<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
ATMI, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
00 207R 10 1
- --------------------------------------------------------------------------------
(CUSIP Number)
STEPHEN H. SIEGELE
6805 CAPITAL OF TEXAS HIGHWAY, SUITE 330
AUSTIN, TEXAS 78731
(512) 418-8200
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
OCTOBER 10, 1997
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with the statement [X].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Page 1 of __ Pages)
Exhibit Index located on Page __
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 00 207R 10 1 PAGE 2 OF PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Stephen H. Siegele
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
3,741,305
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
3,741,305
WITH ------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,741,305
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS) [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
20.9% as of October 10, 1997
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
- --------------------------------------------------------------------------------
<PAGE> 3
STATEMENT ON SCHEDULE 13D
Item 1. Security and Issuer.
This Schedule 13D relates to the Common Stock, par value $0.01 per
share (the "ATMI Common Stock"), of ATMI, Inc., a Delaware corporation ("ATMI")
The principal executive offices of ATMI are located at 7 Commerce Drive,
Danbury, Connecticut, 06810-4169.
Item 2. Identity and Background.
This statement is being filed by Stephen H. Siegele. Mr. Siegele's
business address is 6805 Capital of Texas Highway, Suite 330, Austin, Texas
78731. Mr. Siegele's principal occupation is serving as Chief Executive Officer
of the Advanced Delivery & Chemical Systems Group, a division of ATMI. The
principal business address of the Advanced Delivery & Chemical Systems Group is
6805 Capital of Texas Highway, Suite 330, Austin, Texas 78731. Mr. Siegele has
not, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors). Mr. Siegele has not,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
Federal or State securities laws or finding any violation with respect to such
laws. Mr. Siegele is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
Mr. Siegele acquired an aggregate of 3,741,305 shares of ATMI Common
Stock (the "Exchange Shares") in exchange (the "Exchange") for his equity
interests in Advanced Delivery & Chemical Systems Nevada, Inc. ("ADCS Nevada"),
Advanced Delivery & Chemical Systems Manager, Inc. ("ADCS Manager") and his
membership interest in Advanced Delivery & Chemical Systems Holdings, LLC, a
Delaware limited liability company ("ADCS Holdings"). The Exchange took place
pursuant to the terms of that certain Agreement and Plan of Merger and Exchange
dated as of April 7, 1997, by and among ATMI and its affiliated entities and
ADCS Nevada, ADCS Manager, ADCS Holdings and their wholly-owned subsidiaries
(collectively, the "ADCS Group"), a copy of which is attached hereto as
Exhibit A (the "Exchange Agreement") and incorporated herein by reference.
The Exchange Shares were acquired by Mr. Siegele under a registration
statement on Form S-4 under the Securities Act of 1933 (the "Securities Act")
in a transaction pursuant to Rule 145 under the Securities Act.
Item 4. Purpose of Transaction.
As described above in Item 3, Mr. Siegele acquired the Exchange Shares
in connection with the Exchange for investment purposes. He will continue to
evaluate his investment in ATMI on the basis of various factors, including
ATMI's business, financial
Page 3 of ___ Pages
<PAGE> 4
condition, results of operation and prospects, general economic and industry
conditions, the securities markets in general and those for ATMI's securities in
particular, as well as his own financial condition, other investment
opportunities and other future developments. Based upon such evaluation, Mr.
Siegele will take such actions in the future as he may deem appropriate in light
of the circumstances existing from time to time. Depending on market and other
factors, Mr. Siegele may determine that he should dispose some or all of the
ATMI Common Stock he owns.
As described above in Item 3, the Exchange Shares were acquired by Mr.
Siegele under a registration statement on Form S-4 pursuant to Rule 145 under
the Securities Act and, therefore, provided that the provisions of Rule 145(d)
under the Securities Act are complied with, the Exchange Shares may be sold,
pledged, conveyed or otherwise transferred without registration or
qualification under the Securities Act or applicable state securities or blue
sky laws, provided further, that Mr. Siegele will be subject to the trading
restrictions of Rule 144 under the Securities Act as an affiliate, including
during such time as Mr. Siegele serves as a member of the Board of Directors of
ATMI. In connection with the Exchange, ATMI granted Mr. Siegele and certain
other former equity holders of the ADCS Group, certain demand and incidental
registration rights pursuant to a Registration Rights Agreement (the
"Registration Rights Agreement"), a copy of which is filed as Exhibit B and
incorporated herein by reference.
Pursuant to the Exchange Agreement, ATMI has agreed to appoint Mr.
Siegele to fill a vacancy on the Board of Directors of ATMI with a term of 3
years. To the extent permitted by applicable law, ATMI has agreed to cause the
Board of Directors to nominate Mr. Siegele or his designee to serve for an
additional 3 year term, provided that the former equity holders of the ADCS
Group own 10% or more of the shares of ATMI Common Stock then outstanding. The
description herein of the Exchange Agreement is qualified in its entirety by
reference to such agreement.
Mr. Siegele and other former equity holders of the ADCS Group entered
into an Indemnification Agreement and an Escrow Agreement with ATMI pursuant to
which 513,095 of the Exchange Shares will be held in escrow as security for Mr.
Siegele's indemnification obligations.
Except as set forth in this Item 4, Mr. Siegele does not have any plan
or proposal with respect to any of the actions specified in clauses (a) through
(j) of Item 4 of Schedule 13D.
Page 4 of __ Pages
<PAGE> 5
Item 5. Interest in Securities of the Issuer.
(a) The following table sets forth information with respect
to ATMI Common Stock beneficially owned by Mr. Siegele as of the close of
business on October 10, 1997. Based on representations made by ATMI's
corporate counsel, the percentage interest is computed on the basis of
17,935,973 shares of ATMI Common Stock outstanding as of October 10, 1997.
Name Number of Shares Approximate Percentage of
- ---- ---------------- Outstanding Shares (1)
-------------------------
Stephen H. Siegele 3,741,305 20.9%
(b) Mr. Siegele has the sole power to vote or direct the
vote and to dispose or to direct the disposition of the Exchange Shares.
(c) Mr. Siegele has not acquired any shares of ATMI Common
stock within the past 60 days, other than the Exchange Shares acquired on
October 10, 1997, as described above in Item 3.
(d) No other person has the right to receive or the power
to direct receipt of dividends from, or the proceeds from the sale of, any of
the Exchange Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Except as set forth herein, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) between
Mr. Siegele and any other person with respect to any securities of ATMI,
including, but not limited to, transfer or voting of any of such securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits or loss, or the giving or withholding of proxies.
As described above in Item 4, in connection with the Exchange,
Mr. Siegele and certain other former equity holders of the ADCS Group entered
into the Registration Rights Agreement. Pursuant to the Registration Rights
Agreement, Mr. Siegele is entitled to certain demand and incidental
registration rights with respect to the Exchange Shares.
As described above in Item 4, ATMI has agreed to appoint Mr.
Siegele to fill a vacancy on the Board of Directors of ATMI with a term of 3
years. To the extent permitted by applicable law, ATMI has agreed to cause the
Board of Directors to nominate Mr. Siegele or his designee to serve for an
additional 3 year term, provided that the former equity holders of the ADCS
Group own 10% or more of the shares of ATMI Common Stock then outstanding.
Page 5 of _____ Pages
<PAGE> 6
As described above in Item 4, Mr. Siegele entered into an Indemnification
Agreement and an Escrow Agreement, pursuant to which 513,095 of the Exchange
Shares will be held in escrow as security for his indemnification obligations.
In addition and as a condition to accounting for the Exchange as a
pooling of interests, Mr. Siegele entered into an Affiliate Letter with ATMI, a
copy of which is attached hereto as Exhibit C (the "Affiliate Letter") and is
incorporated herein by reference, pursuant to which Mr. Siegele has agreed not
to sell, transfer or otherwise dispose of, or in any other way reduce his or
its risk with respect to, the Exchange Shares, until such time as financial
results covering at least 30 days of combined operations of ATMI and the ADCS
Group have been published.
Item 7. Material to be Filed as Exhibits.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
Exhibit A Agreement and Plan of Merger and Exchange, dated as of April 7,
1997, by and among ATMI and its affiliated entities and the ADCS
Group.
Exhibit B Registration Rights Agreement, dated as of October 10, 1997, by
and among ATMI and Stephen H. Siegele and other individuals.
Exhibit C Affiliate Letter, dated as of October 10, 1997, from Stephen H.
Siegele to ATMI.
</TABLE>
Page 6 of __ Pages
<PAGE> 7
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: October __, 1997
/s/ STEPHEN H. SIEGELE
----------------------------------------
Stephen H. Siegele
Page 7 or __ Pages
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
LOCATED ON
SEQUENTIALLY
EXHIBIT DESCRIPTION OF EXHIBIT NUMBERED PAGE
------- ---------------------- -------------
<S> <C> <C>
Exhibit A Agreement and Plan of Merger and Exchange, dated as of April 7,
1997, by and among ATMI and its affiliated entities and the ADCS
Group.
Exhibit B Registration Rights Agreement, dated as of October 10, 1997, by
and among ATMI and Stephen H. Siegele and other individuals.
Exhibit C Affiliate Letter, dated as of October 10, 1997, from Stephen H.
Siegele to ATMI.
</TABLE>
Page 8 of __ Pages
<PAGE> 1
APPENDIX A
AGREEMENT AND PLAN OF MERGER AND EXCHANGE
BY AND AMONG
ADVANCED TECHNOLOGY MATERIALS, INC.
ATMI HOLDINGS, INC.,
ALAMO MERGER, INC.
ADVANCED DELIVERY & CHEMICAL SYSTEMS NEVADA, INC.,
ADVANCED DELIVERY & CHEMICAL SYSTEMS HOLDINGS, LLC,
ADVANCED DELIVERY & CHEMICAL SYSTEMS OPERATING, LLC,
ADVANCED DELIVERY & CHEMICAL SYSTEMS MANAGER, INC.,
AND
ADVANCED DELIVERY & CHEMICAL SYSTEMS, LTD.
DATED AS OF APRIL 7, 1997
A-1
<PAGE> 2
AGREEMENT AND PLAN OF MERGER AND EXCHANGE
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
TABLE OF CONTENTS...................................................... A-2
INDEX OF SCHEDULES AND EXHIBITS........................................ A-6
INDEX OF DEFINED TERMS................................................. A-7
ARTICLE I ATMI PLAN OF MERGER ..................................... A-10
1.1 Surviving Corporation................................... A-10
1.2 Certificate of Incorporation............................ A-10
1.3 By-laws................................................. A-10
1.4 Directors............................................... A-10
1.5 Officers................................................ A-10
1.6 Effective Time of the Merger............................ A-10
1.7 Additional Actions...................................... A-10
1.8 Merger Consideration.................................... A-10
1.9 Conversion of Shares.................................... A-11
1.10 Exchange Agent.......................................... A-11
1.11 Exchange of Certificates................................ A-11
1.12 ATMI Stock Options; Warrants............................ A-12
1.13 Closing of Stock Transfer Books......................... A-12
ARTICLE II EXCHANGE................................................ A-12
2.1 Exchange................................................ A-12
2.2 Additional Actions...................................... A-13
2.3 Exchange Consideration.................................. A-13
2.4 Escrow.................................................. A-14
2.5 Average Closing Price................................... A-14
2.6 Tax Treatment........................................... A-14
2.7 Accounting Treatment.................................... A-14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE ADCS GROUP........ A-14
3.1 Capitalization; Options, Warrants, Rights............... A-14
3.2 Ownership of Interests.................................. A-15
3.3 Organization, Good Standing and Power................... A-15
3.4 Organizational Documents................................ A-16
3.5 Authorizations.......................................... A-16
3.6 ADCS Commitments........................................ A-16
3.7 Restrictions; Burdensome Agreements..................... A-18
3.8 Condition of the Assets................................. A-18
3.9 Title; Absence of Liens and Encumbrances, Etc........... A-19
3.10 Government and Other Consents........................... A-19
3.11 Franchises, Permits, Licenses; Compliance with Applica-
ble Laws and Court Orders............................... A-19
3.12 Financial Statements ................................... A-20
3.13 Absence of Undisclosed Liabilities ..................... A-20
3.14 Absence of Certain Changes.............................. A-20
3.15 Indebtedness............................................ A-21
3.16 Accounts Receivable..................................... A-22
3.17 Supplies................................................ A-22
</TABLE>
A-2
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
3.18 No Prebillings.......................................... A-22
3.19 Taxes................................................... A-22
3.20 Facilities.............................................. A-23
3.21 Insurance............................................... A-23
3.22 Books and Records....................................... A-23
3.23 Employees............................................... A-24
3.24 Employee Benefit Plans.................................. A-24
3.25 Litigation.............................................. A-26
3.26 Proprietary Rights...................................... A-26
3.27 Section 341(f)(2) Consent............................... A-27
3.28 Related Party Transactions.............................. A-27
3.29 Bank Accounts and Safe Deposit Arrangements............. A-28
3.30 Powers of Attorney...................................... A-28
3.31 Environmental Matters; Health and Safety................ A-28
3.32 Customers and Suppliers................................. A-30
3.33 Product and Service Warranties.......................... A-30
3.34 Hart-Scott-Rodino....................................... A-31
3.35 Stock Ownership......................................... A-31
3.36 Finders' Fees........................................... A-31
3.37 Information in Disclosure Documents and Registration
Statement............................................... A-31
3.38 Pooling................................................. A-31
3.39 Atlantic Coast Polymers, Inc............................ A-31
3.40 No Misrepresentation.................................... A-31
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE ATMI GROUP........ A-31
4.1 Capitalization; Options, Warrants, Rights............... A-32
4.2 Organization; Good Standing; Power...................... A-32
4.3 Organizational Documents................................ A-32
4.4 Authorization........................................... A-33
4.5 SEC Compliance.......................................... A-33
4.6 ATMI Commitments........................................ A-33
4.7 Restrictions; Burdensome Agreements..................... A-34
4.8 Condition of the Assets................................. A-34
4.9 Title; Absence of Liens and Encumbrances, Etc........... A-35
4.10 Government and Other Consents........................... A-35
4.11 Franchises, Permits, Licenses; Compliance with Applica-
ble Laws and Court Orders............................... A-35
4.12 Financial Statements.................................... A-35
4.13 Absence of Undisclosed Liabilities...................... A-36
4.14 Absence of Certain Changes.............................. A-36
4.15 Indebtedness............................................ A-37
4.16 Accounts Receivable..................................... A-37
4.17 Supplies................................................ A-37
4.18 No Prebillings.......................................... A-37
4.19 Taxes................................................... A-38
4.20 Employees............................................... A-38
4.21 Employee Benefit Plans.................................. A-39
4.22 Litigation.............................................. A-41
4.23 Proprietary Rights...................................... A-41
4.24 Related Party Transactions.............................. A-42
4.25 Environmental Matters; Health and Safety................ A-42
4.26 Customers and Suppliers................................. A-43
</TABLE>
A-3
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
4.27 Product and Service Warranties.......................... A-44
4.28 No Prior Activities..................................... A-44
4.29 Hart-Scott-Rodino....................................... A-44
4.30 Finders' Fees........................................... A-44
4.31 Information in Disclosure Documents and Registration
Statement............................................... A-44
4.32 Pooling................................................. A-45
4.33 Section 203 of the DGCL................................. A-45
4.34 No Misrepresentation.................................... A-45
ARTICLE V COVENANTS............................................... A-45
5.1 Access to Information................................... A-45
5.2 Interim Operations of ADCS Group........................ A-45
5.3 Interim Operation of ATMI Group......................... A-47
5.4 Notices of Certain Events............................... A-49
5.5 Other Acquisitions by ATMI.............................. A-49
5.6 No Public Disclosure.................................... A-50
5.7 No Negotiation.......................................... A-50
5.8 NovaMOS................................................. A-50
5.9 Election of Directors................................... A-50
5.10 HSR Act................................................. A-50
5.11 Preparation of S-4 and the Proxy Statement.............. A-50
5.12 Best Efforts; Cooperation............................... A-51
5.13 ATMI Stockholder Matters................................ A-51
5.14 Nasdaq Listing.......................................... A-51
5.15 Affiliates.............................................. A-51
5.16 Financial Statements and SEC Reports.................... A-51
5.17 Employee Benefits....................................... A-51
5.18 Tax Matters............................................. A-52
5.19 Supplements to Disclosure Schedules..................... A-52
5.20 Expenses................................................ A-52
5.21 Officer and Director Indemnity.......................... A-52
5.22 Exchange Act Section 16(b).............................. A-53
5.23 Environmental Report.................................... A-53
ARTICLE VI CONDITIONS PRECEDENT TO CLOSING......................... A-54
6.1 Conditions to the Obligations of the ATMI Group......... A-54
6.2 Conditions to the Obligations of the ADCS Group......... A-57
ARTICLE VII CLOSING................................................. A-60
7.1 Closing................................................. A-60
7.2 Simultaneous Closing.................................... A-60
ARTICLE VIII FURTHER ASSURANCES...................................... A-60
ARTICLE IX TERMINATION OF AGREEMENT................................ A-60
9.1 Termination............................................. A-60
9.2 Termination Payment..................................... A-61
9.3 Failure to Deliver Interests............................ A-61
9.4 Effect of Termination................................... A-61
9.5 Breach of Section 5.7................................... A-61
</TABLE>
A-4
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE X MISCELLANEOUS.............................................. A-62
10.1 Right of Set-Off........................................... A-62
10.2 Benefits of this Agreement................................. A-62
10.3 Successors and Assigns..................................... A-62
10.4 Notices.................................................... A-62
10.5 Severability............................................... A-63
10.6 Pooling.................................................... A-63
10.7 Entire Agreement; Amendment................................ A-63
10.8 Waiver..................................................... A-63
10.9 Applicable Law............................................. A-63
10.10 Jurisdiction............................................... A-64
10.11 Counterparts............................................... A-64
10.12 Knowledge ................................................. A-64
</TABLE>
A-5
<PAGE> 6
INDEX OF SCHEDULES AND EXHIBITS
SCHEDULES
<TABLE>
<C> <S>
Schedule A Holders
Schedule 1.4 Directors of Surviving Corporation
Schedule 1.5 Officers of Surviving Corporation
Schedule 2.3(a) Exchange Consideration
ADCS Disclosure Schedule
ATMI Disclosure Schedule
Schedule 5.2 Permitted Pre-Closing Activities of ADCS
Schedule 5.3(p) Permitted Employment Agreements by ATMI
Schedule 5.8 Post-Closing Operations
Schedule 6.2(g) ATMI Assessment Opinion Patents
EXHIBITS
Exhibit A Form of Certificate of Merger
Exhibit B Form of Assignment of Membership Interests
Exhibit C Form of Registration Rights Agreement
Exhibit D-1 Form of Affiliates Agreement of ADCS
Exhibit D-2 Form of Affiliates Agreement of ATMI
Exhibit E Form of Proprietary Information and Inventions
Agreement
Exhibit F Form of Employment Agreements
Exhibit G Form of Escrow Agreement
Exhibit H Form of Indemnification Agreement
Exhibit I Form of Certificate of Holder
Exhibit J Form of Opinion of Counsel to ADCS
Exhibit K Form of Opinion of Patent Counsel to ADCS
Exhibit L Form of Releases
Exhibit M Form of Opinion of Counsel to ATMI
Exhibit N Form of Opinion of Patent Counsel to ATMI (General)
Exhibit O Form of Assessment Opinion of Patent Counsel to ATMI
</TABLE>
A-6
<PAGE> 7
INDEX OF DEFINED TERMS
The following index of defined terms is provided for convenience of reference
only:
<TABLE>
<CAPTION>
TERM LOCATION
---- --------
<C> <S>
ADCS Commitments Section 3.6(a)(i)
ADCS Controlled Group Section 3.24(e)(i)
ADCS Disclosure Schedule Introductory paragraph to Article
III
ADCS Financial Statements Section 3.12
ADCS Group Page A-9
ADCS Group Employee Benefit Plans Section 3.24(a)
ADCS Group Securities Section 3.1
ADCS Group Subsidiaries Section 3.1
ADCS Holdings Page A-9
ADCS LP Page A-9
ADCS Manager Page A-9
ADCS Material Adverse Effect Section 3.3(a)
ADCS Nevada Page A-9
ADCS Operating Page A-9
ADCS Organizational Documents Section 3.4
ADCS Premises Section 3.20
Additional Agreements Introductory paragraph to Article
III
Affiliates Agreements Section 5.15
Agreement Page A-9
ATMI Page A-9
ATMI Commitments Section 4.6(a)(i)
ATMI Common Stock Section 1.8
ATMI Controlled Group Section 4.21(e)(i)
ATMI Disclosure Schedule Introductory paragraph to Article
IV
ATMI Employee Benefit Plans Section 4.21(a)
ATMI Financial Statements Section 4.12
ATMI Group Page A-9
ATMI Group Securities Section 4.1
ATMI Group Subsidiaries Section 4.1
ATMI Identified Proprietary Rights Section 4.23(h)
ATMI Material Adverse Effect Section 4.2(a)
ATMI Organizational Documents Section 4.3
ATMI Premises Section 4.25(b)
ATMI SEC Documents Section 4.5
Average Closing Price Section 2.5
Balance Sheet Date Section 3.12
Burdensome Condition Section 6.1(n)
Capital Stock Recitals
Certificate of Merger Section 1.6
Closing Section 7.1
Closing Date Section 7.1
Code Recitals
Commitments Section 3.6(a)(i)
Coverage Section 5.17
Current ADCS Indemnitee Schedule 5.21
DGCL Section 1.1
Demand Date Section 2.3(b)
</TABLE>
A-7
<PAGE> 8
<TABLE>
<CAPTION>
TERM LOCATION
---- --------
<C> <S>
Effective Time Section 1.6
Employment Agreement Section 6.1(f)(ii)
Environmental Conditions Section 3.31(a)(i)
Environmental Laws Section 3.31(a)(ii)
ERISA Section 3.24(b)
Escrow Agreement Section 6.1(f)(iv)
Exchange Recitals
Exchange Act Section 4.5
Exchange Agent Section 1.10
Exchange Consideration Section 2.3(a)
Hazardous Materials Section 3.31(a)(iii)
Holders Recitals
Holdings Page A-9
Holdings Common Stock Recitals
HSR Act Section 5.10
Indemnification Agreement Section 6.1(f)(v)
Interests Recitals
knowledge Section 10.12
Marks Section 3.26(c)
Material Environmental Condition Section 5.23
Membership Interests Recitals
Merger Recitals
Newco Page A-9
Notice (environmental) Section 3.31(a)(iv)
Organizational Chart Section 3.1
Outstanding ATMI Options Section 1.12
Outstanding ATMI Warrants Section 1.12
PBGC Section 3.24
Permit(s) Section 3.11
Pro Rata Portion Section 2.3(a)
Proposal Section 3.6(a)(ii)
Proprietary Information and Inventions
Agreements Section 6.1(f)(i)
Proprietary Rights Section 3.26(b)
Proxy Statement Section 3.37
Qualified Beneficiaries Section 5.17
Registration Rights Agreement Section 5.3(k)
Release Section 3.31(a)(v)
Reorganization Recitals
Returns Section 3.19(a)
S-4 Section 1.8
SEC Section 1.8
Section 16(b) Liability Section 5.22
Section 16(b) Matter Section 5.22
Securities Section 3.1
Securities Act Section 1.8
Site Remediation Measures Section 3.31(a)(vi)
Successor Welfare Plans Section 5.17
Surviving Corporation Section 1.1
Tax or Taxes Section 3.19(a)
Tax Opinion Section 6.1(j)
</TABLE>
A-8
<PAGE> 9
AGREEMENT AND PLAN OF MERGER
AND EXCHANGE
This AGREEMENT AND PLAN OF MERGER AND EXCHANGE ("Agreement") is made and
entered into as of the 7th day of April, 1997, by and among ADVANCED
TECHNOLOGY MATERIALS, INC., a Delaware corporation ("ATMI"), ATMI HOLDINGS,
INC., a Delaware corporation and wholly-owned subsidiary of ATMI ("Holdings"),
ALAMO MERGER, INC., a Delaware corporation and wholly-owned subsidiary of
Holdings ("Newco"), ADVANCED DELIVERY & CHEMICAL SYSTEMS NEVADA, INC., a
Nevada corporation ("ADCS Nevada"), ADVANCED DELIVERY & CHEMICAL SYSTEMS
MANAGER, INC., a Delaware corporation ("ADCS Manager"), ADVANCED DELIVERY &
CHEMICAL SYSTEMS HOLDINGS, LLC, a Delaware limited liability company ("ADCS
Holdings"), ADVANCED DELIVERY & CHEMICAL SYSTEMS OPERATING, LLC, a Delaware
limited liability company ("ADCS Operating") and ADVANCED DELIVERY & CHEMICAL
SYSTEMS, LTD., a Texas limited partnership ("ADCS LP"). ATMI, Holdings and
Newco are referred to herein as the "ATMI Group." ADCS Nevada, ADCS Manager,
ADCS Holdings, ADCS Operating and ADCS LP are referred to herein as the "ADCS
Group." As used herein, the terms the "ATMI Group" and the "ADCS Group" shall
refer to each member of such group, two or more members of such group, and all
members of such group collectively, unless the context requires otherwise.
W I T N E S S E T H:
This Agreement is made with reference to the following facts.
A. The persons listed on Schedule A hereto (collectively, the "Holders"),
are the record and beneficial owners of (i) all of the issued and outstanding
shares of capital stock of ADCS Nevada and ADCS Manager (the "Capital Stock")
and (ii)together with ADCS Nevada, all of the membership interests in ADCS
Holdings (the "Membership Interests," and together with the Capital Stock, the
"Interests").
B. The ATMI Group desires to acquire the ADCS Group by acquiring all of the
Holders' Interests.
C. The parties desire such transaction to be a tax-free transaction under
the Internal Revenue Code of 1986, as amended (the "Code"), and for such
transaction to be accounted for as a pooling of interests.
D. In order to provide for the tax-free treatment of such transaction and to
account for such transaction as a pooling of interests, the parties have
determined that such transaction must be effected in accordance with Section
351 of the Code, pursuant to which (i) Newco will be merged with and into ATMI
(the "Merger") with the stockholders of ATMI receiving shares in Holdings and
(ii) simultaneously therewith the Holders will transfer their Interests to
Holdings in exchange (the "Exchange" and together with the Merger, the
"Reorganization") for shares of Holdings common stock, par value $.01 per
share ("Holdings Common Stock"), all pursuant to the terms, conditions and
provisions of this Agreement.
E. The Board of Directors of ATMI, deeming it advisable and for the benefit
of its stockholders, has unanimously approved the Reorganization, upon and
subject to the terms, conditions and provisions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations and warranties and mutual covenants herein contained, the
parties hereto agree as follows:
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ARTICLE I
ATMI Plan of Merger
1.1. Surviving Corporation. In accordance with the provisions of this
Agreement and at the Effective Time (as hereinafter defined), Newco shall be
merged with and into ATMI, with ATMI being the surviving corporation in the
Merger (the "Surviving Corporation"). At the Effective Time, the separate
existence of Newco shall cease, and the Surviving Corporation shall continue
its corporate existence under the laws of the State of Delaware. The Merger
shall have the effects set forth in Section 259 of the Delaware General
Corporation Law (the "DGCL"). By virtue of the Merger, the Surviving
Corporation will become a wholly-owned subsidiary of Holdings.
1.2. Certificate of Incorporation. The Certificate of Incorporation of ATMI
as in effect at the Effective Time shall be the Certificate of Incorporation
of the Surviving Corporation until thereafter amended in accordance with its
terms and the DGCL. The authorized number and par value of shares of all
classes of capital stock of ATMI immediately prior to the Effective Time shall
be the authorized number and par value of shares of the classes of capital
stock of the Surviving Corporation from and after the Effective Time.
1.3. By-Laws. The By-Laws of ATMI as in effect at the Effective Time shall
be the By-Laws of the Surviving Corporation until thereafter amended as
provided by law.
1.4. Directors. From and after the Effective Time, the persons listed on
SCHEDULE 1.4 shall be the directors of the Surviving Corporation, all such
directors to hold office until their respective successors are duly elected
and qualified in the manner provided in the Certificate of Incorporation and
By-Laws of the Surviving Corporation, or as otherwise provided by law.
1.5. Officers. From and after the Effective Time, the persons listed on
SCHEDULE 1.5 shall be the officers of the Surviving Corporation, all such
officers to hold office until their respective successors are duly elected and
qualified in the manner provided in the Certificate of Incorporation and By-
Laws of the Surviving Corporation, or as otherwise provided by law.
1.6. Effective Time of the Merger. If all the conditions set forth in
Article VI have been fulfilled or waived in accordance with the terms thereof,
and this Agreement has not been terminated in accordance with Article IX, the
ATMI Group shall cause a Certificate of Merger in the form attached hereto as
Exhibit A (the "Certificate of Merger") to be properly executed and filed on
the Closing Date (as hereinafter defined), with the Secretary of State of the
State of Delaware. The Merger shall become effective upon the filing of an
executed Certificate of Merger and any and all required related certificates
with the Secretary of State of the State of Delaware (the date and time when
the Merger becomes effective is referred to as the "Effective Time").
1.7. Additional Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other acts or things are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, its right, title or interest in or to any of the
rights, properties or assets of Newco or ATMI acquired or to be acquired by
reason of, or as a result of, the Merger, or otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors shall be authorized to execute and deliver, in the name and on
behalf of Newco and ATMI, all such deeds, bills of sale, assignments and
assurances and to do, in the name and on behalf of Newco or ATMI, all such
other acts and things necessary or desirable to vest, perfect or confirm any
and all right, title or interest in, to or under such rights, properties or
assets in the Surviving Corporation or otherwise to carry out the purposes of
this Agreement.
1.8. Merger Consideration. Each share of ATMI common stock, par value $.01
per share ("ATMI Common Stock") issued and outstanding on the Effective Time
shall be converted into the right to receive one (1) validly issued, fully
paid and non-assessable share of Holdings Common Stock, such shares of
Holdings Common Stock to be issued in accordance with the terms of this
Agreement and pursuant to a registration
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statement on Form S-4 (the "S-4") declared effective under the Securities Act
of 1933, as amended (the "Securities Act"), by the Securities and Exchange
Commission (the "SEC").
1.9. Conversion of Shares.
(a) At the Effective Time, each share of ATMI Common Stock issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, automatically
be converted into and represent the right to receive one (1) validly issued,
fully paid and non-assessable share of Holdings Common Stock.
(b) At the Effective Time, each share of ATMI Common Stock held in ATMI's
treasury immediately prior to the Effective Time shall, by virtue of the
Merger, be canceled and returned to the status of authorized but unissued
capital stock of ATMI without payment of any consideration therefor.
(c) At the Effective Time, each share of common stock, par value $.01 per
share, of Newco issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of the
holder thereof, automatically be converted into and represent one (1) validly
issued, fully paid and non-assessable share of common stock, par value $.01
per share, of the Surviving Corporation, as such shares of common stock are
constituted immediately following the Effective Time.
(d) At the Effective Time, each share of common stock, par value $.01 per
share, of Holdings issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of the
holder thereof, automatically be canceled.
1.10. Exchange Agent. Boston EquiServe Limited Partnership, or such other
national or state bank as is selected by Holdings, shall act as the agent for
ATMI stockholders for purposes of mailing and receiving transmittal letters
and distributing consideration to holders of ATMI Common Stock (the "Exchange
Agent").
1.11. Exchange of Certificates.
(a) As promptly as practicable after the Effective Time, the Exchange Agent
shall mail or deliver to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of ATMI Common Stock whose shares were converted into the
right to receive Holdings Common Stock pursuant to Section 1.9 hereof and the
Certificate of Merger, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk, loss and title to such certificates
shall pass, only upon delivery of the certificates to the Exchange Agent and
shall be in such form and have such other provisions as Holdings may
reasonably specify) and (ii) instructions for use in effecting the surrender
of such certificates in exchange for a certificate representing Holdings
Common Stock. Upon surrender of a certificate for cancellation to the Exchange
Agent or to such other agent or agents as may be appointed by Holdings,
together with such letter of transmittal, duly executed, such agent shall
promptly deliver in accordance with the instructions properly contained in
such letter of transmittal a certificate for the number of shares of Holdings
Common Stock to which such holder is entitled pursuant to Section 1.9.
