... 2 3. Registration Procedures................................................................................. 3 4. Suspensions of Effectiveness............................................................................ 4 5. Indemnification......................................................................................... 5 6. Contribution............................................................................................ 7 7. Survival................................................................................................ 8 8. Transfer or Assignment of Rights........................................................................ 8 9. Miscellaneous........................................................................................... 8
-i- 3 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Rights Agreement"), entered into as of July 6, 2000, between CANADIAN IMPERIAL HOLDINGS INC., a Delaware corporation (the "Investor") and ASM INTERNATIONAL N.V., a corporation organized under the laws of the Kingdom of the Netherlands (the "Company"). W I T N E S S E T H: WHEREAS, pursuant to that certain Equity Line Financing Agreement by and between the Company and the Investor (the "Agreement"), the parties desire that, upon the terms and subject to the conditions contained herein, the Company may issue to the Investor, and, subject to the terms and conditions thereof, the Investor shall purchase from the Company, from time to time as provided in the Agreement, shares of the Company's common stock, par value Nlg. 0.01 per share (the "Common Stock"), for a maximum aggregate purchase price of $140,000,000 (the Common Stock to be purchased thereunder, the "Common Stock"); WHEREAS, contemporaneous with the execution and delivery of the Agreement, the Company and Canadian Imperial Bank of Commerce (the "Lender"), an affiliate of the Investor, acting through its New York agency, are executing and delivering a Credit Agreement (the "Credit Agreement"), pursuant to which the Lender has agreed to provide to the Company amortizing term loans of up to $75,000,000, collectively. WHEREAS, pursuant to the terms of, and in partial consideration for, the Investor's commitment to enter into the Agreement, the Company has agreed to provide the Investor with certain registration rights with respect to the Common Stock as set forth in this Rights Agreement; NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in the Agreement and this Rights Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intended to be legally bound hereby, the Company and the Investor agree as follows: 1. Certain Definitions. Capitalized terms used in this Rights Agreement and not otherwise defined herein shall have the same meaning ascribed to them in the Agreement. The following terms shall have the following respective meanings: "Agreement Date" shall mean the date as of which the Agreement was duly executed by the parties thereto. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Investor" shall include the Investor and any permitted assignee or transferee of the rights under the Agreement to whom the registration rights conferred by this Rights Agreement have been transferred in compliance with Section 9 of this Rights Agreement. 4 "Loan Amount" has the meaning set forth in Section 1.1 of the Agreement. "Principal Market" has the meaning set forth in Section 1.1 of the Agreement. The terms "register," "registered" and "registration" shall refer to a registration effected by preparing and filing an appropriate registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement. 2. Registration Requirements. The Company shall use its reasonable best efforts to effect the registration of the Common Stock (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as would permit or facilitate the sale or distribution of all the Common Stock in the manner (including manner of sale) and in all states reasonably requested by the Investor for purposes of maximizing the proceeds realizable by the Investor from such sale or distribution. Such reasonable best efforts by the Company shall include without limitation the following: (a) Subject to the terms and conditions of this Rights Agreement, the Company shall file with the Commission (i) no later than August 18, 2000, an appropriate registration statement on Form F-3 (or any successor or other appropriate form) under the Securities Act for the registration of the Common Stock (the "Registration Statement") which Registration Statement shall have been declared effective by the Commission no later than ninety (90) days from the Agreement Date. Furthermore, at the time of filing of the Registration Statement, the Company shall file (A) such blue sky filings as shall have been requested by the Investor; and (B) any required filings with the National Association of Securities Dealers, Inc. or exchange or market where the Common Stock is traded. The Company shall use its best efforts to have all filings declared effective as promptly as practicable. (b) (i) If the Company (A) fails to file the Registration Statement complying with the requirements of this Rights Agreement by August 18, 2000 or if the Registration Statement has not become effective on or before ninety (90) days from the Agreement Date, the Investor shall have, in addition to and without limiting any other rights it may have at law, in equity or under the Agreement, or this Rights Agreement (including the right to specific performance), the right to receive, as liquidated damages, the payments as provided in subparagraph (ii) of this section. (ii) In the event the Registration Statement is not deemed effective within ninety (90) days after the Agreement Date, the Company shall pay to the Investor an amount equal to: (A) 0.75% of the Loan Amount per month (on a pro-rated basis) if the Registration Statement becomes effective anytime from ninety-one (91) days to one hundred thirty-five (135) days after the Agreement Date and (B) 1.0% of the Loan Amount per month (on a pro-rated basis) if the Registration Statement becomes effective anytime after one hundred thirty-five (135) days from the Agreement Date. -2- 5 (c) The Company shall enter into such customary agreements and take all such other reasonable actions in connection therewith in order to expedite or facilitate the disposition of the Common Stock. 