Consolidation Agreement BY And Among Entegris, Fluoroware, & Empak

Exhibit 10.15


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CONSOLIDATION AGREEMENT


by and among


ENTEGRIS, INC.
a Minnesota corporation,


FLUOROWARE, INC.
a Minnesota corporation,


and


EMPAK, INC.
a Minnesota corporation,


June 1, 1999


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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


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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
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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 Hart-Scott-Rodino 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
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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


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CONSOLIDATION AGREEMENT
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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. Daniel Quernemoen 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/ Stan Geyer
President, Secretary
Executive Vice President/ Del Jensen
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.


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1.3 Board/Strategic Integration Team. A Board Integration Team, initially consisting of Stan Geyer, Jim Bernards, Jim Dauwalter and Del Jensen, 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


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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 3500 Lyman Boulevard, Chaska, Minnesota, Minnesota 55318 on June 7, 1999 (the "Closing Date"), or at such other date and time as the chief executive officers of Fluoroware and


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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 Stan Geyer 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 James Bernards and Robert E. Boyle 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 Represen ...