UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8 - K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported) September 12, 1997
INGERSOLL-RAND COMPANY
Exact name of registrant as specified in its charter
New Jersey 1-985 13-5156640
(State of incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
Woodcliff Lake, New Jersey 07675
Address of principal executive offices Zip Code
(201) 573-0123
Registrant's telephone number, including area code
INGERSOLL-RAND COMPANY
Item 5 - Other Events.
Pursuant to a Stock Purchase Agreement, dated as of
September 12, 1997, the Registrant has agreed to purchase
from Westinghouse Electric Corporation all the outstanding
capital stock of Thermo King Corporation (Thermo King),
together with other equity interests and assets related to
Thermo King, for an aggregate purchase price of $2.56
billion. Thermo King designs, manufactures and distributes
transport temperature control systems and service parts for
a variety of mobile applications, including trailers, truck
bodies, sea-going containers, buses and light rail cars.
Item 7 - Exhibits.
Exhibit (10) - Stock Purchase Agreement, dated as of
September 12, 1997, between Westinghouse Electric Company and
the Registrant.
Exhibit (99) - Press Release, dated September 15, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
INGERSOLL-RAND COMPANY
(Registrant)
Date September 17, 1997 /S/ Patricia Nachtigal
Patricia Nachtigal
Vice President & General Counsel
INGERSOLL-RAND COMPANY
INDEX TO EXHIBITS
(Item 7)
Description
Exhibit (10) - Stock Purchase Agreement, dated as of
September 12, 1997, between Westinghouse Electric Company and
the Registrant.
Exhibit (99) - Press Release, dated September 15, 1997.
Joseph Fimbianti
(201) 573-3113
Richard D. Johnson
(201) 573-3087
FOR IMMEDIATE RELEASE
Ingersoll-Rand to Purchase Thermo King
Woodcliff Lake, N.J., September 15, 1997 - Ingersoll-Rand
Company (NYSE:IR) today announced that it has signed a
definitive agreement with Westinghouse Electric Corporation
(NYSE:WX) under which Ingersoll-Rand will acquire Thermo
King Corporation, a wholly owned subsidiary of Westinghouse,
for $2.56 billion in cash. This acquisition is expected to
be accretive to earnings in 1998, the first full year of
combined operations, before considering the impact of any
potential synergies. The transaction is expected to close
in the fourth quarter of 1997, subject to required
regulatory approvals and other customary conditions.
James E. Perrella, Ingersoll-Rand chairman, president and
chief executive officer, said, "Thermo King, like our 1995
acquisition of Clark Equipment, continues the process of
redefining our company as a diversified equipment and
components company. Also, Thermo King meets all of our
criteria for strategic acquisition candidates: businesses
that deliver worldwide market leadership, complement
existing Ingersoll-Rand businesses, and offer excellent
financial results with opportunities for growth."
Perrella continued, "Thermo King is the leader in the
transport temperature control market with a premier brand
name and an excellent management team. The company's
innovative engineering and manufacturing technology
complement Ingersoll-Rand compressor product technology and
our worldwide supplier base."
He concluded, "Thermo King management has produced excellent
operating results in terms of profitability, asset
management and cash flow, and has positioned the company to
take full advantage of opportunities for growth on a global
basis."
Based in Minneapolis, Thermo King is the world leader in the
transport temperature control business with 1996 sales of $1
billion and net income of $141 million. The company has a
global presence with about 45 percent of its sales generated
outside North America. Thermo King operates six
manufacturing facilities in North America, and has other
manufacturing facilities in Brazil, the Czech Republic,
Denmark, Ireland and, through majority-owned joint ventures,
in Spain and China. The company employs more than 4,700
people and distributes its products through a worldwide
network of more than 850 dealers.
Thermo King designs, manufactures and distributes transport
temperature control systems and service parts for a variety
of mobile applications, including trailers, truck bodies,
sea-going containers, buses and light-rail cars. The
systems are used to safely transport food, pharmaceuticals,
flowers, electronic equipment, medical supplies, and other
temperature-sensitive products, as well as to provide air-
conditioned comfort for people transport. The company
founded the transport temperature control market almost 60
years ago and has been the industry leader ever since.
Ingersoll-Rand's bankers have agreed to provide the initial
short-term funding for the acquisition. It is anticipated
that permanent financing will include medium-term debt and
approximately $600 million of equity-linked securities. The
rating for Ingersoll-Rand debt is expected to be A- from
Standard and Poor's.
Ingersoll-Rand Company is a major diversified industrial
equipment and components manufacturer. Its product lines
serve a wide range of industrial and commercial markets
worldwide. The company employs approximately 47,000 people.
Further information on Ingersoll-Rand can be found on the
company's World Wide Web site at www.ingersoll-rand.com.
Certain statements in this news release are forward-looking
statements which are based on the company's current
expectations and, therefore, involve risks and
uncertainties. In order to comply with the Private
Securities Litigation Reform Act "safe harbor" for forward-
looking statements, the company notes that a variety of
factors could cause actual results and experience to differ
materially from the anticipated results or expectations
expressed in these forward-looking statements. These
factors include interest rate and currency fluctuations,
taxes, competitive conditions and general economic
conditions.
STOCK PURCHASE AGREEMENT
Between
WESTINGHOUSE ELECTRIC
CORPORATION
and
INGERSOLL-RAND COMPANY
Dated as of September 12, 1997
Sale of Thermo King
TABLE OF CONTENTS
Page
1. Purchase and Sale of the Shares 1
2. Closing; Reorganization of Sold
Subsidiaries; Nominee Shares;
Purchase Price Adjustment 1
(a) Closing 1
(b) Reorganization of Sold Subsidiaries 2
(c) Nominees Shares 4
(d) Purchase Price Adjustment 4
3. Conditions to Closing 8
(a) Buyer's Obligation 8
(b) Westinghouse's Obligation 10
(c) Frustration of Closing Conditions 10
4. Representations and Warranties of
Westinghouse 10
(a) Authority 10
(b) No Conflicts; Consents 10
(c) The Shares 11
(d) Organization and Standing; Books and
Records 12
(e) Capital Stock of the Sold
Subsidiaries 12
(f) Equity Interests 13
(g) Financial Statements; Undisclosed
Liabilities 13
(h) Taxes 14
(i) Assets Other than Real Property
Interests 16
(j) Title to Real Property 17
(k) Intellectual Property 18
(l) Contracts 19
(m) Litigation 21
(n) Benefit Plans 21
(o) Absence of Changes or Events 25
(p) Compliance with Applicable Laws 25
(q) Condition of Assets 27
(r) Entire Business 27
(s) Labor Matters 27
(t) Product Liability Claims; Warranties 27
(u) Customers 28
5. Covenants of Westinghouse 28
(a) Access 28
(b) Ordinary Conduct 28
(c) Resignations 30
(d) Auditor Consents 31
(e) Termination of Certain Agreements 31
(f) Nonobstruction 31
(g) Supplemental Disclosure 31
(h) Assignment of Confidentiality Agreements 31
(i) Insurance Matters 31
(j) Non-competition 32
6. Representations and Warranties of Buyer 33
(a) Authority 33
(b) No Conflicts; Consents 33
(c) Securities Act 34
(d) Availability of Funds 34
7. Covenants of Buyer 34
(a) Confidentiality 34
(b) Nonobstruction 34
(c) Supplemental Disclosure 34
(d) No Additional Representations 34
(e) Credit Support 35
(f) No Use of Westinghouse Name 36
(g) Transition Services 36
(h) Borrowing Facilities 37
8. Mutual Covenants 37
(a) Consents; Governmental Approvals 37
(b) Cooperation 38
(c) Publicity 39
(d) Reasonable Best Efforts 39
(e) Antitrust Notification 40
9. Employee and Related Matters 40
(a) Employment 40
(b) Continuation of Comparable Benefit
Plans 41
(c) Pension Plan 44
(d) 401(k) Plan 46
(e) Accrued Vacation 48
(f) Union Representation 48
(g) Medical and Disability Benefits; Life
Insurance 48
(h) Severance Obligations 49
(i) Executive Compensation 50
(j) Cooperation 50
(k) WARN Act 50
(l) Workers Compensation 50
(m) Free-Standing Plans 51
(n) Foreign Employment Matters 51
(o) No Right to Employment 53
(p) Multiemployer Plan Liability 53
10. Further Assurances 53
11. Indemnification 53
(a) Tax Indemnification 53
(b) Other Indemnification by Westinghouse 55
(c) Other Indemnification by Buyer 57
(d) Losses Net of Insurance, etc.; No
Consequential Damages 58
(e) Termination of Indemnification 58
(f) Procedures Relating to Indemnification
(Other than under Section 11(a)) 58
(g) Other Claims 61
(h) Procedures Relating to Indemnification
of Tax Claims 62
(i) Mitigation 63
12. Tax Matters 63
13. Assignment 67
14. No Third-Party Beneficiaries 67
15. Termination 67
16. Survival of Representations and Warranties 68
17. Expenses 69
18. Amendments 69
19. Notices 69
20. Interpretation; Exhibits and Schedules; Certain
Definitions 70
21. Counterparts 71
22. Entire Agreement 71
23. Fees 72
24. Severability 72
25. Consent to Jurisdiction 72
26. Governing Law 72
27. Westinghouse Spin-Off 72
EXHIBIT A List of Selling Subsidiaries,
Direct Sold Subsidiaries and Other Sold
Subsidiaries
STOCK PURCHASE AGREEMENT dated as of
September 12, 1997, between WESTINGHOUSE ELECTRIC
CORPORATION, a Pennsylvania corporation
("Westinghouse"), and INGERSOLL-RAND COMPANY, a
New Jersey corporation ("Buyer").
Buyer desires to purchase from Westinghouse and
the subsidiaries of Westinghouse listed as Selling
Subsidiaries in Exhibit A hereto (the "Selling Subsidiaries"
and, collectively with Westinghouse, "Sellers"), and
Westinghouse desires to sell, or cause the Selling
Subsidiaries to sell, to Buyer, all the shares of capital
stock of or, in the case of Thermo King-Dalian Transport
Refrigeration Company, Limited ("Dalian"), other equity
interests in, the entities listed as Direct Sold
Subsidiaries in Exhibit A hereto (the "Direct Sold
Subsidiaries") owned directly or indirectly by Westinghouse
and its subsidiaries (collectively, the "Shares"). The
Direct Sold Subsidiaries together with the entities listed
as Other Sold Subsidiaries in Exhibit A hereto (the "Other
Sold Subsidiaries") are collectively referred to herein as
the "Sold Subsidiaries".
Accordingly, Westinghouse and Buyer hereby agree
as follows:
1. Purchase and Sale of the Shares. On the terms
and subject to the conditions of this Agreement, Westing
house shall, and shall cause the Selling Subsidiaries to,
sell, transfer and deliver to Buyer, and Buyer shall
purchase from Sellers, the Shares for an aggregate purchase
price of $2,560,000,000 (the "Purchase Price"), payable as
set forth below in Section 2(a), subject to adjustment as
provided in Section 2(d). The Purchase Price shall be
allocated among the Direct Sold Subsidiaries as set forth on
Schedule 1, and shall be correspondingly allocated among
Sellers.
2. Closing; Reorganization of Sold Subsidiaries;
Nominee Shares; Purchase Price Adjustment. (a) Closing.
The closing (the "Closing") of the purchase and sale of the
Shares shall be held at the offices of Cravath, Swaine &
Moore, Worldwide Plaza, 825 Eighth Avenue, New York,
New York, at 10:00 a.m. on the third business day (or such
other business day as Westinghouse and Buyer may agree)
following the satisfaction or waiver of the conditions set
forth in Section 3(a)(iii) and 3(b)(iii), or, if the other
conditions to the Closing set forth in Section 3 shall not
have been satisfied or waived by such date, as soon as
practicable after such conditions shall have been satisfied
or waived. The date on which the Closing shall occur is
hereinafter referred to as the "Closing Date". At the
Closing, (i) Buyer shall deliver to Sellers, by wire
transfer to bank accounts designated in writing by
Westinghouse prior to the Closing, immediately available
funds in an aggregate amount equal to the Purchase Price,
(ii) the applicable Seller and Buyer shall deliver to the
other (to the extent not previously delivered) such
appropriately executed instruments of assignment to and
assumption by Buyer of the rights and obligations of the
applicable Seller under (A) the Contract dated December 31,
1989, among Dalian Refrigerator Works, Shenzhen Machinery
Industry Corporation and Westinghouse Electric S.A. relating
to Dalian and (B) the Formation and Shareholders Agreement
dated December 21, 1984, between Westinghouse Electric S.A.,
Frigicoll S.A., Mr. Fernando Coll Soms and Mr. Carlos
Bernils Deulonder concerning Reftrans, S.A., and any related
agreements, in each case as required under any such contract
or agreement, (iii) the applicable Seller shall deliver to
Buyer certificates representing the Shares of all domestic
Direct Sold Subsidiaries and the foreign Direct Sold
Subsidiaries for which certificates representing the
applicable Shares are issued, free and clear of any liens,
claims, encumbrances, security interests, options, charges
and restrictions of any kind, other than those arising from
acts of Buyer or its affiliates, duly endorsed in blank or
accompanied by stock powers duly endorsed in blank in proper
form for transfer, with appropriate transfer stamps, if any,
affixed and (iv) the applicable Sellers and Buyer shall
deliver to the other such other appropriately executed
instruments as are reasonably necessary to sell, transfer
and deliver the Shares of any foreign Direct Sold Subsidiary
to Buyer.
(b) Reorganization of Sold Subsidiaries. At or
prior to the Closing, Westinghouse shall take the following
actions (collectively, the "Reorganization"):
(i) cause Westinghouse Irish Holdings, Limited to
transfer to Westinghouse Electric S.A. all the shares
of capital stock of Westinghouse Electric Ireland
Limited owned by it;
(ii) cause all intercompany payables, receivables
and loans between any Sold Subsidiary, on the one hand,
and Westinghouse and its subsidiaries (other than the
Sold Subsidiaries), on the other hand, to be settled or
canceled;
(iii) transfer, or cause its subsidiaries to
transfer, the assets, liabilities and employees listed
in Schedule 2(b)(iii) to (A) any Sold Subsidiary or
(B) any subsidiary of Westinghouse that (I) is not and
has never been engaged in any business other than the
ownership of any of such assets (subject to such
transferred liabilities) or the employment of any of
such employees, (II) as of the Closing will not have
any obligations or liabilities of whatever kind and
nature, primary or secondary, direct or indirect,
absolute or contingent, known or unknown, whether or
not accrued, other than any of such liabilities and
(III) shall thereafter be considered to be a Sold
Subsidiary (and the direct parent of such Sold
Subsidiary, if not itself already a Sold Subsidiary or
a Seller, shall thereafter be considered to be a
Selling Subsidiary, and Westinghouse shall provide
Buyer with an appropriate update to Exhibit A and
Schedule 4(e)) for all purposes of this Agreement,
except that if Buyer so requests at least 15 days prior
to the Closing Date, Westinghouse shall transfer, or
cause its subsidiaries to transfer, such assets,
liabilities and employees (or all of the outstanding
capital stock of any subsidiaries of Westinghouse which
are not engaged in any business other than the
ownership of any of such assets (subject to such
transferred liabilities) or the employment of any of
such employees and which do not have any obligations or
liabilities of whatever kind and nature, primary or
secondary, direct or indirect, absolute or contingent,
known or unknown, whether or not accrued (other than
any of such liabilities) directly to Buyer or a
subsidiary of Buyer at the Closing for no consideration
in addition to the Purchase Price if (x) transferring
such assets, liabilities and employees (or such capital
stock) directly to Buyer or a subsidiary of Buyer will
not subject Westinghouse or any of its subsidiaries
(other than the Sold Subsidiaries) to any obligations
or liabilities of whatever kind and nature, primary or
secondary, direct or indirect, absolute or contingent,
known or unknown, whether or not accrued (other than
immaterial obligations and liabilities), and (y) Buyer
shall reimburse Westinghouse for all reasonable incre
mental costs and expenses (including those arising out
of or relating to any such immaterial obligations and
liabilities) incurred by Westinghouse related to
transferring such assets, liabilities and employees (or
such capital stock) directly to Buyer or a subsidiary
of Buyer;
(iv) except as set forth on Schedule 2(b)(iv),
cause the Sold Subsidiaries to transfer the assets and
employees listed in Schedule 2(b)(iv) to Westinghouse
or any of its subsidiaries (other than the Sold
Subsidiaries); and
(v) assign its rights under, or cause its subsi
diaries to assign their rights under, and cause the
Sold Subsidiaries to assume all of the obligations of
Westinghouse and its subsidiaries under, the licenses,
leases, contracts, commitments, agreements and instru
ments listed in Schedule 2(b)(v) (collectively, the
"Schedule 2(b)(v) Contracts").
