Exhibit (d)
ESCROW AGREEMENT
AGREEMENT made as of this 10th day of October, 1997, among Advanced
Technology Materials, Inc., a Delaware corporation ("Buyer"), Xxxxxxxx
Semiconductor Laboratories, Inc., an Arizona corporation ("LSL"), Xxxx
Acquisition Corporation, a Delaware corporation ("the Company"), ATMI, Inc.
(f/k/a ATMI Holdings, Inc.), a Delaware corporation ("Holdings"), Security Trust
Company (the "Escrow Agent"), and Xxxxxxx X. Xxxxxxxx, solely in his capacity as
representative of the holders of LSL's common stock (the "Representative").
WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") between Buyer, the Company, Holdings and LSL dated as of May 17,
1997, as amended by that certain First Amendment to Agreement and Plan of Merger
dated as of the 6th day of June, 1997, and that certain Second Amendment to
Agreement and Plan of Merger dated as of the 30th day of July, 1997, a copy of
which has been delivered to the Escrow Agent, the Company is contemporaneously
with the execution of this Agreement being merged into LSL (the "Merger") and
the outstanding shares of LSL common stock are being exchanged for shares of
Buyer's common stock, or Holdings' common stock, if the closing of the
transactions contemplated by the Agreement and Plan of Merger and Exchange dated
April 7, 1997, by and among Buyer, Holdings, Advanced Delivery & Chemical
Systems Nevada, Inc., and others (the "ADCS Merger"), shall occur on or before
the Effective Time of the Merger (as defined in the Merger Agreement); and
WHEREAS, pursuant to the Merger Agreement, the Indemnification Escrow
Shares shall be deposited in escrow and subsequently distributed as contemplated
in Article III of the Merger Agreement and in this Agreement; and
WHEREAS, the holders of LSL's common stock ("Shareholders") have agreed to
indemnify Buyer, the Company and the other Indemnitees and provide for certain
other payments to Buyer to the extent and in the manner provided in the Merger
Agreement through an Indemnification Escrow to be established hereunder
consisting of a portion of the Purchase Price (as defined in the Merger
Agreement); and
WHEREAS, the Escrow Agent is willing to act as Escrow Agent hereunder.
NOW, THEREFORE, in order to induce Buyer, Holdings, and the Company to
consummate the transactions contemplated by the Merger Agreement and in
consideration of the premises and mutual covenants and agreements hereinafter
set forth, and of other good and valuable considerations, the parties hereto
hereby agree as follows:
1. Effectiveness of Agreement. The terms and provisions of this Agreement
shall not become effective unless and until the Company is merged into LSL in
accordance with the terms of the Merger Agreement. In the event that the Merger
is consummated in accordance with the Merger Agreement then, at the Effective
Time of the Merger (as defined in the Merger Agreement), the following terms
and provisions shall, without further act on the part of any of the parties
hereto, become effective and enforceable in accordance with their terms.
All capitalized terms not otherwise defined herein shall have the meaning
ascribed to each such term in the Merger Agreement.
2. Establishment of the Indemnification Escrow.
(a) At the Effective Time, Buyer shall deliver irrevocably to the
Escrow Agent certificates evidencing the Indemnification Escrow Shares. The
Indemnification Escrow shall include the Indemnification Escrow Shares so
deposited, any Escrow Adjustment, any interest, dividends or earnings thereon
from time to time held in the Indemnification Escrow by the Escrow Agent
pursuant to the terms hereof, and any additional shares of Buyer Common Stock of
which the Shareholders may acquire ownership by reason of a stock split, stock
dividend or other recapitalization of the Indemnification Escrow Shares, and any
securities which are issued in exchange for or in replacement of the
Indemnification Escrow Shares (such amounts being referred to collectively as
the "Escrow Fund"). The Escrow Fund shall be held and disbursed by the Escrow
Agent in escrow subject to the terms and conditions hereinafter set forth and
the terms and conditions set forth in the Merger Agreement. The Escrow Agent
agrees not to commingle the Escrow Fund with any other funds held by the Escrow
Agent.