3. Registration Procedures. The Company will keep the Investor advised in writing as to the initiation of each registration and as to the completion thereof. At its expense, the Company will use its reasonable best efforts to: (a) Keep such registration effective for the period ending twenty-four (24) months, as extended pursuant to Section 4 hereof, following the Agreement Date. (b) Furnish such number of prospectuses and amendments and supplements thereto, and other documents incident thereto as the Investor from time to time may reasonably request; (c) Prepare and file with the Commission such amendments and post- effective amendments to the Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period; cause the related prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement or supplement to such prospectus; (d) Notify the Investor and its counsel (as designated in writing by the Investor) promptly, and confirm such notice (a "Notice") in writing, (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission for amendments or supplements to the Registration Statement or related prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any of the Common Stock for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event as a result of which the prospectus included in the Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading, and (vi) of the Company's reasonable determination that a post-effective amendment to the Registration Statement would be appropriate or that there exist circumstances not yet disclosed to the public which make further sales under such Registration Statement inadvisable pending such disclosure and post-effective amendment; (e) Upon the occurrence of any event contemplated by Section 3(d)(ii)-(vi) (unless a Blocking Notice shall be in effect) and immediately upon the expiration of any Blocking Notice (as defined in Section 4), prepare, if the occurrence of such event or period requires such preparation, a supplement or post-effective amendment to the Registration -3- 6 Statement or related prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Common Stock being sold thereunder, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements, in light of the circumstances under which they were made, not misleading; (f) Obtain the withdrawal of any order suspending the effectiveness of the Registration Statement, or the lifting of any suspension of the qualification of any of the Common Stock for sale in any jurisdiction, at the earliest possible moment; (g) Cause all Common Stock subject to the Registration Statement at all times to be registered or qualified for offer and sale under the securities or blue sky laws of such jurisdictions as any Investor reasonably requests in writing; use its best efforts to keep each such registration or qualification effective, including through new filings or amendments or renewals, during the period the Registration Statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in such U.S. jurisdictions of the Common Stock covered by the Registration Statement; provided, however, that the Company will not be required to qualify to do business or take any action that would subject it to taxation or general service of process in any jurisdiction where it is not then so qualified or subject; and (h) Cause all Common Stock included in such Registration Statement to be listed, by the date of first sale of Common Stock pursuant to such Registration Statement, on the Principal Market. Notwithstanding the foregoing, if at any time the Loan Amount shall be zero, the Company may discontinue its obligations under this Section 3 by providing 30 days prior notice thereof to the Investor. 4. Suspensions of Effectiveness. The Company may suspend dispositions under the Registration Statement and notify the Investor that it may not sell the Common Stock pursuant to any Registration Statement or prospectus (a "Blocking Notice") if the Company's management determines in its good faith judgment that the Company's obligation to ensure that such Registration Statement and prospectus are current and complete would require the Company to take actions that might reasonably be expected to have a materially adverse effect on the Company and its shareholders; provided that such suspension pursuant to a Blocking Notice or Prospectus Inadequacy Notice (as defined below) or as a result of the circumstances described in Section 3(d)(ii)-(vi) may not exceed ninety (90) days (whether or not consecutive) in any twelve (12) month period. The Investor agrees by acquisition of the Common Stock that, upon receipt of a Blocking Notice or "Prospectus Inadequacy Notice" from the Company of the existence of any fact of the kind described in the following sentence, the Investor shall not dispose of, sell or offer for sale the Common Stock pursuant to the Registration Statement until such Investor receives (i) copies of the supplemented or amended prospectus, or until counsel for the Company shall have determined that such disclosure is not required due to subsequent events, (ii) notice in writing (the "Advice") from the Company that the use of the prospectus may be resumed and (iii) copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. Pursuant to the immediately preceding sentence, the Company may provide such Prospectus Inadequacy Notice to the Investor upon the determination by the Company of the -4- 7 existence of any fact or the happening or any event that makes any statement of a material fact made in the Registration Statement, the prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue in any material respect, or that requires the making of any additions to or changes in the Registration Statement or the prospectus, in order to make the statements therein not misleading in any material respect. If so directed by the Company in connection with any such notice, each Investor will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Investor's possession, of the prospectus covering such Common Stock that was current immediately prior to the time of receipt of such notice. Delivery of a Blocking Notice or Prospectus Inadequacy Notice and the related suspension of any Registration Statement shall not constitute a default under this Rights Agreement. However, if the Investor's ability to sell under the Registration Statement is suspended for more than the ninety (90) day period described above, the Investor may elect, in its sole and absolute discretion, to terminate the Agreement pursuant to Section 9.4(b)(i) of the Agreement. 5. Indemnification. (a) Company Indemnity. The Company will indemnify the Investor, each of its officers, directors and partners, and each person controlling the Investor, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the rules and regulations thereunder with respect to which registration, qualification or compliance has been effected pursuant to this Rights Agreement, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus (including any related registration statement, notification or the like or any amendment thereto) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any state securities law or in either case, any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse the Investor, each of its officers, directors and partners, and each person controlling the Investor, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission (or alleged untrue statement or omission) that is made in reliance upon and in conformity with written information furnished to the Company by the Investor and stated to be specifically for use therein. In addition to any other information furnished in writing to the Company by the Investor, the information in the Registration Statement concerning the Investor or any of its Affiliates under the caption "Plan of Distribution" (or any similarly captioned Section containing information required pursuant to Item 508 of Regulation S-K) shall be deemed information furnished in writing to the Company by the Investor to the extent it conforms to information actually supplied in writing by the Investor. The indemnity agreement contained in this Section 5(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent will not be unreasonably withheld). -5- 8 (b) Investor Indemnity. The Investor will indemnify the Company, each of its directors, officers, partners, and each underwriter, if any, of the Company's securities covered by the Registration Statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the rules and regulations thereunder, and each of their officers, directors and partners, and each person controlling such other Investor (if any), and each of their officers, directors, and partners, and each person controlling such other Investor against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement (or any amendment thereto) or prospectus or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, and will reimburse the Company and its directors, officers and partners, or control persons for any legal or any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement or prospectus in reliance upon and in conformity with written information furnished to the Company by the Investor and stated to be specifically for use therein, and provided that the Investor shall not be liable under this indemnity for an amount in excess of the proceeds received by the Investor from the sale of the Common Stock pursuant to such Registration Statement; provided, however, that nothing contained herein shall limit the Investor's obligation to provide indemnification pursuant to Section 10.4 of the Agreement. In addition to any other information furnished in writing to the Company by the Investor, the information in the Registration Statement concerning the Investor under the caption "Plan of Distribution" (or any similarly captioned Section containing information required pursuant to Item 508 of Regulation S-K) shall be deemed information furnished in writing to the Company by the Investor to the extent it conforms to information actually supplied in writing by the Investor. The indemnity agreement contained in this Section 5(b) shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities if such settlement is effected without the written consent of the Investor (which consent shall not be unreasonably withheld). (c) Procedure. Each party entitled to indemnification under this Section 5 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim in any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Article except to the extent that the Indemnifying Party is materially and adversely affected by such failure to provide notice. The Indemnifying Party shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Party, provided, however, that if separate firm(s) of attorneys are required due to a conflict of interest, then the indemnifying party shall be liable -6- 9 for the reasonable fees and expenses of one additional firm. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom. 6. Contribution. If the indemnification provided for in Section 5 hereof is unavailable to the Indemnified Party in respect of any losses, claims, damages or liabilities referred to herein (other than by reason of the exceptions provided therein), then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities (i) as between the Company and the Investor on the one hand and the underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Company and the Investor on the one hand or underwriters, as the case may be, on the other from the offering of the Common Stock, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Investor on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations and (ii) as between the Company on the one hand and the Investor on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of the Investor in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Investor on the other shall be deemed to be in the same proportion as the proceeds from the offering of Common Stock by the Company to the Investor pursuant to this Rights Agreement bear to the proceeds received by the Investor from the sale of Common Stock pursuant to the Registration Statement. The relative fault of the Company on the one hand and of the Investor on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Investor. In no event shall the obligation of any Indemnifying Party to contribute under this Section 6 exceed the amount that such Indemnifying Party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 5(a) or Section 5(b) hereof had been available under the circumstances. The Company and the Investor agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraphs. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraphs shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating -7- 10 or defending any such action or claim. Notwithstanding the provisions of this section, the Investor shall not be required to contribute any amount in excess of the amount by which the total price at which the shares of Common Stock offered by the Investor and distributed to the public, or offered to the public, exceeds the amount of any damages that the Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 7. Survival. The indemnity and contribution agreements contained in Section 5 and Section 6 shall remain operative and in full force and effect regardless of (i) any termination of the Agreement or any underwriting agreement, (ii) any investigation made by or on behalf of any Indemnified Party or by or on behalf of the Company and (iii) the consummation of the sale or successive resales of the Registrable Securities. 8. Transfer or Assignment of Rights. Neither this Rights Agreement nor any rights of the Investor or the Company hereunder may be assigned by either party to any other person. Notwithstanding the foregoing, upon prior written notice to the Company, the Investor's rights and obligations under this Rights Agreement may be assigned, in whole or in part, to any Affiliate of the Investor (a "Permitted Transferee"), provided, however, that any such assignment shall not release the Investor from its obligations hereunder. The rights and obligations of the Investor under this Rights Agreement shall inure to the benefit of, and be enforceable by and against, any such Permitted Transferee. 9. Miscellaneous. (a) Entire Agreement. This Rights Agreement, together with the Agreement, contains the entire understanding and agreement of the parties relating to the registration of Registrable Securities, and may not be modified or terminated except by a written agreement signed by both parties. (b) Notices. All notices, demands, requests, consents, approvals or other communications required or permitted to be given hereunder or which are given with respect to this Rights Agreement shall be in writing and shall be personally served or deposited in the mail, registered or certified, return receipt requested, postage prepaid, or delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice: If to the Company, to: ASM International N.V. Jan Van Eycklaan 10 3723 Bilthoven The Netherlands Attn: Rinse de Jong Tel: (31) 30-229-8540 Fax: (31) 30-228-7469 -8- 11 With a copy (which shall not constitute notice) to: Quarles & Brady LLP One East Camelback Road, Suite 400 Phoenix, Arizona 85012-1649 Attn: Bob Moya Tel: (602) 230-5500 Fax: (602) 230-5598 If to the Investor, to Canadian Imperial Holdings Inc. C/o CIBC World Markets Corp. 425 Lexington Ave. New York, NY 10017 Attn: Paul Flynn or Jeff Haas Tel: (212) 856-6506 Fax: (212) 856-4054 With a