(c) Nominee Shares. At the Closing, or as
promptly thereafter as possible, with respect to any Sold
Subsidiaries as to which directors or other nominees of
Westinghouse or any of its subsidiaries (other than one of
the Sold Subsidiaries) own shares of capital stock for the
purpose of satisfying applicable legal requirements (such
shares, "Nominee Shares"), Westinghouse shall cause the
applicable Selling Subsidiary to take all necessary or
appropriate steps to effect the transfer of the Nominee
Shares to new directors or other nominees designated by
Buyer as, when and to the extent permitted by applicable
legal requirements.
(d) Purchase Price Adjustment. (i) Within
90 days after the Closing Date, Westinghouse shall at its
expense prepare and deliver to Buyer a statement (the
"Statement") setting forth Net Assets (as defined below) as
of the close of business on the Closing Date ("Closing Net
Assets"), together with an audited special purpose report of
Westinghouse's independent auditors that the Statement has
been prepared in compliance with the requirements of this
Section 2(d).
Buyer shall cause the Sold Subsidiaries and their
respective employees to assist Westinghouse in the prepara
tion of the Statement and shall provide Westinghouse and its
independent auditors on-site access at all reasonable times
to the personnel, properties, books and records of the Sold
Subsidiaries for such purpose. Buyer acknowledges that
Westinghouse shall have the primary responsibility and
authority for preparing the Statement.
A physical inventory (exclusive of fixed assets)
shall be conducted by the Sold Subsidiaries consistent with
past practice on or before the Closing Date for the purpose
of preparing the Statement, and each of Westinghouse and
Buyer and their respective independent auditors shall have
the right to observe the taking of such physical inventory.
During the 60-day period following Buyer's receipt
of the Statement, Buyer and its independent auditors shall
be permitted to review and make copies reasonably required
of (i) the working papers of Westinghouse and its
independent auditors relating to the Statement and (ii) any
supporting schedules, analyses and other documentation
relating to the Statement. The Statement shall become final
and binding upon the parties on the sixtieth day following
delivery thereof, unless Buyer gives written notice of its
disagreement with the Statement ("Notice of Disagreement")
to Westinghouse prior to such date. Any Notice of
Disagreement shall (A) specify in reasonable detail the
nature of any disagreement so asserted, (B) only include
disagreements based on mathematical errors or based on
Closing Net Assets not being calculated in accordance with
this Section 2(d), (C) be accompanied by a certificate of
Buyer that it has complied with the covenants set forth in
Section 2(d)(iv) and (D) if Buyer's independent auditors are
engaged by Buyer in connection with the preparation of the
Notice of Disagreement, be accompanied by a certificate of
Buyer's independent auditors that they concur with each of
the positions taken by Buyer in the Notice of Disagreement.
If a Notice of Disagreement complying with the preceding
sentence is received by Westinghouse in a timely manner,
then the Statement (as revised in accordance with clause (I)
or (II) below) shall become final and binding upon the
parties on the earlier of (I) the date Westinghouse and
Buyer resolve in writing any differences they have with
respect to the matters specified in the Notice of
Disagreement or (II) the date any disputed matters are
finally resolved in writing by the Accounting Firm (as
defined below).
During the 60-day period following the delivery of
a Notice of Disagreement that complies with the preceding
paragraph, Westinghouse and Buyer shall seek in good faith
to resolve in writing any differences which they may have
with respect to the matters specified in the Notice of
Disagreement. During such period Westinghouse and its
independent auditors shall have reasonable on-site access
during normal business hours to the personnel, properties,
books, records, schedules, analyses and working papers of
the Sold Subsidiaries and shall be permitted to review and
make copies reasonably required of the working papers of
Buyer and its independent auditors (if any) relating to the
preparation of the Notice of Disagreement. If, at the end
of such 60-day period, Westinghouse and Buyer have not so
resolved such differences, Westinghouse and Buyer shall
submit to an independent accounting firm (the "Accounting
Firm") for review and resolution any and all matters which
remain in dispute and which were properly included in the
Notice of Disagreement. The Accounting Firm shall be a
mutually acceptable internationally recognized independent
public accounting firm agreed upon by the parties hereto in
writing. Westinghouse and Buyer shall use reasonable
efforts to cause the Accounting Firm to render a decision
resolving the matters in dispute within 30 days following
the submission of such matters to the Accounting Firm.
Westinghouse and Buyer agree that judgment may be entered
upon the determination of the Accounting Firm in any court
having jurisdiction over the party against which such
determination is to be enforced. Except as specified in the
following sentence, the cost of any arbitration (including
the fees and expenses of the Accounting Firm) pursuant to
this Section 2(d) shall be borne by Westinghouse and Buyer
in inverse proportion as they may prevail on matters
resolved by the Accounting Firm, which proportionate alloca
tions shall also be determined by the Accounting Firm at the
time the determination of the Accounting Firm is rendered on
the merits of the matters submitted. The fees and expenses
of Westinghouse's independent auditors incurred in connec
tion with the issuance of their audited special purpose
report relating to the Statement and review of any Notice of
Disagreement shall be borne by Westinghouse, and the fees
and expenses of Buyer's independent auditors incurred in
connection with their review of the Statement shall be borne
by Buyer.
(ii) The Purchase Price shall be increased by the
amount by which Closing Net Assets exceeds $224,679,000
(the "Target Amount"), and the Purchase Price shall be
decreased by the amount by which Closing Net Assets is less
than the Target Amount (the Purchase Price as so increased
or decreased shall hereinafter be referred to as the
"Adjusted Purchase Price"). If the Purchase Price is less
than the Adjusted Purchase Price, Buyer shall, and if the
Purchase Price is greater than the Adjusted Purchase Price,
Westinghouse shall, within 10 business days after the
Statement becomes final and binding upon the parties, make
payment to the other party by wire transfer in immediately
available funds of the amount of such difference, together
with interest thereon at the three-month treasury bill rate
(as reported by the Wall Street Journal or, if not reported
thereby, by another authoritative source) in effect on the
Closing Date plus .25% (the "Rate"), calculated on the basis
of the actual number of days elapsed over 365, from the
Closing Date to the date of actual payment, compounded
annually. Notwithstanding the foregoing, in the event that
Buyer delivers a Notice of Disagreement to Westinghouse in
accordance with this Section 2(d) and either Westinghouse or
Buyer shall be required to make a payment to the other
regardless of the resolution of the items contained in the
Notice of Disagreement, then Westinghouse or Buyer, as
applicable, shall, within 10 business days of the receipt of
the Notice of Disagreement, make payment to the other by
wire transfer in immediately available funds of the lesser
of the two amounts that may be owed by Westinghouse or
Buyer, as applicable, pending resolution of the items
contained in the Notice of Disagreement together with
interest thereon at the Rate on the date of the Notice of
Disagreement, calculated as described above, and such
payment (excluding interest) shall be credited against the
payment (excluding interest) required pursuant to the second
sentence of this paragraph.
(iii) The term "Net Assets" shall mean Total
Assets minus Total Liabilities (in each case as defined
below). The Target Amount equals Net Assets on the date of
the Balance Sheet (as defined in Section 4(g)) plus
(i) $2,000,000 (in respect of the inventory adjustment set
forth in Schedule 2(d)), (ii) $3,900,000 (in respect of the
adjustment for Reftrans, S.A. goodwill and minority interest
set forth in Schedule 2(d)) and (iii) $2,600,000 (in respect
of the pro rata pension expense adjustment set forth in
Schedule 2(d)). The terms "Total Assets" and "Total
Liabilities" shall mean the combined total assets and
combined total liabilities determined in accordance with
generally accepted accounting principles (it being
understood that pension liabilities, environmental
liabilities and amounts attributable to Income Taxes for the
Pre-Closing Tax Period (as such terms are defined in
Section 4(h)) for which Westinghouse is liable under
clause (i) of the first paragraph of Section 11(a) and all
Irish Reorganization Taxes (as defined in Section 11(a)) for
which Westinghouse is liable under Section 11(a)(vii) and
deferred Income Taxes shall be excluded in determining Total
Assets and Total Liabilities), respectively, of the Sold
Subsidiaries, using the same methodologies, practices,
accounting applications and assumptions, including discount
rates and health care cost trend rates, as used in
determining the Target Amount. The parties agree that the
adjustment contemplated by this Section 2(d) is intended to
show the change in Net Assets from the date of the Balance
Sheet to the Closing Date, and that such change may only be
measured if the calculation is done in accordance with the
preceding sentence. The scope of the disputes to be
resolved by the Accounting Firm is limited to whether such
calculations were done in accordance with the foregoing
provisions of this Section 2(d) or whether there were
mathematical errors in the Statement. The calculation of
the Target Amount is set forth in Schedule 2(d).
(iv) Buyer agrees that following the Closing it
shall not take any actions which would affect the Statement
with respect to the accounting books and records of the Sold
Subsidiaries on which the Statement is to be based that are
not consistent with the Sold Subsidiaries' past practices,
except to the extent such practices do not conform with
generally accepted accounting principles. Buyer shall
cause the Sold Subsidiaries to cooperate in the preparation
of the Statement, including providing customary
certifications, including management representation letters,
to Westinghouse's independent auditors. No such
certifications (including management representation letters)
shall be deemed to constitute Buyer's acceptance of the
matters contained therein or a waiver of Buyer's right to
object to any amounts contained therein or a waiver of
Buyer's right to object to any amounts contained in the
Statement whether or not based on such certifications.
(v) During the period of time from and after the
Closing Date through the resolution of any adjustment to the
Purchase Price contemplated by this Section 2(d), Buyer
shall cause the Sold Subsidiaries to afford to Westinghouse
and any accountants, counsel or financial advisers retained
by Westinghouse in connection with any adjustment to the
Purchase Price contemplated by this Section 2(d) access at
all reasonable times to all the Sold Subsidiaries'
personnel, properties, books, contracts, records, schedules,
analyses and working papers.
3. Conditions to Closing. (a) Buyer's Obliga
tion. The obligation of Buyer to purchase and pay for the
Shares is subject to the satisfaction (or waiver by Buyer)
as of the Closing of the following conditions:
(i) The representations and warranties of
Westinghouse set forth in this Agreement that are
qualified as to materiality shall be true and correct
in all respects, as of the date hereof and as of the
time of the Closing as though made as of such time,
except to the extent such representations and warran
ties expressly relate to an earlier date (in which case
such representations and warranties shall be true and
correct in all respects as of such earlier date) and
the representations and warranties of Westinghouse set
forth in this Agreement that are not qualified as to
materiality shall be true and correct in all material
respects, as of the date hereof and as of the time of
the Closing as though made as of such time, except to
the extent such representations and warranties
expressly relate to an earlier date (in which case such
representations and warranties shall be true and
correct in all material respects as of such earlier
date). Westinghouse shall have performed or complied
in all material respects with all obligations and
covenants required by this Agreement to be performed or
complied with by Westinghouse by the time of the
Closing. Westinghouse shall have delivered to Buyer a
certificate dated the Closing Date and signed by an
authorized officer of Westinghouse confirming the
foregoing.
(ii) No temporary restraining order, preliminary
or permanent injunction or other legal restraint or
prohibition preventing the purchase and sale of the
Shares shall be in effect.
(iii) The waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the "HSR
Act") shall have expired or been earlier terminated and
Westinghouse and Buyer shall have received confirmation
(the "European Confirmation") from the Commission of
the European Community (the "Commission") that the
transactions contemplated by this Agreement do not
raise serious doubts as to their compatibility with the
common market and that the Commission will not either
initiate proceedings under Article 6.1(c) of Council
Regulation (EEC) No. 4064/89 (the "Regulation") or
refer, pursuant to Article 9.3 of the Regulation, the
transactions contemplated by this Agreement to any
competent authority of a Member State for application
of that State's national competition law.
(iv) Each consent listed on Schedule 3(a)(iv)
shall have been obtained.
(v) There shall not be any pending suit, action
or proceeding by any Governmental Entity (as defined in
Section 4(b)) challenging or seeking to restrain or
prohibit the consummation of the transactions
contemplated by this Agreement in any material respect
or seeking to obtain any damages from the Sold
Subsidiaries or Buyer which would reasonably be
expected to have a Material Adverse Effect.
(b) Westinghouse's Obligation. The obligation of
Westinghouse to sell, transfer and deliver, or to cause the
sale, transfer and delivery of, the Shares to Buyer is
subject to the satisfaction (or waiver by Westinghouse) as
of the Closing of the following conditions:
(i) The representations and warranties of Buyer
set forth in this Agreement that are qualified as to
materiality shall be true and correct in all respects,
as of the date hereof and as of the time of the Closing
as though made as of such time, except to the extent
such representations and warranties expressly relate to
an earlier date (in which case such representations and
warranties shall be true and correct in all respects as
of such earlier date) and the representations and war
ranties of Buyer set forth in this Agreement that are
not qualified as to materiality shall be true and cor
rect in all material respects, as of the date hereof
and as of the time of the Closing as though made as of
such time, except to the extent such representations
and warranties expressly relate to an earlier date (in
which case such representations and warranties shall be
true and correct in all material respects as of such
earlier date). Buyer shall have performed or complied
in all material respects with all obligations and
covenants required by this Agreement to be performed or
complied with by Buyer by the time of the Closing.
Buyer shall have delivered to Westinghouse a certifi
cate dated the Closing Date and signed by an authorized
officer of Buyer confirming the foregoing.
(ii) No temporary restraining order, preliminary
or permanent injunction or other legal restraint or
prohibition preventing the purchase and sale of the
Shares shall be in effect.
(iii) The waiting period under the HSR Act shall
have expired or been earlier terminated and
Westinghouse and Buyer shall have received the European
Confirmation.
(iv) There shall not be any pending suit, action
or proceeding by any Governmental Entity challenging or
seeking to restrain or prohibit the consummation of the
transactions contemplated by this Agreement in any
material respect or seeking to obtain any damages which
are material to Westinghouse and its subsidiaries.
(c) Frustration of Closing Conditions. Neither
Buyer nor Westinghouse may rely on the failure of any
condition set forth in Section 3(a) or 3(b), respectively,
to be satisfied if such failure was caused by such party's
failure to act in good faith or to use its reasonable best
efforts to cause the Closing to occur, as required by
Section 8(d).
4. Representations and Warranties of
Westinghouse. Westinghouse hereby represents and warrants
to Buyer as follows, assuming for all purposes that the
Reorganization has been consummated:
(a) Authority. Westinghouse is a corporation
duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania. Westinghouse
has all requisite corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder and each Seller has all requisite corporate power
and authority to consummate the transactions contemplated
hereby. All corporate acts and other proceedings required
to be taken by Sellers to authorize the execution, delivery
and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly and
properly taken or, in the case of the Selling Subsidiaries,
prior to the Closing will be duly and properly taken. This
Agreement has been duly executed and delivered by Westing
house and constitutes a legal, valid and binding obligation
of Westinghouse, enforceable against Westinghouse in
accordance with its terms.