(b) At the Effective Time, each holder of an outstanding certificate or
certificates for shares of ATMI Common Stock shall cease to have any rights as
a stockholder of ATMI. Each such holder of an outstanding certificate or
certificates for shares of ATMI Common Stock converted in the Merger, upon
surrender of each such certificate to the Exchange Agent, shall receive
promptly in exchange for each such certificate the shares of Holdings Common
Stock to which such holder is entitled pursuant to Section 1.9 of this
Agreement. Pending such surrender and exchange, such holder's certificate or
certificates for shares of ATMI Common Stock shall be deemed for all corporate
purposes, by virtue of the Merger and without any action on the part of the
holder thereof, to evidence only the right to receive the shares of Holdings
Common Stock provided for under this Agreement. Unless and until any such
outstanding certificates for shares of ATMI Common Stock shall be so
surrendered, no dividend (cash or stock) payable to holders of record of
shares of Holdings Common Stock as of
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any date subsequent to the Effective Time shall be paid to the holder of any
such outstanding certificate, but upon such surrender of such outstanding
certificate there shall be paid to the record holder of the certificate for
shares of Holdings Common Stock issued in exchange therefor the amount of
dividends, if any, without interest and less any taxes which may have been
imposed thereon, that have theretofore become payable with respect to the
number of those shares of Holdings Common Stock represented by such
certificate issued upon such surrender and exchange.
1.12. ATMI Stock Options; Warrants. At or prior to the Effective Time,
Holdings, ATMI and Newco shall take all action necessary to cause the
assumption by Holdings as of the Effective Time of the options to purchase
ATMI Common Stock outstanding as of the Effective Time (the "Outstanding ATMI
Options") and warrants to purchase ATMI Common Stock outstanding as of the
Effective Time (the "Outstanding ATMI Warrants"). Each of the Outstanding ATMI
Options and the Outstanding ATMI Warrants shall be converted without any
action on the part of the holder thereof into an option or warrant, as the
case may be, to purchase shares of Holdings Common Stock as of the Effective
Time. The holder of an Outstanding ATMI Option or an Outstanding ATMI Warrant
shall be entitled to receive upon the exercise thereof one (1) share of
Holdings Common Stock for each share of ATMI Common Stock subject to such
warrant or option, determined immediately before the Effective Time. The
exercise price of each share of Holdings Common Stock subject to an
Outstanding ATMI Warrant or Outstanding ATMI Option shall be the exercise
price per share of ATMI Common at which such warrant or option is exercisable
immediately before the Effective Time. The assumption and substitution of the
Outstanding ATMI Warrants and Outstanding ATMI Options as provided herein
shall not give the holders of such warrants or options additional benefits
which they did not have immediately prior to the Effective Time or relieve the
holders of any obligations or restrictions applicable to their warrants or
options or the shares obtainable upon exercise of the warrants or options.
Holdings shall (i) reserve out of its authorized but unissued shares of
Holdings Common Stock sufficient shares to provide for the exercise of the
Outstanding ATMI Warrants and Outstanding ATMI Options and (ii) use all
reasonable efforts to register under the Securities Act, coincident with the
Effective Time, those shares of Holdings Common Stock to be issued upon the
exercise of the Outstanding ATMI Options, which registration shall be made on
such form as may be permitted under the Securities Act.
1.13. Closing of Stock Transfer Books. The stock transfer books of ATMI
shall be closed at the close of business on the business day immediately
preceding the Effective Time. In the event of a transfer of ownership of ATMI
Common Stock which is not registered in the transfer records of ATMI, the
shares of Holdings Common Stock and cash for fractional shares (if any) to be
issued in the Merger as provided herein may be delivered to a transferee, if
the certificate representing such ATMI Common Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and by payment of any applicable stock transfer taxes.
ARTICLE II
Exchange
2.1. Exchange. The ADCS Group hereby agrees to use its best efforts to cause
the Holders on the Closing Date and simultaneously with the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware to
tender their Interests in exchange for the number of shares of Holdings Common
Stock determined in accordance with Section 2.3 below. The ADCS Group hereby
further agrees to use its best efforts, exercised in good faith, to cause the
Holders to have present at the Closing the original certificate or
certificates representing all of the issued and outstanding shares of capital
stock of each of ADCS Nevada and ADCS Manager and to cause the Holders and
their spouses, if their signatures be required, to execute and/or deliver (as
appropriate) to Holdings (i) either each of the original share certificates,
duly endorsed for transfer against delivery by Holdings of the Exchange
Consideration (as hereinafter defined) or, as permitted by Section 2.3(c)
below, irrevocable instructions to the Exchange Agent to issue that number of
shares of Holdings Common Stock to each respective Holder as determined
pursuant to Section 2.3 below, with all requisite transfer stamps, if any are
due, attached thereto, (ii) an assignment of the Membership Interests, the
form of which is attached hereto as
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EXHIBIT B, and (iii) all such other deeds, bills of sale, assignments and
assurances which Holdings deems reasonably necessary or desirable to vest,
perfect or confirm any and all right, title or interest in, to or under the
Interests.
2.2. Additional Actions. The ADCS Group hereby agrees to use its best
efforts to cause the Holders and their spouses, if signatures be required, to
execute and deliver at the Closing an agreement to the effect that if at any
time after the Effective Time Holdings shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other acts or things are
necessary or desirable to vest, perfect or confirm, of record or otherwise, in
Holdings, its right, title or interest in or to any of the Holders' Interests
acquired or to be acquired by reason of, or as a result of, the Exchange, or
otherwise to carry out the purposes of this Agreement, the Holders shall
execute and deliver all such deeds, bills of sale, assignments and assurances
and to do all such other acts and things reasonably necessary or desirable to
vest, perfect or confirm any and all right, title or interest in, to or under
the Interests or otherwise to carry out the purposes of this Agreement.
2.3. Exchange Consideration. (a) In exchange for the Interests of the
Holders and subject to the provisions of Section 2.3(b) below, at the Closing
Holdings will issue to the Holders the aggregate number of shares of Holdings
Common Stock (rounded up to the nearest whole number of shares) determined by
dividing Eighty-Seven Million Five Hundred Thousand Dollars ($87,500,000) by
the Average Closing Price (as hereinafter defined) of ATMI Common Stock (the
"Exchange Consideration"). The Exchange Consideration shall be deemed to be
allocated to each Holder as consideration for the exchange of the Holder's
Interests in the various ADCS Group entities, as set forth on SCHEDULE 2.3(a),
according to the Holders' relative pro rata ownership percentage of the
Interests in such ADCS Group entity, determined by the amount which each
Holder's respective ownership bears to the aggregate ownership of all of the
Holders in such entity. The pro rata portion of the aggregate Exchange
Consideration allocated to each Holder is referred to herein as the "Pro Rata
Portion."
(b) In the event that the combined book value of the ADCS Group and the ADCS
Group Subsidiaries (as hereinafter defined) determined as of the Closing Date
in accordance with generally accepted accounting principles is less than
$10,000,000 by an amount greater than $500,000, the number of shares of
Holdings Common Stock to be issued in accordance with Section 2.3(a) above
shall be decreased by a number of shares equal to (1) $10,000,000 less (2) the
book value as of Closing, divided by the Average Closing Price, and the
Holders shall, in the manner provided below and in the Escrow Agreement (as
hereinafter defined) return any excess shares of Holdings Common Stock to
Holdings. The shares of Holdings Common Stock delivered into escrow pursuant
to the Escrow Agreement (as hereinafter defined) shall stand as security for
the Holders' obligations under this Section 2.3(b). The determination of book
value will be made by Holdings no later than ninety (90) days after the
Closing Date, and written notice thereof shall be provided to the Holders and
the escrow agent under the Escrow Agreement. Such written notice shall
indicate a date (the "Demand Date"), no earlier than ten (10) business days
after the date on which such notice is received, on or after which Holdings
may make demand upon the escrow agent for such excess shares. If Holders
owning seventy percent (70%) or more of the Exchange Consideration notify
Holdings and the escrow agent in writing prior to the Demand Date that they do
not agree with such book value, the Demand Date will be postponed and such
Holders and Holdings will attempt to agree on the book value within sixty (60)
days after Holdings' determination thereof. If such Holders and Holdings are
unable to agree, then Ernst & Young LLP or such other nationally recognized
accounting firm acceptable to Holdings and the Holders owning seventy percent
(70%) or more of the Exchange Consideration shall make such determination
which shall be final and binding on all parties. The escrow agent is
authorized to rely without investigation and to release to Holdings the excess
shares upon (i) a demand made by Holdings after the Demand Date if Holders
owning seventy percent (70%) or more of the Exchange Consideration have not
notified the escrow agent in writing of an objection prior to the Demand Date,
(ii) a written determination from Ernst & Young LLP or such other nationally
recognized accounting firm, or (iii) any writing signed by Holdings and the
Holders owning seventy percent (70%) or more of the Exchange Consideration
(each of (i), (ii) and (iii) shall constitute an Adjustment Notice for
purposes of Section 4(b) of the Escrow Agreement).
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(c) The Exchange Consideration, the amount and calculation of which shall be
set forth on a certificate executed by each of the parties at the Closing,
will be allocated among the Holders according to their respective Pro Rata
Portions. Share certificates evidencing the Exchange Consideration shall be
delivered to the Holders at the Closing, if at all practicable; and if not,
then irrevocable instructions regarding the issuance of the Exchange
Consideration to each of the Holders shall be delivered to the Exchange Agent
at Closing with the certificates representing the Exchange Consideration to be
delivered as soon as practicable thereafter. No fractional shares of Holdings
Common Stock shall be issuable by Holdings to any Holder in connection with
the Exchange. In lieu of any such fractional shares, each Holder who would
otherwise have been entitled to receive a fraction of a share of Holdings
Common Stock shall be entitled to receive instead an amount in cash equal to
such fraction multiplied by the Average Closing Price.
2.4. Escrow. At the Effective Time, Holdings shall deliver to the escrow
agent or any successor escrow agent appointed pursuant to the Escrow
Agreement, certificates evidencing 750,000 shares of the Exchange
Consideration, such shares to be allocated among the Holders in accordance
with their respective Pro Rata Portions and to be held and applied in
accordance with the Indemnification Agreement and the Escrow Agreement.
Subject to the restrictions set forth in Section 5.3, if between the date
hereof and the Effective Time, the issued and outstanding shares of ATMI
Common Stock shall have been combined, split, reclassified or otherwise
changed into a different number of shares or a different class of shares, an
appropriate adjustment to the number of shares of Holdings Common Stock to be
delivered into escrow shall be made.
2.5. Average Closing Price. The term "Average Closing Price" shall mean the
average closing price of ATMI Common Stock on The Nasdaq National Market for
the twenty (20) trading days ended five (5) days prior to the date of ATMI's
meeting of stockholders to approve the Merger; provided that (i) in the event
that the Average Closing Price is greater than $16 per share, the Average
Closing Price shall be deemed to be $16 per share; and (ii) in the event that
the Average Closing Price is less than $14 per share, the Average Closing
Price shall be deemed to be $14 per share.
2.6. Tax Treatment. The parties intend and expect that (i) the Merger will
qualify as a reorganization within the meaning of Section 368 of the Code in a
transaction which is described in Section 351 of the Code, and (ii) that, as a
result of the simultaneous closing of the Merger and Exchange, the Holders
will be treated as having exchanged their Interests in a transaction which is
described in Section 351 of the Code.
2.7. Accounting Treatment. The parties intend and expect that the
Reorganization shall be accounted for as a pooling of interests.
ARTICLE III
Representations and Warranties of
the ADCS Group
The ADCS Group hereby jointly and severally represent and warrant to the
ATMI Group that, except as set forth in the ADCS DISCLOSURE SCHEDULE attached
hereto (which ADCS Disclosure Schedule makes explicit reference to the
particular subsection as to which exception is taken, which in each case shall
constitute the sole subsection as to which such exception shall apply, and the
statements in such ADCS Disclosure Schedule shall be deemed to be
representations and warranties), as supplemented pursuant to Section 5.19, and
acknowledge and confirm that the ATMI Group is relying upon such
representations and warranties in connection with the execution, delivery and
performance of this Agreement and the Additional Agreements to which the ATMI
Group is a party described in Section 6.1(f) below (the "Additional
Agreements") and the completion of the Reorganization, notwithstanding any
investigation made by the ATMI Group or on its behalf:
3.1. Capitalization; Options, Warrants, Rights. SCHEDULE 3.1 sets forth the
aggregate number of all of the shares of any class of stock, other securities
or other ownership interests (such types of securities are herein referred to
collectively as "Securities"), including the Capital Stock and the Membership
Interests, which the
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ADCS Group and each ADCS Group Subsidiary (as hereinafter defined) are
authorized to issue (the "ADCS Group Securities"), the aggregate number of all
of the ADCS Group Securities issued and outstanding and the record and
beneficial owners of all of the issued and outstanding ADCS Group Securities.
All Securities of the ADCS Group have been validly authorized and issued and
are fully paid and non-assessable, and have not been issued in violation of
any preemptive, first refusal or other subscription rights of any holder of
any ADCS Group Securities or any other person, and have been issued in
compliance with applicable foreign, federal and state securities laws. The
Capital Stock constitutes all of the issued and outstanding shares of capital
stock of ADCS Nevada and ADCS Manager. Except as set forth on SCHEDULE 3.1,
the Membership Interests constitute all of the membership interests of ADCS
Holdings. With respect to the ADCS Group and each ADCS Group Subsidiary, there
are no outstanding or existing (i) proxies, voting trusts, or other agreements
or understandings with respect to the voting of the ADCS Group Securities,
(ii) ADCS Group Securities convertible into or exchangeable for other ADCS
Group Securities, (iii) options, warrants or other rights to purchase or
subscribe for ADCS Group Securities (other than this Agreement) or ADCS Group
Securities convertible into or exchangeable for other ADCS Group Securities,
or (iv) agreements of any kind relating to the issuance or purchase of ADCS
Group Securities or ADCS Group Securities convertible into or exchangeable for
other ADCS Group Securities. No member of the ADCS Group holds or owns,
directly or indirectly, any Securities of any other corporation, or has any
direct or indirect equity or ownership interest in any association,
partnership, joint venture or other entity other than (i) through mutual funds
or other similar investment vehicles over which no investment discretion is
retained, (ii) publicly-traded Securities having a market value of $25,000 or
less per issuer, (iii) ADCS Group Securities and (iv) as identified on
SCHEDULE 3.1 (each corporation, association, partnership, joint venture or
other entity in which any member of the ADCS Group owns, directly or
indirectly, twenty percent (20%) or more of the issued and outstanding
Securities are referred to herein as the "ADCS Group Subsidiaries"). A true
and correct organizational chart for the ADCS Group and the ADCS Group
Subsidiaries, indicating ownership interests, is attached hereto as part of
SCHEDULE 3.1 (the "Organizational Chart").
3.2. Ownership of Interests. (a) A current list of the record holders of the
Capital Stock and the Membership Interests is set forth on SCHEDULE 3.1. Each
of such record holders is the record and beneficial owner of the number of
ADCS Group Securities shown on SCHEDULE 3.1, and such ADCS Group Securities
are, to the ADCS Group's knowledge, free and clear of all liens, pledges,
security interests, charges, claims and other encumbrances, and will be so
free and clear as of the Closing.
(b) Each of the ADCS Group is the record and beneficial owner of the number
of ADCS Group Securities shown on the Organizational Chart, free and clear of
all liens, pledges, security interests, charges, claims and other
encumbrances.
3.3. Organization, Good Standing and Power. (a) Each member of the ADCS
Group, each ADCS Group Subsidiary and each Holder which is an entity is a
corporation, limited partnership or limited liability company, as the case may
be, duly organized, validly existing and in good standing under the laws of
its state or country of organization, is authorized to do business as a
foreign corporation, foreign limited partnership or foreign limited liability
company, as the case may be, in the jurisdictions set forth on SCHEDULE 3.3
and is not required to be authorized to do business as a foreign corporation,
foreign limited partnership or foreign limited liability company, as the case
may be, in any other jurisdiction (within or without the United States) by
reason of the nature of the business now being conducted by it or the
properties owned or leased or operated by it in which the failure to be so
qualified would have a material adverse effect on the assets, liabilities,
results of operations, financial condition or business of the ADCS Group and
the ADCS Group Subsidiaries taken as a whole (an "ADCS Material Adverse
Effect").
(b) The ADCS Group, each ADCS Group Subsidiary and each Holder which is an
entity have the requisite power, corporate or otherwise, to own, lease and
operate its properties and carry on its business as it is now being conducted
by it, and has the power and authority, corporate or otherwise, to execute,
deliver and perform this Agreement and the Additional Agreements to which it
is a party and consummate the transactions contemplated hereby and thereby.
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(c) The ADCS Group and each ADCS Group Subsidiary conducts its business
under the trade names and other assumed names set forth on Schedule 3.3.
3.4. Organizational Documents. With respect to the ADCS Group, each ADCS
Group Subsidiary and each Holder which is an entity, the ADCS Group has
heretofore made available to the ATMI Group a complete and correct copy of (i)
each corporation's Certificate or Articles of Incorporation, as amended to
date, (ii) each corporation's By-Laws, as amended to date, (iii) each limited
liability company's Articles of Organization or similar instrument, as amended
to date, (iv) each limited liability company's Operating Agreement or similar
agreement, as amended to date, and (v) each limited partnership's certificate
of limited partnership and Limited Partnership Agreement, each as amended to
date (items (i) through (v) being referred to herein as the "ADCS
Organizational Documents"). Each of the foregoing are in full force and
effect, and none of the ADCS Group, any ADCS Group Subsidiary, any Holder or
to the ADCS Group's knowledge, any other party to the ADCS Organizational
Documents, is in violation of any of the provisions thereof. There are no
proceedings for the amendment or modification of or any other change in the
ADCS Organizational Documents. There are no proceedings for the dissolution or
liquidation of the ADCS Group, any ADCS Group Subsidiary or any Holder which
is an entity or, to its knowledge, threatening the existence of the ADCS
Group, any ADCS Group Subsidiary or any Holder which is an entity. The ADCS
Group has made available to the ATMI Group the minute books and stock records
of each member of the ADCS Group and each ADCS Group Subsidiary.
3.5. Authorizations. The ADCS Group has taken all action, corporate or
otherwise, necessary to authorize the execution, delivery and performance of
this Agreement and, as applicable, the Additional Agreements to which it is a
party. Such execution, delivery and performance and the other transactions
contemplated hereby do not and will not violate, result in any default,
acceleration or loss of any material benefit under, permit any third party to
rescind any term or provision of, or conflict with any terms of, the ADCS
Organizational Documents, any law, lien, order, award, judgment, decree,
Permit (as hereinafter defined), or any material agreements or contracts to
which the ADCS Group, any ADCS Group Subsidiary or any Holder is a party or is
subject or by which the ADCS Group, any ADCS Group Subsidiary or any Holder or
their assets is bound or result in the creation of any lien, charge or
encumbrance upon any of the assets, real, personal or mixed, tangible or
intangible, of the ADCS Group, any ADCS Group Subsidiary or any Holder or upon
the Interests. Each of this Agreement and the Additional Agreements to which
the ADCS Group is a party when executed will constitute its legal, valid and
binding obligation, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent transfer and other
similar laws affecting the enforceability of creditors' rights generally.
3.6. ADCS Commitments.
(a) Definitions. The following definitions shall apply for purposes of this
Section 3.6:
(i) "ADCS Commitments" means all of the current written or oral leases,
agreements, contracts, instruments, indentures, notes and other documents
("Commitments") to which the ADCS Group or any ADCS Group Subsidiary is a
party other than the ADCS Group Employee Benefit Plans (as hereinafter
defined). Not included in the definition of ADCS Commitments are
discussions, negotiations or Proposals (as defined below) between ADCS
Group representatives and third parties.
(ii) "Proposal" means all of the current written offers, quotes or
proposals presented by the ADCS Group or any ADCS Group Subsidiary, which
written offer, quote, or proposal has not yet: (1) expired, (2) been
rejected, or (3) resulted in the execution of an ADCS Commitment.
(b) Schedule of ADCS Commitments and Proposals. SCHEDULE 3.6 hereto sets
forth a list of the following:
(i) any ADCS Commitments creating or evidencing rights to purchase ADCS
Group Securities;
(ii) any ADCS Commitments among stockholders, members, partners, or other
persons or entities holding ADCS Group Securities with respect to such ADCS
Group Securities;
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(iii) any ADCS Commitments, not including purchase orders placed by any
member of the ADCS Group, creating or evidencing indebtedness in excess of
$50,000.00 for money borrowed by the ADCS Group or any ADCS Group
Subsidiary;
(iv) any ADCS Commitments mortgaging, pledging, granting, or creating a
lien or security interest or other encumbrance on any real or personal
property of the ADCS Group or any ADCS Group Subsidiary;
(v) any ADCS Commitments creating or evidencing any guaranty by the ADCS
Group or any ADCS Group Subsidiary of payment or performance by any other
party involving in excess of $50,000.00;
(vi) any ADCS Commitments pursuant to which the ADCS Group or any ADCS
Group Subsidiary reasonably expects to receive aggregate payments in excess
of $250,000 in calendar year 1997;
(vii) any ADCS Commitments with any dealer, sales representative, broker
or other distributor, jobber, advertiser or sales agency;
(viii) any ADCS Commitments involving an obligation to pay in excess of
$100,000.00 to or from the ADCS Group or any ADCS Group Subsidiary for the
furnishing or purchase of machinery, equipment, goods or services;
(ix) any ADCS Commitments (including private placement brochures)
relating to the future sale or repurchase of ADCS Group Securities;
(x) any ADCS Commitments to register under the Securities Act any ADCS
Group Securities;
(xi) any ADCS Commitments involving a sharing of profits or expenses,
including, but not limited to, any joint venture agreements;
(xii) any ADCS Commitments limiting the freedom of the ADCS Group or any
ADCS Group Subsidiary to engage in any line of business;
(xiii) any ADCS Commitments limiting the freedom of the ADCS Group or any
ADCS Group Subsidiary to operate in any geographic area;
(xiv) any ADCS Commitments limiting the freedom of the ADCS Group or any
ADCS Group Subsidiary to compete with any party;
(xv) any ADCS Commitments limiting the freedom of the ADCS Group or any
ADCS Group Subsidiary to disclose or use any information material to the
operation of the business of the ADCS Group or any ADCS Group Subsidiary;
(xvi) any collective bargaining agreements;
(xvii) any ADCS Commitments containing any unpaid severance liabilities
or obligations involving in excess of $5,000.00;
(xviii) any fidelity or surety bond or completion bond involving in
excess of $10,000.00;
(xix) any ADCS Commitments relating to capital expenditures involving
future obligations in excess of $100,000.00;
(xx) any ADCS Commitments for construction of physical facilities
involving in excess of $100,000.00;
(xxi) any ADCS Commitments providing for disposition of any line of
business, material assets or ADCS Group Securities;
(xxii) any ADCS Commitments providing for acquisition of any line of
business, material assets or Securities of any other business, which
Securities have a fair market value in excess of $50,000;
(xxiii) any ADCS Commitments providing for merger or consolidation
(including letters of intent) with any other business;
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(xxiv) any ADCS Commitments pertaining to maintenance or support of
products, services or supplies; and
(xxv) any Proposals to enter into any future ADCS Commitments which, if
currently in effect would be described under this Section 3.6(b)(i),
(b)(ii), (b)(ix), (b)(xi), (b)(xii), (b)(xiii), (b)(xiv), (b)(xxi),
(b)(xxii) or (b)(xxiii) as an ADCS Commitment or which involve transactions
not in the ordinary course of business.
(c) The ADCS Group and each ADCS Group Subsidiary have complied in all
material respects with and are not in material default under any of the ADCS
Commitments.
(d) Neither the ADCS Group nor any ADCS Group Subsidiary has granted or been
granted any waiver or forbearance with respect to any ADCS Commitment with any
customer or with any lender that in either case is in excess of $50,000.00.
(e) Neither the ADCS Group nor any ADCS Group Subsidiary has granted or been
granted any waiver or forbearance with respect to any ADCS Commitments to
provide goods or services to customers that produced aggregate payments in the
year ending December 31, 1996 of at least $250,000.00 to the ADCS Group or any
ADCS Group Subsidiary.
(f) The ADCS Commitments listed on Schedule 3.6 are valid and are in full
force and effect as to the ADCS Group or an ADCS Group Subsidiary, as the case
may be (and, to the knowledge of the ADCS Group, the other parties thereto).
(g) Except as otherwise noted and reserved against in the ADCS Financial
Statements (as hereinafter defined), none of the ADCS Commitments listed on
Schedule 3.6 could reasonably be expected to result in the successful
assertion or claim of any material liability against the ADCS Group or any
ADCS Group Subsidiary in excess of that anticipated by the ADCS Commitment.
(h) To the ADCS Group's knowledge, no event has occurred, or could
reasonably be expected to occur, that (after notice and lapse of time, or
both) would become a breach or default under any ADCS Commitment (other than
termination as the result of the expiration, absent a default, of the term of
the ADCS Commitment).
(i) True copies of all written ADCS Commitments and reasonably accurate
descriptions of all oral ADCS Commitments, including any amendments thereto
and modifications thereof, have been made available to the ATMI Group.
3.7. Restrictions; Burdensome Agreements. None of the ADCS Group, any ADCS
Group Subsidiary or any Holder is a party to any contract, commitment or
agreement (including the ADCS Commitments), and none of the ADCS Group, any
ADCS Group Subsidiary or any Holder or any of their respective properties and
assets is subject to or bound or affected by any charter, by-law, operating
agreement, limited partnership agreement, or other organizational restriction,
or any order, judgment, decree, law, statute, ordinance, rule, regulation,
Permit or other restriction of any kind or character, which would (i) prevent
the ADCS Group from entering into this Agreement and the Additional Agreements
to which it is a party or prevent the ADCS Group or any Holder from
consummating the transactions contemplated hereby and thereby, or (ii) have an
ADCS Material Adverse Effect and has not been disclosed in a Schedule hereto.
3.8. Condition of the Assets. Except as would not have an ADCS Material
Adverse Effect, the tangible assets of the ADCS Group and each ADCS Group
Subsidiary, including real, personal and mixed, material to the operation of
its business are in good condition and repair, ordinary wear and tear
excepted, and suitable for the uses intended. The assets of the ADCS Group and
each ADCS Group Subsidiary are operated in conformity in all material respects
with all applicable laws, ordinances, regulations, orders, Permits and other
requirements relating thereto adopted or currently in effect. Schedule 3.8
sets forth a list of each asset (other than intangible assets listed on
Schedule 3.26 and other than as set forth on Schedule 3.20) having a book
value in excess of $50,000, indicating whether each such asset is owned or
leased by the ADCS Group or any ADCS Group
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Subsidiary, and setting forth where each such asset is located. Since the
Balance Sheet Date (as hereinafter defined), neither the ADCS Group nor any
ADCS Group Subsidiary has, except in the ordinary course of business, acquired
or sold or otherwise disposed of any of its assets. Schedule 3.8 also includes
a list of each lease under which the ADCS Group or any ADCS Group Subsidiary
leases an asset (other than leased real property) having replacement cost of
$50,000 or more. The leases and other agreements or instruments under which
the ADCS Group or any ADCS Group Subsidiary holds, leases, subleases or is
entitled to the use of any of the assets having a replacement cost of $50,000
or more are in full force and effect, and all rentals, royalties or other
payments payable thereunder have been duly paid or provided for by adequate
reserves. No default or event of default by the ADCS Group or any ADCS Group
Subsidiary exists, and no event which, with notice or lapse of time or both,
would constitute a default by the ADCS Group or any ADCS Group Subsidiary, has
occurred and is continuing, under terms or provisions, express or implied, of
any lease, agreement or other instrument or under the terms or provisions of
any agreement to which any of its assets is subject which leases, agreements
or other instruments individually or in the aggregate involve assets having a
book value of $50,000 or more, nor has the ADCS Group or any ADCS Group
Subsidiary received notice of any claim of such default.
3.9. Title; Absence of Liens and Encumbrances, Etc. Each member of the ADCS
Group and each ADCS Group Subsidiary has good, valid, and marketable title to
its assets, free and clear of all mortgages, security interests, claims,
liens, charges, title defects, encumbrances, restrictions on use or transfer
or other defects. Except for Securities representing an interest in a member
of the ADCS Group or an ADCS Group Subsidiary and except as set forth on
Schedule 3.9 hereto, ADCS LP has good, valid and marketable title to all of
the tangible assets owned by the ADCS Group.
3.10. Government and Other Consents. No consent, authorization or approval
of, exemption by, or filing with any governmental, public or self-regulatory
body or authority or other party is required in connection with the execution,
delivery and performance by the ADCS Group of this Agreement, the Additional
Agreements to which it is a party or any of the instruments or agreements
required to be executed and delivered pursuant to this Agreement or any
Additional Agreement, or the consummation of the Exchange, except under any
applicable federal and state securities laws and the HSR Act (as hereinafter
defined).
3.11. Franchises, Permits, Licenses; Compliance with Applicable Laws and
Court Orders. Except for intellectual property matters covered by Section
3.26, the ADCS Group and each ADCS Group Subsidiary have all requisite
franchises, permits, licenses, authorizations, variances, orders and approvals
of governmental or administrative authorities (each a "Permit" and together
the "Permits") necessary to own, lease or operate its properties or necessary
for the conduct of its business as currently conducted, other than those the
absence of which would not result in an ADCS Material Adverse Effect. All such
Permits are in full force and effect, and there is no condition, nor has any
event occurred, which constitutes or with the giving of notice, or passage of
time, or both, would constitute a violation of the terms of any Permit, and to
the knowledge of the ADCS Group, no suspension or cancellation of any of them
is pending or threatened. Neither the execution of this Agreement or the
Additional Agreements to which any of the ADCS Group is a party nor the
consummation of the transactions contemplated hereby or thereby would
constitute a violation of the terms of any such Permit or grounds for the
termination of any such Permit. Schedule 3.11 contains a complete list of all
such Permits and any outstanding applications for Permits to which the ADCS
Group or any ADCS Group Subsidiary is a party. No application for a Permit
filed by or on behalf of the ADCS Group or any ADCS Group Subsidiary, or in
connection with a facility operated by the ADCS Group or any ADCS Group
Subsidiary, within the last five (5) years has been denied, other than the
denial of Permits which individually or in the aggregate did not or does not
have an ADCS Material Adverse Effect. The ADCS Group and each ADCS Group
Subsidiary have, in the operation of its business, duly complied with all
applicable laws, rules, regulations, Permits and orders of federal, state,
local and foreign governments, except where the failure to comply did not or
does not have an ADCS Material Adverse Effect. Neither the ADCS Group nor any
ADCS Group Subsidiary is in default, and no event has occurred that with
notice or the passage of time or both would constitute such a default, with
respect to any order, judgment, writ, injunction, decree, award, Permit, rule
or regulation of any court, governmental or regulatory body or arbitrator
which restrains or limits in any material respect the operation of the
business of, or
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the use of the assets of, the ADCS Group and ADCS Group Subsidiaries taken as
a whole. To the knowledge of the ADCS Group, no officer, director, member or
partner of the ADCS Group would be unable to give the representation that none
of the events or circumstances described in Rule 262 of Regulation A under the
Securities Act have occurred.
3.12. Financial Statements. The ADCS Group has made available to the ATMI
Group financial information respecting the ADCS Group, a copy of which is
annexed hereto as Schedule 3.12, as follows: (i) audited consolidated balance
sheet at March 31, 1996 and audited combined balance sheet at December 31,
1996, and (ii) audited consolidated financial statements of the ADCS Group for
the year ended March 31, 1996, and audited combined financial statements for
the nine (9) months ended December 31, 1996 (the "Balance Sheet Date") (the
financial statements referred to in clauses (i) and (ii) collectively called
the "ADCS Financial Statements"). The ADCS Financial Statements fairly present
the financial position and results of operations of the ADCS Group for the
periods then ended and the financial position of the ADCS Group at the dates
thereof in accordance with generally accepted accounting principles (subject
to normal year-end adjustments for unaudited interim financial statements, if
any). The ADCS Group and each ADCS Group Subsidiary has maintained its books
of account in accordance with applicable laws, rules and regulations of
government authorities and with generally accepted accounting principles
consistently applied, and such books of account are and, during the period
covered by the ADCS Financial Statements were, correct and complete in all
material respects, fairly and accurately reflect or reflected the income,
expenses, assets and liabilities of the ADCS Group, including the nature
thereof and the transactions giving rise thereto, and provide or provided a
fair and accurate basis for the preparation of the ADCS Financial Statements.
3.13. Absence of Undisclosed Liabilities. Neither the ADCS Group nor any
ADCS Group Subsidiary has any liabilities or obligations, either absolute,
accrued, contingent or otherwise, which individually or in the aggregate would
have an ADCS Material Adverse Effect, and which (i) have not been reflected in
the ADCS Financial Statements, (ii) have not been described in this Agreement
or in any of the Schedules hereto, or (iii) have been incurred since the
Balance Sheet Date other than in the ordinary course of its business
consistent with past practices.