(b) The parties hereto agree that the Shareholders shall be treated
as the owners of the shares of Buyer Common Stock comprising the Escrow Fund,
excluding any funds disbursed pursuant to the provisions hereof or the Merger
Agreement, and shall file all of their respective returns, reports and similar
information in a manner consistent with such ownership. The Representative, on
behalf of the Shareholders, shall be responsible for any tax liability and tax
reporting obligations attributable to the placement of the Indemnification
Escrow Shares in the Escrow Fund and the payment of any interest or other
amounts payable with respect to the Escrow Fund. The Representative, on behalf
of the Shareholders, agrees to provide the Escrow Agent with executed Forms W-9
or W-8, as applicable.
3. Representative of the Shareholders.
From and after the establishment of the Indemnification Escrow, as
provided in Section 2 hereof, the Shareholders shall be represented hereunder by
the Representative. In the event that the Representative shall die or resign or
otherwise terminate his status as such, his successor shall be selected by the
vote or written consent of not less than a majority in interest of the
Shareholders. The Representative is authorized to act on behalf of the
Shareholders as provided in this Agreement and the Merger Agreement without
further authority from the Shareholders. The Representative shall not be
entitled to be compensated for acting as Representative hereunder.
Notwithstanding anything herein to the contrary, the appointment or selection of
or granting of authority to the Representative shall not impair the right of any
Shareholder to exercise such Shareholder's right to vote any share of Buyer
Common Stock (or Holdings' Common Stock, if the closing of the transactions
contemplated by the ADCS Merger shall occur on or before the Effective Time of
the Merger) owned by such Shareholder.
4. Investment of Escrow Funds. The Escrow Agent shall, except to the
extent that amounts in the Indemnification Escrow are required to satisfy a
claim for payment, invest all cash dividends included in the Escrow Fund in
Authorized Investments. "Authorized Investments" shall mean (a) direct
obligations of the United States of America (including certificates or other
instruments evidencing ownership interests in such obligations) or obligations
the timely payment of the principal and interest on which are fully guaranteed
by the United States of America or any daily or weekly withdrawal money market
fund investing solely in such obligations or interest bearing demand or time
deposits and banker's acceptance in any bank (including the Escrow Agent and its
affiliates) which is rated one of the two highest rating categories by Xxxxx'x
or Standard & Poors. The Escrow Agent shall hold all monies collected on
account of interest earnings in the Indemnification Escrow and such earnings
shall become part of the Escrow Fund.
5. Claims Against the Escrow Fund.
(a) If and whenever Buyer, acting on its behalf or on behalf of the
Company or any other Indemnitee, shall claim indemnification or other payment in
respect of a liquidated claim to be satisfied out of the Indemnification Escrow
pursuant to the Merger Agreement, Buyer shall promptly send written notice of
the same to the Escrow Agent and the Representative (or his successor, as
provided above). Such notice shall state the basis for such claim including a
brief description of the facts upon which such claim is based and the amount
thereof. In the event of an unliquidated claim pursuant to the Merger Agreement,
Buyer shall provide written notice to the Representative and the Escrow Agent of
the unliquidated claim, including a brief description of the facts upon which
such claim is based and a demand for a reserve amount to be created in respect
of such claim. Any claim that is unliquidated shall not be paid, but the Escrow
Agent shall set aside Buyer Common Stock valued at the Average Closing Price
equal to such claim within the Escrow Fund to address such claim until such
claim is fully liquidated. If the Representative shall object to any such claim,
he shall send written notice of his objection to the Escrow Agent within thirty
(30) days after Buyer's delivery of its notice as aforesaid. If no objection to
such claim shall have been received by the Escrow Agent within thirty (30) days
after delivery to it of Buyer's notice, the Representative, on behalf of the
Shareholders, shall be deemed to have acknowledged the correctness of such claim
for the full amount thereof and the Escrow Agent shall transfer to Buyer as
provided in the following sentence on behalf of the claiming party out of the
Indemnification Escrow an amount (pro rata from the account of each Shareholder)
equal to the amount of such claim. Transfer to Buyer of the funds shall be made,
in the case of a liquidated claim, promptly following such thirty-day period,
or, in the case of an unliquidated claim, promptly following the date upon which
the claim is fully liquidated. For the purpose of this paragraph (a), the term
"delivery" shall mean, in the case of notices sent by mail, the time at which
such notice is mailed, in the case of notices delivered personally, the time at
which such notice is delivered and, in the case of notices sent by telecopy, the
time at which such notice is sent. Adjustments pursuant to Section 3.5 of the
Merger Agreement shall be determined, and paid in accordance with the procedures
set forth in the Merger Agreement.