(b) No Conflicts; Consents. The execution and
delivery of this Agreement by Westinghouse do not, and the
consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, conflict with, or
result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a
right of termination, cancelation or acceleration of any
obligation (except any acceleration of vesting under the
Westinghouse Savings Program and the Westinghouse Long-Term
Incentive Plan) or to loss of a benefit under, or result in
the creation of any lien, claim, encumbrance, security
interest, option, charge or restriction of any kind upon any
of the properties or assets of any Sold Subsidiary under,
any provision of (i) the certificate of incorporation or
by-laws (or comparable organizational documents) of any
Seller or any Sold Subsidiary, (ii) except as set forth in
Schedule 4(b), any note, bond, mortgage, indenture, deed of
trust, license, lease, contract, commitment, agreement or
arrangement to which any Seller or any Sold Subsidiary is a
party or by which any of their respective properties or
assets are bound or (iii) except for the exceptions to the
last sentence of this paragraph, any statute, law,
ordinance, rule, regulation, judgment, order or decree
applicable to any Seller or any Sold Subsidiary or their
respective properties or assets, other than, in the case of
clauses (ii) and (iii) above, any such items that, individu
ally or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect. "Material Adverse
Effect" means a material adverse effect on the business,
prospects, financial condition or results of operations of
the Sold Subsidiaries, taken as a whole, other than changes
(A) set forth in Schedule 4(b), (B) relating to or resulting
from generally applicable economic conditions, (C) relating
to or resulting from the announcement by Westinghouse of its
intention to sell any of the Sold Subsidiaries or (D) relat
ing to or resulting from the execution of this Agreement or
the consummation of the transactions contemplated hereby.
Except as set forth on Schedule 4(b), no consent, approval,
license, permit, order or authorization of, or registration,
declaration or filing with, any Federal, state, local or
foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a
"Governmental Entity"), is required to be obtained or made
by any Seller or any Sold Subsidiary in connection with the
execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, other
than (I) compliance with and filings under the HSR Act and
the Regulation, (II) compliance with and filings under Sec
tion 13(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (III) those that may be
required solely by reason of Buyer's (as opposed to any
other third party's) participation in the transactions con
templated hereby and (IV) those the failure of which to
obtain or make, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(c) The Shares. Each Seller has good and valid
title to the Shares owned by such Seller, free and clear of
any liens, claims, encumbrances, security interests,
options, charges and restrictions of any kind. Assuming
Buyer has the requisite corporate power and authority to be
the lawful owner of the Shares, upon delivery to Buyer at
the Closing of certificates representing the Shares (other
than equity interests in Dalian), duly endorsed by the
applicable Seller for transfer to Buyer, and such other
appropriately executed instruments as are reasonably neces
sary to sell, transfer and deliver the equity interests in
Dalian and the Shares of any other Foreign Direct Sold
Subsidiary to Buyer, and upon Westinghouse's receipt of the
Purchase Price, good and valid title to the Shares will pass
to Buyer, free and clear of any liens, claims, encumbrances,
security interests, options, charges and restrictions of any
kind, other than those arising from acts of Buyer or its
affiliates. Except as set forth in Schedule 4(c) and other
than this Agreement, the Shares are not subject to any
voting trust agreement or other contract, commitment, agree
ment or arrangement restricting or otherwise relating to the
voting, dividend rights or disposition of the Shares.
(d) Organization and Standing; Books and Records.
(i) Each of the Sold Subsidiaries is a corporation or other
legal entity duly organized, validly existing and in good
standing (with respect to jurisdictions which recognize such
concept) under the laws of its jurisdiction of organization,
which jurisdiction is set forth in Schedule 4(d). Each of
the Sold Subsidiaries has all requisite corporate or other
power and authority and possesses all governmental fran
chises, approvals, licenses, permits and authorizations
necessary to enable it to own, lease or otherwise hold its
properties and assets and to carry on its business as
presently conducted, other than such franchises, approvals,
licenses, permits and authorizations the lack of which,
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Each of the
Sold Subsidiaries is duly qualified and in good standing
(with respect to jurisdictions which recognize the concept)
to do business as a foreign corporation or other legal
entity in each jurisdiction in which the conduct or nature
of its business or the ownership, leasing or holding of its
properties makes such qualification necessary, except such
jurisdictions where the failure to be so qualified or in
good standing, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
Prior to the execution of this Agreement,
Westinghouse has made available to Buyer true and complete
copies of the certificate of incorporation and by-laws (or
comparable organizational documents), each as amended to
date, and the minute books (or comparable records) of each
Sold Subsidiary.
(e) Capital Stock of the Sold Subsidiaries.
Schedule 4(e) sets forth for each Sold Subsidiary the amount
of its authorized capital stock or other equity interests,
the amount of its outstanding capital stock or other equity
interests and the record owners of its outstanding capital
stock or other equity interests, including all the Shares.
All the Shares and all the outstanding shares of capital
stock of or other equity interests in each Other Sold
Subsidiary have, to the extent applicable, been duly author
ized and validly issued and are fully paid and nonassess
able. Except (i) for the Shares, (ii) for any Nominee
Shares and (iii) as set forth in Schedule 4(e), there are no
shares of capital stock of or other equity interests in any
Sold Subsidiary outstanding. Except as set forth in
Schedule 4(e), none of the Shares nor any shares of capital
stock of or other equity interests in any Other Sold
Subsidiary have been issued in violation of, or are subject
to, any purchase option, call, right of first refusal or pre
emptive, subscription or similar rights under any provision
of applicable law, the certificate of incorporation or
by-laws (or comparable organizational documents) of any Sold
Subsidiary or any contract, agreement or instrument to which
any Sold Subsidiary is subject, bound or a party. Except as
set forth in Schedule 4(e), there are no outstanding
warrants, options, rights, "phantom" stock rights,
convertible or exchangeable securities or other agreements
or instruments (other than this Agreement) pursuant to which
any Seller or any Sold Subsidiary is or may become obligated
to issue, sell, purchase, return or redeem any shares of
capital stock of or other equity interests in any Sold
Subsidiary. A Direct Sold Subsidiary has good and valid
title to all the outstanding shares of capital stock of or
other equity interests in each Other Sold Subsidiary, free
and clear of any liens, claims, encumbrances, security
interests, options, charges and restrictions of any kind.
(f) Equity Interests. Except for the capital
stock of or other equity interests in the Other Sold
Subsidiaries and as set forth in Schedule 4(f), the Direct
Sold Subsidiaries do not directly or indirectly own any
capital stock of or other equity interests in any corpora
tion, partnership, joint stock company, limited liability
company or other legal entity, and none of the Sold
Subsidiaries is a member of or participant in any partner
ship, joint venture or similar entity.
(g) Financial Statements; Undisclosed Liabili
ties. (i) Schedule 4(g) sets forth (A) the unaudited
combined balance sheet as of June 30, 1997, of the Sold
Subsidiaries assuming that the Reorganization had been in
effect for all relevant periods (the "Balance Sheet"), and
the unaudited combined statements of income and cash flows
for the six-month period ended June 30, 1997, of the Sold
Subsidiaries assuming that the Reorganization had been in
effect for all relevant periods, together with the notes to
such financial statements, and (B) the audited combined
balance sheets as of December 31, 1996 and 1995 of the Sold
Subsidiaries assuming that the Reorganization had been in
effect for all relevant periods, and the audited combined
statements of income and cash flows for the years ended
December 31, 1996, 1995 and 1994 of the Sold Subsidiaries
assuming that the Reorganization had been in effect for all
relevant periods, together with the notes to such financial
statements (the financial statements described in
clauses (A) and (B) above, together with the notes to such
financial statements, collectively, the "Financial
Statements"). The Financial Statements have been prepared
in conformity with generally accepted accounting principles
consistently applied (except in each case as described in
the notes thereto) and on that basis present fairly (sub
ject, in the case of the unaudited statements, to normal
year-end audit adjustments), in all material respects, the
combined financial condition and combined results of opera
tions as of the respective dates thereof and for the respec
tive periods indicated of the Sold Subsidiaries assuming
that the Reorganization had been in effect for all relevant
periods.
(ii) Except (A) as disclosed, reflected or
reserved against in the Balance Sheet and the notes thereto,
(B) for items set forth in Schedule 4(g), (C) for liabili
ties and obligations incurred in the ordinary course of busi
ness consistent with past practice since the date of the
Balance Sheet and not in violation of this Agreement,
(D) for liabilities and obligations incurred in connection
with this Agreement and the transactions contemplated hereby
and (E) for Income Taxes and Irish Reorganization Taxes (as
described in Section 11(a)(vii)), none of the Sold
Subsidiaries has any material liabilities or obligations of
a nature required by United States generally accepted
accounting principles to be reflected on a combined balance
sheet of the Sold Subsidiaries or in the notes thereto.
(h) Taxes. (i) For purposes of this Agreement,
(A) "Tax" shall mean any Federal, state, local or foreign
tax, fee or other like assessment or charge of any kind
whatsoever (including any net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, withholding on amounts paid to
or by the taxpayer, payroll, employment, excise, severance,
stamp, capital stock, occupation, property, environmental or
windfall tax, premium, custom, duty or other tax), together
with any interest, penalty, addition to tax, additional
amount due or similar items with respect thereto;
(B) "Income Tax" shall mean any income, franchise, gains or
similar Tax imposed on or measured by net income and any
interest, penalty, addition to tax, additional amount due or
similar items with respect thereto; (C) "Pre-Closing Tax
Period" shall mean all taxable periods ending on or before
the Closing Date and the portion ending on the Closing Date
of any taxable period that includes (but does not end on)
such day; (D) "Post-Closing Tax Period" shall mean all
taxable periods beginning after the Closing Date and the
portion beginning after the Closing Date of any taxable
period that includes (but does not end on) such day; and
(E) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(ii) Except as set forth in Schedule 4(h),
(A) each of the Sold Subsidiaries, and any affiliated group,
within the meaning of Section 1504 of the Code, of which any
of the Sold Subsidiaries is a member, has filed or caused to
be filed in a timely manner (within any applicable extension
periods) all material Tax returns, reports and forms
required to be filed by the Code or by applicable state,
local or foreign tax laws and all such Tax returns were (in
the aggregate) correct and complete in all material
respects, (B) all Taxes shown to be due on such returns,
reports and forms have been timely paid in full or will be
timely paid in full by the due date thereof and (C) no
material Tax liens have been filed and there is no material
dispute or claim with respect to any Tax Liability of any of
the Sold Subsidiaries (i) claimed or raised in writing to
any of the Sellers or the Sold Subsidiaries or (ii) of which
Westinghouse or any of the Sellers or Sold Subsidiaries
otherwise have knowledge.
The United States Federal consolidated Income Tax
returns in which any of the Sold Subsidiaries have joined
have been examined by the Internal Revenue Service for all
taxable years through the year ended December 31, 1989. All
deficiencies resulting from such examinations have either
been paid or adequately provided for. None of the Sold
Subsidiaries has been a member of an affiliated group filing
a consolidated United States Federal Income Tax return other
than a group the common parent of which is Westinghouse.
None of the Sold Subsidiaries has any liability for the
Taxes of any person (other than any other member of the same
affiliated or consolidated group) under Treas. Reg.
1.1502-6 (or any similar provision of state, local, or
foreign law), or as a transferee or successor, pursuant to
any Tax sharing agreement, indemnification arrangement, or
similar contract or arrangement, or otherwise.
(iii) Except as set forth in Schedule 4(h),
(A) neither Westinghouse nor any of its affiliates has made
with respect to any of the Sold Subsidiaries, or any
property held by any of the Sold Subsidiaries, any consent
under Section 341 of the Code, (B) no property of any of the
domestic Sold Subsidiaries (excluding Thermo Puerto Rico) is
"tax exempt use property" within the meaning of
Section 168(h) of the Code, (C) none of the Sold
Subsidiaries is a party to any lease made pursuant to
Section 168(f)(8) of the Internal Revenue Code of 1954 and
(D) none of the Sold Subsidiaries has made any payments, is
obligated to make any payments or is a party to any
agreement that, under certain circumstances, could obligate
it to make any payments that will not be deductible under
Section 280G of the Code.
(iv) Except as set forth in Schedule 4(h), there
are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any material
Tax returns required to be filed with respect to any of the
Sold Subsidiaries and none of the Sold Subsidiaries, nor any
affiliated group, within the meaning of Section 1504 of the
Code, of which any of the Sold Subsidiaries is or was a
member, has requested any extension of time within which to
file any material Tax return, which return has not yet been
filed.
(v) None of the Direct Sold Subsidiaries is or
has been a real property holding company within the meaning
of Section 897 of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.
(vi) Westinghouse is not a "foreign person"
within the meaning of Section 1445 of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of
the Code.
(vii) Neither Sellers nor the Sold Subsidiaries
have taken any action or omitted to take any action that
constitutes a material violation (A) with respect to Puerto
Rico, the tax incentives granted to Westinghouse de Puerto
Rico, Inc. ("Thermo Puerto Rico") Case No. 88-8-I-130,
pursuant to the terms of Act No. 8 of January 24, 1987, as
amended; and (B) with respect to Westinghouse Electric
Ireland, Limited ("Thermo Ireland"), manufacturing relief as
provided for under the provisions of Chapter VI Finance Act
of 1980 as it applies to the activities of Thermo Ireland,
the Shannon grant of tax reduction applicable to the Shannon
business, and the Irish Industrial Development Authority
capital and employment grants, provided, however, that this
representation shall not be deemed violated by any action
contemplated by this Agreement or taken with the knowledge,
consent or participation or at the request of Buyer.
(i) Assets Other than Real Property Interests.
The Sold Subsidiaries have good and valid title to all
material assets reflected on the Balance Sheet or thereafter
acquired, except those sold or otherwise disposed of since
the date of the Balance Sheet not in violation of this
Agreement, in each case free and clear of all mortgages,
liens, claims, encumbrances or security interests of any
kind except (i) such as are set forth in Schedule 4(i),
(ii) mechanics', carriers', workmen's, repairmen's or other
like liens arising or incurred in the ordinary course of
business, liens arising under original purchase price con
ditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business,
(iii) liens for Taxes which are not due and payable or which
are being contested in good faith by appropriate proceed
ings, (iv) mortgages, liens, claims, encumbrances and
security interests which secure debt that is reflected as a
liability on the Balance Sheet and (v) other imperfections
of title or mortgages, liens, claims, encumbrances or
security interests, if any, which do not, individually or in
the aggregate, materially impair the continued operation of
the business of the Sold Subsidiaries, taken as a whole, as
presently conducted (the mortgages, liens, claims, encum
brances, security interests and imperfections of title
described in clauses (i) through (v) above are collectively
referred to herein as "Permitted Liens").
This Section 4(i) does not relate to real
property, interests in real property, leasehold interests,
Intellectual Property (as defined in Section 4(k)) or other
intellectual property rights or intangibles.
