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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
ATMI, INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
00207R101
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(CUSIP Number)
Lamonte H. Lawrence
c/o Lawrence Semiconductor Laboratories, Inc.
550 West Juanita
Mesa, Arizona 88210
(602)668-4000
with a copy to:
Jonathan Freedman
Dewey Ballantine
1301 Avenue of the Americas
New York, NY 10019-6092
(212)259-8000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 10, 1997
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(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 / /. (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.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
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SCHEDULE 13D
CUSIP No. 00207R101
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Lamonte H. Lawrence
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2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) / /
OF A GROUP* (b) / /
Not Applicable
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3 SEC Use Only
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4 SOURCE OF FUNDS*
SC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 3,556,000
PERSON WITH --------------------------------------------------
8 SHARED VOTING POWER
None
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9 SOLE DISPOSITIVE POWER
3,566,000
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10 SHARED DISPOSITIVE POWER
None
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,556,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
Not Applicable
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.8%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 10 Pages
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Item 1. Security and Issuer.
This statement relates to the common stock, par value $.01 per share
("Common Stock"), of ATMI, Inc., a Delaware corporation ("ATMI" or the
"Issuer"), having its principal executive offices at 7 Commerce Drive,
Danbury, Connecticut 06810.
Item 2. Identity and Background.
The following information is provided for the Reporting Person:
(a) Name: Lamonte H. Lawrence
(b) Business address: c/o Lawrence Semiconductor Laboratories, Inc.,
550 West Juanita, Mesa, Arizona 88210
(c) Present principal occupation and related information:
Consultant
(d) During the last five years, Mr. Lawrence has not been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mr. Lawrence has not 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.
(f) Mr. Lawrence is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to an Agreement and Plan of Merger, dated May 17, 1997, as
amended by the First Amendment to Agreement and Plan of Merger dated as of
June 6, 1997, the Second Amendment to Agreement and Plan of Merger dated as
of July 30, 1997, and the Third Amendment to Agreement and Plan of Merger
dated as of August 19, 1997 (the "Merger Agreement") by and among Advanced
Technology Materials, Inc. ("Advanced Technology"), Welk Acquisition
Corporation ("Lawrence Merger Subsidiary"), ATMI, Lawrence Semiconductor
Laboratories, Inc. ("LSL") and Lawrence Semiconductor Laboratories Marketing
and Sales, Inc. ("LSLMS"), all of the shares of the ATMI Common Stock
reported in this Schedule 13D were acquired in exchange for Mr. Lawrence's
98% ownership of the common stock of LSL (the "LSL Common Stock"). The
information set forth in Item 6, "Merger Agreement" is incorporated in this
Item 3 by reference.
Page 3 of 10 Pages
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ITEM 4. PURPOSE OF TRANSACTION.
Pursuant to an Affiliate Agreement (See Item 6, "Affiliate
Agreement"), Mr. Lawrence has agreed not to sell his shares of ATMI Common
Stock until the publication by ATMI of the combined results of operations of
LSL and Advanced Technology for a period of 30 days of combined operations.
Following such publication, Mr. Lawrence may sell some or all of his shares
of ATMI Common Stock, subject to market conditions and applicable securities
laws. Similarly, Mr. Lawrence may acquire additional shares of ATMI Common
Stock, subject to market conditions.
Other than as set forth above and provided in Item 6 (which
information is incorporated by reference in this Item 4), Mr. Lawrence does
not have any present plans or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or
corporate structure;
(g) changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other action which may impede the acquisition of
control of the Issuer by any person;
(h) causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be authorized to be quoted
in an interdealer quotation system of a registered national securities
association;
(i) a class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the
Securities and Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
Page 4 of 10 Pages
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Item 5. Interest in Securities of the Issuer.
(a) Mr. Lawrence beneficially owns 3,556,000 shares of ATMI Common Stock
which represents approximately 19.8% of all ATMI Common Stock outstanding as
of October 10, 1997.*
(b) Mr. Lawrence currently has the sole power to vote or direct the vote
and to dispose or direct the disposition of all of the shares of ATMI Common
Stock referred to in paragraph (a) above.*
(c) Except as reported herein, during the past sixty days, Mr. Lawrence
has not effected any transaction in ATMI Common Stock.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
shares of ATMI Common Stock beneficially owned by Mr. Lawrence.*
(e) Not applicable.
*Pursuant to California law, Regina Lawrence, the wife of Mr. Lawrence,
holds a one-half community property interest in the shares of ATMI Common
Stock held of record by Mr. Lawrence. Regina Lawrence disclaims beneficial
ownership of such shares.
Item 6. Contracts, Arrangements, Undertakings or Relationships with Respect
to Securities of the Issuer.
Except as described herein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among Mr. Lawrence and
any other person with respect to any securities of the Issuer, including any
contract, arrangement, understanding or relationship concerning transfer or
voting of any securities of the Issuer, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Merger Agreement. Pursuant to the Merger Agreement, Lawrence Merger
Subsidiary was merged with and into LSL, and all shares of LSL Common Stock
were converted into the right to receive shares of ATMI Common Stock (the
"Merger"). The receipt of ATMI Common Stock was dependent upon the approval
of Advanced Technology stockholders of a certain merger and exchange with an
unrelated third party. The Merger was consummated on October 10, 1997.
The aggregate number of shares of ATMI Common Stock exchanged for the
outstanding shares of LSL Common Stock (the "Lawrence Acquisition
Consideration") was equal to $78 million divided by the "Lawrence Acquisition
Average Closing Price" of Advanced Technology Common Stock. The purchase
price was subject to adjustment as provided in the Merger Agreement,
including a dollar-for-dollar adjustment based upon any change in the
combined net worth of LSL and LSLMS as indicated on their unaudited financial
statements as of December 31, 1996, and their audited financial statements as
of the effective time of the Merger ("Lawrence Effective Time"). "Lawrence
Acquisition Average Closing Price" means
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the average closing price of Advanced Technology Common Stock as reported by
Nasdaq for the twenty trading days preceding (and including) the third day
prior to the date of the Annual Meeting of the Advanced Technology
stockholders; subject to a high of $21.00 per share and a low of $17.00 per
share. The Lawrence Acquisition Average Closing Price used to determine the
number of ATMI Common Stock to be exchanged for LSL Common Stock was $21.00
per share. The Lawrence Acquisition Consideration was distributed among the
LSL stockholders in proportion to their respective holdings of LSL Common
Stock immediately prior to the consummation of the Merger.
The obligation of LSL to consummate the Merger was subject to, among
other things, the appointment of Lamonte H. Lawrence promptly after the
Lawrence Effective Time to ATMI's seven-member Board of Directors for a term
not to exceed two years.
Pursuant to the terms of the Merger Agreement, Advanced Technology is to
indemnify and hold harmless each of the LSL stockholders against any and all
losses arising out of (i) the conduct of the business of ownership of LSL
after the Lawrence Effective Time, and (ii) any breach of the
representations, warranties, or covenants of Advanced Technology contained in
the Merger Agreement. In addition, the LSL stockholders are to indemnify and
hold harmless LSL, Advanced Technology, Lawrence Merger Subsidiary, ATMI, and
each of their officers, directors, employees, agents, representatives and
affiliates (the "Company Indemnified Parties") against any and all losses
arising out of any breach of the representations, warranties and covenants of
LSL contained in the Merger Agreement. Each LSL stockholder is to indemnify
severally the Indemnified Parties for each LSL stockholder's pro rata share
of losses arising from any breach of the representations, warranties and
covenants of LSL contained in the Merger Agreement with respect to taxes and
environmental matters (the "Special Indemnities"). Other than with respect
to the Special Indemnities and certain covenants, an indemnified party
generally may not make any claim for indemnification after the first
anniversary date of the Closing Date (as defined in the Merger Agreement),
and no such claim may be brought after the date of issuance of the first
independent audit report with respect to the financial statements of Advanced
Technology after the Closing Date if such claim is of a type expected to be
encountered in the course of an audit performed in accordance with generally
accepted auditing standards. With respect to the Special Indemnities, the
claims period is to extend for the statute of limitations applicable to the
matters which are the subject of such claims. At the Lawrence Effective Time,
five percent of the Lawrence Acquisition Consideration was placed in escrow
as security for the indemnification obligations of LSL stockholders. See
"Escrow Agreement" described below.
Affiliate Agreement. Mr. Lawrence and ATMI have entered into an
affiliate agreement (the "Affiliate Agreement") pursuant to which Mr.
Lawrence has agreed that during the period commencing on the date of the
Affiliate Agreement and ending at such time as financial results covering at
least thirty days of combined operations of LSL and Advanced Technology have
been published by ATMI, 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, Mr. Lawrence 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 the entry into any similar transaction intended to reduce the risk of Mr.
Lawrence's risk of ownership, or investment in, any of the following: (a) any
shares of ATMI Common Stock
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which Mr. Lawrence acquires in connection with the Merger, 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 ATMI Common
Stock or other ATMI equity securities which Mr. Lawrence purchases or
otherwise acquires after the execution of the Affiliate Agreement; provided,
that Mr. Lawrence may exercise any conversion, liquidation preference or
similar rights that he may have pursuant to ATMI' Certificate of
Incorporation.
Pursuant to the Affiliate Agreement, ATMI has agreed to publish, as
promptly as practicable following the Merger, financial results covering at
least 30 days of combined operations of Advanced Technology and LSL in the
form of a quarterly earnings report, an effective registrations 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 Advanced Technology and LSL.
In addition, Mr. Lawrence has represented that he has no present plan or
intention to engage in a direct or indirect sale, exchange, transfer,
redemption, disposition or conveyance or any transaction that would have the
effect of reducing in any way Mr. Lawrence's risk of ownership by short sale
or otherwise of the shares of ATMI Common Stock received by him in the
Merger, except as contemplated by the Registration Rights Agreement (as
defined below) and further, that he is not aware of, or participating in, any
plan of any other stockholder of Advanced Technology to engage in a sale of
ATMI Common Stock received in the Merger or otherwise.
Registration Rights Agreement: ATMI has entered into a registration
rights agreement (the "Registration Rights Agreement") with the LSL
stockholders, including Mr. Lawrence, with respect to the shares of ATMI
Common Stock acquired pursuant to the Merger (the "Lawrence Shares").
Pursuant to the Registration Rights Agreement, ATMI is to register for resale
once, during each three-month period in the one-year period following the
Lawrence Effective Time, a number of Lawrence Shares held by each holder that
does not exceed one percent of the then outstanding ATMI Common Stock. Any
holder that does not sell the full one percent in a given three-month period
may cumulate the number of shares not so sold and sell such unsold shares in
a subsequent three-month period. The Registration Rights Agreement also
provides for (1) two demand registrations, if requested by the holders of at
least 70% of the registrable shares, which right is exercisable between the
first anniversary of the Lawrence Effective Time and the third anniversary of
the Lawrence Effective Time; and (2) "piggyback" registration rights,
exercisable prior to the fifth anniversary of the Lawrence Effective Time, on
registration of shares by ATMI, for its own account or the account of other
securityholders. ATMI is required to use diligent efforts to keep any such
demand registration effective up to the third anniversary of the Lawrence
Effective Time (subject to extension for any suspensions of sales or delays
in registration imposed by ATMI). ATMI shall be permitted to delay the
registration of Lawrence Shares during the one-year period following the
Lawrence Effective Time and to require any such holders to delay any request
for a demand registration (i) if ATMI is then proposing to register
securities for its own account and pursues such proposed registration with
diligence, provided that the holders are offered certain "piggyback" rights
in connection therewith, or (ii) for a period of up to 60 days in any
consecutive 12 months period, if in the good faith judgment of the Board of
Directors of ATMI such registration would be seriously
Page 7 of 10 Pages
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detrimental to ATMI and its stockholders. ATMI is required to bear
substantially all registration and selling expenses (including certain fees
of counsel to the selling stockholders but excluding underwriting discounts
and commissions relating to the registrable shares) in connection with the
registration of registrable shares in such registrations. ATMI and the LSL
stockholders have agreed to indemnify the other against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, and to
contribute to payments which the other may be required to make in respect
thereof. The registration rights are transferable in limited circumstances
and may be amended or waived only with the written consent of ATMI, and the
holders of at least 70% of the Lawrence Shares.
Escrow Agreement: Pursuant to an escrow agreement entered into by and
among Advanced Technology, LSL, Lawrence Merger Subsidiary, ATMI, Security
Trust Company, as escrow agent, and Lamonte H. Lawrence, as representative of
the LSL stockholders (the "Escrow Agreement"), at the Lawrence Effective
Time, five percent of the Lawrence Shares were placed in escrow as security
for certain indemnification obligations of the LSL stockholders to Advanced
Technology pursuant to the Merger Agreement. If the purchase price adjustment
based upon any change in the combined net worth of LSL and LSLMS results in
the issuance of additional shares to the LSL stockholders, certificates
representing five percent of the additional shares of ATMI Common Stock to be
delivered to the LSL stockholders will also be placed in escrow. All such
shares are to be allocated among the LSL stockholders pro rata in accordance
with their respective holdings of LSL Common Stock and are to be held and
applied in accordance with the terms of the Merger Agreement and the Escrow
Agreement. The escrow fund is required to remain in existence for a period
of one year from the Lawrence Effective Time.
Consulting Agreement: LSL and Lawrence Semiconductor Investments, Inc.
("LSI"), a corporation wholly owned by Lamonte H. Lawrence, have entered into
a consulting agreement (the "Consulting Agreement"). The Consulting Agreement
provides for the termination of Mr. Lawrence's employment by LSL, the
cessation of LSL's obligations under any employment agreement, and the
retention by LSL of LSI as an independent consultant for a three-year period
(the "Consulting Term") on an independent contractor basis. Consulting
services under the Consulting Agreement are provided exclusively by Mr.
Lawrence. During each of the three twelve-month periods of the Consulting
Term, Mr. Lawrence is to render consulting services as mutually agreed upon
by LSI and LSL. In consideration of the consulting services being provided,
LSL will pay LSI a per diem of $2,880, but in no event will the total fee
payable to LSI be less than $250,000 for the first twelve-month period. Such
minimum is approximately one-third of Mr. Lawrence's compensation from LSL
and LSLMS in 1996, as Mr. Lawrence, on behalf of LSI, is expected to devote
approximately one-third of his time during the year subsequent to the Merger
to LSL-related matters. LSL is permitting LSI to become a participating
employer in LSL's health insurance program, but only for the benefit of Mr.
Lawrence. The Consulting Agreement may be terminated by LSI after one year
upon thirty days' written notice to LSL, may only be terminated by LSL for
cause and terminates automatically upon Mr. Lawrence's disability or death.
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NONCOMPETE AGREEMENT: Advanced Technology, Lawrence Merger
Subsidiary, LSL and Lamonte H. Lawrence have entered into a noncompete
agreement (the "Noncompete Agreement"). Pursuant to the Noncompete
Agreement, Lamonte H. Lawrence has agreed that, for a period of the later of
five years from the Lawrence Effective Time and three years from the
expiration of the Consulting Agreement, he will not, directly or indirectly,
engage or participate in, prepare or set up, assist or have any interest in
any entity that engages in any activities in competition with LSL, or, for a
period of five years from the consummation of the Merger, directly or
indirectly hire or induce or encourage any employee or consultant who is then
employed or retained by Advanced Technology, LSL or any of their subsidiaries
to leave the employment of or terminate consultation with Advanced
Technology, LSL or any of their subsidiaries, without the prior written
consent of Advanced Technology.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
(a) Agreement and Plan of Merger, dated May 17, 1997, as amended
by the First Amendment to Agreement and Plan of Merger dated as of June 6,
1997, the Second Amendment to Agreement and Plan of Merger dated as of
July 30, 1997, and the Third Amendment to Agreement and Plan of Merger dated
as of August 19, 1997 by and among Advanced Technology, Lawrence Merger
Subsidiary, ATMI, LSL, and LSLMS.
(b) Affiliate Agreement between Lamonte H. Lawrence and ATMI,
dated as of October 10, 1997.
(c) Registration Rights Agreement between LSL stockholders and
ATMI, dated as of October 10, 1997.
(d) Escrow Agreement among Advanced Technology, LSL, Lawrence
Merger Subsidiary, ATMI, Security Trust Company and Lamonte H. Lawrence,
dated as of October 10, 1997.
(e) Consulting Agreement between LSL and LSI, dated as of
October 10, 1997.
(f) Noncompete Agreement among Advanced Technology, Lawrence
Merger Subsidiary, LSL and Lamonte H. Lawrence, dated as of October 10, 1997.
Page 9 of 10 Pages
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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 14, 1997
/s/ Lamonte H. Lawrence
------------------------
Lamonte H. Lawrence
Page 10 of 10 Pages
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EXHIBIT (a)
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER is dated as of May 17, 1997, by and among
ADVANCED TECHNOLOGY MATERIALS, INC., a Delaware corporation ("Buyer"), WELK
ACQUISITION CORPORATION, a Delaware corporation and a wholly-owned subsidiary of
Buyer ("Buyer Sub"), ATMI HOLDINGS, INC., a Delaware corporation and
wholly-owned subsidiary of Buyer ("Holdings") LAWRENCE SEMICONDUCTOR
LABORATORIES, INC., an Arizona corporation ("LSL"), and LAWRENCE SEMICONDUCTOR
LABORATORIES MARKETING AND SALES, INC., an Arizona corporation ("LSLMS"); LSL
and LSLMS are referred to collectively as "Lawrence"; and all of the parties
are referred to collectively as the "Companies". Buyer Sub and Lawrence are
referred to collectively as the "Constituent Corporations" and individually as a
"Constituent Corporation."
Buyer and Holdings are parties to that certain Agreement and Plan of Merger
and Exchange dated April 7, 1997, by and among Buyer, Holdings, Advanced
Delivery & Chemical Systems Nevada, Inc., Advanced Delivery & Chemical Systems
Manager, Inc., Advanced Delivery & Chemical Systems Holdings, LLC, Advanced
Delivery & Chemical Systems Operating, LLC, and Advanced Delivery & Chemical
Systems, Ltd. (the "ADCS Merger Agreement").
In connection with the closing of the transactions contemplated by the ADCS
Merger Agreement, inter alia (i) all of the outstanding shares of Buyer common
stock, par value $.01 per share("Buyer Common Stock") will be converted into the
right to receive a like number of shares of Holdings common stock, par value
$.01 per share ("Holdings Common Stock"), and (ii) Buyer will become a
wholly-owned subsidiary of Holdings.
The respective Boards of Directors of the Companies deem it advisable and
in the best interests of their respective shareholders that Buyer acquire
Lawrence by the merger of Buyer Sub with and into Lawrence upon the terms and
subject to the conditions set forth in this Agreement (the "Merger").
The parties desire the Merger to be a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and for such transaction to be
accounted for as a pooling of interests.
In consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:
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ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time (defined below) of the Merger, Buyer Sub shall be merged
with and into Lawrence, with Lawrence being the surviving corporation in such
Merger (the "Surviving Corporation"). The separate existence of Buyer Sub shall
thereupon cease. The Merger shall have the effects set forth in Section 10-1106
of the Arizona Business Corporation Act (the "ABCA") and Section 259 of the
Delaware General Corporation Law (the "DGCL"). Immediately following the
Effective Time, the Surviving Corporation shall be a wholly-owned subsidiary of
Buyer.
1.2 Effective Time of the Merger. The Merger shall become effective upon
the completion of the filing of properly executed Articles of Merger and a Plan
of Merger with the Arizona Corporation Commission and the Secretary of State of
the State of Delaware, which filing shall be made on the Closing Date (defined
below) after satisfaction of the conditions set forth in Article VIII. When used
in this Agreement, the term "Effective Time" shall mean the date and time at
which such Articles of Merger and Plan of Merger are accepted as filed.
ARTICLE II
BUYER AND THE SURVIVING CORPORATION
2.1 Articles of Incorporation of the Surviving Corporation. The Articles
of Incorporation of the Surviving Corporation shall be the Articles of
Incorporation of Lawrence, as amended in connection with the Merger to read in
its entirety (other than with respect to the name of the corporation) as the
Certificate of Incorporation of Buyer Sub in effect immediately prior to the
Effective Time, with such changes as Buyer may determine are necessary or proper
to comply with Arizona law, until thereafter amended as provided by law.
2.2 Bylaws of the Surviving Corporation. The Bylaws of the Surviving
Corporation shall be the Bylaws of Lawrence, as amended in connection with the
Merger to read in their entirety (other than with respect to the name of the
corporation) as the Bylaws of Buyer Sub in effect immediately prior to the
Effective Time, with such changes as Buyer may determine are necessary or proper
to comply with Arizona law, until thereafter amended as provided by law.
2.3 Directors and Officers of the Surviving Corporation.
(a) The directors of Buyer Sub at the Effective Time shall be
the initial directors of the Surviving Corporation and shall hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualified in the manner provided in the Articles of Incorporation
and Bylaws of the Surviving Corporation, or as otherwise provided by law.
(b) The officers of Buyer Sub at the Effective Time shall be the
initial officers of the Surviving Corporation and shall hold office from the
Effective Time until removed or until their respective successors are duly
elected or appointed and qualified in the manner provided in the Articles of
Incorporation and Bylaws of the Surviving Corporation, or as otherwise provided
by law.
ARTICLE III
EXCHANGE OF SHARES
3.1 Disposition of Buyer Sub Shares; Lawrence Treasury Shares. At the
Effective Time, by virtue of the Merger and without any action on the part of
the holder thereof:
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(a) The shares of Buyer Sub common stock which shall be
outstanding immediately prior to the Effective Time shall be converted into a
number of shares of common stock of the Surviving Corporation equal to the
number of shares of common stock of Buyer Sub then outstanding.
(b) Each share of common stock of Lawrence ("Lawrence Share")
held in the treasury of Lawrence, if any, or by any subsidiary of Lawrence and
each such Lawrence Share held by Buyer or any subsidiary of Buyer immediately
prior to the Effective Time shall be canceled and retired and cease to exist,
and no consideration shall be given in exchange therefor.
3.2 Exchange of Lawrence Shares.
(a) Each Lawrence Share outstanding immediately prior to the
Effective Time (other than Lawrence Shares canceled as set forth in Subsection
3.1(b) above, if any) shall, at the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into the
right to receive in shares of Buyer Common Stock, valued at the Average Closing
Price (defined in Section 3.9 below), an amount equal to that described in
Section 3.4 below divided by the number of Lawrence Shares outstanding
immediately prior to the Effective Time (subject to adjustment as provided in
Sections 3.4 and 3.5 and subject to reduction as provided in Article X and the
Escrow Agreement), ninety-five percent (95%) of which amount prior to adjustment
and reduction, if any (the "Preliminary Purchase Price Shares"), shall be issued
to the holder thereof upon the surrender of the certificate formerly
representing such Lawrence Share in accordance with this Section 3.2, and five
percent (5%) of which amount prior to adjustment and reduction, if any (the
"Indemnification Escrow Shares"), shall be held by the escrow agent (the "Escrow
Agent") as provided for in Subsection 10.1(c) hereof.
(b) Immediately following the Effective Time, each record holder
(a "Shareholder") of any certificate or certificates which, immediately prior to
the Effective Time, represented outstanding Lawrence Shares (the "Certificates")
whose Lawrence Shares were converted into the right to receive a portion of the
Purchase Price (defined below) shall be entitled to surrender his or its
Certificates to Buyer for cancellation in exchange for the Shareholder's pro
rata share of the Preliminary Purchase Price Shares, and Buyer hereby agrees to
cause such Shareholder's pro rata share of the Preliminary Purchase Price Shares
to be issued to such person at such time. If any Shareholder shall fail to
surrender his or its Certificates promptly following the Effective Time, Buyer
shall send to such Shareholder notice of the Merger and instructions for use in
effecting the surrender of the Certificates in exchange for the Shareholder's
pro rata share of the Purchase Price and the holder of such Certificates shall
be entitled to receive in exchange therefor solely the Shareholder's pro rata
share of the Purchase Price less any applicable stock transfer taxes, and such
Certificates shall forthwith be canceled. No interest shall be paid or accrued
for the benefit of holders of the Certificates on the consideration payable upon
the surrender of the Certificates. It shall be a condition of exchange that the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer.
(c) From and after the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving Corporation of the
Lawrence Shares which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation for exchange, they shall be canceled and exchanged for a pro rata
share of the Preliminary Purchase Price Shares in accordance with the procedures
set forth in this Section and Section 3.4.
(d) At or prior to the Effective Time of the Merger, Buyer shall
deliver irrevocably to the Escrow Agent certificates evidencing the
Indemnification Escrow Shares, together with appropriate stock powers executed
by each Shareholder. As provided in Article X hereof, the Indemnification Escrow
Shares shall be held in escrow (the "Indemnification Escrow") by the Escrow
Agent. Income, dividends and earnings therefrom shall become funds of the
Indemnification Escrow to be disbursed as provided in Article X of this
Agreement and in the Escrow Agreement.
