Exhibit 10.15
================================================================================
CONSOLIDATION AGREEMENT
by and among
ENTEGRIS, INC.
a Minnesota corporation,
FLUOROWARE, INC.
a Minnesota corporation,
and
EMPAK, INC.
a Minnesota corporation,
June 1, 1999
================================================================================
TABLE OF CONTENTS
ARTICLE I. ORGANIZATION MATTERS...........................................................................2
1.1 Formation of the Company............................................................2
1.2 Management..........................................................................2
1.3 Board/Strategic Integration Team....................................................3
ARTICLE II. THE EXCHANGE...................................................................................3
2.1 Exchange of Shares by the Fluoroware Shareholders...................................3
2.2 Exchange of Shares by the Empak Shareholders........................................3
2.3 Reissuance of Warrants, Options, etc................................................4
2.4 Fractional Shares...................................................................4
2.5 The Closing.........................................................................4
2.6 Shareholder Agreements..............................................................5
2.7 Designation of Shareholder Representatives..........................................5
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF
FLUOROWARE.....................................................................................5
3.1 Incorporation and Corporate Power...................................................6
3.2 Authority...........................................................................6
3.3 No Breach...........................................................................6
3.4 Governmental Authorities; Consents..................................................6
3.5 Capital Stock.......................................................................7
3.6 Financial Statements................................................................7
3.7 Absence of Undisclosed Liabilities..................................................7
3.8 No Material Adverse Changes.........................................................8
3.9 Absence of Certain Developments.....................................................8
3.10 Tax Matters.........................................................................9
3.11 Contracts and Commitments..........................................................11
3.12 No Defaults........................................................................14
3.13 Intellectual Property Rights.......................................................14
3.14 Litigation.........................................................................16
3.15 Employees..........................................................................16
3.16 Employee Benefit Plans.............................................................16
3.17 Customers and Suppliers............................................................18
3.18 Compliance with Laws; Permits......................................................18
3.19 Brokerage..........................................................................18
3.20 Inventory..........................................................................19
-i-
3.21 Accounts and Notes Receivable......................................................19
3.22 Affiliate Transactions.............................................................19
3.23 Real Estate........................................................................19
3.24 Condition of Assets................................................................20
3.25 Environmental Matters..............................................................21
3.26 Year 2000 Compliance...............................................................24
3.27 Warranties.........................................................................25
3.28 Disclosure.........................................................................25
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF EMPAK ......................................................26
4.1 Incorporation; Corporate Power; Subsidiary.........................................26
4.2 Authority..........................................................................26
4.3 No Breach..........................................................................26
4.4 Governmental Authorities; Consents.................................................27
4.5 Capital Stock......................................................................27
4.6 Financial Statements...............................................................27
4.7 Absence of Undisclosed Liabilities.................................................28
4.8 No Material Adverse Changes........................................................28
4.9 Absence of Certain Developments....................................................28
4.10 Tax Matters........................................................................29
4.11 Contracts and Commitments..........................................................31
4.12 No Defaults........................................................................33
4.13 Intellectual Property Rights.......................................................34
4.14 Litigation.........................................................................35
4.15 Employees..........................................................................36
4.16 Employee Benefit Plans.............................................................36
4.17 Customers and Suppliers............................................................37
4.18 Compliance with Laws; Permits......................................................38
4.19 Brokerage..........................................................................38
4.20 Inventory..........................................................................38
4.21 Accounts and Notes Receivable......................................................38
4.22 Affiliate Transactions.............................................................39
4.23 Real Estate........................................................................39
4.24 Conditions of Assets...............................................................40
4.25 Environmental Matters..............................................................40
4.26 Year 2000 Compliance...............................................................44
4.27 Warranties.........................................................................44
4.28 Disclosure.........................................................................45
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................................45
-ii-
5.1 Incorporation and Corporate Power..................................................45
5.2 Execution, Delivery; Valid and Binding Agreement...................................45
5.3 Validity of the Company Shares.....................................................46
5.4 No Breach..........................................................................46
5.5 Governmental Authorities; Consents.................................................46
5.6 Brokerage........................................................................46
ARTICLE VI. COVENANTS OF EMPAK AND FLUOROWARE.............................................................46
6.1 Conduct of the Business............................................................46
6.2 Access to Books and Records........................................................48
6.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filing...........................................................49
6.4 Other Regulatory Filings...........................................................49
6.5 Conditions.........................................................................49
6.6 No Negotiations....................................................................49
6.7 Tax and Accounting Treatment.......................................................50
ARTICLE VII. CONDITIONS TO CLOSING.........................................................................50
7.1 Conditions to the Fluoroware Shareholders' Obligations.............................50
7.2 Conditions to the Empak Shareholders' Obligations..................................52
ARTICLE VIII. TERMINATION...................................................................................55
8.1 Termination........................................................................55
8.2 Effect of Termination..............................................................55
ARTICLE IX. SURVIVAL; OFFSET RIGHTS.......................................................................55
9.1 Survival...........................................................................55
9.2 Indemnification Commitments........................................................56
9.3 Limitations on Indemnification Commitments.........................................56
9.4 Insurance Proceeds.................................................................58
9.5 Claims Procedure...................................................................58
ARTICLE X. MISCELLANEOUS.................................................................................59
10.1 Press Releases and Announcements...................................................59
10.2 Expenses...........................................................................60
10.3 Amendment and Waiver...............................................................60
-iii-
10.4 Notices............................................................................60
10.5 Assignment.........................................................................61
10.6 Severability.......................................................................61
10.7 Complete Agreement.................................................................61
10.8 Counterparts.......................................................................61
10.9 Governing Law......................................................................61
List of Schedules and Exhibits
Schedule A-1 - Fluoroware Shareholder List
Schedule A-2 - Empak Shareholder List
Exhibit A - Shareholder Agreement
Exhibit B - Legal Opinion - Empak's Legal Counsel
Exhibit C - Legal Opinion - Fluoroware's Legal Counsel
-iv-
CONSOLIDATION AGREEMENT
-----------------------
This Consolidation Agreement, dated as June 1, 1999, is made
and entered into by and among ENTEGRIS, INC., a Minnesota corporation (the
"Company"), FLUOROWARE, INC., a Minnesota corporation ("Fluoroware"), and EMPAK,
INC., a Minnesota corporation ("Empak").
WHEREAS, the persons listed on schedule A-1 to this agreement
(the "Fluoroware Shareholders") are the record and beneficial owners of all of
the outstanding shares of capital stock of Fluoroware; and
WHEREAS, the persons listed on schedule A-2 to this agreement
(the "Empak Shareholders") are the record and beneficial owners of all of the
outstanding shares of capital stock of Empak; and
WHEREAS, the Company is a newly-organized corporation which
has been established for the purposes of facilitating the consolidation of the
business operations of Fluoroware and Empak; and
WHEREAS, Fluoroware Shareholders and the Empak Shareholders
(collectively, the "Shareholders") intend to transfer their respective equity
interests in Fluoroware and Empak to the Company, on the terms and subject to
the conditions set forth in this agreement, in exchange for all of the
outstanding shares of the Company's common stock (the "Exchange") so that the
Shareholders will be in "control" of the Company immediately after the Exchange;
and
WHEREAS, the Board of Directors of each of Fluoroware and
Empak has determined that it is advisable and in the respective best interests
of Fluoroware and Empak and their shareholders that the Exchange take place on
the terms set forth in this agreement; and
WHEREAS, for federal income tax purposes, it is intended that
the Exchange qualify as a tax-free transfer of property by the Shareholders
under the provisions of section 351 of the United States Internal Revenue Code
of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended by Fluoroware
and Empak that the Exchange be accounted for as a "pooling of interests."
NOW, THEREFORE, in consideration of the premises, the
respective representations, warranties, covenants and commitments of the parties
set forth in this agreement and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Empak, Fluoroware and the
Company agree as follows:
ARTICLE I
ORGANIZATION MATTERS
1.1 Formation of the Company. Each of Empak and Fluoroware
acknowledges that the Company was incorporated as a Minnesota corporation for
the purposes of facilitating the Exchange and of acting as a holding company
which will initially own and operate Fluoroware and Empak as wholly-owned
subsidiaries. Each of Empak and Fluoroware will deliver a copy of the articles
of incorporation and bylaws of the Company to their respective Shareholders
prior to the completion of the Exchange.
1.2 Management.
(a) Immediately following the completion of the Exchange, the
Board of Directors of the Company shall consist of up to nine (9) persons, three
(3) of whom shall be designated by Fluoroware's current Board of Directors,
three (3) of whom shall be designated by Empak's current Board of Directors, and
up to three (3) of whom shall be independent persons who are initially
designated by the mutual agreement of the other members of the Company's Board
of Directors. The initial Board members shall use their best efforts to mutually
agree upon and select the three (3) independent directors by September 1, 1999.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ will serve as the Chairman of the Board of Directors for an
initial term of one (1) year, and the Board of Directors will establish
appropriate audit and compensation committees.
(b) Immediately following the completion of the Exchange and
for a period of at least one (1) year from the Closing Date, the executive
officers of the Company shall be as follows:
Position Name
-------- ----
Chief Executive Officer/ ▇▇▇▇ ▇▇▇▇▇
President, Secretary
Executive Vice President/ Del ▇▇▇▇▇▇
Operations and Integration
(c) Immediately following the completion of the Exchange, the
Board of Directors of each of Fluoroware and Empak shall be changed to be
identical to the Board of Directors of the Company, and the executive officers
of each of Fluoroware and Empak shall be the respective executive officers of
each of such corporations as of the Closing Date.
(d) Subject to sections 1.2(a) and (b), the persons who
constitute the Boards of Directors and executive officers of the Company, Empak
and Fluoroware may be changed from time to time in accordance with each
corporation's governing instruments and applicable law.
-2-
1.3 Board/Strategic Integration Team. A Board Integration
Team, initially consisting of ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ and Del
▇▇▇▇▇▇, shall oversee the integration of the operations and businesses of Empak
and Fluoroware for a period of at least one (1) year following the Closing Date.
The Board Integration Team shall be responsible for selecting appropriate
representatives of Fluoroware and Empak to constitute a Strategic Integration
Team to implement a comprehensive plan for the integration of all aspects of the
businesses of the Company.
ARTICLE II
THE EXCHANGE
2.1 Exchange of Shares by the Fluoroware Shareholders.
(a) Fluoroware shall use its best efforts to cause each of the
Fluoroware Shareholders to assign, transfer and deliver to the Company, on the
Closing Date, the certificates evidencing that number of shares of Fluoroware
capital stock (the "Fluoroware Shares") owned by such Fluoroware Shareholder and
set forth after such Fluoroware Shareholder's name on schedule A-1, and that
such certificates shall be properly endorsed for transfer on the stock registry
of Fluoroware.
(b) The Company shall issue and deliver up to 1.1579232 shares
of the Company's common stock ("Company Shares") to each of the Fluoroware
shareholders who tender their Fluoroware Shares to the Company pursuant to this
agreement, which Company Shares shall, subject to the provisions of article IX,
be delivered at the following times:
(i) On the Closing Date, the Company shall issue and
deliver to such Fluoroware Shareholders 1.1000270
Company Shares for each Fluoroware Share owned by
such Fluoroware Shareholder and delivered to the
Company on the Closing Date; and
(ii) On the first anniversary of the Closing Date,
the Company shall also issue and deliver to such
Fluoroware Shareholders, for each Fluoroware Share
owned by such Fluoroware Shareholder and delivered to
the Company on the Closing Date, that number of
additional Company Shares (the "Fluoroware Holdback
Shares") as is equal to (A) .0578962, multiplied by
(B) the Fluoroware Adjustment as determined pursuant
to section 9.3(e).
2.2 Exchange of Shares by the Empak Shareholders.
(a) Empak shall use its best efforts to cause each of the
Empak Shareholders to assign, transfer and deliver to the
Company, on the Closing Date, the certificates evidencing that
number of shares of Empak capital stock (the "Empak Shares")
owned by such Empak Shareholder and set forth after such Empak
Shareholder's name on
-3-
schedule A-2, and that such certificates shall be properly
endorsed for transfer on the stock registry of Empak.
(b) The Company shall issue and deliver up to 1.8318759
Company Shares to each of the Empak shareholders who tender
their Empak Shares to the Company pursuant to this agreement,
which Company Shares shall, subject to the provisions of
article IX, be delivered at the following times:
(i) On the Closing Date, the Company shall issue and
deliver to such Empak Shareholders 1.7402821 Company
Shares for each Empak Share owned by such Empak
Shareholder and delivered to the Company on the
Closing Date; and
(ii) On the first anniversary of the Closing Date,
the Company shall also issue and deliver to such
Empak shareholders, for each Empak Share owned by
such Empak Shareholder and delivered to the Company
on the Closing Date, that number of additional
Company Shares (the "Empak Holdback Shares") as is
equal to (A) .0915938, multiplied by (B) the Empak
Adjustment, as determined pursuant to section 9.3(e).
2.3 Reissuance of Warrants, Options, etc. On the Closing Date,
the Board of Directors of the Company shall offer to exchange warrants or
options of the Company which reflect the conversion ratios set forth in sections
2.1 and 2.2 for all outstanding warrants, options or other rights to acquire
Fluoroware Shares or Empak Shares that are issued and outstanding immediately
prior to the Closing Date, which substitute warrants and options shall have
terms (including exercise prices (appropriately adjusted to reflect the
conversion ratios set forth in sections 2.1 and 2.2), vesting schedules and
exercise periods) that are comparable to the warrants or options being exchanged
and shall include such holdback and other provisions as shall be permitted or
required to comply with applicable rules relating to "pooling of interests" and
the continuation of the employee incentive stock option treatment for those
options which currently qualify as incentive stock options .
2.4 Fractional Shares. No certificates or scrip representing
fractional Company Shares shall be issued to any of the Shareholders upon the
Exchange, and the number of Company Shares issuable to any Shareholder pursuant
to this article II shall be rounded up or down to the nearest whole number.
2.5 The Closing. The closing of the Exchange and the other
transactions contemplated by this agreement (the "Closing") will take place at
1:00 p.m. at the Fluoroware corporate offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on June 7, 1999 (the "Closing Date"), or at such
other date and time as the chief executive officers of Fluoroware and
-4-
Empak shall agree upon (which shall be at least three (3) business days after
delivery of written notice of the Closing Date to the Shareholders).
2.6 Shareholder Agreements. Prior to the Closing Date,
Fluoroware and Empak shall use their best efforts to obtain from their
respective Shareholders executed agreements (the "Shareholder Agreements")
pursuant to which the Shareholders shall (a) make certain investment
representations relative to Company Shares, (b) make certain other
representations relative to the Fluoroware Shares or Empak Shares, as the case
may be, (c) acknowledge and agree to the reduction of the number of the
Fluoroware Holdback Shares or the Empak Holdback Shares that will be delivered
by the Company pursuant to section 2.1(b)(ii) or 2.2(b)(ii), as the case may be,
to the extent required to satisfy claims under article IX, and (d) to designate
the Shareholder Representatives referenced in section 2.7 and to empower them to
act on their behalf in the manner contemplated by section 2.7. The Shareholder
Agreements shall be in the form attached to this agreement as Exhibit A.
2.7 Designation of Shareholder Representatives.
(a) Prior to the Closing Date, Fluoroware shall use its best
efforts to obtain from each of the Fluoroware Shareholders, such Fluoroware
Shareholder's authorization to designate ▇▇▇▇ ▇▇▇▇▇ as his/its representative
(the "Fluoroware Representative") for purposes (i) of resolving, settling or
otherwise dealing with any claims made against the Fluoroware Holdback Shares
pursuant to article IX of this agreement, (ii) of pursuing claims against the
Empak Holdback Shares pursuant to article IX, and (iii) of otherwise acting as
the representative of the Fluoroware Shareholders on matters specified in this
agreement or in the Shareholder Agreements.
(b) Prior to the Closing Date, Empak shall use its best
efforts to obtain from each of the Empak Shareholders, such Empak Shareholder's
authorization to designate ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ as its
representatives (the "Empak Representatives") for purposes (i) of resolving,
settling or otherwise dealing with any indemnification claims made against the
Empak Holdback Shares pursuant to article IX of this agreement, (ii) of pursuing
claims against the Fluoroware Holdback Shares pursuant to article IX, and (iii)
of otherwise acting as the representative of the Empak Shareholders on matters
specified in this agreement or in the Shareholder Agreements. (The Fluoroware
Representative and the Empak Representatives shall sometimes be collectively
referred to as the "Shareholder Representatives".)
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FLUOROWARE
As a material inducement to the Company and Empak to enter
into this agreement and to the Empak Shareholders to exchange their Empak Shares
for Company Shares on the terms set forth in this agreement, and with the
understanding that the Company, Empak and the Empak Shareholders will be relying
thereon in consummating the transactions contemplated by this agreement,
-5-
Fluoroware represents and warrants to the Company, Empak and the Empak
Shareholders that, except as set forth in the disclosure schedule delivered to
the Empak Representatives by Fluoroware on or before the Closing Date (the
"Fluoroware Disclosure Schedule"):
3.1 Incorporation and Corporate Power. Fluoroware is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state of Minnesota and has all requisite corporate power and
authority and all authorizations, licenses, permits and certifications necessary
to own and operate its properties and to carry on its business as now conducted
and presently proposed to be conducted. The copies of Fluoroware's articles of
incorporation and bylaws which have been furnished by Fluoroware to the Empak
Representatives prior to the date of this agreement are correct and complete as
of the date of this agreement and reflect all amendments made thereto.
Fluoroware is qualified to do business as a foreign corporation in every
jurisdiction in which the nature of its business or its ownership of property
requires it to be so qualified, except for those jurisdictions in which the
failure to be so qualified would not, individually or in the aggregate, have a
material adverse effect on Fluoroware's financial condition. Fluoroware does not
own any equity interest in any partnership, joint venture, corporation, limited
liability company, other organization, entity or enterprise of any form or
nature.
3.2 Authority. The execution and delivery of this agreement
and the consummation of the transactions by this agreement have been duly and
validly authorized by its Board of Directors and no other corporate proceedings
on the part of Fluoroware are necessary to authorize this agreement or to
consummate the Exchange or the transactions contemplated hereby. This agreement
has been duly and validly executed and delivered by Fluoroware and constitutes a
valid, legal and binding agreement which is enforceable against Fluoroware in
accordance with its terms.