(j) Title to Real Property. Schedule 4(j) sets
forth a complete list of all real property and interests in
real property owned in fee by the Sold Subsidiaries
(individually, an "Owned Property") and a complete list of
all real property and interests in real property leased by
or for the use of the Sold Subsidiaries (individually, a
"Leased Property"; an Owned Property or Leased Property
being sometimes referred to herein, individually, as a "Sold
Subsidiary Property" and, collectively, as "Sold Subsidiary
Properties"), except for Sold Subsidiary Properties
purchased or leased by or for the use of any Sold Subsidiary
between the date hereof and the Closing Date not in
violation of Section 5(b). The Sold Subsidiaries have good
and marketable fee title (except for Permitted Encumbrances
(as defined below)) to all Owned Property free and clear of
all mortgages, liens, encumbrances, security interests,
leases, assignments, subleases, easements, covenants, rights-
of-way and other similar restrictions of any kind, except
(A) such as are set forth in Schedule 4(j), (B) leases,
subleases and occupancy agreements set forth in
Schedule 4(l), (C) Permitted Liens, (D) easements,
covenants, rights-of-way and other similar restrictions,
whether or not of record, (E) any conditions that may be
shown by a current, accurate survey or physical inspection
of any Sold Subsidiary Property and (F) (I) zoning, building
and other similar restrictions, and (II) mortgages, liens,
encumbrances, options, rights of first refusal, security
interests, easements, covenants, rights-of-way and other
similar restrictions that have been placed by any developer,
landlord or other third party on property over which any
Sold Subsidiary has easement rights or on any Leased
Property and subordination or similar agreements relating
thereto, none of which matters described in clauses (D), (E)
and (F) materially impairs the continued operation of the
business of the Sold Subsidiaries, taken as a whole, as
presently conducted (all of the matters referred to in
clauses (A) through (F) are collectively referred to as the
"Permitted Encumbrances"). There are no material
condemnation or eminent domain proceedings pending or, to
the knowledge of Westinghouse, threatened against any Sold
Subsidiary Property. There are no outstanding options or
rights of first refusal on any Owned Property. Except as
set forth in Schedule 4(j), all of the Leased Property is
leased to a Sold Subsidiary which is in possession (which
has not been challenged) of the premises purported to be
leased thereunder, and each such lease is a valid obligation
of one of the Sold Subsidiaries without any material default
(with or without notice or lapse of time, or both)
thereunder by the Sold Subsidiaries. Westinghouse has no
knowledge of any material default under any such lease by
the landlord thereunder. Westinghouse has made available to
Buyer a true and complete copy of each lease and all
amendments thereto pertaining to each Leased Property.
(k) Intellectual Property. Schedule 4(k) sets
forth a complete list of all material patents, registered
trademarks, trade names, service marks and registered
copyrights and applications therefor, owned, filed by,
licensed to or, to Westinghouse's knowledge, used by any of
the Sold Subsidiaries. With respect to material registered
patents, copyrights and trademarks, Schedule 4(k) sets forth
a list of all jurisdictions in which such patents,
copyrights and trademarks are registered or applied for and
all registration and application numbers. Except as set
forth in Schedule 4(k), one of the Sold Subsidiaries owns or
has the right to use, all intellectual property, including
material patents, technology, inventions, know-how, trade
secrets, trademarks, trade names, service marks, copyrights
and registrations applications, and common-law rights
related thereto (collectively, "Intellectual Property") that
is material to the business of the Sold Subsidiaries and the
consummation of the transactions contemplated hereby will
not conflict with, alter or impair any such rights. All
material Intellectual Property is unexpired, has not been
abandoned and is free and clear of all liens, claims,
encumbrances or security interests of any kind, except for
Permitted Liens and except for liens, claims, encumbrances
and security interests, that, individually or in the
aggregate, would not reasonably be expected to have a
Material Adverse Effect. To Westinghouse's knowledge, the
conduct of the business of the Sold Subsidiaries as
presently conducted does not violate, conflict with or
infringe the Intellectual Property of any other person,
except for violations, conflicts or infringements, that,
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Except as set
forth in Schedule 4(k), (i) there is no suit, action or
proceeding pending or, to Westinghouse's knowledge,
threatened against any of the Sold Subsidiaries with respect
to the ownership, validity, enforceability, effectiveness or
use of any Intellectual Property that would reasonably be
expected to have a Material Adverse Effect and (ii) during
the past two years the Sold Subsidiaries have not received
any written communications alleging that any Sold Subsidiary
has violated any rights relating to Intellectual Property of
any person, except for written communications relating to
violations that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
To Westinghouse's knowledge, no third party has interfered
with, infringed, misappropriated or violated any
Intellectual Property rights of any of the Sold Subsidiaries
or is presently doing so, except for interferences,
infringements, misappropriations or violations which would
not reasonably be expected to have a Material Adverse
Effect.
(l) Contracts. Except as set forth in Sched
ule 4(l) or in any other Schedule to this Agreement, none of
the Sold Subsidiaries is a party to or bound by any:
(i) employment agreement with any person that
provides for an annual base salary in excess of
$100,000;
(ii) employee collective bargaining agreement or
other material contract with any labor union;
(iii) covenant of a Sold Subsidiary not to
compete;
(iv) contract, agreement or other arrangement with
(A) Westinghouse or any of its subsidiaries (other than
any Sold Subsidiary) or (B) any officer or director of
Westinghouse or any of its subsidiaries that will not
be terminated prior to the Closing (other than employ
ment agreements described in clause (i) above);
(v) lease or similar agreement with any person
(other than a Sold Subsidiary) under which (A) any Sold
Subsidiary is a lessee of, or holds or operates, any
real property owned by any person (other than a Sold
Subsidiary) for an annual rent in excess of $150,000,
or (B) any Sold Subsidiary is a lessor or sublessor of,
or makes available for use to any person (other than a
Sold Subsidiary), any Sold Subsidiary Property or any
portion of any premises otherwise occupied by a Sold
Subsidiary for an annual rent in excess of $150,000 or
a remaining term in excess of three years;
(vi) lease or similar agreement with any person
(other than a Sold Subsidiary) under which (A) any Sold
Subsidiary is lessee of, or holds or operates, any
machinery, equipment, vehicle or other tangible
personal property owned by any person (other than a
Sold Subsidiary) for an annual rent in excess of
$50,000 or (B) any Sold Subsidiary is a lessor of, or
makes available for use to any person (other than a
Sold Subsidiary), any machinery, equipment, vehicle or
other tangible personal property owned or leased by any
Sold Subsidiary, for an annual rent in excess of
$50,000;
(vii) contract (including purchase orders) that
involves the obligation of the Sold Subsidiaries to
purchase products or services for payment by the Sold
Subsidiaries of more than $1,000,000 and is not
terminable by a Sold Subsidiary by notice of not more
than 60 days for a cost of less than $50,000, other
than any contract entered into in the ordinary course
of business between the date of this Agreement and the
Closing Date;
(viii) any contract (including individual purchase
orders from the Sold Subsidiaries' top 25 dealers based
on 1996 revenues (and not including other purchase
orders)) that involves the obligation of the Sold
Subsidiaries to deliver products for payment of more
than $1,000,000 and is not terminable by a Sold
Subsidiary by notice of not more than 60 days for a
cost of less than $50,000, other than any contract
entered into in the ordinary course of business between
the date of this Agreement and the Closing Date;
(ix) contract, agreement or other instrument
relating to the borrowing of money or any debt security
or other evidence of indebtedness issued in an amount
in excess of $100,000 by any of the Sold Subsidiaries
or to the direct or indirect guarantee or assumption by
any of the Sold Subsidiaries of the obligations of any
other person (other than a Sold Subsidiary) for
borrowed money in an amount in excess of $100,000,
including any arrangement which has the economic effect
although not the legal form of such a guarantee, other
than any contract, agreement or other instrument
entered into in the ordinary course of business between
the date of this Agreement and the Closing Date and
other than letters of credit obtained in the ordinary
course of business;
(x) contract, agreement or other instrument under
which a Sold Subsidiary has, directly or indirectly,
made any advance, loan, extension of credit or capital
contribution to, or other investment in, any person
(other than a Sold Subsidiary), in any such case which,
individually, is in excess of $100,000;
(xi) mortgage, pledge, security agreement, deed of
trust or other instrument granting a material lien or
other material encumbrance upon any Sold Subsidiary
Property;
(xii) contract, agreement or other instrument
providing for indemnification by any of the Sold
Subsidiaries of any person which was executed (I) in
connection with the sale by any Sold Subsidiary of any
business or any corporation, partnership, joint stock
company, limited liability company, association or
other business organization or division thereof, or
(II) outside of the ordinary course of business; or
(xiii) license agreement relating to Intellectual
Property providing for royalty payments that exceeded
$50,000 in respect of the fiscal year ended
December 31, 1996.
Except as set forth in Schedule 4(l), each of the licenses,
leases, contracts, commitments, agreements or instruments of
any Sold Subsidiary listed in Schedule 4(l) (collectively,
the "Contracts") is valid and binding and in full force and
effect (other than as a result of the transactions
contemplated hereby), enforceable against the relevant Sold
Subsidiary in accordance with its terms. Except as set
forth in Schedule 4(l), the Sold Subsidiaries have performed
all material obligations required to be performed by them to
date under the Contracts and they are not (with or without
notice or lapse of time, or both) in violation or default in
any material respect thereunder and, to the knowledge of
Westinghouse, no other party to any of the Contracts is
(with or without notice or lapse of time, or both) in
violation or default in any material respect thereunder.
(m) Litigation. Except as set forth in
Schedule 4(m), there is no suit, action or proceeding
pending or, to the knowledge of Westinghouse, threatened
against any of the Sold Subsidiaries that would reasonably
be expected to have a Material Adverse Effect. None of the
Sold Subsidiaries is in default under any material judgment,
order or decree of any Governmental Entity entered against
any of the Sold Subsidiaries in any respect which would have
a Material Adverse Effect. To the knowledge of
Westinghouse, there are no material pending or threatened
investigations of any of the Sold Subsidiaries by any
Governmental Entity that would reasonably be expected to
have a Material Adverse Effect.
(n) Benefit Plans. (i) Schedule 4(n) contains a
list of all "employee pension benefit plans" (as defined in
Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) including multiemployer plans
within the meaning of Section 3(37) of ERISA (all such
employee pension benefit plans being sometimes referred to
herein as "Pension Plans"), "employee welfare benefit plans"
(as defined in Section 3(1) of ERISA), bonus, stock option,
stock purchase, severance, employment, change-in-control,
fringe benefit, incentive or deferred compensation plans and
all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to
ERISA (all the foregoing being herein called "Benefit
Plans") currently maintained or contributed to by
Westinghouse or any of its subsidiaries for the benefit of
(i) any officers or employees of any Sold Subsidiary
employed in the United States ("U.S. Benefit Plans") and
(ii) any officers or employees of any Sold Subsidiary
employed in foreign jurisdictions (collectively, "Foreign
Benefit Plans"). Westinghouse has made available to Buyer
true, complete and correct copies of (A) each Benefit Plan
(or, in the case of any unwritten Benefit Plans, accurate
descriptions thereof), (B) the most recent annual report on
Form 5500 and attached schedules filed with the Internal
Revenue Service with respect to each U.S. Benefit Plan (if
any such report was required), (C) the most recent summary
plan description for each U.S. Benefit Plan for which such a
summary plan description is required, (D) each trust
agreement and group annuity contract or other funding
mechanism (other than insurance contracts) relating to any
U.S. Benefit Plan, (E) the most recent audited financial
statements and actuarial valuation reports with respect to
each Benefit Plan, to the extent available; and (F) the most
recent determination letter with respect to each U.S.
Benefit Plan (or, with respect to any request for a
determination letter which is pending with the Internal
Revenue Service, copies of the request submitted to the
Internal Revenue Service and any correspondence with the
Internal Revenue Service concerning such request, and an
accurate description of any outstanding issues which remain
to be satisfactorily resolved prior to receipt of such
determination letter). As soon as practicable following the
date of execution of this Agreement, Westinghouse will
deliver or make available to Buyer any attorney's response
to an auditor's request for information with respect to any
U.S. Benefit Plan which has been rendered within the
two years preceding such date of execution.
(ii) Each Benefit Plan has been administered in
all material respects in accordance with its terms. The
Sold Subsidiaries and all the Benefit Plans were established
and continue to be in compliance in all material respects
with the applicable provisions of ERISA, the Code and other
applicable laws, rules and regulations (including, without
limitation, all applicable foreign laws). Except as set
forth in Schedule 4(n), all material reports, returns and
similar documents with respect to the Benefit Plans required
to be filed with any Governmental Entity or distributed to
any Benefit Plan participant have been duly and timely filed
or distributed. Except as set forth in Schedule 4(n), there
are no suits, actions, termination proceedings or other
proceedings pending, or, to the knowledge of Westinghouse,
threatened against any Benefit Plan that relate to any
employees of the Sold Subsidiaries and, to the knowledge of
Westinghouse, there are no investigations by any Governmen
tal Entity or other claims (except claims for benefits
payable in the normal operation of the Benefit Plans)
pending or threatened against any Benefit Plan or asserting
any rights to benefits under any Benefit Plan. Westinghouse
will promptly notify Buyer in writing of any such pending or
threatened lawsuits or investigations by Governmental
Entities arising between the date hereof and the Closing
Date.
(iii) Except as set forth in Schedule 4(n),
(A) all contributions to, and payments from, the Benefit
Plans that may have been required to be made in accordance
with the Benefit Plans, collective bargaining agreements
and, when applicable, Section 302 of ERISA, Section 412 of
the Code or applicable foreign laws, have been timely made,
(B) there has been no application for or waiver of the
minimum funding standards imposed by Section 412 of the Code
with respect to any Pension Plan for the benefit of any
officers or employees of any Sold Subsidiary employed in the
United States ("U.S. Pension Plans"), and (C) no U.S.
Pension Plan has an "accumulated funding deficiency" within
the meaning of Section 412(a) of the Code as of the most
recent plan year.
(iv) Except as set forth in Schedule 4(n), all
U.S. Pension Plans have been the subject of determination
letters from the Internal Revenue Service to the effect that
such U.S. Pension Plans are qualified and exempt from
United States Federal income taxes under Sections 401(a) and
501(a), respectively, of the Code, and no such determination
letter has been revoked nor, to the knowledge of
Westinghouse, has revocation been threatened. Except as set
forth in Schedule 4(n), to the knowledge of Westinghouse,
(i) each such Plan which is intended to be so qualified is
so qualified, and (ii) nothing has occurred, whether by
action or failure to act, which would cause the loss of such
qualification.
(v) Except as set forth in Schedule 4(n), no
"prohibited transaction" (as defined in Section 4975 of the
Code or Section 406 of ERISA) has occurred that involves the
assets of any U.S. Benefit Plan and that is reasonably
likely to subject any Sold Subsidiary or any of their
employees to the tax or penalty on prohibited transactions
imposed by Section 4975 of ERISA or the sanctions imposed
under Title I of ERISA. Except as set forth in
Schedule 4(n), none of the U.S. Pension Plans has been termi
nated nor have there been any "reportable events" (as
defined in Section 4043 of ERISA and the regulations there
under) with respect thereto and no event or condition exists
(other than reportable events triggered solely by pending
sales, dispositions and spin-offs by Westinghouse of
subsidiaries, divisions and businesses, including the sale
contemplated by this Agreement) which is likely to be deemed
such a reportable event.
(vi) With respect to any U.S. Pension Plan
subject to Title IV of ERISA, Westinghouse has not incurred
any liability to such U.S. Pension Plan or to the Pension
Benefit Guaranty Corporation, other than for payment of
premiums, all of which have been paid when due, and other
than any liabilities that, individually or in the aggregate,
would not have a Material Adverse Effect.
(vii) Except as set forth in Schedule 4(n), as of
the most recent valuation date for each U.S. Pension Plan
that is a defined benefit pension plan, there was not any
amount of "unfunded benefit liabilities" (as defined in
Section 4001(a)(18) of ERISA) under such U.S. Pension Plan.
(viii) Except as set forth in Schedule 4(n), at
no time within the five years preceding the Closing Date has
Westinghouse or any of its affiliates (including any of the
Sold Subsidiaries) had any liability (including, without
limitation, any withdrawal liability) with respect to or
been required to contribute to any "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) for the benefit of
any officers or employees of the Sold Subsidiaries or
incurred any withdrawal liability, within the meaning of
Section 4201 of ERISA, with respect to any such
multiemployer plan, which liability has not been fully paid
as of the date hereof, or announced an intention to
withdraw, but not yet completed such withdrawal, from any
such multiemployer plan.