(e) Notwithstanding the foregoing, any Lawrence Shares issued
and outstanding immediately prior to the Effective Time which are held by
Shareholders who have not voted such shares in
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favor of the Merger and who have complied with all other relevant provisions of
Chapter 13 of the ABCA (the "Dissenting Shares") shall not be converted into
shares of Buyer Common Stock in the manner contemplated by Section 3.2(a) above,
and the rights of holders of the Dissenting Shares shall be governed by the
provisions of Chapter 13 of the ABCA; provided, however, that Shareholders that
own in the aggregate no greater than five percent (5%) of the issued and
outstanding Lawrence Shares who have not voted such shares in favor of the
Merger (the "Electing Shares") may elect, in lieu of following the provisions of
Chapter 13 of the ABCA, to receive from Buyer the Average Closing Price for each
share of Buyer Common Stock to which such Shareholder would have been entitled
had such Shareholder voted in favor of the Merger. Lawrence agrees to notify its
Shareholders in writing prior to the time the Merger is submitted to them for a
vote at any Shareholders' meeting or otherwise, of the foregoing election. To be
effective, such election must be made in writing to Lawrence and Buyer within
five (5) days of the date of such Shareholder meeting or other submission for a
vote.
(f) Notwithstanding the foregoing, if the closing of the
transactions contemplated by the ADCS Merger Agreement shall occur on or before
the Effective Time, in lieu of Buyer Common Stock each Lawrence Share shall be
converted into the right to receive Holdings Common Stock in the same ratio as
such Lawrence Shares would have been converted into shares of Buyer Common
Stock. In such event, all references to "Buyer Common Stock" in this Agreement
(other than in Article IV) shall be deemed to be references to "Holdings Common
Stock," unless the context clearly requires otherwise. The parties shall modify
the ancillary agreements to be entered into as of the Effective Time as
appropriate to reflect such change.
3.3 No Further Rights in Lawrence Shares. All shares of Buyer Common
Stock received by any Shareholder pursuant to this Agreement shall be deemed to
have been delivered and received in full satisfaction of all rights pertaining
to such Shareholder's Lawrence Shares. At the Effective Time, the holders of
certificates representing outstanding Lawrence Shares shall cease to have any
rights with respect to such shares (other than such rights as they may have as
dissenting shareholders under the ABCA), and their sole right shall be to
receive their pro rata share of the Purchase Price. Dissenting shareholders
shall have the rights accorded by the ABCA.
3.4 The Purchase Price. The aggregate merger consideration for all
outstanding Lawrence Shares shall be that number of shares of Buyer Common
Stock, valued at the Average Closing Price, having a value equal to Eighty
Million Dollars ($80,000,000) (the "Closing Price") plus an amount (the
Adjustment Amount, defined in Subsection 3.4(g) below), which may be a positive
or a negative number, as determined below, minus the amount of Two Million
Dollars ($2,000,000) required to be paid by LSL to Applied Materials, Inc.
("Applied") pursuant to LSL's settlement of its litigation with Applied (as
described in Section 5.7 and Schedule 5.7), minus any amounts owed to LSL by any
related parties as set forth in Schedule 5.26 and minus the cost to LSL of any
payment required to be made by LSL prior to the Effective Time to any third
party in connection with any other transaction contemplated by LSL, including
any payment in the nature of a required "break-up" fee (the "Specified Amount"),
subject to further reduction as provided in Article X and the Escrow Agreement
("Purchase Price").
(a) Within sixty (60) days after the Effective Time, the
Representative (defined in Subsection 3.6(a)(xix) below) shall cause to be
delivered to Buyer a combined balance sheet of Lawrence as of the close of
business at the Effective Time without inclusion of Lawrence Semiconductor
Research Laboratories, Inc. ("LSRL") or Lawrence Semiconductor Investments, Inc.
("LSI") (the "Effective Time Balance Sheet") together with the related combined
statements of income, shareholders' equity and cash flows for the time period
from January 1, 1997 to the Effective Time (the "Related Effective Time
Statements") audited by Lawrence's current independent accountants, which audit
shall include a physical inventory that representatives of Buyer may observe.
The Effective Time Balance Sheet and the Related Effective Time Statements shall
be prepared in accordance with generally accepted accounting principles applied
on a basis consistent with past practice, and the Effective Time Balance Sheet
shall fairly present the assets and liabilities and financial condition of
Lawrence at the Effective Time, including the tax savings to LSL as a result of
the payment of the Specified Amount, but not including the actual amount of the
Specified Amount. The reasonable cost of the audit pursuant to this Subsection
3.4(a) shall be borne by the Surviving Corporation. After the Effective Time,
Buyer agrees to give the Representative and
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Lawrence's current accountants reasonable access to Lawrence's books and records
and to make available to such parties such employees of Lawrence and the
Surviving Corporation as may be reasonably necessary in connection with the
preparation of the Effective Time Balance Sheet.
(b) The Effective Time Balance Sheet shall become final and
binding on Lawrence and Buyer thirty (30) days after its delivery to Buyer,
unless Buyer or Representative gives written notice to the other of his or its
disagreement with respect to any item included in such Effective Time Balance
Sheet. During said thirty (30) day period, Representative, Buyer and Buyer's
representatives shall be given reasonable access to all of the working papers of
Lawrence's current independent accountants for the purpose of its review of the
Effective Time Balance Sheet. The party making the objection shall notify the
other party in writing by the end of such thirty (30) day period of any
objection it may have to the Effective Time Balance Sheet, which objection shall
identify the basis of such objection and any adjustments to the Effective Time
Balance Sheet that it proposes be made (the "Proposed Adjustments").
(c) If written notice of objections to the Effective Time
Balance Sheet is given within the period specified in Subsection 3.4(b) above,
the party receiving the notice shall notify the party proposing the Proposed
Adjustment of his or its approval or disapproval of the Proposed Adjustments to
the Effective Time Balance Sheet contained in such written objection within
thirty (30) days of his or its receipt of such written objection. If the party
receiving the notice shall fail to notify the party proposing the Proposed
Adjustments in writing of his or its disapproval of the Proposed Adjustments
within said thirty (30) day period, such Proposed Adjustments shall be made to
the Effective Time Balance Sheet, and the Effective Time Balance Sheet, as so
adjusted, shall be final and binding upon all parties. If Representative and
Buyer cannot reach agreement with respect to the Proposed Adjustments and the
objections thereto within thirty (30) days of the date of receipt of the notice
of the Proposed Adjustments (or such longer period as may be acceptable to Buyer
and Representative), Buyer and Representative shall submit the Proposed
Adjustments in dispute to the Arbitrating Accountants (defined in Subsection
3.4(f) below) for resolution. The Arbitrating Accountants shall have no
authority (i) to decide any issues related to the Effective Time Balance Sheet
other than those issues expressly referred to them for arbitration pursuant to
the terms hereof, or (ii) to determine that any disputed Proposed Adjustment
shall be made in excess (negative or positive) of the amount originally proposed
by Buyer or Representative.
(d) If the parties submit a dispute to the Arbitrating
Accountants, the parties shall instruct the Arbitrating Accountants to resolve
the disputed Proposed Adjustments within thirty (30) business days after such
Proposed Adjustments are submitted to them, and such resolution shall be final
and binding upon all parties hereto. Upon such resolution, the adjustments to
the Effective Time Balance Sheet determined by the Arbitrating Accountants shall
be made and the Effective Time Balance Sheet, as so adjusted, shall be final and
binding upon all parties.
(e) The fees and expenses of the Arbitrating Accountants shall
be paid by Buyer; provided that the portion of such fees and expenses equal to
the lesser of (i) 100% or (ii) the percentage obtained by dividing (i) the
aggregate dollar amount of the adjustments to the Effective Time Balance Sheet
determined under Subsection 3.4(d) by (ii) the aggregate dollar amount of the
disputed Proposed Adjustments shall be reimbursed to Buyer from the
Indemnification Escrow. Representative shall have the right to retain legal
counsel of its choosing with regard to any dispute over the Adjustment Amount
(defined in Subsection 3.4(g) below), including Polese, Pietzsch, Williams &
Nolan, P.A., and the costs and expenses of such representation shall be paid
from the Adjustment Amount if that amount is a positive number and sufficient to
so pay the costs and expenses, or otherwise from the Indemnification Escrow.
(f) The "Arbitrating Accountants" shall be a "Big Six"
accounting firm that is mutually agreed to by Buyer and Representative.
(g) Upon the Effective Time Balance Sheet (including any
adjustments) becoming final and binding on all parties as set forth above, the
Adjustment Amount shall be determined by the Buyer. The "Adjustment Amount"
shall equal the difference between (x) the Net Worth (defined below) as shown on
the Effective Time Balance Sheet and (y) the Net Worth as shown on Lawrence's
unaudited balance sheet at December 31, 1996 without inclusion of LSRL or LSI.
"Net Worth" shall equal the amount
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by which assets exceed liabilities. Buyer and Representative shall provide
notice to the Shareholders of the Adjustment Amount and final Purchase Price
within two (2) business days of such amounts becoming final.
3.5 Adjustment of Purchase Price. If the Adjustment Amount is a positive
number, ninety-five percent (95%) of such amount shall be paid by Buyer to
Shareholders pro rata in shares of Buyer Common Stock valued at the Average
Closing Price and five percent (5%) to Escrow Agent (the "Escrow Adjustment") by
delivering appropriate certificates evidencing such shares within ten (10)
business days of determination. If the Adjustment Amount is a negative number,
it shall be paid to Buyer in shares of Buyer Common Stock valued at the Average
Closing Price from the Indemnification Escrow within ten (10) business days of
receipt of notice of determination.
3.6 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Shipman & Goodwin
LLP, One American Row, Hartford, Connecticut 06103, at 9:00 a.m., local time, on
the third business day after the day on which all of the conditions set forth in
Article VIII hereof are satisfied or waived, or such other date, time and place
as the Companies shall otherwise agree (the "Closing Date").
(a) At the Closing, Lawrence shall deliver to Buyer the following:
(i) Resolutions. Copies of resolutions of the Board of
Directors of Lawrence certified by a Secretary, Assistant Secretary or other
appropriate officer of Lawrence, plus certified copies of its Articles of
Incorporation and Bylaws, as amended to date, authorizing the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby and copies of resolutions of the Shareholders of Lawrence (or written
consent in lieu thereof), certified by a Secretary, Assistant Secretary or other
appropriate officer of Lawrence, authorizing the execution, delivery and
performance of this Agreement and the transactions contemplated hereby.
(ii) Certificates, other than those held by any dissenting
shareholder, duly endorsed in blank or accompanied by appropriate stock powers.
(iii) Resignations of certain officers and all directors of
Lawrence effective as of the Effective Time, which Buyer shall request in
writing prior to the Closing.
(iv) Opinion of Polese, Pietzsch, Williams & Nolan, P.A.
in a form reasonably acceptable to Buyer.
(v) The Noncompete Agreement called for by Section 7.7.
(vi) The Consulting Agreement called for by Section 7.8.
(vii) Tax clearances from the Department of Economic
Security and the Arizona Department of Revenue, and all other jurisdictions in
which Lawrence has filed tax returns in the past three (3) years.
(viii) A certificate of good standing from the Arizona
Corporation Commission.
(ix) [Intentionally left blank]
(x) Releases substantially in the form of Exhibit
3.6(a)(x) hereto, executed by Lamonte H. Lawrence and each other officer of
Lawrence, releasing Lawrence from any and all liabilities and obligations owed
by Lawrence to him, including but not limited to those owed to him in his
capacity as a director, officer, Shareholder and/or employee of Lawrence.
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(xi) Written evidence satisfactory to Buyer that the
Shareholders and Lawrence have obtained all necessary governmental or other
approvals for the Merger and the other transactions contemplated hereby.
(xii) Written evidence satisfactory to Buyer that all prior
outstanding options to purchase any capital stock of Lawrence have been properly
terminated.
(xiii) Each of the affiliates of Lawrence and Buyer shall
have entered into an Affiliate Agreement substantially in the form of Exhibit
3.6(a)(xiii)-A (the "Affiliate Agreements"), and Tommy L. Thompson, Gerald W.
McReynolds, and Barbara C. Freund shall have entered into Employment Agreements
with the Surviving Corporation substantially in the form of Exhibit
3.6(a)(xiii)-B (the "Employment Agreements"). The existing employment
agreements listed on Schedule 5.8(b) shall have been terminated effective as of
the Closing.
(xiv) Written evidence satisfactory to Buyer that Lawrence
and LSLMS have been merged in accordance with applicable law, with Lawrence as
the surviving corporation, and that all consents and approvals necessary or
appropriate for such merger have been obtained.
(xv) Written evidence satisfactory to Buyer that Lawrence
has been reincorporated in Arizona in accordance with applicable law, and that
all consents and approvals necessary or appropriate for such reincorporation
have been obtained.
(xvi) A written amendment to the sublease of the Tempe
facility which causes the economic terms of such sublease to reflect accurately
Lawrence's current and intended future use of the Tempe facility, together with
the written consent of LSRL as sublessor to the Merger.
(xvii) (A) All amounts currently outstanding under that
certain Agreement by and among Lawrence, LSRL and LSLMS dated December 31, 1993
shall have been repaid in full or otherwise discharged in a manner satisfactory
to Buyer, and such Agreement terminated with no further liability thereunder;
(B) all other amounts currently outstanding by and among Lawrence, LSRL, LSLMS
and LSI shall have been repaid in full or otherwise discharged in a manner
satisfactory to Buyer; and (c) all amounts currently outstanding and owed by
Lamonte H. Lawrence to Lawrence and LSLMS or from Lawrence and LSLMS to Lamonte
H. Lawrence shall have been repaid in full or otherwise discharged in a manner
satisfactory to Buyer. In lieu of repayment of the net amount contemplated by
this Subsection 3.6(a)(xvii) in cash, the amounts may be satisfied by reducing
the Purchase Price, as contemplated by the second "minus" clause in the first
paragraph of this Section 3.4.
(xviii) Written releases of Lawrence and LSLMS from all
further obligations under those agreements, instruments, documents, etc.
identified prior to Closing by Buyer to which Lawrence and/or LSLMS are parties
or which either or both has guaranteed but which provide the principal benefit
to LSRL, LSI or Lamonte H. Lawrence.
(xix) Each Shareholder shall have executed and delivered an
agreement and acknowledgment with respect to his or its liabilities and
obligations under Article X, in form and substance satisfactory to Buyer and its
counsel.
(xx) Each Shareholder shall have executed and delivered an
irrevocable power of attorney coupled with an interest constituting and
appointing Lamonte H. Lawrence (the "Representative") as his or its true and
lawful agent and attorney-in-fact to enter into any agreement in connection with
the transactions contemplated by this Agreement and the Escrow Agreement, to
exercise all or any of the powers, authority and discretion conferred on him
under any such agreement, to waive any terms and conditions of any such
agreement, to give and receive notices on his or its behalf and to be his or its
exclusive representative with respect to any matter, suit, claim, action or
proceeding arising with respect to any transaction contemplated by any such
agreement, including, without limitation, the defense, settlement or compromise
of any claim, action or proceeding for which Buyer or any Indemnitee (defined in
Subsection 10.1(b) below) may be entitled to indemnification, and the
Representative shall have agreed to
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act as, and to undertake the duties and responsibilities of, such agent and
attorney-in-fact. The Representative shall not be liable for any action taken or
not taken by him in connection with his obligations under such power of attorney
(i) with the consent of Shareholders who, as of the date of this Agreement, own
a majority in number of the outstanding Lawrence Shares, or (ii) in the absence
of his own gross negligence or willful misconduct. If the Representative is
unable or unwilling to serve in such capacity, his successor shall be named by
those persons holding a majority of the outstanding Lawrence Shares as of the
Effective Time who shall serve and exercise the powers of the Representative.
(xxi) Such further instruments or documents as Buyer or
Buyer Sub or their counsel may reasonably request to assure the full and
effective completion of the Merger and to assure the effective carrying out of
the transactions contemplated hereby.
(b) At the Closing, Buyer shall deliver to Shareholders
certificates evidencing the Preliminary Purchase Price Shares in accordance with
Section 3.2 hereof.
(c) At the Closing, Buyer shall deliver to Escrow Agent
certificates evidencing the Indemnification Escrow Shares, in accordance with
Section 3.2 hereof.
(d) At the Closing, Buyer shall deliver to Lawrence the
following:
(i) Copies of resolutions of Buyer and Buyer Sub
certified by a Secretary, Assistant Secretary or other appropriate officer of
Buyer and Buyer Sub, authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby.
(ii) Opinion of Buyer's outside general counsel in a form
reasonably acceptable to Lawrence.
(iii) The Noncompete Agreement called for by Section 7.7.
(iv) The Consulting Agreement called for by Section 7.8.
(e) At the Closing, Buyer shall deliver to the Shareholders an
executed Registration Rights Agreement, in the form of Exhibit 3.6(e). If
Section 3.2(f) shall apply, in lieu of the foregoing, Holdings shall deliver to
the Shareholders an executed Registration Rights Agreement, in the form of
Exhibit 3.6(e) but substituting Holdings for Buyer as a party thereto.
3.7 Supplementary Actions. If, at any time after the Effective Time, any
further assignments or assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of either Constituent
Corporation, or otherwise to carry out the provisions of this Agreement, the
officers and directors of the Surviving Corporation are hereby authorized and
empowered on behalf of the Constituent Corporations, in the name of and on
behalf of either Constituent Corporation as appropriate, to execute and deliver
any and all things necessary or proper to vest or to perfect or confirm title to
such property or rights in the Surviving Corporation and otherwise to carry out
the purposes and provisions of this Agreement.
3.8 No Fractional Securities. No fractional shares of Buyer Common Stock
shall be issuable by Buyer to any Shareholder in connection with the Merger. In
lieu of any such fractional shares, each Shareholder who would otherwise have
been entitled to receive a fraction of a share of Buyer Common Stock shall be
entitled to receive instead an amount in cash equal to such fraction multiplied
by the Average Closing Price.
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3.9 Average Closing Price.
(a) The term "Average Closing Price" shall mean the average
closing price of Buyer Common Stock on The Nasdaq National Market for each of
the twenty (20) trading days preceding (and including) the third trading day
prior to the date of Buyer's meeting of stockholders to approve the Merger;
provided that (i) in the event that the Average Closing Price is greater than
$21 per share, the Average Closing Price shall be deemed to be $21 per share;
and (ii) in the event that the Average Closing Price is less than $17 per share,
the Average Closing Price shall be deemed to be $17 per share.
(b) All per share prices or amounts referred to in this
Agreement shall be appropriately adjusted to reflect the effect of any stock
splits, stock dividends, or similar transactions.
3.10 Tax and Accounting Treatment. The parties intend that the Merger
will be treated as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended, and a pooling of interests for
accounting purposes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Certain Definitions.
As used in Articles IV and V, the following terms shall have the
following meanings:
(a) The term "Material Adverse Effect" with respect to any party
hereto means any change or changes in, or effect or effects on, such party or
any of its subsidiaries that, individually or in the aggregate (i) is materially
adverse to the business, assets, or financial condition of such party and its
subsidiaries taken as a whole or (ii) may materially and adversely affect the
ability of such party to (A) operate or conduct its business substantially in
the manner in which it is currently operated or conducted or (B) substantially
perform its obligations hereunder and consummate the transactions contemplated
hereby.
(b) The word "subsidiary" when used with respect to any party
means any corporation or other organization, whether incorporated or
unincorporated, of which such party or any other subsidiary of such party is a
general partner (excluding partnerships the general partnership interests of
which held by such party or any subsidiary of such party do not have a majority
of the voting interests in such partnership) or of which at least a majority of
the securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporations or other organizations is directly
or indirectly owned or controlled by such party and/or by any one or more of the
subsidiaries, excluding in the case of Lawrence, LSRL and LSI.
(c) The term "Knowledge" with respect to Lawrence shall mean the
actual knowledge of any of the persons set forth on Schedule 4.1(c) and with
respect to Buyer shall mean the actual knowledge of Buyer's CEO and CFO, in each
case after conducting reasonable inquiry.
4.2 Buyer's and Buyer Sub's Representations and Warranties. Buyer and
Buyer Sub each represents and warrants to Lawrence as follows and acknowledges
that Lawrence is relying upon such representations and warranties in connection
with the execution, delivery, and performance of this Agreement and the
completion of the Merger, notwithstanding any investigation made by Lawrence or
on its own behalf.
(a) Each of Buyer and Buyer Sub is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power to carry
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on its business as it is now being conducted or presently proposed to be
conducted and to own all of its properties and assets.
(b) Each of Buyer and Buyer Sub has the corporate power to enter
into this Agreement and to carry out its obligations hereunder. The execution
and delivery of this Agreement by Buyer and Buyer Sub and the consummation by
each of Buyer and Buyer Sub of the transactions contemplated hereby have been
duly authorized by the respective Boards of Directors of Buyer and Buyer Sub,
and this Agreement and each of the transactions contemplated hereby has been
approved by Buyer as the sole stockholder of Buyer Sub. No other corporate
proceedings on the part of either Buyer or Buyer Sub are necessary to approve
this Agreement or the transactions contemplated hereby, other than the approval
of Buyer's stockholders and this Agreement constitutes the valid and binding
obligation of Buyer and Buyer Sub, enforceable against each in accordance with
its terms.
(c) Except as set forth on Schedule 4.2(c) and except for
applicable requirements of state or foreign laws relating to takeovers, federal
and state securities or blue sky laws, filings with the Nasdaq Stock Market,
Inc. and filing of Agreement of Merger under the ABCA and the DGCL, no filing
with, and no permit, authorization, consent or approval of, any public body or
authority is necessary for the consummation by Buyer or Buyer Sub of the
transactions contemplated by this Agreement. Except as set forth on Schedule
4.2(c), neither the execution and delivery of this Agreement by Buyer or Buyer
Sub, nor the consummation by Buyer or Buyer Sub of the transactions contemplated
hereby, nor compliance by Buyer or Buyer Sub with any of the provisions hereof,
will (i) result in any breach of the Certificate of Incorporation or Bylaws of
Buyer or Buyer Sub, (ii) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Buyer or any of
its subsidiaries is a party or by which any of them or any of their properties
or assets may be bound or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Buyer, any of its subsidiaries or any
of their properties or assets, except in the case of clauses (ii) and (iii) for
violations, breaches or defaults that would not have a Material Adverse Effect.
(d) Buyer agrees that, for a period of at least one year
following the Closing Date, the benefits provided under all Employee Benefit
Programs (defined in Subsection 5.9(a) below), with respect to participants who
are employed on the Closing Date, will be substantially similar to those
provided immediately prior to the Closing Date, provided that substantially
similar plans were provided by Buyer to its employees prior to the Effective
Time.
(e) Since November 23, 1993, Buyer has filed all forms, reports
and documents with the Securities and Exchange Commission ("SEC") required to be
filed by it pursuant to the federal securities laws and the rules and
regulations of the SEC (the "SEC Documents"). As of their respective filing
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Exchange Act of 1934 (the "Exchange Act") or the Securities
Act of 1933 (the "Securities Act"), and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated 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 SEC Document.
(f) The authorized shares of capital stock of Buyer are as set
forth in its Annual Report on Form 10-K for the fiscal year ended December 31,
1996. All the issued and outstanding shares of Buyer Common Stock are and, upon
consummation of the transaction contemplated by this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable. As of May 15, 1997,
Buyer had 8,804,820 shares of Common Stock outstanding, outstanding options to
purchase 1,142,806 shares of Buyer Common Stock under its option plans and
25,443 options available for issuance under such plans, and outstanding warrants
to purchase 161,250 shares of Buyer Common Stock.
(g) The audited consolidated balance sheets of Buyer and its
subsidiaries at December 31, 1994, 1995, and 1996 and the statements of
operations and changes in stockholders' equity and
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cash flows for the years ended December 31, 1994, 1995, and 1996, included in
the SEC Documents (the "Buyer Financial Statements") fairly present the
financial position and results of operations of Buyer and its subsidiaries as
for the periods then ended and the financial position of Buyer and its
subsidiaries at the dates thereof in accordance with generally accepted
accounting principles. Buyer 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 Buyer Financial Statements,
were correct and complete in all material respects, fairly and accurately
reflect or reflected the income, expenses, assets and liabilities of Buyer,
including the nature thereof and the transactions giving rise thereto, and
provide or provided a fair and accurate basis for the preparation of the Buyer
Financial Statements
(h) Except as set forth in Schedule 4.2(h), neither the Buyer
nor any subsidiary has, nor at the Closing will have, any liabilities or
obligations, either absolute, accrued, contingent or otherwise, which
individually or in the aggregate are material to the financial condition and
business of the Buyer or any subsidiary and which (i) have not been reflected in
the Buyer 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.
(i) None of the information supplied or to be supplied by Buyer
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 therein, in light of the circumstances under which they are made, not
misleading and (ii) any proxy statement will, at the date mailed to stockholders
and at the times of the meetings of Buyer's 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. Any 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 Buyer with
respect to statements made therein based on information supplied by Lawrence or
any Shareholder for inclusion in any registration statement or proxy statement.