3.3 No Breach. The execution, delivery and performance of this
agreement by Fluoroware and the consummation by Fluoroware and the Fluoroware
Shareholders of the transactions contemplated by this agreement do not, and will
not, conflict with or result in a breach of any of the provisions of, constitute
a default under, result in a violation of, result in the creation of a right of
termination or acceleration or any lien, security interest, charge or
encumbrance upon any assets of Fluoroware, or require any authorization,
consent, approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the certificate of incorporation or
bylaws of Fluoroware or any indenture, mortgage, lease, loan agreement or other
agreement or instrument by which Fluoroware is bound or affected, or any law,
statute, rule or regulation or order, judgment or decree to which Fluoroware is
subject.
3.4 Governmental Authorities; Consents. Fluoroware is not
required to submit any notice, report or other filing with any governmental
authority in connection with the execution or delivery by it of this agreement
or the consummation of the transactions contemplated hereby. No approval or
authorization of any governmental or regulatory authority or any other party or
person is required to be
-6-
obtained by Fluoroware in connection with the execution, delivery and
performance of this agreement by the Fluoroware Shareholders or the transactions
contemplated hereby.
3.5 Capital Stock. The authorized capital stock of Fluoroware
consists of, or on the Closing Date will consist of, 60,000,000 shares of common
stock, $.01 par value per share, of which 15,545,073 shares are issued and
outstanding and are beneficially and legally owned by the Fluoroware
Shareholders in the respective amounts specified on schedule A-1. All of the
outstanding Fluoroware Shares have been duly authorized and are validly issued,
fully paid and nonassessable. Fluoroware has no other equity securities or
securities containing any equity features authorized, issued or outstanding.
There are no agreements or other rights or arrangements existing which provide
for the sale or issuance of capital stock by Fluoroware, and there are no
rights, subscriptions, warrants, options, conversion rights or agreements of any
kind outstanding to purchase or otherwise acquire from Fluoroware any shares of
capital stock or other securities of Fluoroware of any kind. There are no
agreements or other obligations (contingent or otherwise) which may require
Fluoroware to repurchase or otherwise acquire any shares of its capital stock.
3.6 Financial Statements. Fluoroware has delivered to the
Company and the Empak Representatives copies of (a) the unaudited balance sheet,
as of February 28, 1999, of Fluoroware (the "Fluoroware Latest Balance Sheet")
and the unaudited statements of earnings, shareholders' equity and cash flows of
Fluoroware for the six-month period then ended (such statements and the
Fluoroware Latest Balance Sheet being herein referred to as the "Fluoroware
Latest Financial Statements"), and (b) audited balance sheets, as of August 29,
1998 and August 30, 1997, of Fluoroware and the audited statements of earnings,
shareholders' equity and cash flows of Fluoroware for each of the fiscal years
then ended (collectively, the "Fluoroware Annual Financial Statements"). The
Fluoroware Latest Financial Statements and the Fluoroware Annual Financial
Statements are based upon the information contained in the books and records of
Fluoroware and fairly present, in all material respects, the financial condition
of Fluoroware as of the dates thereof and results of operations for the periods
referred to therein. The Fluoroware Annual Financial Statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods indicated. The Fluoroware Latest
Financial Statements have been prepared in accordance with generally accepted
accounting principles applicable to unaudited interim financial statements (and
thus may not contain all the information and footnotes required by generally
accepted accounting principles or complete financial statements) consistently
with the Fluoroware Annual Financial Statements and reflect all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the financial positions, results of operation and cash flows for all periods
presented.
3.7 Absence of Undisclosed Liabilities. Except as reflected in
the Fluoroware Latest Balance Sheet, Fluoroware has no liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise, whether due or to
become due, whether known or unknown, and regardless of when asserted) arising
out of transactions entered into, or any action or inaction, or any state of
facts existing, with respect to or based upon transactions or events occurring
prior to the date of this agreement,
-7-
except liabilities which have arisen after the date of the Fluoroware Latest
Balance Sheet in the ordinary course of business (none of which is an uninsured
liability for breach of contract, breach of warranty, tort, infringement, claim
or lawsuit).
3.8 No Material Adverse Changes. Since the date of the
Fluoroware Latest Balance Sheet (the "Fluoroware Balance Sheet Date"), there has
been no material adverse change in the business or financial condition of
Fluoroware.
3.9 Absence of Certain Developments. Since the Fluoroware
Balance Sheet Date, Fluoroware has not:
(a) borrowed any amount or incurred or become subject to any
liability in excess of $100,000, except (i) current liabilities incurred in the
ordinary course of business, or (ii) liabilities under contracts entered into in
the ordinary course of business;
(b) mortgaged, pledged or subjected to any lien, charge or any
other encumbrance, any of its assets with a fair market value in excess of
$100,000, except (i) liens for current property taxes not yet due and payable,
(ii) liens imposed by law and incurred in the ordinary course of business for
obligations not yet due to carriers, warehousemen, laborers, materialmen and the
like, (iii) liens in respect of pledges or deposits under workers' compensation
laws, or (iv) liens created in the ordinary course of business;
(c) sold, assigned or transferred (including, without
limitation, transfers to any employees, affiliates or shareholders) any tangible
assets with a fair market value in excess of $100,000, or canceled any debts or
claims, in each case, except in the ordinary course of business;
(d) licensed, sublicensed, sold, assigned or transferred
(including, without limitation, licenses or transfers to any employees,
affiliates or shareholders) any patents, trademarks, trade names, copyrights,
trade secrets, computer software or other intellectual property or other
intangible assets;
(e) waived any rights of material value (i.e. with a financial
impact of $50,000 or more) or suffered any extraordinary losses, except in the
ordinary course of business;
(f) declared or paid any dividends or other distributions with
respect to any Fluoroware Shares or redeemed or purchased, directly or
indirectly, any shares of Fluoroware Shares or any options;
(g) issued, sold or transferred any of its equity securities,
securities convertible into or exchangeable for its equity securities or
warrants, options or other rights to acquire its equity securities, or any bonds
or debt securities;
-8-
(h) other than payment of compensation for services rendered
to Fluoroware in the ordinary course of business consistent with past practices,
entered into any transaction with any officer, director or more than 5%
shareholder of Fluoroware or any other entity in which Fluoroware has an equity
interest;
(i) taken any other action or entered into any other
transaction other than in the ordinary course of business and in accordance with
past custom and practice, other than the transactions contemplated by this
agreement;
(j) suffered any theft, damage, destruction or loss of or to
any property or properties owned or used by it, whether or not covered by
insurance;
(k) made or granted any increase in any Plans (as defined in
section 3.16) or arrangement, or amended or terminated any existing Plan or
arrangement, or adopted any new Plan or arrangement or made any commitment or
incurred any liability to any labor organization;
(l) made any single capital expenditure or commitment therefor
in excess of $100,000;
(m) made any change in accounting principles or practices from
those utilized in the preparation of the Fluoroware Annual Financial Statements.
3.10 Tax Matters.
(a) Fluoroware and any subsidiary, any affiliated, combined or
unitary group of which Fluoroware or any subsidiary is or was a member, any
"Plans" (as defined in section 3.16), as the case may be (each, a "Tax
Affiliate" and, collectively, the "Tax Affiliates") have: (i) timely filed all
returns, declarations, reports, estimates, information returns, and statements
("Fluoroware Returns") required to be filed by it in respect of any "Taxes" (as
defined in subsection 3.10(i)) or required to be filed by it by a taxing
authority having jurisdiction; (ii) timely and properly paid (or has had paid on
its behalf) all Taxes shown to be due and payable on such Fluoroware Returns and
such Fluoroware Returns properly reflect the liability for Taxes of Fluoroware
and its Tax Affiliates; (iii) established on the Fluoroware Latest Balance
Sheet, in accordance with generally accepted accounting principles, reserves
that are adequate for the payment of any Taxes not yet due and payable; (iv)
complied with all applicable laws, rules, and regulations relating to the
withholding of Taxes and the payment thereof (including, without limitation,
withholding of Taxes under sections 1441 and 1442 of the Code, or similar
provisions under any foreign laws), and timely and properly withheld from
individual employee wages and paid over to the proper governmental authorities
all amounts required to be so withheld and paid over under all applicable laws.
-9-
(b) There are no liens for Taxes upon any assets of
Fluoroware, except liens for Taxes not yet due.
(c) No deficiency for any Taxes has been proposed, asserted or
assessed against Fluoroware that has not been resolved and paid in full. No
waiver, extension or comparable consent given by Fluoroware regarding the
application of the statute of limitations with respect to any Taxes or
Fluoroware Returns is outstanding, nor is any request for any such waiver or
consent pending. There is no Tax audit or other administrative proceeding or
court proceeding with regard to any Taxes or Fluoroware Returns pending, nor has
there been any notice to Fluoroware by any Taxing authority regarding any such
Tax, audit or other proceeding, nor has Fluoroware received notice of any such
Tax audit or other proceeding threatened with regard to any Taxes or Fluoroware
Returns. Fluoroware is not aware of any unresolved questions, claims or disputes
concerning the liability for Taxes of Fluoroware or the Tax Affiliates which
would exceed the estimated reserves established on its books and records.
(d) Neither Fluoroware nor any Tax Affiliate is a party to any
agreement, contract or arrangement that would result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the meaning
of section 280G of the Code and the consummation of the transactions
contemplated by this agreement will not be a factor causing payments to be made
by Fluoroware or any Tax Affiliate that are not deductible (in whole or in part)
under section 280G of the Code.
(e) No property of Fluoroware or any Tax Affiliate is property
that Fluoroware or any Tax Affiliates will be required to treat as being owned
by another person under the provisions of section 168(f)(8) of the Code (as in
effect prior to amendment by the Tax Reform Act of 1986) or is "tax-exempt use
property" within the meaning of section 168 of the Code.
(f) Neither Fluoroware nor any Tax Affiliate is required to
include in income any adjustment under section 481(a) of the Code by reason of a
voluntary change in accounting method initiated by Fluoroware or any Tax
Affiliate and neither Fluoroware nor any Tax Affiliate has received notice that
the Internal Revenue Service has proposed any such adjustment or change in
accounting method.
(g) All transactions that could give rise to an understatement
of federal income tax (within the meaning of section 6661 of the Code as it
applied prior to repeal) or an underpayment of tax (within the meaning of
section 6662 of the Code) were reported in a manner for which there is
substantial authority or were adequately disclosed (or, with respect to
Fluoroware Returns filed before the Closing Date, will be reported in such a
manner or adequately disclosed) on the Fluoroware Returns required in accordance
with sections 6661(b)(2)(B) and 6662(d)(2)(B) of the Code.
-10-
(h) Neither Fluoroware nor any Tax Affiliate has engaged in
any transaction that would result in a deemed election under section 338(e) of
the Code, and neither Fluoroware nor any Tax Affiliate will engage in any such
transaction within any applicable "consistency period" (as such term is defined
in section 338 of the Code).
(i) For purposes of this agreement, the term "Taxes" means all
taxes, charges, fees, levies, or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, withholding, payroll,
employment, social security, unemployment, excise, estimated, severance, stamp,
occupation, property, or other taxes, customs duties, fees, assessments, or
charges of any kind whatsoever, including, without limitation, all interest and
penalties thereon, and additions to tax or additional amounts imposed by any
taxing authority, domestic or foreign, upon the Constituent Corporation and its
Tax Affiliates.
3.11 Contracts and Commitments. Fluoroware has furnished to
Empak complete information about its assets, business and contractual
commitments including, without limitation, the information listed in this
section 3.11, and such information, and the copies of documents evidencing such
information that were provided to Empak for review, are correct in all material
respects.
1. A list of all equipment (including motor
vehicles), machinery, furniture, fixtures,
furnishings, leasehold improvements and
other similar property that are owned by
Fluoroware and that are being used by
Fluoroware in connection with the business
conducted by it.
2. Each real property lease and any other
instrument under which Fluoroware claims or
holds an interest in real property owned by
another person.
3. Each personal property lease to which
Fluoroware is a party.
4. Listings of all intangible personal property
used by Fluoroware in the conduct of its
trade or business, including without
limitation, all computer programs, trade
secrets, trademarks, trade names, service
names, service marks, copyrights, patents,
patent licenses, applications for any and
all of the foregoing and registrations
thereof owned by Fluoroware or used in its
operations.
5. A legal description of each parcel of real
property owned by Fluoroware, and lists each
mortgage, easement, restriction or other
encumbrance on or affecting each such
parcel.
-11-
6. Each other agreement, whether oral or
written, to which Fluoroware is a party,
including the following:
(i) Each executory or partially
executory contract, commitment,
agreement or arrangement made in the
ordinary course of business by
Fluoroware involving (A) an
expenditure or ongoing commitments
of more than $10,000, or (B)
commitment by Fluoroware for
delivery of its products or services
over a period of more than thirty
(30) days from the date of this
agreement and for an aggregate price
of more than $10,000, or (C) capital
expenditures in excess of $10,000.
(iii) Each contract continuing over a
period of more than six (6) months
from its date, which is not
terminable by Fluoroware upon not
more than thirty (30) days notice.
(iv) Each agreement for the sale of any
capital asset of Fluoroware made or
entered into within twelve (12)
months of the date of this
agreement.
(v) Each employment contract or
agreement relating thereto between
Fluoroware and any officer,
consultant, director or employee,
including any bonus, incentive or
deferred compensation plans, any
confidentiality or non-compete
agreements, and any arrangements
which encourage or compensate
Fluoroware's employees to stay with
or leave Fluoroware following the
Closing.
(vi) Each plan or contract or arrangement
of Fluoroware (including Plans),
providing for pensions, life
insurance, medical insurance,
disability insurance, vacations and
other employees' benefits or
compensation plans, whether formal
or informal.
(vii) Each contract between Fluoroware and
any business partner, joint
venturer, dealer, distributor,
broker, agent, sales representative,
equipment manufacturer or
representatives or agents thereof.
(viii) Each license, royalty or other
contract or agreement relating to
intangible personal property.
-12-
(ix) Each agreement not made in the
ordinary course of Fluoroware's
business.
(x) Each loan agreement, credit facility
or other instrument pursuant to
which Fluoroware is obligated to the
repayment of indebtedness.
7. A list of each policy of liability, property
damage, comprehensive, vehicle, workers'
compensation, key man, disability, fidelity,
errors and omissions, directors' and
officers' and other forms of insurance owned
or maintained by Fluoroware during the past
three (3) years and contains a brief
description of any claims made thereunder
during such period of time.
8. Copies of all permits, licenses, exemptions,
variances, and other approvals and
authorizations which are necessary to
conduct the business of Fluoroware.
9. A list of all personal property owned by any
third parties (whether a customer, supplier
or other person) for which Fluoroware is
responsible, other than property leased by
Fluoroware.
10. A list of each bank or other financial
institution in which Fluoroware has an
account or depository arrangement, together
with the account names and numbers and the
names of all persons authorized to take any
actions with respect thereto.
11. A list of each employee of Fluoroware and
position, title, remuneration.
12. Each contract, agreement or understanding
(a) relating to the voting of Fluoroware
Shares or the election of directors of
Fluoroware; (b) which prohibits Fluoroware
from freely engaging in business anywhere in
the world; (c) relating to any guaranty of
any obligation for borrowed money or
otherwise.
True and correct copies of all documents described in this
section 3.11 have been delivered or made available to Empak or the Empak
Representatives or will be made available upon request and will be signed by an
officer of Fluoroware for identification upon request of Empak or the Empak
Representatives.
-13-
3.12 No Defaults. Each of the leases, contracts, agreements
and insurance policies referred to in section 3.11 is in full force and effect
as of the date hereof with no defaults existing thereunder. Fluoroware is not in
default or breach under any of such leases, contracts, agreements and policies,
and no other party to any such leases, contracts, agreements and policies is in
default or breach thereunder (other than failure by one or more of such other
parties to make timely payment of accounts receivable arising thereunder).
3.13 Intellectual Property Rights.
(a) Definitions.
(i) "Copyrights" shall mean rights in original works
of authorship including, without limitation, computer programs
as those terms are used in 17 U.S.C.ss.101 et seq. and rights
under corresponding foreign laws.
(ii) "Intellectual Property Rights" shall mean the
Copyrights, Patent Rights, Trademarks, Know-How and Trade
Secrets and all other similar rights, that are owned, licensed
or controlled by Fluoroware and used in or held for use in
connection with the operation of its business.
(iii) "Know-How" shall mean (A) design documents, (B)
specifications and performance criteria, (C) operating
instructions and maintenance manuals, (D) computer software
tools and related documentation, including, without
limitation, source and object code copies therefor in
electronic or printed forms, (E) prototypes, models or
samples, (F) files relating to applications for Intellectual
Property Rights, and (G) all other tangible materials (not
necessarily proprietary) used in or held for use in connection
with the Intellectual Property Rights.
(iv) "Licensed Software" shall mean all software used
by Fluoroware under license as part of Fluoroware's business
(or for which Fluoroware has a right to reproduce and
distribute copies as part of Fluoroware's business).
(v) "Patent Rights" shall mean rights provided by a
United States or foreign patent, including reissues or
extensions thereof, and on applications for the foregoing,
including any divisions, continuations and
continuations-in-part thereof filed by Fluoroware.
(vi) "Trade Secrets" shall mean all proprietary
information that is used in or held by Fluoroware for use in
connection with the Fluoroware Intellectual Property Rights
and that (A) derives independent economic value, actual or
potential, from not being generally known to, and not being
readily ascertainable by proper means
-14-
by, third parties who can obtain economic value from its
disclosure or use and (B) is the subject of efforts by
Fluoroware that have been reasonable under the circumstances
to maintain its secrecy. Trade Secrets may include, without
limitation, source and object code, software documentation,
computer program designs, and information regarding future
business opportunities.
(vii) "Trademarks" shall mean trade names,
trademarks, service marks, trade dress and product
configurations that are used or, if any, are presently subject
to an intent to use application to register in the United
States Patent and Trademark Office by Fluoroware in connection
with the operation of its business, and all (A) goodwill and
common law rights associated therewith, (B) registration
applications pending thereon in any state and in any country,
and (C) registrations issued thereon in any state and in any
country.