(ix) Except as set forth in Schedule 4(n), no
employee or former employee of any Sold Subsidiary will
become entitled to any material bonus, retirement, sever
ance, job security or similar benefit or any materially
enhanced benefit solely as a result of the transactions
contemplated hereby that, following the consummation of the
transactions contemplated hereby, will be an obligation of
(i) Buyer or its subsidiaries (including the Sold
Subsidiaries) or (ii) Westinghouse or its affiliates.
(x) Schedule 4(n) describes, as of July 31, 1997,
the claims history for all workers compensation claims filed
for the period January 1, 1983 - July 31, 1997 by employees
of the Sold Subsidiaries and the estimated annual cost of
administration thereof.
(xi) Except as set forth in Schedule 4(n) and
except for statutory benefits with respect to which the Sold
Subsidiaries are, and have been, in material compliance,
there are no material unfunded liabilities in respect of
foreign continued Employees (as defined in Section 9(n)(i))
and former employees who were employed by a Sold Subsidiary
in a foreign jurisdiction under the Foreign Benefit Plans or
otherwise.
(xii) No amount payable to any Continued Employee
or Former Employee in connection with the transactions
contemplated by this Agreement will fail to be deductible by
a Sold Subsidiary by reason of Code Section 280G.
(xiii) As soon as practicable following the date
of execution of this Agreement, Westinghouse will deliver to
Buyer a schedule setting forth, on a plan by plan basis, the
present value of benefits payable presently or in the future
to present or former employees of the Sold Subsidiaries
under each unfunded Pension Plan.
(o) Absence of Changes or Events. Except as set
forth in Schedule 4(o), since the date of the Balance Sheet,
there has not occurred any event or condition that, individ
ually or in the aggregate, has had or is reasonably expected
to have a Material Adverse Effect. Except as set forth in
Schedule 4(o) and except for the offering of the Sold
Subsidiaries for sale, since the date of the Balance Sheet,
Westinghouse has caused the business of the Sold
Subsidiaries to be conducted in the ordinary course and in
substantially the same manner as previously conducted and
has not taken any action which would require the consent of
Buyer under Section 5(b) had such action been taken after
the date of this Agreement.
(p) Compliance with Applicable Laws. (i) Except
as set forth in Schedule 4(p), the Sold Subsidiaries are and
have been in compliance with all applicable statutes, laws,
ordinances, rules, regulations and orders of any Govern
mental Entity, except for instances of noncompliance that,
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. This
Section 4(p)(i) does not relate to matters with respect to
Taxes, which are the subject of Section 4(h), to employee
benefit matters, which are the subject of Section 4(n), or
to environmental matters, which are the subject of
Section 4(p)(ii).
(ii) Except as set forth in Schedule 4(p), (A)
except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect,
none of Westinghouse or any of its subsidiaries has received
any written communication from a Governmental Entity or any
other Person that alleges that any Sold Subsidiary is not in
compliance in any material respect with any Environmental
Laws (as defined below) or otherwise subject to liability
with respect to any Environmental Laws, the substance of
which communication has not been resolved, (B) the Sold
Subsidiaries hold all licenses, permits and governmental
authorizations required for the Sold Subsidiaries to conduct
their business under Environmental Laws (collectively,
"Environmental Permits"), and are in compliance with all
such Environmental Permits and Environmental Laws, except
for any failures to hold Environmental Permits and instances
of noncompliance which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse
Effect, (C) the Sold Subsidiaries have not entered into or
agreed to any court order or decree and are not subject to
any judgment, order or decree relating to compliance with
any Environmental Law or to investigation or cleanup of
Hazardous Materials (as defined below) under any Environ
mental Law that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect,
and (D) Westinghouse, through its outside local counsel, has
been given verbal assurance that its proposed corrective
action plan to remedy certain exceedences of wastewater
discharge permit criteria at the facility in Ciales, Puerto
Rico has received the approval of the appropriate
Governmental Entity. None of the improvements or activities
required by such corrective action plan will result in costs
that would reasonably be expected to have a Material Adverse
Effect. As used in this Agreement, the term "Environmental
Laws" means any and all applicable statutes, laws,
ordinances, orders or decrees, entered, promulgated or
issued in final form by any Governmental Entity, relating to
the environment, including preservation or reclamation of
natural resources, the management, Release (as defined
below) or threatened Release of Hazardous Materials, or the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C.
9601 et seq. ("CERCLA"), the Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33
U.S.C. 1251 et seq. Clean Air Act of 1970, as amended, 42
U.S.C. 7401 et seq., the Toxic Substances Control Act of
1976, 15 U.S.C. 2601 et seq., the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. 11001
et seq., the Safe Drinking Water Act of 1974, as amended,
42 U.S.C. 300(f) et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. 1801 et seq., and any
similar or implementing state or local law, and all
amendments or regulations promulgated thereunder as of the
date hereof. As used in this Agreement, the term "Hazardous
Materials" means all substances, wastes, chemicals,
petroleum (including crude oil or any fraction thereof) and
petroleum products, polychlorinated biphenyls, asbestos and
asbestos-containing materials in a friable condition,
pollutants, contaminants and all other materials regulated
pursuant to any Environmental Law. As used in this
Agreement, the term "Release" means any spilling, leaking,
pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, spreading, migrating, dumping
or disposing (including the abandonment or discarding of
barrels, containers, and other closed receptacles containing
any Hazardous Materials) that is in violation of
Environmental Law.
(q) Condition of Assets. Each item of material
tangible personal property of the Sold Subsidiaries is in
good operating condition and repair, ordinary wear and tear
excepted, other than failures to be in good operating
condition and repair which do not and would not reasonably
be expected to, individually or in the aggregate, materially
interfere with the normal operation of the business of the
Sold Subsidiaries as presently conducted.
(r) Entire Business. Following the
Reorganization, Westinghouse and its subsidiaries will not
be engaged in the business of designing, manufacturing and
distributing transport temperature control systems and
associated service parts for mobile applications (the
"Thermo King Business") other than through the Sold
Subsidiaries (it being understood that Westinghouse and its
subsidiaries provide the Sold Subsidiaries with certain
services, such as insurance, employee benefits, tax, payroll
and accounting services, which are not part of the Thermo
King Business being transferred pursuant to the transactions
contemplated hereby).
(s) Labor Matters. Except as set forth in
Schedule 4(s), (i) there is not, and since January 1, 1996
there has not been, any labor strike, work stoppage or
lockout pending against any Sold Subsidiary, (ii) there is
no unfair labor practice charge or complaint against any
Sold Subsidiary pending or, to the knowledge of
Westinghouse, threatened before the National Labor Relations
Board or any similar body in any material foreign
jurisdiction and (iii) there are no pending or, to the
knowledge of Westinghouse, threatened union grievances
against any Sold Subsidiary which, in the case of clauses
(i), (ii) and (iii), would, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(t) Product Liability Claims; Warranties.
(i) Schedule 4(t) sets forth a list of each Product
Liability Claim (as defined below) that resulted in payments
(exclusive of legal fees and other defense costs) in excess
of $250,000 paid by or on behalf of any Sold Subsidiary
during the past five fiscal years, and each currently
outstanding Product Liability Claim in excess of $250,000.
For purposes of this Section 4(t), the term "Product
Liability Claim" shall mean any claim arising out of any
injury to an individual or property as a result of the
ownership, possession, or use of any product manufactured,
sold or delivered by any Sold Subsidiary, other than any
claim for repair or replacement of the product itself.
(ii) Except as set forth on Schedule 4(t), no
standard product warranty or guarantee is generally made
available by the Sold Subsidiaries with respect to the Sold
Subsidiaries' products or services, except for implied
warranties of merchantability or fitness or any other
warranties arising by operation of law.
(u) Customers. Schedule 4(u) sets forth a list,
as of the date of this Agreement, of the 15 largest direct
customers (including dealers) of the Sold Subsidiaries in
terms of revenues during the year ended December 31, 1996,
showing the approximate total sales by the Sold Subsidiaries
to each such customer during such period.
5. Covenants of Westinghouse. Westinghouse
covenants and agrees as follows:
(a) Access. Prior to the Closing, Westinghouse
shall, and shall cause its subsidiaries to, give Buyer and
its employees, representatives, counsel and accountants
reasonable access, during normal business hours and upon
reasonable notice, to the personnel, properties, books and
records of the Sold Subsidiaries and of the Sellers, to the
extent related to the Sold Subsidiaries, including access to
the work papers of Westinghouse's and the Sold Subsidiaries'
independent auditors; provided, however, that such access
does not unreasonably disrupt the normal operations of
Westinghouse or any of its subsidiaries; provided further,
however, that Westinghouse and its subsidiaries shall be
under no obligation to disclose to Buyer (i) any information
as to which the attorney-client privilege may be available
until a mutually satisfactory joint defense agreement has
been executed by Westinghouse and Buyer, and (ii) any
information the disclosure of which is restricted by
Contract or applicable law except in strict compliance with
the applicable Contract or law. Buyer agrees to give the
reasonable notice described above to, and arrange access
through, only the individuals listed in Schedule 5(a).
(b) Ordinary Conduct. Except as contemplated by
Schedule 5(b), Section 2(b) or otherwise expressly provided
by this Agreement, from the date hereof to the Closing,
Westinghouse shall cause the business of the Sold
Subsidiaries to be conducted in the ordinary course in
substantially the same manner as presently conducted and
shall make all reasonable efforts consistent with past
practices to preserve their relationships with dealers,
suppliers and others with whom any Sold Subsidiary deals.
In addition, except as contemplated by Schedule 5(b),
Section 2(b) or otherwise expressly provided by this
Agreement, Westinghouse shall not permit any Sold Subsidiary
to do (or permit any Selling Subsidiary to permit any Sold
Subsidiary to do) any of the following without the prior
written consent of Buyer:
(i) amend its certificate of incorporation or
by-laws (or comparable organizational documents) in any
material respect;
(ii) declare or pay any dividend or make any other
distribution to its stockholders whether or not upon or
in respect of any shares of its capital stock; pro
vided, however, that (A) Buyer acknowledges that the
Sold Subsidiaries do not maintain cash balances and, at
the time of Closing, Westinghouse will withdraw any
cash balances of the Sold Subsidiaries, (B) dividends
and distributions may continue to be made by Other Sold
Subsidiaries to Direct Sold Subsidiaries and (C) cash
dividends and distributions may continue to be made by
any Direct Sold Subsidiary to any Seller, provided that
such dividends and distributions shall not be funded by
the proceeds of borrowings by the Sold Subsidiaries;
(iii) adopt or amend in any material respect any
Benefit Plan or collective bargaining agreement, except
as required by law or pursuant to the terms of any
existing collective bargaining agreement or other
existing contract, agreement or instrument and except
for changes made by Westinghouse to any Benefit Plan
which affects substantially all the employees of
Westinghouse and its subsidiaries;
(iv) grant to any executive officer of any Sold
Subsidiary any increase in compensation or benefits or
loans, except in the ordinary course of business
consistent with past practice or as may be required
under existing contracts or agreements and except for
any increases or loans the liability for which a Seller
shall be solely obligated;
(v) incur or assume any liabilities, obligations
or indebtedness for borrowed money or guarantee any
such liabilities, obligations or indebtedness, or
cancel any material indebtedness or waive any claim or
rights of material value, in each case other than in
the ordinary course of business consistent with past
practice;
(vi) except for dividends and distributions permit
ted under clause (ii) above and cash management and
other intercompany transactions in the ordinary course
of business, pay, loan or advance any material amount
to, or sell, transfer or lease any of its material
assets to, or enter into any material contract,
agreement or arrangement with, Westinghouse or any of
its subsidiaries (other than any Sold Subsidiaries);
(vii) make any material change in any method of
accounting or accounting practice or policy other than
those required by generally accepted accounting princi
ples;
(viii) acquire by merging or consolidating with,
or by purchasing a material portion of the assets of,
or by any other manner, any business or any corpora
tion, partnership, joint stock company, limited
liability company, association or other business
organization or division thereof;
(ix) acquire any assets (other than inventory)
which are material, individually or in the aggregate,
to the Sold Subsidiaries, taken as a whole, except in
the ordinary course of business;
(x) sell, lease, mortgage, pledge or otherwise
dispose of, or grant preferential rights to, any of its
assets which are material, individually or in the
aggregate, to the Sold Subsidiaries, taken as a whole,
except for the sale of inventory in the ordinary course
of business consistent with past practice;
(xi) enter into any lease of real property for an
annual rent in excess of $150,000, except any renewals
of existing leases in the ordinary course of business;
(xii) enter into any joint venture, partnership or
other similar arrangement;
(xiii) sell, assign, or transfer any material
Intellectual Property except in the ordinary course of
business;
(xiv) make any capital expenditures in excess of
$1,000,000 more than the capital expenditures
contemplated in the capital budget previously made
available to Buyer;
(xv) amend any Contract in any material respect
other than in the ordinary course of business; or
(xvi) agree, whether in writing or otherwise, to
do any of the foregoing.
(c) Resignations. On the Closing Date,
Westinghouse shall cause to be delivered to Buyer duly
signed resignations, effective immediately after the
Closing, of all directors of the Sold Subsidiaries.
(d) Auditor Consents. Westinghouse shall use
reasonable best efforts to cause KPMG Peat Marwick LLP,
Westinghouse's independent public accountants, to deliver to
Buyer or Price Waterhouse LLP, Buyer's independent public
accountants, such consents and authorizations which Buyer
may require in order to satisfy Buyer's reporting
obligations under the United States Securities Exchange Act
of 1934, as amended, with respect to the transactions
contemplated hereby.
(e) Termination of Certain Agreements. Except as
set forth in Schedule 5(d), prior to or on the Closing Date
all contracts, agreements and instruments between (i) any
Sold Subsidiary and (ii) Westinghouse or any of its other
subsidiaries shall be terminated.
(f) Nonobstruction. Westinghouse shall not, and
shall cause the Selling Subsidiaries and Sold Subsidiaries
not to, intentionally take any action that would reasonably
be expected to result in any of the conditions to
Westinghouse's and Buyer's obligations set forth in Section
3 not being satisfied.
(g) Supplemental Disclosure. Westinghouse shall
promptly notify Buyer of, and furnish Buyer any information
Buyer may reasonably request with respect to, the occurrence
to Westinghouse's knowledge of any event or condition, or
the existence to Westinghouse's knowledge of any fact, that
would result in any of the conditions to Westinghouse's and
Buyer's obligations set forth in Section 3 not being
satisfied.
(h) Assignment of Confidentiality Agreements. On
the Closing Date, Westinghouse shall assign to Buyer its
rights under those confidentiality agreements executed by
Westinghouse and prospective purchasers of the Sold
Subsidiaries to the extent such rights relate to the Sold
Subsidiaries.
(i) Insurance Matters. Following the Closing,
Westinghouse shall surrender to Buyer (i) all insurance
proceeds received with respect to any damage, destruction or
other casualty loss suffered by any material asset of any
Sold Subsidiary prior to the Closing and (ii) all rights of
Westinghouse with respect to any causes of action, whether
or not litigation has commenced as of the Closing, in
connection with any such damage, destruction or loss.
Westinghouse shall make available to the Sold Subsidiaries
the benefit of any workers' compensation, general liability,
product liability, automobile liability, umbrella (excess)
liability or crime or other insurance policy covering the
Sold Subsidiaries and relating to the Thermo King Business
with respect to claims made prior to the Closing or claims
relating to pre-Closing events where occurrence-based
insurance policies would be applicable; provided, however,
that Westinghouse may in its sole discretion liquidate,
commute, settle, modify or amend any occurrence-based
insurance policy in any respect; provided further, however,
that (i) all of Westinghouse's costs and expenses incurred
in connection with the foregoing are promptly paid by Buyer
and (ii) such benefit shall be subject to (and recovery
thereon shall be reduced by the amount of) any applicable
deductibles and co-payments provisions or any payment or
reimbursement obligations of Westinghouse or any of its
affiliates in respect thereof.