(j) Neither this Agreement nor any certificate or Schedule or
other information furnished by or on behalf of Buyer pursuant to this Agreement
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 necessary to make the statements contained herein
or therein not misleading.
(k) Holdings was formed solely for the purpose of engaging in
the transactions contemplated by the ADCS Merger Agreement and 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 the ADCS Merger Agreement and this Agreement,
Holdings does not have and will not have incurred 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.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF LAWRENCE
Lawrence represents and warrants to Buyer and Buyer Sub as follows and
acknowledges and confirms that Buyer and Buyer Sub are relying upon such
representations and warranties in connection with the execution, delivery and
performance of this Agreement and the completion of the Merger, notwithstanding
any investigation made by Buyer or Buyer Sub or on their behalf:
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5.1 Organization; Permits. Lawrence is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power to carry on its business as it is now
being conducted and to own all of its properties and assets. True and complete
copies of the Articles of Incorporation and Bylaws of Lawrence with all
amendments and restatements thereto through the date hereof have been provided
to Buyer prior to the date hereof. Lawrence is duly qualified as a foreign
corporation to do business, and is in good standing in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified will not have a Material Adverse Effect. Lawrence has all business
licenses, permits and approvals necessary to conduct its business as presently
conducted, except where the failure to have such permit or approval does not
have a Material Adverse Effect. Lawrence conducts its business under the trade
names and other assumed names set forth on Schedule 5.1.
5.2 Capitalization; Shareholders. As of the date hereof, the authorized
capital stock of Lawrence, the number and class of Lawrence Shares which are
issued and outstanding, and all persons having record or beneficial ownership of
shares of the capital stock of Lawrence or having any right to purchase, acquire
or obtain any of the capital stock of Lawrence are as set forth on Schedule 5.2.
Schedule 5.2 also sets forth the foregoing information on a pro forma basis
taking into account the merger of Lawrence and LSLMS. All of the issued and
outstanding Lawrence Shares are validly issued, fully paid and nonassessable and
not subject to any lien, charge or encumbrance, and were issued in compliance
with applicable federal and state securities laws. Lawrence is not, and prior to
the Effective Time will not become, a party to or subject to any contract or
obligation wherein any person has a right or option to purchase or acquire any
rights in any additional capital stock or other equity securities of Lawrence or
any of its subsidiaries, including any stock option plan, stock appreciation
rights plan, restricted stock plan or stock purchase plan. Lawrence does not
hold or own, directly or indirectly, any capital stock of any other corporation,
or have any direct or indirect equity or ownership interest in any association,
partnership, joint venture or other entity. To Lawrence's Knowledge, no officer,
director, or Shareholder of Lawrence 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.
5.3 Authority Relative to this Agreement. Lawrence has the corporate
power to enter into this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement by Lawrence and the consummation by
Lawrence of the transactions contemplated hereby have been duly authorized by
the Board of Directors of Lawrence, and no other corporate proceedings on the
part of Lawrence are necessary to approve this Agreement or the transactions
contemplated hereby. This Agreement constitutes the legal, valid and binding
obligation of Lawrence, enforceable against it in accordance with the
Agreement's terms.
5.4 Consents and Approvals; No Violations. Except as set forth on
Schedule 5.4 and except for applicable requirements of state or foreign laws
relating to takeovers, state securities or blue sky laws, and filing of
Agreement of Merger under the ABCA and the DGCL, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Lawrence of the transactions contemplated by this
Agreement. Except as set forth on Schedule 5.4, neither the execution and
delivery of this Agreement by Lawrence, nor the consummation by Lawrence of the
transactions contemplated hereby, nor compliance by Lawrence with any of the
provisions hereof, will (i) result in any breach of the Articles of
Incorporation or Bylaws of Lawrence, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which Lawrence
is a party or by which it or any of its properties or assets may be bound or
(iii) violate any order, writ, injunction, decree, statute, rule, regulation or
permit applicable to Lawrence or any of its properties or assets, except in the
case of clauses (ii) and (iii) for violations, breaches or defaults that would
not have a Material Adverse Effect.
5.5 Financial Statements. Lawrence has furnished to Buyer Lawrence's
audited combined financial statements (combined balance sheets, combined
statements of
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income, combined statements of shareholders' equity and combined statements of
cash flows) at and for each of the twelve-month periods ended December 31, 1993,
December 31, 1994, December 31, 1995, and December 31, 1996, and the three-month
period ended March 31, 1997, all restated so as to exclude LSRL and LSI
(collectively, the "Lawrence Financial Statements"). Except as set forth on
Schedule 5.5, each of the balance sheets (including the related notes) included
in the Lawrence Financial Statements fairly presents in all material respects
the financial position of Lawrence as of the respective dates thereof, and the
other related statements (including the related notes) included therein fairly
present in all material respects the results of operations and cash flows of
Lawrence for the respective periods or as of the respective dates set forth
therein, all in conformity with generally accepted accounting principles
consistently applied during the periods involved, except as otherwise noted
therein and subject, in the case of the interim financial statements, to normal
year-end adjustments and any other adjustments described therein and the absence
of any notes thereto.
5.6 Absence of Certain Changes or Events. Other than as permitted under
Section 6.1 and except as set forth on Schedule 5.6, since December 31, 1996 and
through the date hereof, Lawrence has not suffered a Material Adverse Effect and
Lawrence has not (i) declared any dividend or made any payment or other
distribution in respect of any shares of its capital stock, (ii) acquired or
disposed of any shares of its capital stock or granted any options, warrants or
other rights to acquire or convert any obligation into any shares of its capital
stock, (iii) entered into any material transaction with any officer, director,
employee or any known relative thereof or any entity in which such person has an
interest, except the payment of rent, salaries, wages and expense reimbursement
in the ordinary course of business, (iv) incurred any material obligation or
liability (contingent or otherwise), except for (A) this Agreement, (B) normal
trade and other obligations incurred in the ordinary course of business
consistent with past practice and (C) obligations under contracts, agreements
and leases incurred in the ordinary course of business consistent with past
practice, the performance of which has not and will not, individually or in the
aggregate, have a Material Adverse Effect on Lawrence, (v) discharged or
satisfied any material lien or other encumbrance or paid any material obligation
or liability (fixed or contingent), except in the ordinary course of business or
as contemplated by this Agreement, (vi) mortgaged, pledged or subjected to any
lien or other encumbrance any of its material assets (whether tangible or
intangible), (vii) sold, assigned, transferred, conveyed, leased or otherwise
disposed of or agreed to sell, lease or otherwise dispose of any of its material
assets except for sales of inventory or other assets for fair consideration in
the ordinary course of business or as contemplated by this Agreement, (viii)
canceled or compromised any material debt or claim, except in the ordinary
course of business, (ix) waived or released any material rights, except for
waivers or releases made in the ordinary course of business consistent with past
practice, (x) made any single capital expenditure in excess of One Hundred
Thousand Dollars ($100,000), or entered into any commitment therefor, or (xi)
suffered any material casualty loss or damage, whether or not covered by
insurance, or any adverse ruling, judgment or award, whether or not amounts were
reserved on Lawrence's books, which would have a Material Adverse Effect on
Lawrence.
5.7 Litigation. Except as set forth on Schedule 5.7, as of the date of
this Agreement, (a) there is no action, suit, judicial or administrative
proceeding, arbitration or investigation pending or, to Lawrence's Knowledge,
threatened against or involving Lawrence, or any of its properties or rights,
before any court, arbitrator, or administrative or governmental body; (b) there
is no judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against Lawrence; and (c) Lawrence is not in violation of any term of any
judgments, decrees, injunctions or orders outstanding against it. An action,
suit, proceeding, arbitration or investigation shall be considered "threatened"
for purposes of this Article V if Lawrence has received written notice or
otherwise has Knowledge that such event may be commenced. Except as set forth on
Schedule 5.7, to Lawrence'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.
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5.8 Contracts.
(a) Set forth on Schedule 5.8(a) is a list of all contracts,
instruments, mortgages, notes, security agreements, leases, agreements or
understandings to which Lawrence is a party and which are material to the
business of Lawrence or which exceed $50,000. Each of the contracts,
instruments, mortgages, notes, security agreements, leases, agreements or
understandings to which Lawrence is a party that relates to or affects the
assets or operations of Lawrence or to which Lawrence or its assets or
operations may be bound or subject is a valid and binding obligation of Lawrence
and, to Lawrence's Knowledge, of the other parties thereto and is in full force
and effect, except for where the failure to be in full force and effect would
not individually or in the aggregate have a Material Adverse Effect. Except to
the extent that the consummation of the transactions contemplated by this
Agreement may require the consent of third parties as identified on Schedule
5.4, there are no existing defaults by Lawrence thereunder or, to the Knowledge
of Lawrence, by any other party thereto, which defaults, individually or in the
aggregate, would have a Material Adverse Effect; and no event of default has
occurred, and no event, condition or occurrence exists, that (whether with or
without notice, lapse of time or the happening or occurrence of any other event)
would constitute a default by Lawrence thereunder which default would,
individually or in the aggregate, have a Material Adverse Effect.
(b) Except as set forth on Schedule 5.8(b), as of the date of
this Agreement, Lawrence is not a party to any oral or written (i) consulting
agreement not terminable on sixty (60) days or less notice involving the payment
of more than Fifty Thousand Dollars ($50,000) per annum, (ii) joint venture
agreement, (iii) noncompetition or similar agreement that restricts Lawrence
from engaging in a line of business, (iv) agreement with any executive officer
or other employee of Lawrence the benefits of which are contingent, or the terms
of which are materially altered, upon the occurrence of a transaction involving
Lawrence of the nature contemplated by this Agreement and which provides for the
payment of in excess of Fifty Thousand Dollars ($50,000), (v) agreement with
respect to any executive officer of Lawrence or any subsidiary providing any
term of employment or compensation guaranty in excess of Fifty Thousand Dollars
($50,000) per annum, (vi) agreement or plan, including any stock option plan,
stock appreciation rights plan, restricted stock plan or stock purchase plan,
any of the benefits of which will be increased, or the vesting of the benefits
of which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement, (vii) (A) any agreement providing for disposition of any line of
business, material assets or securities of Lawrence, (B) any agreement with
respect to the acquisition of any line of business, material assets or
securities of any other business, or (C) any agreement of merger or
consolidation or letter of intent with respect to the foregoing, or (viii) any
agreement to indemnify any other party with respect to an adverse environmental
condition.
5.9 Employee Benefit Plans.
(a) Schedule 5.9(a) lists each "employee benefit plan" (within
the meaning of section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) that is maintained or otherwise contributed to by
Lawrence for the benefit of its employees (including, without limitation,
pension, profit sharing, stock bonus, medical reimbursement, life insurance,
disability and severance pay plans) (collectively, "Company Plans") and all
other employee benefit plans providing for deferred compensation, bonuses, stock
options, employee insurance coverage or any similar compensation or welfare
benefit plan (collectively, "Benefit Arrangements" and, together with Company
Plans, collectively referred to as "Employee Benefit Programs").
(b) With respect to each of the Company Plans, Lawrence has made
available to Buyer a current, accurate and complete copy (or, to the extent no
such copy exists, an accurate description) thereof (including all existing
amendments thereto that shall become effective at a later date) and, to the
extent applicable, (i) any related trust agreement, annuity contract or other
funding instrument; and (ii) any summary plan description.
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(c) (i) Each of the Employee Benefit Programs has been
established and administered in compliance with any applicable provisions of
ERISA, the Internal Revenue Code of 1986, as amended (the "Code"), and the terms
of all documents relating to such programs; (ii) each Company Plan that is
intended to be qualified within the meaning of section 401(a) of the Code has
received a favorable determination letter as to its qualification; (iii) as of
the date of this Agreement, no "reportable event" (as such term is used in
section 4043 of ERISA) other than an event of a type as to which the Pension
Benefit Guaranty Corporation has waived the reporting requirements, "prohibited
transaction" (as such term is used in section 4975 of the Code or section 406 of
ERISA) or "accumulated funding deficiency" (as such term is used in section 412
or 4971 of the Code) has heretofore occurred with respect to any Company Plan;
and (iv) there are no pending or, to Lawrence's Knowledge, threatened, actions,
claims or lawsuits which have been asserted or instituted against the Employee
Benefit Programs, the assets of any of the trusts under such plans or the plan
sponsor or the plan administrator, or against any fiduciary of the Employee
Benefit Programs with respect to the operation of such plans (other than routine
benefit claims).
(d) Lawrence does not maintain or contribute to any
"multiemployer plan" (as such term is defined in section 3(37) of ERISA) and has
not incurred any material liability that remains unsatisfied with respect to any
such plans.
(e) No Employee Benefit Program (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
Lawrence beyond their retirement or other termination of service with Lawrence,
other than (a) coverage mandated by applicable law, (b) deferred compensation
benefits which have been accrued as liabilities on the books of Lawrence, (c)
benefits the full cost of which is borne by the current or former employees (or
their beneficiaries), or (d) benefits which have already been satisfied in full.
5.10 Regulatory Authority Matters.
(a) Except as set forth in Schedule 5.10(a), Lawrence is, and
the products sold by Lawrence are, in compliance in all material respects with
all applicable statutes, rules, regulations, standards, guides or orders
administered or issued by any federal, state or local agency or governmental
body having regulatory authority over such products (the "Regulatory Agencies").
(b) Except as set forth in Schedule 5.10(b), Lawrence has not
received from the Regulatory Agencies, and has no Knowledge of any facts that
would furnish any reasonable basis for, any notice of adverse findings,
regulatory letters, warning letters or other similar communications from the
Regulatory Agencies, and there have been no seizures conducted or threatened by
the Regulatory Agencies, and no recalls, field notifications or alerts
conducted, requested or threatened by the Regulatory Agencies relating to the
products sold by Lawrence or any of its subsidiaries.
(c) Except as set forth on Schedule 5.10(c), Lawrence is not
aware of any facts which are reasonably likely to cause (i) the denial,
withdrawal, recall or suspension of any products sold or intended to be sold by
Lawrence or any of its subsidiaries, or (ii) a change in the marketing
classification or labeling of any such products, or (iii) a termination or
suspension of marketing of any such products.
(d) Except as set forth on Schedule 5.10(d), none of the
products manufactured, marketed or sold by Lawrence has been recalled or subject
to a field notification (whether voluntarily or otherwise), and Lawrence has not
received notice (whether completed or pending) of any proceeding seeking recall,
suspension or seizure of any products sold or proposed to be sold by Lawrence or
any of its subsidiaries.
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5.11 Intellectual Property.
(a) Schedule 5.11(a) contains an accurate and complete list of
(i) all patents, applications for patents, registrations of trademarks
(including service marks) and applications therefor, registrations of copyrights
and applications therefor that are owned by Lawrence and that are part of the
business of Lawrence as presently conducted; (ii) all other intellectual
property rights that are owned by Lawrence and that are material to the conduct
of business as presently conducted; (iii) all unexpired licenses relating to
such of Lawrence's intellectual property rights that have been granted to or by
Lawrence and that are material to the conduct of the business of Lawrence as
presently conducted, but excluding end-user licenses granted to Lawrence
relating to standard "off-the-shelf" personal computer software that is
generally available on commercially reasonable terms from vendors that are
unaffiliated with Lawrence, including software made available from such vendors
on a "shrink wrap license" basis ("Non-Scheduled Licenses"); and (iv) all other
agreements relating to intellectual property rights that are material to the
conduct of the business of Lawrence as presently conducted, but excluding the
Non-Scheduled Licenses (collectively, items (i)-(iv) are referred to as
"Lawrence Intellectual Property Rights").
(b) Lawrence owns and has the right to use, and license others
to use, all Lawrence Intellectual Property Rights that are material to the
conduct of the business of Lawrence as presently conducted, and such ownership
and right to use, and license of others to use, are free and clear of, and
without liability under, all liens and security interests of third parties. Such
ownership and right to use, and license of others to use, are free and clear of,
and without liability under, all claims and rights of third parties that, if
determined to be legally protectable, could have a Material Adverse Effect.
(c) Lawrence has taken reasonable steps sufficient to safeguard
and maintain the secrecy and confidentiality of, and its proprietary rights in,
the unpatented know-how, technology, proprietary processes, formulae, and other
information that is material to the conduct of the business of Lawrence as
presently conducted. Without limiting the generality of the foregoing, Lawrence
has obtained confidentiality and inventions assignment agreements from all of
Lawrence's past and present employees and independent contractors involved in
the creation or development of Lawrence Intellectual Property Rights including,
without limitation, from all employees and contractors who are inventors,
authors, creators or developers of Lawrence Intellectual Property Rights that
are material to the conduct of the business as presently conducted. Schedule
5.11(c) lists all nondisclosure agreements to which Lawrence is a party or by
which it is bound.
(d) Except as set forth on Schedule 5.11(d) and except for
payments made with respect to patents and patent applications, there are no
royalties, honoraria, fees or other payments payable by Lawrence to any person
by reason of the ownership, use, license, sale or disposition of any Lawrence
Intellectual Property Right.
(e) Except as set forth on Schedule 5.11(e), Lawrence has not
received notice that Lawrence is infringing in the conduct of the business upon
the right or claimed right of any other party with respect to any Lawrence
Intellectual Property Rights, nor does Lawrence have any Knowledge of any
alleged or claimed infringement by any product or process manufactured, used,
sold or under development by or for Lawrence in the conduct of the business of
Lawrence as presently conducted.
(f) For purposes of this Section 5.11, "use" with respect to
intellectual property rights includes make, reproduce, display or perform
(publicly or otherwise), prepare derivative works based on, sell, distribute,
disclose and otherwise exploit such intellectual property rights and products
incorporating or subject to such intellectual property rights. No reference in
this Section 5.11 to Lawrence's right to use the Lawrence Intellectual Property
Rights shall be construed as a representation or warranty as to the validity of
an issued patent included in the Lawrence Intellectual Property Rights.
(g) To Lawrence's Knowledge, the Lawrence Intellectual Property
Rights are free of any unresolved ownership disputes with respect to any third
party, and there is no unauthorized use,
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infringement or misappropriation of any of such Lawrence Intellectual Property
Rights by any third party, including any employee or former employee of
Lawrence.
5.12 Owned Property; Lawrence Facilities.
(a) Schedule 5.12(a) sets forth, by address, owner and usage,
all real property owned by Lawrence.
(b) Schedule 5.12(b) sets forth, by address, owner and usage,
all material real property agreements (including any amendments thereto) (the
"Real Property Leases") pursuant to which Lawrence leases, subleases or
otherwise occupies or leased, sublet or otherwise occupied during the past five
(5) years any plants, offices, manufacturing facilities, warehouses,
improvements, administration buildings and all other real property (the
"Lawrence Facilities"). There are no defaults or events which, with the passage
of time, would constitute a default under the Real Property Leases, except in
either instance for defaults which individually or in the aggregate would not
have a Material Adverse Effect on Lawrence.
(c) Lawrence owns, leases or has the right to use all material
fixtures, furniture, improvements, machinery or equipment necessary to conduct
its business as currently conducted (the "Equipment Leases"). There are no
defaults or events which, with the passage of time, would constitute a default
under the Equipment Leases, except in either instance for defaults which
individually or in the aggregate would not have a Material Adverse Effect on
Lawrence.
5.13 Compliance With Legislation Regulating Environmental Quality.
(a) For the purposes of this Agreement, the term "Environmental
Laws" shall mean all federal, foreign, state and local environmental protection,
occupational, health and safety or similar laws, ordinances, restrictions,
licenses, rules, regulations and permit conditions, including but not limited to
the Federal Water Pollution Control Act, Resource Conservation & Recovery Act,
Safe Drinking Water Act, Toxic Substances Control Act, Clean Air Act,
Comprehensive Environmental Response, Compensation and Liability Act, Emergency
Planning and Community Right to Know or other United States or foreign, federal,
state, province, or local laws of similar effect, each as amended as of the
Effective Time, and the term "Hazardous Materials" shall mean any hazardous or
toxic substances, wastes or materials, including without limitation petroleum or
petroleum products, defined as such or regulated by any applicable Environmental
Law or governmental agencies.
(b) Except as set forth on Schedule 5.13(b), (i) Lawrence has
not received any written notices, directives, violation reports, actions or
claims from or by (A) any local, state, federal or foreign governmental agency
concerning Environmental Laws or (B) any person alleging that, in connection
with Hazardous Materials, conditions at any of the Lawrence Facilities or
Lawrence's acts or omissions have resulted in or caused or threatened to result
in or cause injury or death to any person or damage to any property, including
without limitation, damage to natural resources and, to Lawrence's Knowledge, no
such notices, directives, violation reports, actions, claims or allegations
exist; (ii) the Lawrence Facilities and the business operated by Lawrence are
in compliance with all applicable state, federal, foreign and local
Environmental Laws, except where any noncompliance with Environmental Laws would
not have a Material Adverse Effect on Lawrence; (iii) no underground storage
tanks have been installed by Lawrence and to Lawrence's Knowledge none either
are or have been located at any of the Lawrence Facilities; and (iv) to
Lawrence's Knowledge, no friable asbestos or PCBs have been located at any of
the Lawrence Facilities.
(c) Except as set forth on Schedule 5.13(c), (i) there has been
no spill, discharge, release, cleanup of or contamination by any Hazardous
Materials used, generated, treated, stored, disposed of or handled by Lawrence;
and (ii) Lawrence holds all necessary permits, licenses, approvals and consents
to conduct its business as currently being conducted and is not in violation of
any condition of any such permit, license or consent.
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5.14 Violations; Condemnation. Except as set forth on Schedule 5.14,
Lawrence has not received, with respect to any Lawrence Facility, any written or
oral notice of default or any written or oral notice of noncompliance with
respect to applicable state, federal or local laws or regulations relating to
zoning, building, fire, use restriction or safety or health codes which have not
been remedied in all respects, and noncompliance with which could have a
Material Adverse Effect. Lawrence has received no written or oral notice of any
pending or threatened condemnation or other governmental taking of any of the
Lawrence Facilities.
5.15 Taxes.
(a) Except as set forth on Schedule 5.15(a), (i) all Returns
(defined in Subsection 5.15(b) below) in respect of Taxes (defined in Subsection
5.15(b) below) required to be filed with respect to Lawrence (including any
consolidated federal income tax return and any state Tax return that includes
Lawrence or any of its related companies on a consolidated, combined or unitary
basis) have been timely filed, none of such Returns contains, or is required to
contain, a disclosure statement under section 6661 or 6662 of the Code or any
similar provision of state, local or foreign law, and no extension of time
within which to file any such Return has been requested, which Return has not
since been timely filed; (ii) all Taxes whether or not shown on such Returns
have been timely paid and all payments of estimated Taxes required to be made
with respect to Lawrence under section 6655 of the Code or any comparable
provision of state, local or foreign law have been made; (iii) all such Returns
are true, correct and complete in all material respects; (iv) no adjustment
relating to any of such Returns has been proposed formally or informally by any
Tax authority; (v) there are no outstanding subpoenas or requests for
information with respect to any Returns of Lawrence or the Taxes reflected on
such Returns; (vi) there are no pending or to Lawrence's Knowledge threatened
actions or proceedings for the assessment or collection of Taxes against
Lawrence or any corporation that was included in the filing of a Return with
Lawrence on a consolidated, combined or unitary basis; (vii) no consent under
section 341(f) of the Code has been filed with respect to Lawrence; (viii) there
are no Tax liens on any assets of Lawrence except liens for Taxes not yet due
and payable or being contested in good faith by appropriate proceedings for
which adequate reserves have been established; (ix) no acceleration of the
vesting schedule for any property that is nonvested within the meaning of the
regulations under section 83 of the Code will occur in connection with the
transactions contemplated by this Agreement; (x) Lawrence is not now nor has it
at any time been subject to any accumulated earnings tax or personal holding
company tax; (xi) Lawrence owes no amounts pursuant to any written or unwritten
Tax sharing agreement or arrangement and will not have any liability after the
date hereof in respect of any written or unwritten Tax sharing agreement or
arrangement executed or agreed to prior to the date hereof; (xii) all Taxes
required to be withheld, collected or deposited by Lawrence have been timely
withheld, collected or deposited and, to the extent required, have been paid to
the relevant Tax authority; (xiii) any adjustment of Taxes of Lawrence made by
the IRS that is required to be reported to any state, local or foreign Tax
authority has been so reported and any additional Tax due as a result thereof
has been paid in full; (xiv) there are no outstanding waivers or agreements
extending the statute of limitations for any period with respect to any Tax to
which Lawrence may be subject; (xv) to Lawrence's Knowledge there are no
requests for rulings or information currently outstanding that could affect the
Taxes of Lawrence, or any similar matters pending with respect to any Tax
authority; (xvi) no Tax authority has proposed reassessments of any property
owned or leased by Lawrence that could increase the amount of any Tax to which
Lawrence would be subject; (xvii) no power of attorney that is currently in
force has been granted with respect to any matter relating to Taxes that could
affect Lawrence and (xviii) with respect to each Return that has been examined
by the relevant Tax authority, such examination is closed and final without any
adjustment having been made to such Return (including adjustments not affecting
the amount of Tax due with respect to such Return).