3.14. Absence of Certain Changes. Since the Balance Sheet Date there has not
been, except as described in Schedule 3.14 hereto:
(a) any material adverse change in the business, financial condition, assets
or liabilities, results of operations, or prospects of the ADCS Group and the
ADCS Group Subsidiaries taken as a whole other than changes in the ordinary
course of business, which changes have not in the aggregate been, and do not,
to the ADCS Group's knowledge, threaten to become, materially adverse to the
business, financial condition, assets or liabilities, results of operations,
or prospects of the ADCS Group and the ADCS Group Subsidiaries taken as a
whole;
(b) any damage, destruction or loss in excess of $25,000 (whether or not
covered by insurance) adversely affecting any of the assets or business of the
ADCS Group or any ADCS Group Subsidiary;
(c) any ADCS Commitment or liability undertaken or incurred by the ADCS
Group or any ADCS Group Subsidiary (whether absolute, accrued, contingent or
otherwise and whether due or to become due), or any transaction entered into
by the ADCS Group or any ADCS Group Subsidiary which is material to the ADCS
Group and the ADCS Group Subsidiaries taken as a whole, other than items
incurred or entered into in the ordinary course of business and consistent
with past practices of the ADCS Group or any ADCS Group Subsidiary;
(d) any payment, discharge or satisfaction of any claim, lien, encumbrance
or liability of the ADCS Group or any ADCS Group Subsidiary outside the
ordinary course of business in excess of $5,000 individually or $50,000 in the
aggregate;
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(e) any sale, transfer, conveyance, assignment, lease, license, pledge,
mortgage or other disposition or encumbrance by the ADCS Group or any ADCS
Group Subsidiary of any asset of the ADCS Group or any ADCS Group Subsidiary
having a value more than $20,000 individually or $50,000 in the aggregate,
except in the ordinary course of business and consistent with past practices
of the ADCS Group or any ADCS Group Subsidiary;
(f) any modification, amendment, cancellation, termination, revocation,
rescission, or waiver of any rights with value to the ADCS Group or any ADCS
Group Subsidiary in excess of $20,000 pursuant to any ADCS Commitments;
(g) any material change in the accounting methods or practices followed by
the ADCS Group or any ADCS Group Subsidiary or any change in the depreciation
or amortization policies or rates theretofore adopted and applied;
(h) any (i) grant of any severance or termination pay to any director,
officer, employee, partner or member of the ADCS Group or any ADCS Group
Subsidiary in excess of $25,000, (ii) entering into of any employment,
severance, management, consulting, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any director,
officer, employee, partner or member of the ADCS Group or any ADCS Group
Subsidiary, except for employment agreements entered into in the ordinary
course of business (which agreements do not involve any Holder or which
individually or in the aggregate are not material to the financial condition
or results of operations of the ADCS Group and the ADCS Group Subsidiaries
taken as a whole), (iii) change in benefits payable under existing severance
or termination pay policies or employment, severance, management, consulting
or other similar agreements, other than normal yearly adjustments, or (iv)
change in compensation, bonus or other benefits payable to any director,
officer, employee, partner or member of the ADCS Group or any ADCS Group
Subsidiary, other than normal yearly adjustments, and other than any increase
pursuant to any ADCS Group Employee Benefit Plan, the formulae or commission
rates of which have not been amended or changed;
(i) declared, paid or set aside for payment by the ADCS Group or any ADCS
Group Subsidiary any dividend or other distribution in respect of ADCS Group
Securities, or redeemed, purchased or otherwise acquired any of their
respective ADCS Group Securities;
(j) issued, authorized for issuance, or entered into any commitment to issue
any Security, bond, note or other debt obligation of the ADCS Group or any
ADCS Group Subsidiary;
(k) any transaction or payments between (i) any Holder or any related party
or entity and (ii) the ADCS Group or any ADCS Group Subsidiary not in the
ordinary course of business;
(l) the termination, whether voluntary or involuntary, of any material
employee of the ADCS Group or any ADCS Group Subsidiary or of any material
relationship between the ADCS Group or any ADCS Group Subsidiary and a
consultant; or
(m) any agreement or understanding entered into by the ADCS Group or any
ADCS Group Subsidiary whether in writing or otherwise, for the ADCS Group, any
ADCS Group Subsidiary or, to the ADCS Group's knowledge, any Holder to take
any of the actions specified in this Section 3.14.
3.15. Indebtedness. Neither the ADCS Group nor any ADCS Group Subsidiary has
any obligation for money borrowed or under any guarantee nor any agreement or
arrangement to borrow money or to enter into any such guarantee, and as of the
Closing Date, neither the ADCS Group nor any ADCS Group Subsidiary will have
any obligation for money borrowed nor any agreement or arrangement to borrow
money, and neither the ADCS Group nor any ADCS Group Subsidiary will have any
guarantee outstanding nor any agreement or commitment to enter into any such
guarantee.
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3.16. Accounts Receivable. No amounts in excess of $10,000 individually or
$50,000 in the aggregate included in the accounts receivable of the ADCS Group
or any ADCS Group Subsidiary in the ADCS Financial Statements have been
released or are, or are currently expected to be, regarded under generally
accepted accounting principles as unrecoverable in whole or in part except to
the extent there shall have been an appropriate bad debt reserve therefor.
Such receivables are not, to the knowledge of the ADCS Group, subject to any
counterclaim, refusal to pay or setoff not reflected in the reserves set forth
on the ADCS Financial Statements. Schedule 3.16 hereto sets forth a list of
all accounts receivable of the ADCS Group or any ADCS Group Subsidiary as of
the close of business on the Balance Sheet Date, none of which, to the ADCS
Group's knowledge, is owing from a debtor that has become bankrupt or
insolvent or has been pledged to any third party.
3.17. Supplies. The supplies of the ADCS Group and the ADCS Group
Subsidiaries taken as a whole consist of a quality and quantity generally
adequate for and usable in the ordinary course of business consistent with
past practice.
3.18. No Prebillings. Neither the ADCS Group nor any ADCS Group Subsidiary
has prebilled or received payment, and the ADCS Group and the ADCS Group
Subsidiaries will not prebill or receive payment, from any of its accounts for
goods to be delivered or for services to be rendered or for expenses to be
incurred subsequent to the Closing Date, except in the ordinary course of
business and consistent with past practices of the ADCS Group or any ADCS
Group Subsidiary.
3.19. Taxes.
(a) All returns, reports, information statements, and other forms or
documentation (the "Returns") related to Taxes (as hereinafter defined)
required to be filed or maintained on or before the Closing Date with respect
to the business, activities or assets of the ADCS Group or any ADCS Group
Subsidiary, have been filed or maintained, or will be filed or maintained on
or before the Closing Date, in accordance with all applicable laws (after
taking into account extensions duly obtained), and no penalties or other
charges are due or could reasonably be expected to become due with respect to
the late filing of any Return. All Returns are or will be accurate and
complete in all material respects and properly reflect the Taxes due for the
periods covered thereby. All Taxes due and payable, whether or not called for
by the Returns, and all Taxes properly allocable to periods ending on or
before the Closing Date have been paid, adequately provided for in the ADCS
Financial Statements or any ADCS Group Subsidiary's financial statements, or
properly protested or will be so paid, reserved for or protested by the
Closing Date, and the ADCS Group and each ADCS Group Subsidiary have
maintained all required records with respect to Taxes. All Taxes required to
be withheld or collected by the ADCS Group or any ADCS Group Subsidiary have
been duly withheld or collected and have been paid over to the appropriate
governmental authorities, or are held in separate bank accounts established
exclusively for such purpose. Except as set forth on Schedule 3.19 hereto, no
audit or investigation of any Return is pending or, to the knowledge of the
ADCS Group, threatened. Schedule 3.19 hereto sets forth the status of any
audit that is pending, including the amounts of any deficiencies and additions
to Tax indicated on any notices of proposed deficiency or statutory notices of
deficiency that may have been issued in connection therewith and all of such
deficiencies or additions to Tax have been paid. There are no requests for
rulings pending before any taxing authority. Schedule 3.19 sets forth the
states in which the ADCS Group or any ADCS Group Subsidiary has filed Returns
relating to Taxes for the taxable years ended March 31, 1994 through March 31,
1996. Neither the ADCS Group nor any ADCS Group Subsidiary has executed or
filed with the Internal Revenue Service or any other domestic or foreign
taxing authority any agreement extending the period for assessment or
collection of any Taxes, and neither the ADCS Group nor any ADCS Group
Subsidiary has waived any law or regulation fixing the period for assessment
or collection of Taxes. Neither the ADCS Group nor any ADCS Group Subsidiary
is a party to any pending action or proceeding by any domestic or foreign
governmental authority for assessment or collection of Taxes, and no claim for
assessment or collection of Taxes has been asserted or threatened against the
ADCS Group or any ADCS Group Subsidiary for which provision has not been made
in the ADCS Financial Statements or any ADCS Group Subsidiary's financial
statements. There are no tax liens upon any of the properties or assets of the
ADCS Group or any ADCS Group Subsidiary other than liens for Taxes not yet due
and payable. True and complete
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copies of the income tax returns of the ADCS Group and each ADCS Group
Subsidiary for the three (3) fiscal years ended in 1994 through 1996, as filed
with the Internal Revenue Service and all other domestic or foreign taxing
authorities, have previously been made available to the ATMI Group.
As used herein, "Taxes" (or "Tax" where the context requires) shall mean all
federal, state, county, local, foreign and other taxes (including, without
limitation, income, profits, premium, estimated, excise, stamp, sales, use,
occupancy, gross receipts, franchise, ad valorem, value added, severance,
capital levy, production, transfer, gains, withholding, employment, social
security, workers' compensation, unemployment compensation, payroll-related
and property taxes (real and personal), imposts, custom duties and other
governmental charges and assessments of whatever kind), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest or penalties with respect thereto.
(b) No sales, use or other transfer or conveyance taxes are or will become
payable by the ADCS Group or the ATMI Group solely as a consequence of the
Exchange, other than taxes based upon the net income of the parties.
3.20. Facilities. SCHEDULE 3.20 hereto sets forth a list of all of the real
property and all of the buildings, warehouses and storage facilities owned,
leased or operated by the ADCS Group or any ADCS Group Subsidiary during the
last five (5) years (the "ADCS Premises"), indicating where such property or
facility is located, whether such property is owned, leased, occupied and/or
operated by the ADCS Group or any ADCS Group Subsidiary and the date of
acquisition or occupancy thereof. The leases and other agreements or
instruments under which the ADCS Group or any ADCS Group Subsidiary holds,
leases, subleases, occupies or is entitled to the use of the ADCS Premises are
in full force and effect, and all rentals, royalties or other payments payable
thereunder prior to the date hereof have been duly paid. Neither the ADCS
Group nor any ADCS Group Subsidiary is in default in any material respect, and
no event has occurred that with notice or the passage of time or both would
constitute such a default, with respect to any such leases and other such
agreements or instruments. The current use by the ADCS Group or any ADCS Group
Subsidiary and, to the knowledge of the ADCS Group, by any third party, of the
ADCS Premises complies in all material respects with all applicable zoning
laws and building and use restrictions. Neither the ADCS Group nor any ADCS
Group Subsidiary has received a notice of violation of any applicable law,
ordinance, regulation, order, Permit or requirement (other than Environmental
Laws which are addressed in Section 3.31) relating to its operations or the
ADCS Premises, nor has the ADCS Group or any ADCS Group Subsidiary failed to
comply in any material respect with any provision or condition of any such
lease, agreement or other instrument with respect to the ADCS Premises. All
buildings, plants, and structures owned by the ADCS Group or any ADCS Group
Subsidiary lie wholly within the boundaries of the real property owned by it
and do not encroach upon the property of, or otherwise materially conflict
with the property rights of, any other person.
3.21. Insurance. Schedule 3.21 sets forth a list of the policies of
insurance and fidelity or surety bonds carried by the ADCS Group and the ADCS
Group Subsidiaries. Neither the ADCS Group nor any ADCS Group Subsidiary has
failed to present or to give any notice with respect to any material claim
under any insurance policy in due and timely fashion, and all insurance
premiums due and payable by the ADCS Group or any ADCS Group Subsidiary in
connection with the policies set forth on Schedule 3.21 prior to the Closing
Date have been or will be paid. There are no outstanding written requirements
or material written recommendations by any insurance company that issued a
policy with respect to any of the properties and assets of the ADCS Group or
any ADCS Group Subsidiary, by any Board of Fire Underwriters or other body
exercising similar functions or by any governmental authority requiring or
recommending any repairs or other work to be done on or with respect to any of
the properties and assets of the ADCS Group or any ADCS Group Subsidiary or
requiring or recommending any equipment or facilities to be installed on or in
connection with any of the assets. The unemployment insurance ratings and
contributions of the ADCS Group and each ADCS Group Subsidiary are also set
forth on Schedule 3.21.
3.22. Books and Records. The books of account and other financial and
corporate records of the ADCS Group and each ADCS Group Subsidiary are
complete and accurate in all material respects and are maintained
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in accordance with good business practices. The minute books of the ADCS Group
and each ADCS Group Subsidiary as previously made available to the ATMI Group
and its counsel, contain accurate records of all meetings and accurately
reflect all other action of the stockholders, directors, partners and members
(and committees thereof) of the ADCS Group and each ADCS Group Subsidiary.
3.23. Employees. SCHEDULE 3.23 contains a true and complete list of all of
the officers and directors, partners and members of the ADCS Group and the
ADCS Group Subsidiaries, specifying their office or title, and a true and
complete list of all the employees of the ADCS Group and each ADCS Group
Subsidiary as of the date hereof. Neither the ADCS Group nor any ADCS Group
Subsidiary has any written or oral contract of employment with any employee of
the ADCS Group or any ADCS Group Subsidiary, and neither the ADCS Group nor
any ADCS Group Subsidiary is a party to or subject to any collective
bargaining agreement nor has been a party to or subject to any collective
bargaining agreement or collective bargaining plan during the last five (5)
years. Neither the ADCS Group nor any ADCS Group Subsidiary is a party to any
pending nor, to the ADCS Group's knowledge, threatened labor dispute affecting
the ADCS Group or any ADCS Group Subsidiary. The ADCS Group and each ADCS
Group Subsidiary have complied in all material respects with all applicable
foreign, federal, state and local laws, ordinances, rules and regulations and
requirements relating to the employment of labor, including, but not limited
to, the provisions thereof relative to wages, hours, collective bargaining,
drug testing, personnel policies and practices, payment of Social Security,
unemployment and withholding taxes, and ensuring equality of opportunity for
employment and advancement of minorities and women. To the knowledge of the
ADCS Group, neither the ADCS Group nor any ADCS Group Subsidiary is liable for
any arrears of wages or any taxes or penalties for failure to comply with any
of the foregoing. None of the ADCS Group or any ADCS Group Subsidiary has
received notice from any employee listed on Schedule 3.23 as earning an annual
base salary in excess of $40,000 that such employee is terminating his or her
employment with the ADCS Group or any ADCS Group Subsidiary, nor to the
knowledge of the ADCS Group does any such employee intend to terminate his or
her employment with the ADCS Group or any ADCS Group Subsidiary.
3.24. Employee Benefit Plans.
(a) SCHEDULE 3.24 sets forth a list of every stock option, stock purchase,
stock appreciation right, bonus, incentive, deferred or current compensation,
excess benefits, profit sharing, pension, thrift, savings, retirement,
severance, sickness, accident, medical, disability, hospitalization, vacation,
insurance or other plan or agreement which provides benefits to or for or on
behalf of any one or more employees of the ADCS Group or any ADCS Group
Subsidiary (including former employees) or their beneficiaries (collectively,
"ADCS Group Employee Benefit Plans"). The ADCS Group has made available to the
ATMI Group true, correct and complete copies of all ADCS Group Employee
Benefit Plans, as in effect on the date of this Agreement, all written
descriptions or summaries thereof, all trust agreements or other funding
arrangements (including insurance or group annuity contracts) relating
thereto, all amendments thereto and all determination letters issued by the
Internal Revenue Service with respect to such ADCS Group Employee Benefit
Plans.
(b) No employee benefit plan (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) exists
which covers or is maintained for the benefit of any of the employees of the
ADCS Group or any ADCS Group Subsidiary or to which the ADCS Group or any ADCS
Group Subsidiary or any Holder is required to make contributions on account of
any employees of the ADCS Group or any ADCS Group Subsidiary.
(c) There are no actions, suits or claims pending (other than routine claims
for benefits) or, to the knowledge of the ADCS Group, threatened against any
ADCS Group Employee Benefit Plan, nor, to the knowledge of the ADCS Group,
does any basis therefor exist. Each ADCS Group Employee Benefit Plan is in
compliance in all material respects with all applicable requirements of ERISA
and the Code and their regulations, and other applicable laws and regulations
and has been administered in all material respects in accordance with its
terms and with applicable legal requirements.
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(d) With respect to each ADCS Group Employee Benefit Plan,
(i) the ADCS Group and each ADCS Group Subsidiary have performed or
caused to be performed all obligations required to be performed under such
ADCS Group Employee Benefit Plan (including, but not limited to, the making
when due of all contributions required by the terms of such plan, by law,
or by any collective bargaining agreement, or otherwise);
(ii) the ADCS Group and each ADCS Group Subsidiary have complied in
timely fashion with the terms of each ADCS Group Employee Benefit Plan and
with all requirements of all laws, rules and regulations (including, but
not limited to, ERISA and the Code) which are applicable to each ADCS Group
Employee Benefit Plan and each ERISA Plan, including, but not limited to,
(1) the filing when due of all required returns, reports and other
documents, and
(2) compliance with all rules concerning notifications and
disclosures to participants and beneficiaries under each such plan;
(iii) neither the ADCS Group nor any ADCS Group Subsidiary has engaged in
any "prohibited transaction" within the meaning of Section 4975 of the Code
or Section 406 of ERISA nor has committed any breach of fiduciary
responsibility under ERISA (or has any knowledge that any other person has
engaged in any such prohibited transaction or committed any such breach)
which could subject the ATMI Group and/or the Surviving Corporation to an
excise tax or other liability under ERISA or the Code; and
(iv) neither the ADCS Group nor any ADCS Group Subsidiary is in default
under or in violation of (and has no knowledge of any default or violation
by any other person of) the terms of any ADCS Group Employee Benefit Plan.
(e) Except as set forth on SCHEDULE 3.24,
(i) no employee pension benefit plan (as defined in Section 3(2)(A) of
ERISA) which is sponsored by any member of the "controlled group" (as
defined in Section 4001(a)(14) of ERISA) which includes the ADCS Group, any
ADCS Group Subsidiary or any Holder (the "ADCS Controlled Group") has been
terminated since September 2, 1974;
(ii) no proceeding has been initiated to terminate any such employee
pension benefit plan;
(iii) there has been no "reportable event" (within the meaning of Section
4043(c) of ERISA) with respect to any such employee pension benefit plan,
other than those with respect to which the requirement of thirty (30) days'
notice, whether in advance of the event or following the event, to the
Pension Benefit Guaranty Corporation ("PBGC") has been waived by
regulation;
(iv) no excise or other taxes (or interest or penalties with respect
thereto) are due or owing with respect to any such employee pension benefit
plan because of any failure to comply with the minimum funding standards of
ERISA or for failing to comply with any other applicable requirement under
ERISA or the Code;
(v) all contributions to any such employee pension benefit plan have been
made within the time provided by law;
(vi) at no time during the last five (5) years has the ADCS Group or any
ADCS Group Subsidiary or any member of the ADCS Controlled Group been a
party to, or been required to make any contribution to, a "Multiemployer
Plan" (as defined in Section 3(37) of ERISA), nor has the ADCS Group or any
ADCS Group Subsidiary or any member of the ADCS Controlled Group made a
complete or partial withdrawal from a Multiemployer Plan as a result of
which any withdrawal liability has been or will be incurred by any of them;
(vii) neither the ADCS Group or any ADCS Group Subsidiary nor any member
of the ADCS Controlled Group has incurred any liability to the PBGC other
than for the payment of annual premiums (and no such premium payments are
currently due and owing); and
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(viii) neither the ADCS Group or any ADCS Group Subsidiary nor any member
of the ADCS Controlled Group has entered into any transaction within the
past five (5) years the purpose of which is to evade liability under Title
IV of ERISA.
(f) No ADCS Group Employee Benefit Plan (other than one which is an employee
pension benefit plan within the meaning of Section 3(2)(A) of ERISA) provides
benefits (including, without limitation, death, health or medical benefits,
whether or not insured) with respect to current or former employees of the
ADCS Group or any ADCS Group Subsidiary beyond their retirement or other
termination of service with the ADCS Group or any ADCS Group Subsidiary, other
than (i) coverage mandated by applicable law, (ii) deferred compensation
benefits which have been accrued as liabilities on the books of the ADCS Group
or any ADCS Group Subsidiary, (iii) benefits the full cost of which is borne
by the current or former employees (or their beneficiaries), (iv) benefits
which have already been satisfied in full or (v) death benefits under any
pension plan to the extent set forth in Schedule 3.24 hereto.
3.25. Litigation. There is no action, suit or proceeding pending and of
which it has been served notice or, to the ADCS Group's knowledge, threatened,
by or against the ADCS Group, any ADCS Group Subsidiary, its respective
business or assets, or, to the ADCS Group's knowledge, any Holder relating to
or affecting the Interests, at law, in equity, by way of arbitration or before
any governmental department, commission, board or agency. To the ADCS Group's
knowledge, there are no existing facts or conditions which reasonably would be
expected to give rise to any charge, claim, litigation, proceeding, or
investigation by any third party which could reasonably be expected to
materially adversely affect its business, the ADCS Group or any ADCS Group
Subsidiary, nor are there any facts or conditions which could reasonably be
expected to give rise to any order of condemnation, appropriation or other
taking of any of the assets. There is no litigation, action, suit,
investigation or proceeding pending and of which it has been served notice or,
to the knowledge of the ADCS Group, threatened, before any court, agency or
other governmental body against the ADCS Group, any ADCS Group Subsidiary or
any Holder (or any corporation or entity affiliated with the ADCS Group, any
ADCS Group Subsidiary or any Holder) which seeks to enjoin or prohibit or
otherwise challenge the transactions contemplated hereby or contemplated by
the Additional Agreements. SCHEDULE 3.25 sets forth each action, suit or
proceeding against the ADCS Group, any ADCS Group Subsidiary, its respective
business or assets, or any Holder relating to or affecting the Interests, at
law, in equity, by way of arbitration or before any governmental department,
commission, board or agency, which has been dismissed or settled or in which a
judgment has been rendered, in each case within the past five (5) years, and
the disposition thereof. The ADCS Group has made available to ATMI true and
correct copies of each settlement agreement and release, if any, in connection
with any matter discussed in the prior sentence, each of which constitutes a
legal, valid and binding obligation of the parties thereto, and no party
thereto is in default of any of its obligations thereunder. There is no order,
judgment, decree or settlement agreement against or involving the ADCS Group,
any ADCS Group Subsidiary or any Holder involving any ongoing liabilities or
restrictions which, in the case of a Holder, would adversely affect the
ability of the Holder to transfer the Interests.
3.26. Proprietary Rights. (a) SCHEDULE 3.26 sets forth a true, correct and
complete list of all foreign and domestic Marks (as hereinafter defined),
patents and applications for patents, and registered copyrights, and
applications therefor, owned by the ADCS Group or any ADCS Group Subsidiary or
in which the ADCS Group or any ADCS Group Subsidiary has any rights or
licenses. The ADCS Group has made available to the ATMI Group copies of all
agreements of the ADCS Group or any ADCS Group Subsidiary with each officer,
employee or consultant of the ADCS Group or any ADCS Group Subsidiary
providing the ADCS Group or any ADCS Group Subsidiary with secrets and
inventions developed or used by the ADCS Group or any ADCS Group Subsidiary.
All of such agreements so described are valid, enforceable and legally
binding.
(b) The ADCS Group and each ADCS Group Subsidiary own or possess or have the
right to obtain licenses or other rights to use all patents, patent
applications, trade secrets, copyrights, inventions, drawings, designs,
proprietary know-how or information, or other rights with respect thereto
(collectively referred to as "Proprietary Rights"), which it has determined
are used in its business, and it believes the same are sufficient
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to conduct its business as it has been and is now being conducted. The ADCS
Group is not aware of any existing Proprietary Rights that the ADCS Group and
the ADCS Group Subsidiaries do not already own or possess or will be able to
obtain a license under, which Proprietary Rights would be necessary for the
ADCS Group or any ADCS Group Subsidiary to conduct its business.
(c) To the ADCS Group's knowledge, the operations of the ADCS Group and each
ADCS Group Subsidiary do not conflict with or infringe upon, and no one has
asserted to the ADCS Group or any ADCS Group Subsidiary that such operations
conflict with or infringe upon, any Proprietary Rights or any trademarks,
trade names, or service marks (collectively referred to as "Marks"), Marks
owned, possessed or used by any third party. There are no claims, disputes,
actions, proceedings, suits or appeals pending against the ADCS Group, any
ADCS Group Subsidiary or any Holder with respect to any Proprietary Rights or
Marks, and none has been threatened against the ADCS Group or any ADCS Group
Subsidiary. To the ADCS Group's knowledge, there are no facts or alleged facts
which would reasonably serve as a basis for any claim that the ADCS Group or
any ADCS Group Subsidiary does not have the right to use, free of any rights
or claims of others, all Proprietary Rights and Marks in the development,
manufacture, use, sale or other disposition of any or all products or services
presently being used, furnished or sold in the conduct of its business as it
has been and is now being conducted. Neither the ADCS Group nor any ADCS Group
Subsidiary has violated the terms of any confidentiality agreement or
nondisclosure agreement entered into in favor of any third party.
(d) There are no inter parties proceedings before any patent or trademark
authority to which the ADCS Group or any ADCS Group Subsidiary is a party.
(e) The ADCS Group and each ADCS Group Subsidiary have taken all other
measures they deem reasonable to maintain the confidentiality of the processes
and formulae, research and development results and other know-how, the value
of which to the ADCS Group or any ADCS Group Subsidiary is contingent upon
maintenance of the confidentiality thereof.
(f) Each employee and officer of the ADCS Group or any ADCS Group Subsidiary
is a party to a confidential non-disclosure agreement with the ADCS Group or
such ADCS Group Subsidiary (the form of which has been made available to the
ATMI Group). No employee of the ADCS Group or any ADCS Group Subsidiary is in
violation of any material term of any employment contract, proprietary
information and inventions agreement, confidentiality agreement, non-
competition agreement, or any other contract or agreement relating to the
relationship of any such employee with the ADCS Group or any ADCS Group
Subsidiary, or any previous employer.
(g) The Proprietary Rights and Marks are free of any unresolved ownership
disputes with respect to any third party. To the ADCS Group's knowledge there
is no unauthorized use, infringement or misappropriation of any of such
Proprietary Rights or Marks by any third party, including any employee or
former employee of the ADCS Group or any ADCS Group Subsidiary.
(h) Other than as part of transactions identified in SCHEDULE 3.26, the ADCS
Group has not burdened the Proprietary Rights with any liens, security
interests, financing agreements, or other encumbrances.
3.27. Section 341(f)(2) Consent. At no time has the ADCS Group or any ADCS
Group Subsidiary, or any predecessor, consented under Section 341(f)(1) of the
Code, or agreed under Section 341(f)(3) of the Code, to have the provisions of
Section 341(f)(2) of the Code apply to any sale of its capital stock.
3.28. Related Party Transactions. SCHEDULE 3.28 sets forth the amounts and
other essential terms of indebtedness or other obligations, liabilities or
commitments (contingent or otherwise) of the ADCS Group or any ADCS Group
Subsidiary to or from any Holder or any other present officer, director,
partner, member or stockholder or any person related to, controlling,
controlled by or under common control with any of the foregoing (other than
for employment services performed within the past month the payment for which
is not yet due), and all other transactions between such persons and the ADCS
Group or any ADCS Group Subsidiary,
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except for transactions which through consolidation are eliminated in the ADCS
Group Financial Statements. Without limiting the generality of the foregoing,
as of the date hereof, none of the Holders or any other present officer,
director, partner, member or stockholder or any person related to,
controlling, controlled by or under common control with any of the foregoing
(a) has any material direct or indirect interest in any entity which does
business with the ADCS Group or any ADCS Group Subsidiary, (b) has any direct
or indirect interest in any property, asset or right which is used by the ADCS
Group or any ADCS Group Subsidiary in the conduct of its business, or (c) has
any contractual relationship with the ADCS Group or any ADCS Group Subsidiary
other than such relationships which occur from being an employee, officer,
director, etc.
3.29. Bank Accounts and Safe Deposit Arrangements. SCHEDULE 3.29 sets forth
a complete list of (i) the name and address of each bank and brokerage firm
with which the ADCS Group or any ADCS Group Subsidiary has any accounts, safe
deposit boxes, lock boxes or vaults, (ii) the account numbers relating
thereto, and (iii) the names of all persons authorized to deal with such
accounts or to have access to such boxes or vaults.
3.30. Powers of Attorney. No person has any power of attorney to act on
behalf of the ADCS Group or any ADCS Group Subsidiary in connection with any
of its properties or business affairs other than such powers to so act as
normally pertain to the officers of such entity.
3.31. Environmental Matters; Health and Safety.
(a) Definitions. The following definitions shall apply for purposes of this
Section 3.31:
(i) "Environmental Conditions" means circumstances with respect to soil,
surface waters, groundwaters, stream sediment and air, both on-site and
off-site of the real property either owned or leased by a party or on which
a party operates or operated its business during the last ten (10) years,
that could require remedial action and/or that would reasonably be expected
to result in claims and/or demands by and/or liabilities to third parties,
including, but not limited to governmental entities.
(ii) "Environmental Laws" means any and all foreign, federal, state,
local or municipal laws, regulations, ordinances, rules, orders,
guidelines, policies or requirements of any governmental authority
regulating or imposing standards of liability or standards of conduct
(including common law) concerning air, water, solid waste, Hazardous
Materials (including, but not limited to, the transfer of facilities
involved in the generation, storage, handling, transportation and/or
disposal of Hazardous Materials), worker and community right-to-know,
hazard communication, noise, radioactive material, resource protection,
inland wetlands and watercourses and health protection. Such laws include,
but are not limited to, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Superfund Amendments and Reauthorization Act, the Occupational Safety and
Health Act, the Hazardous Materials Transportation Act, the Toxic
Substances Control Act, the Federal Insecticide Fungicide and Rodenticide
Act, the Clean Water Act, the Clean Air Act, and the Safe Drinking Water
Act, all as amended and effective on the date hereof, and the regulations,
rules and orders promulgated or issued thereunder. Environmental Laws also
include any or all environmental permits, approvals, consents,
stipulations, licenses, registrations, certificates and authorizations
which are required by law, ordinance or regulation and any and all
environmental regulatory compliance requirements applicable to a party's
business and/or a party or, to the party's knowledge, its predecessor(s) in
interest as of or prior to the Closing.
(iii) "Hazardous Materials" means any petroleum, petroleum products, fuel
oil, explosives, reactive materials, ignitable materials, corrosive
materials, hazardous chemicals, hazardous wastes, hazardous substances,
extremely hazardous substances, toxic substances, toxic chemicals,
radioactive materials, infectious materials and any other element,
compound, mixture, solution or substance that may pose a present or
potential hazard to human health or the environment, or as otherwise
defined in or regulated by Environmental Laws.
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(iv) "Notice" means any summons, citation, directive, order, claim,
litigation, pleading, investigation, proceeding, judgment, letter or any
other written or oral communication (if such oral communication is made to
a manager, officer or employee responsible for environmental compliance
matters) from the United States Environmental Protection Agency, California
Environmental Protection Agency, Texas Natural Resources Conservation
Commission, Connecticut Department of Environmental Protection or any other
foreign, federal, state or local agency or authority, or any other entity
or any individual, concerning any intentional or unintentional act or
omission that constitutes or may constitute a violation of an Environmental
Law and shall expressly include the imposition of any lien pursuant to any
Environmental Laws.
(v) "Release" means releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, ejecting, escaping, leaching, disposing,
seeping, infiltrating, draining or dumping. This term shall be interpreted
to include both the present and past tense, as appropriate.
(vi) "Site Remediation Measures" means any efforts of any foreign,
federal, state or local government, or a party, their contractors,
subcontractors, or agents, that are made, designed, initiated, or
maintained as required by Environmental Laws or Commitments entered into by
a party in order to ensure that Environmental Conditions are consistent
with Environmental Laws or Commitments entered into by a party, including,
site investigation, site monitoring, containment, clean-up, transport,
removal, disposal, restoration and other remedial efforts of any kind.
(b) Environmental Representations and Warranties. Except as may be found to
the contrary in the Phase II environmental site assessment referred to in
Section 5.23 below:
(i) Compliance. The ADCS Group and each ADCS Group Subsidiary and, to the
ADCS Group's knowledge, its predecessor(s) in interest, have been and are
in compliance with and have no liability or obligation arising under any
Environmental Law, and neither the ADCS Group nor any ADCS Group Subsidiary
has received any Notice from any applicable governmental agency seeking any
information or alleging any violation of such Environmental Laws. No Site
Remediation Measure is necessary or required under Environmental Law or any
ADCS Commitment for its business or the ADCS Premises, nor are there any
Environmental Conditions on the ADCS Premises. No capital improvements,
alterations or repairs to the ADCS Premises are necessary or required to
bring such facility into compliance with all Environmental Laws now in
effect.