copy (which shall not constitute notice) to: Mayer, Brown & Platt 1675 Broadway New York, NY 10019 Attn: David K. Duffee Tel: (212) 506-2630 Fax: (212) 262-1910 Subject to Section 2.3(c) of the Agreement, notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile during normal business hours of the recipient. Notice otherwise sent as provided herein shall be deemed given on the third business day following the date mailed or on the second business day following delivery of such notice by a reputable air courier service. (c) Registration Expenses. The Company shall be responsible for the expenses to be incurred by the Company in connection with Investor's exercise of its registration rights under this Rights Agreement, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the expense of any special audits that may be required in connection herewith. (d) Gender of Terms. All terms used herein shall be deemed to include the feminine and the neuter, and the singular and the plural, as the context requires. (e) GOVERNING LAW. THIS RIGHTS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE -9- 12 STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. (f) Jurisdiction. The parties hereby agree that all actions or proceedings arising directly or indirectly from or in connection with this Rights Agreement shall, at the option of either party, be litigated only in the United States District Court for the Southern District of New York located in New York County, New York, unless such District Court declines jurisdiction, in which case such actions or proceedings shall be litigated only in the state court located in New York County, New York. Each party hereto irrevocably waives, to the fullest extent permitted by applicable law, any objection which it might now or hereafter have to the laying of venue of any proceeding in the United States District Court for the Southern District of New York or the courts of the State of New York in New York County, and any claim that any proceeding brought in any such court has been brought in an inconvenient forum. The Company agrees that it shall at all times have an authorized agent in New York County, New York, upon whom process may be served in connection with any proceeding hereunder, and the Company has appointed Corporate Service Company, which currently maintains a New York County office situated at [ ], as its agent for such purposes. If for any reason such person shall cease to act as agent for the service of process, the Company shall promptly appoint another such agent, and shall forthwith notify the Investor of such appointment. The submission to jurisdiction reflected in this paragraph shall not (and shall not be construed so as to) limit the right of any person to commence proceedings in any court of competent jurisdiction, nor shall the commencement of proceedings in any one or more jurisdictions preclude the commencement of proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law. The parties hereto waive any right to a jury trial in connection with any litigation pursuant to this Rights Agreement. (g) Waiver of Sovereign Immunity. The Company irrevocably waives, to the fullest extent permitted by law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, attachment (both before and after judgment) and execution to which it might otherwise be entitled in any action or proceeding in any court relating in any way to this Rights Agreement and agrees that it will not raise or claim or cause to be pleaded any such immunity at or in respect of such action or proceeding. (h) Titles. The titles used in this Rights Agreement are used for convenience only and are not to be considered in construing or interpreting this Rights Agreement. (i) Counterparts. This Rights Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. -10- 13 IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be duly executed as of the date first above written. ASM INTERNATIONAL N.V. CANADIAN IMPERIAL HOLDINGS INC. By: _____________________ By:____________________________ Name: Name: Title: Title: -11- EX-23.4 5 p63730ex23-4.txt EX-23.4 1 SECURITY AGREEMENT This SECURITY AGREEMENT (as amended, supplemented, amended and restated or otherwise modified from time to time, this "Security Agreement"), dated as of July 6, 2000, is made by ADVANCED SEMICONDUCTOR MATERIALS (NETHERLANDS ANTILLES) N.V., a company duly organized and existing under the laws of the Netherlands Antilles (the "Grantor"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, a bank organized and validly existing under the laws of Canada, acting through its New York agency (the "Lender"). W I T N E S S E T H : WHEREAS, pursuant to a Credit Agreement, dated as of July 6, 2000 (as amended, supplemented, amended and restated or otherwise modified from time to time, the "Credit Agreement"), among ASM International N.V., a company duly organized and existing under the laws of the Netherlands (the "Borrower"), the Grantor, as a Guarantor, and the Lender, the Lender has extended Commitments to make Loans to the Borrower; WHEREAS, Section 6 of the Credit Agreement provides, in relevant part, that the Grantor is required to guarantee the payment obligations of the Borrower thereunder; WHEREAS, Section 7.01(j)(i) of the Credit Agreement provides, in relevant part, that the Grantor is required to execute and deliver this Security Agreement; WHEREAS, the Grantor has duly authorized the execution, delivery and performance of its Guarantee and this Security Agreement; and WHEREAS, it is in the best interests of the Grantor to execute this Security Agreement inasmuch as the Grantor will derive substantial direct and indirect benefits from the Loans made to the Borrower by the Lender pursuant to the Credit Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make Loans to the Borrower pursuant to the Credit Agreement, the Grantor agrees, for the benefit of the Lender, as follows: 2 ARTICLE I DEFINITIONS SECTION 1.1. Certain Terms. The following terms (whether or not underscored) when used in this Security Agreement, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof): "Borrower" is defined in the first recital. "Collateral" is defined in Section 2.1. "Common Stock" has the meaning set forth in the Financing Agreement. "Control Agreement" means an agreement in form and substance satisfactory to the Lender which provides for the Lender to have "control" (as defined in Section 8-106 of the U.C.C.) as such term relates to Securities. "Credit Agreement" is defined in the first recital. "Distributions" means all stock dividends, liquidating dividends, shares of stock resulting from (or in connection with the exercise of) stock splits, reclassifications, warrants, options, non-cash dividends, mergers, consolidations, and all other distributions (whether similar or dissimilar to the foregoing) on or with respect to any Securities constituting Collateral, but shall not include Dividends. "Dividends" means cash dividends and cash distributions with respect to any Securities constituting Collateral made in the ordinary course of business and not a liquidating dividend. "Financing Agreement" shall mean an Equity Line Financing Agreement between the Borrower and the Canadian Imperial Holdings Inc., as Investor, substantially in the form of Exhibit C to