(b) For purposes of this Agreement, "Tax" or "Taxes" shall mean
any and all taxes, charges, fees, levies, and other governmental assessments and
impositions of any kind, payable to any federal, state, local or foreign
governmental entity or taxing authority or agency, including, without
limitation, (i) income, franchise, profits, gross receipts, minimum, alternative
minimum, estimated, ad valorem, value added, sales, use, service, real or
personal property, capital stock, license, payroll, withholding, disability,
employment, social security, workers compensation, unemployment compensation,
utility, severance, production, excise, stamp, occupation, premiums, windfall
profits, transfer and gains
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taxes, (ii) customs duties, imposts, charges, levies or other similar
assessments of any kind, and (iii) interest, penalties and additions to tax
imposed with respect thereto; and "Returns" shall mean any and all returns,
reports, and information statements with respect to Taxes required to be filed
with the Internal Revenue Service or any other governmental entity or Tax
authority or agency, whether domestic or foreign including, without limitation,
consolidated, combined and unitary tax returns. For the purposes of this Section
5.15, references to Lawrence shall include former subsidiaries of Lawrence
identified on Schedule 5.15(b), if any, for the periods during which any such
corporations were owned, directly or indirectly, by Lawrence.
5.16 Product Liability Matters. Except as set forth on Schedule 5.16, as
of the date of this Agreement, Lawrence has not submitted to its product
liability insurance carriers any claims with respect to potential product
liability of Lawrence which claims could have a Material Adverse Effect on
Lawrence, nor does it know of any such claims which should have been submitted
to its product liability insurance carriers. Buyer has previously been afforded
access to all files containing, or been furnished with copies of, all pleadings,
claims, complaints and relevant documents in connection with the foregoing.
Neither Lawrence nor, to Lawrence's Knowledge, any employee or agent of
Lawrence, has made any untrue statement of a material fact or omitted to state a
material fact in connection with obtaining or renewing any insurance policy
providing product liability coverage in respect of the products of Lawrence
which could reasonably result in the loss of any material portion of such
coverage, and Lawrence has not received any written or oral notice from any
insurance company stating that any insurance policy of Lawrence may not provide
coverage up to the limits of such policy for any liability, loss or damage which
may be incurred or suffered by Lawrence in connection with product liability
claims other than the possible lack of coverage for punitive damages and claims
for deductible amounts.
5.17 No Undisclosed Liabilities. Except as set forth on Schedule 5.17 and
except to the extent specifically reflected or reserved against in the
Consolidated Balance Sheet of Lawrence as of December 31, 1996, Lawrence does
not have any material liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise.
5.18 Construction of Certain Provisions. It is understood and agreed that
any dollar amount specified in the foregoing representations and warranties or
the inclusion of any specific items on the Schedules hereto is not intended to
imply that higher or lower amounts, or that the items that have been so
included, are or are not material, and neither party shall use the fact of the
setting of such amounts or the fact of the inclusion of any such items on the
Schedules hereto in any dispute or controversy between the parties on whether
any obligation, item or matter not described herein or included on a Schedule
hereto is or is not material for purposes of this Agreement.
5.19 Condition of the Assets. The assets of Lawrence, including real,
personal and mixed, tangible and intangible, necessary or useful to the
operation of its business (the "Assets") are in good condition and repair,
ordinary wear and tear excepted, and suitable for the uses intended. The Assets
comply with and are operated in conformity with all applicable laws, ordinances,
regulations, orders, permits and other requirements relating thereto adopted or
currently in effect. The leases and other agreements or instruments under which
Lawrence holds, leases, subleases or is entitled to the use of any of the Assets
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 Lawrence exists, and no event which, with notice
or lapse of time or both, would constitute a default by Lawrence, has occurred
and is continuing, under the terms or provisions of any such lease, agreement or
other instrument or under the terms or provisions of any agreement to which any
of such Assets is subject, nor has Lawrence received notice of any claim of such
default.
5.20 Title; Absence of Liens and Encumbrances, Etc. Except as set forth
on Schedule 5.20 and except for the restrictions imposed under the terms of its
capital and operating leases, Lawrence has good, valid, and marketable title to
the Assets, free and clear of all mortgages, security interests, claims, liens
(except inchoate construction liens), charges, title defects, encumbrances,
restrictions on use or transfer or other defects.
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5.21 Indebtedness. Except as set forth on Schedule 5.21, Lawrence does
not have 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, except as set forth on Schedule 5.21, Lawrence will
not have any obligation for money borrowed nor any agreement or arrangement to
borrow money, and Lawrence will not have any guarantee outstanding nor any
agreement or commitment to enter into any such guarantee.
5.22 Accounts Receivable. No amount included in the accounts receivable
of Lawrence in the Lawrence Financial Statements has been released for an amount
less than the value at which it was included or is or will be regarded 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 Lawrence's
Knowledge, subject to any counterclaim, refusal to pay or setoff not reflected
in the reserves set forth on the Lawrence Financial Statements. Schedule 5.22
hereto sets forth a list of all accounts receivable of Lawrence as of the close
of business on December 31, 1996, none of which are owing from a debtor that, to
Lawrence's Knowledge, has become bankrupt or insolvent or have been pledged to
any third party.
5.23 No Sales or Conveyance Tax Due. No sales, use or other transfer or
conveyance taxes are or will become payable by any of the parties to this
Agreement as a consequence of the execution, delivery or performance of this
Agreement or any of the ancillary agreements, other than taxes based upon the
net income of the parties.
5.24 Books and Records. Lawrence has maintained its books of account in
accordance with applicable laws, rules and regulations and with generally
accepted accounting principles consistently applied, and such books of account
are and, during the period covered by the Lawrence Financial Statements, were
correct and complete in all material respects, fairly and accurately reflect or
reflected the income, expenses, assets and liabilities of Lawrence, including
the nature thereof and the transactions giving rise thereto, and provide or
provided a fair and accurate basis for the preparation of the Lawrence Financial
Statements. The minute books of Lawrence, as previously made available to Buyer
and its counsel, contain accurate records of all meetings and accurately reflect
all other corporate action of the Shareholder and directors (and committees
thereof) of Lawrence.
5.25 Employees. Schedule 5.25 sets forth a list of the names, employment
status, location of employment, and rates of compensation (including salaries,
wages, commissions and bonuses) of all employees of Lawrence. Except as
described on Schedule 5.25, Lawrence has no written or oral contract of
employment with any employee of Lawrence, and Lawrence is not 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. Except as described on Schedule 5.25, Lawrence
is not a party to any pending nor, to Lawrence's Knowledge, threatened labor
dispute affecting the business of Lawrence. Lawrence has 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 Lawrence's Knowledge, Lawrence is not liable for any arrears of wages or any
taxes or penalties for failure to comply with any of the foregoing. At the
Closing Date, all employees will be terminable at will by Lawrence and will be
free to become the employees of Buyer, the Surviving Corporation or an affiliate
or subsidiary of Buyer. Lawrence has not received notice from any employee
listed on Schedule 5.25 as earning an annual base salary in excess of $40,000
that such employee is terminating his or her employment with Lawrence, nor to
Lawrence's Knowledge, does any such employee intend to terminate his or her
employment with Lawrence.
5.26 Related Party Transactions. Schedule 5.26 sets forth the amounts and
other essential terms of indebtedness or other obligations, liabilities or
commitments (contingent or otherwise) of Lawrence to or from any Shareholder or
any other present officer, or director, 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
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between such persons and Lawrence. Without limiting the generality of the
foregoing, as of the date hereof, none of the Shareholders or any other present
officer, or director, or any person related to, controlling, controlled by or
under common control with any of the foregoing (i) has any material direct or
indirect interest in any entity which does business with Lawrence, (ii) has any
direct or indirect interest in any property, asset or right which is used by
Lawrence in the conduct of its business, or (iii) has any contractual
relationship with Lawrence other than such relationships which occur from being
an employee, officer, director, etc.
5.27 Hart-Scott-Rodino. The "total assets" and the "annual net sales" of
the "ultimate parent entity" of Lawrence (as such terms are used within the
meaning of Section 7A.(a)(2)(A) of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976) are shown on Schedule 5.27.
5.28 Customers and Suppliers. Except as set forth in Schedule 5.28,
Lawrence has not received any notice or has any Knowledge that any customer from
whom Lawrence received more than $50,000 in gross receipts during the 1995 or
1996 fiscal years (i) has ceased, or will cease, to use the products, goods or
services of its business, (ii) has substantially reduced, or will substantially
reduce, the use of products, goods or services of its business or (iii) has
sought, or is seeking, to reduce the price it will pay for products, goods or
services of its business. Lawrence has not received any notice or has any
Knowledge that any supplier from whom Lawrence purchased more than $50,000 in
goods during the 1995 or 1996 fiscal years will not sell raw materials,
supplies, merchandise and other goods to Lawrence at any time after the Closing
Date on terms and conditions similar to those used in the current sales to
Lawrence, subject to general and customary price increases and unforeseeable
supply or demand changes.
5.29 Stock Ownership. Other than through mutual funds or other similar
investment vehicles over which no investment discretion is retained, none of
Lawrence or any Shareholder owns any securities issued by Buyer and has no
warrants, options or other rights to purchase or otherwise acquire or convert
any obligations into securities issued by Buyer.
5.30 Insurance. All of the Assets are covered by such fire, casualty,
product liability, environmental liability and other insurance policies issued
by reputable companies as are customarily obtained to cover comparable
properties and assets by businesses in the region in which such Assets are
located, in amounts, scope and coverage which are reasonable in light of
existing conditions. Schedule 5.30 sets forth a list of the policies of
insurance and fidelity or surety bonds carried by Lawrence, including, but not
limited to, fire, flood, liability, workers' compensation, officers' life, and
directors' and officers' liability insurance policies. Lawrence has not failed
to give any notice or present any material claim under any insurance policy in
due and timely fashion, and all insurance premiums due and payable by Lawrence
in connection with the policies set forth on Schedule 5.30 prior to the Closing
Date have been or will be paid. There are no outstanding written requirements or
written recommendations by any insurance company that issued a policy with
respect to any of the properties and assets of Lawrence 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 or Assets of Lawrence or requiring or
recommending any equipment or facilities to be installed on or in connection
with any of the properties or Assets. The unemployment insurance ratings and
contributions of Lawrence are also set forth on Schedule 5.30.
5.31 Information in Disclosure Documents and Registration Statement. None
of the information supplied or to be supplied by Lawrence 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 therein, in
light of the circumstances under which they are made, not misleading, and (ii)
any proxy statement relating to the meeting of Buyer's stockholders to be held
in connection with the Merger 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.
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5.32 No Misrepresentation. Neither this Agreement nor any certificate or
Schedule or other information furnished by or on behalf of Lawrence or any
Shareholder pursuant to this Agreement 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
necessary to make the statements contained herein or therein not misleading.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
6.1 Conduct of Business Pending the Merger. Lawrence agrees that, except
as expressly contemplated by this Agreement, during the period from the date of
this Agreement and continuing until the Effective Time:
(a) The business of Lawrence shall be conducted only in the
ordinary and usual course of business and consistent with past practices;
(b) Lawrence shall not (i) amend its Articles of Incorporation
or Bylaws; or (ii) split, combine or reclassify any shares of its outstanding
capital stock, declare, set aside or pay any dividend or other distribution
payable in cash, stock or property in respect of its capital stock, or directly
or indirectly redeem, purchase or otherwise acquire any shares of its capital
stock or other securities;
(c) Lawrence shall not (i) authorize for issuance, issue, sell,
pledge, dispose of, encumber, deliver or agree or commit to issue, sell, pledge,
or deliver any additional shares of, or rights of any kind to acquire any shares
of, its capital stock of any class (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise),
(ii) acquire, dispose of, transfer, lease, or license, any fixed or other
substantial assets other than in the ordinary course of business and consistent
with past practices; (iii) incur, assume or prepay any material indebtedness,
liability or obligation or any other material liabilities or issue any debt
securities; (iv) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person; (v) make any material loans, advances or capital contributions
to, or investments in, any other person; (vi) fail to maintain adequate
insurance consistent with past practices for its business; (vii) take any action
described in items (i) through (x) of Section 5.6 without the consent of the
Buyer; or (viii) enter into any contract, agreement, commitment or arrangement
with respect to any of the foregoing;
(d) Lawrence shall use reasonable efforts to maintain the
Assets, to preserve intact its business organization, to keep available the
services of its present officers and key employees, and to preserve the goodwill
of those having business relationships with it; provided, however, that no
breach of this covenant shall be deemed to have occurred as a result of any
matter arising out of the transactions contemplated by this Agreement or the
public announcement thereof;
(e) Lawrence shall use all reasonable efforts to prevent any
representation or warranty of Lawrence herein from becoming materially untrue or
incorrect in any material respect; and
(f) Notwithstanding anything to the contrary in subsections (a)
through (e) above, Lawrence shall be permitted to take the following actions:
(i) pay any judgment or settlement of pending legal claims (including penalties,
fees, or taxes related thereto) provided that Lawrence will not without Buyer's
written consent enter into any settlement which imposes upon Lawrence any
restrictions or limitations on its ability to operate its business consistent
with past practice; (ii) repay any guarantors of Lawrence's obligations or
pledgors of collateral to secure Lawrence's obligations (including collateral
pledged to secure letters of credit relating to such obligations) if and to the
extent such guarantors pay any amount under the guaranty, or such pledgors have
such collateral foreclosed upon, in connection with any of Lawrence's
obligations, on behalf of Lawrence, and (iii) pay compensation as permitted
under Section 6.2 below.
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6.2 Compensation Plans. During the period from the date of this
Agreement and continuing until the Effective Time, Lawrence agrees that it will
not, without the prior written consent of Buyer (except as required by
applicable law or pursuant to existing contractual arrangements or other plans
or commitments as otherwise disclosed in writing pursuant hereto) (a) enter
into, adopt or amend any Employee Benefit Programs as to increase the benefits
thereunder, (b) grant or become obligated to grant any increase in the
compensation or fringe benefits of directors, officers or employees (including
any such increase pursuant to any Employee Benefit Program) or any increase in
the compensation payable or to become payable to any officer, except for
increases in compensation in the ordinary course of business consistent with
past practice, or enter into any contract, commitment or arrangement to do any
of the foregoing, except for normal increases and non-stock benefit changes in
the ordinary course of business consistent with past practice, (c) institute any
new Employee Benefit Program, (d) make any material change in any Employee
Benefit Program arrangement or enter into any employment or similar agreement or
arrangement with any employee, or (e) enter into or renew any contract,
agreement, commitment or arrangement providing for the payment to any director,
officer or employee of compensation or benefits contingent, or the terms of
which are altered in favor of such individual, upon the occurrence of any of the
transactions contemplated by this Agreement. Notwithstanding anything to the
contrary in this Section 6.2, Lawrence shall be permitted to (i) pay fiscal
year-end cash bonuses to its employees in amounts consistent with past practice
and (ii) enter into staying bonus/severance agreements with the employees (the
"Designated Employees") listed on Exhibit "A-1" in the form attached as Exhibit
"A-2."
6.3 Legal Conditions to Merger. Each of Lawrence and Buyer shall use all
reasonable efforts (a) to take, or cause to be taken, all actions reasonably
necessary to comply promptly with all legal requirements which may be imposed on
such party or its subsidiaries with respect to the Merger and to consummate the
transactions contemplated by this Agreement, and (b) to obtain (and to cooperate
with the other party to obtain) any consent, authorization, order or approval
of, or any exemption by, any governmental entity and or any other public or
private third party which is required to be obtained or made by such party or
any of its subsidiaries in connection with the Merger and the transactions
contemplated by this Agreement; provided, however, that a party shall not be
obligated to take any action pursuant to the foregoing if the taking of such
action or such compliance or the obtaining of such consent, authorization,
order, approval or exemption would, in Buyer's reasonable opinion, result in the
imposition of a condition or restriction on such party or on the Surviving
Corporation of the type referred to in Section 8.1; and provided further that
neither party shall be obligated to take any action to obtain any third party
consent where a failure to obtain such consent would not in Buyer's reasonable
opinion have a Material Adverse Effect. Each party will cooperate with and
promptly furnish information to the other in connection with any such burden
suffered by, or requirement imposed upon, either of them in connection with the
foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Access and Information. Lawrence shall afford to Buyer and to
Buyer's financial advisors, legal counsel, accountants, consultants and other
representatives reasonable access during normal business hours throughout the
period from the date hereof to the Effective Time to all of its books, records,
properties, facilities, personnel, commitments and records (including but not
limited to tax returns) and, during such period, shall furnish promptly to Buyer
all information concerning its business, properties and personnel as Buyer may
reasonably request.
7.2 Pooling. None of Lawrence, Buyer and Buyer Sub shall take any action
which would jeopardize the treatment of the Merger as a tax-free reorganization
or which would prevent the Merger from being accounted for as a pooling of
interests.
7.3 Public Announcements. Lawrence understands that Buyer is a public
company, and that until the transactions contemplated by this Agreement are made
public, Lawrence and the Shareholders and those whom they advise of this
transaction (which shall only be on a "need to know basis") may be privy to
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material inside information; accordingly, Lawrence understands, and Lawrence has
apprized those of its officers, directors and employees who know of the
potential transaction, of the need for confidentiality and the potential
consequences of any trading in Buyer Common Stock. 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 Lawrence
and Buyer, except as may be required by law or the rules or regulations of The
Nasdaq Stock Market. 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 Merger by stating that it is their policy not to comment on
such matters.
7.4 Additional Agreements.
(a) Subject to the terms and conditions hereof, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including using all
reasonable efforts to obtain all necessary waivers, consents and approvals, and
to effect all necessary registrations and filings. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and/or directors of the
Companies shall take all such necessary action.
(b) Subject to the terms and conditions hereof, Buyer and
Lawrence will cooperate with each other and use all reasonable efforts to
prepare all necessary documentation to effect promptly all necessary filings and
to obtain all necessary permits, consents, approvals, orders and authorizations
of or any exemptions by, all third parties and governmental bodies necessary to
consummate the transactions contemplated by this Agreement.
(c) Each party will keep the other party apprized of the status
of any inquiries made of such party by any governmental agency or authority or
members of their respective staffs with respect to this Agreement or the
transactions contemplated herein.
7.5 Confidentiality. All confidential information disclosed by any party
to this Agreement to any other party to this Agreement in connection with the
transactions contemplated hereby shall be kept confidential by such other party
and shall not be used by such other party otherwise than as herein contemplated,
except to the extent that (a) it is or becomes generally available to the public
other than as a result of a wrongful disclosure by a party receiving such
confidential information hereunder, (b) it was readily available to the party
receiving such information on a non-confidential basis prior to its disclosure
hereunder, (c) it was already lawfully in the receiving party's possession prior
to its disclosure hereunder, (d) it becomes available to the receiving party on
a non-confidential basis from a source other than the disclosing party hereunder
without violation of such source's confidentiality agreement with the disclosing
party or its representatives or of legal, fiduciary or ethical constraints on
disclosure of such information, (e) it may be required by law, or (f) such duty
as to confidentiality is waived by the other party. Such obligation as to
confidentiality and non-use shall survive the termination of this Agreement for
any reason. This Section 7.5 shall survive termination hereof or consummation of
the transactions hereunder, and shall replace any prior confidentiality
agreements, including the Confidentiality Agreement dated October 23, 1996,
entered into by Lawrence and Buyer.
7.6 Guarantees. Buyer shall cooperate with Lawrence and use Buyer's
reasonable efforts to obtain, prior to the Effective Time, the release of all
guarantees listed on Schedule 7.6 ("Guarantees") provided by individuals, LSI or
LSRL on behalf of Lawrence relating to Lawrence's bank financings or other
indebtedness (the "Releases"), provided that no modification to, or amendment
of, the terms of any such bank financing or other indebtedness shall be made in
connection with obtaining a Release without Buyer's prior written consent. In
the event that the parties are unable to obtain the release of any of the
Guarantees, the Buyer shall indemnify the guarantors against any losses incurred
by them under such Guarantees as a result of a default by Lawrence of its
obligations as provided in Section 10.3.
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7.7 Noncompete Agreement. At the Effective Time, Lamonte H. Lawrence
shall enter into a Noncompete Agreement in the form attached hereto as Exhibit
"B."
7.8 Consulting Agreement. At the Effective Time, the Surviving
Corporation shall enter into Consulting Agreement with LSI in the form attached
hereto as Exhibit "C."
7.9 Notices of Certain Events. From the date hereof to and including the
Closing Date, Lawrence and Buyer 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.
7.10 No Solicitation. Lawrence will not, and Lawrence will use best
efforts to cause each Shareholder not to, directly or indirectly, solicit any
active discussions or negotiations with, or provide information to, any person,
other than Buyer, concerning any possible proposal regarding the acquisition of
Lawrence or any part thereof, or any merger or consolidation thereof or accept
any such proposal.
7.11 Preparation of S-4 and the Proxy Statement. Buyer shall prepare and
file as promptly as practicable after the execution of this Agreement with the
SEC a proxy statement and a registration statement on Form S-4 (in which the
proxy statement will be included as a prospectus) (the "S-4"). Buyer shall use
its best efforts to have the S-4 declared effective under the Securities Act as
promptly as practicable after such filing. Buyer shall also 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 with the issuance of Buyer Common Stock in the Merger, and Lawrence
shall furnish all information concerning Lawrence and the Shareholders as may be
reasonably requested in connection with any such action.
7.12 Nasdaq Listing. Buyer will make such filings as are necessary with
The Nasdaq Stock Market regarding the transactions contemplated hereby,
including filing a Notification Form for Listing of Additional Shares with
respect to the shares of Buyer Common Stock to be issued in the Merger.
7.13 Qualified Retirement Plan. The Lawrence Profit Sharing Plan and
Trust (the "Plan and Trust") shall be continued by Lawrence for at least twelve
months from the Effective Time (the "Continuation Period") with respect to the
Lawrence employees at the Effective Time (except for LSRL employees), and the
Lawrence employees shall continue to participate in the Plan and Trust during
such time. After the Continuation Period, neither Lawrence nor Buyer will have
any obligation to continue the Plan and Trust. At Buyer's discretion, after the
Continuation Period Lawrence may continue the Plan and Trust, freeze it,
terminate it, or merge it into any other qualified plan in which Buyer's
employees are eligible to participate. At the Effective Time, LSRL employees
shall cease to participate in the Plan and Trust. After the Continuation Period,
Lawrence employees shall be eligible to participate in Buyer's 401(k) plan,
except to the extent Buyer has elected to continue the Plan and Trust beyond the
Continuation Period in which case the Lawrence employees will remain eligible
under the Plan and Trust. When Lawrence employees do become eligible to
participate in Buyer's 401(k) plan, they shall be given credit for their service
with Lawrence toward eligibility requirements and vesting in Buyer's 401(k)
plan.
7.14 Name. It is Buyer's current intention that the Surviving Corporation
will continue to do business under the name "Lawrence Semiconductor
Laboratories, Inc." following the Closing.
7.15 Conduct of Buyer's Business Pending the Merger. Buyer agrees that,
except as expressly contemplated by this Agreement, and except as may be
necessary or required in connection with the consummation of the transaction
contemplated by the ADCS Merger Agreement, during the period from the date of
this Agreement and continuing until the Effective Time:
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(a) The business of Buyer shall be conducted only in the
ordinary and usual course of business and consistent with past practices;
(b) Buyer shall not (i) amend its Articles of Incorporation or
Bylaws; or (ii) split, combine or reclassify any shares of its outstanding
capital stock, declare, set aside or pay any dividend or other distribution
payable in cash, stock or property in respect of its capital stock, or directly
or indirectly redeem, purchase or otherwise acquire any shares of its capital
stock or other securities;
(c) Buyer shall not authorize for issuance, issue, sell, pledge,
dispose of, encumber, deliver or agree or commit to issue, sell, pledge, or
deliver any additional shares of, or rights of any kind to acquire any shares
of, its capital stock of any class (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise),
provided, however, that Buyer may do any of the foregoing if the value of the
consideration per Share received by Buyer in such transaction is greater than
the greater of (i) $17 and (ii) the closing price of Buyer Common Stock on the
Nasdaq National Market on the trading day immediately preceding the date of the
consummation of such transaction. Notwithstanding the foregoing, Buyer may grant
additional options under its existing option plans consistent with past
practice, and may also issue additional shares upon the exercise of outstanding
options and warrants.