(ii) Hazardous Materials/Underground Tanks. None of the ADCS Group, any
ADCS Group Subsidiary or any Holder and, to the ADCS Group's knowledge,
their predecessor(s) in interest, has caused or permitted any use of its
business or the ADCS Premises to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process any Hazardous
Materials or solid waste, except in compliance with all Environmental Laws,
and has not caused or permitted and has no knowledge of the Release of any
such Hazardous Materials on-site or off-site of the ADCS Premises,
resulting, or that could in the future result in an Environmental Condition
requiring Site Remediation Measures. The ADCS Premises and all principal
items and machinery and equipment used in the ADCS Group's business comply
with all applicable Environmental Laws. The ADCS Premises do not contain
any asbestos requiring removal now or in the course of any remodeling that
may occur in the future, or other Hazardous Materials, and, except for
chemicals and raw materials used, and wastes generated in connection with,
the manufacture of the ADCS Group's products, which in each case are
located on the ADCS Premises in the ordinary course of business, no such
materials are located on, in or under the ADCS Premises. Any and all
underground and aboveground tanks at the ADCS Premises are in compliance
with any and all Environmental Laws, and such Environmental Laws do not
mandate the removal or retrofitting of such tanks for a period of five (5)
years after the Closing. The removal of any tank has been carried out in
compliance with all applicable Environmental Laws.
(iii) There are no outstanding or, to the ADCS Group's knowledge,
threatened actions, claims, proceedings, determinations or judgments by any
party, including but not limited to any governmental
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authority, whether foreign, federal, state, local or any agency thereof,
against or involving the ADCS Group, any ADCS Group Subsidiary or any
Holder, or to the ADCS Group's knowledge, against or involving the ADCS
Group's or any ADCS Group Subsidiary's predecessor(s) in interest in any
manner arising under the Environmental Laws or alleging or involving
personal injury or property damage as a result of a violation of any
Environmental Law or otherwise involving Environmental Conditions. Attached
hereto as SCHEDULE 3.31 is a list of all such actions, claims, proceedings,
determinations and judgments issued within the past ten (10) years by any
party against the ADCS Group, any ADCS Group Subsidiary or any Holder as it
relates to the ADCS Group or the ADCS Group Subsidiaries and, to the ADCS
Group's knowledge, against any predecessor(s) in interest.
(iv) The ADCS Group and each ADCS Group Subsidiary and, to the ADCS
Group's knowledge, their predecessor(s) in interest, have complied with all
notice, recordkeeping and reporting requirements imposed by any
governmental authority and any informational requests or demands arising
under any Environmental Laws. None of the ADCS Group, any ADCS Group
Subsidiary or any Holder, nor, to the ADCS Group's knowledge, the ADCS
Group's or any ADCS Group Subsidiary's predecessor(s) in interest, is
liable for any penalties, fines, or forfeitures or is subject to any
restrictions on the conduct of its business for failure to comply with any
of the foregoing.
(v) Schedule 3.31 lists all of the ADCS Premises, the date of acquisition
or leasing thereof, the person or entity from whom the ADCS Premises were
acquired or leased, the operations conducted thereon and, to the ADCS
Group's knowledge, the operations conducted prior to the acquisition or
leasing thereof.
3.32. Customers and Suppliers. SCHEDULE 3.32 sets forth a list of (i) all of
the customers of the ADCS Group or any ADCS Group Subsidiary as of the date
hereof, but not including customers from whom the ADCS Group or any ADCS Group
Subsidiary in the aggregate has received less than $250,000 in gross receipts
during the immediately preceding twelve-month period, and (ii) the ten (10)
largest suppliers of the ADCS Group and the ADCS Group Subsidiaries taken as a
whole in terms of purchases made during the 1995 and 1996 fiscal years.
Neither the ADCS Group nor any ADCS Group Subsidiary has received any notice
or has any knowledge that any customer listed for the 1996 fiscal year (1) has
ceased, or currently intends to cease, to use the products, goods or services
of the business of the ADCS Group or of any ADCS Group Subsidiary; (2) has
substantially reduced, or currently intends to substantially reduce, the use
of products, goods or services of the business of the ADCS Group or of any
ADCS Group Subsidiary; or (3) other than in the ordinary course of business
and to an extent which is not reasonably likely to have an ADCS Material
Adverse Effect, has sought, or is seeking, to reduce the price it will pay for
products, goods or services of the business of the ADCS Group or of any ADCS
Group Subsidiary. Neither the ADCS Group nor any ADCS Group Subsidiary has
received any notice or has any knowledge that any such supplier will not sell
raw materials, supplies, merchandise and other goods to the ADCS Group or any
ADCS Group Subsidiary at any time after the Closing Date on terms and
conditions similar to those used in the current sales to the business, subject
to general and customary price increases and unforeseeable supply or demand
changes.
3.33. Product and Service Warranties. To the knowledge of the ADCS Group:
(a) All products sold and all services rendered by the ADCS Group and each
ADCS Group Subsidiary have been in conformity in all material respects with
all applicable ADCS Commitments and all expressed warranties, and no material
liability exists or will arise for replacement or damage in connection with
such sales or for services not rendered in all material respects in accordance
therewith.
(b) There is adequate provision in the ADCS Financial Statements for
liabilities and obligations for damaged, defective or returned goods, or for
replacement of goods or for allowances with respect to goods sold or services
rendered by or on behalf of the ADCS Group or any ADCS Group Subsidiary.
(c) Neither the ADCS Group nor any ADCS Group Subsidiary has any pattern of
claims or actions based upon allegations of the same or similar product defect
for any of its products.
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(d) There has not been any material product recall, rework or retrofit
relating to any line of product manufactured, shipped or sold by the ADCS
Group or any ADCS Group Subsidiary, nor to the knowledge of the ADCS Group is
there any basis for any such product recall, rework or retrofit.
3.34. Hart-Scott-Rodino. The "total assets" and the "annual net sales" of
the "ultimate parent entity" (as such terms are used within the meaning of
Section 7A.(a)(2)(A) of the Hart-Scott-Rodino Antitrust Improvements Act of
1976) of the ADCS Group are less than $100,000,000.
3.35. Stock Ownership. Other than through mutual funds or other similar
investment vehicles over which no investment discretion is retained, none of
the ADCS Group, any ADCS Group Subsidiary or any Holder owns any ATMI Group
Securities issued by ATMI and has no warrants, options or other rights to
purchase or otherwise acquire or convert any obligations into ATMI Group
Securities.
3.36. Finders' Fees. There is no investment banker, broker, finder or other
intermediary that has been retained by or is authorized to act on behalf of
the ADCS Group, any ADCS Group Subsidiary or any Holder who might be entitled
to any fee or commission from the ATMI Group or any other person upon
consummation of the transactions contemplated by this Agreement.
3.37. Information in Disclosure Documents and Registration Statement. None
of the information made available or to be made available by the ADCS Group
for inclusion or incorporation by reference in (i) the S-4 will, at the time
such registration statement becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, and (ii) the proxy statement relating to the meeting of ATMI's
stockholders to be held in connection with the Merger (the "Proxy Statement")
will, at the date mailed to stockholders and at the time of the meeting of
stockholders to be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading.
3.38. Pooling. To its knowledge, the ADCS Group has not taken, or failed to
take, any action that would jeopardize the treatment of the Reorganization as
a "pooling of interests" for accounting purposes.
3.39. Atlantic Coast Polymers, Inc. ADCS Nevada is the record and beneficial
owner of the number of Securities of Atlantic Coast Polymers, Inc. shown on
SCHEDULE 3.39, which Securities owned by ADCS Nevada represent less than
twenty percent (20%) of the issued and outstanding voting Securities of
Atlantic Coast Polymers, Inc. and which Securities owned by ADCS Nevada have
been fully paid and are nonassessable. Neither the ADCS Group nor any ADCS
Group Subsidiary is liable, directly or indirectly, whether as co-maker,
guarantor, surety or otherwise, for any of the liabilities or obligations of
Atlantic Coast Polymers, Inc.
3.40. No Misrepresentation. Neither this Agreement nor any certificate or
Schedule or other information furnished pursuant to this Agreement by or on
behalf of the ADCS Group or any ADCS Group Subsidiary contains any untrue
statement of a material fact or, when this Agreement and such certificates,
Schedules and other information are taken in their entirety, omits to state a
material fact required to be stated herein or therein necessary to make the
statements contained herein or therein not misleading.
ARTICLE IV
Representations and Warranties of the ATMI Group
The ATMI Group hereby jointly and severally represent and warrant to the
ADCS Group that, except as set forth in the ATMI DISCLOSURE SCHEDULE attached
hereto (which ATMI Disclosure Schedule makes explicit reference to the
particular subsection as to which exception is taken, which in each case shall
constitute the sole subsection as to which such exception shall apply, and the
statements in such ATMI Disclosure Schedule shall
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be deemed to be representations and warranties), as supplemented pursuant to
Section 5.19, and acknowledge and confirm that the ADCS Group is relying upon
such representations and warranties in connection with the execution, delivery
and performance of this Agreement and the Additional Agreements to which it is
a party, notwithstanding any investigation made by the ADCS Group or on its
behalf:
4.1. Capitalization; Options, Warrants, Rights. SCHEDULE 4.1 sets forth the
aggregate number of all of the Securities which the ATMI Group and each ATMI
Group Subsidiary (as hereinafter defined) are authorized to issue (the "ATMI
Group Securities") and the aggregate number of all of the ATMI Group
Securities issued and outstanding. All ATMI Group Securities have been validly
authorized and issued and are fully paid and nonassessable, and have not been
issued in violation of any preemptive, first refusal or other subscription
rights of any holder of any ATMI Group Securities or any other person, and
have been issued in compliance with applicable foreign, federal and state
securities laws. With respect to the ATMI Group, there are no outstanding or
existing (i) proxies, voting trusts, or other agreements or understandings
with respect to the voting of the ATMI Group Securities known to the ATMI
Group, (ii) ATMI Group Securities convertible into or exchangeable for other
ATMI Group Securities, (iii) options, warrants or other rights to purchase or
subscribe for ATMI Group Securities (other than this Agreement) or ATMI Group
Securities convertible into or exchangeable for other ATMI Group Securities,
or (iv) agreements of any kind relating to the issuance or purchase of ATMI
Group Securities or Securities convertible into or exchangeable for other ATMI
Group Securities. No member of the ATMI Group holds or owns, directly or
indirectly, any Securities of any other corporation, or has any direct or
indirect equity or ownership interest in any association, partnership, joint
venture or other entity other than (i) through mutual funds or other similar
investment vehicles over which no investment discretion is retained, (ii)
publicly-traded Securities having a market value of $25,000 or less per
issuer, (iii) ATMI Group Securities and (iv) as identified on SCHEDULE 4.1
(each corporation, association, partnership, joint venture or other entity in
which any member of the ATMI Group owns, directly or indirectly, twenty
percent (20%) or more of the issued and outstanding Securities are referred to
herein as the "ATMI Group Subsidiaries").
4.2. Organization; Good Standing; Power. (a) Each of the ATMI Group and each
of the ATMI Group Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation, is
authorized to do business as a foreign corporation in the jurisdictions set
forth on SCHEDULE 4.2 and is not required to be authorized to do business as a
foreign corporation in any other jurisdiction (within or without the United
States) by reason of the nature of the business now being conducted by it or
the properties owned or leased or operated by it in which the failure to be so
qualified would have a material adverse effect on the assets, liabilities,
results of operations, financial condition or business of the ATMI Group and
the ATMI Group Subsidiaries taken as a whole (an "ATMI Material Adverse
Effect").
(b) Each of the ATMI Group has the requisite corporate power and authority
to own, lease and operate its properties and carry on its business as is now
being conducted by it, and to execute, deliver and perform this Agreement and
the Additional Agreements to which it is a party and consummate the
transactions contemplated hereby and thereby.
(c) The ATMI Group and each ATMI Group Subsidiary conducts its business
under the trade names and other assumed names set forth on SCHEDULE 4.2, if
any.
4.3. Organizational Documents. With respect to the ATMI Group and each ATMI
Group Subsidiary, the ATMI Group has heretofore made available to the ADCS
Group a complete and correct copy of (i) each corporation's Certificate or
Articles of Incorporation, as amended to date, and (ii) each corporation's By-
Laws, as amended to date (items (i) and (ii) being referred to herein as the
"ATMI Organizational Documents"). Each of the foregoing are in full force and
effect, and none of the ATMI Group, any ATMI Group Subsidiary or to the ATMI
Group's knowledge, any other party to the ATMI Organizational Documents, is in
violation of any of the provisions thereof. There are no proceedings for the
amendment or modification of or any other change in the ATMI Organizational
Documents. There are no proceedings for the dissolution or liquidation of the
ATMI Group or any ATMI Group Subsidiary or, to the knowledge of the ATMI
Group, threatening the existence of the ATMI
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Group or any ATMI Group Subsidiary. The ATMI Group has made available to the
ADCS Group the minute books and stock records of each member of the ATMI Group
and ATMI Group Subsidiary.
4.4. Authorization. Except for the vote of ATMI stockholders contemplated
hereby, the ATMI Group has taken all corporate action necessary to authorize
the execution, delivery and performance of this Agreement and, as applicable,
the Additional Agreements to which it is a party. Such execution, delivery and
performance and the other transactions contemplated hereby do not and will not
violate, result in any default, acceleration or loss of any material benefit
under, permit any third party to rescind any term or provision of, or conflict
with any terms of, the ATMI Organizational Documents, any law, lien, order,
award, judgment, decree, Permit, or any material agreements or contracts to
which the ATMI Group or any ATMI Group Subsidiary is a party or is subject or
by which the ATMI Group or any ATMI Group Subsidiary or their assets is bound
or result in the creation of any lien, charge or encumbrance upon any of the
assets, real, personal or mixed, tangible or intangible, of the ATMI Group, or
any ATMI Group Subsidiary. This Agreement and each of the Additional
Agreements to which any of the ATMI Group is a party when executed will
constitute the legal, valid and binding obligation of the ATMI Group,
enforceable against the ATMI Group in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer and other similar laws
affecting the enforceability of creditors' rights generally.
4.5. SEC Compliance. Since November 23, 1993, ATMI has filed all forms,
reports and documents (including all exhibits required to be filed therewith)
with the SEC (the "ATMI SEC Documents") required to be filed by it pursuant to
the federal securities laws and the SEC rules and regulations thereunder. As
of their respective filing dates, the ATMI SEC Documents complied in all
material respects with the requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or the Securities Act or the rules and
regulations promulgated under either, and none of the ATMI SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, except to the extent corrected by a subsequently filed
ATMI SEC Document. ATMI has made available to the ADCS Group copies of all of
the ATMI SEC Documents.
4.6. ATMI Commitments
(a) Definitions. The following definition shall apply for purposes of this
Section 4.6:
(i) "ATMI Commitments" means all of the Commitments to which the ATMI
Group or any ATMI Group Subsidiary is a party other than the ATMI Group
Employee Benefit Plans (as hereinafter defined).
(b) Schedule of ATMI Commitments and Proposals. SCHEDULE 4.6 hereto sets
forth a list of the following:
(i) any ATMI Commitments, not including purchase orders placed by any
member of the ATMI Group, creating or evidencing indebtedness in excess of
$100,000.00 for money borrowed by the ATMI Group or any ATMI Group
Subsidiary;
(ii) any material ATMI Commitments mortgaging, pledging, granting, or
creating a lien or security interest or other encumbrance on any real or
personal property of the ATMI Group or any ATMI Group Subsidiary;
(iii) any ATMI Commitments creating or evidencing any guaranty by the
ATMI Group or any ATMI Group Subsidiary of payment or performance by any
other party involving in excess of $100,000.00;
(iv) any ATMI Commitments involving a sharing of profits or expenses,
including, but not limited to, any joint venture agreements;
(v) any ATMI Commitments limiting the freedom of the ATMI Group or any
ATMI Group Subsidiary to engage in any line of business;
(vi) any ATMI Commitments limiting the freedom of the ATMI Group or any
ATMI Group Subsidiary to operate in any geographic area;
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(vii) any ATMI Commitments limiting the freedom of the ATMI Group or any
ATMI Group Subsidiary to compete with any party;
(viii) any ATMI Commitments limiting the freedom of the ATMI Group or any
ATMI Group Subsidiary to disclose or use any information material to the
operation of the business of the ATMI Group or any ATMI Group Subsidiary;
(ix) any ATMI Commitments for construction of physical facilities
involving in excess of $100,000.00;
(x) any ATMI Commitments providing for disposition of any line of
business, material assets or ATMI Group Securities;
(xi) any ATMI Commitments providing for acquisition of any line of
business, material assets or Securities of any other business, which
Securities have a fair market value in excess of $50,000; and
(xii) any ATMI Commitments providing for merger or consolidation
(including letters of intent) with any other business.
(c) The ATMI Group and each ATMI Group Subsidiary have complied in all
material respects with and are not in material default under any of the ATMI
Commitments.
(d) Neither the ATMI Group nor any ATMI Group Subsidiary has granted or been
granted any waiver or forbearance with respect to any ATMI Commitments to
provide goods or services to customers that produced aggregate payments in the
year ending December 31, 1996 of at least $250,000.00 to the ATMI Group or any
ATMI Group Subsidiary.
(e) The ATMI Commitments listed on Schedule 4.6 are valid and are in full
force and effect as to the ATMI Group or an ATMI Group Subsidiary, as the case
may be (and, to the knowledge of the ATMI Group, the other parties thereto).
4.7. Restrictions; Burdensome Agreements. None of the ATMI Group or any ATMI
Group Subsidiary is a party to any contract, commitment or agreement
(including the ATMI Commitments), and none of the ATMI Group or any ATMI Group
Subsidiary or any of their respective properties and assets is subject to or
bound or affected by any charter, by-law, operating agreement, limited
partnership agreement, or other organizational restriction, or any order,
judgment, decree, law, statute, ordinance, rule, regulation, Permit or other
restriction of any kind or character, which would (i) prevent the ATMI Group
from entering into this Agreement and the Additional Agreements to which it is
a party or prevent the ATMI Group from consummating the transactions
contemplated hereby and thereby, or (ii) have an ATMI Material Adverse Effect
that has not been disclosed in a Schedule hereto.
4.8. Condition of the Assets. Except as would not have an ATMI Material
Adverse Effect, the tangible assets of the ATMI Group and each ATMI Group
Subsidiary, including real, personal and mixed, material to the operation of
its business are in good condition and repair, ordinary wear and tear
excepted, and suitable for the uses intended. The assets of the ATMI Group and
each ATMI Group Subsidiary are operated in conformity in all material respects
with all applicable laws, ordinances, regulations, orders, Permits and other
requirements relating thereto adopted or currently in effect. SCHEDULE 4.8
sets forth a list of each asset (other than intangible assets listed on
SCHEDULE 4.23 and other than as set forth on SCHEDULE 4.25) having a book
value in excess of $50,000, indicating whether each such asset is owned or
leased by the ATMI Group or any ATMI Group Subsidiary, and setting forth where
each such asset is located. Since December 31, 1996, neither the ATMI Group
nor any ATMI Group Subsidiary has, except in the ordinary course of business,
acquired or sold or otherwise disposed of any of its assets. SCHEDULE 4.8 also
includes a list of each lease under which the ATMI Group or any ATMI Group
Subsidiary leases an asset (other than leased real property) having a
replacement cost of $50,000 or more. The leases and other agreements or
instruments under which the ATMI Group or any ATMI Group Subsidiary holds,
leases, subleases or is entitled to the use of any of the assets having a
replacement cost of $50,000 or more are in full force and effect, and all
rentals, royalties or other payments payable
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thereunder have been duly paid or provided for by adequate reserves. No
default or event of default by the ATMI Group or any ATMI Group Subsidiary
exists, and no event which, with notice or lapse of time or both, would
constitute a default by the ATMI Group or any ATMI Group Subsidiary, has
occurred and is continuing, under terms or provisions, express or implied, of
any such lease, agreement or other instrument or under the terms or provisions
of any agreement to which any of its assets is subject, which lease,
agreements or other instruments individually or in the aggregate involve
assets having a book value of $50,000 or more, nor has the ATMI Group received
notice of any claim of such default.
4.9. Title; Absence of Liens and Encumbrances, Etc. The ATMI Group and each
ATMI Group Subsidiary have good, valid, and marketable title to its assets,
free and clear of all mortgages, security interests, claims, liens, charges,
title defects, encumbrances, restrictions on use or transfer or other defects.
4.10. Government and Other Consents. No consent, authorization or approval
of, exemption by, or filing with any governmental, public or self-regulatory
body or authority or other party is required in connection with the execution,
delivery and performance by the ATMI Group of this Agreement, the Additional
Agreements to which it is a party or any of the instruments or agreements
required to be executed and delivered pursuant to this Agreement or any
Additional Agreement, or the consummation of the Exchange, except under any
applicable federal and state securities laws, the HSR Act and the rules and
regulations of the NASD.
4.11. Franchises, Permits, Licenses; Compliance with Applicable Laws and
Court Orders. Except for intellectual property matters covered by Section
4.23, the ATMI Group and each ATMI Group Subsidiary have all Permits necessary
to own, lease or operate its properties or necessary for the conduct of its
business as currently conducted, other than those the absence of which would
not result in an ATMI Material Adverse Effect. All such Permits are in full
force and effect, and there is no condition, nor has any event occurred, which
constitutes or with the giving of notice, or passage of time, or both, would
constitute a violation of the terms of any Permit, and to the knowledge of the
ATMI Group, no suspension or cancellation of any of them is pending or
threatened. Neither the execution of this Agreement or the Additional
Agreements to which any of the ATMI Group is a party nor the consummation of
the transactions contemplated hereby or thereby would constitute a violation
of the terms of any such Permit or grounds for the termination of any such
Permit. No application for a Permit filed by or on behalf of the ATMI Group or
any ATMI Group Subsidiary, or in connection with a facility operated by the
ATMI Group or any ATMI Group Subsidiary, within the last five (5) years has
been denied, other than the denial of Permits which individually or in the
aggregate did not or does not have an ATMI Material Adverse Effect. The ATMI
Group and each ATMI Group Subsidiary have, in the operation of its business,
duly complied with all applicable laws, rules, regulations, Permits and orders
of federal, state, local and foreign governments, except where the failure to
comply did not or does not have an ATMI Material Adverse Effect. Neither the
ATMI Group nor any ATMI Group Subsidiary is in default, and no event has
occurred that with notice or the passage of time or both would constitute such
a default, with respect to any order, judgment, writ, injunction, decree,
award, Permit, rule or regulation of any court, governmental or regulatory
body or arbitrator which restrains or limits in any material respect the
operation of the business of, or the use of the assets of, the ATMI Group and
the ATMI Group Subsidiaries taken as a whole. To the knowledge of the ATMI
Group, no officer, director, member or partner of the ATMI Group would be
unable to give the representation that none of the events or circumstances
described in Rule 262 of Regulation A under the Securities Act have occurred.
4.12. Financial Statements. The (i) audited consolidated balance sheets of
ATMI and its subsidiaries at December 31, 1994 and 1995 and the statements of
operations and changes in stockholders' equity and cash flows for the years
ended December 31, 1994 and 1995, and (ii) the unaudited consolidated balance
sheet at September 30, 1996 and the statement of operations and cash flows for
the nine months then ended and the unaudited consolidated statement of
operations for the three months ended September 30, 1996, included in the ATMI
SEC Documents (the "ATMI Financial Statements") fairly present the financial
position and results of operations of the ATMI Group as for the periods then
ended and the financial position of the ATMI Group at the dates thereof in
accordance with generally accepted accounting principles (subject to normal
year-end adjustments for unaudited interim financial statements, if any). ATMI
has maintained its books of account in accordance with applicable laws, rules
and regulations of government authorities and with generally accepted
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accounting principles consistently applied, and such books of account are and,
during the period covered by the ATMI Financial Statements were, correct and
complete in all material respects, fairly and accurately reflect or reflected
the income, expenses, assets and liabilities of ATMI, including the nature
thereof and the transactions giving rise thereto, and provide or provided a
fair and accurate basis for the preparation of the ATMI Financial Statements.
4.13. Absence of Undisclosed Liabilities. Neither the ATMI Group nor any
ATMI Group Subsidiary has any liabilities or obligations, either absolute,
accrued, contingent or otherwise, which individually or in the aggregate would
have an ATMI Material Adverse Effect and which (i) have not been reflected in
the ATMI Financial Statements, (ii) have not been described in this Agreement
or in any of the Schedules hereto, or (iii) have been incurred since December
31, 1996, other than in the ordinary course of its business consistent with
past practices.
4.14. Absence of Certain Changes. Since December 31, 1996 there has not
been, except as described in SCHEDULE 4.14 hereto:
(a) any material adverse change in the business, financial condition, assets
or liabilities, results of operations, or prospects of the ATMI Group and the
ATMI Group Subsidiaries taken as a whole other than changes in the ordinary
course of business, which changes have not in the aggregate been, and do not,
to the ATMI Group's knowledge, threaten to become, materially adverse to the
business, financial condition, assets or liabilities, results of operations,
or prospects of the ATMI Group and the ATMI Group Subsidiaries taken as a
whole;
(b) any damage, destruction or loss in excess of $25,000 (whether or not
covered by insurance) adversely affecting any of the assets or business of the
ATMI Group or any ATMI Group Subsidiary;
(c) any ATMI Commitment or liability undertaken or incurred by the ATMI
Group or any ATMI Group Subsidiary (whether absolute, accrued, contingent or
otherwise and whether due or to become due), or any transaction entered into
by the ATMI Group or any ATMI Group Subsidiary which is material to the ATMI
Group and the ATMI Group Subsidiaries taken as a whole, other than items
incurred or entered into in the ordinary course of business and consistent
with past practices of the ATMI Group or any ATMI Group Subsidiary;
(d) any payment, discharge or satisfaction of any claim, lien, encumbrance
or liability of the ATMI Group or any ATMI Group Subsidiary outside the
ordinary course of business in excess of $5,000 individually or $50,000 in the
aggregate;
(e) any sale, transfer, conveyance, assignment, lease, license, pledge,
mortgage or other disposition or encumbrance by the ATMI Group or any ATMI
Group Subsidiary of any asset of the ATMI Group or any ATMI Group Subsidiary
having a value more than $20,000 individually or $50,000 in the aggregate,
except in the ordinary course of business and consistent with past practices
of the ATMI Group or any ATMI Group Subsidiary;
(f) any modification, amendment, cancellation, termination, revocation,
rescission, or waiver of any rights with value to the ATMI Group or any ATMI
Group Subsidiary in excess of $20,000 pursuant to any ATMI Commitments;
(g) any material change in the accounting methods or practices followed by
the ATMI Group or any ATMI Group Subsidiary or any change in the depreciation
or amortization policies or rates theretofore adopted and applied;
(h) any (i) grant of any severance or termination pay to any director,
officer, employee, partner or member of the ATMI Group or any ATMI Group
Subsidiary in excess of $25,000, (ii) entering into of any employment,
severance, management, consulting, deferred compensation or other similar
agreement (or any amendment to any
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such existing agreement) with any director, officer, employee, partner or
member of the ATMI Group or any ATMI Group Subsidiary, except for employment
agreements entered into in the ordinary course of business (which agreements
individually or in the aggregate are not material to the financial condition
or results of operations of the ATMI Group and the ATMI Group Subsidiaries
taken as a whole), (iii) change in benefits payable under existing severance
or termination pay policies or employment, severance, management, consulting
or other similar agreements, other than normal yearly adjustments, or (iv)
change in compensation, bonus or other benefits payable to any director,
officer, employee, partner or member of the ATMI Group or any ATMI Group
Subsidiary, other than normal yearly adjustments, and other than any increase
pursuant to any ATMI Group Employee Benefit Plan, the formulae or commission
rates of which have not been amended or changed;
(i) declared, paid or set aside for payment by the ATMI Group or any ATMI
Group Subsidiary any dividend or other distribution in respect of ATMI Group
Securities, or redeemed, purchased or otherwise acquired any of their
respective ATMI Group Securities;
(j) issued, authorized for issuance, or entered into any commitment to issue
any Security, bond, note or other debt obligation of the ATMI Group or any
ATMI Group Subsidiary;
(k) any transaction or payments between (i) any stockholder or any related
party or entity and (ii) the ATMI Group or any ATMI Group Subsidiary not in
the ordinary course of business, other than indebtedness which by its terms
does not require payment of principal or interest at any time after December
31, 1997;
(l) the termination, whether voluntary or involuntary, of any material
employee of the ATMI Group or any ATMI Group Subsidiary or of any material
relationship between the ATMI Group or any ATMI Group Subsidiary and a
consultant; or
(m) any agreement or understanding entered into by the ATMI Group or any
ATMI Group Subsidiary whether in writing or otherwise, for the ATMI Group or
any ATMI Group Subsidiary to take any of the actions specified in this Section
4.14.
4.15. Indebtedness. Neither the ATMI Group nor any ATMI Group Subsidiary has
any obligation for money borrowed or under any guarantee nor any agreement or
arrangement to borrow money or to enter into any such guarantee, and as of the
Closing Date, neither the ATMI Group nor any ATMI Group Subsidiary will have
any obligation for money borrowed nor any agreement or arrangement to borrow
money, and neither the ATMI Group nor any ATMI Group Subsidiary will have any
guarantee outstanding nor any agreement or commitment to enter into any such
guarantee, which with respect to any of the above is material to the ATMI
Group and the ATMI Group Subsidiaries taken as a whole.
4.16. Accounts Receivable. No amounts in excess of $10,000 individually or
$50,000 in the aggregate included in the accounts receivable of the ATMI Group
or any ATMI Group Subsidiary in the ATMI Financial Statements have been
released or are, or are currently expected to be, regarded under generally
accepted accounting principles as unrecoverable in whole or in part except to
the extent there shall have been an appropriate bad debt reserve therefor.
Such receivables are not, to the knowledge of the ATMI Group, subject to any
counterclaim, refusal to pay or setoff not reflected in the reserves set forth
on the ATMI Financial Statements. SCHEDULE 4.16 hereto sets forth a list of
all accounts receivable of the ATMI Group or any ATMI Group Subsidiary as of
the close of business on December 31, 1996, none of which, to the ATMI Group's
knowledge, is owing from a debtor that has become bankrupt or insolvent or has
been pledged to any third party.
4.17. Supplies. The supplies of the ATMI Group and the ATMI Group
Subsidiaries taken as a whole consist of a quality and quantity generally
adequate for and usable in the ordinary course of business consistent with
past practice.
4.18. No Prebillings. Neither the ATMI Group nor any ATMI Group Subsidiary
has prebilled or received payment in amounts greater than $20,000 individually
or $50,000 in the aggregate, and the ATMI Group and the
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ATMI Group Subsidiaries will not prebill or receive payment in such amounts,
from any of its accounts for goods to be delivered or for services to be
rendered or for expenses to be incurred subsequent to the Closing Date, except
in connection with any government contract and except in the ordinary course
of business and consistent with past practices of the ATMI Group or any ATMI
Group Subsidiary.
4.19. Taxes.
(a) All Returns related to Taxes required to be filed or maintained on or
before the Closing Date with respect to the business, activities or assets of
the ATMI Group or any ATMI Group Subsidiary, have been filed or maintained, or
will be filed or maintained on or before the Closing Date, in accordance with
all applicable laws (after taking into account extensions duly obtained), and
no penalties or other charges are due or could reasonably be expected to
become due with respect to the late filing of any Return. All Returns are or
will be accurate and complete in all material respects and properly reflect
the Taxes due for the periods covered thereby. All Taxes due and payable,
whether or not called for by the Returns, and all Taxes properly allocable to
periods ending on or before the Closing Date have been paid, adequately
provided for in the ATMI Financial Statements or any ATMI Group Subsidiary's
financial statements, or properly protested or will be so paid, reserved for
or protested by the Closing Date, and the ATMI Group and each ATMI Group
Subsidiary have maintained all required records with respect to Taxes. All
Taxes required to be withheld or collected by the ATMI Group or any ATMI Group
Subsidiary have been duly withheld or collected and have been paid over to the
appropriate governmental authorities, or are held in separate bank accounts
established exclusively for such purpose. Except as set forth on SCHEDULE 4.19
hereto, no audit or investigation of any Return is pending or, to the
knowledge of the ATMI Group, threatened. SCHEDULE 4.19 hereto sets forth the
status of any audit that is pending, including the amounts of any deficiencies
and additions to Tax indicated on any notices of proposed deficiency or
statutory notices of deficiency that may have been issued in connection
therewith and all of such deficiencies or additions to Tax have been paid.
There are no requests for rulings pending before any taxing authority.