(b) Certain Representations and Warranties Regarding
Intellectual Property.
(i) Fluoroware owns or has the exclusive right to use
the Intellectual Property Rights and has the right to fully
use and exploit all the Trade Secrets and Know-How. Fluoroware
has taken all reasonably necessary action to protect the
Intellectual Property Rights, including, without limitation,
use of reasonable secrecy measures to protect the Trade
Secrets included in the Intellectual Property Rights.
Fluoroware has not granted to any third party any license for
or access to the Intellectual Property Rights and has not
previously assigned, transferred or otherwise encumbered the
Intellectual Property Rights.
(ii) The Intellectual Property Rights comprise all
intellectual property rights used by Fluoroware in the conduct
of its business.
(iii) No claim by any third party contesting the
validity of the Intellectual Property Rights has been made, is
currently outstanding or is threatened, and Fluoroware has not
received any notice of any facts suggesting any infringement,
misappropriation or violation by others of the Intellectual
Property Rights.
(iv) No infringement, illicit copying,
misappropriation or violation of any third party intellectual
property rights has or will occur with respect to Fluoroware's
use of the Intellectual Property Rights as currently being
used by Fluoroware or the continuing conduct of Fluoroware's
business as now conducted.
(v) Fluoroware has valid licenses to use the
intellectual property rights of third parties which are used
in Fluoroware's business but are not owned by Fluoroware.
Except for the licenses for licensed software which have been
provided to
-15-
Empak for review, there are no other agreements requiring
Fluoroware to make payments or provide any consideration for,
or restricting Fluoroware's right to use, any intellectual
property rights of third parties.
(vi) Fluoroware has performed all material
obligations required to be performed by it, and is not in
default under material contract or arrangement relating to any
Intellectual Property Rights.
3.14 Litigation. Fluoroware is not a party to, or the subject
of, any litigation pending or threatened. Fluoroware is not the subject of any
investigation by any governmental or quasi-governmental body or agency or legal,
administrative or arbitration proceeding, and there are no facts which might
result in or form the basis for any such investigation or proceeding. There is
no outstanding judgment, order, junction or decree affecting Fluoroware or its
properties, assets or business or preventing the consummation of the Exchange.
3.15 Employees. To Fluoroware's knowledge, no management or
key employee of Fluoroware intends to terminate his/her employment with
Fluoroware. Fluoroware has complied with all laws relating to the employment of
labor, including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining and the payment of social security and other taxes. There
is not pending or, to the knowledge of Fluoroware, threatened any labor dispute,
strike or work stoppage against Fluoroware which may interfere with the
continued operation of the business activities of Fluoroware. None of Fluoroware
or any representative or employee of Fluoroware has committed any unfair labor
practices in connection with the operation of Fluoroware's business, and there
is not pending or threatened any charge or complaint against Fluoroware by the
National Labor Relations Board or any comparable state agency. Fluoroware is not
or will not become, liable for any retroactive workers' compensation insurance
premiums or retroactive unemployment compensation experience ratings or charges
in connection with the operation of its business relating to the period of time
prior to the date of this agreement. No employee of Fluoroware is subject to any
secrecy or noncompetition agreement or any other agreement or restriction of any
kind that would impede in any way the ability of such employee to carry out
fully all activities of such employee in furtherance of the business of
Fluoroware. No employee or former employee of Fluoroware has any claim with
respect to any intellectual property rights of Fluoroware.
3.16 Employee Benefit Plans.
(a) Except for plans, contracts or arrangements which
Fluoroware has provided to Empak for review, with respect to all employees and
former employees of Fluoroware and all dependents and beneficiaries of such
employees and former employees, (i) Fluoroware does not maintain or contribute
to any nonqualified deferred compensation or retirement plans, contracts or
arrangements; (ii) Fluoroware does not maintain or contribute to any qualified
defined contribution plans (as defined in Section 3(34) of the Employee
Retirement Income Security Act of 1974, as amended
-16-
("ERISA"), or Section 414(i) of the Code; (iii) Fluoroware does not maintain or
contribute to any qualified defined benefit plans (as defined in Section 3(35)
of ERISA or Section 414(j) of the Code); and (iv) Fluoroware does not maintain
or contribute to any employee welfare benefit plans (as defined in Section 3(1)
of ERISA, other than plans that are excluded from the coverage of ERISA by
reason of the regulations promulgated thereunder).
(b) To the extent required (either as a matter of law or to
obtain the intended tax treatment and tax benefits), all employee benefit plans
(as defined in Section 3(3) of ERISA) Fluoroware maintains or to which it
contributes (collectively, the "Fluoroware Plans") comply in all respects with
the requirements of ERISA and the Code. With respect to the Fluoroware Plans,
(i) all required contributions which are due have been made and a proper accrual
has been made for all contributions due; (ii) there are no actions, suits or
claims pending, other than routine uncontested claims for benefits and actions
relating to qualified domestic relations orders; and (iii) there have been no
prohibited transactions (as defined in Section 406 of ERISA or Section 4975 of
the Code).
(c) Fluoroware has delivered to the Empak Representative true
and complete copies of (i) the most recent determination letter, if any,
received by Fluoroware from the Internal Revenue Service regarding the
Fluoroware Plans which Fluoroware maintains or to which it contributes and any
amendment to any Fluoroware Plan made subsequent to any Fluoroware Plan
amendments covered by any such determination letter; (ii) the most recent
financial statements and annual report or return for the Fluoroware Plans; and
(iii) the most recently prepared actuarial valuation reports, if any.
(d) Fluoroware does not contribute (and has never contributed)
to any multiemployer plan, as defined in Section 3(37) of ERISA. Fluoroware has
no actual or potential liabilities under Section 4201 of ERISA for any complete
or partial withdrawal from a multiemployer plan. Fluoroware has no actual or
potential liability for death or medical benefits after separation from
employment, other than (i) death benefits under the employee benefit plans or
programs (whether or not subject to ERISA) made available to Empak for review
and (ii) health care continuation benefits described in Section 4980B of the
Code.
(e) Neither Fluoroware nor any of its directors, officers,
employees or other "fiduciaries", as such term is defined in Section 3(21) of
ERISA, has committed any breach of fiduciary responsibility imposed by ERISA or
any other applicable law with respect to the Fluoroware Plans which would
subject the Company, Fluoroware, any Fluoroware subsidiary, or any of their
respective directors, officers or employees to any liability under ERISA or any
applicable law.
(f) Fluoroware has not incurred any liability for any tax or
civil penalty or any disqualification of any employee benefit plan (as defined
in Section 3(3) of ERISA) imposed by Sections 4980B and 4975 of the Code and
Part 6 of Title I and Section 502(i) of ERISA.
-17-
3.17 Customers and Suppliers. As of the date of this
agreement, the relationships of Fluoroware with its customers and suppliers are
good commercial working relationships. No customer or supplier has indicated
that it will stop or decrease the amount of business done with Fluoroware,
except for changes in the ordinary course of Fluoroware's business.
3.18 Compliance with Laws; Permits.
(a) Fluoroware is not currently being charged with, any
violations of the Americans with Disabilities Act of 1990 or the regulations
promulgated thereunder (collectively, the "ADA") or similar state laws or
regulations, nor has Fluoroware been notified of any problems, which through the
passage of time or the future to take corrective action, could result in a
violation of the ADA or such state's laws or regulations. Fluoroware has
provided the Empak Representative with any written materials in its possession
which assess or relate to the status of Fluoroware's real property or
Fluoroware's compliance with ADA and such state's laws or regulations.
Fluoroware is not currently being charged with nor, to its knowledge, is it
operating its business in violation of any applicable foreign, federal, state or
municipal laws, regulations or ordinances including, without limitation, the
federal Foreign Corrupt Practices Act, the federal Occupational Safety and
Health Act of 1970, or the regulations promulgated thereunder ("OSHA"), or any
other applicable foreign, federal, state or municipal statute, law, regulation
or ordinance relating to occupational health and safety, nor is Fluoroware
relying on any exemption from or deferral of any such applicable statute, law or
regulation that would not be available to it or the Company after the Exchange.
(b) Fluoroware has, in full force and effect, all licenses,
permits and certificates, from federal, state, local and foreign authorities
(including, without limitation, federal and state agencies regulating
occupational health and safety) used in and, individually or in the aggregate,
material to the business or financial condition of Fluoroware or necessary to
conduct its business and own and operate its properties (collectively, the
"Fluoroware Permits"). Fluoroware has conducted its business in substantial
compliance with all material terms and conditions of the Fluoroware Permits.
(c) Fluoroware has not made or agreed to make gifts of money,
other property or similar benefits (other than incidental gifts of articles of
nominal value) to any actual or potential customer, supplier, governmental
employee or any other person in a position to assist or hinder Fluoroware in
connection with any actual or proposed transaction.
3.19 Brokerage. No third party shall be entitled to receive
any brokerage commissions, finder's fees, fees for financial advisory services
or similar compensation in connection with the transactions contemplated by this
agreement based on any arrangement or agreement made by or on behalf of
Fluoroware or any of the Fluoroware Shareholders.
3.20 Inventory. All inventories reflected in the Fluoroware
Latest Balance Sheet are stated at the lower of cost or market and, as so
stated, are in good condition and are currently usable
-18-
or salable in the category in which they are inventoried, in the ordinary course
of business of Fluoroware, without discounts other than normal trade discounts
regularly offered by Fluoroware for prompt payment or quantity purchase.
3.21 Accounts and Notes Receivable. To the extent they exceed
the reserves for doubtful accounts, the accounts and notes receivable of
Fluoroware as set forth in the Fluoroware Latest Balance Sheet, and all accounts
receivable of Fluoroware that have arisen since the Latest Balance Sheet Date
are valid and enforceable obligations due to Fluoroware and shall be collectible
by Fluoroware in the ordinary course of business. The goods and services sold
and delivered by Fluoroware that give rise to such accounts and notes receivable
were sold and delivered in conformity with the applicable purchase orders,
agreements and specifications. Such accounts and notes receivable are subject to
no valid defense or offsets except routine customer complaints of an immaterial
nature.
3.22 Affiliate Transactions. Other than pursuant to this
agreement, no officer, director or employee of Fluoroware or any member of the
immediate family of any such officer, director or employee, or any entity in
which any of such persons owns any beneficial interest (other than any
publicly-held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market and less than one percent of the
stock of which is beneficially owned by any of such persons) (collectively
"insiders"), has any agreement with Fluoroware (other than normal employment
arrangements) or any interest in any property, real, personal or mixed, tangible
or intangible, used in or pertaining to the business of Fluoroware (other than
ownership of Fluoroware Shares). None of the insiders has any direct or indirect
interest in any competitor, supplier or customer of Fluoroware or in any person,
firm or entity from whom or to whom Fluoroware leases any property, or in any
other person, firm or entity with whom Fluoroware transacts business of any
nature. For purposes of this section 3.22, the members of the immediate family
of an officer, director or employee shall consist of the spouse, parents,
children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and
brothers- and sisters-in-law of such officer, director or employee.
3.23 Real Estate.
(a) Fluoroware has good and marketable title in fee simple to
all real property and improvements which are owned by it and used in its
business (the "Fluoroware Owned Real Property"), free and clear of all liens,
mortgages, encumbrances, covenants, charges, easements, restrictions,
reservations, leases and assessments of any nature whatsoever. All of the
buildings, improvements and structures located on the Fluoroware Owned Real
Property or located on the real property subject to the leases to which
Fluoroware is a party (the "Fluoroware Leased Real Property") are in good
operating condition and repair and suitable for the purposes for which they are
being used. Each has adequate rights of ingress and egress for the operation of
its business as it is currently being conducted by Fluoroware and has access,
sufficient for the conduct of Fluoroware's business as now conducted or as
presently proposed to be conducted, to all utilities, including electricity,
sanitary and
-19-
storm sewer, potable water, natural gas and other utilities, used in the
operation of the business of Fluoroware at that location. No such building,
structure or improvement, or any appurtenance thereto or equipment therein, or
the operation or maintenance thereof, violates any restrictive covenant or any
provision of any federal, state or local law, ordinance or zoning, fire, safety,
pollution or health regulations, or encroaches on any property owned by others.
No condemnation proceeding is pending or threatened with respect to the
Fluoroware Owned Real Property or the Fluoroware Leased Real Property. No change
is pending or threatened in any provision of any federal, state or local law,
ordinance or zoning or other regulation which might materially interfere with
the present or proposed use of any building, improvement or structure located on
the Fluoroware Owned Real Property or the Fluoroware Leased Real Property.
(b) Fluoroware has previously delivered to the Empak
Representatives a true and complete copy of each lease (including all amendments
and supplements thereto) of each real property leased or otherwise used by
Fluoroware in its business. Each such lease is in full force and effect, and
constitutes a legal, valid, and binding obligation of Fluoroware and each other
party thereto, enforceable by Fluoroware against the lessor thereof in
accordance with its terms. Neither Fluoroware nor any other party to any such
lease is in default of or under any such lease. The transaction contemplated by
this agreement will not result in the default of or under any such lease or
require the consent of the lessor under any such lease.
(c) The leases to which Fluoroware is are party are in full
force and effect, and Fluoroware holds a valid and existing leasehold interest
under each of such leases. Fluoroware is not in default, and no circumstances
exist which, if not remedied, would, either with or without notice or the
passage of time or both, result in such default under any of such leases.
3.24 Condition of Assets.
(a) Fluoroware owns good and marketable title to each of the
tangible personal properties and tangible and intangible assets reflected on the
Fluoroware Latest Balance Sheet, or acquired since the date thereof, free and
clear of all liens and encumbrances, except for (i) liens for taxes not yet due
or delinquent or being contested in good faith by appropriate proceedings, (ii)
liens identified in the Fluoroware Disclosure Statement, (iii) assets disposed
of since the Fluoroware Balance Sheet Date in the ordinary course of business,
(iv) liens imposed by law and incurred in the ordinary course of business for
obligations not yet due or delinquent and (v) liens in respect of pledges or
deposits under workers' compensation laws.
(b) The buildings, equipment and other tangible assets used by
Fluoroware in the conduct of its business are, in all material respects, in good
condition and repair, ordinary wear and tear excepted, and are adequate and
suitable for the purposes for which they are currently being used.
-20-
3.25 Environmental Matters.
(a) As used in this section 3.25, the following terms shall
have the following meanings:
(i) "Clean-up" shall mean removal and/or remediation
of, or other response (including, without limitation, testing,
monitoring, sampling or investigating of any kind) to, any
Release of Hazardous Substances or Contamination, to the
satisfaction of all applicable governmental agencies, in
compliance with Environmental Laws and in compliance with good
commercial practice.
(ii) "Contamination" shall mean the presence of, or
Release on, under, from or to the Property of any Hazardous
Substance, except the routine storage and use of Hazardous
Substances from time to time in the ordinary course of
business, in compliance with Environmental Laws and in
compliance with good commercial practice.
(iii) "Environmental Documents" shall mean (A) any
and all documents received by Fluoroware from the United
States Environmental Protection Agency ("EPA") and/or any
state, county or municipal environmental or health agency
concerning the environmental condition of the Fluoroware
Property or the effect of Fluoroware's business operations on
the environmental condition of the Fluoroware Property; (B)
any and all documents submitted by Fluoroware to the EPA
and/or any state, county or municipal environmental or health
agency concerning the environmental condition of the
Fluoroware Property or the effect of Fluoroware's business
operations on the environmental condition of the Fluoroware
Property; and (C) any and all reviews, audits, reports, or
other analyzes concerning Contamination.
(iv) "Environmental Law(s)" shall mean any and all
federal, state and local laws, statutes, codes, ordinances,
regulations, rules, policies, consent decrees, judicial
orders, administrative orders or other requirements relating
to the environment or to human health or safety associated
with the environment, all as amended or modified from time to
time. Environmental Laws include, but are not limited to, the
following statutes and all rules and regulations relating
thereto, all as amended or modified from time to time:
A. The Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), as amended
by the Superfund Amendments and Reauthorization Act
of 1986 ("▇▇▇▇") 42 U.S.C.ss.ss.9601-9675; the
Resource Conservation and Recovery Act of 1976
("RCRA") 42 U.S.C.ss.6901-6991; the Clean Water Act
33 ▇.▇.▇.▇▇. 1321 et seq; the Clean Air Act
-21-
42 U.S.C.ss.ss.7401 et seq; the Federal Insecticide,
Fungicide and Rodenticide Act ("FIFRA") 7
U.S.C.ss.136 et seq; the Toxic Substances Control Act
("TSCA") 15 U.S.C. ▇▇.▇▇. 2601-2671; and
B. The Minnesota Environmental Response and
Liability Act ("▇▇▇▇▇") Minn. Stat. Ch. 115B; the
Minnesota Petroleum Tank Release Cleanup Act, Minn.
Stat. Ch. 115C; the Minnesota Agricultural Chemical
Liability, Incidents, and Enforcement Act, Minn.
Stat. Ch. 18D; and the Minnesota Agricultural
Chemical Response and Reimbursement Law, Minn. Stat.
Ch. 18E.
(v) "Hazardous Substance(s)" shall mean (A) any
substance, the presence of which requires investigation or
remediation under any Environmental Law or under common law;
(B) any dangerous, toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous substance which is regulated by any Environmental
Law; (C) any substance, the presence of which causes or
threatens to cause a nuisance upon the Fluoroware Property or
to adjacent properties or poses or threatens to pose a hazard
to the health or safety of persons on or about the Fluoroware
Property; (D) any substance, the presence of which on
properties adjacent to the Property could constitute a
trespass by Fluoroware; and (E) urea-formaldehyde,
polychlorinated biphenyls, asbestos or asbestos-containing
materials, petroleum and petroleum products; provided,
however, that substances otherwise within the meaning of
Hazardous Substances and held for resale or used in the
preparation of pharmaceuticals shall not be considered
Hazardous Substances.
(vi) "Fluoroware Property" shall refer to any real
property currently owned by Fluoroware, any real property
currently leased by Fluoroware and any other real property
that has been previously owned or used by Fluoroware in the
operation of its business.