(d) Buyer shall use reasonable efforts to maintain its assets,
to preserve intact its business organization, to keep available the services of
its present officers and key employees, and to preserve the goodwill of those
having business relationships with it; provided, however, that no breach of this
covenant shall be deemed to have occurred as a result of any matter arising out
of the transactions contemplated by this Agreement or the public announcement
thereof;
(e) Buyer shall use all reasonable efforts to prevent any
representation or warranty of Buyer herein from becoming materially untrue or
incorrect in any material respect; and
(f) Notwithstanding anything to the contrary in subsections (a)
through (e) above, Buyer shall be permitted to take the following actions: (i)
pay any judgment or settlement of pending legal claims (including penalties,
fees, or taxes related thereto) provided that Buyer will not without Lawrence's
written consent enter into any settlement which imposes upon Buyer any
restrictions or limitations on its ability to operate its business consistent
with past practice; and (ii) repay any guarantors of Buyer's obligations or
pledgors of collateral to secure Buyer's obligations (including collateral
pledged to secure letters of credit relating to such obligations) if and to the
extent such guarantors pay any amount under the guaranty, or such pledgors have
such collateral foreclosed upon, in connection with any of Buyer's obligations,
on behalf of Buyer.
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ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
8.1 Conditions to Both Lawrence's and Buyer's Obligation to Effect the
Merger. The respective obligations of Lawrence and Buyer to effect the
transactions contemplated in this Agreement shall be subject to the satisfaction
at or prior to the Effective Time of the following conditions, which may be
waived by mutual agreement: (a) no preliminary or permanent injunction or other
order by or before any federal, state or foreign court of competent jurisdiction
which prohibits the consummation of the Merger shall have been issued and remain
in effect; and (b) no statute, rule, regulation, executive order, stay, decree,
or judgment shall have been enacted, entered, issued, promulgated or enforced by
or before any court or governmental authority which prohibits or restricts the
consummation of the Merger. Other than the filing of Articles of Merger and Plan
of Merger with the Arizona Corporation Commission and the Secretary of State of
the State of Delaware, all authorizations, consents, orders or approvals of, or
declarations or filings with, and all expirations of waiting periods imposed by,
any governmental entity (all of the foregoing, "Consents") which are necessary
for the consummation of the Merger, other than Consents the failure to obtain
which would have no Material Adverse Effect on the consummation of the Merger or
on the Surviving Corporation, Buyer and their subsidiaries shall have been
filed, occurred or been obtained (all such permits, approvals, filings and
consents and the lapse of all such waiting periods being referred to as the
"Requisite Regulatory Approvals"), and all such Requisite Regulatory Approvals
shall be in full force and effect.
8.2 Conditions to Obligation of Each Company to Effect the Merger.
(a) The obligation of Lawrence to effect the Merger shall be
further subject to the following conditions: (i) Buyer and Buyer Sub shall
satisfy all of the obligations under this Agreement required to be performed by
Buyer and Buyer Sub at or prior to the Effective Time in all material respects,
(ii) the representations and warranties of Buyer and Buyer Sub contained in this
Agreement shall be true and correct in all material respects when made and at
and as of the Effective Time as if made at and as of such time, except as
contemplated by this Agreement, and (iii) Lamonte H. Lawrence shall have been
elected to serve as a member of Buyer's six (6) person Board of Directors,
effective immediately following the Closing Date, provided that if Section
3.2(f) shall apply, in lieu of the foregoing, Lamonte H. Lawrence shall have
been elected to serve as a member of the class of directors elected for a term
not to exceed two (2) years on Holdings' seven (7) person Board of Directors.
These conditions may be waived by Lawrence. Further, if and to the extent
Holdings is formed on or prior to the Effective Time, and Section 3.2(f) is
applicable, then at the Effective Time: (i) Holdings shall own directly all of
the issued and outstanding capital stock of Buyer; (ii) Holdings shall not have
incurred any liabilities of any nature whatsoever, except for the liabilities
described in Section 4.2(k); and (iii) the authorized, issued and outstanding
capital stock of Holdings shall be substantially identical to that of the Buyer
as of the Effective Time, subject only to changes therein necessary to
consummate the transactions contemplated by the ACDS Merger Agreement, and (iv)
evidence reasonably satisfactory to Lawrence that all conditions to Lawrence's
obligations hereunder have been satisfied in all material respects.
(b) The obligation of Buyer to effect the Merger shall be
further subject to the following conditions: (i) Lawrence shall satisfy all of
the obligations under this Agreement required to be performed by Lawrence at or
prior to the Effective Time in all material respects, (ii) the representations
and warranties of Lawrence contained in this Agreement shall be true and correct
in all material respects when made and at and as of the Effective Time as if
made at and as of such time, except as contemplated by this Agreement, and (iii)
evidence reasonably satisfactory to Buyer that all conditions to Buyer's
obligations hereunder have been satisfied in all material respects. These
conditions may be waived by Buyer.
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8.3 Additional Conditions to Obligations of Buyer. The obligation of
Buyer to effect the Merger shall be further subject to the following conditions:
(a) This Agreement and the consummation of the Merger shall have
been duly approved and adopted by the affirmative vote of the holders of at
least 95% of the voting securities of Lawrence. This Agreement and the
consummation of the Merger shall have been duly approved and adopted by the
stockholders of Buyer in accordance with the DGCL and its charter.
(b) Ernst & Young LLP, independent accountants to Buyer, shall
have rendered its opinion(s), addressed to Buyer, in form and substance
satisfactory to Buyer as to the appropriateness of pooling of interest
accounting for the Merger under Accounting Principles Board Opinion No. 16 and
Ernst & Young shall have rendered its opinion to Buyer to the effect that the
Merger has been structured in a manner which is tax-free with respect to Buyer
and its stockholders and Lawrence and the Shareholders.
(c) Lawrence shall have delivered (or cause to be delivered)
duly executed counterparts of Employee Proprietary Information and Inventions
Agreements with Buyer and the Surviving Corporation substantially in the form of
Exhibit 8.3(d) duly executed by each employee of Lawrence.
(d) The share certificates representing all of the issued and
outstanding Lawrence Shares as of the Closing Date (other than Dissenting
Shares), in each case duly endorsed in blank, shall have been surrendered for
cancellation.
(e) The S-4 registering the issuance and delivery of the shares
of Buyer Common Stock 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 Buyer Common Stock in compliance therewith shall have been made, and
any authorizations in connection therewith from all applicable securities
regulatory authorities shall have been obtained.
(f) There shall not have been a material adverse change in the
general affairs, business, business prospects, properties, management, condition
(financial or otherwise) or results of operations of Lawrence, whether or not
arising from transactions in the ordinary course of business, and Lawrence shall
not 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.
(g) The Mesa real estate (both the developed and undeveloped
parcels) shall have been reconveyed to Lawrence from LSI, subject to the liens
and encumbrances existing on the date hereof, for an aggregate consideration no
greater than net book value.
(h) Buyer shall have received satisfactory Phase I and, if,
applicable, Phase II environmental site assessments of the Lawrence Facilities,
and all permits necessary for the operation of those facilities shall have been
appropriately transferred, if required by applicable law.
(i) That certain litigation currently pending in the United
States District Court, Northern District of California, San Jose Division,
captioned Applied Materials, Inc. v. Lawrence Semiconductor, Inc. (C-96 20591
EAI) shall have been dismissed with prejudice.
8.4 Additional Conditions to Obligations of Lawrence. The obligation of
Lawrence to effect the Merger shall be further subject to the following
conditions:
(a) There shall not have been a material adverse change in the
general affairs, business, business prospects, properties, management, condition
(financial or otherwise) or results of operations of Buyer, whether or not
arising from transactions in the ordinary course of business, and Buyer shall
not have sustained any material loss or interference with its business or
properties from fire,
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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.
(b) Price Waterhouse, LLP, independent accountants to Lawrence,
shall have rendered its opinion(s) addressed to Lawrence and Lamonte H.
Lawrence, and dated the Closing Date, in form and substance satisfactory to
Lawrence as to the appropriateness of pooling interest accounting for the Merger
under Accounting Principles Board Opinion No. 16.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby abandoned at any time prior to the Effective Time:
(a) By mutual written consent of Buyer and Lawrence.
(b) By Buyer or Lawrence if the Merger shall not have been
consummated within one hundred twenty (120) days of the date hereof, unless the
failure of the Effective Time to occur by such date shall be due to the failure
of the party seeking to terminate this Agreement to perform or observe the
covenants and agreements of such party set forth herein.
(c) By Buyer or Lawrence if there shall have been any material
misrepresentation or material breach of a material obligation of the other and,
if such breach is curable, such default shall have not been remedied within
thirty (30) days after receipt by the defaulting party of notice in writing from
the other party specifying such breach and requesting that it be remedied;
provided, that such thirty-day period shall be extended for so long as the other
party shall be making diligent attempts to cure such default, but not beyond an
additional thirty (30) days.
(d) By Buyer or Lawrence, if any court of competent jurisdiction
in the United States or other United States governmental body shall have issued
an order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting any Merger and such order, decree, ruling or any other
action shall have become final and non-appealable.
9.2 Termination; Termination Payment. 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, or stockholders, except as provided below and
except for those obligations intended to survive termination. In the event that
either the Buyer or Lawrence shall terminate this Agreement because of a
material misrepresentation or a material breach of a material covenant by the
other party (subject to the 30-day notice and cure period provided in Section
9.1(c)), the breaching 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 the breaching party's receipt of written
notice of termination. It is agreed that the payments due hereunder are the
exclusive remedy for termination of this Agreement. Notwithstanding the
foregoing, in the event of a breach by Lawrence of Section 7.10, the Buyer may
pursue any and all remedies available to it at law or in equity. Recovery by the
Buyer of a termination payment under this Section 9.2 shall not bar any such
action for breach of Section 7.10, but the amount of any monetary damages
awarded to the Buyer in such action shall be reduced by the termination payment
actually received by the Buyer.
9.3 Amendment. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
9.4 Waiver. At any time prior to the Effective Time, the parties hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant
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hereto and (c) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. Such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
ARTICLE X
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES: INDEMNIFICATION
10.1 Survival: Indemnification.
(a) No representations, warranties or agreements contained
herein shall survive beyond the Effective Time except that (i) the
representations, warranties and agreements contained in Sections 3.1, 3.2, 3.3,
3.4, 3.5, 3.7, 5.13, 5.15, 7.3, 7.4, 7.5, 7.6, 9.2, 9.3, 9.4, 11.1, 11.2, 11.5,
11.6, 11.7, 11.8, 11.9 and 11.10 and Article X hereof shall survive beyond the
Effective Time for the period of the applicable statute of limitations and (ii)
the other representations and warranties of Buyer and Lawrence in this Agreement
shall survive beyond the Effective Time for one (1) year (the end of such
one-year period, the "Termination Date") solely for the purpose of the
Indemnification Escrow as described below.
(b) Through the Indemnification Escrow described below, the
Surviving Corporation, Buyer, Buyer Sub, Holdings and each of their officers,
directors, employees, agents, representatives and affiliates (collectively, the
"Indemnitees" and, individually, each an "Indemnitee") (subject to the terms and
conditions below) will be entitled to be indemnified and held harmless by the
Shareholders against and in respect of any claims, damages, losses, costs,
expenses, liabilities (absolute, accrued, contingent or otherwise), and
reasonable legal fees and expenses (collectively, "Losses") incurred or suffered
by any Indemnitee, directly or indirectly, caused by or arising out of or
related to any untruth, inaccuracy, error in, or breach of, any representation
or warranty (when made or deemed to be made) or covenant of Lawrence contained
in this Agreement. The rights of Indemnitees to indemnification under this
Subsection 10.1(b) shall be limited to, and satisfied solely out of and to the
extent of, the Indemnification Escrow as it may be reduced or increased pursuant
to Subsections 3.2(d), 3.4(e), 3.5 this Section 10.1 and the Escrow Agreement,
and any Loss shall be reduced by any amounts actually received by the Indemnitee
under applicable insurance policies, if any. All indemnification requests of
Indemnitees hereunder shall be made by or through Buyer.
(c) By voting to approve this Agreement or by surrendering his
or its Certificate(s) evidencing Lawrence Shares at Closing, each Shareholder,
other than Shareholders who have perfected dissenter rights under the ABCA,
acknowledges and agrees that (i) the consideration to which such Shareholder is
entitled hereunder is subject to adjustment as contemplated in Articles III and
X, (ii) the Indemnification Escrow Shares and the Escrow Adjustment shall be
placed in the Indemnification Escrow provided for in an Escrow Agreement to be
entered into, as of the Effective Time, in the form of Exhibit "D" attached
hereto and (iii) the Escrow Agent shall be, and is hereby, authorized from time
to time to transfer all or any portion of the amounts so deposited in
satisfaction of the indemnity obligation and as otherwise provided pursuant to
Articles III and X and as contemplated in the Escrow Agreement. Except as
provided in Section 10.5, the Indemnitees agree to look solely to the
Indemnification Escrow for recourse in the event of a breach of any
representation or warranty or covenant of Lawrence contained in this Agreement
and will not look directly to any Shareholder or Shareholders for any
indemnification hereunder.
(d) If any Indemnitee shall have any liquidated claim of
indemnification pursuant to Subsection 10.1(b), it shall promptly request that
Buyer give written notice thereof to the Representative and the Escrow Agent,
including a brief description of the facts upon which such claim is based and
the amount thereof. Any Indemnitee may also request that Buyer provide written
notice to the Representative and the Escrow Agent of any unliquidated claim of
indemnification pursuant to Subsection 10.1(b), including a brief description of
the facts upon which such claim is based and a demand for a reserve
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amount to be created in respect of such claim. Any claim made by any Indemnitee
for Losses that are unliquidated shall not be paid, but shares of Buyer Common
Stock valued at the Average Closing Price equal to such claim shall be held in
the Indemnification Escrow until such Losses are fully liquidated.
Notwithstanding the foregoing, no amount will be delivered to an Indemnitee
pursuant to a written claim notice (with respect to either a liquidated or
unliquidated claim) pursuant to Subsection 10.1(b) above and Section 10.5 below
unless, and then only to the extent that, the aggregate amount of Losses
sustained by Indemnitees as a group and as to which written claim notices have
been given exceeds Two Hundred Fifty Thousand Dollars ($250,000) (taking into
account any reduction of prior noticed claims resulting from the dispute
resolution procedures of Section 10.2 below).
(e) If the Representative shall notify the Escrow Agent in
writing (within thirty (30) days of delivery to the Escrow Agent by Buyer of a
written notice of claim for indemnification) of his objection to a claim of
indemnification or a demand for the creation of a reserve against the
Indemnification Escrow for any unliquidated claim (or the amount thereof), the
Escrow Agent shall hold the disputed amount of funds in the Indemnification
Escrow until the rights of the Shareholders and the Indemnitees with respect
thereto have been agreed upon between the Representative and the claiming
Indemnitee. In the event such an agreement is reached, the claiming Indemnitee
shall request Buyer to provide to the Escrow Agent a written notice signed by
the Representative in the form specified in the Escrow Agreement. If no such
agreement has been reached, either the Indemnitee or the Representative may, not
earlier than thirty (30) days after the date of the initial claim notice, submit
the dispute to confidential, binding arbitration in New York, New York before a
panel of three arbitrators, one each to be selected by Buyer and the
Representative, and the third to be selected by the other two arbitrators,
pursuant to the procedures and rules for commercial arbitration of the American
Arbitration Association. The Escrow Agent may rely on the order or other
determination of such arbitrators. If such arbitrators shall determine that any
part of the Indemnification Escrow is to be delivered to an Indemnitee or is to
be set aside in a reserve for any unliquidated claim, the Escrow Agent shall
promptly following receipt of a copy of such determination establish such
reserve or deliver to such Indemnitee the lesser of (i) the amount of the claim
or claims as awarded to the Indemnitee to be satisfied, subject to the
limitation set forth in Subsection 10.1(d) or (ii) the entire amount remaining
in the Indemnification Escrow. Any disputed amounts not awarded to the
Indemnitee shall promptly be transferred to the unreserved portion of the
Indemnification Escrow. Buyer and the Representative shall bear their respective
costs and expenses of any such arbitration. Buyer expressly acknowledges that
Polese, Pietzsch, Williams & Nolan, P.A. can continue to represent
Representative in any such dispute and hereby waives any conflict of interest
which might otherwise exist.
(f) Promptly after the Termination Date, the Escrow Agent shall
distribute to the Shareholders on a pro rata basis all remaining unreserved
amounts in the Indemnification Escrow, less an amount equal to the dollar amount
of all claims pursuant to Subsection 10.1(c) that are still in process and (i)
that are then-payable liquidated claims, (ii) for which a reserve established
pursuant to Subsection 10.1(d) then exists, or (iii) that are still in the
process of resolution pursuant to this Section 10.1. No new claims may be
brought under this Section 10.1 after the Termination Date.
(g) After the Termination Date, (i) as each matter referred to
in Subsection 10.1(f) is resolved or otherwise concluded and (ii) as each
undisputed unliquidated claim which remains unliquidated as of the Termination
Date is liquidated, the Escrow Agent shall distribute to the Shareholders their
respective pro rata portion of the Escrow Fund (as defined in Exhibit D) then
determined by the Escrow Agent to be free of any rights of any Indemnitee and,
when all such matters are resolved and such claims are liquidated, the
obligations under Subsection 10.1(b) hereof shall terminate. The Indemnification
Escrow shall be terminated when all of the Escrow Fund in the Indemnification
Escrow shall have been disbursed by the Escrow Agent in accordance with the
provisions hereof and the Escrow Agreement.
(h) In taking any action whatsoever hereunder, the
Representative shall be protected in relying upon any notice, paper or other
document reasonably believed by him to be genuine, or upon any evidence
reasonably deemed by him to be sufficient. The Representative may consult with
counsel in connection with his duties hereunder and shall be fully protected in
any act taken, suffered or permitted by him in good faith or in accordance with
the advice of counsel. The Representative shall not be liable to the
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Shareholders for the performance of any act or the failure to act so long as he
acted or failed to act in good faith within what he reasonably believed to be
the scope of his authority and for a purpose which he reasonably believed to be
in the best interests of the Shareholders.
10.2 Procedure. In the event that, at any time or from time to time after
the Effective Time, a person indemnified under Section 10.1 or 10.3 (an
"Indemnified Party") shall sustain a loss of any nature whatsoever against which
such Indemnified Party is indemnified under this Agreement, such Indemnified
Party shall notify the party hereto obligated to provide such indemnification
(the "Indemnitor") of any such loss so sustained. If Indemnitor is Buyer,
Indemnitor shall within thirty (30) days after transmittal of such notice pay to
such Indemnified Party the amount of such loss so sustained, subject to the
right to contest any claim. If Indemnitor is the Shareholders, payment shall be
governed by the Escrow Agreement. The Indemnified Party shall promptly notify
the Indemnitor of the existence of any claim, demand, or other matter involving
liabilities to third parties to which the Indemnitor's indemnification
obligations would apply and shall give the Indemnitor (acting through the
Representative if Indemnitor is the Escrow Agent) a reasonable opportunity to
defend the same or prosecute such action to conclusion or settlement
satisfactory to the Indemnified Party at Indemnitor's own expense and with
counsel of Indemnitor's selection (who shall be approved by Indemnified Party,
which approval shall not be unreasonably withheld); provided that the
Indemnified Party shall at all times also have the right to fully participate in
the defense at its own expense. If the Indemnitor shall, within a reasonable
time after said notice, fail to defend, the Indemnified Party shall have the
right, but not the obligation, to undertake the defense of, and to compromise or
settle (exercising reasonable business judgment) the claim or other matter on
behalf, for the account, and at the risk and expense of Indemnitor. Except as
provided in the preceding sentence, the Indemnified Party shall not compromise
or settle the claim or other matter without the prior written consent of the
Indemnitor. If the claim is one that cannot by its nature be defended solely by
the Indemnitor, the Indemnified Party shall make available all information and
assistance that the Indemnitor may reasonably request; provided that any
associated expenses shall be paid by the Indemnitor. If the Losses relate to a
Loss or demand asserted by a third party, the Indemnified Party and Indemnitor
shall jointly control the defense and settlement thereof and any settlement
shall require the prior written consent of both parties, which consent shall not
be unreasonably withheld.
10.3 Buyer's Indemnification. Buyer agrees to indemnify and hold
Shareholders harmless from and against any and all Losses which may accrue or be
sustained by Shareholders arising out of or as a result of (a) the conduct of
the business or ownership of Lawrence or the Surviving Corporation after the
Effective Time, or (b) any of the warranties, representations or covenants of
Buyer contained in this Agreement being incorrect, untrue or breached. The term
"Losses" for purposes of this Section 10.3 shall not include any loss resulting
from a diminution in the value of Buyer Common Stock received in the Merger.
Buyer also agrees to indemnify and hold Lamonte H. Lawrence, LSI and LSRL
harmless from and against any and all losses which may accrue or be sustained by
Lamonte H. Lawrence, LSI and/or LSRL arising out of or as a result of the
parties' inability to obtain the Releases of all of the Guarantees and a breach
by Lawrence of the guaranteed obligation. Notwithstanding the foregoing, no
amount will be paid pursuant to a written claim notice for indemnification
pursuant to this Section 10.3 (with respect to either a liquidated or
unliquidated claim) unless, and then only to the extent that, the aggregate
amount of Losses sustained by Shareholders, Lamonte H. Lawrence, LSI, or LSRL as
a group and as to which written claim notices have been given by any of
Shareholders, Lamonte H. Lawrence, LSI and/or LSRL to Buyer exceeds Two Hundred
Fifty Thousand Dollars ($250,000).
10.4 Contest; Challenge. If Indemnitor contests or challenges any claim
or action asserted against Indemnified Party referred to in this Article, it
shall do so at its own cost and expense, holding Indemnified Party harmless from
all costs, fees, expenses, debts, liabilities and charges in connection with
such contest; shall diligently defend against any such claim; and shall hold
Indemnified Party's business and assets free and harmless from any attachment,
execution, judgment, lien or other legal process.
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10.5 Special Indemnity.
(a) By voting to approve this Agreement or by surrendering his
or its Certificate(s) evidencing Lawrence Shares at Closing, each Shareholder,
other than Shareholders who have perfected dissenter rights under applicable
law, severally and not jointly, agrees to defend and indemnify the Indemnitees
against and hold each of them harmless from each Shareholder's Pro Rata Portion
(defined below) of any and all Losses which any such Indemnitee may suffer or
incur by reason of the inaccuracy or breach of any of the representations,
warranties and covenants of Lawrence contained in Section 5.13 or Section 5.15
of this Agreement or any documents, certificates or agreements delivered
pursuant hereto. The right of Indemnitees to indemnification under this Section
10.5 shall apply only to those claims for indemnification, notice of which is
given pursuant to this Agreement to the Shareholders on or before the running of
the applicable statute of limitations; provided that such limitations shall not
apply to any claim resulting from fraud or intentional misrepresentation. As
used herein, "Pro Rata Portion" shall mean with respect to each Shareholder his
or its percentage ownership of Lawrence after the merger of Lawrence and LSLMS
and immediately prior to the Effective Time.
(b) Each Shareholder, other than Shareholders who have perfected
dissenter rights under applicable law, acknowledges and agrees that its
obligations under this Section 10.5 are recourse obligations enforceable against
it personally. Each Shareholder waives any right to require Indemnitees to (i)
proceed against any person or entity including any other Shareholder, (ii)
proceed against or exhaust any collateral or security or any part thereof, or
(iii) pursue any other remedy in its power, and waives any defense arising by
reason of any inability of any other obligor to pay or any defense based on
bankruptcy or insolvency or other similar limitations on creditors' remedies
with respect to any other person. Indemnitees agree to use their reasonable
efforts to collect any Losses from any available insurer or third party
indemnitors before collecting from the Shareholders or the Escrow Fund, and to
use their reasonable efforts to collect from the Escrow Fund before collecting
from the Shareholders; however, nothing in the foregoing clauses shall preclude
any claiming party from filing a claim against either the Shareholders or the
Escrow Fund from the outset. If any amounts are recovered from an insurer or
third party after payment to an Indemnitee of all Losses suffered or incurred by
it, such Indemnitee shall promptly pay over to the indemnifying party the excess
amount so recovered. Any claims against the Escrow Fund shall be subject to the
procedures set forth in Section 10.2.
(c) Notwithstanding anything to the contrary in this Article X,
including without limitation any provision of Section 10.2, the Representative
shall have sole and complete power and authority (i) to settle any matter which
is the subject of a claim for indemnification pursuant to this Section 10.5
which can be settled solely with the payment of money (ii) to conduct and settle
any litigation which is the subject of a claim for indemnification pursuant to
this Section 10.5 which can be settled solely with the payment of money, and
(iii) to control and direct, subject to Buyer's approval, which shall not be
unreasonably withheld or delayed, any and all remediation or other clean-up or
mitigation of any environmental condition which is the subject of a claim for
indemnification pursuant to this Section 10.5.