the Credit Agreement, as the same may be modified and supplemented and in effect from time to time. "Grantor" and "Grantors" are defined in the preamble. "Lender" is defined in the first recital. "Loan Documents" shall mean the Credit Agreement, this Security Agreement, the Control Agreement and all exhibits and annexes thereto. -2- 3 "Securities" means any obligations of an issuer or any shares, participations, or other interests in an issuer or in property or an enterprise of an issuer which (a) are represented by a certificate representing a security in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of such issuer, (b) are one of a class or series or by its terms is divisible into a class or series of shares, participations, interests or obligations and (c) (i) are, or are of a type, dealt with or traded on securities exchanges or securities markets or (ii) are a medium for investment and by their terms expressly provide that they are a security governed by Article 8 of the U.C.C. "Securities Intermediary" means CIBC World Markets Corp. "Security Agreement" is defined in the preamble. "U.C.C." means the Uniform Commercial Code, as in effect from time to time in the State of New York. SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Security Agreement, including its preamble and recitals, have the meanings provided in the Credit Agreement. SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or in the Credit Agreement or the context otherwise requires, terms for which meanings are provided in the U.C.C. are used in this Security Agreement, including its preamble and recitals, with such meanings. ARTICLE II SECURITY INTEREST SECTION 2.1. Grant of Security. The Grantor hereby assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to the Lender, and hereby grants to the Lender, a security interest in all of the following, whether now or hereafter existing or acquired by the Grantor (the "Collateral"): (a) all ASM Pacific Shares and Additional ASM Pacific Shares described in Schedule I hereto and any Additional ASM Pacific Shares identified in a supplement to this Security Agreement; (b) all Dividends and Distributions with respect to any the Securities described in clause (a) above; -3- 4 (c) cash as may be deposited with the Lender from time to time; and (d) all profits, returns, income and proceeds of and from any and all of the foregoing Collateral (including proceeds which constitute property of the type described in clause (a) above). SECTION 2.2. Treatment of Additional ASM Pacific Shares. The Lender acknowledges and agrees that its ability to take any action with respect to the Additional ASM Pacific Shares under this Security Agreement is subject to the provisions of Section 9.08(a) of the Credit Agreement. To facilitate the provisions of said Section 9.08(a), the Lender will maintain the Initial ASM Pacific Shares and the Additional ASM Pacific Shares in separate securities accounts with the Securities Intermediary. SECTION 2.3. Security for Obligations. This Security Agreement secures the payment of all Guaranteed Obligations under the Credit Agreement. SECTION 2.4. Delivery of Securities. All Collateral comprised of Securities shall be delivered to and held by the Lender or on behalf of the Lender pursuant hereto and to a Control Agreement, shall be in suitable form for transfer by delivery, and shall be accompanied by all necessary instruments of transfer or assignment, duly executed in blank. SECTION 2.5. Dividends on Securities. In the event that any Dividend is to be paid on any Security that constitutes Collateral at a time when no Default or Event of Default has occurred and is continuing or would result therefrom, such Dividend may be paid directly to the Grantor. If any such Default or Event of Default has occurred and is continuing, then any such Dividend shall be paid directly to the Lender for application in accordance with Section 4.01(c) of the Credit Agreement. SECTION 2.6. Continuing Security Interest; Transfer of Notes. This Security Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until indefeasible payment in full in cash of all Guaranteed Obligations and the termination of the Commitment; (b) be binding upon the Grantor, its successors, transferees and assigns; and (c) inure, together with the rights and remedies of the Lender hereunder, to the benefit of the Lender. Without limiting the generality of the foregoing clause (c), the Lender may, subject to Section 11.07 of the Credit Agreement, assign or otherwise transfer (in whole or in part) any -4- 5 Note or Loan held by it to any other Person (other than Persons that compete directly with Lender in one of its principal lines of business), and such other Person shall thereupon become vested with all the rights and benefits in respect thereof granted to such Lender under the Credit Agreement (including this Security Agreement). Upon (i) the sale, transfer or other disposition of Collateral in accordance with this Security Agreement or (ii) the payment in full in accordance with the Credit Agreement of all Guaranteed Obligations and the termination of all Commitments, the security interests granted herein shall automatically terminate with respect to (x) such Collateral (in the case of clause (i)) or (y) all Collateral (in the case of clause (ii)). Upon any such sale, transfer, disposition or termination, the Lender will, at the Grantor's sole expense, deliver to the Grantor, without any representations, warranties or recourse of any kind whatsoever, all applicable certificated and uncertificated Securities, together with all other applicable Collateral held by the Lender hereunder, and execute and deliver to the Grantor such documents as the Grantor shall reasonably request to evidence such termination. SECTION 2.7. Security Interest Absolute. All rights of the Lender and the security interests granted to the Lender hereunder, and all obligations of the Grantor hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of the Credit Agreement, any Note, the Guarantee or any other Loan Document; (b) the failure of the Lender to assert any claim or demand or to enforce any right or remedy against the Borrower, the Guarantor or any other Person under the provisions of the Credit Agreement, any Note or any other Loan Document or otherwise; (c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other extension, compromise or renewal of any Guaranteed Obligations; (d) any reduction, limitation, impairment or termination of any Guaranteed Obligations for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Grantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Guaranteed Obligations or otherwise; (e) any amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the terms of the Credit Agreement, any Note or any other Loan Document; -5- 6 (f) any addition, exchange, release, surrender or non-perfection of any collateral (including the Collateral), or any amendment to or waiver or release of or addition to or consent to departure from any guaranty, for any of the Guaranteed Obligations; or (g) any other circumstances which might otherwise constitute a defense available to, or a legal or equitable discharge of, the Borrower or the Guarantor. SECTION 2.8. Postponement of Subrogation, etc. Until the indefeasible payment