(b) Notwithstanding the foregoing, no amount will be paid pursuant to
a written claim notice for indemnification pursuant to Article X of the Merger
Agreement (with respect to either a liquidated or unliquidated claim) unless,
and then only to the extent that, the
aggregate amount of Losses sustained by Indemnitees as a group and as to which
written claim notices have been given by Buyer to the Escrow Agent exceeds Two
Hundred Fifty Thousand Dollars ($250,000) (taking into account any reduction of
prior noticed claims resulting from the dispute resolution procedures of
paragraph (c) below).
(c) If the Representative shall timely notify the Escrow Agent in
writing of his good faith objection to a claim of indemnification or other
payment or a demand for the creation of reserve for any unliquidated claim (or
the amount thereof), the Escrow Agent shall hold the disputed amount of funds in
the Indemnification Escrow until the rights of the Shareholders and the claiming
party or parties with respect thereto have been agreed upon between the
Representative and the claiming party or parties. In the event such an agreement
is reached, the claiming party or parties shall request Buyer to provide to the
Escrow Agent a written notice signed by the Representative acknowledging that
such agreement has been reached and authorizing the Escrow Agent to release
funds having a value equal to the agreed amount specified in the notice in the
same manner set forth for undisputed claims as provided in paragraph (a) hereof.
If no such agreement has been reached, either the claiming party or parties or
the Representative may, not earlier than thirty (30) days after the date of the
initial claim notice, submit the dispute to confidential, binding arbitration in
New York, New York, before a panel of three (3) arbitrators, one (1) each to be
selected by the Buyer and the Representative, and the third to be selected by
the other two (2) arbitrators pursuant to the procedures and rules for
commercial arbitration of the American Arbitration Association. The Escrow Agent
may rely on the order or other determination of any such arbitrators. If such
arbitrators shall determine that any part of the Indemnification Escrow is to be
delivered to a claiming party or parties or is to be set aside in a reserve for
any unliquidated claim, the Escrow Agent shall promptly following receipt of a
copy of such determination establish such reserve or deliver to such claiming
party or parties the lesser of (i) the amount of the claim or claims as awarded
to be satisfied, subject to the limitation set forth in paragraph (a) above, or
(ii) the entire amount remaining in the Indemnification Escrow. Any disputed
amounts not awarded shall promptly be transferred to the unreserved portion of
the Indemnification Escrow. Buyer and the Representative shall bear their
respective costs and expenses of any such arbitration.
(d) On and after the Termination Date, the Escrow Agent shall
distribute to the Shareholders on a pro rata basis all remaining unreserved
amounts in the Indemnification Escrow less an amount equal to the dollar amount
of all claims (i) that are then-payable liquidated claims, (ii) for which a
reserve established pursuant to paragraph (a) above then exists, or (iii) that
are still in process of resolution pursuant to paragraph (c) hereof. No new
claims for indemnification under Section 10.1 of the Merger Agreement may be
brought after the Termination Date. Notwithstanding the foregoing or anything in
this Agreement to the contrary, no claim seeking indemnification from the
Shareholders or the Indemnification Escrow may be brought after the date of
issuance of the first independent audit report with respect to the financial
statements of the Buyer (or Holdings, if the closing of the transactions
contemplated by the ADCS Merger Agreement shall occur on or before the Effective
Time) after the Effective Time if such claim is of a type expected to be
encountered in the course of an audit performed in accordance with generally
accepted auditing standards.
(e) After the Termination Date, (i) as each matter referred to in
paragraph (d)
hereof is resolved or otherwise concluded and (ii) as each undisputed liquidated
claim under paragraph (a) which remains unliquidated as of the Termination Date
is liquidated, the Escrow Agent shall distribute to the Shareholders their
respective pro rata portion of the Escrow Fund then determined by the Escrow
Agent to be free of any rights of any Indemnitee.
(f) To the extent that the Indemnitees make a claim against the
Escrow Fund pursuant to this Agreement, and such claim is paid in shares of
Buyer Common Stock, then for purposes of such payment, the shares of Buyer
Common Stock (or Holdings' Common Stock, if the closing of the transactions
contemplated by the ADCS Merger shall occur on or before the Effective Time of
the Merger) shall be valued at the Average Closing Price.