(j) Non-Competition. For a period of three years
from the Closing, Westinghouse shall not, and shall cause
its controlled affiliates not to, directly or indirectly
engage in any business that is in competition with the
Thermo King Business. Notwithstanding anything to the
contrary contained in this Section 5(j), Buyer hereby agrees
that the foregoing covenant shall not be deemed breached as
a result of (i) the ownership by Westinghouse or any
affiliate of Westinghouse of less than an aggregate of 5% of
any class of capital stock of a person engaged, directly or
indirectly, in a business that is in competition with the
Thermo King Business or less than 10% in value of any
instrument of indebtedness of a person engaged, directly or
indirectly, in a business that is in competition with the
Thermo King Business or (ii) the acquisition by Westinghouse
or any affiliate of Westinghouse of any person (A) which
derives less than $25,000,000 in revenues from businesses in
competition with the Thermo King Business or (B) the
predominant business of which is not in competition with the
Thermo King Business if after such acquisition Westinghouse
or its affiliates uses reasonable best efforts to divest the
business of such person that is in competition with the
Thermo King Business and actually divests such business
within 270 days after the acquisition of such business.
Westinghouse agrees to, and to cause its subsidiaries to,
maintain the confidentiality of any confidential information
regarding the Sold Subsidiaries, except (i) in the event
Westinghouse or any of its subsidiaries is required to
disclose any of such information pursuant to applicable law
or by applicable legal process, (ii) becomes generally
available to the public other than as a result of a
disclosure by Westinghouse or its subsidiaries, (iii) to the
extent such information was available to Westinghouse or its
subsidiaries on a non-confidential basis prior to its
disclosure to Westinghouse or its subsidiaries, or (iv) to
the extent such information becomes available to
Westinghouse or its subsidiaries on a non-confidential basis
from a source other than Westinghouse or its subsidiaries,
provided that such source is not prohibited from disclosing
such information by a contractual, legal or fiduciary
obligation.
6. Representations and Warranties of Buyer.
Buyer hereby represents and warrants to Westinghouse as
follows:
(a) Authority. Buyer is a corporation duly
organized, validly existing and in good standing under the
laws of the State of New Jersey. Buyer has all requisite
corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. All
corporate acts and other proceedings required to be taken by
Buyer to authorize the execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and properly taken. This
Agreement has been duly executed and delivered by Buyer and
constitutes a legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.
(b) No Conflicts; Consents. The execution and
delivery of this Agreement by Buyer do not, and the
consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, conflict with, or
result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a
right of termination, cancelation or acceleration of any
obligation or to loss of a benefit under, or result in the
creation of any lien, claim, encumbrance, security interest,
option, charge or restriction of any kind upon any of the
properties or assets of Buyer under, any provision of
(i) the certificate of incorporation or by-laws of Buyer,
(ii) any note, bond, mortgage, indenture, deed of trust,
license, lease, contract, commitment, agreement or
arrangement to which Buyer is a party or by which its proper
ties or assets are bound or (iii) except for the exceptions
to the next sentence, any statute, law, ordinance, rule,
regulation, judgment, order or decree applicable to Buyer or
its properties or assets, other than, in the case of
clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, would not reasonably be
expected to materially impair the ability of Buyer to
consummate the transactions contemplated hereby. No
material consent, approval, license, permit, order or
authorization of, or registration, declaration or filing
with, any Governmental Entity is required to be obtained or
made by Buyer in connection with the execution, delivery and
performance of this Agreement or the consummation of the
transactions contemplated hereby, other than (I) compliance
with and filings under the HSR Act and the Regulation,
(II) compliance with and filings under Section 13(a) of the
Exchange Act, (III) those that may be required solely by
reason of Westinghouse's (as opposed to any other third
party's) participation in the transactions contemplated
hereby and (IV) those the failure of which to obtain or
make, individually or in the aggregate, would not reasonably
be expected to materially impair the ability of Buyer to
consummate the transactions contemplated hereby.
(c) Securities Act. The Shares purchased by
Buyer pursuant to this Agreement are being acquired for
investment only and not with a view to any public distribu
tion thereof, and Buyer shall not offer to sell or otherwise
dispose of the Shares so acquired by it in violation of any
of the registration requirements of the Securities Act.
(d) Availability of Funds. Buyer has cash
available or prior to Closing will have borrowing facilities
which together are sufficient to enable it to consummate the
transactions contemplated by this Agreement.
7. Covenants of Buyer. Buyer covenants and
agrees as follows:
(a) Confidentiality. Buyer acknowledges that the
information being provided to it in connection with the
purchase and sale of the Shares and the consummation of the
other transactions contemplated hereby is subject to the
terms of a confidentiality agreement between Buyer and
Westinghouse (the "Confidentiality Agreement"), the terms of
which are incorporated herein by reference. Effective upon
the Closing, the Confidentiality Agreement shall terminate
with respect to information relating solely to the Sold
Subsidiaries; provided that Buyer acknowledges that any and
all other information provided to it concerning Westinghouse
or any of its subsidiaries (other than the Sold Subsi
diaries) shall remain subject to the terms and conditions of
the Confidentiality Agreement after the Closing Date.
(b) Nonobstruction. Buyer shall not intentionally
take any action that would reasonably be expected to result
in any of the conditions to Westinghouse's and Buyer's
obligations set forth in Section 3 not being satisfied.
(c) Supplemental Disclosure. Buyer shall
promptly notify Westinghouse of, and furnish Westinghouse
any information Westinghouse may reasonably request with
respect to, the occurrence to Buyer's knowledge of any event
or condition, or the existence to Buyer's knowledge of any
fact, that would result in any of the conditions to
Westinghouse's and Buyer's obligations set forth in
Section 3 not being satisfied.
(d) No Additional Representations. Buyer
acknowledges that none of Sellers, the Sold Subsidiaries or
any other person has made any representation or warranty,
expressed or implied, as to the accuracy or completeness of
any information (including any projections, estimates or
budgets of future revenues, expenses or expenditures or of
future results of operations) regarding the Sold
Subsidiaries furnished or made available to Buyer and its
representatives or any other matter, except as expressly set
forth in this Agreement or the Schedules hereto, and none of
Sellers, the Sold Subsidiaries or any other person shall
have or be subject to any liability to Buyer or any other
person resulting from the distribution to Buyer, or Buyer's
use of, any such information, including the Information
Memorandum dated June 1997 and any information, documents or
material made available to Buyer in certain "data rooms",
management presentations or in any other form in expectation
of the transactions contemplated hereby.
(e) Credit Support. Buyer acknowledges that in
the course of the conduct by the Sold Subsidiaries of their
business, Westinghouse and its subsidiaries (other than the
Sold Subsidiaries) have entered into various arrangements
(i) in which guarantees (including of performance under
contracts or agreements), letters of credit or other credit
arrangements, including surety and performance bonds, were
issued by or for the account of Westinghouse and its
subsidiaries (other than the Sold Subsidiaries) or (ii) in
which Westinghouse and its subsidiaries (other than the Sold
Subsidiaries) are the primary or secondary obligors on debt
instruments or financing or other contracts or agreements,
in any such case to support or facilitate business trans
actions of the Sold Subsidiaries. Such arrangements by such
parties are hereinafter referred to as the "Credit Support
Arrangements". Schedule 7(e) sets forth a list of all
Credit Support Arrangements existing as of the date of this
Agreement. Westinghouse agrees that it will not, and will
not permit any of its subsidiaries to, enter into any Credit
Support Arrangements prior to the Closing except for
(i) foreign exchange contracts entered into in the ordinary
course of business and (ii) letters of credit and surety
bonds which do not, in the aggregate, exceed $1,000,000.
Westinghouse and Buyer agree that the Credit Support
Arrangements are not intended to continue after the Closing.
Buyer will use reasonable best efforts to (i) obtain
replacement Credit Support Arrangements which will be in
effect at the Closing or (ii) repay, or cause the repayment
of, all debt and other obligations to which such Credit
Support Arrangements relate (and cause the cancelation of
such Credit Support Arrangements) or arrange for itself or
one of its subsidiaries (including the Sold Subsidiaries) to
be substituted as the obligor thereon as of the Closing
Date. In the event that notwithstanding the foregoing
sentence Credit Support Arrangements remain outstanding
following the Closing, Buyer will continue to use reasonable
best efforts to take the actions described in clauses (i)
and (ii) of the preceding sentence and will indemnify
Westinghouse and its subsidiaries (other than the Sold
Subsidiaries) for all losses, liabilities, claims, damages
and expenses suffered or incurred by Westinghouse and its
subsidiaries (other than the Sold Subsidiaries) arising from
the existence of Credit Support Arrangements following the
Closing.
(f) No Use of Westinghouse Name. (i) Promptly
after the Closing, Buyer shall, or shall cause its subsi
diaries (including the Sold Subsidiaries) to, amend the
certificate of incorporation and by-laws (or comparable
organizational documents) of any Sold Subsidiary whose name
includes "Westinghouse" to change the name of such Sold
Subsidiary to a name which does not include "Westinghouse".
(ii) Buyer shall not use any signs or stationery,
purchase order forms, packaging or other similar paper goods
or supplies, advertising and promotional materials, product,
training and service literature and materials, or computer
programs or like materials (collectively, the "Supplies")
that include the word "Westinghouse" or contain any trade
marks, trade names, service marks or corporate or business
names, derived from or including the words "Westinghouse
Electric Corporation", "Westinghouse" or "Circle W" (in
logotype design or any other style or design) in whole or in
part; provided, however, that, to the extent any Supplies so
include the word "Westinghouse" or contain any such trade
marks, trade names, service marks or corporate or business
names, Buyer may, for a period of 180 days after the Closing
Date, use such Supplies after first using reasonable best
efforts to cross out or mark over such word or trademark,
trade name, service mark or corporate or business name and
otherwise clearly indicate on such Supplies that the Sold
Subsidiaries are no longer affiliated with Westinghouse.
Buyer shall not reorder or produce any Supplies which
include the word "Westinghouse" or contain any such
trademarks, trade names, service marks or corporate or
business names.
(g) Transition Services. (i) Prior to the
Closing Westinghouse and Buyer shall enter into a mutually
acceptable transition services agreement pursuant to which
Westinghouse will provide to the Sold Subsidiaries for a
term of up to 9 months the transition services set forth in
Schedule 7(g)(i) and such other services as shall be
reasonably requested by Buyer and which Westinghouse may
legally and practically provide to Buyer. The transition
services agreement will provide that Buyer will bear
Westinghouse's costs and expenses of providing such
transition services, it being understood that such services
will be provided by Westinghouse (x) without additional
charge for the administrative services expense incurred by
Westinghouse in providing such transition services for the
first three months following the Closing Date, (y) at an
additional charge of 10% of the administrative services
expense incurred for the fourth through six months following
the Closing Date and (z) at an additional charge of 15% of
the administrative services expense incurred for the seventh
through ninth months following the Closing Date, and will
contain other customary terms and conditions.
(ii) Westinghouse will as of the date of the
Closing grant the Sold Subsidiaries a perpetual, royalty-
free license to continue to use any business system that is
exclusively proprietary to Westinghouse or its subsidiaries
(other than the Sold Subsidiaries) that is currently used by
the Sold Subsidiaries.
(iii) With respect to business systems or software licensed
by Westinghouse or its subsidiaries (other than the Sold
Subsidiaries) from third parties that are listed on
Schedule 7(g)(iii), Westinghouse will use reasonable best
efforts to arrange for the Sold Subsidiaries to continue to
be licensed to use such systems on the terms currently in
place, without any payment required to be made by the Sold
Subsidiaries or Buyer in excess of that currently paid by or
allocated to the Sold Subsidiaries, whether such additional
payment arises from the consummation of transactions
contemplated hereby or the granting of a new license to the
Sold Subsidiaries, it being understood that Westinghouse
shall be responsible for the costs of so arranging for such
licenses. With respect to business systems or software
licensed by Westinghouse or its subsidiaries (other than the
Sold Subsidiaries) from third parties not listed in
Schedule 7(g)(iii), Westinghouse and Buyer shall share
equally the costs of obtaining any licenses determined by
Westinghouse and Buyer to be reasonably necessary to the
Sold Subsidiaries for the operation of their business in the
ordinary course.
(h) Borrowing Facilities. Buyer will deliver to
Westinghouse true and complete copies of all borrowing
facilities under which indebtedness will be incurred to
finance the payment of the Purchase Price.
8. Mutual Covenants. Each of Westinghouse and
Buyer covenants and agrees as follows:
(a) Consents; Governmental Approvals. Buyer
acknowledges that certain consents, waivers and approvals
with respect to the transactions contemplated hereby may be
required from parties to the licenses, leases, contracts,
commitments, agreements or instruments listed on the
Schedules hereto and Governmental Entities and that such
consents, waivers and approvals have not yet been obtained.
Buyer agrees that except as expressly provided in this
Section 8(a) Westinghouse shall not have any liability
whatsoever (including any liability under Section 11) to
Buyer arising out of or relating to the failure to obtain
any consents, waivers or approvals that may be required in
connection with the transactions contemplated hereby or
because of the termination of any license, lease, contract,
commitment, agreement or instrument as a result thereof.
Buyer further agrees that no representation, warranty,
covenant or agreement of Westinghouse contained herein shall
be breached or deemed breached, and, except to the extent
expressly provided in Sections 3(a)(iii) and 3(a)(iv), no
condition shall be deemed not satisfied, as a result of
(i) the failure to obtain any such consent, waiver or
approval, (ii) any such termination or (iii) any suit,
action, proceeding or investigation commenced or threatened
by or on behalf of any person arising out of or relating to
the failure to obtain any such consent, waiver or approval
or any such termination. Westinghouse and Buyer agree that
nothing in this Section 8(a) is intended to relieve
Westinghouse from liability under Section 11(b)(i) for a
breach of the representations and warranties set forth in
Section 4(c). Prior to the Closing and for a period of
180 days following the Closing, Westinghouse shall, and
shall cause the Sold Subsidiaries to, cooperate with Buyer,
upon the request of Buyer, in any reasonable manner in
connection with Buyer obtaining any such consents, waivers
and approvals; provided, however, that such cooperation
shall not include any requirement of Westinghouse or any of
its affiliates (including the Sold Subsidiaries) to expend a
material amount of money, commence or participate in any
litigation or offer or grant any accommodation (financial or
otherwise) to any third party except for the payment of its
administrative and legal costs and expenses incurred in
connection with the performance of its obligations under
this sentence. Each of Westinghouse and Buyer shall as
promptly as practicable comply with any laws of any country
which are applicable to any of the transactions contemplated
hereby and pursuant to which any consent, approval, order or
authorization of, or registration, declaration or filing
with, any Governmental Entity or any other person in
connection with such transactions is necessary.
In the event that any of the consents, waivers or
approvals set forth in paragraphs 4, 16 and 18 of
Schedule 4(b) are not obtained prior to the Closing,
(i) Westinghouse and Buyer shall use reasonable best efforts
to obtain such consent, waiver or approval as soon as
practicable following the Closing and (ii) Westinghouse and
Buyer shall negotiate in good faith and execute such
instrument or instruments as are necessary to provide to
Buyer the benefits and rights and impose on Buyer the costs,
liabilities and obligations that Buyer would have been
entitled to or responsible for had such consent, waiver or
approval been obtained prior to the Closing.