(vii) "Regulatory Action(s)" shall mean any claim,
demand, action or proceeding brought or instigated by any
governmental authority in connection with any Environmental
Law (including without limitation civil, criminal and/or
administrative proceedings), whether or not seeking costs,
damages, penalties or expenses.
(viii) "Release" shall mean the spilling, leaking,
disposing, discharging, emitting, depositing, injecting,
leaching, escaping or any other release or threatened release,
however defined, and whether intentional or unintentional, of
any Hazardous Substance.
-22-
(ix) "Third Party Claim(s)" shall mean third party
claims, actions, demands or proceedings (other than Regulatory
Actions) based on negligence, trespass, strict liability,
nuisance, toxic tort or detriment to human health or welfare
due to any Release of Hazardous Substances or Contamination,
and whether or not seeking costs, damages, penalties or
expenses.
(b) No Third Party Claims and/or Regulatory Actions have been
asserted or assessed against Fluoroware or the Fluoroware Property and no Third
Party Claims and/or Regulatory Actions are pending or threatened against
Fluoroware or the Fluoroware Property, arising out of or due to, or allegedly
arising out of or due to, (i) the Release on, under or from the Fluoroware
Property of any Hazardous Substances; (ii) any Contamination of the Fluoroware
Property, including without limitation, the presence of any Hazardous Substance
which has come to be located on or under the Fluoroware Property from another
location; (iii) any violation or alleged violation of any Environmental Law with
respect to the Fluoroware Property or Fluoroware's business operations on the
Fluoroware Property; (iv) any injury to human health or safety or to the
environment by reason of the past or present condition of, or past or present
activities on or under, the Fluoroware Property; or (v) the generation,
manufacture, storage, treatment, handling, transportation or other use, however
defined, of any Hazardous Substance on the Fluoroware Property.
(c) Fluoroware's storage, transportation, handling, use or
disposal, if any, of Hazardous Substances on or under the Fluoroware Property
and/or disposal elsewhere, if any, of Hazardous Substances generated on or from
the Fluoroware Property is currently, and at all times has been, in compliance
with all applicable Environmental Laws.
(d) Fluoroware has delivered to the Empak Representatives,
prior to the execution and delivery of this agreement, complete copies of any
and all Environmental Documents.
(e) Fluoroware has not transported nor arranged for the
transportation of any Hazardous Substances to any location which is: (i) listed
on the EPA's National Priorities List of Hazardous Waste Sites (the "National
Priorities List"); (ii) listed for possible inclusion on the National Priorities
List, in CERCLIS or on any similar state list; or (iii) the subject of any
Regulatory Action which may lead to claims against Fluoroware for damages to
natural resources, personal injury, Clean-up costs or Clean-up work, including,
but not limited to, claims under CERCLA.
(f) The Fluoroware Property is not listed in the National
Priorities List or any other list, schedule, log, inventory or record, however
defined, maintained by any federal, state or local governmental agency with
respect to sites from which there is or has been a Release of any Hazardous
Substance or any Contamination.
(g) No part of the Fluoroware Property was ever used, nor is
it now being used, (A) as a landfill, dump or other disposal, storage, transfer
or handling area for Hazardous Substances,
-23-
excepting, however, for the routine storage and use of Hazardous Substances from
time to time in the ordinary course of business, in compliance with
Environmental Laws and in compliance with good commercial practice; (B) for
industrial, military or manufacturing purposes; or (C) as a gasoline service
station or a facility for selling, dispensing, storing, transferring or handling
petroleum and/or petroleum products.
(h) There are no underground or aboveground storage tanks
(whether or not currently in use), urea-formaldehyde materials, asbestos,
asbestos containing materials, polychlorinated biphenyls (PCBs) or nuclear fuels
or wastes, located on or under the Fluoroware Property, and no underground tank
previously located on the Fluoroware Property has been removed therefrom.
(i) There has not been, or is not now occurring, any Release
of any Hazardous Substance on, under or from the Fluoroware Property. There has
not been, and is not now present, any Contamination on the Fluoroware Property.
(j) The Fluoroware Property and the use and operation thereof,
are currently and, at all times during either Fluoroware's ownership or
operation thereof, have been, and, to the best of Fluoroware's knowledge after
due inquiry, at all times during the ownership and/or operation thereof by prior
owners and/or users have been, in compliance with all applicable Environmental
Laws.
(k) There are no liens against the Fluoroware Property arising
under any Environmental Law, or based upon a Regulatory Action and/or Third
Party Claim.
(l) There are no ▇▇▇▇▇ (as said term is defined in Minn.
▇▇▇▇.▇▇. 103I.005, Subd. 21) on the Fluoroware Property. This disclosure is
intended to satisfy the requirements of Minn. ▇▇▇▇.▇▇. 103I.235, Subd. 1(a).
(m) All chemical substances contained in Fluoroware's
commercially-sold product lines were included on the initial inventory list
promulgated under the United States Toxic Substances Control Act or were the
subject of a premanufacturing notice filed with the EPA under such act.
Fluoroware's material safety data sheets for its assets accurately and properly
reflect any hazardous ingredients in any products manufactured or sold by
Fluoroware in the conduct of its business.
3.26 Year 2000 Compliance. All software used by Fluoroware in
the operation of its business (the "Software") is Year 2000 Compliant, including
date century recognition, calculations which accommodate same century and
multi-century formulas and date values that reflect the century. As used herein,
"Year 2000 Compliant" shall mean the ability of the Software to (i) consistently
handle date information before, during and after January 1, 2000,
including but not limited to accepting date input, providing date output, and
performing calculations on dates or portions of dates; (ii) function accurately
in accordance with all documentation without interruption before, during and
after January 1, 2000, without any change of operations associated with the
advent of the new century; (iii) respond to
-24-
two-digit date input in a way that resolves any ambiguity as to century in a
disclosed, defined and predetermined manner; and (iv) store and provide output
of date information in ways that are unambiguous as to century.
3.27 Warranties.
(a) Fluoroware has provided Empak with an accurate listing of
all claims outstanding, pending or, to the best knowledge of Fluoroware,
threatened for breach of any warranty relating to any products sold by
Fluoroware prior to the date hereof. The reserves for warranty claims on the
Fluoroware Latest Balance Sheet are consistent with Fluoroware's prior practices
and are fully adequate to cover all warranty claims made or to be made against
any products of Fluoroware sold prior to the date thereof.
(b) The goods and services sold by Fluoroware (i) conform in
all respects with the specification, documentation, performance standard,
representation or statement (if any) made or provided with respect thereto by or
with authorization of Fluoroware and (ii) there has not been any material claim
by any customer or other person alleging that any such goods and services does
not conform in all respects with any specification, documentation, performance,
standard, representation or statement made or provided by or on behalf of
Fluoroware, and, to the knowledge of Fluoroware, there is no basis for any such
claim.
(c) Other than its obligations to perform under the contracts
to which it is a party and which have been made available to Empak for review,
Fluoroware has not incurred or become subject to any material liability arising
from (i) any product, system, program, other asset designed, developed,
manufactured, assembled, sold, supplied, installed, repaired, licensed or made
available by Fluoroware, or (ii) any consulting services, installation services,
programming services, repair services, maintenance services, training services,
support services or other services performed by Fluoroware.
3.28. Disclosure. Neither this agreement nor any of the exhibits,
schedules or any of the documents delivered by or on behalf of Fluoroware
pursuant to this agreement nor the Fluoroware Disclosure Schedule nor any of the
financial statements referred to in section 3.6, taken as a whole, contains any
untrue statement of a material fact regarding Fluoroware or its business or any
of the other matters dealt with in this article III relating to Fluoroware or
the transactions contemplated by this agreement. This agreement, the exhibits or
schedules hereto, the documents delivered to Empak by or on behalf of Fluoroware
pursuant to this agreement, the Disclosure Schedule and the financial statements
referred to in section 3.6, taken as a whole, do not omit any material fact
necessary to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading, and there is no fact
known to Fluoroware which has not been disclosed to the Empak Representatives
which materially affects adversely or could reasonably be anticipated to
materially affect adversely the assets, financial condition, operating results,
customer, employee or supplier relations, business condition or prospects of
Fluoroware or the Company.
-25-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EMPAK
As a material inducement to the Company and Fluoroware to
enter into this agreement and to the Fluoroware Shareholders to exchange their
Fluoroware Shares for Company Shares on the terms set forth in this agreement,
and with the understanding that the Company, Fluoroware and the Fluoroware
Shareholders will be relying thereon in consummating the transactions
contemplated by this agreement, Empak represents and warrants to the Company,
Fluoroware and the Fluoroware Shareholders that, except as set forth in the
disclosure schedule delivered to the Fluoroware Representative by Empak on or
before the Closing Date (the "Empak Disclosure Schedule"):
4.1 Incorporation; Corporate Power; Subsidiary. Empak is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state of Minnesota and has all requisite corporate power and
authority and all authorizations, licenses, permits and certifications necessary
to own and operate its properties; to carry on its business as now conducted and
presently proposed to be conducted and to execute and deliver this agreement and
consummate the transactions contemplated by this agreement. The copies of
Empak's articles of incorporation and bylaws which have been furnished by Empak
to the Fluoroware Representative prior to the date of this agreement are correct
and complete as of the date of this agreement and reflect all amendments made
thereto. Empak is qualified to do business as a foreign corporation in every
jurisdiction in which the nature of its business or its ownership of property
requires it to be so qualified, except for those jurisdictions in which the
failure to be so qualified would not, individually or in the aggregate, have a
material adverse effect on Empak's financial condition. Empak does not own any
equity interest in any partnership, joint venture, corporation, limited
liability company or other organization, entity or enterprise of any form or
nature.
4.2 Authority. The execution and delivery of this agreement
and the consummation of the transactions by this agreement have been duly and
validly authorized by its Board of Directors and no other corporate proceedings
on the part of Empak are necessary to authorize this agreement or to consummate
the Exchange or the transactions contemplated hereby. This agreement has been
duly and validly executed and delivered by Empak and constitutes a valid, legal
and binding agreement which is enforceable against Empak in accordance with its
terms.
4.3 No Breach. The execution, delivery and performance of this
agreement by Empak and the consummation by Empak and the Empak Shareholders of
the transactions contemplated by this agreement do not conflict with or result
in a breach of any of the provisions of, constitute a default under, result in a
violation of, result in the creation of a right of termination or acceleration
or any lien, security interest, charge or encumbrance upon any assets of Empak,
or require any authorization, consent, approval, exemption or other action by or
notice to any court or other governmental body, under the provisions of the
certificate of incorporation or bylaws of Empak or any indenture, mortgage,
lease, loan agreement or other agreement or instrument by which Empak is bound
-26-
or affected, or any law, statute, rule or regulation or order, judgment or
decree to which Empak is subject.
4.4 Governmental Authorities; Consents. Empak is not required
to submit any notice, report or other filing with any governmental authority in
connection with the execution or delivery by it of this agreement or the
consummation of the transactions contemplated hereby. No approval or
authorization of any governmental or regulatory authority or any other party or
person is required to be obtained by Empak in connection with the execution,
delivery and performance of this agreement by the Empak Shareholders or the
transactions contemplated hereby.
4.5 Capital Stock. The authorized capital stock of Empak
consists of 15,000,000 shares of common stock, $.01 par value per share of which
6,550,662 shares are issued and outstanding and are beneficially and legally
owned by the Empak Shareholders in the respective amounts specified on schedule
A-2. All of the outstanding Empak Shares have been duly authorized and are
validly issued, fully paid and nonassessable. Empak has no other equity
securities or securities containing any equity features authorized, issued or
outstanding. There are no agreements or other rights or arrangements existing
which provide for the sale or issuance of capital stock by Empak, and there are
no rights, subscriptions, warrants, options, conversion rights or agreements of
any kind outstanding to purchase or otherwise acquire from Empak any shares of
capital stock or other securities of Empak of any kind. There are no agreements
or other obligations (contingent or otherwise) which may require Empak to
repurchase or otherwise acquire any shares of its capital stock.
4.6 Financial Statements. Empak has delivered to the Company
and the Fluoroware Representative copies of (a) the unaudited balance sheet, as
of February 28, 1999, of Empak (the "Empak Latest Balance Sheet") and the
unaudited statements of earnings, shareholders' equity and cash flows of Empak
for the six-month period then ended (such statements and the Empak Latest
Balance Sheet being herein referred to as the "Empak Latest Financial
Statements"), and (b) audited balance sheets, as of August 31, 1998 and August
31, 1997, of Empak and the audited statements of earnings, shareholders' equity
and cash flows of Empak for each of the fiscal years then ended (collectively,
the "Empak Annual Financial Statements"). The Empak Latest Financial Statements
and the Empak Annual Financial Statements are based upon the information
contained in the books and records of Empak and fairly present, in all material
respects, the financial condition of Empak as of the dates thereof and results
of operations for the periods referred to therein. The Empak Annual Financial
Statements have been prepared in accordance with generally accepted accounting
principles, consistently applied throughout the periods indicated. The Empak
Latest Financial Statements have been prepared in accordance with generally
accepted accounting principles applicable to unaudited interim financial
statements (and thus may not contain all the information and footnotes required
by generally accepted accounting principles or complete financial statements)
consistently with the Empak Annual Financial Statements and reflect all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial positions, results of operation and cash flows for
all periods presented.
-27-
4.7 Absence of Undisclosed Liabilities. Except as reflected in
the Empak Latest Balance Sheet, Empak has no liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise, whether due or to become due,
whether known or unknown, and regardless of when asserted) arising out of
transactions entered into, or any action or inaction, or any state of facts
existing, with respect to or based upon transactions or events occurring prior
to the date of this agreement, except liabilities which have arisen after the
date of the Empak Latest Balance Sheet in the ordinary course of business (none
of which is an uninsured liability for breach of contract, breach of warranty,
tort, infringement, claim or lawsuit).
4.8 No Material Adverse Changes. Since the date of the Empak
Latest Balance Sheet (the "Empak Balance Sheet Date"), there has been no
material adverse change in the business or financial condition of Empak.
4.9 Absence of Certain Developments. Since the Empak Balance
Sheet Date, Empak has not:
(a) borrowed any amount or incurred or become subject to any
liability in excess of $100,000, except (i) current liabilities incurred in the
ordinary course of business, or (ii) liabilities under contracts entered into in
the ordinary course of business;
(b) mortgaged, pledged or subjected to any lien, charge or any
other encumbrance, any of its assets with a fair market value in excess of
$100,000, except (i) liens for current property taxes not yet due and payable,
(ii) liens imposed by law and incurred in the ordinary course of business for
obligations not yet due to carriers, warehousemen, laborers, materialmen and the
like, (iii) liens in respect of pledges or deposits under workers' compensation
laws, or (iv) liens created in the ordinary course of business;
(c) sold, assigned or transferred (including, without
limitation, transfers to any employees, affiliates or shareholders) any tangible
assets with a fair market value in excess of $100,000, or canceled any debts or
claims, in each case, except in the ordinary course of business;
(d) licensed, sublicensed, sold, assigned or transferred
(including, without limitation, licenses or transfers to any employees,
affiliates or shareholders) any patents, trademarks, trade names, copyrights,
trade secrets, computer software or other intellectual property or other
intangible assets;
(e) waived any rights of material value (i.e. with a financial
impact of $50,000 or more) or suffered any extraordinary losses, except in the
ordinary course of business;
(f) declared or paid any dividends or other distributions with
respect to any Empak Shares or redeemed or purchased, directly or indirectly,
any Empak Shares or any options;
-28-
(g) issued, sold or transferred any of its equity securities,
securities convertible into or exchangeable for its equity securities or
warrants, options or other rights to acquire its equity securities, or any bonds
or debt securities;
(h) other than payment of compensation for services rendered
to Empak in the ordinary course of business consistent with past practices,
entered into any transaction with any officers, directors or more than 5%
shareholders of Empak or any other entity in which Empak has an equity interest;
(i) taken any other action or entered into any other
transaction other than in the ordinary course of business and in accordance with
past custom and practice, other than the transactions contemplated by this
agreement;
(j) suffered any theft, damage, destruction or loss of or to
any property or properties owned or used by it, whether or not covered by
insurance;
(k) made or granted any increase in any Plans (as defined in
section 4.16) or arrangement, or amended or terminated any existing Plan or
arrangement, or adopted any new Plan or arrangement or made any commitment or
incurred any liability to any labor organization;
(l) made any single capital expenditure or commitment therefor
in excess of $100,000;
(m) made any change in accounting principles or practices from
those utilized in the preparation of the Empak Annual Financial Statements.
4.10 Tax Matters.
(a) Empak and any subsidiary, any affiliated, combined or
unitary group of which Empak or any subsidiary is or was a member, any "Plans"
(as defined in section 4.16), as the case may be (each, a "Tax Affiliate" and,
collectively, the "Tax Affiliates") has: (i) timely filed all returns,
declarations, reports, estimates, information returns, and statements ("Empak
Returns") required to be filed by it in respect of any "Taxes" (as defined in
subsection 3.10(i)) or required to be filed by it by a taxing authority having
jurisdiction; (ii) timely and properly paid (or has had paid on its behalf) all
Taxes shown to be due and payable on such Empak Returns and such Empak Returns
properly reflect the liability for Taxes of Empak and its Tax Affiliates;
(iii) established on the Empak Latest Balance Sheet, in accordance with
generally accepted accounting principles, reserves that are adequate for the
payment of any Taxes not yet due and payable; (iv) complied with all applicable
laws, rules, and regulations relating to the withholding of Taxes and the
payment thereof (including, without limitation, withholding of Taxes under
sections 1441 and 1442 of the Code, or similar provisions under any foreign
laws), and timely and properly withheld from individual employee wages and paid
over to the
-29-
proper governmental authorities all amounts required to be so withheld and paid
over under all applicable laws.
(b) There are no liens for Taxes upon any assets of Empak,
except liens for Taxes not yet due.