6. Termination of Escrow.
(a) The Indemnification Escrow provided for hereunder shall terminate
upon written notification by Buyer to the Escrow Agent that the Shareholders'
indemnity obligation under Article X of the Merger Agreement has been satisfied
or waived by Buyer. Such written notification shall be provided by Buyer to the
Escrow Agent as soon as practicable after the date which is one year after
closing.
(b) Upon such notice, the Escrow Agent shall pay over the Escrow
Fund, if any, to the Shareholders as their respective interests may appear.
7. Escrow Agent.
(a) The Escrow Agent shall be entitled to receive compensation for
its services as Escrow Agent. Such compensation shall be paid by Buyer.
(b) The Escrow Agent's duties and responsibilities shall be limited
to those expressly set forth in this Escrow Agreement and in the Merger
Agreement, and it shall not be subject to, or obliged to recognize, any other
agreement between the parties hereto even though reference thereto may be made
herein; provided, however, that with the Escrow Agent's written consent, this
Escrow Agreement may be amended at any time or times by an instrument in writing
signed by or on behalf of Buyer, the Company (or after the merger, Surviving
Corporation), the Representative and the Escrow Agent. The Escrow Agent may
withhold such consent only if such amendment would adversely affect the rights
or liabilities of the Escrow Agent.
(c) The Escrow Agent is authorized, in its reasonable discretion, to
disregard any and all notices or instructions given by any of the parties hereto
or by any other person, firm or corporation, except only (i) such notices or
instructions as are herein or in the Merger Agreement specifically provided for,
and (ii) orders or process of any court with jurisdiction. If any property in
the Indemnification Escrow is at any time attached, garnished or levied upon or
under any court order or in case the payment, assignment, transfer, conveyance
or delivery of any such property shall be stayed or enjoined by any court order,
or in case any order, judgment or decree shall be made or entered by any court
affecting such property or any part thereof, then, and in any of such events the
Escrow Agent is authorized, in its sole discretion,
to rely upon and comply with any such order, writ, judgment or decree which it
is advised by legal counsel of its own choosing is binding upon it; and if it
complies with any such order, writ, judgment or decree it shall not be liable to
any of the parties hereto or to any other person, firm or corporation by reason
of such compliance even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
(d) The Escrow Agent shall not be personally liable for any act taken
or omitted hereunder if taken or omitted by it in good faith. In taking any
action whatsoever hereunder, the Escrow Agent shall be protected in relying upon
any notice, paper or other document reasonably believed by it to be genuine, or
upon any evidence reasonably deemed by it to be sufficient. The Escrow Agent may
consult with counsel in connection with its duties hereunder and shall be fully
protected in any act taken, suffered or permitted by it in good faith in
accordance with the advice of counsel. It shall also be fully protected in
relying upon any written notice, demand, certificate or document which it in
good faith believes to be genuine. The Escrow Agent shall not be responsible for
the sufficiency or accuracy of the form, execution, validity or genuineness of
documents now or hereafter deposited hereunder, nor shall it be responsible or
liable in any respect on account of the identity, authority or rights of the
persons executing and delivering or purporting to execute or deliver any such
document.
(e) If the Escrow Agent believes it to be reasonably necessary to
consult with counsel concerning any of its duties in connection with this Escrow
Agreement, or in case it becomes involved in litigation on account of being
Escrow Agent hereunder or on account of having received property subject hereto,
then in either case, the Escrow Agent's costs, expenses, and reasonable
attorneys' fees shall be paid by Buyer.
(f) Buyer and Shareholders hereby indemnify and hold harmless the
Escrow Agent from and against any and all Losses which the Escrow Agent may
suffer or incur by reason of any action, claim or proceeding brought against the
Escrow Agent arising out of or relating in any way to this Agreement or any
transaction to which this Agreement relates unless such action, claim or
proceeding is the result of the gross negligence or willful misconduct of the
Escrow Agent, provided, however, that one-half of Buyer's obligation hereunder
shall be satisfied out of the Indemnification Escrow to the extent thereof.
(g) By its execution and delivery of this Escrow Agreement, the
Escrow Agent acknowledges that its terms and provisions are acceptable and it
agrees to carry out the provisions hereof and in the Merger Agreement on its
part to be performed.