SCHEDULE 4.19 sets forth the states in which the ATMI Group or any ATMI Group
Subsidiary has filed Returns relating to Taxes for the taxable years ended
December 31, 1993 through December 31, 1995. Neither the ATMI Group nor any
ATMI Group Subsidiary has executed or filed with the Internal Revenue Service
or any other domestic or foreign taxing authority any agreement extending the
period for assessment or collection of any Taxes, and neither the ATMI Group
nor any ATMI Group Subsidiary has waived any law or regulation fixing the
period for assessment or collection of Taxes. Neither the ATMI Group nor any
ATMI Group Subsidiary is a party to any pending action or proceeding by any
domestic or foreign governmental authority for assessment or collection of
Taxes, and no claim for assessment or collection of Taxes has been asserted or
threatened against the ATMI Group or any ATMI Group Subsidiary for which
provision has not been made in the ATMI Financial Statements or any ATMI Group
Subsidiary's financial statements. There are no tax liens upon any of the
properties or assets of the ATMI Group or any ATMI Group Subsidiary other than
liens for Taxes not yet due and payable. True and complete copies of the
income tax returns of the ATMI Group and each ATMI Group Subsidiary for the
three (3) fiscal years ended in 1993 through 1995, as filed with the Internal
Revenue Service and all other domestic or foreign taxing authorities, have
previously been made available to the ATMI Group.
(b) No sales, use or other transfer or conveyance taxes are or will become
payable by the ADCS Group or the ATMI Group solely as a consequence of the
Merger, Exchange or Reorganization, other than taxes based upon the net income
of the parties.
4.20. Employees. SCHEDULE 4.20 contains a true and complete list of all of
the officers and directors, partners and members of the ATMI Group and ATMI
Group Subsidiaries, specifying their office or title, and a true and complete
list of all the employees of the ATMI Group and each ATMI Group Subsidiary as
of the date hereof. Neither the ATMI Group nor any ATMI Group Subsidiary has
any written or oral contract of employment with any employee of the ATMI Group
or any ATMI Group Subsidiary, and neither the ATMI Group nor any ATMI Group
Subsidiary is a party to or subject to any collective bargaining agreement nor
has been a party to or subject to any collective bargaining agreement or
collective bargaining plan during the last five (5) years. Neither the ATMI
Group nor any ATMI Group Subsidiary is a party to any pending nor, to the ATMI
Group's knowledge, threatened labor dispute affecting the ATMI Group or any
ATMI Group Subsidiary.
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The ATMI Group and each ATMI Group Subsidiary have complied in all material
respects with all applicable foreign, federal, state and local laws,
ordinances, rules and regulations and requirements relating to the employment
of labor, including, but not limited to, the provisions thereof relative to
wages, hours, collective bargaining, drug testing, personnel policies and
practices, payment of Social Security, unemployment and withholding taxes, and
ensuring equality of opportunity for employment and advancement of minorities
and women. To the knowledge of the ATMI Group, neither the ATMI Group nor any
ATMI Group Subsidiary is liable for any arrears of wages or any taxes or
penalties for failure to comply with any of the foregoing. None of the ATMI
Group or any ATMI Group Subsidiary has received notice from any employee
listed on SCHEDULE 4.20 as earning an annual base salary in excess of $40,000
that such employee is terminating his or her employment with the ATMI Group or
any ATMI Group Subsidiary, nor to the knowledge of the ATMI Group does any
such employee intend to terminate his or her employment with the ATMI Group or
any ATMI Group Subsidiary.
4.21. Employee Benefit Plans.
(a) SCHEDULE 4.21 sets forth a list of every stock option, stock purchase,
stock appreciation right, bonus, incentive, deferred or current compensation,
excess benefits, profit sharing, pension, thrift, savings, retirement,
severance, sickness, accident, medical, disability, hospitalization, vacation,
insurance or other plan or agreement which provides benefits to or for or on
behalf of any one or more employees of the ATMI Group or any ATMI Group
Subsidiary (including former employees) or their beneficiaries (collectively,
"ATMI Employee Benefit Plans"). The ATMI Group has made available to the ADCS
Group true, correct and complete copies of all ATMI Employee Benefit Plans, as
in effect on the date of this Agreement, all written descriptions or summaries
thereof, all trust agreements or other funding arrangements (including
insurance or group annuity contracts) relating thereto, all amendments thereto
and all determination letters issued by the Internal Revenue Service with
respect to such ATMI Employee Benefit Plans.
(b) No employee benefit plan (within the meaning of Section 3(3) of ERISA)
exists which covers or is maintained for the benefit of any of the employees
of the ATMI Group or any ATMI Group Subsidiary or to which the ATMI Group or
any ATMI Group Subsidiary is required to make contributions on account of any
employees of the ATMI Group or any ATMI Group Subsidiary.
(c) There are no actions, suits or claims pending (other than routine claims
for benefits) or, to the knowledge of the ATMI Group, threatened against any
ATMI Employee Benefit Plan, nor, to the knowledge of the ATMI Group, does any
basis therefor exist. Each ATMI Employee Benefit Plan is in compliance in all
material respects with all applicable requirements of ERISA and the Code and
their regulations, and other applicable laws and regulations and has been
administered in all material respects in accordance with its terms and with
applicable legal requirements.
(d) With respect to each ATMI Employee Benefit Plan,
(i) the ATMI Group and each ATMI Group Subsidiary have performed or
caused to be performed all obligations required to be performed under such
ATMI Employee Benefit Plan (including, but not limited to, the making when
due of all contributions required by the terms of such plan, by law, or by
any collective bargaining agreement, or otherwise);
(ii) the ATMI Group and each ATMI Group Subsidiary have complied in
timely fashion with the terms of each ATMI Employee Benefit Plan and with
all requirements of all laws, rules and regulations (including, but not
limited to, ERISA and the Code) which are applicable to each ATMI Employee
Benefit Plan and each ERISA Plan, including, but not limited to,
(1) the filing when due of all required returns, reports and other
documents, and
(2) compliance with all rules concerning notifications and
disclosures to participants and beneficiaries under each such plan;
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(iii) neither the ATMI Group nor any ATMI Group Subsidiary has engaged in
any "prohibited transaction" within the meaning of Section 4975 of the Code
or Section 406 of ERISA nor has committed any breach of fiduciary
responsibility under ERISA (or has any knowledge that any other person has
engaged in any such prohibited transaction or committed any such breach)
which could subject the ADCS Group and/or the Surviving Corporation to an
excise tax or other liability under ERISA or the Code; and
(iv) neither the ATMI Group nor any ATMI Group Subsidiary is in default
under or in violation of (and has no knowledge of any default or violation
by any other person of) the terms of any ATMI Employee Benefit Plan.
(e) Except as set forth on SCHEDULE 4.21,
(i) no employee pension benefit plan (as defined in Section 3(2)(A) of
ERISA) which is sponsored by any member of the "controlled group" (as
defined in Section 4001(a)(14) of ERISA) which includes the ATMI Group or
any ATMI Group Subsidiary (the "ATMI Controlled Group") has been terminated
since September 2, 1974;
(ii) no proceeding has been initiated to terminate any such employee
pension benefit plan;
(iii) there has been no "reportable event" (within the meaning of Section
4043(c) of ERISA) with respect to any such employee pension benefit plan,
other than those with respect to which the requirement of thirty (30) days'
notice, whether in advance of the event or following the event, to the PBGC
has been waived by regulation;
(iv) no excise or other taxes (or interest or penalties with respect
thereto) are due or owing with respect to any such employee pension benefit
plan because of any failure to comply with the minimum funding standards of
ERISA or for failing to comply with any other applicable requirement under
ERISA or the Code;
(v) all contributions to any such employee pension benefit plan have been
made within the time provided by law;
(vi) at no time during the last five (5) years has the ATMI Group or any
ATMI Group Subsidiary or any member of the ATMI Controlled Group been a
party to, or been required to make any contribution to, a "Multiemployer
Plan" (as defined in Section 3(37) of ERISA), nor has the ATMI Group or any
ATMI Group Subsidiary or any member of the ATMI Controlled Group made a
complete or partial withdrawal from a Multiemployer Plan as a result of
which any withdrawal liability has been or will be incurred by any of them;
(vii) neither the ATMI Group or any ATMI Group Subsidiary nor any member
of the ATMI Controlled Group has incurred any liability to the PBGC other
than for the payment of annual premiums (and no such premium payments are
currently due and owing); and
(viii) neither the ATMI Group or any ATMI Group Subsidiary nor any member
of the ATMI Controlled Group has entered into any transaction within the
past five (5) years the purpose of which is to evade liability under Title
IV of ERISA.
(f) No ATMI Employee Benefit Plan (other than one which is an employee
pension benefit plan within the meaning of Section 3(2)(A) of ERISA) provides
benefits (including, without limitation, death, health or medical benefits,
whether or not insured) with respect to current or former employees of the
ATMI Group or any ATMI Group Subsidiary beyond their retirement or other
termination of service with the ATMI Group or any ATMI Group Subsidiary, other
than (i) coverage mandated by applicable law, (ii) deferred compensation
benefits which have been accrued as liabilities on the books of the ATMI Group
or any ATMI Group Subsidiary, (iii) benefits the full cost of which is borne
by the current or former employees (or their beneficiaries), (iv) benefits
which have already been satisfied in full or (v) death benefits under any
pension plan to the extent set forth in SCHEDULE 4.21 hereto.
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4.22. Litigation. There is no action, suit or proceeding pending and of
which it has been served notice or, to the ATMI Group's knowledge, threatened,
by or against the ATMI Group or any ATMI Group Subsidiary relating to or
affecting its business or assets, at law, in equity, by way of arbitration or
before any governmental department, commission, board or agency. To the ATMI
Group's knowledge, there are no existing facts or conditions which reasonably
would be expected to give rise to any charge, claim, litigation, proceeding,
or investigation by any third party which could reasonably be expected to
materially adversely affect its business, the ATMI Group or any ATMI Group
Subsidiary, nor are there any facts or conditions which could reasonably be
expected to give rise to any order of condemnation, appropriation or other
taking of any of the assets. There is no litigation, action, suit,
investigation or proceeding pending and of which it has been served notice or,
to the knowledge of the ATMI Group, threatened, before any court, agency or
other governmental body against the ATMI Group or any ATMI Group Subsidiary
(or any corporation or entity affiliated with the ADCS Group or any ATMI Group
Subsidiary) which seeks to enjoin or prohibit or otherwise challenge the
transactions contemplated hereby or contemplated by the Additional Agreements.
Schedule 4.22 sets forth each action, suit or proceeding against the ATMI
Group or any ATMI Group Subsidiary relating to or affecting its business or
assets, at law, in equity, by way of arbitration or before any governmental
department, commission, board or agency, which has been dismissed or settled
or in which a judgment has been rendered, in each case within the past five
(5) years, and the disposition thereof. The ATMI Group has made available to
ATMI true and correct copies of each settlement agreement and release, if any,
in connection with any matter discussed in the prior sentence, each of which
constitutes a legal, valid and binding obligation of the parties thereto, and
no party thereto is in default of any of its obligations thereunder. There is
no order, judgment, decree or settlement agreement against or involving the
ATMI Group or any ATMI Group Subsidiary involving any ongoing liabilities or
restrictions.
4.23. Proprietary Rights. (a) SCHEDULE 4.23 sets forth a true, correct and
complete list of all foreign and domestic patents and applications for
patents, Marks, and registered copyrights, and applications therefor, owned by
the ATMI Group or any ATMI Group Subsidiary or in which the ATMI Group or any
ATMI Group Subsidiary has any rights or licenses. The ATMI Group has made
available to the ADCS Group copies of all agreements of the ATMI Group or any
ATMI Group Subsidiary with each officer, employee or consultant of the ATMI
Group or any ATMI Group Subsidiary providing the ATMI Group or any ATMI Group
Subsidiary with secrets and inventions developed or used by the ATMI Group or
any ATMI Group Subsidiary. All of such agreements so described are valid,
enforceable and legally binding.
(b) The ATMI Group and each ATMI Group Subsidiary own or possess or have the
right to obtain licenses or other rights to use all Proprietary Rights which
it has determined are used in its business, and it believes the same are
sufficient to conduct its business as it has been and is now being conducted.
The ATMI Group is not aware of any existing Proprietary Rights that the ATMI
Group and the ATMI Group Subsidiaries do not already own or possess or will be
able to obtain a license under, which Proprietary Rights would be necessary
for the ATMI Group or any ATMI Group Subsidiary to conduct its business.
(c) To the ATMI Group's knowledge, the operations of the ATMI Group and each
ATMI Group Subsidiary do not conflict with or infringe upon, and no one has
asserted to the ATMI Group or any ATMI Group Subsidiary that such operations
conflict with or infringe upon, any Proprietary Rights any Marks owned,
possessed or used by any third party. There are no claims, disputes, actions,
proceedings, suits or appeals pending against the ATMI Group or any ATMI Group
Subsidiary with respect to any Proprietary Rights or Marks, and none has been
threatened against the ATMI Group or any ATMI Group Subsidiary. To the ATMI
Group's knowledge, there are no facts or alleged facts which would reasonably
serve as a basis for any claim that the ATMI Group or any ATMI Group
Subsidiary does not have the right to use, free of any rights or claims of
others, all Proprietary Rights and Marks in the development, manufacture, use,
sale or other disposition of any or all products or services presently being
used, furnished or sold in the conduct of its business as it has been and is
now being conducted. Neither the ATMI Group nor any ATMI Group Subsidiary has
violated the terms of any confidentiality agreement or nondisclosure agreement
entered into in favor of any third party.
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(d) There are no inter parties proceedings before any patent or trademark
authority to which the ATMI Group or any ATMI Group Subsidiary is a party.
(e) The ATMI Group and each ATMI Group Subsidiary have taken all other
measures it deems reasonable to maintain the confidentiality of the processes
and formulae, research and development results and other know-how, the value
of which to the ATMI Group or any ATMI Group Subsidiary is contingent upon
maintenance of the confidentiality thereof.
(f) Each employee and officer of the ATMI Group or any ATMI Group Subsidiary
is a party to a confidential non-disclosure agreement with the ATMI Group or
such ATMI Group Subsidiary (the form of which has been made available to the
ADCS Group). No employee of the ATMI Group or any ATMI Group Subsidiary is in
violation of any material term of any employment contract, proprietary
information and inventions agreement, confidentiality agreement, non-
competition agreement, or any other contract or agreement relating to the
relationship of any such employee with the ATMI Group or any ATMI Group
Subsidiary, or any previous employer.
(g) The Proprietary Rights and Marks are free of any unresolved ownership
disputes with respect to any third party. To the ATMI Group's knowledge there
is no unauthorized use, infringement or misappropriation of any of such
Proprietary Rights or Marks by any third party, including any employee or
former employee of the ATMI Group or any ATMI Group Subsidiary.
(h) Other than as part of transactions identified in SCHEDULE 4.23, the ATMI
Group has not licensed, granted rights under, waived, released, discharged,
dedicated, disclaimed or otherwise relinquished any of the Proprietary Rights
identified on SCHEDULE 4.23(H) (the "ATMI Identified Proprietary Rights") to
third parties; has not burdened the Proprietary Rights with any liens,
security interests, financing agreements, or other encumbrances; and to the
ATMI Group's knowledge is not prevented in any manner, as by estoppel, laches,
inequitable conduct, or otherwise, from enforcing any of the ATMI Identified
Proprietary Rights, which prevention would individually or in the aggregate
have an ATMI Material Adverse Effect.
4.24. Related Party Transactions. SCHEDULE 4.24 sets forth the amounts and
other essential terms of indebtedness (which by its terms requires payment of
principal or interest at any time after December 31, 1997) or other
obligations, liabilities or commitments (contingent or otherwise) of the ATMI
Group or any ATMI Group Subsidiary to or from any present officer, director,
partner, member or stockholder or any person related to, controlling,
controlled by or under common control with any of the foregoing (other than
for employment services performed within the past month the payment for which
is not yet due), and all other transactions between such persons and the ATMI
Group or any ATMI Group Subsidiary, except for transactions which through
consolidation are eliminated in the ATMI Group Financial Statements. Without
limiting the generality of the foregoing, as of the date hereof, none of the
present officers, directors, partners, members or stockholders or any person
related to, controlling, controlled by or under common control with any of the
foregoing (a) has any material direct or indirect interest in any entity which
does business with the ATMI Group or any ATMI Group Subsidiary, (b) has any
direct or indirect interest in any property, asset or right which is used by
the ATMI Group or any ATMI Group Subsidiary in the conduct of its business, or
(c) has any contractual relationship with the ATMI Group or any ATMI Group
Subsidiary other than such relationships which occur from being an employee,
officer, director, etc.
4.25. Environmental Matters; Health and Safety.
(a) Definitions. The definitions set forth in Section 3.31 shall apply for
purposes of this Section 4.25.
(b) Environmental Representations and Warranties. SCHEDULE 4.25 hereto sets
forth a list of all of the real property and all of the buildings, warehouses
and storage facilities owned, leased or operated by the ATMI Group or any ATMI
Group Subsidiary during the last five (5) years (the "ATMI Premises"),
indicating where such
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property or facility is located, whether such property is owned, leased and/or
operated by the ATMI Group or any ATMI Group Subsidiary and the date of
acquisition or occupancy thereof.
(i) Compliance. The ATMI Group and each ATMI Group Subsidiary and, to the
ATMI Group's knowledge, its predecessor(s) in interest, have been and are
in compliance with and have no liability or obligation arising under any
Environmental Law, and neither the ATMI Group nor any ATMI Group Subsidiary
has received any Notice from any applicable governmental agency seeking any
information or alleging any violation of such Environmental Laws. No Site
Remediation Measure is necessary or required under Environmental Law or any
ATMI Commitment for its business or the ATMI Premises, nor are there any
Environmental Conditions on the ATMI Premises. No capital improvements,
alterations or repairs to the ATMI Premises are necessary or required to
bring such facility into compliance with all Environmental Laws now in
effect or enacted or promulgated but not yet in effect.
(ii) Hazardous Materials/Underground Tanks. None of the ATMI Group or any
ATMI Group Subsidiary and, to the ATMI Group's knowledge, their
predecessor(s) in interest, has caused or permitted any use of its business
or ATMI Premises to generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer, produce or process any Hazardous Materials or
solid waste, except in compliance with all Environmental Laws, and has not
caused or permitted and has no knowledge of the Release of any such
Hazardous Materials on-site or off-site of the ATMI Premises resulting or
that could in the future result in an Environmental Condition requiring
Site Remediation Measures. The ATMI Premises and all principal items and
machinery and equipment used in the ATMI Group's business comply with all
applicable Environmental Laws. The ATMI Premises do not contain any
asbestos requiring removal now or in the course of any remodeling that may
occur in the future, or other Hazardous Materials, and, except for
chemicals and raw materials used, and wastes generated in connection with,
the manufacture of the ATMI Group's products, which in each case are
located on the ATMI Premises in the ordinary course of business, no such
materials are located on, in or under the ATMI Premises. Any and all
underground and aboveground tanks at the ATMI Premises are in compliance
with any and all Environmental Laws, and such Environmental Laws do not
mandate the removal or retrofitting of such tanks for a period of five (5)
years after the Closing. The removal of any tank has been carried out in
compliance with all applicable Environmental Laws.
(iii) There are no outstanding or, to the ATMI Group's knowledge,
threatened actions, claims, proceedings, determinations or judgments by any
party, including but not limited to any governmental authority, whether
foreign, federal, state, local or any agency thereof, against or involving
the ATMI Group or any ATMI Group Subsidiary, or to the ATMI Group's
knowledge, against or involving the ATMI Group's or any ATMI Group
Subsidiary's predecessor(s) in interest in any manner arising under the
Environmental Laws or alleging or involving personal injury or property
damage as a result of a violation of any Environmental Law or otherwise
involving Environmental Conditions. Attached hereto as SCHEDULE 4.25 is a
list of all such actions, claims, proceedings, determinations and judgments
issued within the past ten (10) years by any party against the ATMI Group
or any ATMI Group Subsidiary and, to the ATMI Group's knowledge, against
any predecessor(s) in interest.
(iv) The ATMI Group and each ATMI Group Subsidiary and, to the ATMI
Group's knowledge, their predecessor(s) in interest, have complied with all
notice, recordkeeping and reporting requirements imposed by any
governmental authority and any informational requests or demands arising
under any Environmental Laws. None of the ATMI Group or any ATMI Group
Subsidiary, nor, to the ATMI Group's knowledge, the ATMI Group's or any
ATMI Group Subsidiary's predecessor(s) in interest, is liable for any
penalties, fines, or forfeitures or is subject to any restrictions on the
conduct of its business for failure to comply with any of the foregoing.
4.26. Customers and Suppliers. Neither the ATMI Group nor any ATMI Group
Subsidiary has received any notice or has any knowledge that any customer from
whom the ATMI Group or any ATMI Group Subsidiary in the aggregate has received
more than $250,000 in gross receipts during the immediately preceding twelve-
month period (1) has ceased, or currently intends to cease, to use the
products, goods or services of the business
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of the ATMI Group or of any ATMI Group Subsidiary, (2) has substantially
reduced, or currently intends to substantially reduce, the use of products,
goods or services of the business of the ATMI Group or of any ATMI Group
Subsidiary, or (3) other than in the ordinary course of business and to an
extent which is not reasonably likely to have an ATMI Material Adverse Effect,
has sought, or is seeking, to reduce the price it will pay for products, goods
or services of the business of the ATMI Group or of any ATMI Group Subsidiary.
Neither the ATMI Group nor any ATMI Group Subsidiary has received any notice
or has any knowledge that any of the ten (10) largest suppliers of the ATMI
Group and the ATMI Group Subsidiaries taken as a whole in terms of purchases
made during the 1995 and 1996 fiscal years will not sell raw materials,
supplies, merchandise and other goods to the business of the ATMI Group or of
any ATMI Group Subsidiary at any time after the Closing Date on terms and
conditions similar to those used in the current sales to the business, subject
to general and customary price increases and unforeseeable supply or demand
changes.
4.27. Product and Service Warranties. To the knowledge of the ATMI Group:
(a) All products sold and all services rendered by the ATMI Group and each
ATMI Group Subsidiary have been in conformity in all material respects with
all applicable ATMI Commitments and all expressed warranties, and no material
liability exists or will arise for replacement or damage in connection with
such sales or for services not rendered in all material respects in accordance
therewith.
(b) There is adequate provision in the ATMI Financial Statements for
liabilities and obligations for damaged, defective or returned goods, or for
replacement of goods or for allowances with respect to goods sold or services
rendered by or on behalf of the ATMI Group or any ATMI Group Subsidiary.
(c) Neither the ATMI Group nor any ATMI Group Subsidiary has any pattern of
claims or actions based upon allegations of the same or similar product defect
for any of its products.
(d) There has not been any material product recall, rework or retrofit
relating to any line of product manufactured, shipped or sold by the ATMI
Group or any ATMI Group Subsidiary, nor to the knowledge of the ATMI Group is
there any basis for any such product recall, rework or retrofit.
4.28. No Prior Activities. Holdings and Newco were formed solely for the
purpose of engaging in the transactions contemplated by this Agreement. As of
the date hereof and the Effective Time, except for obligations or liabilities
incurred in connection with its incorporation or organization and the
transactions contemplated by this Agreement and except for this Agreement and
any other agreements or arrangements contemplated by this Agreement, neither
Holdings nor Newco has nor will have incurred, directly or indirectly, through
any subsidiary or affiliate (other than its parent), any obligations or
liabilities or engaged in any business activities of any type or kind
whatsoever or entered into any agreements or arrangements with any person.
4.29. Hart-Scott-Rodino. The "total assets" and the "annual net sales" of
the "ultimate parent entity" (as such terms are used within the meaning of
Section 7A.(a)(2)(A) of the Hart-Scott-Rodino Antitrust Improvements Act of
1976) of the ATMI Group are less than $100,000,000.
4.30. Finders' Fees. There is no investment banker, broker, finder or other
intermediary that has been retained by or is authorized to act on behalf of
the ATMI Group or any ATMI Group Subsidiary who might be entitled to any fee
or commission from the ADCS Group or any other person upon consummation of the
transactions contemplated by this Agreement.
4.31. Information in Disclosure Documents and Registration Statement. None
of the information made available or to be made available by the ATMI Group
for inclusion or incorporation by reference in (i) any registration statement
filed in connection with this Agreement will, at the time such registration
statement is filed with the SEC and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements
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therein, in light of the circumstances under which they are made, not
misleading and (ii) the Proxy Statement will, at the date mailed to
stockholders and at the time of the meeting of stockholders to be held in
connection with the Merger, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply as to
form in all material respects with the provisions of the Exchange Act and the
rules and regulations thereunder, and any registration statement will comply
as to form in all material respects with the provisions of the Securities Act
and the rules and regulations thereunder, except that no representation is
made by the ATMI Group with respect to statements made therein based on
information made available by the ADCS Group, any ADCS Group Subsidiary or any
Holder for inclusion in any registration statement or the Proxy Statement.
4.32. Pooling. To its knowledge, the ATMI Group has not taken, or failed to
take, any action that would jeopardize the treatment of the Reorganization as
a "pooling of interests" for accounting purposes.
4.33. Section 203 of the DGCL. The Exchange by the Holders of each of their
Interests for their Pro Rata Portion of the Exchange Consideration has been
approved by the Board of Directors of Holdings for the purposes of Section 203
of the DGCL.
4.34. No Misrepresentation. Neither this Agreement nor any certificate or
Schedule or other information furnished pursuant to this Agreement by or on
behalf of the ATMI Group or any ATMI Group Subsidiary contains any untrue
statement of a material fact or, when this Agreement and such certificates,
Schedules and other information are taken in their entirety, omits to state a
material fact required to be stated herein or therein necessary to make the
statements contained herein or therein not misleading.
ARTICLE V
Covenants
5.1. Access to Information. From the date hereof to the Closing Date, each
party will (i) afford to the officers, independent certified public
accountants, legal counsel and other representatives of the other parties,
during normal business hours, reasonable access to its properties, books,
records and personnel in order that each party may have full opportunity to
make such investigation as it reasonably desires to make in connection with
the transactions contemplated herein; (ii) confer with representatives of the
other parties; (iii) furnish to the other parties, either orally or by means
of such records, documents, and memoranda as are available or reasonably
capable of preparation, such information as the other parties may reasonably
request; and (iv) furnish to the other parties' auditors all consents and
authority that they may reasonably request in connection with any examination
of each party by the other parties. The rights pursuant to this Section 5.1
shall be subject to the provisions of the Confidentiality Agreement dated
October 22, 1996 between ADCS LP and ATMI, which Confidentiality Agreement
shall be binding on each of the ADCS Group and each of the ATMI Group and
shall survive the execution and delivery of and the termination of, this
Agreement.
5.2. Interim Operations of ADCS Group. Except as set forth on Schedule 5.2
and as provided in Section 5.21, the ADCS Group hereby covenants and agrees
that between the date hereof and the Closing, and unless the ATMI Group
otherwise consents in advance in writing:
(a) The ADCS Group and each ADCS Group Subsidiary shall conduct its business
in the ordinary course and in accordance with its past practices, and use its
diligent efforts to (i) preserve its business organization intact, (ii)
preserve its goodwill and the confidentiality of its business know-how, (iii)
keep available to the ADCS Group and each ADCS Group Subsidiary the services
of its present key employees and those material to the operation of its
respective business, and (iv) preserve the present relationships between the
ADCS Group or
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any ADCS Group Subsidiary and its collaborators, licensors and others having
business relations with the ADCS Group or any ADCS Group Subsidiary.
(b) The ADCS Group and each ADCS Group Subsidiary shall conduct its business
only in the usual and ordinary manner and shall not change the character of
its business.
(c) Neither the ADCS Group nor any ADCS Group Subsidiary shall authorize,
amend the terms of, issue or contract for the issuance of or grant options,
warrants or rights to purchase any ADCS Group Securities.
(d) The ADCS Group shall use its best efforts to cause the Holders not to
transfer any of the Interests, other than transfers to family members and
trusts for their benefit or involuntary transfers, which in any event do not
adversely affect the pooling of interests treatment of the Reorganization. The
ADCS Group will give ATMI prompt written notice of any such transfer. Each
such permitted transferee shall be deemed a "Holder" for all purposes of this
Agreement.
(e) Neither the ADCS Group nor any ADCS Group Subsidiary shall pay any
dividend or make any other distribution with respect to or repurchase or agree
to repurchase any ADCS Group Securities.
(f) The ADCS Group and each ADCS Group Subsidiary shall (i) use and operate
substantially all of its assets in the ordinary course of business in
accordance with past practices and maintain substantially all of its assets in
substantially the same condition as they are now (reasonable wear and tear,
which are not such as to adversely affect the operation of such business,
excepted); (ii) maintain insurance upon all of its assets and with respect to
the conduct of its business, all such insurance to be comparable in amount,
scope and coverage to that in effect on the date of this Agreement; and (iii)
give ATMI prompt written notice of any material damage to its properties by
fire or other casualty.
(g) The ADCS Group and each ADCS Group Subsidiary shall maintain its books,
records and accounts in the ordinary course consistent with past practice, on
a basis consistent with prior periods, and shall not make any material changes
in the accounting methods or practices followed by the ADCS Group or any ADCS
Group Subsidiary or any change in the depreciation or amortization policies or
rates theretofore adopted or applied.
(h) The ADCS Group and each ADCS Group Subsidiary shall duly comply in all
material respects with all laws applicable to it, its assets and the conduct
of its business.
(i) The ADCS Group and each ADCS Group Subsidiary shall perform all of its
material obligations under the ADCS Commitments without default.
(j) Except in the ordinary course of business consistent with past practice,
neither the ADCS Group nor any ADCS Group Subsidiary shall grant any power of
attorney with respect to its business or assets.
(k) Except in the ordinary course of business consistent with past practice,
neither the ADCS Group nor any ADCS Group Subsidiary shall enter into any new
ADCS Commitments, or cancel, amend, modify adversely, assign, encumber or
terminate any of the ADCS Commitments or make any material capital investment,
expenditure or improvement or enter into any agreement therefor, which in any
event would be material to the ADCS Group and the ADCS Group Subsidiaries
taken as a whole.
(l) Except in the ordinary course of business and to the extent not material
to the ADCS Group and the ADCS Group Subsidiaries taken as a whole, neither
the ADCS Group nor any ADCS Group Subsidiary shall (i) make any loan, or
otherwise extend credit to any person, firm or corporation, except in the
ordinary course of business and consistent with the past practices of the ADCS
Group or any ADCS Group Subsidiary, (ii) give any guarantee or indemnity, or
make any other similar commitment with respect to a debt or other liability of
any person, firm or corporation, or (iii) (excluding transactions among the
ADCS Group and the ADCS Group
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Subsidiaries) create, incur or otherwise become liable for any indebtedness
(other than interest and fees assessed on the outstanding portion of such
indebtedness), or otherwise subject any of its property or assets to any lien,
security interests, encumbrance or charge.
(m) Neither the ADCS Group nor any ADCS Group Subsidiary shall make any
payment in excess of $50,000, except for payment of liabilities incurred in
the ordinary course of business, and the payment of the fees and expenses of
its attorneys and accountants incurred in connection with the transactions
contemplated hereby.
(n) Neither the ADCS Group nor any ADCS Group Subsidiary shall sell, lease
or otherwise dispose of any of the assets, except in the ordinary course of
business for a cash consideration which equals a fair value at the time of the
sale of any of the assets.
(o) Except in the ordinary course of business consistent with past practice,
neither the ADCS Group nor any ADCS Group Subsidiary shall (i) grant any
severance or termination pay to any director, officer, employee, partner or
member of the ADCS Group or any ADCS Group Subsidiary; (ii) enter into any
employment, severance, management, consulting, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with any
director, officer, employee, partner or member of the ADCS Group or any ADCS
Group Subsidiary; (iii) change benefits payable under existing severance or
termination pay policies or employment, severance, management, consulting or
other similar agreements other than normal yearly adjustments; or (iv) change
compensation, bonus or other benefits payable to director, officer, employee,
partner or member of the ADCS Group or any ADCS Group Subsidiary, other than
normal yearly adjustments, other than promotions made in the ordinary course
and other than any increase pursuant to any ADCS Employee Benefit Plan, the
formulae or commission rates of which have not been amended or changed.
(p) The ADCS Group will use its best efforts not to authorize or permit (i)
the ADCS Organizational Documents to be amended; (ii) the merger,
consolidation or other combination of the ADCS Group or any ADCS Group
Subsidiary with any other entity; or (iii) the ADCS Group or any ADCS Group
Subsidiary to organize a subsidiary.
(q) The ADCS Group shall not take any action which would jeopardize the
treatment of the Reorganization as a tax-free transaction or which would
prevent the Reorganization from being accounted for as a pooling of interests.
5.3. Interim Operation of the ATMI Group. The ATMI Group hereby covenants
and agrees that between the date hereof and the Closing, and unless the ADCS
Group otherwise consents in advance in writing:
(a) The ATMI Group and each ATMI Group Subsidiary shall conduct its business
in the ordinary course and in accordance with its past practices, and use its
diligent efforts to (i) preserve its business organization intact, (ii)
preserve its goodwill and the confidentiality of its business know-how, (iii)
keep available to the ATMI Group and each ATMI Group Subsidiary the services
of its present key employees and those material to the operation of its
respective business, and (iv) preserve the present relationships between the
ATMI Group or any ATMI Group Subsidiary and its collaborators, licensors and
others having business relations with the ATMI Group or any ATMI Group
Subsidiary.