(c) No deficiency for any Taxes has been proposed, asserted or
assessed against Empak that has not been resolved and paid in full. No waiver,
extension or comparable consent given by Empak regarding the application of the
statute of limitations with respect to any Taxes or Empak Returns is
outstanding, nor is any request for any such waiver or consent pending. There is
no Tax audit or other administrative proceeding or court proceeding with regard
to any Taxes or Empak Returns pending, nor has there been any notice to Empak by
any Taxing authority regarding any such Tax, audit or other proceeding, nor has
Empak received notice of any such Tax audit or other proceeding threatened with
regard to any Taxes or Empak Returns. Empak is not aware of any unresolved
questions, claims or disputes concerning the liability for Taxes of Empak or the
Tax Affiliates which would exceed the estimated reserves established on its
books and records.
(d) Neither Empak nor any Tax Affiliate is a party to any
agreement, contract or arrangement that would result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the meaning
of section 280G of the Code and the consummation of the transactions
contemplated by this agreement will not be a factor causing payments to be made
by Empak or any Tax Affiliate that are not deductible (in whole or in part)
under section 280G of the Code.
(e) No property of Empak or any Tax Affiliate is property that
Empak or any Tax Affiliates will be required to treat as being owned by another
person under the provisions of section 168(f)(8) of the Code (as in effect prior
to amendment by the Tax Reform Act of 1986) or is "tax-exempt use property"
within the meaning of section 168 of the Code.
(f) Neither Empak nor any Tax Affiliate is required to include
in income any adjustment under section 481(a) of the Code by reason of a
voluntary change in accounting method initiated by Empak or any Tax Affiliate
and neither Empak nor any Tax Affiliate has received notice that the Internal
Revenue Service has proposed any such adjustment or change in accounting method.
(g) All transactions that could give rise to an understatement
of federal income tax (within the meaning of section 6661 of the Code as it
applied prior to repeal) or an underpayment of tax (within the meaning of
section 6662 of the Code) were reported in a manner for which there is
substantial authority or were adequately disclosed (or, with respect to Empak
Returns filed before the Closing Date, will be reported in such a manner or
adequately disclosed) on the Empak Returns required in accordance with sections
6661(b)(2)(B) and 6662(d)(2)(B) of the Code.
-30-
(h) Neither Empak nor any Tax Affiliate has engaged in any
transaction that would result in a deemed election under section 338(e) of the
Code, and neither Empak nor any Tax Affiliate will engage in any such
transaction within any applicable "consistency period" (as such term is defined
in section 338 of the Code).
4.11 Contracts and Commitments. Empak has furnished to
Fluoroware complete information about its assets, business and contractual
commitments including, without limitation, the information listed in this
section 4.11, and such information, and the copies of documents evidencing such
information that were provided to Fluoroware for review, are correct in all
material respects.
1. A list of all equipment (including motor
vehicles), machinery, furniture, fixtures,
furnishings, leasehold improvements and
other similar property that are owned by
Empak and that are being used by Empak in
connection with the business conducted by
it..
2. Each real property lease and any other
instrument under which Empak claims or holds
an interest in real property owned by
another person.
3. Each personal property lease to which Empak
is a party.
4. Listings of all intangible personal property
used by Empak in the conduct of its trade or
business, including without limitation, all
computer programs, trade secrets,
trademarks, trade names, service names,
service marks, copyrights, patents, patent
licenses, applications for any and all of
the foregoing and registrations thereof
owned by Empak or used in its operations.
5. A legal description of each parcel of real
property owned by Empak, and lists each
mortgage, easement, restriction or other
encumbrance on or affecting each such
parcel.
6. Each other agreement, whether oral or
written, to which Empak is a party,
including the following:
(i) Each executory or partially
executory contract, commitment,
agreement or arrangement made in the
ordinary course of business by Empak
involving (A) an expenditure or
ongoing commitments of more than
$10,000, or (B) commitment by Empak
for delivery of its products or
services over a period of more than
thirty (30) days from the date of
this agreement and
-31-
for an aggregate price of more than
$10,000, or (C) capital expenditures
in excess of $10,000.
(iii) Each contract continuing over a
period of more than six (6) months
from its date, which is not
terminable by Empak upon not more
than thirty (30) days notice.
(iv) Each agreement for the sale of any
capital asset of Empak made or
entered into within twelve (12)
months of the date of this
agreement.
(v) Each employment contract or
agreement relating thereto between
Empak and any officer, consultant,
director or employee, including any
bonus, incentive or deferred
compensation plans, any
confidentiality or non-compete
agreements, and any arrangements
which encourage or compensate
Empak's employees to stay with or
leave Empak following the Closing.
(vi) Each plan or contract or arrangement
of Empak (including Plans),
providing for pensions, life
insurance, medical insurance,
disability insurance, vacations and
other employees' benefits or
compensation plans, whether formal
or informal.
(vii) Each contract between Empak and any
business partner, joint venturer,
dealer, distributor, broker, agent,
sales representative, equipment
manufacturer or representatives or
agents thereof.
(viii) Each license, royalty or other
contract or agreement relating to
intangible personal property.
(ix) Each agreement not made in the
ordinary course of Empak's business.
(x) Each loan agreement, credit facility
or other instrument pursuant to
which Empak is obligated to the
repayment of indebtedness.
7. A list of each policy of liability, property
damage, comprehensive, vehicle, workers'
compensation, key man, disability, fidelity,
errors and omissions, directors' and
officers' and other forms of insurance owned
or maintained by Empak during the past three
(3) years and contains a
-32-
brief description of any claims made
thereunder during such period of time.
8. Copies of all permits, licenses, exemptions,
variances, and other approvals and
authorizations which are necessary to
conduct the business of Empak.
9. A list of all personal property owned by any
third parties (whether a customer, supplier
or other person) for which Empak is
responsible, other than property leased by
Empak.
10. A list of each bank or other financial
institution in which Empak has an account or
depository arrangement, together with the
account names and numbers and the names of
all persons authorized to take any actions
with respect thereto.
11. A list of each employee of Empak and
position, title, remuneration.
12. Each contract, agreement or understanding
(a) relating to the voting of Empak Shares
or the election of directors of Empak; (b)
which prohibits Empak from freely engaging
in business anywhere in the world; (c)
relating to any guaranty of any obligation
for borrowed money or otherwise.
True and correct copies of all documents described in this
section 4.11 have been delivered or made available to Fluoroware or the
Fluoroware Representatives or will be made available upon request and will be
signed by an officer of Empak for identification upon request of Fluoroware or
the Fluoroware Representative.
4.12 No Defaults. Each of the leases, contracts, agreements
and insurance policies described in section 4.11 is in full force and effect as
of the date hereof with no defaults existing thereunder. Empak is not in default
or breach under any of such leases, contracts, agreements and policies, and no
other party to any such leases, contracts, agreements and policies is in default
or breach thereunder (other than failure by one or more of such other parties to
make timely payment of accounts receivable arising thereunder).
-33-
4.13 Intellectual Property Rights.
(a) Definitions.
(i) "Copyrights" shall mean rights in original works
of authorship including, without limitation, computer programs
as those terms are used in 17 U.S.C.ss.101 et seq. and rights
under corresponding foreign laws.
(ii) "Intellectual Property Rights" shall mean the
Copyrights, Patent Rights, Trademarks, Know-How and Trade
Secrets and all other similar rights, that are owned, licensed
or controlled by Empak and used in or held for use in
connection with the operations of its business.
(iii) "Know-How" shall mean (A) design documents, (B)
specifications and performance criteria, (C) operating
instructions and maintenance manuals, (D) computer software
tools and related documentation, including, without
limitation, source and object code copies therefor in
electronic or printed forms, (E) prototypes, models or
samples, (F) files relating to applications for Intellectual
Property Rights, and (G) all other tangible materials (not
necessarily proprietary) used in or held for use in connection
with the Intellectual Property Rights.
(iv) "Licensed Software" shall mean all software used
by Empak under license as part of Empak's business (or for
which Empak has a right to reproduce and distribute copies as
part of Empak's business).
(v) "Patent Rights" shall mean rights provided by a
United States or foreign patent, including reissues or
extensions thereof, and on applications for the foregoing,
including any divisions, continuations and
continuations-in-part thereof filed by Empak.
(vi) "Trade Secrets" shall mean all proprietary
information that is used in or held by Empak for use in
connection with the Empak Intellectual Property Rights and
that (A) derives independent economic value, actual or
potential, from not being generally known to, and not being
readily ascertainable by proper means by, third parties who
can obtain economic value from its disclosure or use and (B)
is the subject of efforts by Empak that have been reasonable
under the circumstances to maintain its secrecy. Trade Secrets
may include, without limitation, source and object code,
software documentation, computer program designs, and
information regarding future business opportunities.
(vii) "Trademarks" shall mean trade names,
trademarks, service marks, trade dress and product
configurations that are used or, if any, are presently subject
to
-34-
an intent to use application to register in the United States
Patent and Trademark Office by Empak in connection with the
operations of its business, and all (A) goodwill and common
law rights associated therewith, (B) registration applications
pending thereon in any state and in any country, and (C)
registrations issued thereon in any state and in any country.
(b) Certain Representations and Warranties Regarding
Intellectual Property.
(i) Empak owns or has the exclusive right to use the
Intellectual Property Rights and has the right to fully use
and exploit all the Trade Secrets and Know-How. Empak has
taken all reasonably necessary action to protect the
Intellectual Property Rights including, without limitation,
use of reasonable secrecy measures to protect the Trade
Secrets included in the Intellectual Property Rights. Empak
has not granted to any third party any license for or access
to the Intellectual Property Rights and has not previously
assigned, transferred or otherwise encumbered the Intellectual
Property Rights.
(ii) The Intellectual Property Rights comprise all
intellectual property rights used by Empak in the conduct of
its business.
(iii) No claim by any third party contesting the
validity of the Intellectual Property Rights has been made, is
currently outstanding or is threatened, and Empak has not
received any notice of any facts suggesting any infringement,
misappropriation or violation by others of the Intellectual
Property Rights.
(iv) No infringement, illicit copying,
misappropriation or violation of any third party intellectual
property rights has or will occur with respect to Empak's use
of the Intellectual Property Rights as currently being used by
Empak or the continuing conduct of Empak's business as now
conducted.
(v) Empak has valid licenses to use the intellectual
property rights of third parties which are used in Empak's
business but are not owned by Empak. Except for the licenses
for licensed software which have been provided to Fluoroware
for review, there are no other agreements requiring Empak to
make payments or provide any consideration for, or restricting
Empak's right to use, any intellectual property rights of
third parties.
(vi) Empak has performed all material obligations
required to be performed by it, and is not in default under
material contract or arrangement relating to any Intellectual
Property Rights.
-35-
4.14 Litigation. Empak is not a party to, or the subject of,
any litigation pending or threatened. Empak is not the subject of any
investigation by any governmental or quasi-governmental body or agency or legal,
administrative or arbitration proceeding, and there are no facts which might
result in or form the basis for any such investigation or proceeding. There is
no outstanding judgment, order, junction or decree affecting Empak or its
properties, assets or business or preventing the consummation of the Exchange.
4.15 Employees. To Empak's knowledge, no management or key
employee of Empak intends to terminate his/her employment with Empak. Empak has
complied with all laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective bargaining and
the payment of social security and other taxes. There is not pending or, to the
knowledge of Empak, threatened any labor dispute, strike or work stoppage
against Empak which may interfere with the continued operation of the business
activities of Empak. None of Empak or any representative or employee of Empak
has committed any unfair labor practices in connection with the operation of
Empak's business, and there is not pending or threatened any charge or complaint
against Empak by the National Labor Relations Board or any comparable state
agency. Empak is not or will not become, liable for any retroactive workers'
compensation insurance premiums or retroactive unemployment compensation
experience ratings or charges in connection with the operation of its business
relating to the period of time prior to the date of this agreement. No employee
of Empak is subject to any secrecy or noncompetition agreement or any other
agreement or restriction of any kind that would impede in any way the ability of
such employee to carry out fully all activities of such employee in furtherance
of the business of Empak. No employee or former employee of Empak has any claim
with respect to any intellectual property rights of Empak.
4.16 Employee Benefit Plans.
(a) Except for plans, contracts or arrangements which Empak
has provided to Fluoroware for review, with respect to all employees and former
employees of Empak and all dependents and beneficiaries of such employees and
former employees, (i) Empak does not maintain or contribute to any nonqualified
deferred compensation or retirement plans, contracts or arrangements; (ii) Empak
does not maintain or contribute to any qualified defined contribution plans (as
defined in Section 3(34) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 414(i) of the Code, (iii) Empak does not
maintain or contribute to any qualified defined benefit plans (as defined in
Section 3(35) of ERISA or Section 414(j) of the Code); and (iv) Empak does not
maintain or contribute to any employee welfare benefit plans (as defined in
Section 3(1) of ERISA, other than plans that are excluded from the coverage of
ERISA by reason of the regulations promulgated thereunder).
(b) To the extent required (either as a matter of law or to
obtain the intended tax treatment and tax benefits), all employee benefit plans
(as defined in Section 3(3) of ERISA) Empak maintains or to which it contributes
(collectively, the "Empak Plans") comply in all respects with the
-36-
requirements of ERISA and the Code. With respect to the Empak Plans, (i) all
required contributions which are due have been made and a proper accrual has
been made for all contributions due; (ii) there are no actions, suits or claims
pending, other than routine uncontested claims for benefits and actions relating
to qualified domestic relations orders; and (iii) there have been no prohibited
transactions (as defined in Section 406 of ERISA or Section 4975 of the Code).
(c) Empak has delivered to the Fluoroware Representative true
and complete copies of (i) the most recent determination letter, if any,
received by Empak from the Internal Revenue Service regarding the Empak Plans
which Empak maintains or to which it contributes and any amendment to any Empak
Plan made subsequent to any Empak Plan amendments covered by any such
determination letter; (ii) the most recent financial statements and annual
report or return for the Empak Plans; and (iii) the most recently prepared
actuarial valuation reports, if any.
(d) Empak does not contribute (and has never contributed) to
any multiemployer plan, as defined in Section 3(37) of ERISA. Empak has no
actual or potential liabilities under Section 4201 of ERISA for any complete or
partial withdrawal from a multiemployer plan. Empak has no actual or potential
liability for death or medical benefits after separation from employment, other
than (i) death benefits under the employee benefit plans or programs (whether or
not subject to ERISA) provided to Fluoroware for review and (ii) health care
continuation benefits described in Section 4980B of the Code.
(e) Neither Empak nor any of its directors, officers,
employees or other "fiduciaries", as such term is defined in Section 3(21) of
ERISA, has committed any breach of fiduciary responsibility imposed by ERISA or
any other applicable law with respect to the Empak Plans which would subject the
Company, Empak, any Empak subsidiary, or any of their respective directors,
officers or employees to any liability under ERISA or any applicable law.
(f) Empak has not incurred any liability for any tax or civil
penalty or any disqualification of any employee benefit plan (as defined in
Section 3(3) of ERISA) imposed by Sections 4980B and 4975 of the Code and Part 6
of Title I and Section 502(i) of ERISA.
4.17 Customers and Suppliers. As of the date of this
agreement, the relationships of Empak with its customers and suppliers are good
commercial working relationships. No customer or supplier has indicated that it
will stop or decrease the amount of business done with Empak, except for changes
in the ordinary course of Empak's business.
4.18 Compliance with Laws; Permits.
-37-
(a) Empak is not currently being charged with any violations
of the Americans with Disabilities Act of 1990 or the regulations promulgated
thereunder (collectively, the "ADA") or similar state laws or regulations, nor
has Empak been notified of any problems, which through the passage of time or
the future to take corrective action, could result in a violation of the ADA or
such state's laws or regulations. Empak has provided the Fluoroware
Representative with any written materials in its possession which assess or
relate to the status of Empak's real property or Empak's compliance with ADA and
such state's laws or regulations. Empak is not currently being charged with nor,
to its knowledge, is it operating its business in violation of any applicable
foreign, federal, state or municipal laws, regulations or ordinances including,
without limitation, the federal Foreign Corrupt Practices Act, the federal
Occupational Safety and Health Act of 1970, or the regulations promulgated
thereunder ("OSHA"), or any other applicable foreign, federal, state or
municipal statute, law, regulation or ordinance relating to occupational health
and safety, nor is Empak relying on any exemption from or deferral of any such
applicable statute, law or regulation that would not be available to it or the
Company after the Exchange.
(b) Empak has, in full force and effect, all licenses, permits
and certificates, from federal, state, local and foreign authorities (including,
without limitation, federal and state agencies regulating occupational health
and safety) used in and, individually or in the aggregate, material to the
business or financial condition of Empak or necessary to conduct its business
and own and operate its properties (collectively, the "Empak Permits"). Empak
has conducted its business in substantial compliance with all material terms and
conditions of the Empak Permits.
(c) Empak has not made or agreed to make gifts of money, other
property or similar benefits (other than incidental gifts of articles of nominal
value) to any actual or potential customer, supplier, governmental employee or
any other person in a position to assist or hinder Empak in connection with any
actual or proposed transaction.
4.19 Brokerage. No third party shall be entitled to receive
any brokerage commissions, finder's fees, fees for financial advisory services
or similar compensation in connection with the transactions contemplated by this
agreement based on any arrangement or agreement made by or on behalf of Empak or
any of the Empak Shareholders.
4.20 Inventory. All inventories reflected in the Empak Latest
Balance Sheets are stated at the lower of cost or market and, as so stated, are
in good condition and are currently usable or salable in the category in which
they are inventoried, in the ordinary course of business of Empak, without
discounts other than normal trade discounts regularly offered by Empak for
prompt payment or quantity purchase.
4.21 Accounts and Notes Receivable. To the extent they exceed
the reserves for doubtful accounts, the accounts and notes receivable of Empak
as set forth in the Empak Latest
-38-
Balance Sheets. and all accounts receivable of Empak that have arisen since the
Latest Balance Sheet Date are valid and enforceable obligations due to Empak and
shall be collectible by Empak in the ordinary course of business. The goods and
services sold and delivered by Empak that give rise to such accounts and notes
receivable were sold and delivered in conformity with the applicable purchase
orders, agreements and specifications. Such accounts and notes receivable are
subject to no valid defense or offsets except routine customer complaints of an
immaterial nature.