10.6 Waiver. Each Shareholder irrevocably, knowingly and voluntarily
waives any claim which such Shareholder now has or may hereafter have against
Indemnitees, the Escrow Fund, and any collateral or security whatsoever now or
hereafter held by Indemnitees, arising out of or resulting from payment or
demand for payment of Losses, whether such claim is characterized as a claim for
contribution, indemnification, subrogation or otherwise; provided that the
foregoing shall not limit the Shareholders' ability to challenge the propriety
of any claim for Losses made by Indemnitee(s).
10.7 Average Closing Price. To the extent that the Indemnitees make a
claim against the Escrow Fund pursuant to the Escrow Agreement, and such claim
is paid in shares of Buyer Common Stock, then for purposes of such payment, the
shares of Buyer Common Stock shall be valued at the Average Closing Price.
10.8 Reduction of Losses. The amount of any Losses for which
indemnification is provided under this Article X shall be reduced to take
account of any net tax benefit realized arising from the
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incurrence or payment of any such Losses or from the receipt of any such
indemnification payment and shall be reduced by the insurance proceeds received
and any other amount, if any, recovered from third parties by an Indemnitee (or
any of their affiliated entities) with respect to any Losses. The Indemnified
Party shall be obligated to use commercially reasonable efforts to prosecute
diligently and in good faith claims under any applicable insurance policies
(including, without limitation, any applicable insurance policies maintained by
either of the Companies or the Surviving Corporation) and against other third
parties who may be responsible for Losses prior to collecting indemnification
for such Losses under this Article X. If any Indemnitee (or any of their
affiliated entities) shall have received any payment pursuant to this Article X
with respect to any Loss and shall subsequently have received insurance proceeds
or other amounts with respect to such Loss, then such Indemnitee (or its
affiliated entities) shall promptly pay over to the Representative (for
distribution pro rata to the Shareholders) the amount so recovered but not in
excess of the amount previously so paid by the Shareholders.
10.9 Remedies. The sole and exclusive remedy of any party to this
Agreement for any claim arising under this Agreement against any other party
hereto shall be the indemnification provided in this Article X, and each party
agrees that it will not pursue any other remedy, except that either party may
seek specific performance or injunctive relief.
ARTICLE XI
GENERAL PROVISIONS
11.1 Brokers. Lawrence represents and warrants to Buyer and Buyer Sub
that, except for Lawrence's financial advisor, Alex. Brown & Sons Incorporated,
no broker, finder or financial advisor is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger or the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Lawrence. Buyer represents and warrants to Lawrence that no broker, finder or
financial advisor is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger or the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Buyer.
11.2 Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile or mailed by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) If to Lawrence, to:
Lawrence Semiconductor Laboratories, Inc.
2300 West Huntington Drive
Tempe, Arizona 85282
Attention: Lamonte H. Lawrence, President
Facsimile Number: (602) 464-7421
with a copy to:
Polese, Pietzsch, Williams & Nolan, P.A.
2702 North Third Street, Suite 3000
Phoenix, Arizona 85004-4607
Attention: Michael E. Pietzsch, Esq.
Michael J. Tucker, Esq.
Facsimile Number: (602) 279-5107
-34-
<PAGE>
(b) If to Buyer, or Buyer Sub or Holdings, to:
Advanced Technology Materials, Inc.
7 Commerce Drive
Danbury, CT 06810
Attention: Daniel P. Sharkey, VP
Facsimile Number: (203) 792-8040
with a copy to:
Shipman & Goodwin LLP
One American Row
Hartford, CT 06103
Attention: Frank J. Marco, Esq.
Facsimile Number: (860) 251-5900
and
(c) If to the Representative, to:
Lamonte H. Lawrence
100 Sir Francis Drake Blvd.
Ross, California 94957
Facsimile Number: (415) 456-0949
with a copy to:
Polese, Pietzsch, Williams & Nolan, P.A.
2702 North Third Street, Suite 3000
Phoenix, Arizona 85004-4607
Attention: Michael E. Pietzsch, Esq.
Facsimile Number: (602) 279-5107
All such notices shall be deemed received on the date of delivery (if delivered
personally or by facsimile) or on the date shown on the return receipt (if
delivered by mail).
11.3 Descriptive Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.4 Entire Agreement; Assignment. This Agreement (including the
Schedules, Exhibits and other documents and instruments referred to herein)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them, with
respect to the subject matter hereof, and shall not be assigned by operation of
law or otherwise.
11.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
provisions thereof relating to conflicts of law.
11.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
11.7 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
-35-
<PAGE>
11.8 Investigation. The respective representations and warranties of
Buyer or Lawrence contained herein or in the certificates or other documents
delivered prior to the Effective Time shall not be deemed waived or otherwise
affected by any investigation made by the other.
11.9 Consents. For purposes of any provision of this Agreement requiring,
permitting or providing for the consent of any party, the written consent of the
Chief Executive Officer of such party shall be sufficient to constitute such
consent.
11.10 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 court or United States federal court located in the County 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 is the most convenient forum for litigation
of any such suit, action, or legal proceeding.
-36-
<PAGE>
IN WITNESS WHEREOF, each of Buyer, Buyer Sub and Lawrence has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
ADVANCED TECHNOLOGY MATERIALS, INC.,
a Delaware corporation
By: /s/ DANIEL P. SHARKEY
---------------------------------------------
Name: Daniel P. Sharkey
-------------------------------------------
Title: Vice President, Chief Financial Officer
-------------------------------------------
WELK ACQUISITION CORPORATION, a Delaware
corporation
By: /s/ DANIEL P. SHARKEY
---------------------------------------------
Name: Daniel P. Sharkey
-------------------------------------------
Title: President
-------------------------------------------
ATMI HOLDINGS, INC., a Delaware corporation
By: /s/ DANIEL P. SHARKEY
---------------------------------------------
Name: Daniel P. Sharkey
-------------------------------------------
Title: Treasurer
-------------------------------------------
LAWRENCE SEMICONDUCTOR LABORATORIES, INC., an
Arizona corporation
By: /s/ LAMONTE H. LAWRENCE
---------------------------------------------
Name: Lamonte H. Lawrence
-------------------------------------------
Title: Chief Executive Officer
-------------------------------------------
LAWRENCE SEMICONDUCTOR LABORATORIES MARKETING AND
SALES, INC., an Arizona corporation
By: /s/ Lamonte H. Lawrence
---------------------------------------------
Name: Lamonte H. Lawrence
-------------------------------------------
Title: Chief Executive Officer
-------------------------------------------
-37-
<PAGE>
EXHIBITS
3.6(a)(xiii)-A Affiliate Agreement Section 3.6(a)(xiii)-A
3.6(a)(xiii)-B Employment Agreement Section 3.6(a)(xiii)-B
3.6(a)(x) Release Section 3.6(a)(x)
3.6(e) Registration Rights Agreement Section 3.6(e)
A-1 Designated Employees Section 6.2
A-2 Staying Bonus and Severance Agreement Section 6.2
B Noncompete Agreement --
Lamonte H. Lawrence Section 7.8
C Consulting Agreement --
Lamonte H. Lawrence Section 7.9
8.3(d) Proprietary Information and
Inventions Agreement Section 8.3(d)
D Escrow Agreement Subsection 10.1(c)
-38-
<PAGE>
SCHEDULES
Schedule Contents
Number Number
- -------- --------
4.1(c) Persons whose knowledge constitute the "Knowledge" of Lawrence
4.2(c) Filings, permits, authorizations, consents and approvals required
for Buyer and/or Buyer Sub to consummate transaction
4.2(h) Material liabilities of Buyer
5.1 Trade names and assumed names
5.2 Authorized capital stock, number and class of issued and
outstanding stock, identity of owners of capital stock, and
identity of anyone with a right to acquire any capital stock; pro
forma following merger
5.4 Filings, permits, authorizations, consents and approvals required
for Lawrence to consummate transaction
5.5 Material errors in Lawrence financial statements
5.6 Material adverse changes and other specified information
occurring since date of unaudited financial statement
5.7 Litigation; expected litigation
5.8(a) Contracts and other instruments
5.8(b) Consulting agreements and other contracts with certain provisions
5.9(a) Employee benefits programs
5.10(a) Known non-compliance of products with laws, statutes, etc.
5.10(b) Notices received from regulatory agencies regarding possible
violations, or facts that might lead to such
5.10(c) Facts that might lead to recall of products, termination of
marketing of products, etc.
5.10(d) Recalls of products
5.11(a) Patents, applications for patents, registration of trademarks,
other intellectual property
5.11(c) Nondisclosure agreements to which Lawrence is a party or bound
5.11(d) Royalties, fees or other payments owed by reason of any
intellectual property
5.11(e) Notices of infringement
5.12(b) Property agreements (leases, etc.)
5.13(b) Environmental notices received, existence of USTs, asbestos, etc.
5.13(c) Environmental incidents
5.14 Notices of violations of city codes, condemnation actions, etc.
5.15(a) Tax information
5.15(b) Subsidiaries
5.16 Product liability insurance claims
5.17 Other material liabilities
5.20 Mortgages, liens, etc.
5.21 Debts
5.22 Accounts Receivable
5.25 Employee Names
5.26 Related Parties; Transactions
5.27 Hart-Scott-Rodino
5.28 Customers
5.30 Insurance; Unemployment insurance ratings
7.6 Guarantees
8.3(d) Proprietary Information and Inventions Agreements
-39-
<PAGE>
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER is dated as of June 6,
1997, by and among ADVANCED TECHNOLOGY MATERIALS, INC., a Delaware corporation
("Buyer"), WELK ACQUISITION CORPORATION, a Delaware corporation and a
wholly-owned subsidiary of Buyer ("Buyer Sub"), ATMI HOLDINGS, INC., a Delaware
corporation and wholly- owned subsidiary of Buyer ("Holdings") LAWRENCE
SEMICONDUCTOR LABORATORIES, INC., an Arizona corporation ("LSL"), and LAWRENCE
SEMICONDUCTOR LABORATORIES MARKETING AND SALES, INC., an Arizona corporation
("LSLMS"; LSL and LSLMS are referred to collectively as "Lawrence"); and all of
the parties are referred to collectively as the "Companies." Buyer Sub and
Lawrence are referred to collectively as the "Constituent Corporations" and
individually as a "Constituent Corporation."
The Companies are parties to that certain Agreement and Plan of Merger
dated May 17, 1997 (the "Merger Agreement"), and wish to amend the Merger
Agreement in order to permit the following: (i) the possible transfer by Buyer
of the issued and outstanding shares of capital stock of Buyer Sub to Holdings,
(ii) the transfer by Lamonte H. Lawrence of the issued and outstanding shares of
capital stock of LSLMS to LSL, and (iii) the adoption by Holdings or Buyer, as
appropriate, of a stock option plan for 900,000 shares of common stock. The
Companies also wish to amend the Merger Agreement in order to eliminate any
offset of the intercompany indebtedness against the purchase price.
In consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:
1. Capitalized terms not otherwise defined herein shall have the meanings
provided in the Merger Agreement.
2. Section 1.1 is hereby amended to insert the following at the end of
the final sentence: "unless Buyer elects in its discretion to contribute prior
to the Effective Time all of the issued and outstanding shares of capital stock
of Buyer Sub to Holdings, in which case the Surviving Corporation shall be a
wholly-owned subsidiary of Holdings."
3. Section 3.1(b) is hereby amended and restated to read in its entirety
as follows: "Each share of common stock of LSL ("Lawrence Share") held in the
treasury of LSL, if any, or by any subsidiary of Lawrence and each such Lawrence
Share held by Buyer or any subsidiary of Buyer immediately prior to the
Effective Time shall be canceled and retired and cease to exist, and no
consideration shall be given in exchange therefor."
4. Section 3.4 is hereby amended to delete the following from the first
paragraph: "minus any amounts owed to LSL by any related parties as set forth in
Schedule 5.26."
5. Section 3.6(a)(xiv) is hereby amended and restated to read in its
entirety as follows: "Written evidence satisfactory to Buyer that Lamonte H.
Lawrence, the sole stockholder of LSLMS, has contributed immediately prior to
the Effective Time all of the issued and outstanding shares of capital stock of
LSLMS to LSL, with LSLMS becoming a wholly-owned subsidiary of LSL and that all
consents and approvals necessary or appropriate for such contribution have been
obtained."
6. Section 3.6(a)(xvii) is hereby amended to delete the final sentence.
7. Section 4.2(k) is hereby amended to insert the following as a new
final sentence: "Notwithstanding the foregoing, Buyer may elect in its
discretion to contribute prior to the Effective Time all of the issued and
outstanding shares of capital stock of Buyer Sub to Holdings, in which case the
Surviving Corporation shall become a wholly-owned subsidiary of Holdings."
8. Section 5.2 is hereby amended to delete the second sentence.
-40-
<PAGE>
9. Section 6.1(f) is hereby amended to insert the following as subsection
(iv): "(iv) Lamonte H. Lawrence, the sole stockholder of LSLMS, may contribute
all of the issued and outstanding shares of capital stock of LSLMS to LSL, with
LSLMS becoming a wholly-owned subsidiary of LSL."
10. Section 7.15(f) is hereby amended to insert the following as
subsections (iii) and (iv): "(iii) "Buyer may in its discretion contribute
prior to the Effective Time all of the issued and outstanding shares of capital
stock of Buyer Sub to Holdings, in which case the Surviving Corporation shall be
a wholly-owned subsidiary of Holdings; and (iv) (A) Buyer may approve a new
stock option plan for up to 900,000 shares of Buyer Common Stock, if the closing
of the transactions contemplated by the ADCS Merger Agreement shall not have
occurred on or before the Effective Time, or (B) Holdings may increase the
authorized number of shares of Holdings Common Stock available in its existing
stock option plan from 750,000 to 900,000, if the closing of the transactions
contemplated by the ADCS Merger Agreement shall have occurred on or before the
Effective Time."
11. The final sentence of Section 10.5(a) is hereby amended and restated
to read in its entirety as follows: "As used herein, "Pro Rata Portion" shall
mean with respect to each Shareholder his or its percentage ownership of LSL
immediately prior to the Effective Time."
12. Except as modified herein, the Agreement as originally executed and
previously amended is hereby ratified and affirmed and acknowledged to be the
legal, valid and binding obligations of each of the parties hereto.
13. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the provisions
thereof relating to conflicts of law.
14. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
IN WITNESS WHEREOF, each of Buyer, Buyer Sub, Holdings and Lawrence has
caused this Amendment to be executed on its behalf by its officers thereunto
duly authorized, all as of the date first above written.
ADVANCED TECHNOLOGY MATERIALS, INC., a
Delaware corporation
By: /S/ DANIEL P. SHARKEY
----------------------------------------
Name: Daniel P. Sharkey
----------------------------------------
Title: Vice President, Chief Financial Officer
---------------------------------------
WELK ACQUISITION CORPORATION, a Delaware
corporation
-41-
<PAGE>
By: /S/ DANIEL P. SHARKEY
----------------------------------------
Name: Daniel P. Sharkey
----------------------------------------
Title: President
----------------------------------------
ATMI HOLDINGS, INC., a Delaware corporation
By: /S/ DANIEL P. SHARKEY
----------------------------------------
Name: Daniel P. Sharkey
----------------------------------------
Title: Treasurer
----------------------------------------
LAWRENCE SEMICONDUCTOR LABORATORIES, INC., an
Arizona corporation
By: /S/ LAMONTE H. LAWRENCE
----------------------------------------
Name: Lamonte H. Lawrence
----------------------------------------
Title: Chief Executive Officer
----------------------------------------
LAWRENCE SEMICONDUCTOR LABORATORIES MARKETING
AND SALES, INC., an Arizona corporation
By: /S/ LAMONTE H. LAWRENCE
----------------------------------------
Name: Lamonte H. Lawrence
----------------------------------------
Title: Chief Executive Officer
----------------------------------------
-42-
<PAGE>
SECOND AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER is dated as of July
30, 1997, by and among ADVANCED TECHNOLOGY MATERIALS, INC., a Delaware
corporation ("Buyer"), WELK ACQUISITION CORPORATION, a Delaware corporation and
a wholly-owned subsidiary of Buyer ("Buyer Sub"), ATMI HOLDINGS, INC., a
Delaware corporation and wholly-owned subsidiary of Buyer ("Holdings") LAWRENCE
SEMICONDUCTOR LABORATORIES, INC., an Arizona corporation ("LSL"), and LAWRENCE
SEMICONDUCTOR LABORATORIES MARKETING AND SALES, INC., an Arizona corporation
("LSLMS"; LSL and LSLMS are referred to collectively as "Lawrence"); and all of
the parties are referred to collectively as the "Companies." Buyer Sub and
Lawrence are referred to collectively as the "Constituent Corporations" and
individually as a "Constituent Corporation."
The Companies are parties to that certain Agreement and Plan of Merger
dated May 17, 1997, as amended by First Amendment to Agreement and Plan of
Merger dated June 6, 1997 (as amended, the "Merger Agreement"), and wish to
amend further the Merger Agreement in order to limit the time period in which
certain claims for indemnification may be made.
In consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:
1. Capitalized terms not otherwise defined herein shall have the meanings
provided in the Merger Agreement.
2. Section 10.1(f) is hereby amended to insert the following as a new
final sentence: "Notwithstanding the foregoing or anything in this Agreement to
the contrary, no claim seeking indemnification from the Shareholders or the
Indemnification Escrow may be brought after the date of issuance of the first
independent audit report with respect to the financial statements of Buyer (or
Holdings, if the closing of the transactions contemplated by the ADCS Merger
Agreement shall occur on or before the Effective Time) after the Effective Time
if such claim is of a type expected to be encountered in the course of an audit
performed in accordance with generally accepted auditing standards."
3. Section 10.3 is hereby amended to insert the following as a new final
sentence: "Notwithstanding the foregoing or anything in this Agreement to the
contrary, no claim seeking indemnification from Buyer may be brought after the
date of issuance of the first independent audit report with respect to the
financial statements of Buyer (or Holdings, if the closing of the transactions
contemplated by the ADCS Merger Agreement shall occur on or before the Effective
Time) after the Effective Time if such claim is of a type expected to be
encountered in the course of an audit performed in accordance with generally
accepted auditing standards."
4. Section 5(d) of the form of Escrow Agreement attached to the Merger
Agreement as Exhibit D is hereby amended to insert the following as a new final
sentence: "Notwithstanding the foregoing or anything in this Agreement to the
contrary, no claim seeking indemnification from the Shareholders or the
Indemnification Escrow may be brought after the date of issuance of the first
independent audit report with respect to the financial statements of Buyer (or
Holdings, if the closing of the transactions contemplated by the ADCS Merger
Agreement shall occur on or before the Effective Time) after the Effective Time
if such claim is of a type expected to be encountered in the course of an audit
performed in accordance with generally accepted auditing standards."
5. Except as modified herein, the Agreement as originally executed and
previously amended is hereby ratified and affirmed and acknowledged to be the
legal, valid and binding obligations of each of the parties hereto.
6. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the provisions
thereof relating to conflicts of law.
G-1
<PAGE>
7. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
IN WITNESS WHEREOF, each of Buyer, Buyer Sub, Holdings and Lawrence has
caused this Amendment to be executed on its behalf by its officers thereunto
duly authorized, all as of the date first above written.
ADVANCED TECHNOLOGY MATERIALS, INC., a
Delaware corporation
By: /S/ DANIEL P. SHARKEY
--------------------------------------
Name: Daniel P. Sharkey
--------------------------------------
Title: Vice President, Chief Financial Officer
---------------------------------------
WELK ACQUISITION CORPORATION, a Delaware
corporation
By: /S/ DANIEL P. SHARKEY
--------------------------------------
Name: Daniel P. Sharkey
--------------------------------------
Title: President
--------------------------------------
ATMI HOLDINGS, INC., a Delaware corporation
By: /S/ DANIEL P. SHARKEY
--------------------------------------
Name: Daniel P. Sharkey
--------------------------------------
Title: Treasurer
--------------------------------------
LAWRENCE SEMICONDUCTOR LABORATORIES, INC., an
Arizona corporation
By: /S/ LAMONTE H. LAWRENCE
--------------------------------------
Name: Lamonte H. Lawrence
--------------------------------------
Title: Chief Executive Officer
--------------------------------------
LAWRENCE SEMICONDUCTOR LABORATORIES MARKETING
AND SALES, INC., an Arizona corporation
By: /S/ LAMONTE H. LAWRENCE
--------------------------------------
Name: Lamonte H. Lawrence
--------------------------------------
Title: Chief Executive Officer
--------------------------------------
G-2
<PAGE>
THIRD AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER is dated as of
August 19, 1997, by and among ADVANCED TECHNOLOGY MATERIALS, INC., a Delaware
corporation ("Buyer"), WELK ACQUISITION CORPORATION, a Delaware corporation and
a wholly-owned subsidiary of Buyer ("Buyer Sub"), ATMI HOLDINGS, INC., a
Delaware corporation and a wholly-owned subsidiary of Buyer ("Buyer Sub"), ATMI
HOLDINGS, INC., a Delaware corporation and wholly-owned subsidiary of Buyer
("Holdings"), LAWRENCE SEMICONDUCTOR LABORABORIES, INC., an Arizona corporation
("LSL"), and LAWRENCE SEMICONDUCTOR LABORATORIES MARKETING AND SALES, INC., an
Arizona corporation ("LSMS"; LSL and LSLMS are referred to collectively as
"Lawrence"); and all of the parties are referred to as the "Companies."
The Companies are parties to that certain Agreement and Plan of Merger
dated May 17, 1997, as amended by First and Second Amendments to Agreement and
Plan of Merger dated June 6, 1997 and as of July 30, 1997, respectively (as
amended, the "Merger Agreement"), and wish to amend further the Merger Agreement
as set forth herein.
In consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:
1. Section 9.1(b) of the Merger Agreement is hereby amended to read
in its entirety as so amended as follows:
"By Buyer or Lawrence if the Merger shall not have been consummated by September
30, 1997, unless the failure of the Effective Time to occur by such date shall
be due to the failure of the party seeking to terminate this Agreement to
perform or observe the covenants and agreements of such party set forth herein.
"
2. Capitalized terms not otherwise defined herein shall have the
meanings provided in the Merger Agreement.
3. Except as modified herein, the Agreement as originally executed
and previously amended is hereby ratified and affirmed and acknowledged to be
the legal, valid and binding obligations of each of the parties.
4. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to the provisions
thereof relating to conflicts of law.
5. This Amendment may be executed in two or more counterparts, each
of which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
G-3
<PAGE>
IN WITNESS WHEREOF, each of Buyer, Buyer Sub, Holdings and Lawrence
has caused this Amendment to be executed on its behalf by its officers thereunto
duly authorized, all as of the date first above written.
ADVANCED TECHNOLOGY
MATERIALS, INC., a Delaware
Corporation
By: /S/ DANIEL P. SHARKEY
--------------------------------------
Name: Daniel P. Sharkey
Title: Vice President -
Chief Financial Officer
WELK ACQUSITION
CORPORATION, a Delaware
Corporation
By: /S/ DANIEL P. SHARKEY
--------------------------------------
Name: Daniel P. Sharkey
Title: President
ATMI HOLDINGS, INC., a Delaware Corporation
By: /S/ DANIEL P. SHARKEY
--------------------------------------
Name: Daniel P. Sharkey
Title: Treasurer
LAWRENCE SEMICONDUCTOR
LABORATORIES, an Arizona
Corporation
By: /S/ LAMONTE H. LAWRENCE
--------------------------------------
Name: Lamonte H. Lawrence
Title: Chief Executive Officer
LAWRENCE SEMICONDUCTOR
LABORATORIES MARKETING AND SALES, INC., an
Arizona corporation
By: /S/ LAMONTE H. LAWRENCE
--------------------------------------
Name: Lamonte H. Lawrence
Title: Chief Executive Officer
G-4
<PAGE>
AFFILIATE AGREEMENT
October 10, 1997
ATMI, Inc.
7 Commerce Drive
Danbury, CT 06810
Ladies and Gentlemen:
Pursuant to the terms and conditions of that certain Agreement and Plan
of Merger dated as of the 17th day of May, 1997, as amended by that certain
First Amendment to Agreement and Plan of Merger dated as of the 6th day of
June, 1997 and that certain Second Amendment to Agreement and Plan of Merger
dated as of the 30th day of July, 1997 (as amended, the "Merger Agreement"),
by and among Welk Acquisition Corporation, a Delaware corporation ("Merger
Sub"), Advanced Technology Materials, Inc., a Delaware corporation ("ATMI"),
Lawrence Semiconductor Laboratories, Inc., an Arizona corporation
("Lawrence"), Lawrence Semiconductor Laboratories Marketing and Sales, Inc.,
an Arizona corporation ("LSLMS") and you (f/k/a ATMI Holdings, Inc.)