(b) The ATMI Group and each ATMI Group Subsidiary shall conduct its business
only in the usual and ordinary manner and shall not change the character of
its business.
(c) Neither the ATMI Group nor any ATMI Group Subsidiary shall pay any
dividend or make any other distribution with respect to or repurchase or agree
to repurchase any ATMI Group Securities.
(d) The ATMI Group and each ATMI Group Subsidiary shall (i) use and operate
substantially all of its assets in the ordinary course of business in
accordance with past practices and maintain substantially all of its
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assets in substantially the same condition as they are now (reasonable wear
and tear, which are not such as to adversely affect the operation of such
business, excepted); (ii) maintain insurance upon the assets and with respect
to the conduct of its business, all such insurance to be comparable in amount,
scope and coverage to that in effect on the date of this Agreement; and (iii)
give the ADCS Group prompt written notice of any material damage to its
properties by fire or other casualty.
(e) The ATMI Group and each ATMI Group Subsidiary shall maintain its books,
records and accounts in the ordinary course consistent with past practice, on
a basis consistent with prior periods, and shall not make any material changes
in the accounting methods or practices followed by the ATMI Group or any ATMI
Group Subsidiary or any change in the depreciation or amortization policies or
rates theretofore adopted or applied.
(f) The ATMI Group and each ATMI Group Subsidiary shall duly comply in all
material respects with all laws applicable to it, its assets and the conduct
of its business.
(g) The ATMI Group and each ATMI Group Subsidiary shall perform all of its
material obligations under the ATMI Commitments without default.
(h) Neither the ATMI Group nor any ATMI Group Subsidiary shall sell, lease
or otherwise dispose of any of the assets, except in the ordinary course of
business for a cash consideration which equals a fair value at the time of the
sale of any of the assets.
(i) The ATMI Group will use its best efforts not to authorize or permit with
respect to ATMI, and will not authorize or permit with respect to any ATMI
Subsidiary, (i) the ATMI Organizational Documents to be amended, or (ii) the
merger, consolidation or other combination of the ATMI Group or any ATMI Group
Subsidiary with any other entity, except as may be necessary to effect any
acquisitions made by ATMI, subject to its obligations under Section 5.5, or to
change the name of any member of the ATMI Group.
(j) The ATMI Group shall not take any action which would jeopardize the
treatment of the Reorganization as a tax-free transaction or which would
prevent the Reorganization from being accounted for as a pooling of interests.
(k) The ATMI Group shall not grant to any other party piggyback or demand
registration rights which are pari passu or greater in priority than the
registration rights to be provided pursuant to the Registration Rights
Agreement attached hereto as EXHIBIT C (the "Registration Rights Agreement").
(l) The ATMI Group will not amend its stock option, stock purchase or other
similar equity-based incentive compensation plans to increase the number of
shares of stock issuable thereunder, nor issue shares of its capital stock
which would cause the number of its shares of capital stock to be more than
the number of shares that are issued and outstanding as of the date hereof,
except (i) the ATMI Group may approve and issue options under ATMI's existing
stock option plans, (ii) the ATMI Group may approve a new stock option plan
for up to 900,000 shares of Holdings Common Stock, (iii) pursuant to the
exercise of Outstanding ATMI Options, Outstanding ATMI Warrants and options
hereafter issued under (i) above, and (iv) in connection with acquisitions
made by ATMI, subject to its obligations under Section 5.5.
(m) Except in the ordinary course of business consistent with past practice,
neither the ATMI Group nor any ATMI Group Subsidiary shall enter into any new
ATMI Commitments, or cancel, amend, modify adversely, assign, encumber or
terminate any of the ATMI Commitments or make any material capital investment,
expenditure or improvement or enter into any agreement therefor, which in any
event would be material to the ATMI Group and the ATMI Group Subsidiaries
taken as a whole.
(n) Except in the ordinary course of business and to the extent not material
to the ATMI Group and the ATMI Group Subsidiaries taken as a whole, neither
the ATMI Group nor any ATMI Group Subsidiary shall
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(i) make any loan, or otherwise extend credit to any person, firm or
corporation, except in the ordinary course of business and consistent with the
past practices of the ATMI Group or any ATMI Group Subsidiary, (ii) give any
guarantee or indemnity, or make any other similar commitment with respect to a
debt or other liability of any person, firm or corporation, or (iii)
(excluding transactions among the ATMI Group and the ATMI Group Subsidiaries)
create, incur or otherwise become liable for any indebtedness (other than
interest and fees assessed on the outstanding portion of such indebtedness),
or otherwise subject any of its property or assets to any lien, security
interests, encumbrance or charge.
(o) Neither the ATMI Group nor any ATMI Group Subsidiary shall make any
payment in excess of $100,000, except for payment of liabilities incurred in
the ordinary course of business, and the payment of the fees and expenses of
its attorneys and accountants incurred in connection with the transactions
contemplated hereby.
(p) Except in the ordinary course of business consistent with past practice,
neither the ATMI Group nor any ATMI Group Subsidiary shall (i) grant any
severance or termination pay to any director, officer, employee, partner or
member of the ATMI Group or any ATMI Group Subsidiary; (ii) except as
described in Schedule 5.3(p), enter into any employment, severance,
management, consulting, deferred compensation or other similar agreement (or
any amendment to any such existing agreement) with any director, officer,
employee, partner or member of the ATMI Group or any ATMI Group Subsidiary;
(iii) change benefits payable under existing severance or termination pay
policies or employment, severance, management, consulting or other similar
agreements other than normal yearly adjustments; or (iv) change compensation,
bonus or other benefits payable to director, officer, employee, partner or
member of the ATMI Group or any ATMI Group Subsidiary, other than normal
yearly adjustments, other than promotions made in the ordinary course and
other than any increase pursuant to any ATMI Employee Benefit Plan, the
formulae or commission rates of which have not been amended or changed.
5.4. Notices of Certain Events. From the date hereof to and including the
Closing Date, the ADCS Group and the ATMI Group covenant and agree to notify
the other of (i) any notice or other communication from any person alleging
that the consent of such person is or may be required in connection with the
transactions contemplated by this Agreement; (ii) any notice or other
communication from any foreign or domestic governmental authority in
connection with the transactions contemplated by this Agreement; and (iii) any
matter arising and discovered after the date of this Agreement that, if
existing or known on the date of this Agreement, would have been required to
be disclosed pursuant to this Agreement, or that constitutes a breach or
prospective breach of this Agreement by the notifying party or its affiliates.
5.5. Other Acquisitions by ATMI. From and after the date hereof to the
Effective Time or the termination of this Agreement in accordance with Article
IX, without first giving the ADCS Group notice thereof, ATMI will not enter
into a definitive agreement with respect to any acquisition having a value in
excess of $18,000,000 (including the value of (i) cash, stock and assets
transferred as consideration in any acquisition, whether by way of merger,
purchase or exchange or otherwise; (ii) options, warrants or convertible
securities issued or assumed in connection with such acquisition; and (iii)
any debt or other liability issued or assumed in connection with such
acquisition). The information contained in such notice shall be subject to the
restrictions set forth in Sections 5.1 and 5.6. The ADCS Group shall have the
right within ten (10) business days after notice is given by ATMI to notify
ATMI that the ADCS Group objects to such acquisition and indicating the
reasonable basis for such objection. Failure of the ADCS Group to give notice
within such 10-day period shall waive the ADCS Group's right to object. Within
five (5) business days after ATMI's receipt of the ADCS Group's notice of
objection, ATMI shall notify the ADCS Group of ATMI's intention to either
terminate or proceed with such acquisition. If ATMI indicates its intention to
proceed with such acquisition, the ADCS Group shall have the right,
exercisable within five (5) business days after its receipt of ATMI's notice
of its intent to proceed, to terminate this Agreement pursuant to Section
9.1(d)(ii) without any liability on the part of any party hereto.
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5.6. No Public Disclosure. The ADCS Group understands that ATMI is a public
company, and that until the transactions contemplated by this Agreement are
made public, the ADCS Group and the Holders and those whom they advise of this
transaction (which shall only be on a "need to know basis") may be privy to
material inside information; accordingly, the ADCS Group understands, and the
ADCS Group has apprised those of its officers, members, partners and agents
who know of the potential transaction, of the need for confidentiality and the
potential consequences of any trading in the ATMI Group Securities. No public
announcements shall be made concerning the negotiations between the parties,
this Agreement or the transactions contemplated herein, without the prior
mutual consent of the ADCS Group and ATMI, except as may be required by law or
the rules or regulations of The Nasdaq National Market; provided that ATMI
shall use its best efforts to obtain ADCS' mutual consent to the timing and
content of any such announcements. The parties agree that, to the maximum
extent feasible, they will advise and confer with each other prior to the
issuance of any reports, statements or releases pertaining to this Agreement
or the transactions contemplated herein. In addition, the parties agree to
respond to all inquiries with respect to the Reorganization by stating that it
is their policy not to comment on such matters.
5.7. No Negotiation. The ADCS Group and each ADCS Group Subsidiary will not,
and the ADCS Group will use best efforts to cause each Holder not to, directly
or indirectly, solicit, discuss, or engage in negotiations with, or provide
information to, any person, other than ATMI, concerning any possible proposal
regarding the acquisition of the Interests, the ADCS Group or any ADCS Group
Subsidiary or any part thereof, or any merger or consolidation thereof, or
accept any such proposal.
5.8. NovaMOS. Following the Closing, the NovaMOS division and the ADCS Group
shall be operated as set forth on SCHEDULE 5.8.
5.9. Election of Directors. Holdings shall, as of the Closing Date, have a
vacancy on its six (6) person Board of Directors for the class of directors
elected for a three-year term and shall, on the day after the Closing Date,
appoint Stephen H. Siegele to fill such vacancy. To the extent permitted by
applicable law, Holdings shall cause the Board of Directors to nominate
Stephen H. Siegele or his designee to serve for an additional three-year term
and to support his or her nomination to the same extent and in the same manner
as it supports other nominees on the slate of directors proposed by Holdings,
provided that at the time of such nomination by the Board the Exchange
Consideration owned of record by the Holders represents in the aggregate ten
percent (10%) or more of the shares of Holdings Common Stock then outstanding.
5.10. HSR Act. In the event that the parties determine that the proposed
transactions are subject to a waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the ADCS Group
and the ATMI Group shall promptly file or cause to be filed on behalf of
itself and any other acquired or acquiring persons under the HSR Act,
Premerger Notification and Report Forms with respect to the transactions
contemplated herein, respond to any requests for additional information and
documents and provide the necessary information and make the necessary filings
under the HSR Act. The Closing Date shall be reasonably extended as necessary
to allow the period specified in the HSR Act and any extensions thereof to
expire prior to such date. The ATMI Group shall pay all applicable HSR filing
fees of the ADCS Group, the Holders and their respective affiliates.
5.11. Preparation of S-4 and the Proxy Statement. The ATMI Group shall
prepare and file as promptly as practicable after the execution of this
Agreement with the SEC a confidential preliminary Proxy Statement with respect
to the Reorganization which complies in form with applicable requirements of
the SEC. As promptly as practicable after the receipt of any comment letter
from the staff of the SEC, ADCS and ATMI shall cooperate in the response to
any such comment letter, or, in any event and if no such letter is received,
shall use all reasonable efforts to cause the S-4 to become effective as soon
thereafter as practicable. The ATMI Group shall use its best efforts to have
the S-4 declared effective under the Securities Act as promptly as practicable
after such filing. The ATMI Group shall take any action (other than qualifying
to do business in any jurisdiction in which it is not now so qualified)
required to be taken under any applicable state securities laws in connection
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with the issuance of Holdings Common Stock in the Reorganization, and the ADCS
Group shall furnish all information concerning the ADCS Group and the Holders
as may be reasonably requested in connection with any such action.
5.12. Best Efforts; Cooperation. The ADCS Group will use its best efforts to
cause the Holders to tender their Interests at the Closing and to cause the
other conditions of Closing to be met by it, and ATMI will use its best
efforts to cause the other conditions of Closing to be met by it.
5.13. ATMI Stockholder Matters. ATMI shall call a meeting of its
stockholders for the purpose of voting upon matters relating to this Agreement
and the Reorganization to be held as soon as practicable after the SEC
declares the S-4 effective. ATMI will use reasonable best efforts to hold its
stockholders' meeting as promptly as practicable thereafter and will, through
its Board of Directors, recommend to its stockholders approval of this
Agreement, the Reorganization and the other transactions contemplated hereby
or thereby and will use its reasonable best efforts to cause its stockholders
to approve the Merger. In addition, the ATMI Group may retain a nationally-
recognized proxy solicitation firm if the ATMI Group in consultation with the
ADCS Group deems such action to be necessary in order to receive the approval
of ATMI stockholders with respect to the transactions contemplated hereby.
5.14. Nasdaq Listing. ATMI and Holdings will make such filings as are
necessary with the NASD and The Nasdaq National Market regarding the
transactions contemplated hereby and will use their best efforts to cause the
shares of Holdings Common Stock to be issued in the Reorganization to be
approved for listing on The Nasdaq National Market, subject to official notice
of issuance, prior to the Effective Time.
5.15. Affiliates. The ATMI Group and the ADCS Group shall deliver to
Holdings a letter identifying all persons who are, at the time the
Reorganization is effected, "affiliates" of either the ATMI Group or the ADCS
Group. The ATMI Group and the ADCS Group shall cause each person who is
identified as an "affiliate" in such letter to deliver to Holdings on or prior
to the Effective Time an Affiliates Agreement, in the form attached hereto as
EXHIBIT D-1 with respect to affiliates of ADCS and EXHIBIT D-2 with respect to
affiliates of ATMI (the "Affiliates Agreements").
5.16. Financial Statements and SEC Reports. From and after the date hereof
until the Effective Time, each party hereto shall deliver to the other, as
soon as available but in no event later than forty-five (45) days after the
end of each fiscal quarter, a consolidated balance sheet as of the last day of
such fiscal period and a consolidated statement of income, stockholders'
equity and cash flows of such party and its subsidiaries for the fiscal period
then ended, prepared in accordance with general accounting principles, with
such exceptions as are noted on such financial statements, and in the case of
ATMI, the requirements of Form 10-Q or Form 10-K, as the case may be, under
the Exchange Act. From and after the date hereof until the Effective Time,
ATMI shall deliver to the ADCS Group as soon as available all forms, reports
and other documents filed by the ATMI Group or its affiliates with the SEC,
and each party shall otherwise keep the other apprised of any material
development with respect to its business or financial condition.
5.17. Employee Benefits. (a) As of Closing Date, ATMI or Holdings shall
provide all employees of the ADCS Group and each ADCS Group ERISA Affiliate
and their dependents, and all qualified beneficiaries (as defined in Section
4980B(g)(1) of the Code) entitled to receive continuation coverage under COBRA
as of the Closing Date (the "Qualified Beneficiaries") with coverage under one
or more ATMI Benefit Plans (the "Successor Welfare Plans"), including, without
limitation, health care coverage ("Coverage"), which meets at least the
following requirements: (i) service with the ADCS Group and each ADCS Group
ERISA Affiliate prior to the Closing Date shall be credited against all
service and waiting period requirements under the Successor Welfare Plans for
those employees of the ADCS Group and each ADCS Group ERISA Affiliate (and
their eligible dependents) that received coverage from the ADCS Group or an
ADCS-Group ERISA Affiliate as of the Closing Date, (ii) the Successor Welfare
Plans shall not provide for any pre-existing condition exclusion for those
employees of the ADCS Group and each ADCS Group ERISA Affiliate (and their
eligible dependents) and
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Qualified Beneficiaries that were entitled to coverage from the ADCS Group or
an ADCS Group ERISA Affiliate as of the Closing Date, and (iii) the
deductibles in effect under the Successor Welfare Plans for the plan year in
which the Closing Date occurs shall be reduced by any amounts applied towards
the deductibles under the ADCS Group Benefit Plans for the plan year in which
the Closing Date occurs provided such individuals submit evidence to ATMI
sufficient to demonstrate the amount so applied against any applicable
deductibles in effect under any ADCS Group Benefit Plan, provided ATMI or
Holdings shall only be obligated to provide Coverage to such employees,
dependents and qualified beneficiaries to the extent ATMI or Holdings sponsors
the same type of Group Benefit Plans that the ADCS Group did as of the Closing
Date.
(b) ATMI covenants that the service of each employee of the ADCS Group and
each ADCS Group ERISA Affiliate prior to the Closing Date shall be credited as
service under the ATMI 401(k) Plan for all purposes (including without
limitation, eligibility and vesting) for those employees of the ADCS Group and
each ADCS Group ERISA Affiliate that were participants in any 401(k) plan
maintained by the ADCS Group or an ADCS Group ERISA Affiliate as of the
Closing Date.
(c) The parties recognize that the ADCS Group's forms of compensation of its
employees, consultants and directors have differed from ATMI's, including, but
not limited to, in the payment of cash versus equity-based compensation. ATMI
will use reasonable efforts prior to Closing to obtain the ADCS Group's
agreement to the amount and types of compensation to be paid to employees of
the ADCS Group commencing as of the Closing. Nothing herein shall confer any
rights upon any such employees.
5.18. Tax Matters. Each of the parties agrees to prepare and file any and
all tax returns, reports and other filings regarding the tax treatment of the
Reorganization in a manner which is consistent in all respects with the intent
and expectation set forth in Section 2.6 above. Each of the parties further
agrees to use reasonable efforts not to do any act or thing, before or at any
time after the Reorganization, which would cause the Reorganization not to be
a transaction described in Section 351 of the Code. The ATMI Group agrees that
it will not take any tax position contrary to, or in conflict with, any tax
position taken in good faith prior to the Closing by a member of the ADCS
Group, any ADCS Group Subsidiary, or any predecessor in interest to any of the
foregoing, or any Holder.
5.19. Supplements to Disclosure Schedules. Without limiting the parties'
obligations under Section 5.4, from time to time prior to the Closing, the
ATMI Group and the ADCS Group will promptly supplement or amend the respective
disclosure schedules which they have delivered pursuant to this Agreement with
respect to any matter hereafter arising which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described
in any such disclosure schedule or which is necessary to correct any
information in any such disclosure schedule which has been rendered inaccurate
thereby. No supplement or amendment to any such disclosure schedule shall have
any effect for the purpose of determining satisfaction of the conditions set
forth in Sections 6.l(a) or 6.2(a) of this Agreement.
5.20. Expenses. In the event the Reorganization is consummated, the
reasonable legal and accounting costs (for all of which an estimate shall be
given to the ATMI Group on the date hereof) will be borne by the ATMI Group;
otherwise, in the event the Reorganization is not consummated, each party will
bear its own costs and expenses. Whether or not the transaction is
consummated, the ATMI Group shall pay all SEC registration, HSR and other
applicable governmental filing fees incurred in connection with the
negotiation, preparation and execution of this Agreement and the performance
of any of the obligations contemplated hereby or thereby.
5.21. Officer and Director Indemnity. (a) Simultaneously with the Closing,
the ADCS Organizational Documents shall be amended to the extent necessary to
provide the same level of indemnification for the current directors and
officers and employees of the ADCS Group (each, a "Current ADCS Indemnitee")
as the bylaws of ATMI provide on the date hereof for directors, officers and
employees of ATMI. Holdings will not permit the ADCS Organizational Documents
to be amended to affect adversely the provisions concerning indemnification
for a Current ADCS Indemnitee; provided, however, that Holdings reserves the
right to liquidate, dissolve,
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consolidate, reorganize or merge any entity within the ADCS Group so long as
any successor(s) expressly assumes and agrees to perform the obligations of
indemnity set forth in such ADCS Organizational Documents in the same manner
and to the same extent that the predecessor entity would be required to
perform if no such succession had taken place, and each Current ADCS
Indemnitee shall be entitled to enforce such obligations of indemnity against
any such successor(s) to the same extent and with the same force and effect as
if such successor was originally a party hereto.
(b) Holdings agrees that in the event that the ATMI Organizational Documents
are at any time amended so that the provisions therein relating to the
indemnification of directors, officers or employees of the ATMI Group are less
favorable than those currently contained therein, that Holdings will first
agree with any Current ADCS Indemnitee, who at any time is or becomes a
director, officer or employee of Holdings, ATMI, or any subsidiary thereof, to
provide for rights to indemnification no less favorable than those in effect
on the date hereof.
5.22. Exchange Act Section 16(b). The ATMI Group shall take no position
inconsistent with the positions taken by any Holders with respect to a
"Section 16(b) Matter" after the date hereof that will or may, directly or
indirectly, whether taken alone or together with other facts or events, result
in a Holder or any affiliate of a Holder having "Section 16(b) Liability." As
used herein, the following terms shall have the respective meanings set forth
below:
"Section 16(b) Liability" means liability under Section 16(b) of the
Exchange Act with respect to or as a consequence, directly or indirectly,
of (i) a Holder's or Holder's affiliate's acquisition (or deemed
acquisition) of "beneficial ownership" of, or a "pecuniary interest" or
"indirect pecuniary interest" in, any of the Exchange Consideration that
shall have been acquired (or deemed to have been acquired) pursuant to this
Agreement; or (ii) any dispute with respect to the date on which any Holder
becomes subject to Section 16 of the Exchange Act, if at all, pursuant to
this Agreement.
"Section 16(b) Matter" means each matter or series of matters (including,
without limitation, a proposed transaction or series of transactions
involving any stock or other non-cash dividend, split-up, reverse split-up,
reclassification, recapitalization, reorganization, combination,
subdivision, conversion, exchange of shares or acquisition, merger or other
similar such transaction), which, directly or indirectly, as a result of
the taking of such action by Holdings, its Board of Directors or
stockholders or any governmental authority having jurisdiction thereover,
or the conclusion of any such matter will or may, directly or indirectly,
whether taken alone or together with other facts or events, result in
Section 16(b) Liability.
5.23. Environmental Report. The ATMI Group has at its expense ordered from
GZA GeoEnvironmental, Inc. a Phase II environmental site assessment of the
ADCS manufacturing site in Burnet, Texas. The ATMI Group will use reasonable
efforts to have the assessment completed no later than April 28, 1997. Within
ten (10) days after its receipt thereof, the ATMI Group shall deliver to ADCS
Nevada a copy of the assessment, together with a written statement from ATMI
stating whether or not (i) the assessment indicates an Environmental Condition
which ATMI in good faith has determined could have an ADCS Material Adverse
Effect (a "Material Environmental Condition"), and (ii) the ATMI Group intends
to terminate this Agreement as a result of such Material Environmental
Condition. If the ATMI Group states its intention to terminate this Agreement
as a result of a Material Environmental Condition, this Agreement will
terminate on the thirtieth (30th) day after ADCS Nevada's receipt of such
notice unless within such 30-day period the ADCS Group successfully remediates
such Material Environmental Condition or the parties agree otherwise. If this
Agreement is terminated pursuant to this Section 5.23, the ATMI Group shall
not be entitled to a termination payment under Section 9.2. If this Agreement
is not terminated pursuant to this Section 5.23, then the results of such
Phase II site assessment shall be deemed to be incorporated into the ADCS
Disclosure Schedule as of the date on which this Agreement is executed.
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ARTICLE VI
Conditions Precedent to Closing
6.1. Conditions to the Obligations of the ATMI Group. The obligation of the
ATMI Group to consummate the Merger, the Exchange and the other transactions
contemplated hereby shall be subject to the satisfaction, on or prior to the
Closing Date, of each of the following conditions (any of which may be waived
in writing by the ATMI Group in its sole discretion):
(a) Representations and Warranties True. The representations and warranties
of the ADCS Group and the Holders which are contained in this Agreement, or
contained in any Schedule, certificate or other instrument or document
delivered or to be delivered pursuant to this Agreement, shall be true and
correct in all material respects on and as of the Closing Date as though such
representations and warranties were made on and as of the Closing Date, except
for the effect of any activities or transactions which may have taken place
after the date of this Agreement expressly permitted by this Agreement,
incident to carrying out this Agreement, or consented to in writing by ATMI.
At the Closing, the ADCS Group shall have delivered to the ATMI Group a
certificate confirming the foregoing (signed on behalf of the ADCS Group by
the President, General Partner, authorized member, etc., as appropriate).
(b) Performance. The ADCS Group shall have performed and complied in all
material respects with all of the obligations under this Agreement which are
required to be performed or complied with by it on or prior to the Closing
Date. At the Closing, the ADCS Group shall have delivered to the ATMI Group a
certificate confirming the foregoing (signed on behalf of the ADCS Group by
the President, General Partner, authorized member, etc., as appropriate).
(c) Stockholder Approval. This Agreement and the consummation of the
transactions contemplated herein shall have been duly approved and adopted by
the stockholders of ATMI in accordance with the DGCL and the ATMI
Organizational Documents.
(d) Absence of Litigation. No statute, rule or regulation shall have been
enacted or promulgated, and no order, decree, writ or injunction shall have
been issued and shall remain in effect, by any court or governmental or
regulatory body, agency or authority which restrains, enjoins or otherwise
prohibits the consummation of the transactions contemplated hereby, and no
action, suit or proceeding before any court or governmental or regulatory
body, agency or authority shall have been commenced with respect to the
transactions contemplated hereby or with respect to the ADCS Group, any ADCS
Group Subsidiary or any Holder not set forth in a Schedule hereto which, in
the reasonable judgment of the ATMI Group, would have a material adverse
effect on the transactions contemplated hereby or an ADCS Material Adverse
Effect.
(e) Pooling of Interests. The ATMI Group shall have received a letter dated
as of the Effective Time from Ernst & Young LLP, independent accountants to
the ADCS Group and the ATMI Group, regarding the appropriateness of pooling of
interest accounting for the Reorganization under Accounting Principles Board
Opinion No. 16.
(f) Additional Agreements. The ADCS Group and the Holders shall have
delivered (or cause to be delivered) duly executed counterparts of the
following agreements:
(i) Proprietary Information and Inventions Agreements. The ADCS Group
shall have used best efforts to cause each employee of the ADCS Group and
each ADCS Group Subsidiary to have entered into ATMI's customary Employee
Proprietary Information and Inventions Agreements (the "Proprietary
Information and Inventions Agreements") with ATMI and/or the ADCS Group, as
ATMI may determine, a copy of which is attached hereto as EXHIBIT E.
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(ii) Employment Agreements. Each of Stephen H. Siegele, Frederick H.
Siegele, and Frederick J. Siegele shall have entered into an Employment
Agreement (each an "Employment Agreement") with ATMI and/or the ADCS Group,
as ATMI may determine, substantially in the form(s) of EXHIBIT F.
(iii) Affiliate Agreement. Each of the affiliates of the ADCS Group and
ATMI shall have entered into an Affiliate Agreement in the form of EXHIBIT
D-1 or EXHIBIT D-2, as appropriate.
(iv) Escrow Agreement. Each of the Holders and the escrow agent
thereunder shall have entered into the Escrow Agreement (the "Escrow
Agreement") substantially in the form of EXHIBIT G.
(v) Indemnification Agreement. Each of the Holders and the ATMI Group
shall have entered into the Indemnification Agreement (the "Indemnification
Agreement") substantially in the form of EXHIBIT H.
(vi) Representations and Warranties of Holders. Each Holder shall have
executed and delivered to the ATMI Group a Certificate of Holder in the
form attached hereto as EXHIBIT I making each of the representations and
warranties contained therein with respect to such Holder, but only as to
that Holder.
(g) Opinions of Counsel. (i) Brobeck, Phleger & Harrison LLP, counsel to the
ADCS Group, the ADCS Group Subsidiaries and the Holders, shall have delivered
to the ATMI Group an opinion substantially in the form of Exhibit J; and (ii)
Lyon & Lyon, patent counsel to the ADCS Group, shall have delivered to the
ATMI Group an opinion substantially in the form of EXHIBIT K;
(h) Fairness Opinion. Alex. Brown & Sons Incorporated, financial advisers to
ATMI, shall have delivered an opinion to the Board of Directors of ATMI to the
effect that the Exchange Consideration payable pursuant to the Reorganization
is fair from a financial point of view to ATMI.
(i) Comfort Letter. Ernst & Young LLP, independent accountants to the ADCS
Group and the ATMI Group, shall have delivered a "comfort" letter, addressed
to the ADCS Group and the ATMI Group and dated as of the effective date of the
S-4 and the Closing Date, in such form and substance as is customary in
connection with such transactions and is satisfactory to the ADCS Group and
the ATMI Group.
(j) Tax Opinion. Ernst & Young LLP, independent accountants to the ADCS
Group and the ATMI Group, shall have delivered an opinion letter, addressed to
the ADCS Group and the ATMI Group and dated as of the Closing Date, to the
effect that the Reorganization has been structured in a manner which is tax-
free with respect to the ATMI Group and its stockholders and the Holders (the
"Tax Opinion").
(k) Delivery of Certificates and Assignment. In exchange for the Exchange
Consideration, the Holders shall have delivered (i) each of the original share
certificates evidencing the Capital Stock, duly endorsed for transfer with all
requisite transfer stamps, if any are due, attached thereto, (ii) an
assignment of the Membership Interests, the form of which is attached hereto
as EXHIBIT B, and (iii) all such other deeds, bills of sale, assignments and
assurances which Holdings deems reasonably necessary or desirable to vest,
perfect or confirm any and all right, title or interest in, to or under the
Interests or otherwise to carry out the purposes of this Agreement. Each of
the foregoing shall also be executed and delivered by each Holder's spouse, if
required.
(l) Securities Law Compliance. The S-4 registering the issuance and delivery
of the shares of Holdings Common Stock pursuant to the Merger shall have been
declared effective in accordance with the provisions of the Securities Act,
and no stop order suspending the effectiveness of the S-4 shall have been
issued by the SEC. All other filings necessary under federal and state
securities laws to permit the issuance and delivery of the shares of Holdings
Common Stock pursuant to the Merger and of the Exchange Consideration in
compliance with such laws shall have been made, and any authorizations in
connection therewith from all applicable securities regulatory authorities
shall have been obtained.
(m) Nasdaq Listing. Holdings Common Stock shall have been, at the Effective
Time, authorized for listing on The Nasdaq National Market.
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(n) Consents and Approvals. The ADCS Group shall have obtained all consents
and approvals and waivers and given such notices as may be reasonably
necessary to complete properly the restructuring undertaken by the ADCS Group
in 1996. The ADCS Group shall have obtained all consents and approvals
and waivers and given such notices as may be necessary to consummate the
transactions contemplated hereby and by the Additional Agreements to which it
is a party, including but not limited to (i) requisite stockholder, partner,
member, etc. approval or notification and (ii) the consent to the transactions
contemplated hereby of the parties to all Commitments under which the ADCS
Group, any ADCS Group Subsidiary or any Holder would otherwise be in default
in any material respect as a result of the transactions contemplated hereby,
other than Commitments which ATMI agrees are not material to the ADCS Group or
any ADCS Group Subsidiary's business or prospects. All consents,
authorizations, orders or approvals of, and filings or registrations with, any
federal, state, local or foreign governmental commission, board or other
regulatory body which are required for or in connection with the execution,
delivery and performance of this Agreement and the Additional Agreements by
the ADCS Group, any ADCS Group Subsidiary and the Holders and the consummation
of the transactions contemplated hereby and thereby, and in order to permit or
enable its business to be conducted after the Closing, shall have been duly
obtained or made, except filings under state securities laws, if any, which
may be made in the time period permitted by law. It is understood that none of
such approvals shall be deemed to have been received if any such approval is
subject to satisfaction of or compliance with a Burdensome Condition.
"Burdensome Condition" shall mean the imposition of a material restriction on
the ATMI Group's or the ADCS Group's ability to operate its business following
the Effective Time or requiring the ATMI Group or the ADCS Group to dispose of
a material amount of its assets following the Effective Time. Either the ATMI
Group or the ADCS Group may, but is not obligated to, seek the removal or
otherwise satisfactorily resolve the Burdensome Condition.
(o) No Material Adverse Changes. There shall not have been a material
adverse change in the general affairs, business, prospects, properties,
management, condition (financial or otherwise) or results of operations of the
ADCS Group or any ADCS Group Subsidiary, whether or not arising from
transactions in the ordinary course of business, and neither the ADCS Group
nor any ADCS Group Subsidiary shall have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree.
(p) Delivery by the ADCS Group. The ADCS Group shall deliver or cause to be
delivered to ATMI:
(i) With respect to the ADCS Group, each ADCS Group Subsidiary and each
Holder which is an entity, a complete and correct copy of (i) each
corporation's Certificate or Articles of Incorporation, as amended to date,
certified by the Secretary of State of its state or country of
incorporation, (ii) each corporation's By-Laws, as amended to date,
certified by the Secretary or an Assistant Secretary of the respective
corporation, (iii) each limited liability company's Articles of
Organization or similar instrument, as amended to date, certified by the
Secretary of State of its state of organization, (iv) each limited
liability company's Operating Agreement or similar agreement, as amended to
date, certified by a member or manager of the respective limited liability
company, (v) each limited partnership's certificate of limited partnership,
as amended to date, certified by the Secretary of State of the State of
Texas, and (vi) ADCS LP's Limited Partnership Agreement, as amended to
date, certified by its general partner, and the original corporate stock
ledgers, corporate seal and minute book(s) of the ADCS Group.