in full in cash of all Guaranteed Obligations and the termination of the Commitment, the Grantor hereby agrees that it will not exercise any rights which it may acquire by reason of any payment made hereunder, whether by way of subrogation, reimbursement or otherwise. Any payment of Dividends or Distributions to the Grantor during the existence of a Default or Event of Default shall immediately be paid to the Lender and credited and applied against the Guaranteed Obligations in accordance with this Security Agreement. In furtherance of the foregoing, for so long as any Guaranteed Obligations or Commitment remain in full force and effect, the Grantor shall refrain from taking any action or commencing any proceeding against the Borrower (or its successors or assigns, whether in connection with a bankruptcy proceeding or otherwise) to recover any amounts in respect of payments made under this Security Agreement to the Lender. ARTICLE III REPRESENTATIONS AND WARRANTIES The Grantor represents and warrants to the Lender as follows: SECTION 3.1. As to Securities. (a) The Initial ASM Pacific Shares constitute 33.07% of the total number of outstanding shares of common stock of ASM Pacific. The Additional ASM Pacific Shares constitute 21.81% of the total number of outstanding shares of common stock of ASM Pacific. (b) The Securities included in the Collateral are duly authorized, validly existing, fully paid, and non-assessable, and none of the Securities constituting the Collateral is or will be subject to any contractual restriction, or any restriction under the charter or by-laws of ASM Pacific, on the transfer of such Securities. (c) All of the Securities included in the Collateral are in certificated form and Schedule 1 correctly identifies the class and par value of the Securities included in the Collateral and the respective number of shares evidenced by each certificate identified in said Schedule. -6- 7 (d) The Grantor is the sole beneficial and registered legal owner of all of the Securities included in the Collateral and no Lien exists or will exist upon such Securities at any time (except for Liens under this Security Agreement). SECTION 3.2. Place of Business. The Grantor has no place of business in the United States of America or Canada. SECTION 3.3. Ownership, No Liens, etc. The Grantor owns the Collateral free and clear of any Lien, security interest, charge or encumbrance except for the security interest created by this Security Agreement. No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording office, except such as may have been filed in favor of the Lender relating to this Security Agreement or as to which a duly executed termination statement relating to such financing statement or other instrument has been delivered to the Lender on the Closing Date. SECTION 3.4. Validity, etc. This Security Agreement creates a valid first priority security interest in the Collateral securing the payment of the Secured Obligations, and in the case of Collateral comprised of Securities or instruments, upon the Lender obtaining "control" (as defined in Section 8-106 of the U.C.C., as such term relates to certificated securities) with respect to such Collateral, such security interest will be a valid first priority perfected security interest. SECTION 3.5. Authorization, Approval, etc. Except as have been obtained or made and are in full force and effect (or otherwise provided for to the satisfaction of the Lender), no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required either (a) for the grant by the Grantor of the security interest granted hereby, the pledge by the Grantor of any Collateral pursuant hereto or for the execution, delivery and performance of this Security Agreement by the Grantor, (b) for the perfection of or the exercise by the Lender of its rights and remedies hereunder, or (c) for the exercise by the Lender of the voting or other rights provided for in this Security Agreement, or, except with respect to any Securities issued by a Subsidiary of the Grantor, as may be required in connection with a disposition of such Securities by laws affecting the offering and sale of securities generally, the remedies in respect of the Collateral pursuant to this Security Agreement. SECTION 3.6. Compliance with Laws. The Grantor is in compliance with the requirements of all applicable laws, rules, regulations and orders of every governmental -7- 8 authority, the non-compliance with which could reasonably be expected to have a Material Adverse Effect or which could reasonably be expected to materially adversely affect the value of the Collateral or the worth of the Collateral as collateral security. ARTICLE IV COVENANTS SECTION 4.1. Certain Covenants. The Grantor covenants and agrees that, so long as any portion of the Secured Obligations shall remain unpaid or the Commitment shall remain outstanding, the Grantor will perform, comply with and be bound by the obligations set forth in this Article 4. SECTION 4.2. Stock Powers, etc. The Grantor agrees that all certificated Securities constituting Collateral delivered by the Grantor pursuant to this Security Agreement will be accompanied by duly executed undated blank stock powers, or other equivalent instruments of transfer acceptable to the Lender. The Grantor will, from time to time upon the request of the Lender, promptly deliver to the Lender such stock powers, instruments, and similar documents, satisfactory in form and substance to the Lender, with respect to such Collateral as the Lender may reasonably request and will, from time to time upon the request of the Lender after the occurrence of any Event of Default, promptly transfer any Securities constituting Collateral into the name of any nominee designated by the Lender. SECTION 4.3. Continuous Pledge. The Grantor will, at all times, keep pledged to the Lender pursuant hereto on a first priority perfected basis all Securities constituting Collateral, all Dividends and Distributions with respect thereto, and all other Collateral and other securities, instruments, proceeds, and rights from time to time received by or distributable to the Grantor in respect of any of the foregoing Collateral and will not permit any Subsidiary of the Grantor to issue any Securities which have not been pledged hereunder on a first priority perfected basis. SECTION 4.4. Voting Rights; Dividends, etc. The Grantor agrees: (a) after any Default or any Event of Default shall have occurred and be continuing, promptly upon receipt of notice thereof by the Grantor and without any request therefor by the Lender, to deliver (properly endorsed where required hereby or requested by the Lender) to the Lender all Dividends, Distributions, all interest, all principal, all other cash payments, and all proceeds of the Collateral, all of which shall be held by the Lender as additional Collateral for use in accordance with clause (b) of Section 6.1; and -8- 9 (b) after any Event of Default shall have occurred and be continuing and the Lender has notified the Grantor of the Lender's intention to exercise its voting power under this Section 4.4(b): (i) the Lender may exercise (to the exclusion of the Grantor) the voting power and all other incidental rights of ownership with respect to any Securities and the Grantor