(b) Cooperation. Westinghouse and Buyer shall
reasonably cooperate with each other, and shall cause their
officers, employees, advisors and representatives to
reasonably cooperate with each other, after the Closing to
facilitate the orderly transition of the Sold Subsidiaries
from Westinghouse to Buyer and to minimize any disruption to
the respective businesses of Westinghouse, Buyer or the Sold
Subsidiaries that might result from the transactions contem
plated hereby. After the Closing, upon reasonable written
notice, Buyer and Westinghouse shall furnish or cause to be
furnished to each other and their officers, employees,
advisors and representatives access, during normal business
hours, to such information and assistance relating to the
Sold Subsidiaries as is reasonably necessary for financial
reporting and accounting matters, the preparation and filing
of any returns, reports or forms, the defense of, or any
response required in connection with, any suit, action,
claim or assessment or for any other reasonable business
purpose. Each party shall reimburse the other for
reasonable out-of-pocket costs and expenses incurred by the
other in connection with actions taken by the other pursuant
to this Section 8(b) for the benefit of or at the request of
such other party. Neither party shall be required by this
Section 8(b) to take any action that would unreasonably
interfere with the conduct of its or any of its
subsidiaries' business or unreasonably disrupt its or any of
its subsidiaries' normal operations. Westinghouse and Buyer
shall, and shall cause their affiliates to, retain until
five years after the Closing Date all records pertinent to
the Sold Subsidiaries which are owned by such person
immediately after the Closing; after the end of such period,
before disposing of any such records, the applicable party
shall give 90 days' advance notice to such effect to the
other, and shall give the other, at the other's cost and
expense, a reasonable opportunity to remove and retain all
or any part of such information as the other may select.
(c) Publicity. Westinghouse and Buyer agree
that, from the date hereof through the Closing Date, no
public release or announcement concerning the transactions
contemplated hereby shall be issued by either party without
the prior consent of the other party (which consent shall
not be unreasonably withheld), except as such release or
announcement may be required by law or the rules or
regulations of any securities exchange, in which case the
party required to make the release or announcement shall
allow the other party reasonable time to comment on such
release or announcement in advance of such issuance.
(d) Reasonable Best Efforts. Subject to the
terms and conditions of this Agreement, each party shall use
its reasonable best efforts to cause the Closing to occur,
including (i) as contemplated by Sections 8(a) and 8(e) and
(ii) defending against any suits, actions or proceedings,
judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby,
including seeking to have any temporary restraining order,
preliminary injunction or other legal restraint or
prohibition entered or imposed by any court or other
Governmental Entity that is not yet final and nonappealable
vacated or reversed; provided, however, that, except as
provided in Section 8(a), none of Westinghouse or its
affiliates shall be required to make any material monetary
expenditure, commence or be a plaintiff in any litigation or
offer or grant any material accommodation (financial or
otherwise) to any Governmental Entity or any other person.
Without limiting the foregoing or the provisions set forth
in Section 8(e), Westinghouse and Buyer shall use their
respective reasonable best efforts to cause the Closing to
occur on or prior to October 31, 1997.
(e) Antitrust Notification. Each of Westinghouse
and Buyer shall as promptly as practicable, but in no event
later than five business days following the execution and
delivery of this Agreement, (i) file with the United States
Federal Trade Commission (the "FTC") and the United States
Department of Justice (the "DOJ") the notification and
report form, if any, required for the transactions contem
plated hereby and any supplemental information requested in
connection therewith pursuant to the HSR Act and (ii) file
with the Commission all forms, applications and other
documents required to be filed in order to receive the
European Confirmation. Any such forms, supplemental
information, applications and other documents shall be in
substantial compliance with the requirements of the HSR Act
or the Regulation, as applicable. Each of Westinghouse and
Buyer shall furnish to the other such necessary information
and reasonable assistance as the other may request in
connection with its preparation of any filing, submission,
registration or declaration which is necessary under the HSR
Act, the Regulation or any other law. Westinghouse and
Buyer shall keep each other apprised of the status of any
communications with, and any inquiries or requests for
additional information from, the FTC, the DOJ, the
Commission and any other Governmental Entities and shall
comply promptly with any such inquiry or request. Each of
Westinghouse and Buyer shall use its reasonable best efforts
to obtain any clearance required under the HSR Act or to
obtain the European Confirmation or any other consent,
approval, order or authorization of any Governmental Entity
necessary for the purchase and sale of the Shares subject,
in the case of Westinghouse, to the proviso to Section 8(d).
For purposes of this Section 8(e) and of Section 8(d), the
"reasonable best efforts" of Buyer shall not include Buyer's
agreement to divest any business or assets of any of the
Sold Subsidiaries or of Buyer or any of its subsidiaries.
9. Employee and Related Matters. (a) Employ
ment. Effective as of the Closing, Buyer shall continue to
employ, or cause a Sold Subsidiary to continue to employ,
each employee of the Sold Subsidiaries who is actively at
work on the Closing Date ("Active Employees") and Buyer
shall also honor any commitment of Westinghouse, any Sold
Subsidiary or, following the Closing, Buyer, to reemploy any
employee of the Sold Subsidiaries who is not actively at
work on the Closing Date due to leave of absence, disability
leave, military leave or layoff with recall rights
(collectively, "Inactive Employees"). Schedule 9(a) hereto
contains a list which, to the knowledge of Westinghouse,
includes (i) all employees of the Sold Subsidiaries who were
not actively at work as of September 11, 1997 due to any of
the reasons described in the preceding sentence and (ii) the
reason therefor. For purposes hereof, any employee of a
Sold Subsidiary who is not actively at work on the Closing
Date due to a short-term absence (including due to vacation,
holiday, illness or injury of shorter duration than seven
days, jury duty or death leave) in accordance with
applicable policies of Westinghouse, any of the Sold
Subsidiaries or any of their respective affiliates shall be
deemed to be an Active Employee. For purposes of this
Agreement, Active Employees who immediately following the
Closing continue their employment with any of the Sold
Subsidiaries and Inactive Employees, whether or not they
become reemployed by any of the Sold Subsidiaries, shall be
referred to herein collectively as "Continued Employees".
For purposes hereof, an employee of any Sold Subsidiary
whose employment with the Sold Subsidiaries has terminated
for any reason (including retirement) prior to the Closing
Date and who, as of the Closing Date, is not employed by
Westinghouse or any of its affiliates shall be referred to
herein as a "Former Employee". Notwithstanding the
foregoing, (i) the employees of the Sold Subsidiaries that
pursuant to Section 2(b)(iv) will be transferred to
Westinghouse or one of its subsidiaries (other than the Sold
Subsidiaries) shall not be considered Continued Employees
for the purposes of this Agreement and (ii) the employees of
Westinghouse or its subsidiaries (other than the Sold
Subsidiaries) that pursuant to Section 2(b)(iii) will be
transferred to the Sold Subsidiaries (or to Buyer or a
subsidiary of Buyer) shall be considered Continued Employees
for the purposes of this Agreement.
(b) Continuation of Comparable Benefit Plans.
(i) For not less than one year following the Closing Date,
Buyer shall maintain, or shall cause the Sold Subsidiaries
to maintain, compensation and employee benefit plans and
arrangements (other than any plans and arrangements based on
equity securities or any equivalent thereof or any special
bonus or incentive arrangements not in the ordinary course)
for employees of the Sold Subsidiaries other than Continued
Employees and Former Employees who are subject to a
collective bargaining agreement (collectively, "Union
Employees") that, in the aggregate, are comparable to those
provided pursuant to the compensation and employee benefit
plans and arrangements in effect on the date hereof except
for such changes as may be (i) required by law including,
without limitation, any applicable qualification
requirements of Section 401(a) of the Code, (ii) necessary
as a technical matter to reflect the transactions
contemplated hereby, or (iii) required by a collective
bargaining agreement or other contract, agreement or
instrument to which Westinghouse or the applicable Sold
Subsidiary is a party as of the Closing Date or provided in
a contract, agreement or instrument entered into after the
Closing Date with the affected employees or collective
bargaining agent. With respect to Union Employees, Buyer
shall assume all of the collective bargaining agreements set
forth in Schedule 4(l)(ii) and shall comply with all of the
terms thereof (including any specific provisions thereunder
relating to comparability of wages and benefits). Without
limiting the foregoing, Buyer shall have employee welfare
benefit plans in effect on the Closing Date (or, to the
extent applicable, on the expiration of the Benefits
Transition Services Period, as defined in Section 9(b)
hereof) providing continuous uninterrupted medical and
dental benefits substantially similar to the medical and
dental benefits provided by Westinghouse immediately prior
to the Closing Date and life insurance and disability
benefit coverage for the Continued Employees, Former
Employees and their respective dependents who immediately
prior to the Closing Date were covered (including
individuals receiving benefits immediately prior to the
Closing Date) under employee welfare benefit plans by
Westinghouse or any of its affiliates. Buyer shall recog
nize each Continued Employee's (and, to the extent appli
cable, each Foreign Employee's) eligibility service with
Westinghouse or its affiliates as of the Closing Date as
eligibility service with Buyer for purposes of determining
eligibility and benefit levels as applicable in Buyer's
employee welfare benefit plans, vacation, disability,
severance and similar benefits, but only to the extent that
such service was recognized by Westinghouse under its
applicable welfare benefit plans. Buyer shall cause to be
waived any pre-existing condition limitation under the
employee welfare benefit plans applicable to Continued
Employees (and, to the extent applicable, Foreign Employees)
or their respective dependents and shall recognize (or cause
to be recognized) the dollar amount of all expenses incurred
by Continued Employees, Former Employees and their respec
tive dependents during the calendar year in which the
Closing Date occurs for purposes of satisfying the
deductibles and co-payments limitations for such calendar
year under the relevant employee welfare benefit plans of
Buyer.
(ii) If requested by Buyer, Westinghouse will
allow Continued Employees and Former Employees (and their
eligible dependents) to continue to participate in the
employee benefit plans and programs set forth in
Schedule 9(b) hereto provided that a mutually acceptable
employee benefits transition services agreement (the
"Benefits Transition Services Agreement") is executed by
Westinghouse and Buyer, such agreement to include the
following key terms and conditions (in addition to other
customary terms and conditions): (i) Westinghouse will not
be obligated to provide benefits services to Buyer on a
transitional basis beyond a date which is nine months
following the Closing Date (the "Benefits Transition
Services Period"), (ii) Buyer will bear, and will indemnify
Westinghouse and its affiliates against, all claims,
liabilities (other than liabilities arising solely from
Westinghouse's gross negligence or willful misconduct) and
obligations, costs and expenses of providing such benefits
transition services on behalf of Buyer, it being understood
that such services will be provided by Westinghouse
(x) without additional charge for the administrative
services expense incurred by Westinghouse in providing such
benefits transition services for the first three months
following the Closing Date, (y) at an additional charge of
10% of the administrative services expense incurred for the
fourth through six months following the Closing Date and
(z) at an additional charge of 15% of the administrative
services expense incurred for the seventh through ninth
months following the Closing Date, (iii) Buyer will promptly
pay Westinghouse, within 15 days following Buyer's receipt
of Westinghouse's written invoice, the amount set forth
therein for providing such benefits transition services,
(iv) the Continued Employees (and, to the extent applicable,
Former Employees) remain on Westinghouse's PRISM payroll
system during the Transition Services Period (subject to the
terms of a payroll services transition agreement to be
included as part of the Benefits Transition Services
Agreement), (v) Westinghouse will act as an independent
contractor of Buyer in providing such benefits transition
services on behalf of Buyer, and (vi) the execution of the
Benefits Transition Services Agreement will not in any way
be construed to restrict Westinghouse or Buyer or their
respective affiliates from amending or terminating at any
time (including during the Benefits Transition Services
Period) any of its employee benefit plans and programs;
provided, however, that if Buyer's amendment or termination
of any plan or program makes it unreasonably difficult for
Westinghouse to provide administrative services,
Westinghouse may terminate such services, and further
provided, that any such action by Buyer may affect the costs
to be charged by Westinghouse in providing such services.
Westinghouse will provide reasonable assistance to Buyer in
Buyer's discussions with outside vendors with respect to the
establishment of, and/or the providing of administrative
services under, the plans and arrangements to be established
or maintained by Buyer under this Section 9.
(c) Pension Plan. Effective as of the Closing
Date, Buyer or the applicable Sold Subsidiary shall have in
effect a defined benefit plan ("Buyer's Plan") intended to
be qualified pursuant to Section 401(a) of the Code that
will provide benefits, for not less than one year following
the Closing Date, to Continued Employees which are
substantially similar in all material respects (except for
such changes as may be (i) required by law, including any
applicable requirements of Section 401(a) of the Code,
(ii) necessary as a technical matter to reflect the
transactions contemplated hereby, or (iii) required by a
collective bargaining agreement or other contract, agreement
or instrument to which Westinghouse or the applicable Sold
Subsidiary is a party as of the Closing Date or provided in
a contract, agreement or instrument entered into after the
Closing Date with the affected employees or collective
bargaining agent) to those provided to such Continued
Employees under the Westinghouse pension plan listed on
Schedule 4(n) (the "Westinghouse Pension Plan") as of the
date hereof. Each Continued Employee, and to the extent any
Former Employees are participants in the Westinghouse
Pension Plan immediately prior to the Closing Date, each
such Former Employee (each, a "Former Pension Participant"),
participating in the Westinghouse Pension Plan as of the
Closing Date shall become a participant in Buyer's Plan as
of the Closing Date. Continued Employees and Former Pension
Participants shall receive credit for all service with
Westinghouse and its affiliates for purposes of eligibility,
vesting and benefit accruals under Buyer's Plan to the
extent that such service was taken into account under the
Westinghouse Pension Plan.
As soon as practicable after the Closing Date,
Westinghouse shall cause to be transferred from the
Westinghouse Pension Plan to Buyer's Plan all accrued
benefits and other liabilities of the Westinghouse Pension
Plan relating to Continued Employees and Former Pension
Participants (the "Transferred Benefits") in the form and
manner described below.
Following the completion of the transfer of assets
and liabilities from the Westinghouse Pension Plan to
Buyer's Plan as provided herein, Westinghouse and its
affiliates shall have no further liability whatsoever
(either under this Agreement or otherwise) with respect to
the Continued Employees and Former Pension Participants for
benefits under the Westinghouse Pension Plan other than
liability for any breach of fiduciary duties or any
nonexempt prohibited transaction occurring prior to such
transfer of assets and liabilities. As of the Closing Date,
Westinghouse shall cause Continued Employees and Former
Employees then participating in the Westinghouse Pension
Plan to cease further accrual of benefits thereunder.
Westinghouse shall cause Kwasha Lipton ("Westing
house's Actuary") to determine the amount of assets required
by Section 414(l) of the Code for the Transferred Benefits
obligation based on allocating assets by priority categories
described in Section 4044(a) of ERISA (the "414(l) Amount"),
to be transferred from the Westinghouse Pension Plan to
Buyer's Plan. The 414(l) Amount shall be determined as of
the Closing Date by Westinghouse's Actuary on the basis of
the Pension Benefit Guaranty Corporation's safe harbor
assumptions set forth in Treasury Regulation
Section 1.414(l)-1(b)(5)(ii). In connection therewith,
Westinghouse shall cause Westinghouse's Actuary to determine
the amounts of charges and credits to the funding standard
account under Section 412 of the Code, the funding standard
account credit balance and the annual amortization charges
and credits (such amounts determined under the provisions of
Internal Revenue Service Revenue Ruling 81-212 and other
applicable guidance) to be allocated between the
Westinghouse Pension Plan and the Buyer's Plan as a result
of the transfer of assets and liabilities anticipated under
this Section. Such amounts shall be determined without
regard to use of the de minimis option contained in such
revenue ruling and the regulations promulgated under
Section 414(l) of the Code. The actuarial calculation of
the liabilities by Pension Benefit Guaranty Corporation
priority categories underlying the 414(l) Amount determined
by Westinghouse's Actuary shall be reviewed for accuracy by
an actuarial firm designated by Buyer ("Buyer's" Actuary").