(ii) Long form certificates of good standing or legal existence, as
appropriate, as of a recent date issued by (i) the Secretary of State of
the state in which each of the ADCS Group and each ADCS Group Subsidiary is
organized to the effect that each is in good standing under the laws of
such state, and (ii) the Secretary of State of each state in which that the
ADCS Group or any ADCS Group Subsidiary is authorized to transact business
as a foreign corporation, foreign limited liability company or foreign
limited partnership to the effect that the ADCS Group or any ADCS Group
Subsidiary is duly qualified as a foreign entity in such state.
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(iii) Certificates issued as of a recent date by the Tax authorities of
the state of organization and of each state in which the ADCS Group or any
ADCS Group Subsidiary is authorized to transact business as to the status
of the ADCS Group and each ADCS Group Subsidiary's Tax liabilities
(including, but not limited to, sales tax).
(iv) Releases substantially in the form of EXHIBIT L hereto, executed by
each Holder.
(v) Written evidence satisfactory to ATMI that all prior outstanding
options to purchase any Securities of the ADCS Group or any ADCS Group
Subsidiary, if any, have been properly terminated.
(vi) Such other certificates and representations as are reasonably
requested by Ernst & Young LLP in order to render the Tax Opinion.
(vii) Such further instruments or documents as the ATMI Group or their
counsel may reasonably request to assure the full and effective completion
of the Reorganization and to assure the effective completion of the
transactions contemplated hereby.
(q) Termination of Certain Agreements. The following agreements shall have
been terminated with no further liability thereunder: (i) that certain
Members' and Shareholders' Agreement dated January 16, 1996; (ii) that certain
Agreement Regarding Stock Ownership and Distribution dated July 1, 1993; and
(iii) that certain Shareholders' Agreement dated on or about September, 1992.
(r) ADCS-Korea. The parties shall have obtained all third party and
governmental consents with respect to ADCS-Korea required as a result of, or
in connection with, the Reorganization. The parties shall cooperate in
obtaining and shall use best efforts to obtain such consents.
6.2. Conditions to the Obligations of the ADCS Group. The obligation of the
ADCS Group to consummate the Exchange and the other transactions contemplated
by this Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of each of the following conditions (any of which may be waived
in writing by the ADCS Group in its sole discretion):
(a) Representations and Warranties True. The representations and warranties
of the ATMI Group contained in this Agreement, or contained in any Schedule,
certificate or other instrument or document delivered or to be delivered
pursuant to this Agreement, shall be true and correct in all material respects
on and as of the Closing Date as though such representations and warranties
were made on and as of the Closing Date, except for the effect of any
activities or transactions which may have taken place after the date of this
Agreement expressly permitted by this Agreement, incident to carrying out this
Agreement, or consented to in writing by the ADCS Group. At the Closing, each
of the ATMI Group shall have delivered to the ADCS Group a certificate (signed
on its behalf by its President and its Chief Financial Officer) confirming the
foregoing.
(b) Performance. The ATMI Group shall have performed and complied in all
material respects with all of the obligations under this Agreement which are
required to be performed or complied with by it on or prior to the Closing
Date. At the Closing, each of the ATMI Group shall have delivered to the ADCS
Group a certificate (signed on its behalf by its President and its Chief
Financial Officer) confirming the foregoing.
(c) Stockholder Approval. This Agreement and the consummation of the
transaction contemplated herein shall have been duly approved and adopted by
the stockholders of ATMI in accordance with the DGCL and the ATMI
Organizational Documents.
(d) Absence of Litigation. No statute, rule or regulation shall have been
enacted or promulgated, and no order, decree, writ or injunction shall have
been issued and shall remain in effect, by any court or governmental or
regulatory body, agency or authority which restrains, enjoins or otherwise
prohibits the consummation of the transactions contemplated hereby, and no
action, suit or proceeding before any court or governmental or regulatory
body, agency or authority shall have been commenced with respect to the
transactions contemplated
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hereby or with respect to the ATMI Group which, in the reasonable judgment of
the ADCS Group, would have a material adverse effect on the transactions
contemplated hereby or an ATMI Material Adverse Effect.
(e) Pooling of Interests. The ADCS Group shall have received a letter dated
as of the Effective Time from Ernst & Young LLP, independent accountants to
the ADCS Group and the ATMI Group, regarding the appropriateness of pooling of
interest accounting for the Reorganization under Accounting Principles Board
Opinion No. 16.
(f) Additional Agreements. The ATMI Group shall have executed and delivered
(and shall have agreed to cause Holdings to execute and deliver immediately
following the Effective Time, as applicable) counterparts of the following
documents:
(i) The Certificate of Merger.
(ii) The Proprietary Information and Inventions Agreements.
(iii) The Employment Agreements.
(iv) Affiliate Agreements in the form attached as Exhibit D-2.
(v) The Registration Rights Agreement.
(vi) The Escrow Agreement.
(vii) The Indemnification Agreement.
(viii) An employment agreement with each of Eugene G. Banucci, Chief
Executive Officer of ATMI, Daniel P. Sharkey, Chief Financial Officer of
ATMI, and Peter S. Kirlin, Executive Vice President of ATMI, which shall be
in the form of EXHIBIT F and contain the additional terms set forth on
SCHEDULE 5.3(P).
(g) Opinions of Counsel. (i) Shipman & Goodwin LLP, counsel to the ATMI
Group shall have delivered to the ADCS Group an opinion substantially in the
form of EXHIBIT M; and (ii) Intellectual Property/Technology Law, patent
counsel to the ATMI Group, shall have delivered to the ADCS Group (A) an
opinion substantially in the form of EXHIBIT N and (B) an assessment opinion
in the form of EXHIBIT O with respect to each of the patents listed on
SCHEDULE 6.2(G).
(h) Comfort Letter. Ernst & Young LLP, independent accountants to the ADCS
Group and the ATMI Group, shall have delivered a "comfort" letter, addressed
to the ADCS Group and the ATMI Group and dated the Closing Date, in such form
and substance as is customary in connection with such transactions and is
satisfactory to the ADCS Group and the ATMI Group.
(i) Tax Opinion. Ernst & Young LLP, independent accountants to the ADCS
Group and the ATMI Group, shall have rendered the Tax Opinion.
(j) Securities Law Compliance. All filings necessary under federal and state
securities laws to permit the issuance and delivery of the Exchange
Consideration in compliance therewith shall have been made, and any
authorizations in connection therewith from all applicable securities
regulatory authorities shall have been obtained.
(k) Nasdaq Listing. Holdings Common Stock, including that constituting the
Exchange Consideration, shall have been, at the Effective Time, authorized for
listing on The Nasdaq National Market.
(l) Consents and Approvals. The ATMI Group shall have obtained all consents
and approvals and waivers and given such notices as may be necessary to
consummate the transactions contemplated hereby and by the Additional
Agreements to which it is a party, including but not limited to (i) requisite
stockholder, partner, member, etc. approval or notification and (ii) the
consent to the transactions contemplated hereby of the parties to all
commitments under which the ATMI Group or any ATMI Group Subsidiary would
otherwise be in default
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in any material respect as a result of the transactions contemplated hereby,
other than commitments which the ADCS Group agrees are not material to the
ATMI Group or any ATMI Group Subsidiary's business or prospects. All consents,
authorizations, orders or approvals of, and filings or registrations with, any
federal, state, local or foreign governmental commission, board or other
regulatory body which are required for or in connection with the execution,
delivery and performance of this Agreement and the Additional Agreements by
the ADCS Group and any ADCS Group Subsidiary and the consummation of the
transactions contemplated hereby and thereby, and in order to permit or enable
its business to be conducted after the Closing, shall have been duly obtained
or made, except filings under state securities laws, if any, which may be made
in the time period permitted by law. It is understood that none of such
approvals shall be deemed to have been received if any such approval is
subject to satisfaction of or compliance with a Burdensome Condition. Either
the ATMI Group or the ADCS Group may, but is not obligated to, seek the
removal or otherwise satisfactorily resolve the Burdensome Condition.
(m) No Material Adverse Changes. There shall not have been a material
adverse change in the general affairs, business, prospects, properties,
management, condition (financial or otherwise) or results of operations (other
than volatility in the market price of the ATMI Common Stock) of the ATMI
Group whether or not arising from transactions in the ordinary course of
business, and neither the ATMI Group nor any ADCS Group Subsidiary shall have
sustained any material loss or interference with its business or properties
from fire, explosion, flood, or other casualty, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree.
(n) Delivery by the ATMI Group. The ATMI Group shall deliver or cause to be
delivered to the ADCS Group:
(i) With respect to the ATMI Group and each ATMI Group Subsidiary, a
complete and correct copy of (i) each corporation's Certificate or Articles
of Incorporation, as amended to date, certified by the Secretary of State
of its state or country of incorporation, and (ii) each corporation's By-
Laws, as amended to date, certified by the Secretary or an Assistant
Secretary of the respective corporation.
(ii) Long form certificates of good standing or legal existence, as
appropriate, as of a recent date issued by (i) the Secretary of State of
the state in which each of the ATMI Group and each ADCS Group Subsidiary is
organized to the effect that each is in good standing under the laws of
such state, and (ii) the Secretary of State of each state in which that the
ATMI Group or any ADCS Group Subsidiary is authorized to transact business
as a foreign corporation, foreign limited liability company or foreign
limited partnership to the effect that the ADCS Group or any ADCS Group
Subsidiary is duly qualified as a foreign entity in such state.
(iii) Certificates issued as of a recent date by the Tax authorities of
the state of organization and of each state in which the ATMI Group or any
ADCS Group Subsidiary is authorized to transact business as to the status
of the ATMI Group and each ADCS Group Subsidiary's Tax liabilities
(including, but not limited to, sales tax).
(iv) Such other certificates and representations as are reasonably
requested by Ernst & Young LLP in order to render the Tax Opinion.
(v) Such further instruments or documents as the ADCS Group or their
counsel may reasonably request to assure the full and effective completion
of the Reorganization and to assure the effective completion of the
transactions contemplated hereby.
(o) Shares of Exchange Consideration. Subject to the deposit into escrow of
shares of Holdings Common Stock contemplated under the Indemnification
Agreement and the Escrow Agreement, at the Closing, ATMI shall have delivered
to the Holders the Exchange Consideration issuable to the Holders pursuant to
Section 2.3 hereof or irrevocable instruction letters as described in Section
2.1.
(p) ADCS-Korea. Holdings shall have delivered the commitments, if any,
required with respect to the ADCS Korea joint venture upon the change in
control of ADCS Nevada effected at the Closing.
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ARTICLE VII
Closing
7.1. Closing. The closing of transactions contemplated hereby (the
"Closing") shall occur at the offices of Shipman & Goodwin LLP, One American
Row, Hartford, Connecticut 06103, as soon as reasonably practicable following
the meeting of ATMI's stockholders described in Section 5.13 and in any event
within three (3) business days after the satisfaction or waiver of the other
conditions set forth in Article VI. The date on which the Closing occurs shall
be referred to as the "Closing Date".
7.2. Simultaneous Closing. All actions to be taken on the Closing Date shall
be deemed to occur simultaneously and in no event shall be deemed to occur
unless and until all such events have occurred; provided, that the election of
Stephen H. Siegele as a director of Holdings shall not, and shall not be
deemed to, occur prior to the Closing.
ARTICLE VIII
Further Assurances
The parties agree that they will execute or furnish such documents and
further assurances to each other or to proper authorities as may be necessary
for the full implementation and consummation of this Agreement and the
Additional Agreements. This Article VIII shall survive the Closing.
ARTICLE IX
Termination of Agreement
9.1. Termination. This Agreement may be terminated at any time prior to the
Closing, notwithstanding the approval of this Agreement by the stockholders of
ATMI:
(a) by the mutual written consent of ATMI and the ADCS Group;
(b) by either ATMI or the ADCS Group:
(i) if any court or governmental or regulatory agency, authority or body
shall have enacted, promulgated or issued any statute, rule, regulation,
ruling, writ or injunction, or taken any other action, restraining,
enjoining or otherwise prohibiting the transactions contemplated hereby and
all appeals and means of appeal therefrom have been exhausted;
(ii) if the Closing shall not have occurred on or before the later of (A)
August 31, 1997, subject to extension pursuant to Section 9.3 hereof, and
(B) the expiration of any cure period provided herein; provided, however,
that the right to terminate this Agreement pursuant to this Section
9.1(b)(ii) shall not be available to any party whose (or whose
affiliate(s)') breach of any representation or warranty or failure to
perform or comply with any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before
such date; or
(iii) for any reason, upon the payment of $5,000,000 to the non-
terminating party (unless any other provision of the Agreement would permit
termination without payment of such amount);
(c) by ATMI (provided it has met its obligations under Section 5.12):
(i) in the event of a material breach of a representation or warranty as
of the date when made (or, in the case of the Phase II environmental site
assessment referred to in Section 5.23 above, when deemed to be made), or
covenant by the ADCS Group (subject to written notice and a thirty business
day cure period);
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(ii) subject to Section 9.3 hereof, if any Holder fails, refuses or is
unable to contribute its Interests in exchange for the Exchange
Consideration;
(iii) if any condition to Closing specified in Section 6.1 shall not be
satisfied and such condition is not waived by the ATMI Group in its
discretion; or
(iv) pursuant to Section 5.23 above; or
(d) by the ADCS Group (provided it has met its obligations under Section
5.12):
(i) in the event of a material breach of a representation or warranty as
of the date when made, or covenant by the ATMI Group (subject to written
notice and a thirty business day cure period);
(ii) pursuant to Section 5.5 above; or
(iii) if any condition to Closing specified in Section 6.2 shall not be
satisfied and such condition is not waived by the ADCS Group in its
discretion.
9.2. Termination Payment. No party shall be entitled to a termination
payment unless otherwise specified herein. In the event that either the ATMI
Group or the ADCS Group shall terminate this Agreement pursuant to subsection
(b)(iii), the terminating party shall be liable to and shall pay to the non-
terminating party by wire transfer the sum of $5,000,000 in full satisfaction
of all claims within fifteen (15) business days after the non-terminating
party's receipt of written notice of termination. In the event that (i) the
ADCS Group shall terminate this Agreement pursuant to subsection (d)(i) above
or (ii) ATMI shall terminate this Agreement pursuant to subsection (c)(i)
above (other than with respect to a breach of Section 5.7, which breach shall
be governed by Section 9.5 below), then the non-terminating party shall be
liable to and shall pay to the terminating party by wire transfer the sum of
$5,000,000 in full satisfaction of all claims within fifteen (15) business
days after receipt of written notice of termination by the terminating party.
In the event that ATMI shall terminate this Agreement pursuant to subsection
(c)(ii) (other than with respect to a failure, refusal or inability to
contribute described in Section 9.3), the ADCS Group shall be liable to and
shall pay to ATMI by wire transfer the sum of $5,000,000 in full satisfaction
of all claims within fifteen (15) business days after the ADCS Group's receipt
of written notice of termination by ATMI. It is agreed that the payments due
hereunder are the exclusive remedy for termination of this Agreement.
9.3. Failure to Deliver Interests. If any Holder fails, refuses or is unable
to contribute its Interests in exchange for the Exchange Consideration as a
direct result of any reason beyond Holder's control and of which Holder had no
knowledge as of the date of this Agreement, including, but not limited to,
Holder's death, disability, bankruptcy, divorce or separation, legal
proceeding, act of any governmental authority, or act of God, the ATMI Group
shall have the option, after giving notice, to (A) terminate this Agreement,
in which event no termination payment as described in Section 9.2 will be due,
(B) extend the Closing Date for a period of up to ninety (90) days, or (C)
close on the Merger and on the Exchange with those Holders who have tendered
their Interests, provided that the Merger and Exchange will qualify as a
pooling of interests transaction. In the event the Closing Date is extended
pursuant to clause (B) above, the ADCS Group will continue to use its best
efforts during such 90-day period to cause the Holders to tender their
Interests at the Closing. In the event the Closing occurs pursuant to clause
(C) above, the tendering Holders will agree at the Closing to use their best
efforts for a period of one (1) year after the Closing to cause the non-
tendering Holders to tender the Interests.
9.4. Effect of Termination. In the event of termination of this Agreement,
this Agreement shall forthwith become void and there shall be no liability on
the part of any of the parties hereto or their respective affiliates,
directors, officers, stockholders, general partners, limited partners, and
members, except for Section 5.6, Section 9.2 and the last sentence of Section
5.1, which shall remain in full force and effect.
9.5. Breach of Section 5.7. In the event of a breach by the ADCS Group or
any ADCS Group Subsidiary of Section 5.7 (subject to written notice and a
thirty business day cure period), the ATMI Group may pursue any and all
remedies available to it at law or in equity. Recovery by the ATMI Group of a
termination payment under Section 9.2 shall not bar any such action for breach
of Section 5.7, but the amount of any monetary damages awarded to the ATMI
Group in such action shall be reduced by the termination payment actually
received by the ATMI Group.
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ARTICLE X
Miscellaneous
10.1. Right of Set-Off. Any party to this Agreement shall be entitled to
set-off against any amounts due to another party under the terms of this
Agreement or under any Additional Agreement, any amounts due from such other
party under the terms of this Agreement.
10.2. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give any benefits to any person (including, without limiting the
generality of the foregoing, any present or former employee of the ADCS Group
or any ADCS Group Subsidiary) or corporation or other entity, other than the
ADCS Group, the Holders, ATMI, Holdings, Newco and the Surviving Corporation,
except for persons entitled to the protections afforded by Section 5.21; and
this Agreement shall be for the sole and exclusive benefit of the ADCS Group,
the Holders, and the ATMI Group. The obligations of the ADCS Group and the
obligations of the ATMI Group shall be joint and several.
10.3. Successors and Assigns. This Agreement may not be assigned by any
party without the prior written consent of all of the parties hereto. This
Agreement shall bind and inure to the benefit of the parties hereto and their
respective heirs, administrators, executors, successors and permitted assigns.
10.4. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by facsimile (if sent during regular business hours, otherwise on the
next business day) (with written confirmation of receipt), provided that a
copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by certified mail or a nationally
recognized overnight delivery service (receipt requested), in each case to the
appropriate addresses and facsimile numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice to the
other parties):
If to the ATMI Group:
Advanced Technology Materials, Inc.
7 Commerce Drive
Danbury, CT 06810-4169
Facsimile No. (203) 792-8040
Attention Eugene Banucci
with copies to:
Frank J. Marco, Esq.
Shipman & Goodwin LLP
One American Row
Hartford, CT 06103-2819
Facsimile No. (860) 251-5900
If to the ADCS Group:
Advanced Delivery & Chemical Systems Nevada, Inc.
6805 Capital of Texas Highway, Suite 330
Austin, TX 78731
Facsimile No. (512) 418-1909
Attention Stephen H. Siegele
A-62
<PAGE> 63
with copies to:
Carmelo M. Gordian, Esq.
Brobeck, Phleger & Harrison LLP
301 Congress Avenue
Suite 1200
Austin, TX 78701
Facsimile No. (512) 477-5813
By its inclusion herein as a recipient of copies of notices, the parties
acknowledge and agree that notwithstanding the fact that Brobeck, Phleger &
Harrison LLP represented the ADCS Group (which effective as of the Closing
shall be wholly owned by Holdings) in connection with the transactions
contemplated by the Exchange Agreement, Brobeck, Phleger & Harrison LLP shall
be permitted (A) to represent the Holders and their respective heirs,
executors, administrators, affiliates, successors and assigns in connection
with any and all matters which may arise out of or in connection with this
Agreement, the Escrow Agreement or any of the other Additional Agreements; and
(B) that upon receipt of appropriate conflict waiver letters, if any be
required, and subject to applicable ethical obligations of attorneys, shall be
entitled to represent any of the other parties to this Agreement, the Escrow
Agreement or the Additional Agreements on any other matters which any such
party may request; provided, however, that the foregoing consent and waiver
are applicable only to any conflict which may arise out of the matters
referred to above.
10.5. Severability. In the event any covenant, condition or other provision
of this Agreement is held to be invalid or unenforceable by a final judgment
of a court of competent jurisdiction, then such covenant, condition or other
provision shall be automatically terminated and performance thereof waived,
and such invalidity or unenforceability shall in no way affect any of the
other covenants, conditions or provisions hereof, and the parties hereto shall
negotiate in good faith to agree to such amendments, modifications or
supplements of or to this Agreement or such other appropriate actions as, to
the maximum extent practicable, shall implement and give effect to the
intentions of the parties as reflected herein.
10.6 Pooling. If any provision of this Agreement or the application of any
such provisions to any person or circumstance precludes the use of "pooling of
interests" accounting treatment in connection with the Reorganization, then
provided the parties mutually agree (A) such provision shall be of no force
and effect to the extent and solely to the extent necessary to preserve such
accounting treatment for the Reorganization; (B) such invalidity or
unenforceability shall in no way affect any of the other provisions hereof;
and (C) the parties hereto shall negotiate in good faith to agree to such
amendments, modifications or supplements of or to this Agreement or such other
appropriate actions in order, to the maximum extent practicable, for the
Reorganization to be treated as a "pooling of interests" for accounting
purposes.
10.7. Entire Agreement; Amendment. This Agreement, the Schedules, the
Exhibits, the Additional Agreements and the Confidentiality Agreement dated
October 22, 1996 between ADCS LP and ATMI contain all of the terms agreed upon
by the parties with respect to the subject matter hereof, and there are no
representations or understandings between the parties except as provided
herein. Without limiting the generality of the foregoing, this Agreement
specifically supersedes the letter of intent dated January 10, 1997 between
ATMI and ADCS Nevada, ADCS Manager and ADCS Holdings. This Agreement may not
be amended or modified in any way except by a written amendment to this
Agreement duly executed by ATMI and ADCS Nevada.
10.8. Waiver. No waiver of a breach of, or default under, any provision of
this Agreement shall be deemed a waiver of such provision or of any subsequent
breach or default of the same or similar nature or of any other provision or
condition of this Agreement.
10.9. Applicable Law. This Agreement shall be governed by and construed
(both as to validity and performance) and enforced in accordance with the laws
of the State of Delaware applicable to agreements made and to be performed
wholly within such jurisdiction.
A-63
<PAGE> 64
10.10. Jurisdiction. Each party hereby irrevocably: (1) agrees that any
suit, action, or other legal proceeding arising out of this Agreement or out
of any of the transactions contemplated hereby or thereby, may be brought in
any New York state court or United States federal court located in the
southern district of New York; (2) consents to the jurisdiction of each such
court in any such suit, action, or legal proceeding; (3) waives any objection
which such party may have to the laying of venue of any such suit, action, or
legal proceeding in any of such courts; and (4) agrees that New York state is
the most convenient forum for litigation of any such suit, action, or legal
proceeding.
10.11. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument, but all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
10.12 Knowledge. As used herein, "knowledge" means knowledge of the
executive management of the ADCS Group or the ATMI Group, as the case may be,
after making reasonable inquiry of the knowledge of officers or senior
management employees having responsibility for those operations or
transactions to which such representation and warranty relates. An individual
will be deemed to have "knowledge" of a particular fact or other matter if:
(i) such individual is actually aware of such fact or other matter; or
(ii) a reasonably prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of making
reasonable inquiry of the knowledge of other officers or employees having
general responsibility for those operations or transactions to which such
representation and warranty relates.
[SIGNATURE PAGES FOLLOW.]
A-64
<PAGE> 65
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger and Exchange to be executed as of the date first written above.
Advanced Technology Materials, Inc.
By: /s/ Eugene G. Banucci
---------------------------------
Eugene G. Banucci
Chief Executive Officer
ATMI Holdings, Inc.
By: /s/ Eugene G. Banucci
---------------------------------
Eugene G. Banucci
President
Alamo Merger, Inc.
By: /s/ Daniel P. Sharkey
---------------------------------
Daniel P. Sharkey
President
Advanced Delivery & Chemical Systems
Nevada, Inc.
By: /s/ Stephen H. Siegele
---------------------------------
Stephen H. Siegele
President
Advanced Delivery & Chemical Systems
Manager, Inc.
By: /s/ Stephen H. Siegele
---------------------------------
Stephen H. Siegele
President
A-65
<PAGE> 66
Advanced Delivery & Chemical Systems
Holdings, LLC
By: Advanced Delivery & Chemical
Systems Nevada, Inc., Its
Manager
By: /s/ Stephen H. Siegele
---------------------------------
Stephen H. Siegele
President
Advanced Delivery & Chemical Systems
Operating, LLC
By: Advanced Delivery &
ChemicalSystems Manager, Inc.,
Its Manager
By: /s/ Stephen H. Siegele
---------------------------------
Stephen H. Siegele
President
Advanced Delivery & Chemical
Systems, Ltd.
By: Advanced Delivery & Chemical
Systems Operating, LLC, Its
General Partner
By: Advanced Delivery & Chemical
Systems Manager, Inc., Its
Manager
By: /s/ Stephen H. Siegele
---------------------------------
Stephen H. Siegele
President
A-66
<PAGE> 1
AFFILIATE AGREEMENT
October 10, 1997
ATMI, Inc.
7 Commerce Drive
Danbury, CT 06810
Ladies and Gentlemen:
This Affiliate Agreement is being entered into pursuant to the terms
and conditions of that certain Agreement and Plan of Merger and Exchange dated
as of the 7th day of April, 1997 (the "Exchange Agreement"), by and among
Advanced Technology Materials, Inc, a Delaware corporation ("ATMI"), ATMI
Holdings, Inc. (n/k/a ATMI, Inc.), a Delaware corporation ("Holdings"), Alamo
Merger, Inc., a Delaware corporation, Advanced Delivery & Chemical Systems
Nevada, Inc., a Nevada corporation, Advanced Delivery & Chemical Systems
Manager, Inc., a Delaware corporation, Advanced Delivery & Chemical Systems
Holdings, LLC, a Delaware limited liability company, Advanced Delivery &
Chemical Systems Operating, LLC, a Delaware limited liability company and
Advanced Delivery & Chemical Systems, Ltd., a Texas limited partnership.
Capitalized terms used and not defined herein shall have the respective meanings
assigned to such terms in the Exchange Agreement.
The undersigned has been advised that as of the date hereof the
undersigned may be deemed to be an "affiliate" of the ADCS Group and may be
deemed to be an "affiliate" of Holdings, as the term "affiliate" is (i) defined
under Rule 144 ("Rule 144") of the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act"), and/or (ii) used in and for
purposes of Accounting Series Releases 130 and 135, as amended. The undersigned
understands that the representations, warranties and covenants set forth herein
will be relied upon by the ATMI Group, the ADCS Group, the ADCS Holders and
their respective counsel and accountants.
The undersigned represents and warrants to and agrees that:
1. The undersigned has full power to execute and deliver this Affiliate
Agreement and to make the representations and warranties herein and to perform
his or its obligations hereunder.
<PAGE> 2
2. The undersigned has carefully read this letter and the Exchange
Agreement and all schedules and exhibits thereto and discussed the requirements
and other applicable limitations upon the undersigned's ability to sell,
transfer or otherwise dispose of Holdings Common Stock to the extent the
undersigned has felt necessary with his or its counsel, counsel to the ATMI
Group or counsel to the ADCS Group.
3. The undersigned shall not make any sale, transfer or other
disposition of Holdings Common Stock in violation of the Act or the Rules and
Regulations.
4. The undersigned has been advised that the issuance of shares of
Holdings Common Stock to the undersigned in connection with the Exchange has
been registered with the SEC under the Act on a Registration Statement on Form
S-4. However, the undersigned has also been advised that, since the undersigned
may be deemed to be an affiliate of the ADCS Group and the distribution by the
undersigned of any Holdings Common Stock received in the Exchange has not been
registered under the Act, the undersigned may not sell, transfer or otherwise
dispose of Holdings Common Stock issued to the undersigned in the Exchange
unless (i) such sale, transfer or other disposition has been registered under
the Act, (ii) such sale, transfer or other disposition is made in conformity
with the requirements, to the extent applicable, of Rule 145 ("Rule 145") of the
Rules and Regulations under the Act and of Rule 144, or (iii) in the opinion of
counsel reasonably acceptable to Holdings, such sale, transfer or other
disposition is otherwise exempt from registration under the Act. The undersigned
hereby agrees to comply with such requirements.
5. From and after the Closing Date and for so long as and to the extent
necessary to permit the undersigned to sell any shares of Holdings Common Stock
pursuant to the applicable provisions of Rule 145 and Rule 144, Holdings shall
use best efforts to file, on a timely basis, all reports required to be filed by
it with the SEC pursuant to Section 13 or 15(d) of the Exchange Act (or, if
applicable, Holdings will make publicly available the information regarding
itself referred to in paragraph (c)(2) of Rule 144), and, so long as Holdings is
subject to such requirement, furnish to the undersigned upon request a written
statement as to whether Holdings has complied with such reporting requirements
during the twelve (12) months preceding any proposed sale under Rule 145 or Rule
144 and otherwise use its best efforts to permit such sales pursuant to Rule 145
or Rule 144. ATMI has filed, on a timely basis, all reports required to be filed
with the SEC under Section 13 of the Exchange Act during the twelve (12) months
preceding the date hereof.
6. Stop transfer instructions will be given to Holdings' transfer agent
with respect to the Holdings Common Stock received in the Exchange, and there
will be placed on the certificates for such Holdings Common Stock issued to the
undersigned, or any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
-2-
<PAGE> 3
THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE TERMS
OF THAT CERTAIN AFFILIATE AGREEMENT DATED OCTOBER 10, 1997
BETWEEN THE REGISTERED HOLDER HEREOF AND ATMI, INC., A COPY OF
WHICH AFFILIATE AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES
OF ATMI, INC. ATMI, INC. WILL FURNISH, WITHOUT CHARGE, A COPY
OF SUCH AGREEMENT TO THE HOLDER OF THIS CERTIFICATE UPON
WRITTEN REQUEST THEREFOR."
7. Unless the transfer by the undersigned of his or its Holdings Common
Stock has been registered under the Act or is a sale made in conformity with the
applicable provisions of Rule 145 or Rule 144, Holdings reserves the right to
put the following legend on the certificates issued to any transferee of the
undersigned:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED, ASSIGNED, HYPOTHECATED OR
OTHERWISE DISPOSED EXCEPT (I) UPON EFFECTIVE REGISTRATION OF
THE SECURITIES UNDER THE ACT AND OTHER APPLICABLE SECURITIES
LAWS COVERING SUCH SECURITIES, OR (II) UPON ACCEPTANCE BY THE
COMPANY OF AN OPINION OF COUNSEL IN SUCH FORM AND BY SUCH
COUNSEL, OR OTHER DOCUMENTATION, AS IS SATISFACTORY TO COUNSEL
FOR THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED."
8. The legends set forth in paragraphs 6 and 7 above shall be removed
and any stop transfer instructions terminated upon delivery of substitute
certificates without such legend if the undersigned shall have delivered to
Holdings a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably satisfactory to Holdings, to the effect that
such legend is not required for purposes of the Act.
9. The undersigned is, as of the Closing, the beneficial owner of (i.e.
has sole or shared voting or investment power with respect to) all the shares of
Holdings Common Stock and options to purchase shares of Holdings Common Stock
indicated on the last page hereof. Except as set forth on the last page hereof,
the undersigned does not own beneficially any shares of Holdings Common Stock or
any other equity securities of Holdings or any options, warrants or other rights
to acquire any equity securities of Holdings.
-3-
<PAGE> 4
10. The undersigned agrees that during the period commencing on the
date hereof and ending at such time as financial results covering at least
thirty (30) days of combined results of operations of the ADCS Group and the
ATMI Group have been published by Holdings, in the form of a quarterly earnings
report, an effective registration statement filed with the SEC, a report to the
SEC on Form 10-K, 10-Q or 8-K, or any other public filing or announcement which
includes the combined results of operations, he or it will not engage in any
sale, exchange, transfer, pledge, disposition of or grant of any option, the
establishment of any "short" or put-equivalent position with respect to, or
enter into any similar transaction intended to reduce the risk of the
undersigned's ownership of, or investment in, any of the following:
(a) any shares of Holdings Common Stock which the undersigned
may acquire in connection with the Exchange, or any securities which
may be paid as a dividend or otherwise distributed thereon or with
respect thereto or issued or delivered in exchange or substitution
therefor (all such shares and other securities being referred to
herein, collectively, as "Restricted Securities"), or any option, right
or other interest with respect to any Restricted Securities; or
(b) any other shares of Holdings Common Stock or other
Holdings equity securities which the undersigned purchases or otherwise
acquires after the execution of this Affiliate Agreement;
provided that the foregoing shall not be deemed to limit the undersigned's right
to exercise any conversion, liquidation preference or similar rights that the
undersigned may have pursuant to Holdings' Certificate of Incorporation.