hereby grants the Lender an irrevocable proxy, exercisable under such circumstances, to vote such Securities; and (ii) promptly to deliver to the Lender such additional proxies and other documents as may be necessary to allow the Lender to exercise such voting power. All Dividends, Distributions, interest, principal, cash payments, and proceeds which may at any time and from time to time be held by the Grantor but which the Grantor is then obligated to deliver to the Lender, shall, until delivery to the Lender, be held by the Grantor separate and apart from its other property in trust for the Lender. The Lender agrees that unless an Event of Default shall have occurred and be continuing and the Lender shall have given the notice referred to in Section 4.4(b), the Grantor shall have the exclusive voting power with respect to any Securities constituting Collateral and the Lender shall, upon the written request of the Grantor, promptly deliver such proxies and other documents, if any, as shall be reasonably requested by the Grantor which are necessary to allow the Grantor to exercise voting power with respect to any such Securities; provided, however, that no vote shall be cast, or consent, waiver, or ratification given, or action taken by the Grantor that would impair any such Collateral or be inconsistent with or violate any provision of the Credit Agreement or any other Loan Document (including this Security Agreement). SECTION 4.5. Amendment of Constitutive Documents. The Grantor will not amend, supplement or otherwise modify, or permit, consent or suffer to occur any amendment, supplement or modification of any terms or provisions contained in, or applicable to, any constitutive document of any issuer of any Security comprising the Collateral in which it has an equity interest if the effect thereof is to impair, or is in any manner adverse to, the rights or interests of the Lender or any other Senior Secured Party hereunder or under the Credit Agreement or any other Loan Document, without the prior written consent of the Lender. SECTION 4.6. Transfers and Other Liens. The Grantor shall not: (a) sell, assign (by operation of law or otherwise) or otherwise dispose of any of the Collateral; or (b) create or suffer to exist any Lien or other charge or encumbrance upon or with respect to any of the Collateral to secure Indebtedness of any Person or entity, except for -9- 10 the security interest created by this Security Agreement and except as permitted by the Credit Agreement. SECTION 4.7. Further Assurances, etc. The Grantor agrees that, from time to time at its own expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Lender may request, in order to perfect, preserve and protect any security interest granted or purported to be granted hereby or to enable the Lender to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, the Grantor will (a) execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices as may be necessary or desirable, or as the Lender may request, in order to perfect and preserve the security interests and other rights granted or purported to be granted to the Lender hereby; (b) promptly execute and deliver all further instruments, and take all further action, that may be necessary or desirable, or that the Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Lender to exercise and enforce its rights and remedies hereunder with respect to any Collateral; and (c) furnish to the Lender, from time to time at the Lender's request, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Lender may reasonably request, all in reasonable detail. With respect to the foregoing and the grant of the security interest hereunder, the Grantor hereby authorizes the Lender to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of the Grantor where permitted by law. A carbon, photographic or other reproduction of this Security Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law. ARTICLE V THE LENDER SECTION 5.1. Lender Appointed Attorney-in-Fact. The Grantor hereby irrevocably appoints the Lender the Grantor's attorney-in-fact, with full authority in the place and stead of the Grantor and in the name of the Grantor or otherwise, from time to time in the Lender's discretion, following the occurrence and continuation of an Event of Default, to take any action -10- 11 and to execute any instrument which the Lender may deem necessary or advisable to accomplish the purposes of this Security Agreement, including: (a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral; (b) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper, in connection with clause (a) above; (c) to file any claims or take any action or institute any proceedings which the Lender may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Lender with respect to any of the Collateral; and (d) to perform the affirmative obligations of the Grantor hereunder (including all obligations of the Grantor pursuant to Section 4.4). The Grantor hereby acknowledges, consents and agrees that the power of attorney granted pursuant to this Section is irrevocable and coupled with an interest. SECTION 5.2. Lender May Perform. If any Grantor fails to perform any agreement contained herein, the Lender may itself perform, or cause performance of, such agreement, and the expenses of the Lender incurred in connection therewith shall be payable by the Grantor pursuant to Section 6.3. SECTION 5.3. Lender Has No Duty. The powers conferred on the Lender hereunder are solely to protect its interest in the Collateral and shall not impose any duty on it to exercise any such powers. Except for reasonable care of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Lender shall have no duty as to any Collateral or responsibility for: (a) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Securities, whether or not the Lender has or is deemed to have knowledge of such matters, or (b) taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. SECTION 5.4. Reasonable Care. The Lender is required to exercise reasonable care in the custody and preservation of any of the Collateral in its possession; provided, however, the Lender shall be deemed to have exercised reasonable care in the custody and preservation of any of the Collateral, if it takes such action for that purpose as any Grantor reasonably requests in -11- 12 writing at times other than upon the occurrence and during the continuance of any Event of Default, but failure of the Lender to comply with any such request at any time shall not in itself be deemed a failure to exercise reasonable care. ARTICLE VI REMEDIES SECTION 6.1. Certain Remedies. If any Event of Default shall have occurred and be continuing: (a) The Lender may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the U.C.C. (whether or not the U.C.C. applies to the affected Collateral) and also may, without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Lender's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Lender may deem commercially reasonable. The Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days' prior notice to the Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Lender shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Lender may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. (b) All cash proceeds received by