4.22 Affiliate Transactions. Other than pursuant to this
agreement, no officer, director or employee of Empak or any member of the
immediate family of any such officer, director or employee, or any entity in
which any of such persons owns any beneficial interest (other than any
publicly-held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market and less than one percent of the
stock of which is beneficially owned by any of such persons) (collectively
"insiders"), has any agreement with Empak (other than normal employment
arrangements) or any interest in any property, real, personal or mixed, tangible
or intangible, used in or pertaining to the business of Empak (other than
ownership of Empak Shares). None of the insiders has any direct or indirect
interest in any competitor, supplier or customer of Empak or in any person, firm
or entity from whom or to whom Empak leases any property, or in any other
person, firm or entity with whom Empak transacts business of any nature. For
purposes of this section 4.22, the members of the immediate family of an
officer, director or employee shall consist of the spouse, parents, children,
siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers-
and sisters-in-law of such officer, director or employee.
4.23 Real Estate.
(a) Empak has good and marketable title in fee simple to all
real property and improvements which are owned by Empak and used in its business
(the "Empak Owned Real Property"), free and clear of all liens, mortgages,
encumbrances, covenants, charges, easements, restrictions, reservations, leases
and assessments of any nature whatsoever. All of the buildings, improvements and
structures located on the Empak Owned Real Property or located on the real
property subject to the leases to which Empak is a party (the "Empak Leased Real
Property") are in good operating condition and repair and suitable for the
purposes for which they are being used. Each has adequate rights of ingress and
egress for the operation of its business as it is currently being conducted by
Empak, and has access, sufficient for the conduct of Empak's business as now
conducted or as presently proposed to be conducted, to all utilities, including
electricity, sanitary and storm sewer, potable water, natural gas and other
utilities, used in the operation of the business of Empak at that location. No
such building, structure or improvement, or any appurtenance thereto or
equipment therein, or the operation or maintenance thereof, violates any
restrictive covenant or any provision of any federal, state or local law,
ordinance or zoning, fire, safety, pollution or health regulations, or
encroaches on any property owned by others. No condemnation proceeding is
pending or threatened with respect to the Empak Owned Real Property or the Empak
Leased Real Property. No change is pending or threatened in any provision of any
federal, state or local law, ordinance or
-39-
zoning or other regulation which might materially interfere with the present or
proposed use of any building, improvement or structure located on the Empak
Owned Real Property or the Empak Leased Real Property.
(b) Empak has previously delivered to the Fluoroware
Representative a true and complete copy of each lease (including all amendments
and supplements thereto) for property leased or otherwise used by Empak in its
business. Each such lease is in full force and effect, and constitutes a legal,
valid, and binding obligation of Empak and each other party thereto, enforceable
by Empak against the lessor thereof in accordance with its terms. Neither Empak
nor any other party to any such lease is in default of or under any such lease.
The transaction contemplated by this agreement will not result in the default of
or under any such lease or require the consent of the lessor under any such
lease.
(c) The leases to which Empak is a party are in full force and
effect, and Empak holds a valid and existing leasehold interest under each of
such leases. Empak is not in default, and no circumstances exist which, if not
remedied, would, either with or without notice or the passage of time or both,
result in such default under any of such leases.
4.24 Conditions of Assets.
(a) Empak owns good and marketable title to each of the
tangible personal properties and tangible and intangible assets reflected on the
Empak Latest Balance Sheet, or acquired since the date thereof, free and clear
of all liens and encumbrances, except for (i) liens for taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings, (ii)
liens identified in the Empak Disclosure Statement, (iii) assets disposed of
since the Empak Balance Sheet Date in the ordinary course of business, (iv)
liens imposed by law and incurred in the ordinary course of business for
obligations not yet due or delinquent and (v) liens in respect of pledges or
deposits under workers' compensation laws.
(b) The buildings, equipment and other tangible assets used by
Empak in the conduct of its business are, in all material respects, in good
condition and repair, ordinary wear and tear excepted, and are adequate and
suitable for the purposes for which they are currently being used.
4.25 Environmental Matters.
(a) As used in this section 4.25, the following terms shall
have the following meanings:
(i) "Clean-up" shall mean removal and/or remediation
of, or other response (including, without limitation, testing,
monitoring, sampling or investigating of any kind) to, any
Release of Hazardous Substances or Contamination, to the
-40-
satisfaction of all applicable governmental agencies, in
compliance with Environmental Laws and in compliance with good
commercial practice.
(ii) "Contamination" shall mean the presence of, or
Release on, under, from or to the Empak Property of any
Hazardous Substance, except the routine storage and use of
Hazardous Substances from time to time in the ordinary course
of business, in compliance with Environmental Laws and in
compliance with good commercial practice.
(iii) "Environmental Documents" shall mean (A) any
and all documents received by Empak from the United States
Environmental Protection Agency ("EPA") and/or any state,
county or municipal environmental or health agency concerning
the environmental condition of the Empak Property or the
effect of Empak's business operations on the environmental
condition of the Empak Property; (B) any and all documents
submitted by Empak to the EPA and/or any state, county or
municipal environmental or health agency concerning the
environmental condition of the Empak Property or the effect of
Empak's business operations on the environmental condition of
the Empak Property; and (C) any and all reviews, audits,
reports, or other analyzes concerning Contamination.
(iv) "Environmental Law(s)" shall mean any and all
federal, state and local laws, statutes, codes, ordinances,
regulations, rules, policies, consent decrees, judicial
orders, administrative orders or other requirements relating
to the environment or to human health or safety associated
with the environment, all as amended or modified from time to
time. Environmental Laws include, but are not limited to, the
following statutes and all rules and regulations relating
thereto, all as amended or modified from time to time:
A. The Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), as amended
by the Superfund Amendments and Reauthorization Act
of 1986 ("▇▇▇▇") 42 U.S.C.ss.ss.9601-9675; the
Resource Conservation and Recovery Act of 1976
("RCRA") 42 U.S.C.ss.6901-6991; the Clean Water Act
33 ▇.▇.▇.▇▇. 1321 et seq; the Clean Air Act 42
U.S.C.ss.ss.7401 et seq; the Federal Insecticide,
Fungicide and Rodenticide Act ("FIFRA") 7
U.S.C.ss.136 et seq; the Toxic Substances Control Act
("TSCA") 15 U.S.C. ▇▇.▇▇. 2601-2671; and
B. The Minnesota Environmental Response and
Liability Act ("▇▇▇▇▇") Minn. Stat. Ch. 115B; the
Minnesota Petroleum Tank Release Cleanup Act, Minn.
Stat. Ch. 115C; the Minnesota Agricultural Chemical
Liability, Incidents, and Enforcement Act, Minn.
Stat. Ch. 18D; and the
-41-
Minnesota Agricultural Chemical Response and
Reimbursement Law, Minn. Stat. Ch. 18E.
(v) "Hazardous Substance(s)" shall mean (A) any
substance, the presence of which requires investigation or
remediation under any Environmental Law or under common law;
(B) any dangerous, toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous substance which is regulated by any Environmental
Law; (C) any substance, the presence of which causes or
threatens to cause a nuisance upon the Empak Property or to
adjacent properties or poses or threatens to pose a hazard to
the health or safety of persons on or about the Empak
Property; (D) any substance, the presence of which on
properties adjacent to the Empak Property could constitute a
trespass by Empak; and (E) urea-formaldehyde, polychlorinated
biphenyls, asbestos or asbestos-containing materials,
petroleum and petroleum products; provided, however, that
substances otherwise within the meaning of Hazardous
Substances and held for resale or used in the preparation of
pharmaceuticals shall not be considered Hazardous Substances.
(vi) "Empak Property" shall refer to any real
property currently owned by Empak, any real property currently
leased by Empak and any other real property that has been
previously owned or used by Empak in the operation of its
business.
(vii) "Regulatory Action(s)" shall mean any claim,
demand, action or proceeding brought or instigated by any
governmental authority in connection with any Environmental
Law (including without limitation civil, criminal and/or
administrative proceedings), whether or not seeking costs,
damages, penalties or expenses.
(viii) "Release" shall mean the spilling, leaking,
disposing, discharging, emitting, depositing, injecting,
leaching, escaping or any other release or threatened release,
however defined, and whether intentional or unintentional, of
any Hazardous Substance.
(ix) "Third Party Claim(s)" shall mean third party
claims, actions, demands or proceedings (other than Regulatory
Actions) based on negligence, trespass, strict liability,
nuisance, toxic tort or detriment to human health or welfare
due to any Release of Hazardous Substances or Contamination,
and whether or not seeking costs, damages, penalties or
expenses.
(b) No Third Party Claims and/or Regulatory Actions have been
asserted or assessed against Empak or the Empak Property and no Third Party
Claims and/or Regulatory Actions are pending or threatened against Empak or the
Empak Property, arising out of or due to, or allegedly arising out of or due to,
(i) the Release on, under or from the Empak Property of any Hazardous
-42-
Substances; (ii) any Contamination of the Empak Property, including without
limitation, the presence of any Hazardous Substance which has come to be located
on or under the Empak Property from another location; (iii) any violation or
alleged violation of any Environmental Law with respect to the Empak Property or
Empak's business operations on the Empak Property; (iv) any injury to human
health or safety or to the environment by reason of the past or present
condition of, or past or present activities on or under, the Empak Property; or
(v) the generation, manufacture, storage, treatment, handling, transportation or
other use, however defined, of any Hazardous Substance on the Empak Property.
(c) Empak's storage, transportation, handling, use or
disposal, if any, of Hazardous Substances on or under the Empak Property and/or
disposal elsewhere, if any, of Hazardous Substances generated on or from the
Empak Property is currently, and at all times has been, in compliance with all
applicable Environmental Laws.
(d) Empak has delivered to the Fluoroware Representative,
prior to the execution and delivery of this agreement, complete copies of any
and all Environmental Documents.
(e) Empak has not transported nor arranged for the
transportation of any Hazardous Substances to any location which is: (i) listed
on the EPA's National Priorities List of Hazardous Waste Sites (the "National
Priorities List"); (ii) listed for possible inclusion on the National Priorities
List, in CERCLIS or on any similar state list; or (iii) the subject of any
Regulatory Action which may lead to claims against Empak for damages to natural
resources, personal injury, Clean-up costs or Clean-up work, including, but not
limited to, claims under CERCLA.
(f) The Empak Property is not listed in the National
Priorities List or any other list, schedule, log, inventory or record, however
defined, maintained by any federal, state or local governmental agency with
respect to sites from which there is or has been a Release of any Hazardous
Substance or any Contamination.
(g) No part of the Empak Property was ever used, nor is it now
being used, (A) as a landfill, dump or other disposal, storage, transfer or
handling area for Hazardous Substances, excepting, however, for the routine
storage and use of Hazardous Substances from time to time in the ordinary course
of business, in compliance with Environmental Laws and in compliance with good
commercial practice; (B) for industrial, military or manufacturing purposes; or
(C) as a gasoline service station or a facility for selling, dispensing,
storing, transferring or handling petroleum and/or petroleum products.
(h) There are no underground or aboveground storage tanks
(whether or not currently in use), urea-formaldehyde materials, asbestos,
asbestos containing materials, polychlorinated biphenyls (PCBs) or nuclear fuels
or wastes, located on or under the Empak Property, and no underground tank
previously located on the Empak Property has been removed therefrom.
-43-
(i) There has not been, or is not now occurring, any Release
of any Hazardous Substance on, under or from the Empak Property. There has not
been, and is not now present, any Contamination of the Empak Property.
(j) The Empak Property and the use and operation thereof, are
currently and, at all times during Empak's ownership or operation thereof, have
been, and, to the best of Empak's knowledge after due inquiry, at all times
during the ownership and/or operation thereof by prior owners and/or users have
been, in compliance with all applicable Environmental Laws.
(k) There are no liens against the Empak Property arising
under any Environmental Law, or based upon a Regulatory Action and/or Third
Party Claim.
(l) There are no ▇▇▇▇▇ (as said term is defined in Minn.
▇▇▇▇.▇▇. 103I.005, Subd. 21) on the Empak Property.
(m) All chemical substances contained in Empak's
commercially-sold product lines were included on the initial inventory list
promulgated under the United States Toxic Substances Control Act or were the
subject of a premanufacturing notice filed with the EPA under such act. Empak's
material safety data sheets for its assets accurately and properly reflect any
hazardous ingredients in any products manufactured or sold by Empak in the
conduct of its business.
4.26 Year 2000 Compliance. All software used by Empak in the
operation of its business (the "Software") is Year 2000 Compliant, including
date century recognition, calculations which accommodate same century and
multi-century formulas and date values that reflect the century. As used herein,
"Year 2000 Compliant" shall mean the ability of the Software to (i) consistently
handle date information before, during and after January 1, 2000, including but
not limited to accepting date input, providing date output, and performing
calculations on dates or portions of dates; (ii) function accurately in
accordance with all documentation without interruption before, during and after
January 1, 2000, without any change of operations associated with the advent of
the new century; (iii) respond to two-digit date input in a way that resolves
any ambiguity as to century in a disclosed, defined and predetermined manner;
and (iv) store and provide output of date information in ways that are
unambiguous as to century.
4.27 Warranties.
(a) Empak has provided Fluoroware with an accurate listing of
a claims or threatened claims for breach of any warranty relating to any
products sold by Empak prior to the date hereof. The reserves for warranty
claims on the Empak Latest Balance Sheet are consistent with Empak's prior
practices and are fully adequate to cover all warranty claims made or to be made
against any products of Empak sold prior to the date thereof.
-44-
(b) The goods and services sold by Empak (i) conform in all
respects with the specification, documentation, performance standard,
representation or statement (if any) made or provided with respect thereto by or
with authorization of Empak and (ii) there has not been any material claim by
any customer or other person alleging that any such goods and services does not
conform in all respects with any specification, documentation, performance,
standard, representation or statement made or provided by or on behalf of Empak,
and, to the knowledge of Fluoroware, there is no basis for any such claim.
(c) Other than its obligations to perform under the contracts
to which it is a party , Empak has not incurred or become subject to any
material liability arising from (i) any product, system, program, other asset
designed, developed, manufactured, assembled, sold, supplied, installed,
repaired, licensed or made available by Empak, or (ii) any consulting services,
installation services, programming services, repair services, maintenance
services, training services, support services or other services performed by
Empak.
4.28 Disclosure. Neither this agreement nor any of the
exhibits, schedules or any of the documents delivered by or on behalf of Empak
pursuant to this agreement nor the Empak Disclosure Schedule nor any of the
financial statements referred to in section 4.6, taken as a whole, contains any
untrue statement of a material fact regarding Empak or its business or any of
the other matters dealt with in this article IV relating to Empak or the
transactions contemplated by this agreement. This agreement, the exhibits or
schedules hereto, the documents delivered to Fluoroware by or on behalf of Empak
pursuant to this agreement, the Disclosure Schedule and the financial statements
referred to in section 4.6, taken as a whole, do not omit any material fact
necessary to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading, and there is no fact
which has not been disclosed to the Fluoroware Representative of which Empak is
aware which materially affects adversely or could reasonably be anticipated to
materially affect adversely the assets, financial condition, operating results,
customer, employee or supplier relations, business condition or prospects of
Empak or the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Fluoroware Shareholders and the Empak
Shareholders to enter into the Shareholder Agreements and to complete the
Exchange on the terms set forth in this agreement and with the understanding
that the Shareholders will be relying thereon in consummating the Exchange and
the other transactions contemplated by this agreement, the Company hereby
represents and warrants to each of the Shareholders as follows:
5.1 Incorporation and Corporate Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state of Minnesota, with the
-45-
requisite corporate power and authority to enter into this agreement and perform
its obligations hereunder.
5.2 Execution, Delivery; Valid and Binding Agreement. The
execution, delivery and performance of this agreement, by the Company, and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all requisite corporate action, and no other corporate proceedings
on its part are necessary to authorize the execution, delivery or performance of
this agreement This agreement has been duly executed and delivered by the
Company and constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms.
5.3 Validity of the Company Shares. The Company Shares to be
issued pursuant to this agreement will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and subject to no preemptive rights.
5.4 No Breach. The execution, delivery and performance of this
agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not conflict with or result in any breach of any of the
provisions of, constitute a default under, result in a violation of, result in
the creation of a right of termination or acceleration of any lien, security
interest, charge or encumbrance upon any assets of the Company, or require any
authorization, consent, approval, exemption or other action by or notice to any
court or other governmental body, under the provisions of the articles or
certificate of incorporation or bylaws of the Company or any indenture,
mortgage, lease, loan agreement or other agreement or instrument by which the
Company is bound or affected, or any law, statute, rule or regulation or order,
judgment or decree to which the Company is subject.
5.5 Governmental Authorities; Consents. The Company is not
required to submit any notice, report or other filing with any governmental
authority in connection with the execution or delivery by it of this agreement
or the consummation of the transactions contemplated hereby. No consent,
approval or authorization of any governmental or regulatory authority or any
other party or person is required to be obtained by the Company in connection
with its execution, delivery and performance of this agreement or the
transactions contemplated hereby.
5.6 Brokerage. No third party shall be entitled to receive any
brokerage commissions, finder's fees, fees for financial advisory services or
similar compensation in connection with the transactions contemplated by this
agreement based on any arrangement or agreement made by or on behalf of the
Company.
