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