the Lender in respect of any sale of, collection from, or other realization upon, all or any part of the Collateral shall be applied by the Lender against, all or any part of the Obligations as follows: (i) first, to the payment of any amounts payable to the Lender pursuant to Section 6.3; (ii) second, to the equal and ratable payment of Guaranteed Obligations, in accordance with Guaranteed Obligations owing to the Lender under or pursuant to the Credit Agreement or any other Loan Document, applied: (A) first to fees and expense reimbursements then due to the Lender, -12- 13 (B) then to interest due to the Lender, (C) then to pay or prepay principal of the Loans owing to the Lender, and (D) then to pay the remaining outstanding Guaranteed Obligations; (iii) third, without duplication of any amounts paid pursuant to clause (b)(ii) above, to the Indemnified Parties to the extent of any amounts owing pursuant to Section 11.04 of the Credit Agreement; and (iv) fourth, to be held as additional collateral security until the payment in full in cash of all of the Guaranteed Obligations and the termination of the Commitment, after which such remaining cash proceeds shall be paid over to the Grantor or to whomsoever may be lawfully entitled to receive such surplus. (c) The Lender may: (i) transfer all or any part of the Collateral into the name of the Lender or its nominee, with or without disclosing that such Collateral is subject to the lien and security interest hereunder, (ii) notify the parties obligated on any of the Collateral to make payment to the Lender of any amount due or to become due thereunder, (iii) enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto, (iv) endorse any checks, drafts, or other writings in the Grantor's name to allow collection of the Collateral, (v) take control of any proceeds of the Collateral, and (vi) execute (in the name, place and stead of the Grantor) endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Collateral. SECTION 6.2. Compliance with Restrictions. The Grantor agrees that in any sale of any of the Collateral whenever an Event of Default shall have occurred and be continuing, the Lender -13- 14 is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications, and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required approval of the sale or of the purchaser by any governmental regulatory authority or official, and the Grantor further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Lender be liable nor accountable to the Grantor for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction. SECTION 6.3. Indemnity and Expenses. (a) The Grantor jointly and severally agrees to indemnify the Lender from and against any and all claims, losses and liabilities arising out of or resulting from this Security Agreement (including enforcement of this Security Agreement), except claims, losses or liabilities resulting from the Lender's gross negligence or wilful misconduct. (b) The Grantor will upon demand pay to the Lender the amount of any and all reasonable expenses, including the reasonable fees and disbursements of its counsel and of any experts and agents, which the Lender may incur in connection with (i) the administration of this Security Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of the Lender or the Lender hereunder, and (iv) the failure by any Grantor to perform or observe any of the provisions hereof. ARTICLE VII MISCELLANEOUS PROVISIONS SECTION 7.1. Loan Document. This Security Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof. -14- 15 SECTION 7.2. Amendments; etc. No amendment to or waiver of any provision of this Security Agreement nor consent to any departure by any Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Lender (on behalf of the Lenders, as the case may be), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 7.3. Protection of Collateral. The Lender may from time to time, at its option, perform any act which the Grantor agrees hereunder to perform and which the Grantor shall fail to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of an Event of Default) and the Lender may from time to time take any other action which the Lender reasonably deems necessary for the maintenance, preservation or protection of any of the Collateral or of its security interest in the Collateral. SECTION 7.4. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to any Grantor, mailed or telecopied or delivered to it, addressed to it in care of the Borrower at the address of the Borrower specified in the Credit Agreement, if to the Lender, mailed or telecopied or delivered to it, addressed to it at the address of the Lender specified in the Credit Agreement. All such notices and other communications, when mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any such notice or communication, if transmitted by telecopier, shall be deemed given when transmitted and electronically confirmed. SECTION 7.5. Section Captions. Section captions used in this Security Agreement are for convenience of reference only, and shall not affect the construction of this Security Agreement. SECTION 7.6. Severability. Wherever possible each provision of this Security Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Security Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Security Agreement. SECTION 7.7. Counterparts. This Security Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed an original and all of which shall constitute together but one and the same agreement. SECTION 7.8. Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT -15- 16 TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE INTERNAL LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO. -16- 17 IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. ADVANCED SEMICONDUCTOR MATERIALS (NETHERLANDS ANTILLES) N.V. as Grantor By__________________________________ Name: Title: CANADIAN IMPERIAL BANK OF COMMERCE, Acting through its New York agency, as Lender By__________________________________ Name: Title: 18 SCHEDULE I to Security Agreement INITIAL ASM PACIFIC SHARES
Certificate Number Date Shares 74300 Oct. 1, 1990 4,750,000 274820 Dec. 5, 1995 10,000,000 274821 Dec. 5, 1995 10,000,000 274822 Dec. 5, 1995 10,000,000 274823 Dec. 5, 1995 10,000,000 274824 Dec. 5, 1995 10,000,000 274825 Dec. 5, 1995 10,000,000 274826 Dec. 5, 1995 10,000,000 274827 Dec. 5, 1995 10,000,000 274828 Dec. 5, 1995 10,000,000 274829 Dec. 5, 1995 10,000,000 274830 Dec. 5, 1995 10,000,000 274831 Dec. 5, 1995 10,000,000 278008 to 278132* May 12, 1998 250,000 Total number of shares 125,000,000
- -------- * Each certificate represents 2,000 shares. 19 SCHEDULE I to Security Agreement Page 2 ADDITIONAL ASM PACIFIC SHARES*
Certificate Number Date Number of Shares 167191 May 1, 1991 1,250,000 199996 Apr. 7, 1992 3,600,000 274819 Dec. 5, 1995 6,500,000 274832 Dec. 5, 1995 10,000,000 274833 Dec. 5, 1995 10,000,000 274834 Dec. 5, 1995 10,000,000 274835 Dec. 5, 1995 10,000,000 274836 Dec. 5, 1995 10,000,000 278133 to 279222** May 12, 1998 2,180,000 Total number of shares 63,530,000
* 18,897,500 Additional ASM Pacific Shares will be indicated in a supplement to this Security Agreement no later than 10 days following the Closing Date. ** Each certificate represents 2,000 shares. -----END PRIVACY-ENHANCED MESSAGE-----