-46-
ARTICLE VI
COVENANTS OF EMPAK AND FLUOROWARE
6.1 Conduct of the Business. Each of Fluoroware and Empak (the
"Constituent Corporations" or each singly a "Constituent Corporation") shall
observe each term set forth in this section 6.1 and agrees that, from the date
hereof until the Closing Date, unless otherwise consented to by the other
Constituent Corporation in writing:
(a) The business of such Constituent Corporation shall be
conducted only in, and such Constituent Corporation shall not take any action
except in, the ordinary course of such Constituent Corporation's business, on an
arm's-length basis and in accordance in all material respects with all
applicable laws, rules and regulations and such Constituent Corporation's past
custom and practice;
(b) Such Constituent Corporation shall not, directly or
indirectly, do or permit to occur any of the following: (i) issue or sell any
additional shares of, or any options, warrants, conversion privileges or rights
of any kind to acquire any shares of, any of its capital stock, (ii) sell,
pledge, dispose of or encumber any of its assets, except in the ordinary course
of business; (iii) amend or propose to amend its certificate of incorporation or
bylaws; (iv) split, combine or reclassify any outstanding shares of its capital
stock, or declare, set aside or pay any dividend or other distribution payable
in cash, stock, property or otherwise with respect to shares of its capital
stock; (v) redeem, purchase or acquire or offer to acquire any shares of such
Constituent Corporation's capital stock or other securities of such Constituent
Corporation; (vi) acquire (by merger, exchange, consolidation, acquisition of
stock or assets or otherwise) any corporation, partnership, joint venture or
other business organization or division or material assets thereof; (vii) incur
any indebtedness for borrowed money or issue any debt securities except the
borrowing of working capital in the ordinary course of business and consistent
with past practice; (viii) permit any accounts payable owed to trade creditors
to remain outstanding more than 60 days; (ix) accelerate, beyond the normal
collection cycle, collection of accounts receivable; or (x) enter into or
propose to enter into, or modify or propose to modify, any agreement,
arrangement or understanding with respect to any of the matters set forth in
this section 6.1(b);
(c) Such Constituent Corporation shall not, directly or
indirectly, enter into or modify any employment, severance or similar agreements
or arrangements with, or grant any bonuses, salary increases, severance or
termination pay to, any officers, directors, employees or consultants, or take
any action with respect to the grant of any bonuses, salary increases, severance
or termination pay or with respect to any increase of benefits payable in effect
on the date of this agreement;
(d) Such Constituent Corporation shall not adopt or amend any
bonus, profit sharing, compensation, stock option, pension, retirement, deferred
compensation, employment or other employee benefit plan, trust, fund or group
arrangement for the benefit or welfare of any employees or any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or
arrangements for the benefit or welfare of any director;
-47-
(e) Such Constituent Corporation shall not cancel or terminate
its current insurance policies or cause any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse, replacement
policies providing coverage equal to or greater than the coverage under the
canceled, terminated or lapsed policies for substantially similar premiums are
in full force and effect;
(f) Such Constituent Corporation shall (i) use its best
efforts to preserve intact such Constituent Corporation's business organization
and goodwill, keep available the services of such Constituent Corporation's
officers and employees as a group and maintain satisfactory relationships with
suppliers, distributors, customers and others having business relationships with
such Constituent Corporation; (ii) confer on a regular and frequent basis with
representatives of the other Constituent Corporation to report operational
matters and the general status of ongoing operations; (iii) not intentionally
take any action which would render, or which reasonably may be expected to
render, any representation or warranty made by it in this agreement untrue at
the Closing; (iv) notify the other Constituent Corporation of any emergency or
other change in the normal course of such Constituent Corporation's business or
in the operation of such Constituent Corporation's properties and of any
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated) if such emergency,
change, complaint, investigation or hearing would be material, individually or
in the aggregate, to the business, operations or financial condition of such
Constituent Corporation or to such Constituent Corporation's ability to
consummate the transactions contemplated by this agreement; and (v) promptly
notify the other Constituent Corporation in writing if such Constituent
Corporation shall discover that any representation or warranty made by its
shareholders in this agreement was when made, or has subsequently become, untrue
in any respect;
(g) Such Constituent Corporation shall (i) file any Tax
returns, elections or information statements with respect to any liabilities for
Taxes of such Constituent Corporation or other matters relating to Taxes of such
Constituent Corporation which pursuant to applicable law must be filed prior to
the Closing Date; (ii) promptly upon filing provide copies of any such Tax
returns, elections or information statements to the other Constituent
Corporation; (iii) make any such Tax elections or other discretionary positions
with respect to Taxes taken by or affecting such Constituent Corporation only
upon prior consultation with and consent of the other Constituent Corporation;
and (iv) not amend any Return; and
(h) Such Constituent Corporation shall not perform any act
referenced by (or omit to perform any act which omission is referenced by) the
terms of section 3.9 or section 4.9.
6.2 Access to Books and Records. Between the date of this
agreement and the Closing Date, each Constituent Corporation shall afford to the
other Constituent Corporation and the Fluoroware Representative or the Empak
Representatives (collectively, the "Representatives") full access at all
reasonable times and upon reasonable notice to the offices, properties, books,
records, officers, employees and other items of such Constituent Corporation,
and the work papers of its regular
-48-
independent accountants, relating to work done by such accountants with respect
to such Constituent Corporation for each of the fiscal years ended in August,
1998 and 1997, and otherwise provide such assistance as is reasonably requested
by the Fluoroware Representative or the Empak Representatives, as the case may
be, in order that the other Constituent Corporation may have a full opportunity
to make such investigation and evaluation as it shall reasonably desire to make
of the business and affairs of such Constituent Corporation. In addition, such
Constituent Corporation and its officers and directors shall cooperate fully
(including providing introductions, where necessary) with the other Constituent
Corporation to enable the other Constituent Corporation to contact such third
parties, including customers, prospective customers, specifying agencies,
vendors, or suppliers of such Constituent Corporation as the other Constituent
Corporation deems reasonably necessary to complete its due diligence; provided
that, the other Constituent Corporation agrees not to initiate such contacts
without the prior approval of such Constituent Corporation, which approval will
not be unreasonably withheld. Any information obtained by the other Constituent
Corporation or its representatives in connection with such investigation,
evaluation and due diligence shall be maintained by the other Constituent
Corporation or its representatives on a confidential basis in accordance with
the confidentiality commitments set forth in the letter of intent, dated March
15, 1999, between the Constituent Corporations, and the separate confidentiality
agreement between the Constituent Corporations, dated September 25, 1998 and
October 12, 1998.
6.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filing. Fluoroware, Empak and any
Shareholder who is an "Ultimate Parent Entity" of either Fluoroware or Empak
shall cooperate with each other and cause to be filed with the Federal Trade
Commission (the "FTC") and the U.S. Department of Justice the premerger
notification filing required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements
Act of 1976 (the "▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act"), and shall make available to each
other such financial and other information as may be needed to complete and file
the forms required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. Each of Empak and Fluoroware
shall be responsible for the payment of one-half (1/2) of the filing date
payable to the FTC for the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act notification filing.
6.4 Other Regulatory Filings. Each Constituent Corporation
shall, as promptly as practicable after the execution of this agreement, make or
cause to be made all filings and submissions under any laws or regulations
applicable to such Constituent Corporation for the consummation of the
transactions contemplated herein. Each Constituent Corporation will coordinate
and cooperate with the other Constituent Corporation in exchanging such
information, will not make any such filing without providing to the other
Constituent Corporation a final copy thereof for its review and consent at least
two full business days in advance of the proposed filing and will provide such
reasonable assistance as the other Constituent Corporation may request in
connection with all of the foregoing.
6.5 Conditions. Each Constituent Corporation shall take all
commercially reasonable actions necessary or desirable to cause the conditions
set forth in sections 7.1 and 7.2 to be satisfied and to consummate the
transactions contemplated herein as soon as reasonably possible after the
satisfaction thereof (but in any event within three business days of such date).
-49-
6.6 No Negotiations. Neither Constituent Corporation shall
enter into any negotiations or agreement, or make any undertaking or commitment,
(i) to merge or consolidate with, or acquire substantially all of the property
and assets of, any other corporation or person, (ii) to sell, lease or exchange
all or substantially all of their respective properties and assets to any
other corporation or person or (iii) otherwise to cause the ownership or control
of such Constituent Corporation or any of its subsidiaries to be transferred to
any party other than the other Constituent Corporation.
6.7 Tax and Accounting Treatment. Each Constituent Corporation
shall use all reasonable efforts to cause the Exchange to qualify for pooling-
of-interests accounting treatment and as an exchange of property pursuant to
Section 351 of the Code that would be tax-free to the Shareholders.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to the Obligations of Fluoroware and the
Fluoroware Shareholders. The respective obligations of Fluoroware and each
Fluoroware Shareholder to consummate the Exchange and the other transactions
contemplated by this agreement are subject to the satisfaction (or waiver by the
Fluoroware Representative) of the following conditions on or before the Closing
Date:
(a) The representations and warranties of Empak set forth in
this agreement shall be true and correct in all material respects at and as of
the Closing Date as though then made and as though the Closing Date had been
substituted for the date of this agreement throughout such representations and
warranties (without taking into account any disclosures by Empak of discoveries,
events or occurrences arising on or after the date hereof), except that any such
representation or warranty made as of a specified date (other than the date
hereof) shall only need to have been true on and as of such date;
(b) Empak shall have performed in all material respects all of
the covenants and agreements required to be performed and complied with by it
under this agreement prior to the Closing Date;
(c) Empak shall have obtained, or caused to be obtained, each
consent and approval necessary in order that the transactions contemplated
herein not constitute a breach or violation of, or result in a right of
termination or acceleration of, or creation of any encumbrance on any of Empak's
assets pursuant to the provisions of, any agreement, arrangement or undertaking
of or affecting Empak or any license, franchise or permit of or affecting Empak;
(d) The waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and
other FTC and U.S. Department of Justice rules and regulations shall have
lapsed;
-50-
(e) All material governmental filings, authorizations and
approvals that are required for the consummation of the transactions
contemplated by this agreement shall have been duly made and obtained;
(f) There shall not be threatened, instituted or pending any
action or proceeding, before any court or governmental authority or agency,
domestic or foreign, (i) challenging or seeking to make illegal, or to delay or
otherwise directly or indirectly restrain or prohibit, the consummation of the
transactions contemplated hereby or seeking to obtain material damages in
connection with such transactions, (ii) seeking to prohibit direct or indirect
ownership or operation by the Company of all or a material portion of the
business or assets of Empak or Fluoroware, (iii) seeking to invalidate or render
unenforceable any material provision of this agreement, or (iv) otherwise
relating to and materially adversely affecting the transactions contemplated
hereby;
(g) Neither Fluoroware nor the Fluoroware Representative shall
have discovered any fact or circumstance existing as of the date of this
agreement which has not been disclosed to the Fluoroware Representative as of
the date of this agreement regarding the business, assets, properties, condition
(financial or otherwise), results of operations or prospects of Empak which is,
individually or in the aggregate with other such facts and circumstances,
materially adverse to Empak or to the value of the Empak Shares;
(h) There shall have been no damage, destruction or loss of or
to any property or properties owned or used by Empak, whether or not covered by
insurance, which, in the aggregate, has, or would be reasonably likely to have,
a material adverse effect on Empak;
(i) The Fluoroware Shareholders shall have received from
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Associates P.A., legal counsel for Empak, a written opinion,
dated the Closing Date, addressed to the Fluoroware Shareholders and
satisfactory to Fluoroware's legal counsel, in form and substance substantially
as set forth in exhibit B;
(j) The Company shall have received a letter from KPMG Peat
Marwick LLP, in a form reasonably satisfactory to the Fluoroware and Empak,
dated as of the Closing Date to the effect that based on information provided to
it by Fluoroware and Empak and its review of this agreement, no conditions exist
which would preclude the Company from accounting for the Exchange as a "pooling
of interest" (the "Pooling Letter");
(k) Shareholder Agreements shall have been executed by each of
the Empak Shareholders, and such Shareholder Agreements, together with
certificates evidencing the Empak Shares owned by such Empak Shareholders, shall
have been delivered to the Company;
(l) HSBC Bank USA, the independent fiduciary of the
Fluoroware, Inc. Employee Stock Ownership Plan and Trust (the "ESOP) shall have
(i) received an opinion from its independent
-51-
financial advisor, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Financial Advisors, Inc., to
the effect that (A) the value of the Company Shares received by the ESOP in
exchange for the Fluoroware Shares held by the ESOP is no less than fair market
value, and (B) the terms of the transactions are fair to the ESOP from a
financial point of view; and (ii) determined that entering into the Shareholder
Agreement and consummating the transactions contemplated by this agreement are
prudent and in the best interests of the ESOP participants and beneficiaries.
(m) Prior to the Closing Date, Empak shall have delivered to
the Company and the Fluoroware Representative each of the following:
(i) a certificate of the President of Empak, dated as of the
Closing Date, stating that the conditions precedent set forth in
subsection (a) or (b) above have been satisfied;
(ii) copies of the third party and governmental consents and
approvals and of the authorizations referred to in subsection (c), (d)
or (e) above;
(iii) Empak's minute books, stock transfer records, corporate
seal and other materials related to Empak's corporate administration;
(iv) a copy of the certificate of incorporation of Empak,
certified by the Secretary of State of the state of Minnesota and the
other states Empak is required to be qualified to do business in,
evidencing the good standing of Empak in such jurisdictions;
(v) a certificate (dated as of the Closing Date) executed on
behalf of Empak by its Corporate Secretary certifying to the Company
and the Fluoroware Shareholders setting forth a copy of each of (A) the
text of the resolutions adopted by the Board of Directors of Empak
authorizing the execution, delivery and performance of this agreement
and the consummation of all of the transactions contemplated by this
agreement, and (B) bylaws of Empak; and further certifying that such
copies are true, correct and complete copies of such resolutions and
bylaws, respectively, and that such resolutions and bylaws were duly
adopted and have not been amended or rescinded;
(vi) such other certificates, documents and instruments as the
Fluoroware Representative reasonably request related to the
transactions contemplated hereby.
7.2 Conditions to the Obligations of Empak and the Empak
Shareholders. The respective obligations of Empak and each Empak Shareholder to
consummate the Exchange and the other transactions contemplated by this
agreement are subject to the satisfaction (or waiver by the Empak
Representatives) of the following conditions on or before the Closing Date:
-52-
(a) The representations and warranties of Fluoroware set forth
in this agreement shall be true and correct in all material respects at and as
of the Closing Date as though then made and as though the Closing Date had been
substituted for the date of this agreement throughout such representations and
warranties (without taking into account any disclosures by Fluoroware of
discoveries, events or occurrences arising on or after the date hereof), except
that any such representation or warranty made as of a specified date (other than
the date hereof) shall only need to have been true on and as of such date;
(b) Fluoroware shall have performed in all material respects
all of the covenants and agreements required to be performed and complied with
by it under this agreement prior to the Closing Date;
(c) Fluoroware shall have obtained, or caused to be obtained,
each consent and approval necessary in order that the transactions contemplated
herein not constitute a breach or violation of, or result in a right of
termination or acceleration of, or creation of any encumbrance on any of
Fluoroware's assets pursuant to the provisions of, any agreement, arrangement or
undertaking of or affecting Fluoroware or any license, franchise or permit of or
affecting Fluoroware;
(d) The waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and
other FTC and U.S. Department of Justice rules and regulations shall have
lapsed;
(e) All material governmental filings, authorizations and
approvals that are required for the consummation of the transactions
contemplated by this agreement shall have been duly made and obtained;
(f) There shall not be threatened, instituted or pending any
action or proceeding, before any court or governmental authority or agency,
domestic or foreign, (i) challenging or seeking to make illegal, or to delay or
otherwise directly or indirectly restrain or prohibit, the consummation of the
transactions contemplated hereby or seeking to obtain material damages in
connection with such transactions, (ii) seeking to prohibit direct or indirect
ownership or operation by the Company of all or a material portion of the
business or assets of Fluoroware or Empak, (iii) seeking to invalidate or render
unenforceable any material provision of this agreement, or (iv) otherwise
relating to and materially adversely affecting the transactions contemplated
hereby;
(g) Neither Empak nor the Empak Representatives shall have
discovered any fact or circumstance existing as of the date of this agreement
which has not been disclosed to the Empak Representatives as of the date of this
agreement regarding the business, assets, properties, condition (financial or
otherwise), results of operations or prospects of Fluoroware which is,
individually or in the aggregate with other such facts and circumstances,
materially adverse to Fluoroware or to the value of the Fluoroware Shares;
-53-
(h) There shall have been no damage, destruction or loss of or
to any property or properties owned or used by Fluoroware, whether or not
covered by insurance, which, in the aggregate, has, or would be reasonably
likely to have, a material adverse effect on Fluoroware;
(i) The Empak Shareholders shall have received from Dunkly,
Bennett & ▇▇▇▇▇▇▇▇▇▇▇ P.A., legal counsel for Fluoroware, a written opinion,
dated the Closing Date, addressed to the Empak Shareholders and satisfactory to
Empak's legal counsel, in form and substance substantially as set forth in
exhibit C;
(j) The Company shall have received the Pooling Letter;
(k) Shareholder Agreements shall have been executed by each of
the Fluoroware Shareholders, and such Shareholder Agreements, together with
certificates evidencing the Fluoroware shares owned by such Fluoroware
Shareholders, shall have been delivered to the Company; and
(l) Prior to the Closing Date, Fluoroware shall have delivered
to the Company all of the following:
(i) a certificate of the President of Fluoroware, dated as of
the Closing Date, stating that the conditions precedent set forth in
subsection (a) or (b) above have been satisfied;
(ii) copies of the third party and governmental consents and
approvals and of the authorizations referred to in subsections (c), (d)
or (e) above;
(iii) Fluoroware's minute books, stock transfer records,
corporate seal and other materials related to Fluoroware's corporate
administration;
(iv) a copy of the certificate of incorporation of Fluoroware,
certified by the Secretary of State of the state of Minnesota and the
other states Fluoroware is required to be qualified to do business in,
evidencing the good standing of Fluoroware in such jurisdictions;
(v) a certificate (dated as of the Closing Date) executed on
behalf of Fluoroware by its Corporate Secretary certifying to the
Company and the Empak Shareholders setting forth a copy of each of (A)
the text of the resolutions adopted by the board of directors of
Fluoroware authorizing the execution, delivery and performance of this
agreement and the consummation of all of the transactions contemplated
by this agreement, and (B) the bylaws of Fluoroware; and further
certifying that such copies are true, correct and complete copies of
such resolutions and bylaws, respectively, and that such resolutions
and bylaws were duly adopted and have not been amended or rescinded;
-54-
(vi) such other certificates, documents and instruments as the
Empak Representative reasonably requests related to the transactions
contemplated hereby.