("Holdings"), following the contribution of all of the issued and outstanding
shares of capital stock of LSLMS to Lawrence, Holdings will acquire Lawrence
through the merger of Merger Sub with and into Lawrence (the "Merger"), with
Lawrence continuing as the surviving corporation and as a wholly-owned
subsidiary of Holdings. Subject to the terms and conditions of the Merger
Agreement, at the Effective Time (as defined in the Merger Agreement), all of
the issued and outstanding shares of capital stock of Lawrence will be
converted into the right to receive shares of common stock, par value $.01
per share, of Holdings (the "Holdings Common Stock"), on the basis described
in the Merger Agreement.
The undersigned has been advised that as of the date hereof the
undersigned may be deemed to be an "affiliate" of Lawrence and may be deemed
to be an "affiliate" of Holdings, as the term "affiliate" is (i) defined for
purposes of 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 "Securities Act"), and/or (ii) used
in and for purposes of Accounting Series Releases 130 and 135, as amended,
and Staff Accounting Bulletins 65 and 76 of the SEC. The undersigned
understands that the representations, warranties and covenants set forth
herein will be relied upon by Holdings, ATMI, stockholders of ATMI, Lawrence,
other stockholders of Lawrence 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 obligations hereunder.
<PAGE>
2. The undersigned has carefully read this letter and the Merger
Agreement and all schedules and exhibits thereto and discussed its
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 felt necessary, with his counsel or counsel to Lawrence.
3. The undersigned shall not make any sale, transfer or other
disposition of Holdings Common Stock in violation of the Securities 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 Merger has
not been registered with the SEC under the Securities Act on a registration
statement on Form S-4. Furthermore, the undersigned has also been advised
that, since the undersigned may be deemed to have been an affiliate of
Lawrence and may be deemed to be an affiliate of Holdings and the
distribution by the undersigned of any Holdings Common Stock has not been
registered, and is not exempt, under the Securities Act, the undersigned may
not sell, transfer or otherwise dispose of Holdings Common Stock issued to
the undersigned in the Merger unless (i) such sale, transfer or other
disposition has been registered under the Securities Act, (ii) such sale,
transfer or other disposition is made in conformity with the requirements of
Rule 144 promulgated by the SEC under the Securities Act, or (iii) in the
opinion of counsel reasonably acceptable to Holdings, such sale, transfer or
other disposition is otherwise exempt from registration under the Securities
Act. The undersigned hereby agrees to comply with such requirements.
5. From and after the Effective Time for so long as and to the extent
necessary to permit the undersigned to sell any shares of Holdings Common
Stock pursuant to Rule 144 under the Securities Act, Holdings shall use
reasonable efforts to file, on a timely basis, all reports required to be
filed by it with the SEC pursuant to Section 13 of the Exchange Act, so long
as it is subject to such requirement, and to 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 144 and otherwise use its reasonable efforts to permit such
sales pursuant to 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 Merger, and there
will be placed on the certificates for the 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 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
-2-
<PAGE>
COPY OF WHICH 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 Holdings Common Stock
has been registered under the Securities Act or is a sale made in conformity
with the applicable provisions of 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 Securities Act.
9. Subject to applicable community property laws, the undersigned is,
as of the Effective Time, the beneficial owner of (i.e., has sole or shared
voting or investment power with respect to) all the shares of Holdings Common
Stock indicated on the last page hereof. Except as set forth on the last
page hereof, the undersigned does not beneficially own 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.
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 operations of Lawrence and ATMI 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 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 the entry into any
similar transaction intended to reduce the risk of the undersigned's
ownership of, or investment in, any of the following:
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<PAGE>
(a) any shares of Holdings Common Stock which the undersigned may
acquire in connection with the Merger, 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
Merger, financial results covering at least thirty (30) days of combined
operations of ATMI and Lawrence 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 ATMI and Lawrence; 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 Agreement may not be amended or waived other than by a writing
signed by both 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.
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 transaction that would have the effect of reducing in any
way the undersigned's risk of ownership by short sale or otherwise of the
shares of Holdings Common Stock to be received by the undersigned in the
Merger, except as contemplated by the Registration Rights Agreement between
the undersigned and Holdings of even date. The undersigned acknowledges that
the undersigned is giving this representation and covenant to enable Ernst &
Young LLP to opine that the Merger constitutes a reorganization within the
meaning of Section 368 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 Merger or otherwise.
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<PAGE>
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]
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<PAGE>
Number of shares of Holdings Common Stock
beneficially owned by the undersigned:
3,556,000
Very truly yours,
Lamonte H. Lawrence
----------------------------------------
(print name of stockholder above)
By: /S/ LAMONTE H. LAWRENCE
------------------------------------
Name:
Title:
(if applicable)
Accepted this 10th day of
October, 1997, by
ATMI, Inc.
By: /S/ DANIEL P. SHARKEY
--------------------------
Name: Daniel P. Sharkey
Title: President, Secretary, & Treasurer
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<PAGE>
EXHIBIT (c)
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.,
Welk Acquisition Corporation and Lawrence (as defined in the Merger Agreement
which is defined below), entered into an Agreement and Plan of Merger dated
as of May 17, 1997, as amended by that certain First Amendment to Agreement
and Plan of Merger, dated as of June 6, 1997 and that certain Second
Amendment to Agreement and Plan of Merger dated as of July 30, 1997 (as
amended, the "Merger Agreement"). At the Closing, as defined in the Merger
Agreement, the Stockholders received an aggregate of 3,628,571 shares of
common stock of the Company, par value $.01 per share (the "Company Common
Stock"), in exchange for all of their Lawrence Shares, all in accordance with
and subject to the provisions of the Merger Agreement. In satisfaction of
one of the conditions to Closing set forth in the Merger 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 combined operations of the Company and Lawrence (on a consolidated
basis) shall have been
<PAGE>
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 Merger 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, (i) any securities referred to in the preceding sentence which are
registered on Form S-4 in connection with the Merger Agreement shall not be
Registrable Securities for purposes of Section 3(a) hereof, and (ii) 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 Merger Agreement.
3. Required Registration.
(a) If any Registrable Securities were issued to the Stockholders
pursuant to the Merger Agreement without registration under the Securities
Act, the Company shall use its reasonable best efforts to register
Registrable Securities under the Securities Act for sale as follows:
(i) the Company will register once, during each three-month
period in the one-year period commencing on the Closing Date, that number
of shares of Registrable Securities held by each such Stockholder that
does not exceed, for each such three-month period, one percent (1%) of
the then outstanding Company Common Stock; provided that the number of
shares permitted to be sold in such three-month periods shall be
cumulative, and any Stockholder that does not sell the full one percent
(1%) in a given three-month period may cumulate the number
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<PAGE>
of shares not so sold and sell such unsold shares in a subsequent three-
month period;
(ii) 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), the Company will, upon a request from Stockholders holding
at least 70% of the Registrable Securities initially issued pursuant to
the Merger Agreement, register any Registrable Securities 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 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 $1,000,000 if registered on
Form S-3; and
(iii) the Company shall use diligent efforts: (A) in the case of the
first registration pursuant to Section 3(a)(i), to cause such
registration statement to become effective under the Securities Act not
later than the business day next following the expiration of the Pooling
Period; (B) in the case of each other registration pursuant to Section
3(a)(i), to cause such registration statement to become effective under
the Securities Act not later than the first day of each successive
three-month period; and (C) in the case of the first registration
requested pursuant clause (a)(ii) of this Section 3, if such request is
delivered at least 45 days prior to the first anniversary of the Closing
Date, to cause such registration statement to become effective under the
Securities Act not later than the business day next following the first
anniversary of the Closing Date.
(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 Merger Agreement may request the Company to register
up to 50% of the Registrable Securities issued to such Stockholders pursuant
to the Merger 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 $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 registration pursuant to Section 3(a)(i) or request made under
Section 3(a)(ii) or 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
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<PAGE>
Stockholders prior to the Company's obligation to register under Section
3(a)(i) or the 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; provided, however, that if the obligation of
the Company under Section 3(a)(i) is so suspended by the Company pursuant to
clause (i) above, such suspension shall be effective only if the Stockholders
are permitted to include in the registration statement filed by the Company,
in addition to any shares included in such registration pursuant to Section 4
of this Agreement, no less than the number of shares which they would have
been permitted to sell pursuant to Section 3(a)(i) during the period of such
suspension and, if such Company registration involves an underwriting, any
lock-up period requested by the managing underwriter. 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 periods specified in Sections
3(a)(ii) and 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(a)(i) on four occasions
only, pursuant to Section 3(a)(ii) on two occasions only, and 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,
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
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<PAGE>
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(a) 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 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.
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<PAGE>
(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 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
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<PAGE>
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
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
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<PAGE>
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;
(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
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<PAGE>
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 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.
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<PAGE>
(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, 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 all
registrations pursuant to Section 3(a)(i) hereof, each registration pursuant
to Section 4 hereof, and each registration pursuant to Sections 3(a)(ii) and
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
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"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 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
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<PAGE>
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 public offering of such Registrable Securities or (ii)
any 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
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<PAGE>
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 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.
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<PAGE>
(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 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
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<PAGE>
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
(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
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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 Merger 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 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:
Michael E. Pietzsch, Esq.
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Polese, Pietzsch, Williams & Nolan, P.A.
2702 North Third Street, Suite 3000
Phoenix, AZ 85004-4607
Facsimile: (602) 279-5107
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.
(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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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/ DANIEL P. SHARKEY
---------------------
Name: Daniel P. Sharkey
------------------
Title: President, Treasurer, Secretary
----------------------------------------
STOCKHOLDERS:
/s/ LAMONTE H. LAWRENCE
-------------------------------------
Lamonte H. Lawrence
The Arizona State University Foundation
By: /s/ LONNIE L. OSTROM
-----------------------------
Name: Lonnie L. Ostrom
---------------------------
Title: President
----------------------------
<PAGE>
SCHEDULE 1
Stockholders
Name: Initial No. of Registrable Securities
Lamonte H. Lawrence 3,556,000
100 Sir Francis Drake Boulevard
Ross, CA 94957
The Arizona State University Foundation 72,571
707 South College
Tempe, AZ 85281
<PAGE>
Exhibit (d)
ESCROW AGREEMENT
AGREEMENT made as of this 10th day of October, 1997, among Advanced
Technology Materials, Inc., a Delaware corporation ("Buyer"), Lawrence
Semiconductor Laboratories, Inc., an Arizona corporation ("LSL"), Welk
Acquisition Corporation, a Delaware corporation ("the Company"), ATMI, Inc.
(f/k/a ATMI Holdings, Inc.), a Delaware corporation ("Holdings"), Security Trust
Company (the "Escrow Agent"), and Lamonte H. Lawrence, solely in his capacity as
representative of the holders of LSL's common stock (the "Representative").
WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") between Buyer, the Company, Holdings and LSL dated as of May 17,
1997, as amended by that certain First Amendment to Agreement and Plan of Merger
dated as of the 6th day of June, 1997, and that certain Second Amendment to
Agreement and Plan of Merger dated as of the 30th day of July, 1997, a copy of
which has been delivered to the Escrow Agent, the Company is contemporaneously
with the execution of this Agreement being merged into LSL (the "Merger") and
the outstanding shares of LSL common stock are being exchanged for shares of
Buyer's common stock, or Holdings' common stock, if the closing of the
transactions contemplated by the Agreement and Plan of Merger and Exchange dated
April 7, 1997, by and among Buyer, Holdings, Advanced Delivery & Chemical
Systems Nevada, Inc., and others (the "ADCS Merger"), shall occur on or before
the Effective Time of the Merger (as defined in the Merger Agreement); and
WHEREAS, pursuant to the Merger Agreement, the Indemnification Escrow
Shares shall be deposited in escrow and subsequently distributed as contemplated
in Article III of the Merger Agreement and in this Agreement; and
WHEREAS, the holders of LSL's common stock ("Shareholders") have agreed to
indemnify Buyer, the Company and the other Indemnitees and provide for certain
other payments to Buyer to the extent and in the manner provided in the Merger
Agreement through an Indemnification Escrow to be established hereunder
consisting of a portion of the Purchase Price (as defined in the Merger
Agreement); and
WHEREAS, the Escrow Agent is willing to act as Escrow Agent hereunder.
NOW, THEREFORE, in order to induce Buyer, Holdings, and the Company to
consummate the transactions contemplated by the Merger Agreement and in
consideration of the premises and mutual covenants and agreements hereinafter
set forth, and of other good and valuable considerations, the parties hereto
hereby agree as follows:
1. Effectiveness of Agreement. The terms and provisions of this Agreement
shall not become effective unless and until the Company is merged into LSL in
accordance with the terms of the Merger Agreement. In the event that the Merger
is consummated in accordance with the Merger Agreement then, at the Effective
Time of the Merger (as defined in the Merger Agreement), the following terms
and provisions shall, without further act on the part of any of the parties
hereto, become effective and enforceable in accordance with their terms.
<PAGE>
All capitalized terms not otherwise defined herein shall have the meaning
ascribed to each such term in the Merger Agreement.
2. Establishment of the Indemnification Escrow.
(a) At the Effective Time, Buyer shall deliver irrevocably to the
Escrow Agent certificates evidencing the Indemnification Escrow Shares. The
Indemnification Escrow shall include the Indemnification Escrow Shares so
deposited, any Escrow Adjustment, any interest, dividends or earnings thereon
from time to time held in the Indemnification Escrow by the Escrow Agent
pursuant to the terms hereof, and any additional shares of Buyer Common Stock of
which the Shareholders may acquire ownership by reason of a stock split, stock
dividend or other recapitalization of the Indemnification Escrow Shares, and any
securities which are issued in exchange for or in replacement of the
Indemnification Escrow Shares (such amounts being referred to collectively as
the "Escrow Fund"). The Escrow Fund shall be held and disbursed by the Escrow
Agent in escrow subject to the terms and conditions hereinafter set forth and
the terms and conditions set forth in the Merger Agreement. The Escrow Agent
agrees not to commingle the Escrow Fund with any other funds held by the Escrow
Agent.
(b) The parties hereto agree that the Shareholders shall be treated
as the owners of the shares of Buyer Common Stock comprising the Escrow Fund,
excluding any funds disbursed pursuant to the provisions hereof or the Merger
Agreement, and shall file all of their respective returns, reports and similar
information in a manner consistent with such ownership. The Representative, on
behalf of the Shareholders, shall be responsible for any tax liability and tax
reporting obligations attributable to the placement of the Indemnification
Escrow Shares in the Escrow Fund and the payment of any interest or other
amounts payable with respect to the Escrow Fund. The Representative, on behalf
of the Shareholders, agrees to provide the Escrow Agent with executed Forms W-9
or W-8, as applicable.
3. Representative of the Shareholders.
From and after the establishment of the Indemnification Escrow, as
provided in Section 2 hereof, the Shareholders shall be represented hereunder by
the Representative. In the event that the Representative shall die or resign or
otherwise terminate his status as such, his successor shall be selected by the
vote or written consent of not less than a majority in interest of the
Shareholders. The Representative is authorized to act on behalf of the
Shareholders as provided in this Agreement and the Merger Agreement without
further authority from the Shareholders. The Representative shall not be
entitled to be compensated for acting as Representative hereunder.
Notwithstanding anything herein to the contrary, the appointment or selection of
or granting of authority to the Representative shall not impair the right of any
Shareholder to exercise such Shareholder's right to vote any share of Buyer
Common Stock (or Holdings' Common Stock, if the closing of the transactions
contemplated by the ADCS Merger shall occur on or before the Effective Time of
the Merger) owned by such Shareholder.
<PAGE>
4. Investment of Escrow Funds. The Escrow Agent shall, except to the
extent that amounts in the Indemnification Escrow are required to satisfy a
claim for payment, invest all cash dividends included in the Escrow Fund in
Authorized Investments. "Authorized Investments" shall mean (a) direct
obligations of the United States of America (including certificates or other
instruments evidencing ownership interests in such obligations) or obligations
the timely payment of the principal and interest on which are fully guaranteed
by the United States of America or any daily or weekly withdrawal money market
fund investing solely in such obligations or interest bearing demand or time
deposits and banker's acceptance in any bank (including the Escrow Agent and its
affiliates) which is rated one of the two highest rating categories by Moody's
or Standard & Poors. The Escrow Agent shall hold all monies collected on
account of interest earnings in the Indemnification Escrow and such earnings
shall become part of the Escrow Fund.
5. Claims Against the Escrow Fund.
(a) If and whenever Buyer, acting on its behalf or on behalf of the
Company or any other Indemnitee, shall claim indemnification or other payment in
respect of a liquidated claim to be satisfied out of the Indemnification Escrow
pursuant to the Merger Agreement, Buyer shall promptly send written notice of
the same to the Escrow Agent and the Representative (or his successor, as
provided above). Such notice shall state the basis for such claim including a
brief description of the facts upon which such claim is based and the amount
thereof. In the event of an unliquidated claim pursuant to the Merger Agreement,
Buyer shall provide written notice to the Representative and the Escrow Agent of
the unliquidated claim, including a brief description of the facts upon which
such claim is based and a demand for a reserve amount to be created in respect
of such claim. Any claim that is unliquidated shall not be paid, but the Escrow
Agent shall set aside Buyer Common Stock valued at the Average Closing Price
equal to such claim within the Escrow Fund to address such claim until such
claim is fully liquidated. If the Representative shall object to any such claim,
he shall send written notice of his objection to the Escrow Agent within thirty
(30) days after Buyer's delivery of its notice as aforesaid. If no objection to
such claim shall have been received by the Escrow Agent within thirty (30) days
after delivery to it of Buyer's notice, the Representative, on behalf of the
Shareholders, shall be deemed to have acknowledged the correctness of such claim
for the full amount thereof and the Escrow Agent shall transfer to Buyer as
provided in the following sentence on behalf of the claiming party out of the
Indemnification Escrow an amount (pro rata from the account of each Shareholder)
equal to the amount of such claim. Transfer to Buyer of the funds shall be made,
in the case of a liquidated claim, promptly following such thirty-day period,
or, in the case of an unliquidated claim, promptly following the date upon which
the claim is fully liquidated. For the purpose of this paragraph (a), the term
"delivery" shall mean, in the case of notices sent by mail, the time at which
such notice is mailed, in the case of notices delivered personally, the time at
which such notice is delivered and, in the case of notices sent by telecopy, the
time at which such notice is sent. Adjustments pursuant to Section 3.5 of the
Merger Agreement shall be determined, and paid in accordance with the procedures
set forth in the Merger Agreement.
(b) Notwithstanding the foregoing, no amount will be paid pursuant to
a written claim notice for indemnification pursuant to Article X of the Merger
Agreement (with respect to either a liquidated or unliquidated claim) unless,
and then only to the extent that, the
<PAGE>
aggregate amount of Losses sustained by Indemnitees as a group and as to which
written claim notices have been given by Buyer to the Escrow Agent exceeds Two
Hundred Fifty Thousand Dollars ($250,000) (taking into account any reduction of
prior noticed claims resulting from the dispute resolution procedures of
paragraph (c) below).
(c) If the Representative shall timely notify the Escrow Agent in
writing of his good faith objection to a claim of indemnification or other
payment or a demand for the creation of reserve for any unliquidated claim (or
the amount thereof), the Escrow Agent shall hold the disputed amount of funds in
the Indemnification Escrow until the rights of the Shareholders and the claiming
party or parties with respect thereto have been agreed upon between the
Representative and the claiming party or parties. In the event such an agreement
is reached, the claiming party or parties shall request Buyer to provide to the
Escrow Agent a written notice signed by the Representative acknowledging that
such agreement has been reached and authorizing the Escrow Agent to release
funds having a value equal to the agreed amount specified in the notice in the
same manner set forth for undisputed claims as provided in paragraph (a) hereof.
If no such agreement has been reached, either the claiming party or parties or
the Representative may, not earlier than thirty (30) days after the date of the
initial claim notice, submit the dispute to confidential, binding arbitration in
New York, New York, before a panel of three (3) arbitrators, one (1) each to be
selected by the Buyer and the Representative, and the third to be selected by
the other two (2) arbitrators pursuant to the procedures and rules for
commercial arbitration of the American Arbitration Association. The Escrow Agent
may rely on the order or other determination of any such arbitrators. If such
arbitrators shall determine that any part of the Indemnification Escrow is to be
delivered to a claiming party or parties or is to be set aside in a reserve for
any unliquidated claim, the Escrow Agent shall promptly following receipt of a
copy of such determination establish such reserve or deliver to such claiming
party or parties the lesser of (i) the amount of the claim or claims as awarded
to be satisfied, subject to the limitation set forth in paragraph (a) above, or
(ii) the entire amount remaining in the Indemnification Escrow. Any disputed
amounts not awarded shall promptly be transferred to the unreserved portion of
the Indemnification Escrow. Buyer and the Representative shall bear their
respective costs and expenses of any such arbitration.
(d) On and after the Termination Date, the Escrow Agent shall
distribute to the Shareholders on a pro rata basis all remaining unreserved
amounts in the Indemnification Escrow less an amount equal to the dollar amount
of all claims (i) that are then-payable liquidated claims, (ii) for which a
reserve established pursuant to paragraph (a) above then exists, or (iii) that
are still in process of resolution pursuant to paragraph (c) hereof. No new
claims for indemnification under Section 10.1 of the Merger Agreement may be
brought after the Termination Date. Notwithstanding the foregoing or anything in
this Agreement to the contrary, no claim seeking indemnification from the
Shareholders or the Indemnification Escrow may be brought after the date of
issuance of the first independent audit report with respect to the financial
statements of the Buyer (or Holdings, if the closing of the transactions
contemplated by the ADCS Merger Agreement shall occur on or before the Effective
Time) after the Effective Time if such claim is of a type expected to be
encountered in the course of an audit performed in accordance with generally
accepted auditing standards.
(e) After the Termination Date, (i) as each matter referred to in
paragraph (d)
<PAGE>
hereof is resolved or otherwise concluded and (ii) as each undisputed liquidated
claim under paragraph (a) which remains unliquidated as of the Termination Date
is liquidated, the Escrow Agent shall distribute to the Shareholders their
respective pro rata portion of the Escrow Fund then determined by the Escrow
Agent to be free of any rights of any Indemnitee.
(f) To the extent that the Indemnitees make a claim against the
Escrow Fund pursuant to this Agreement, and such claim is paid in shares of
Buyer Common Stock, then for purposes of such payment, the shares of Buyer
Common Stock (or Holdings' Common Stock, if the closing of the transactions
contemplated by the ADCS Merger shall occur on or before the Effective Time of
the Merger) shall be valued at the Average Closing Price.
6. Termination of Escrow.
(a) The Indemnification Escrow provided for hereunder shall terminate
upon written notification by Buyer to the Escrow Agent that the Shareholders'
indemnity obligation under Article X of the Merger Agreement has been satisfied
or waived by Buyer. Such written notification shall be provided by Buyer to the
Escrow Agent as soon as practicable after the date which is one year after
closing.
(b) Upon such notice, the Escrow Agent shall pay over the Escrow
Fund, if any, to the Shareholders as their respective interests may appear.
7. Escrow Agent.
(a) The Escrow Agent shall be entitled to receive compensation for
its services as Escrow Agent. Such compensation shall be paid by Buyer.
(b) The Escrow Agent's duties and responsibilities shall be limited
to those expressly set forth in this Escrow Agreement and in the Merger
Agreement, and it shall not be subject to, or obliged to recognize, any other
agreement between the parties hereto even though reference thereto may be made
herein; provided, however, that with the Escrow Agent's written consent, this
Escrow Agreement may be amended at any time or times by an instrument in writing
signed by or on behalf of Buyer, the Company (or after the merger, Surviving
Corporation), the Representative and the Escrow Agent. The Escrow Agent may
withhold such consent only if such amendment would adversely affect the rights
or liabilities of the Escrow Agent.
(c) The Escrow Agent is authorized, in its reasonable discretion, to
disregard any and all notices or instructions given by any of the parties hereto
or by any other person, firm or corporation, except only (i) such notices or
instructions as are herein or in the Merger Agreement specifically provided for,
and (ii) orders or process of any court with jurisdiction. If any property in
the Indemnification Escrow is at any time attached, garnished or levied upon or
under any court order or in case the payment, assignment, transfer, conveyance
or delivery of any such property shall be stayed or enjoined by any court order,
or in case any order, judgment or decree shall be made or entered by any court
affecting such property or any part thereof, then, and in any of such events the
Escrow Agent is authorized, in its sole discretion,
<PAGE>
to rely upon and comply with any such order, writ, judgment or decree which it
is advised by legal counsel of its own choosing is binding upon it; and if it
complies with any such order, writ, judgment or decree it shall not be liable to
any of the parties hereto or to any other person, firm or corporation by reason
of such compliance even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
(d) The Escrow Agent shall not be personally liable for any act taken
or omitted hereunder if taken or omitted by it in good faith. In taking any
action whatsoever hereunder, the Escrow Agent shall be protected in relying upon
any notice, paper or other document reasonably believed by it to be genuine, or
upon any evidence reasonably deemed by it to be sufficient. The Escrow Agent may
consult with counsel in connection with its duties hereunder and shall be fully
protected in any act taken, suffered or permitted by it in good faith in
accordance with the advice of counsel. It shall also be fully protected in
relying upon any written notice, demand, certificate or document which it in
good faith believes to be genuine. The Escrow Agent shall not be responsible for
the sufficiency or accuracy of the form, execution, validity or genuineness of
documents now or hereafter deposited hereunder, nor shall it be responsible or
liable in any respect on account of the identity, authority or rights of the
persons executing and delivering or purporting to execute or deliver any such
document.