8. Resignation, Removal of Escrow Agent. The Escrow Agent may at any time
resign by giving sixty (60) days' written notice of resignation to the
Representative and Buyer. The Representative and Buyer may jointly at any time
remove the Escrow Agent by giving written notice to the Escrow Agent. If the
Escrow Agent shall resign or be removed, a successor Escrow Agent, which shall
be a bank, trust company or other financial institution satisfactory to both
Buyer and the Representative, shall be appointed by written instrument executed
and delivered by both Buyer and the Representative to the Escrow Agent and to
such successor Escrow Agent and, upon the resignation or removal of the
predecessor Escrow Agent, the successor Escrow Agent shall, without any further
act, deed or conveyance, become vested with
all the right, title and interest to all property held hereunder, of such
predecessor Escrow Agent; but nevertheless such predecessor Escrow Agent shall,
on the written request of the Representative, Buyer or such successor Escrow
Agent execute and deliver to such successor Escrow Agent an instrument
transferring to such successor Escrow Agent all right, title and interest
hereunder in and to the property in the Indemnification Escrow and all other
rights hereunder, of such predecessor Escrow Agent. If no successor Escrow Agent
has been appointed at the end of sixty (60) days after notice of resignation by
the Escrow Agent, the Escrow Agent hereunder may seek relief from a court of
competent jurisdiction, in interpleader proceedings in which Buyer and the
Representative shall be joined as parties.
9. Governing Agreement; Amendments. The Escrow Agent hereby acknowledges
receipt of a copy of the Merger Agreement. As between the Escrow Agent, on the
one hand, and the other parties hereto, on the other hand, this Escrow Agreement
together with the applicable provisions of the Merger Agreement constitutes the
entire agreement with respect to the subject matter herein. Representative, and
Buyer and the Company agree to make such amendments herein as may be necessary
to reconcile any conflict between the terms hereof and the Merger Agreement. No
change in, addition to, or waiver of the terms and conditions hereof shall be
binding upon any of the parties hereto unless approved in writing by the other
parties hereto.
10. Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by telecopy or mailed by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
- If to LSL, to:
Xxxxxxxx Semiconductor Laboratories, Inc.
0000 Xxxx Xxxxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, President
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx, Xxxxxxxx & Xxxxx, P.A.
0000 Xxxxx Xxxxx Xxxxxx Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx; Xxxxxxxx X. Xxxxx
Telecopy Number: (000) 000-0000
- If to Buyer, the Company (or the Surviving Corporation),
or any other Indemnitee, to:
Advanced Technology Materials, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile Number: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxxx, LLP
Xxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile Number: (000) 000-0000
- If to Escrow Agent, to:
Security Trust Company
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx, 00000
- If to Representative, to
Xxxxxxx X. Xxxxxxxx
000 Xxx Xxxxxxx Xxxxx Xxxx.
Xxxx, Xxxxxxxxxx 00000
Facsimile Number: (000) 000-0000
and a copy to:
Polese, Pietzsch, Xxxxxxxx & Xxxxx, P.A.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx; Xxxxxxxx X. Xxxxx
Telecopy Number: (000) 000-0000
11. Binding Effect. This Escrow Agreement shall be binding upon and inure
to the benefit of the parties, their successors, heirs and assigns.
12. Counterparts. This Escrow Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
the day and year first above written.
Attest: ADVANCED TECHNOLOGY MATERIALS, INC.
/s/ Xxxxxxxx X. Xxxxx By: /s/ XXXXXX X. XXXXXXX
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Title: Vice President, Chief Financial Officer,
Treasurer
---------------------------------------
Attest: XXXX ACQUISITION CORPORATION
/s/ Xxxxxxxx X. Xxxxx By: /s/ XXXXXX X. XXXXXXX
---------------------- ---------------------
Title: President, Treasurer, Secreatary
--------------------------------
Attest: ATMI, INC.
By: /s/ XXXXXX X. XXXXXXX
---------------------
Title: Treasurer, Secretary
--------------------
Attest: XXXXXXXX SEMICONDUCTOR LABORATORIES, INC.
/s/ Xxxxxxxx X. Xxxxx By: /s/ XXXXXXX X. XXXXXXXX
----------------------- -----------------------
Title: President, CEO
---------------
Attest: SECURITY TRUST COMPANY
By: /s/
----------------------- ---------------------------
Title: President
------------------------
/s/ XXXXXXX X. XXXXXXXX
-----------------------
Xxxxxxx X. Xxxxxxxx, solely in his capacity as
representative