ARTICLE VIII
TERMINATION
8.1 Termination. This agreement may be terminated at any time
prior to the Closing Date:
(a) by the mutual consent of Fluoroware and Empak;
(b) by either Fluoroware, on the one hand, or Empak, on the
other, if there has been a material misrepresentation, breach of warranty or
breach of covenant on the part of the other in the representations, warranties
and covenants set forth in this agreement;
(c) by either Fluoroware or the Fluoroware Representative, on
the one hand, or Empak or the Empak Representatives, on the other, if the
transactions contemplated by this agreement have not been consummated by June
30, 1999; provided that, neither will be entitled to terminate this agreement
pursuant to this section 8.1(c) if such party's willful breach of this agreement
has prevented the consummation of the transactions contemplated by this
agreement; or
(d) by Fluoroware or the Fluoroware Representative if, after
the date hereof, there shall have been a material adverse change in the
financial condition or business of Empak or if an event shall have occurred
which, so far as reasonably can be foreseen, would result in any such change,
except to the extent such change is directly caused by Fluoroware or the
Fluoroware Shareholders; or
(e) by Empak or the Empak Representatives if, after the date
hereof, there shall have been a material adverse change in the financial
condition or business of Fluoroware or if an event shall have occurred which, so
far as reasonably can be foreseen, would result in any such change, except to
the extent such change is directly caused by Empak or the Empak Shareholders.
8.2 Effect of Termination. In the event of termination of this
agreement by either Fluoroware or the Fluoroware Representative, on the one
hand, or Empak or the Empak Representatives, on the other, as provided in
section 8.1, all provisions of this agreement shall terminate and there shall be
no liability on the part of any of the parties to this agreement, except further
that parties shall remain liable for willful breaches of this agreement prior to
the time of such termination.
-55-
ARTICLE IX
SURVIVAL; OFFSET RIGHTS
9.1 Survival. Notwithstanding any investigation made by or on
behalf of any of the parties to this agreement or any of the Shareholder
Representatives or the results of any such investigation and notwithstanding the
participation of such party in the Closing, the representations, warranties,
covenants and agreements of Empak and Fluoroware in this agreement shall survive
the Closing Date for a period of one (1) year following the Closing Date. If a
notice of an indemnification claim is given in accordance with section 9.5
before the expiration of such one (1) year period, then (notwithstanding the
expiration of the one (1) year period) the representation, warranty, covenant or
agreement applicable to such claim shall survive until, but only for purposes
of, the resolution of such claim.
9.2 Indemnification Commitments.
(a) Subject to the limitations of sections 9.3(a), 9.3(b) and
9.3(d), the Company shall have the right to full and complete indemnification
against, and to be held harmless from, any loss, liability, deficiency, damage,
expense or cost (including reasonable legal expenses) which the Company may
suffer, sustain or become subject to, as a result of (i) any misrepresentation
in any of the representations and warranties of Fluoroware contained in this
agreement or of any of the Fluoroware Shareholders contained in the Fluoroware
Shareholder Agreements, (ii) any breach of, or failure to perform, any agreement
of Fluoroware contained in this agreement or any of the Fluoroware Shareholders
contained in the Fluoroware Shareholder Agreements, or (iii) any third party
claims asserted or threatened against the Company which arise out of the actions
or inactions of Fluoroware or any of the Fluoroware Shareholders prior to the
Closing (collectively, "Fluoroware Recoverable Losses").
(b) Subject to the limitations of sections 9.3(a), 9.3(c) and
9.3(d), the Company shall have the right to full and complete indemnification
against, and to be held harmless from, any loss, liability, deficiency, damage,
expense or cost (including reasonable legal expenses) which the Company may
suffer, sustain or become subject to, as a result of (i) any misrepresentation
in any of the representations and warranties of Empak contained in this
agreement or of any of the Empak Shareholders contained in the Empak Shareholder
Agreements, (ii) any breach of, or failure to perform, any agreement of Empak or
the Empak Shareholders contained in this agreement or any of the Empak
Shareholders contained in the Empak Shareholder Agreements, or (iii) any third
party claims asserted or threatened against the Company which arise out of the
actions or inactions of Empak or any of the Empak Shareholders prior to the
Closing (collectively, "Empak Recoverable Losses"). Fluoroware Recoverable
Losses and Empak Recoverable Losses shall sometimes be collectively referred to
as "Company Losses."
9.3 Limitations on Indemnification Commitments.
(a) In the event that any claims for indemnification are made
by the Company or any of the Shareholder Representatives pursuant to this
article IX, such claims
-56-
shall be satisfied solely from the Fluoroware Holdback Shares or the Empak
Holdback Shares, as the case may be, and neither Fluoroware, Empak nor any
Shareholder shall be personally liable for any indemnification commitments under
this agreement; provided, however, that such limitation on indemnification shall
not apply to indemnification claims that arise from the inaccuracy of any
representation of a Shareholder under a Shareholder Agreement.
(b) The Fluoroware Holdback Shares shall be subject to
reduction by the Company for any Fluoroware Recoverable Losses (i) only if the
Company or the Empak Representatives deliver to the Fluoroware Representative
written notice (a "Claim Notice") in the form contemplated by section 9.5
related to a claim or claims prior to the first (1st) anniversary of the Closing
Date and (ii) only if, and to the extent that, the aggregate amount of all
Fluoroware Recoverable Losses exceeds Two Hundred Fifty Thousand Dollars
($250,000) (the "Threshold"), in which case such losses shall only constitute
Fluoroware Recoverable Losses to the extent of the excess of the aggregate
amount of all such Fluoroware Recoverable Losses over the Threshold; provided,
however, that any Fluoroware Recoverable Losses (A) arising out of or
attributable to the inaccuracy of representations set forth in section 3.5 of
this agreement or any of the Fluoroware Shareholder Agreements or the failure by
Fluoroware or the Fluoroware Shareholders to comply with any of their covenants
under this agreement or the Fluoroware Shareholder Agreements, respectively, or
(C) which are based on fraudulent actions or statements of Fluoroware or any
Fluoroware Shareholder, shall not be subject to the limitations set forth in
this section 9.3(b).
(c) The Empak Holdback Shares, shall be subject to reduction
by the Company for any Empak Recoverable Losses (i) only if the Company or the
Fluoroware Representative deliver to the Empak Representatives a Claim Notice
related to claim or claims prior to the first (1st) anniversary of the Closing
Date and (ii) only if, and to the extent that, the aggregate amount of all Empak
Recoverable Losses exceeds the Threshold, in which case such losses shall only
constitute Empak Recoverable Losses to the extent of the excess of the aggregate
amount of all such Empak Indemnified Losses over the Threshold; provided,
however, that any Empak Recoverable Losses (A) arising out of or attributable to
the inaccuracy of representations set forth in section 4.5 of this agreement or
any of the Empak Shareholder Agreements or the failure by Empak or the Empak
Shareholders to comply with any of its covenants under this agreement or the
Empak Shareholder Agreements, respectively, or (C) which are based on fraudulent
actions or statements Empak or any Empak Shareholder, shall not be subject to
the limitations set forth in this section 9.3(c).
(d) If any claim for indemnification under this article IX is
determined to be valid pursuant to the procedures set forth in section 9.5, the
amount of the Fluoroware Recoverable Loss or the Empak Recoverable Loss, as the
case may be, shall be satisfied by reducing the number of Fluoroware Holdback
Shares or Empak Holdback Shares, respectively, which are to be issued by the
Company on the first anniversary of the Closing Date. The reduction in the
number of Fluoroware Holdback Shares (the "Fluoroware Reduction") shall be equal
to (i) the amount of the Fluoroware
-57-
Recoverable Loss, divided by (ii) the Holdback Value. The reduction in the
number of Empak Holdback Shares (the "Empak Reduction") shall be equal to (i)
the amount of the Empak Recoverable Loss, divided by (ii) the Holdback Value.
For this purpose, such Holdback Value shall be deemed to be the per share value
of Company Shares immediately following the completion of the Exchange on the
Closing Date that is determined by the mutual agreement of the Shareholder
Representatives, and the Shareholder Representatives shall be authorized to
obtain, at the expense of the Company, such independent valuation assistance as
they, in their discretion, determine to be appropriate to determine the Holdback
Value.
(e) For purposes of section 2.1(b)(ii), the Fluoroware
Adjustment shall be equal to (i) the amount by which (A) 900,001, exceeds (B)
the Fluoroware Reduction, divided by (ii) 900,001. For purposes of section
2.2(b)(ii), the Empak Adjustment shall be equal to (i) the amount by which (A)
600,001, exceeds (B) the Empak Reduction, divided by (ii) 600,001.
9.4 Insurance Proceeds. Notwithstanding any provision in this
agreement to the contrary, no reduction in the amount of the Holdback Shares
shall be made, if and to the extent that the Company, Empak or Fluoroware has
actually received any insurance proceeds attributable to the Company Losses. If
and to the extent such insurance proceeds are received by the Company, Empak or
Fluoroware after the Company has reduced the number of Holdback Shares pursuant
to this article IX, the Company shall reissue that number of additional Company
Shares to the appropriate Shareholders as shall be equal to the amount of such
insurance proceeds, divided by the Holdback Value, determined pursuant to
section 9.3(d). The Company covenants and agrees to pursue diligently all claims
for insurance proceeds under any applicable policy maintained by Empak,
Fluoroware or the Company. The parties agree to use reasonable efforts to
cooperate in ascertaining and establishing coverage and pursuing and collecting
any claims under applicable insurance polices related to insured Company Losses.
9.5 Claims Procedure.
(a) Initiation of Claim Procedure. In the event the Company or
any Fluoroware Representative or any Empak Representative (the "Claimant")
proposes to make any claim for indemnification under this article IX, it shall
deliver a written notice signed by Claimant (the "Claim Notice") to other
Shareholder Representatives (with a duplicate copy thereof being delivered
concurrently to the Company, if appropriate) prior to the first anniversary of
the Closing Date. The Claim Notice shall specify in reasonable detail each
individual item of damage, loss, expense or other claim included in the amount
so stated, the date such item was paid or properly accrued, the basis for any
anticipated liability and the nature of the misrepresentation, breach of
warranty, agreement or claim to which each such item is related. Respondent
shall have forty-five (45) days after receipt of any Claim Notice in which to
object in writing to the claim or claims made by Claimant in the Claim Notice,
which written objection (the "Objection Notice") shall state, in reasonable
detail, the basis for Respondent's objection.
-58-
(b) Negotiated Settlement of Claims. In the event that
Respondent does deliver an Objection Notice with respect to any claim or claims
made in any Claim Notice, the Empak Representatives and the Fluoroware
Representative shall, within the forty-five (45) day period beginning as of the
date of the receipt by Claimant of the Objection Notice, attempt in good faith
to agree upon the proper resolutions of each of such claims. If the parties
should so agree, a memorandum setting forth such agreement shall be prepared and
signed by both parties and shall be furnished to the Company. The Company shall
be entitled to rely on any such memorandum to make distributions of the Holdback
Shares in accordance with the terms of such memorandum and section 2.1(b)(ii) or
section 2.2(b)(ii) of this agreement.
(c) Arbitration. If no agreement can be reached after good
faith negotiation within the forty-five (45) day period specified in section
9.5(b) or such extended period as the Shareholder Representatives shall mutually
agree upon in writing, the matter shall be submitted to binding arbitration in
accordance with the rules and procedures of the American Arbitration
Association. Unless otherwise agreed to by the Shareholder Representatives, any
such arbitration shall be held in Minneapolis, Minnesota. The decision of the
arbitrator as to the validity and amount of any claim shall be conclusive and
binding upon the Company, the Shareholder Representatives and the Shareholders.
The Company shall be entitled to act in accordance with such decision and make
distributions of the Holdback Shares in accordance therewith and with section
2.1(b)(ii) or section 2.2(b)(ii). Any arbitrator's decision may be used as a
basis for entry of judgment in any jurisdiction. Each party shall pay their own
costs and expenses incurred in connection with such arbitration proceedings and
each party shall pay fifty percent (50%) of the fees of the arbitrator and the
American Arbitration Association; provided, however, that if either party is
successful in such arbitration proceeding in an amount equal to eighty percent
(80%) or more of the amount in dispute (e.g. the Empak Representatives are
successful if awarded eighty percent (80%) or more of their claims, and the
Fluoroware Representative is successful if the Empak Representatives are awarded
less than twenty percent (20%) of their claims), the other party shall be
responsible for paying all of the costs of the proceeding, including the costs
and expenses (including reasonable attorneys' fees, arbitration fees and costs)
of the prevailing party.
(d) Final Payment. Upon the later of (i) the first anniversary
of the Closing Date, or (ii) expiration of the forty-five (45) day period after
the delivery of a memorandum of agreement, in cases covered by section 9.5(b) of
this agreement, or the receipt of a decision of the arbitrator, in cases covered
in section 9.5(c) of this agreement, the Company shall, as promptly as
practicable, issue to the Shareholders the number of Holdback Shares determined
to be issuable to each of them pursuant to section 2.1(b)(ii) or section
2.2(b)(ii), as applicable.
-59-
ARTICLE X
MISCELLANEOUS
10.1 Press Releases and Announcements. Prior to the Closing
Date, no party hereto shall issue any press release (or make any other public
announcement) related to this agreement or the transactions contemplated hereby
or make any announcement to the employees, customers or suppliers of Empak or
Fluoroware without prior written approval of the other parties, except as may be
necessary, in the opinion of counsel to the party seeking to make disclosure, to
comply with the requirements of this agreement or applicable law. If any such
press release or public announcement is so required, the party making such
disclosure shall consult with the other party prior to making such disclosure,
and the parties shall use all reasonable efforts, acting in good faith, to agree
upon a text for such disclosure which is satisfactory to both parties.
10.2 Expenses. Except as otherwise expressly provided for
herein, Fluoroware and the Fluoroware Shareholders, on the one hand, and Empak
and the Empak Shareholders, on the other hand, will be responsible for the
payment of all of their own expenses (including attorneys' and accountants'
fees) in connection with the negotiation of this agreement, the performance of
their respective obligations under this agreement and the consummation of the
transactions contemplated hereby (whether consummated or not); provided,
however, that legal fees and expenses of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, as special legal
counsel for the Exchange, shall be regarded as expenses of the transaction and
one-half (1/2) of such fees and expenses shall be paid by each of Fluoroware and
Empak, regardless of whether the transactions contemplated by this agreement are
consummated.
10.3 Amendment and Waiver. This agreement may not be amended
or waived except in a writing executed by the party against which such amendment
or waiver is sought to be enforced; provided, however, that (a) the Fluoroware
Representative shall be authorized to amend or waive provisions of this
agreement on behalf of the Fluoroware Shareholders so long as such amendment
does not modify the number of Company Shares to be received by the Fluoroware
Shareholders pursuant to the Exchange, and the Empak Representative shall be
authorized to amend or waive provisions of this agreement on behalf of the Empak
Shareholders so long as such amendment does not modify the number of Company
Shares to be received by the Empak Shareholders pursuant to the Exchange. No
course of dealing between or among any persons having any interest in this
agreement will be deemed effective to modify or amend any part of this agreement
or any rights or obligations of any person under or by reason of this agreement.
10.4 Notices. All notices, demands and other communications to
be given or delivered under or by reason of the provisions of this agreement
will be in writing and will be deemed to have been given when personally
delivered or three days after being mailed, if mailed by first class mail,
return receipt requested, or when receipt is acknowledged, if sent by overnight
courier service, facsimile, telecopy or other electronic transmission device.
Notices, demands and communications to the Fluoroware Shareholders, Fluoroware,
the Empak Shareholders and Empak will, unless another address is specified in
writing, be sent to the address indicated below:
-60-
Notices to Fluoroware or with a copy to:
Fluoroware Representative: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ P.A.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Empak or the Empak with a copy to
Representatives: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Associates, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
10.5 Assignment. This agreement and all of the provisions
hereof will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, except that neither this
agreement nor any of the rights, interests or obligations hereunder may be
assigned by any party hereto without the prior written consent of the other
parties hereto.
10.6 Severability. Whenever possible, each provision of this
agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this agreement.
10.7 Complete Agreement. This agreement, the schedules, and
other exhibits hereto, the Fluoroware Disclosure Schedule, the Empak Disclosure
Schedule and the other documents referred to herein contain the complete
agreement among the parties and supersede any prior understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
10.8 Counterparts. This agreement may be executed in one or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together will constitute one and the
same instrument. This agreement shall not be binding until is executed by all of
the parties hereto.
10.9 Governing Law. The internal law, without regard for
conflicts of laws principles, of the State of Minnesota will govern all
questions concerning the construction, validity and interpretation of this
agreement and the performance of the obligations imposed by this agreement.
-61-
IN WITNESS WHEREOF, each of the parties to this agreement has
executed this agreement as of the date set forth in the first paragraph.
FLUOROWARE, INC. EMPAK, INC.
By By
--------------------------------- --------------------------------
ENTEGRIS, INC.
By
---------------------------------
-62-
Schedule A-1
Shareholder Fluoroware Shares
Fluoroware, Inc. Employee Stock
Ownership Plan Trust 10,040,562
▇▇▇ ▇▇▇▇▇▇▇ 80,380
▇▇▇▇▇ ▇▇▇▇▇▇▇ 78,100
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 16,100
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 16,100
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 16,100
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 16,100
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 1,775,280
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 199,220
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 33,220
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 33,220
▇▇▇▇▇▇▇ Dauwaler 33,220
▇▇▇▇▇ ▇▇▇▇▇▇▇ 3,300
▇▇▇▇ ▇▇▇▇▇ 749,300
▇▇▇▇▇▇▇ ▇▇▇▇▇ 145,880
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 20,100
▇▇▇▇▇ ▇▇▇▇▇ 20,100
▇▇▇▇ ▇▇▇▇▇▇▇ 67,840
▇▇▇▇▇ ▇▇▇▇▇▇ 17,967
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ 56,560
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 27,080
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 67,840
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 5,880
▇▇▇ ▇▇▇▇▇▇▇▇ 130,440
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ 4,460
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 70,640
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 421,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 170,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust 89,000
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ Trust 89,000
▇▇▇▇▇ ▇▇▇▇▇▇ 58,880
T.▇▇▇▇▇▇ ▇▇▇▇▇ 70,640
▇▇▇▇ ▇▇▇▇▇▇ 2,964
▇▇▇▇ Villas 67,840
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trust 322,220
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Children Trust 83,780
Wallestad Foundation 5,900
▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,300
▇▇▇ ▇. ▇▇▇▇▇▇ 398,420
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 46,120
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 8,340
-63-
Schedule A-2
Shareholder Empak Shares
Marubeni Corporation 396,215
Marubeni America
Corporation 264,144
WCB Holdings, LLC 5,890,303
-64-