(e) If the Escrow Agent believes it to be reasonably necessary to
consult with counsel concerning any of its duties in connection with this Escrow
Agreement, or in case it becomes involved in litigation on account of being
Escrow Agent hereunder or on account of having received property subject hereto,
then in either case, the Escrow Agent's costs, expenses, and reasonable
attorneys' fees shall be paid by Buyer.
(f) Buyer and Shareholders hereby indemnify and hold harmless the
Escrow Agent from and against any and all Losses which the Escrow Agent may
suffer or incur by reason of any action, claim or proceeding brought against the
Escrow Agent arising out of or relating in any way to this Agreement or any
transaction to which this Agreement relates unless such action, claim or
proceeding is the result of the gross negligence or willful misconduct of the
Escrow Agent, provided, however, that one-half of Buyer's obligation hereunder
shall be satisfied out of the Indemnification Escrow to the extent thereof.
(g) By its execution and delivery of this Escrow Agreement, the
Escrow Agent acknowledges that its terms and provisions are acceptable and it
agrees to carry out the provisions hereof and in the Merger Agreement on its
part to be performed.
8. Resignation, Removal of Escrow Agent. The Escrow Agent may at any time
resign by giving sixty (60) days' written notice of resignation to the
Representative and Buyer. The Representative and Buyer may jointly at any time
remove the Escrow Agent by giving written notice to the Escrow Agent. If the
Escrow Agent shall resign or be removed, a successor Escrow Agent, which shall
be a bank, trust company or other financial institution satisfactory to both
Buyer and the Representative, shall be appointed by written instrument executed
and delivered by both Buyer and the Representative to the Escrow Agent and to
such successor Escrow Agent and, upon the resignation or removal of the
predecessor Escrow Agent, the successor Escrow Agent shall, without any further
act, deed or conveyance, become vested with
<PAGE>
all the right, title and interest to all property held hereunder, of such
predecessor Escrow Agent; but nevertheless such predecessor Escrow Agent shall,
on the written request of the Representative, Buyer or such successor Escrow
Agent execute and deliver to such successor Escrow Agent an instrument
transferring to such successor Escrow Agent all right, title and interest
hereunder in and to the property in the Indemnification Escrow and all other
rights hereunder, of such predecessor Escrow Agent. If no successor Escrow Agent
has been appointed at the end of sixty (60) days after notice of resignation by
the Escrow Agent, the Escrow Agent hereunder may seek relief from a court of
competent jurisdiction, in interpleader proceedings in which Buyer and the
Representative shall be joined as parties.
9. Governing Agreement; Amendments. The Escrow Agent hereby acknowledges
receipt of a copy of the Merger Agreement. As between the Escrow Agent, on the
one hand, and the other parties hereto, on the other hand, this Escrow Agreement
together with the applicable provisions of the Merger Agreement constitutes the
entire agreement with respect to the subject matter herein. Representative, and
Buyer and the Company agree to make such amendments herein as may be necessary
to reconcile any conflict between the terms hereof and the Merger Agreement. No
change in, addition to, or waiver of the terms and conditions hereof shall be
binding upon any of the parties hereto unless approved in writing by the other
parties hereto.
10. Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by telecopy or mailed by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
- If to LSL, to:
Lawrence Semiconductor Laboratories, Inc.
2300 West Huntington Drive
Tempe, Arizona 85282
Attention: Lamonte H. Lawrence, President
Telecopy Number: (602) 464-5941
with a copy to:
Polese Pietzsch, Williams & Nolan, P.A.
2702 North Third Street Suite 3000
Phoenix, Arizona 85004-4607
Attention: Michael E. Pietzsch; Patricia E. Nolan
Telecopy Number: (602) 279-5107
- If to Buyer, the Company (or the Surviving Corporation),
or any other Indemnitee, to:
Advanced Technology Materials, Inc.
<PAGE>
7 Commerce Drive
Danbury, Connecticut 06810
Attention: Daniel P. Sharkey
Facsimile Number: (203) 792-8040
with a copy to:
Shipman & Goodwin, LLP
One American Row
Hartford, Connecticut 06103
Attention: Frank Marco, Esq.
Facsimile Number: (860) 251-5900
- If to Escrow Agent, to:
Security Trust Company
2525 East Camelback Road
Phoenix, Arizona, 85016
- If to Representative, to
Lamonte H. Lawrence
100 Sir Francis Drake Blvd.
Ross, California 94957
Facsimile Number: (415) 456-0949
and a copy to:
Polese, Pietzsch, Williams & Nolan, P.A.
2702 North Third Street, Suite 3000
Phoenix, Arizona 85004-4607
Attention: Michael E. Pietzsch; Patricia E. Nolan
Telecopy Number: (602) 279-5107
11. Binding Effect. This Escrow Agreement shall be binding upon and inure
to the benefit of the parties, their successors, heirs and assigns.
12. Counterparts. This Escrow Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
the day and year first above written.
Attest: ADVANCED TECHNOLOGY MATERIALS, INC.
/s/ Kathleen A. Ellis By: /s/ DANIEL P. SHARKEY
- ---------------------- ---------------------
Title: Vice President, Chief Financial Officer,
Treasurer
---------------------------------------
Attest: WELK ACQUISITION CORPORATION
/s/ Kathleen A. Ellis By: /s/ DANIEL P. SHARKEY
- ---------------------- ---------------------
Title: President, Treasurer, Secreatary
--------------------------------
Attest: ATMI, INC.
By: /s/ DANIEL P. SHARKEY
---------------------
Title: Treasurer, Secretary
--------------------
Attest: LAWRENCE SEMICONDUCTOR LABORATORIES, INC.
/s/ Kathleen A. Ellis By: /s/ LAMONTE H. LAWRENCE
- ----------------------- -----------------------
Title: President, CEO
---------------
Attest: SECURITY TRUST COMPANY
By: /s/
- ----------------------- ---------------------------
Title: President
------------------------
/s/ LAMONTE H. LAWRENCE
-----------------------
Lamonte H. Lawrence, solely in his capacity as
representative
<PAGE>
Exhibit (e)
CONSULTING AGREEMENT
CONSULTING AGREEMENT (the "Agreement") dated as of October 10, 1997, by and
between LAWRENCE SEMICONDUCTOR LABORATORIES, INC., an Arizona corporation (the
"Company") and LAWRENCE SEMICONDUCTOR INVESTMENTS, INC., an Arizona corporation
("Consultant").
WHEREAS, the Company has entered into that certain Agreement and Plan of
Merger (the "Merger Agreement") dated May 17, 1997 as amended by a First
Amendment thereto dated June 6, 1997 and a Second Amendment thereto dated July
30, 1997 among the Company, LAWRENCE SEMICONDUCTOR LABORATORIES MARKETING AND
SALES, INC., an Arizona corporation; ADVANCED TECHNOLOGY MATERIALS, INC., a
Delaware corporation; ATMI, INC. (f/k/a ATMI HOLDINGS, INC.), a Delaware
corporation; and WELK ACQUISITION CORPORATION, a Delaware corporation ("Buyer
Sub"), whereby the Company will be acquired by the Buyer by the Merger of the
Buyer Sub with and into the Company upon the terms set forth therein; and
WHEREAS, the Merger Agreement calls for the Company to enter into a
Consulting Agreement with Lamonte H. Lawrence ("Lawrence"); and
WHEREAS, Consultant has an exclusive arrangement with Lawrence regarding
his consulting services; and
WHEREAS, the Company and Consultant desire to enter into a consulting
arrangement on the terms set forth below. All capitalized terms not otherwise
defined in this Agreement shall have the meaning ascribed to each such term in
the Merger Agreement.
NOW, THEREFORE, the Company and Consultant agree as follows:
1. Termination of Employment Relationship. As of the Effective Date,
Consultant and the Company hereby agree that the employment of Lawrence by LSL
shall terminate and LSL's obligations under any employment agreement shall cease
at such time.
2. Retention as Consultant. The Company hereby retains Consultant as an
independent consultant for the three (3) year period ("Consulting Term") from
the Effective Time (the "Expiration Date"), or such earlier date on which this
Agreement is terminated as provided in Section 7, below. Consultant shall retain
the services of Lawrence to provide consulting services hereunder to the Company
throughout the term of this Agreement, unless the Company shall provide its
prior written consent given in its sole discretion, to Consultant regarding the
retention of the services of another expert in epitaxial processing of silicon
wafers to provide consulting services to the Company.
<PAGE>
3. Consulting Services. Consultant shall perform those consulting
services and work on such projects as Consultant and the Company may from time
to time mutually agree. Consultant's relationship with the Company shall be that
of an independent contractor and not that of an employee of the Company or any
affiliate and, except as otherwise provided herein, Consultant shall not be
eligible for any employee benefits offered by the Company, and the Company shall
neither make nor be liable for any deductions from Consultant's fees paid
hereunder for taxes, insurance, bonds or any other subscriptions of any kind.
The Company and Consultant hereby agree that all consulting services to be
performed under this Agreement shall be personal services of Lawrence.
During each of the three twelve-month periods of the Consulting Term,
Consultant shall render consulting services as mutually agreed by Consultant and
the Company.
4. Performance of Consulting Services. The nature of the consulting
services to be performed and the time and place of performance of such services
shall be at Mesa, Arizona, or as mutually agreed to by the Company and
Consultant. The Company agrees to provide Consultant such secretarial services
and office facilities as Consultant requires in rendering consulting services
hereunder. Consultant shall not be required to relocate in order to perform the
services required hereunder.
5. Consideration. In consideration of the consulting services to be
provided by Consultant hereunder, the Company agrees to pay Consultant, for
each year during the Consulting Term, a per diem of Two Thousand Eight Hundred
Eighty Dollars ($2,880.00) for a mutually agreed number of days per twelve-month
period under this Agreement, but in no event shall the total fee payable to
Consultant hereunder total less than Two Hundred Fifty Thousand Dollars
($250,000.00) for the first twelve-month period. No minimum shall be applicable
after the first twelve-month period. On or before the 10th day of each month,
Consultant shall submit an invoice for the prior month, indicating total hours
worked. The Company shall pay such invoice within 15 days of its receipt
thereof.
In addition, the Company agrees to take such action as may be necessary to
permit Consultant to become a participating employer in the Company's health
insurance or similar benefit program, but only for the benefit of Lamonte H.
Lawrence and his dependents.
6. Expenses. Consultant's reasonable expenses incurred in connection with
the perform ance of consulting services hereunder will be paid by the Company
or, if Consultant has paid such expenses, reimbursed by the Company upon receipt
of documentation of such expenses in accordance with the Company's standard
policies and procedures; provided that Consultant shall obtain preapproval from
the Company for any expenditures in excess of One Thousand Dollars ($1,000), and
the Company shall not be liable for reimbursement for such expenses where
Consultant did not obtain preapproval for such expenditures.
7. Termination. This Agreement shall be subject to termination as
follows:
(a) Consultant may terminate this Agreement at any time after one (1)
year from the Effective Time upon thirty (30) days' written notice to the
Company;
(b) The Company may terminate this Agreement only for "cause" which,
for
<PAGE>
purposes of this Agreement, shall mean (i) the continued failure by Consultant
or Lawrence to perform his duties with the Company (other than any such failure
resulting from his incapacity due to death or physical or mental incapacity),
after a written demand for substantial performance is delivered to Consultant or
Lawrence by the Company that identifies the manner in which the Company believes
that Consultant or Lawrence has not substantially performed his duties and
provides for a 30-day cure period, (ii) engaging by Consultant or Lawrence in
misconduct which is materially injurious to the Company, monetarily or
otherwise, after a written warning and a 30-day cure period, (iii) Consultant's
or Lawrence's final conviction for fraud or of any felony, or (iv) Consultant's
or Lawrence's use of illegal drugs and/or abuse of alcohol. Notwithstanding the
foregoing, Consultant shall not be deemed to have been terminated for cause
under clause (i) or (ii) unless and until there shall have been delivered to
Consultant a copy of a Notice of Termination from the Board of Directors of the
Company after reasonable notice to Consultant and an opportunity for Consultant
to be heard before the Board finding that, in the good faith opinion of the
Board, Consultant was guilty of conduct set forth above and specifying the
particulars thereof in detail.
(c) This Agreement, and the Company's obligations hereunder, shall
terminate immediately upon Consultant's or Lawrence's disability. For purposes
of this Agreement, the term "disability" shall be defined as a physical or
mental impairment of any type that prevents Consultant or Lawrence from
performing the essential functions of his employment under this Agreement for a
total period of ninety (90) days in any twelve (12) consecutive month period, as
reasonably determined by the Company.
(d) This Agreement shall terminate upon the death of Consultant or
Lawrence.
8. Effect of Termination. Upon termination of this Agreement pursuant to
Section 7 hereof, Sections 8, 9, and 10 shall survive, and Consultant shall be
entitled to receive all fees and expenses payable under Section 5 through the
date of termination of this Agreement.
9. Indemnification. The Company agrees to defend, indemnify and hold
Consultant and Consultant's estate harmless from and against all losses,
liabilities, damages, claims, demands, actions, and proceedings, and all costs
and expenses in connection therewith, including reasonable attorneys' fees,
arising out of or connected with the performance of Consultant's services under
this Agreement, except as may arise from Consultant's willful misconduct or
negligent acts or omissions.
10. Additional Instruments. The parties hereto shall execute any further
or additional instruments and they will perform any acts which may be reasonably
necessary or appropriate in order to effectuate and carry out the purposes of
this Agreement.
11. Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
12. Modification and Amendments. No provision of this Agreement may be
modified or amended except by a writing executed by the party sought to be
charged with such modification or amendment.
<PAGE>
13. Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by telecopy or mailed by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
If to Consultant, to:
Lawrence Semiconductor Investments, Inc.
100 Sir Francis Drake Blvd.
Ross, California 94957
Facsimile Number: (415) 456-0949
with a copy to:
Polese, Pietzsch, Williams & Nolan, P.A.
2702 North Third Street, Suite 3000
Phoenix, Arizona 85004-4607
Attention: Michael E. Pietzsch; Michael J. Tucker
Facsimile Number: (602) 279-5107
If to the Company, to:
Lawrence Semiconductor Laboratories, Inc.
c/o Advance Technology Materials, Inc.
7 Commerce Drive
Danbury, Connecticut 06810
Attention: Daniel P. Sharkey
Facsimile: (203) 792-8040
with a copy to:
Shipman & Goodwin, LLP
One American Row
Hartford, Connecticut 06103
Attention: Frank J. Marco, Esq.
Facsimile: (860) 251-5900
14. Entire Agreement; Assignment. This Agreement constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them, with respect to the subject
matter hereof, and shall not be assigned by operation of law or otherwise.
15. Binding Agreement. This Agreement shall inure to the benefit of and
shall be binding upon the Company and Consultant, and their respective
successors and assigns.
16. Severability.
<PAGE>
16.1 Severable. The provisions of this Agreement are severable and, in
the event that any provision hereof shall be found by any court to be
unenforceable, in whole or in part, the remainder of this Agreement shall
nonetheless remain enforceable and binding upon the Company and Consultant.
16.2 Enforcement. To the extent that any provision hereof is deemed
unenforceable by virtue of its scope in terms of area, business activity
prohibited and/or length of time, but could be enforceable by reducing the
scope of area, business activity prohibited or length of time, Consultant and
the Company agree that same shall be enforced to the fullest extent
permissible under the laws and public policies applied in the jurisdiction in
which enforcement is sought, and that the Company shall have the right, in
its sole discretion, to modify such invalid or unenforceable written
provision to the extent required to be valid and enforceable. Consultant
agrees to be bound by any promise or covenant imposing the maximum duty
permitted by law which is subsumed within the terms of any provision hereof,
as though it were separately articulated in and made a part of this
Agreement, that may result from striking or modifying any of the provisions
hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement the date first
written above.
CONSULTANT: LAWRENCE SEMICONDUCTOR INVESTMENTS, INC.,
an Arizona corporation
By /s/ LAMONTE H. LAWRENCE
Lamonte H. Lawrence, President
THE COMPANY: LAWRENCE SEMICONDUCTOR LABORATORIES, INC.,
an Arizona corporation
By /s/ LAMONTE H. LAWRENCE
Its President, CEO
<PAGE>
Exhibit (f)
NONCOMPETE AGREEMENT
This NONCOMPETE AGREEMENT (the "Agreement") is made as of this 10th day of
October, 1997, by and among ADVANCED TECHNOLOGY MATERIALS, INC., a Delaware
corporation ("Buyer"), WELK ACQUISITION CORPORATION, a Delaware corporation and
a wholly-owned subsidiary of Buyer ("Buyer Sub"), LAWRENCE SEMICONDUCTOR
LABORATORIES, INC., an Arizona corporation (the "Company"), and LAMONTE H.
LAWRENCE, an individual ("Shareholder").
WHEREAS, Shareholder is a shareholder, officer and director of the Company;
WHEREAS, Buyer is acquiring the Company through the merger of Buyer Sub
into the Company (the "Merger"), as provided in the Agreement and Plan of Merger
dated May 17, 1997 as amended by a First Amendment thereto dated June 6, 1997
and a Second Amendment thereto dated July 30, 1997, among Buyer, Buyer Sub,
ATMI, Inc. (f/k/a ATMI Holdings, Inc.), and the Company (the "Merger
Agreement");
WHEREAS, Shareholder has voted all of his shares of Company stock owned by
Shareholder in favor of the Merger;
WHEREAS, Company is in the business (the "LSL Business") of the chemical
vapor deposition of silicon wafers using epitaxial processes to meet product
specifications furnished by the Company's customers for certain applications, as
conducted on the date of this Agreement and during the term of that certain
Consulting Agreement of even date herewith between the Company and Lawrence
Investments, Inc., an Arizona corporation wholly owned by Shareholder (the
"Consulting Agreement");
WHEREAS, Shareholder is knowledgeable of, and has well-established goodwill
in and relationships and contacts with, the LSL Business;
WHEREAS, Buyer expects to receive, as a result of the Merger, all of the
assets, goodwill, trademarks, service marks, trade names and fictitious business
names of Company;
WHEREAS, Buyer has required that Shareholder enter into this Agreement as a
condition to Buyer and the Buyer Sub consummating the Merger.
NOW, THEREFORE, in order to induce Buyer and Buyer Sub to consummate the
Merger, Shareholder hereby agrees as follows:
1. Non-competition.
a. Except as provided in the following sentence, Shareholder agrees
that, for a period of the later of five (5) years from the date of this
Agreement and three (3) years from
<PAGE>
the expiration of the Consulting Agreement, Shareholder will not, directly or
indirectly, engage or participate in, prepare or set up, assist or have any
interest in any person, partnership, corporation, firm, association, or other
business organization, entity or enterprise (each, a "Person") (whether as an
employee, officer, director, partner, owner, consultant or otherwise) that
engage in any activities in competition with the LSL Business. Nothing herein
shall preclude Lawrence Semiconductor Research Laboratories, Inc. ("LSRL"), of
which Shareholder is the sole owner, from engaging in research and development,
or the chemical vapor deposition of silicon wafers using epitaxial processes;
provided, however, that the processing of wafers for LSRL's customers shall not
exceed 1000 wafers per specification without the prior written consent of the
Company, which consent shall not be unreasonably withheld.
b. Nothing in this Section shall be deemed to prohibit Shareholder
from pur chasing or owning equity securities of any issuer if those securities
constitute less than five percent (5%) of the class of equity securities and
that class is registered under the Securities Exchange Act of 1934.
2. Shareholder's Additional Covenants. Shareholder shall not, for a
period of five (5) years from the date of this Agreement, directly or
indirectly, hire, or induce or encourage any employee or consultant or group of
employees or consultants who are then employed or retained by Buyer or the
Company, to leave the employment of or terminate consultation with Buyer or the
Company or any of their subsidiaries, without the prior written consent of
Buyer.
3. Consideration. Shareholder understands and acknowledges that the
provisions of this Agreement are necessary to protect the legitimate business
interests of Buyer, Buyer Sub and the Company and are fair and reasonable for
numerous reasons, including Shareholder's receipt of shares of Buyer common
stock in connection with the Merger and the consideration provided in the
Consulting Agreement. In addition, as a result of Shareholder's prior position
with the Company, Shareholder has had, and will continue to have, access to
significant confidential, proprietary or trade secret information of the
Company, so that, if Shareholder were employed by a competitor of the Company,
there would be a substantial risk to the Company of Shareholder's use of its
confidential, proprietary or trade secret information.
4. Incorporation of Recitals. The recitals in this Agreement, including
the terms defined therein, are hereby incorporated as substantive terms and
provisions of this Agreement.
5. Injunctive Relief. Shareholder hereby acknowledges and agrees that it
would be impossible to compensate Buyer and the Company fully for damages
resulting from the breach or threatened breach of Sections 1 or 2 of this
Agreement and, accordingly, that Buyer and the Company shall be entitled to
temporary and permanent injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, to enforce such
Sections without the necessity of proving actual damages therewith. This
provision with respect to injunctive relief shall not, however, diminish Buyer's
right to claim and recover damages or enforce any other of its legal and/or
equitable rights or defenses.
6. Severable Provisions. The provisions of this Agreement are severable,
and if any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions to the extent enforceable, shall nevertheless be
binding and enforceable.
<PAGE>
7. Binding Agreement. This Agreement shall inure to the benefit of and
shall be binding upon Buyer, the Company and Shareholder, and their heirs,
successors and assigns, provided that Shareholder may not assign his rights or
obligations hereunder.
8. Descriptive Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9. Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties or any of them, with respect to the subject matter hereof. No
modification of this Agreement shall be valid unless made in writing and signed
by the parties hereto.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut without giving effect to
the provisions thereof relating to conflicts of law.
11. Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by telecopy or mailed by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
If to Shareholder, to:
Lamonte H. Lawrence
100 Sir Francis Drake Blvd.
Ross, California 94957
Facsimile Number: (415)456-0949
with a copy to:
Polese, Pietzsch, Williams & Nolan, P.A.
2702 North Third Street, Suite 3000
Phoenix, Arizona 85004-4607
Attention: Michael E. Pietzsch; Michael J. Tucker
Facsimile Number: (602) 279-5107
If to Buyer or the Company, to:
Advanced Technology Materials, Inc.
7 Commerce Drive
Danbury, CT 06810
Attention: Daniel P. Sharkey, VP
Facsimile Number: 203-792-8040
<PAGE>
with a copy to:
Shipman & Goodwin LLP
One American Row
Hartford, CT 06103
Attention: Frank J. Marco, Esq.
Facsimile Number: 860-251-5900
12. Attorneys' Fees. In the event that any party shall bring an action in
connection with the performance, breach or interpretation hereof, then the
prevailing party in such action as determined by the court or other body having
jurisdiction shall be entitled to recover from the losing party in such action,
as determined by the court or ether body having jurisdiction, all reasonable
costs and expense of litigation or arbitration, including reasonable attorney's
fees, court costs, costs of investigation and other costs reasonably related to
such proceeding.
13. Enforcement. To the extent that any provision hereof is deemed
unenforceable by virtue of its scope in terms of area, business activity
prohibited and/or length of time, but could be enforceable by reducing the scope
of area, business activity prohibited or length of time, Consultant and the
Company agree that same shall be enforced to the fullest extent permissible
under the laws and public policies applied in the jurisdiction in which
enforcement is sought, and that the Company shall have the right, in its sole
discretion, to modify such invalid or unenforceable written provision to the
extent required to be valid and enforceable. Consultant agrees to be bound by
any promise or covenant imposing the maximum duty permitted by law which is
subsumed within the terms of any provision hereof, as though it were separately
articulated in and made a part of this Agreement, that may result from striking
or modifying any of the provisions hereof.
<PAGE>
IN WITNESS WHEREOF, this Noncompete Agreement is executed as of this day
and year first above written.
SHAREHOLDER:
/s/ LAMONTE H. LAWRENCE
-------------------
Lamonte H. Lawrence
BUYER: ADVANCED TECHNOLOGY
MATERIALS, INC., a Delaware corporation
By /s/ DANIEL P. SHARKEY
---------------------
Its Vice President, Chief Financial Officer,
Treasurer
----------------------------------------
BUYER SUB: WELK ACQUISITION CORPORATION,
INC., a Delaware corporation
By /s/ DANIEL P. SHARKEY
---------------------
Its President, Treasurer, Secretary
-------------------------------
COMPANY: LAWRENCE SEMICONDUCTOR
LABORATORIES, INC., an Arizona
corporation
By /s/ LAMONTE H. LAWRENCE
-----------------------
Its Prsident, CEO
-----------------------