11. Holdings agrees to publish, as promptly as practicable following
the Reorganization, financial results covering at least thirty (30) days of
combined operations of the ADCS Group and the ATMI Group in the form of a
quarterly earnings report, an effective registration statement filed with the
SEC, a report to the SEC on Form 10-K, 10-Q or 8-K, or any other public filing
or announcement that includes the combined results of operations of Holdings,
the ATMI Group and the ADCS Group; provided, however, that Holdings shall be
under no obligation to publish any such financial information other than with
respect to a fiscal quarter of Holdings.
12. This Affiliate Agreement may not be amended or waived other than by
a writing signed by the undersigned and Holdings.
13. In the event they were to become available, the undersigned will
not exercise dissenters' rights in connection with the Merger or the Exchange.
14. The undersigned has no present plan or intention to engage in a
direct or indirect sale, exchange, transfer, redemption, disposition or
conveyance or any other transaction that would have the effect of reducing in
any way the undersigned's risk of ownership by short sale or otherwise
-4-
<PAGE> 5
including, but not limited to, distributions by a partnership to its partners
and by a corporation to its stockholders, of the shares of Holdings Common Stock
to be received by the undersigned in the Exchange, but without prejudice to his
or its right to sell into the public market consistent with ordinary investment
discretion based upon future circumstances of Holdings and the undersigned. The
undersigned acknowledges that the undersigned is giving this representation and
covenant to enable Ernst & Young LLP to opine that the Exchange constitutes a
tax-free transaction under Section 351 of the Code and further recognizes that
significant adverse tax consequences might result if such representation is not
true.
15. The undersigned is not aware of, or participating in, any plan of
any other stockholder of the Company to engage in a sale of shares of Holdings
Common Stock that will be received in the Exchange or otherwise.
16. Notices to the undersigned or Holdings hereunder shall be given in
the manner set forth in the Registration Rights Agreement. Any waiver, amendment
or modification of this Agreement shall be made in the manner set forth in the
Registration Rights Agreement.
[signature page follows]
-5-
<PAGE> 6
NUMBER OF SHARES OF HOLDINGS COMMON STOCK
BENEFICIALLY OWNED BY THE SIGNING STOCKHOLDER:
3,741,305
NUMBER OF SHARES OF HOLDINGS COMMON STOCK
SUBJECT TO OPTIONS
BENEFICIALLY OWNED BY THE SIGNING STOCKHOLDER:
----------------
Very truly yours,
Stephen H. Siegele
------------------
(print name of stockholder above)
By: /s/ Stephen H. Siegele
-----------------------------
Name: Stephen H. Siegele
Title:
(if applicable)
Accepted this 10th day of
October, 1997
ATMI, Inc.
By: /s/ E. G. Banucci
-------------------------
Name: E. G. Banucci
Title: President
-6-
<PAGE> 7
ADCS AFFILIATES
SHARES OF HOLDINGS
NAME COMMON STOCK
- ---- BENEFICIALLY OWNED
------------------
Stephen H. Siegele 3,741,305
F. H. S. Investments, Ltd. 626,534
Frederick H. Siegele 0
Bernard McKeown 626,534
Frederick J. Siegele 179,009
Robert M. Jackson 89,504
Curtis D. Logan 0
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated as of October 10, 1997 (the
"Agreement") is entered into by and among ATMI, INC., a Delaware corporation
(the "Company"), and THE STOCKHOLDERS LISTED ON SCHEDULE 1 HERETO (the
"Stockholders").
1. Introduction. The Company, Advanced Technology Materials, Inc.,
Alamo Merger, Inc. and the ADCS Group (as defined in the Reorganization
Agreement which is defined below), entered into an Agreement and Plan of Merger
and Exchange dated April 7, 1997 (the "Reorganization Agreement"). At the
Closing, as defined in the Reorganization Agreement, the Stockholders received
an aggregate of 5,468,747 shares of common stock of the Company, par value $.01
per share (the "Company Common Stock"), in exchange for all of their Interests
in the ADCS Group, all in accordance with and subject to the provisions of the
Reorganization Agreement. In satisfaction of one of the conditions to Closing
set forth in the Reorganization Agreement, the Company and the Stockholders
desire to provide hereunder for the registration of the Company Common Stock
under the Securities Act upon the terms and conditions set forth herein.
2. Certain Definitions. As used herein, unless the context clearly
requires otherwise, the following terms have the meanings set forth below:
Commission: The Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
Exchange Act: The Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such successor federal statute.
Holder: Each initial holder of Registrable Securities and each
assignee or transferee thereof which is assigned or transferred at least 20,000
shares of the Company Common Stock (as adjusted for stock dividends, stock
splits, combinations, recapitalizations and similar events).
Person: An individual, a corporation, an association, a
general, limited or limited liability partnership, a limited liability company,
an unincorporated organization, a business, a government or a political
subdivision thereof or a governmental agency.
Pooling Period: The period beginning at the Effective
Time of the Merger and running through such time as financial results covering
at least 30 days of
<PAGE> 2
combined operations of the Company and the ADCS Group (on a consolidated basis)
shall have been published by the Company within the meaning of Section 201.01 of
the Commission's Codification of Financial Reporting Policies, which the Company
shall file as promptly as practicable following the Closing.
Registrable Securities: (a) Any shares of the Company Common
Stock received by the Stockholders under the Reorganization Agreement and (b)
any securities issued or issuable with respect to such shares of the Company
Common Stock by way of a stock dividend or stock split or in connection with a
combination or reclassification of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. Notwithstanding the
foregoing, any particular Registrable Securities shall cease to be Registrable
Securities when (x) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, or (y) they shall have been sold pursuant to Rule 144 (or any
successor provision) under the Securities Act.
Registration Expenses: As defined in Section 8 hereof.
Securities Act: The Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Act of 1933 shall include a reference to
the comparable section, if any, of any such successor federal statute.
Selling Expenses: As defined in Section 8 hereof.
All other capitalized terms not otherwise defined herein shall
carry the same definition as under the Reorganization Agreement.
3. Required Registration.
(a) Intentionally omitted.
(b) If the Registrable Securities were issued to the Stockholders
pursuant to a registration statement under the Securities Act, then, from the
first anniversary of the Closing Date until the third anniversary of the Closing
Date (as may be extended pursuant to Section 3(c) below), Stockholders holding
at least 70% of the Registrable Securities initially issued pursuant to the
Reorganization Agreement may request the Company to register up to 50% of the
Registrable Securities issued to such Stockholders pursuant to the
Reorganization Agreement on Form S-3 (or any successor form) or, if such form is
unavailable to the Company, on such other form as is available to the Company;
provided, however, that each such request relates to the registration of shares
having a market value of at least $5,000,000 if registered on Form S-1 or
-2-
<PAGE> 3
$1,000,000 if registered on Form S-3; provided, further, however, that the
maximum number of Registrable Securities which the Company is obligated to
register for a Stockholder under this Section 3(b) shall be reduced to the
extent that such Stockholder has sold Registrable Securities pursuant to Rule
145(d) or otherwise.
(c) No request made under Section 3(b) shall require a registration
statement requested therein to become effective (i) prior to the effective date
of a registration statement filed by the Company covering a firm commitment
underwritten public offering of the Company Common Stock being sold for the
account of the Company if the Company shall have given written notice in the
manner provided in Section 4 below of such registration statement to the
Stockholders prior to the Company's receipt of a demand notice from the Holders
pursuant to this Section 3 and shall have thereafter pursued the preparation,
filing and effectiveness of such registration statement with diligence (it being
understood by such Stockholders that advance notice of the pendency of such
registration may be material, non-public information); or (ii) if the Company
shall furnish to the Stockholders a certificate signed by the President of the
Company and prepared in good faith stating that, in the good faith judgment of
the Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such registration to be effected at such time,
in which event the Company shall have the right to defer the filing of the
registration statement for a period of not more than sixty (60) days after
receipt of the request for registration, which right may not be exercised by the
Company on more than one occasion during any period of 12 consecutive months. If
the right of the Stockholders to request a registration is so suspended by the
Company pursuant to clause (i) or (ii) above, then the period specified in
Section 3(b) shall be increased by one day for each day such right is suspended.
(d) Following receipt of any notice under this Section 3, the Company
shall immediately notify all Stockholders from whom notice has not been received
and shall use its reasonable best efforts to register under the Securities Act,
for public sale in accordance with the method of disposition specified in such
notice from requesting Stockholders, the number of Registrable Securities
specified in such notice subject to the limitations specified in this Section 3
(and in all notices received by the Company from other Stockholders within 30
days after the giving of such notice by the Company). If such method of
disposition shall be an underwritten public offering, the Company may designate
the managing underwriter of such offering, subject to the approval of the
Stockholders holding a majority of the Registrable Securities to be sold in such
offering, which approval shall not be unreasonably withheld or delayed. The
Company shall be obligated to register Registrable Securities pursuant to
Section 3(b) on one occasion only; provided, however, that such obligation shall
be deemed satisfied only when a registration statement, which covers all
Registrable Securities specified in notices received as aforesaid and with
respect to which the request for registration has not been withdrawn and
provides for sale of such shares in accordance with the method of disposition
specified by the requesting Stockholders, shall have become effective and, if
such method of disposition is a firm commitment underwritten public offering,
-3-
<PAGE> 4
all such shares shall have been sold pursuant thereto; provided further, if, on
any one occasion, the Stockholders exercise a demand right and subsequently
inform the Company in writing that (i) they desire to withdraw such registration
or (ii) they are unable to sell in excess of 50% of the Registrable Shares
covered by such registration statement due to a deterioration in market
conditions or other bona fide reason and the Stockholders reimburse the Company
for all Registration Expenses incurred by the Company in connection with such
terminated registration, then the Stockholders shall be deemed not to have
exercised the demand right under this Agreement and shall be permitted to
exercise such right in accordance with the terms of Section 3(b) of this
Agreement on one additional occasion; and provided, further, that if such
withdrawal or inability to sell in excess of 50% of such shares is due to the
discovery by the Stockholders of a material adverse change in the condition,
business or prospects of the Company as determined by the managing
underwriter(s) of the related offering, if any, or by Stockholders holding at
least 70% of the Registrable Securities proposed to be included in the
registration, if there shall be no underwriters, from that known to any of the
Stockholders at the time of their request and the Stockholders shall have
withdrawn such request or terminated sales promptly following the disclosure by
the Company of such material adverse change, then the Stockholders shall not be
required to pay such expenses and shall retain their right to again request such
registration in the future.
(e) The Company shall be entitled, upon written notice to the Holders
within 30 days after receipt of their request to effect a registration pursuant
to this Section 3, to include in any registration statement referred to in this
Section 3, for sale in accordance with the method of disposition specified by
the requesting Stockholders, shares of Company Common Stock to be sold by the
Company for its own account, except as and to the extent that, in the opinion of
the managing underwriter (if such method of disposition shall be an underwritten
public offering), such inclusion would adversely affect the marketing of the
Registrable Securities to be sold. In the event the Company exercises such right
and includes shares in such registration statement equaling more than 50% of the
shares included in such registration, such registration shall be deemed to be
Company-initiated registration and the Holders shall not be deemed to have
exercised a demand right under Section 3.
4. Piggy-Back Registration.
(a) Notice. If the Company at any time after the expiration of the
Pooling Period proposes to register, other than pursuant to Section 3 hereof,
any of its securities under the Securities Act for sale to the public, whether
for its own account or for the account of securityholders other than the Holders
or both (except for registrations on Form S-4 or S-8 or another form not
available for registering the Registrable Securities for sale to the public),
each such time it will give written notice to all Holders of its intention to do
so and of the Holders' rights under this Section 4. Upon the written request of
any such Holder, received by the Company within 30 days after the giving of any
such notice by the Company, to register any of the Holder's Registrable
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Securities, the Company will cause the Registrable Securities as to which
registration shall have been so requested to be included in the securities to be
covered by the registration statement proposed to be filed by the Company, all
to the extent requisite to permit the sale or other disposition by the Holder
(in accordance with the Holder's written request) of such Registrable Securities
so registered.
(b) Underwriting. If (i) a registration described in this Section 4
involves an underwritten offering of the securities so being registered to be
distributed (on a firm commitment basis ) by or through one or more
underwriters, (ii) the Registrable Securities so requested to be registered for
sale for the account of the Holders are also to be included in such underwritten
offering, and (iii) the managing underwriter of such underwritten offering shall
inform the Company and the Holders by letter of its belief that the distribution
of all or a specified number of the Registrable Securities requested to be
included concurrently with the securities being distributed by such underwriters
would interfere with the successful marketing of the securities being
distributed by such underwriters, then the Company may, upon written notice to
all Holders, reduce (if and to the extent stated by such managing underwriter to
be necessary to eliminate such effect) the number of the Registrable Securities
requested to be included so that the resultant aggregate number of the
Registrable Securities requested to be included that will be included in such
registration shall be equal to the number of shares stated in such managing
underwriter's letter; provided, however, that the priority in such registration
shall be as follows: (i) first, securities offered for the account of the
Company or, if such registration is for a securityholder exercising a
contractual request for registration, then securities offered for the account of
such securityholder, (ii) second, the Registrable Securities and the securities
of other securityholders, if any, who are entitled by contract to have such
securities included in such registration, pro rata based on the number of shares
of Company Common Stock then held, and (iii) third, all other securities
proposed to be registered.
(c) Other Matters. Notwithstanding the foregoing provisions, the
Company may withdraw or delay any registration statement referred to in this
Section 4 without thereby incurring any liability to the Holders. Any such
withdrawal or delay shall be without prejudice to the rights of the Holders
under Section 3 hereof. No registration effected under this Section 4 shall
relieve the Company of its obligations under Section 3 hereof.
5. Termination of the Company's Registration Obligations. The Company's
registration obligations under (i) Section 3 shall terminate three years after
the Closing Date (subject to extension pursuant to Section 3(c) and the
penultimate paragraph of Section 6) and (ii) Section 4 shall terminate five
years after the Closing Date. In addition, the Company shall not be required to
effect a registration pursuant to Section 3 or 4 hereof for any Holder desiring
to participate in such registration or to maintain the effectiveness of any
registration statement for any Holder who, in any such case, may then dispose of
all of such Holder's shares of Registrable Securities pursuant to Rule 144
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within the three-month period following such proposed registration; provided,
however, no termination of the Company's registration obligations shall be
deemed to affect the parties' obligations under Sections 8, 9 and 10 of this
Agreement, which Sections shall survive the termination of such registration
obligations.
6. Registration Procedures. If and whenever the Company is required by
the provisions of Section 3 or 4 to effect the registration of any Registrable
Securities under the Securities Act, the Company shall, as expeditiously as
possible and until the Company's registration obligations terminate pursuant to
Section 5 hereof:
(a) prepare and file with the Commission the requisite registration
statement to effect such registration and thereafter use diligent efforts to
cause each such registration statement to become and remain effective until the
earlier of (A) the date on which all of the Registrable Securities covered by
such registration statement have been disposed of by the Holder or Holders
thereof in accordance with the intended methods of disposition thereof described
in the registration statement (each Holder or Holders thereof hereby agreeing to
inform the Company upon the completion of the disposition of their respective
Registrable Securities); or (B) the expiration of the following periods: (i) in
the case of any Holder, the period after which the Company's registration
obligations terminate as to such Holder pursuant to Section 5 hereof; and (ii)
in the case of a registration pursuant to Section 4 hereof, 180 days after the
effective date of such registration statement (as the periods specified in
clauses (i) and (ii) above may be extended pursuant to the penultimate paragraph
of this Section 6);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the applicable period specified in Section 6(a) hereof and to comply during such
period with the obligations of a registrant under the Securities Act (including,
without limitation, provisions relating to the disposition of all securities
covered by such registration statement in accordance with the intended methods
of disposition by the Holders set forth in such registration statement);
(c) furnish to each Holder of Registrable Securities covered by such
registration statement and each underwriter thereof, if any, such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and of any other prospectus
filed under Rule 424 under the Securities Act, and such other documents, as such
Holder and underwriter may reasonably request in order to facilitate the public
sale or other disposition of such Registrable Securities;
(d) use diligent efforts to register or qualify all Registrable
Securities covered by such registration statement under such other securities
laws or blue sky laws of such jurisdictions as any Holder thereof and any
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underwriter thereof shall reasonably request, and to keep such registrations or
qualifications in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary or advisable
to enable such Holder and underwriter to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder, except that
the Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this Section 6(d) be obligated to be so qualified or
to consent to general service of process in any such jurisdiction (unless the
Company is subject to service in such jurisdiction and except as may be required
by the Securities Act);
(e) upon request, furnish each Holder of Registrable Securities a
signed counterpart, addressed to such Holder, of an opinion of counsel for the
Company, dated the effective date of such registration statement (or, if such
registration statement includes an underwritten public offering, dated the date
of closing under the underwriting agreement), with opinions of issuer's counsel
with respect to corporate and securities and patent issues as customarily
delivered in connection with public offerings;
(f) promptly notify each Holder of Registrable Securities covered by
such registration statement and each underwriter thereof, if any, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon the Company's discovery that, or upon the happening of any
event of which the Company has knowledge as a result of which, the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and at the request of any such Holder
or underwriter promptly prepare and furnish to such Holder or underwriter, if
any, a reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(g) otherwise use diligent efforts to comply with all applicable rules
and regulations of the Commission, and make generally available (within the
meaning of Section 11(a) of the Securities Act and the regulations thereunder)
to its securityholders, as soon as reasonably practicable, an earnings statement
covering a period of at least twelve months, beginning with the first month of
the first fiscal quarter after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and the regulations thereunder;
(h) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by such registration statement from and
after a date not later than the effective date of such registration statement;
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(i) use diligent efforts to list all Company Common Stock covered by
such registration statement on each securities exchange on which any of the
Company Common Stock is then listed or, if the Company Common Stock is not then
listed on any national securities exchange but is included in Nasdaq or the
Nasdaq National Market, use diligent efforts to have such Company Common Stock
included in Nasdaq or the Nasdaq National Market, as the case may be; and
(j) in connection with each such registration, give the Holders of
Registrable Securities to be registered therein, their underwriters, if any, and
up to one designated counsel and one designated accounting firm to represent the
interests of such Holders, at the expense of such Holders, the reasonable
opportunity to participate in the preparation prior to filing of the related
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto;
(k) upon receipt by the Company of reasonable confidentiality
agreements, make available for inspection by any underwriter participating in
any disposition pursuant to such registration statement and any attorney,
accountant or other agent retained by any such underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent accountants
to be available on a reasonable basis and cooperate with such parties' "due
diligence" and to supply all information reasonably requested by any such
underwriter, attorney, accountant or agent in connection with such registration
statement, provided that the Company may refrain from disclosing any proprietary
or other information that is not material to the Company's financial condition
or results of operations; and
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Company Common Stock included in such registration statement for sale in any
jurisdiction, the Company will use diligent efforts promptly to obtain the
withdrawal of such order.
The Holders agree that, upon receipt of any notice from the Company of
the occurrence of any event of the kind described in Section 6(f) hereof, the
Holders will forthwith discontinue their disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until the Holders' receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6(f) hereof and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in the Holders' possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
three-year and 180-day periods referred to in Sections 5 and 6(a) hereof,
respectively, shall be extended by the length of the period from and including
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the date when each Holder of any Registrable Securities covered by such
registration statement shall have received such notice to the date on which each
such Holder has received the copies of the supplemented or amended prospectus
contemplated by Section 6(f) hereof.
In connection with each such registration, each Holder of Registrable
Securities to be named in the registration statement shall furnish to the
Company such information regarding such Holder and the proposed distribution of
such Registrable Securities as the Company may from time to time reasonably
request in writing, and the delivery of such information shall be a condition
precedent to the obligation of the Company to file any registration statement.
7. Underwritten Offerings.
(a) Underwritten Offerings Requested by Holders. If requested by the
underwriters for any underwritten offering by a Holder or Holders pursuant to a
registration requested under Section 3 hereof, the Company will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be reasonably satisfactory in substance and form to the Company, such Holder
or Holders and the underwriters, and to contain such representations and
warranties by the Company for the benefit of the underwriters and the Holders
and such other terms as are customarily contained in an underwriting agreement
with respect to such an offering, including, without limitation, representations
and warranties by the Company to the underwriters, provisions regarding the
delivery of opinions of counsel, a "cold comfort" letter and updates thereof and
other closing certificates and documents, in each case as customarily included
in underwritten public offerings, and indemnities substantially to the effect
and to the extent provided in Section 9 hereof. Such Holder or Holders will
cooperate with the Company in the negotiation of the underwriting agreement and
will give consideration to the reasonable suggestions of the Company regarding
the form thereof; provided, however, that nothing herein contained shall
diminish the foregoing obligations of the Company. Such Holder or Holders of
Registrable Securities to be distributed by such underwriters shall be parties
to such underwriting agreement, which may contain representations and warranties
of the Holders for the benefit of the underwriters and the Company as are usual
and customary and may require that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Holder or Holders.
(b) Underwritten Piggy-Back Offerings. The Holder or Holders of
Registrable Securities to be distributed by an underwritten offering described
in Section 4 hereof shall be parties to the underwriting agreement between the
Company and such underwriters and may require that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such Holder or Holders.
No such Holder shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
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<PAGE> 10
warranties or agreements regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of distribution customarily given
to underwriters and any other representation required by law.
8. Expenses. All expenses incurred by the Company in complying with
Sections 3, 4, 6 and 7 hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, reasonable fees and expenses of
one counsel for the holders of Registrable Securities participating in such
registration (not to exceed $25,000 for each registration pursuant to Section 4
or Section 3(b) hereof), fees and expenses incurred in connection with complying
with state securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc., fees of transfer agents and registrars, and costs of
insurance, but excluding any Selling Expenses, are herein called "Registration
Expenses." All underwriting discounts, brokerage fees and selling commissions
applicable to the sale of Registrable Securities by a Holder or Holders are
herein called "Selling Expenses."
The Company will pay all Registration Expenses in connection with any
registration pursuant to this Agreement. All Selling Expenses in connection with
each such registration shall be borne by the participating Holders in proportion
to the number of shares of Registrable Securities sold by each, or as such
Holders may otherwise agree.
9. Indemnification.
(a) Indemnification by the Company. In the event of any registration,
qualification or compliance effected pursuant to Sections 3 or 4 hereof, the
Company shall indemnify and hold harmless the Holder of any Registrable
Securities covered by such registration statement, its directors and officers
and affiliates, if any, each underwriter of such Registrable Securities
thereunder, if any, each broker, dealer, or similar person acting on behalf of
any such Holder, and each other person, if any, who controls any of the
foregoing persons within the meaning of the Securities Act (each a "Company
Indemnitee" and collectively the "Company Indemnitees"), in each case, against
any losses, claims, damages or liabilities, joint or several, to which such
Company Indemnitee may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any breach of any representation, warranty, agreement or
covenant of the Company contained in the underwriting agreement covering the
public offering of such Registrable Securities or untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Securities were registered under the Securities Act
pursuant to Sections 3 or 4, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any other document incident to any such registration, qualification or
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<PAGE> 11
compliance, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse such Company
Indemnitee for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, however, that the Company shall not be liable in
any such case if and to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such document in reliance upon and in conformity with
written information furnished to the Company by such Company Indemnitee,
specifically for use in such document; and provided further, that the foregoing
indemnity agreement is subject to the condition that, insofar as it relates to
any such untrue statement or alleged untrue statement or omission or alleged
omission made in the preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time the registration
statement becomes effective or in the amended prospectus filed with the
Commission pursuant to Rule 424(b) or in the prospectus subject to completion
and term sheet under Rule 434 of the Securities Act, which together meet the
requirements of Section 10(a) of the Securities Act (the "Final Prospectus"),
such indemnity agreement shall not inure to the benefit of any such seller, any
such underwriter or any such controlling person, if a copy of the Final
Prospectus was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act, but only if the Company had previously furnished a
sufficient number of copies of the Final Prospectus to such seller for
distribution to any underwriter or controlling person. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder, director, officer, underwriter or controlling person,
shall survive the transfer of such securities by any Holder or underwriter, and
shall be in addition to any liability which the Company may otherwise have.
(b) Indemnification by the Holders. In the event of any registration,
qualification or compliance effected pursuant to Sections 3 or 4 hereof, each
Holder selling Registrable Securities pursuant thereto shall indemnify and hold
harmless the Company, each director of the Company, each officer of the Company
and each other person, if any, who controls the Company within the meaning of
the Securities Act, each underwriter, if any, and each person who controls any
of the foregoing persons within the meaning of the Securities Act (each a
"Holder Indemnitee" and collectively the "Holder Indemnitees"), in each case,
against any losses, claims, damages or liabilities, joint or several, to which a
Holder Indemnitee may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (i) any breach of any representation, warranty, agreement or
covenant of such Holder contained in the underwriting agreement covering the
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public offering of such Registrable Securities or (ii) untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such Registrable Securities were registered under the
Securities Act pursuant to Sections 3 or 4, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any other document incident to any such registration,
qualification or compliance, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Holder Indemnitee for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
but only to the extent that any such loss, claim, damage or liability (or action
or proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to such
Holder, as such, furnished in writing to the Company by such Holder specifically
for use in such document; provided, however, that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any such
untrue statement or alleged untrue statement or omission or alleged omission
made in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration statement
becomes effective or in the Final Prospectus, such indemnity agreement shall not
inure to the benefit of the Company, any controlling person or any underwriter,
if the Company had an obligation under the Securities Act to deliver the Final
Prospectus to the person or entity asserting the loss, liability, claim or
damage and such Final Prospectus was not so furnished at or prior to the time
such furnishing is required by the Securities Act; and provided, further, that,
in the case of a registration pursuant to Section 3 or 4 hereof, in no event
shall any indemnity by a seller under this Section 9(b) exceed the gross
proceeds from the offering received by such seller. Such indemnity shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer, underwriter or controlling person,
shall survive the transfer of such Registrable Securities by any such Holder or
underwriter, and shall be in addition to any liability which any such Holder may
otherwise have.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding provisions of this Section 9, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding provisions of this Section 9, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action or proceeding is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that the indemnifying party
may wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
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<PAGE> 13
liable to such indemnified party under this Section 9 for any legal or other
expenses subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement of any such action 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, or a covenant not to sue,
with respect to such claim or litigation. No indemnified party shall consent to
entry of any judgment or enter into any settlement of any such action the
defense of which has been assumed by an indemnifying party without the consent
of such indemnifying party (which consent shall not be unreasonably withheld).
(d) Indemnification Payments. The indemnification required by this
Section 9 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(e) Contribution. If for any reason the indemnification provided for in
the preceding provisions of this Section 9 is unavailable to an indemnified
party in respect of any losses, claims, damages or liabilities (or any action or
proceeding in respect thereof) referred to therein, then each indemnifying
party, in lieu of indemnifying an indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or any action or proceeding in respect thereof)
(i) as between the Company and the Holders 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 Holders on the one hand and the
underwriters on the other from the offering of the securities, or if such
allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Company and the Holders on the one hand and of the underwriters on
the other in connection with the statement or omissions which resulted in such
losses, claims, damages or liabilities (or action or proceeding), as well as any
other relevant equitable considerations and (ii) as between the Company on the
one hand and each Holder on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of each Holder in connection with
such statements or omissions, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Holders on
the one hand and the underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the Holders bear to the total underwriting discounts and commissions
received by the underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of the Company and the Holders
on the one hand and of the underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Holders or by the
underwriters. The relative fault of the Company on the one hand and of each
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Holder on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 9 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 paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph 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 or defending any such action or claim. 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. Each Holder's
obligation to contribute pursuant to this Section 9 is several, and not joint,
in the proportion that the proceeds of the offering received by such Holder
bears to the total proceeds of the offering received by all the Holders.
10. Rule 144. With a view to making available the benefits of certain
rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees
to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use diligent efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act;
(c) furnish to a Holder of Registrable Securities forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 and of the Securities Act and the Exchange
Act a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents previously filed as the Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
the Holder to sell any such securities without registration; and
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(d) in accordance with the Company's current practices, pay the fees
and expenses of the Company's counsel in obtaining routine, appropriate opinions
of counsel (to the effect that registration under Securities Act will or will
not be required for any sale or transfer) if at any time or from time to time
any holder desires to sell or otherwise transfer any or all of the Registrable
Securities held by it pursuant to Rule 144 or Rule 145(d) under the Securities
Act.
11. Lock-Up.
(a) Company Lock-Up. The Company agrees not to effect any public sale
or public distribution of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, during the 30-day
period prior to and during the 90-day period beginning on the commencement date
of any underwritten offering on behalf of the Holders (except pursuant to (i)
registrations on Form S-8 or any successor form, (ii) registrations on Form S-4
or any successor form and (iii) as part of such underwritten registration, if
permitted pursuant to Section 3(d)), unless the underwriters managing such
offering otherwise agree; provided, however, that the foregoing 30-day and
90-day periods shall be extended to the extent requested by such managing
underwriters, but not beyond a 60-day and 180-day period, respectively.
(b) Holder Lock-Up. Each Holder agrees not to effect any public sale or
other distribution of Company Common Stock, or any securities convertible into
or exchangeable or exercisable therefor, during the 30-day period prior to (or
if less, the period beginning on the date notice of such proposed offering is
received) and during the 90-day period beginning on the commencement of any
underwritten offering on the part of the Company of Company Common Stock being
sold for the account of the Company (except pursuant to (i) registrations on
Form S-8 or any successor form, (ii) registrations on Form S-4 or any successor
form and (iii) any part of such underwritten registration, if permitted pursuant
to Section 4(a)), unless the underwriters managing such offering otherwise
agree; provided, however, that the foregoing 30-day and 90-day periods shall be
extended to the extent requested by such managing underwriters, but not beyond a
60-day and 180-day period, respectively.
12. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall have obtained the written
consent to such amendment, action or omission to act, of the holders of at least
seventy percent (70%) of the Registrable Securities initially issued pursuant to
the Reorganization Agreement.
13. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by facsimile (if received during regular business hours; otherwise on the
next business day) (with written confirmation of receipt), provided that a copy
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<PAGE> 16
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by certified mail or a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):
(a) If to the Company:
ATMI, Inc.
7 Commerce Drive
Danbury, Connecticut 06810-4169
Attention: President and CEO
Facsimile: (203) 792-8040
with a copy to:
Frank J. Marco, Esq.
Shipman & Goodwin LLP
One American Row
Hartford, CT 06103
Facsimile: (860) 251-5900
(b) If to a Holder, at the Holder's address as set forth on Schedule 1.
with a copy to:
Carmelo M. Gordian, Esq.
Brobeck, Phleger & Harrison LLP
301 Congress Avenue
Suite 1200
Austin TX 78701
Facsimile: (512) 477-5813
14. Miscellaneous.
(a) Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective heirs,
successors and assigns.
(b) Headings. The headings of the several sections and paragraphs of
this Agreement are inserted for reference only and shall not limit or otherwise
affect the meaning thereof.
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<PAGE> 17
(c) Counterparts. This Agreement may be executed in counterparts, and
when so executed each counterpart shall be deemed to be an original, and said
counterparts together shall constitute one and the same instrument.
(d) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings with respect to
such subject matter.
(e) Singular and Plural Words; Gender. Unless the context otherwise
requires, all words used herein in the singular shall include the plural, all
words used herein in the plural shall include the singular, and all words used
herein in any gender shall include all genders.
(f) Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware without reference to the principles of conflicts of laws.
[The signature page follows.]
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<PAGE> 18
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed and delivered as of the date first above written.
ATMI, INC.
By: /s/ E. G. Banucci
-----------------------------
Its: President
STOCKHOLDERS:
/s/ Stephen H. Siegele
-------------------------------
Stephen H. Siegele
F.H.S. Investments, Ltd.
By /s/ Frederick H. Siegele
-----------------------------
General Partner
/s/ Frederick J. Siegele
--------------------------------
Frederick J. Siegele
/s/ Bernard McKeown
--------------------------------
Bernard McKeown
/s/ Robert M. Jackson
--------------------------------
Robert M. Jackson
<PAGE> 19
SCHEDULE 1
STOCKHOLDERS
------------
INITIAL NO. OF
NAME: REGISTRABLE SECURITIES
----- ----------------------
Stephen H. Siegele 3,741,305
3600 Woodcutters Way
Austin, Texas 78746
F.H.S. Investments, Ltd. 626,534
c/o Frederick H. Siegele
2723 Barton's Bluff Lane
Austin, Texas 78746
Frederick J. Siegele 179,009
1613 Cabinwood Cove
Austin, Texas 78746
Bernard McKeown 626,534
12931 Drury Lane
Plymouth, Michigan 48170
Robert M. Jackson 89,504
102 Wilcox Drive
Burnet, Texas 78654