On the Closing Date (provided that (i) Buyer has received
either a favorable determination letter from the Internal
Revenue Service to the effect that Buyer's Plan meets the
requirements for qualification under Section 401(a) of the
Code or an opinion of Buyer's counsel, reasonably
satisfactory to Westinghouse, to such effect, and
(ii) Westinghouse has received either a favorable
determination letter from the Internal Revenue Service to
the effect that the Westinghouse Pension Plan meets the
requirements for qualification under Section 401(a) of the
Code or an opinion of Westinghouse's counsel reasonably
satisfactory to Buyer to such effect), Westinghouse shall
cause to be transferred from the Master Trust for the
Westinghouse Pension Plan (the "Master Trust") to the trust
established for Buyer's Plan, an amount in the form of cash
equal to 80% of the amount reasonably estimated by
Westinghouse's Actuary in good faith to be equal to the
414(l) amount (the "Initial Transfer Amount"). The Initial
Transfer Amount (plus interest thereon at the rate equal to
the rate payable under Mellon's Short-Term Investment Fund
net of such Fund's fees (such rate, net of Fund fees, being
referred to as the "STIF Rate") from the Closing Date to the
date of transfer) shall be transferred to Buyer's Plan. As
soon as practicable after the final determination of the
414(l) Amount (the "True-Up Date"), Westinghouse shall cause
a second transfer to be made to Buyer's Plan, in cash, of
the "True-Up Amount". The True-Up Amount shall be equal to
the 414(l) Amount minus the sum of (i) the Initial Transfer
Amount and (ii) distributions, if any, from, and reasonable
expenses of administration (consistent with past practice)
under, the Westinghouse Pension Plan for benefits or other
purposes made with respect to Continued Employees and Former
Pension Participants from the Closing Date through the date
of transfer plus interest on the True-Up Amount at the STIF
Rate from the Closing Date to the date of such second
transfer.
If the 414(l) Amount is less than $37 million,
then, on the True-Up Date, Westinghouse shall pay, or shall
cause to be paid, to Buyer an amount, in cash, equal to the
difference between $37 million minus the sum of (i) the
Initial Transfer Amount and (ii) the True-Up Amount (such
difference being referred to as the "Shortfall") plus
interest on the Shortfall from the Closing Date to the True-
Up Date at the STIF Rate.
Effective as of the Closing Date, Buyer shall have
in effect a defined benefit plan ("Buyer's Puerto Rico
Pension Plan") intended to be qualified pursuant to
applicable laws of Puerto Rico that will provide benefits,
for not less than one year following the Closing Date, to
Continued Employees which are substantially similar in all
material respects (except for such changes as may be
(i) required by law, including any applicable requirements
of Section 401(a) of the Code, (ii) necessary as a technical
matter to reflect the transactions contemplated hereby, or
(iii) required by a collective bargaining agreement or other
contract, agreement or instrument to which Westinghouse or
the applicable Sold Subsidiary is a party as of the Closing
or provided in a contract, agreement or instrument entered
into after the Closing with the affected employees or
collective bargaining agent to those provided to such
Continued Employees under the Westinghouse Pension Plan for
Operations in Puerto Rico as of the date hereof. All of the
foregoing provisions of this Section 9(c) shall also apply
to the transfer of assets and liabilities from the
Westinghouse Pension Plan for Operations in Puerto Rico to
the Buyer's Puerto Rico Pension Plan, including with respect
to any Former Employees who are participants in the
Westinghouse Pension Plan for Operations in Puerto Rico
immediately prior to the Closing Date.
(d) 401(k) Plan. Effective as of the Closing
Date, Buyer or the applicable Sold Subsidiary shall have in
effect defined contribution plans that include a qualified
cash or deferred arrangement within the meaning of Section
401(k) of the Code ("Buyer's 401(k) Plans") that will
provide benefits, for not less than one year following the
Closing Date, to Continued Employees substantially similar
in all material respects (except for such changes as may be
(i) required by law (ii) necessary as a technical matter to
reflect the transactions contemplated hereby, or
(iii) required by a collective bargaining agreement or other
contract, agreement or instrument to which Westinghouse or
the applicable Sold Subsidiary is a party as of the Closing
Date or provided in a contract, agreement or instrument
entered into after the Closing Date with the affected
employees or collective bargaining agent to those provided
by the Westinghouse savings program listed on Schedule 4(n)
(the "Westinghouse Savings Program") and the Westinghouse
de Puerto Rico retirement savings plan listed on
Schedule 4(n) (the "Westinghouse de Puerto Rico Retirement
Savings Plan") (collectively, "Westinghouse's 401(k)
Plans")) as of the date hereof. Each Continued Employee,
and to the extent any Former Employees are participants in
Westinghouse's 401(k) Plans immediately prior to the Closing
Date, such Former Employees (each, a "Former 401(k)
Participant"), participating in Westinghouse's 401(k) Plans
as of the Closing Date shall become participants in Buyer's
401(k) Plans as of the Closing Date. Continued Employees
and Former 401(k) Participants shall receive credit for all
service with Westinghouse and its affiliates for purposes of
eligibility and vesting under Buyer's 401(k) Plans. As of
the Closing Date, Westinghouse will fully vest the account
balance of each Continued Employee (to the extent not then
fully vested), if any, under Westinghouse's 401(k) Plans.
As soon as practicable following the later of
(i) the Closing Date, (ii) receipt by Buyer of a favorable
determination letter from the Internal Revenue Service to
the effect that Buyer's 401(k) Plans meet the requirements
for qualification under Section 401(a) of the Code (or an
opinion of Buyer's counsel, reasonably satisfactory to
Westinghouse, to such effect) and (iii) receipt by
Westinghouse of a favorable determination letter from the
Internal Revenue Service to the effect that the Westinghouse
401(k) Plan meets the requirements for qualification under
Section 401(a) of the Code (or an opinion of Westinghouse's
counsel reasonably satisfactory to Buyer to such effect),
Westinghouse shall cause to be transferred to Buyer's 401(k)
Plans, cash or, if acceptable to Buyer, marketable
securities selected by Westinghouse having a fair market
value equal to the aggregate value of the account balances
in Westinghouse's 401(k) Plans as of the date of transfer
for Continued Employees and Former 401(k) Participants (such
transfer to be in notes evidencing loans to Continued
Employees and Former 401(k) Participants from their account
balances and the balance in cash or marketable securities as
provided above), and shall also transfer all qualified
domestic relations orders, within the meaning of
Section 414(p) of the Code. Following such transfer of
assets, Buyer shall assume all of Westinghouse's and its
affiliates' liabilities under Westinghouse's 401(k) Plans
with respect to Continued Employees and Former 401(k)
Participants and Westinghouse and its affiliates shall have
no further liability to Buyer or any Continued Employee or
Former 401(k) Participant with respect thereto other than
liability for any breach of fiduciary duties or any non
exempt prohibited transaction occurring prior to such
transfer of assets and liabilities.
(e) Accrued Vacation. Buyer shall credit each
Continued Employee (and, to the extent any such amount is
owing to any Former Employee, each such Former Employee)
with the accrued and unused vacation days and any personal
and sickness days accrued in accordance with the vacation
and personnel policies and labor agreements of Westinghouse
or its affiliates in effect as of the Closing Date listed in
Schedules 4(l)(ii) and 4(n), provided, however, that
Westinghouse may supplement the list of vacation and
personnel policies set forth in such schedules by delivering
to Buyer, within seven days of the date of execution of this
Agreement, a supplemental list including additional policies
and which list is expected to set forth, on a country-by-
country basis, the applicable policies in effect in each
such country, including all statutorily-mandated policies.
To the knowledge of Westinghouse, such policies (excluding,
for this purpose, statutorily-mandated policies) do not
generally provide materially greater benefits than those
afforded under the applicable policies set forth in Schedule
4(n) as of the date of this Agreement.
(f) Union Representation. Buyer agrees to
recognize each union listed in Schedule 4(l)(ii) which at
the Closing Date represents any of the Continued Employees
(and, to the extent applicable, any Former Employees) as the
collective bargaining representatives of such employees as
of the Closing Date and agrees to assume all collective
bargaining agreements then covering any Continued Employees
(and, to the extent applicable, any Former Employees).
(g) Medical and Disability Benefits; Life
Insurance. (i) Each Sold Subsidiary shall continue to be
responsible, in accordance with past accounting practice, to
reimburse Westinghouse for all costs and expenses in respect
of their participation in Westinghouse's applicable employee
welfare benefit plans in effect prior to the Closing Date
for all medical and dental claims for expenses incurred
prior to the Closing Date by Continued Employees, Former
Employees and their respective covered dependents.
Reimbursement of such individuals for medical and dental
expenses associated with such claims (including claims
submitted on behalf of disabled employees and their
dependents) shall be determined in accordance with the terms
of Westinghouse's medical and dental programs as in effect
immediately prior to the Closing Date. Subject to the
Benefits Transition Services Agreement described in
Section 9(b), Westinghouse shall terminate coverage of
Continued Employees, Former Employees and their respective
dependents effective for claims for expenses incurred on and
after the Closing Date. Buyer shall be responsible for all
medical and dental claims for expenses incurred on and after
the Closing Date (including responsibility for post-retire
ment medical and dental claims) by Continued Employees,
Former Employees and their respective covered dependents;
provided, however, that Buyer's or the applicable Sold
Subsidiary's medical and dental programs shall not contain a
pre-existing condition clause with respect to Continued
Employees, Former Employees and their covered dependents.
For purposes of this Section 9(g), an expense shall be
deemed incurred when the medical or dental service relating
to the expense is provided (regardless of when the incident
giving rise to the medical or dental expense occurs).
(ii) Buyer shall be responsible for all short-
term and long-term disability income benefits and other
related benefits payable to or in respect of Continued
Employees, Former Employees and their respective dependents
regardless of whether the onset of the disability occurred
prior to, on or after the Closing Date.
(iii) Buyer shall be responsible for all life
insurance claims (including post-retirement life insurance
claims) of Continued Employees, Former Employees and their
respective dependents for losses incurred by such employees
or dependents on and after the Closing Date under Buyer's
group insurance policies in effect prior to or following the
Closing Date. Westinghouse shall be responsible solely for
claims for such losses incurred prior to the Closing Date.
(h) Severance Obligations. Westinghouse and
Buyer agree that the transactions contemplated hereby shall
not constitute a severance of employment of any Continued
Employee prior to the consummation of the transactions
contemplated hereby, and that such employees will be deemed
for all purposes to have continuous and uninterrupted
employment before and immediately after the Closing. Except
as required by law or an applicable collective bargaining
agreement or as otherwise agreed in writing by Westinghouse
and Buyer, Buyer shall provide severance and other
separation benefits to each Continued Employee terminated by
Buyer within one year following the Closing Date (or, in the
case of Continued Employees who are subject to a collective
bargaining agreement, the period required therein) upon
terms and conditions that are comparable to the severance
and other separation benefits provided by Westinghouse and
its affiliates in effect on the date of this Agreement set
forth in Schedule 4(n). Buyer shall recognize service with
Westinghouse and its affiliates prior to the Closing Date
for purposes of determining the amount of such severance and
other separation benefits. Buyer shall be responsible for
any claims made by any Continued Employee or Former Employee
for severance or other separation benefits, for any claims
based on breach of contract and for any other claims arising
out of or in connection with the employment or the failure
to offer employment to, or the termination of employment of,
any Continued Employee or Former Employee other than claims
arising solely as a result of the transactions contemplated
hereby unless the principal basis of any such claim is due
to Buyer's breach of any provision of this Section 9.
Westinghouse shall be responsible for any claims made by any
Continued Employee for severance or other separation
benefits, for any claims based on breach of contract and for
any other claims, in each case arising solely from the
transactions contemplated hereby; provided, however, that
Westinghouse shall not be responsible for any such claim if
the principal basis of such claim is due to Buyer's breach
of any provision of this Section 9.
(i) Executive Compensation. Effective as of the
Closing Date, Buyer shall assume all liabilities and
obligations relating to Continued Employees and Former
Employees under the Westinghouse Executive Pension Plan,
which plan is listed in Schedule 4(n).
(j) Cooperation. The parties agree to furnish
each other with such information concerning employees and
employee benefit plans, and to take all such other action,
as is necessary and appropriate to effect the transactions
contemplated hereby.
(k) WARN Act. Buyer agrees to provide any
required notice under the Worker Adjustment and Retraining
Notification Act, as amended (the "WARN Act"), and any
similar statute, and otherwise to comply with any such
statute with respect to any "plant closing" or "mass layoff"
(as defined in the WARN Act) or similar event affecting
Continued Employees or Former Employees and occurring on or
after the Closing. Buyer shall indemnify and hold harmless
Westinghouse and its affiliates with respect to any
liability under the WARN Act or similar statute arising from
the actions of Buyer and its affiliates (including the Sold
Subsidiaries) on or after the Closing.
(l) Workers Compensation. Westinghouse currently
sponsors a program that provides workers compensation
benefits for eligible Continued Employees and Former
Employees ("Westinghouse's Workers Compensation Program").
Effective as of the Closing Date, Buyer shall take all
necessary and appropriate action to adopt a workers
compensation program providing such workers compensation
benefits substantially similar to those provided under
Westinghouse's Workers Compensation Program for the
Continued Employees covered by such program ("Buyer's
Workers Compensation Program"). Buyer's Worker
Compensation Program shall be responsible for all claims for
workers compensation benefits which are incurred prior to,
on or following the Closing Date by Continued Employees and
Former Employees, including claims that are otherwise
payable under the terms and conditions of Westinghouse's
Workers Compensation Program.
(m) Free-Standing Plans. Notwithstanding the
foregoing provisions of this Section 9, effective as of the
Closing, Buyer shall assume and be responsible for all
liabilities and obligations under those Benefit Plans in
which the sole participants are Continued Employees and
Former Employees listed in Schedule 4(n) ("Free-Standing
Plans"). Westinghouse and Buyer shall take all action
necessary and appropriate (including, in the case of Buyer,
establishing legal entities to serve as plan sponsor) to
establish Buyer as successor to Westinghouse to all rights,
assets, duties, liabilities and obligations under or with
respect to such Free-Standing Plans.
(n) Foreign Employment Matters. (i) Employment.
Without limiting the generality of Sections 9(a) and 9(b),
Buyer shall, or shall cause a Sold Subsidiary to, assume or
retain and be responsible for the employment (including any
employment contracts) of the Continued Employees who are
employed outside the United States ("Foreign Continued
Employees"), and Buyer shall take any and all actions
necessary or appropriate (if any) to continue the employment
of such Foreign Continued Employees and to have Buyer or any
Sold Subsidiary assume or retain all obligations and
liabilities relating to their employment (including, but not
limited to, any employment contracts listed in
Schedule 4(l)(i)) under local laws and practices without
Westinghouse or any of its affiliates having any liability
to any such employees for severance, redundancy,
termination, payment in lieu of notice, indemnity or other
payments to any of such employees by reason of, or as a
result of, the actions contemplated by this Section 9(n).
(ii) Employee Benefit Plans for Foreign Continued
Employees. Except for the Free-Standing Plans,
(A) effective as of the Closing Date, and as soon
as necessary or practicable thereafter, Buyer or a Sold
Subsidiary shall establish and qualify or register with
applicable regulatory authorities employee benefit plans
for, or shall extend existing Buyer or Sold Subsidiary
employee benefit plans, programs, policies and arrangements
to, the Foreign Continued Employees which are in accordance
with local law and which provide benefits, for not less than
one year following the Closing Date, to the Foreign
Continued Employees on terms and conditions which are
substantially similar in the aggregate to those provided to
Foreign Continued Employees by Westinghouse or its
subsidiaries immediately prior to the Closing Date.
(B) As of the Closing Date, Buyer or a Sold
Subsidiary shall (i) establish and adopt one or more foreign
pension plans or shall extend one or more existing Buyer or
Sold Subsidiary pension plans (each, a "New Foreign Retire
ment Plan") which shall provide retirement benefits for each
of the Foreign Continued Employees and, to the extent
applicable, Former Employees who were employed by a Sold
Subsidiary in a foreign jurisdiction and who, as of the
Closing Date, are not employed by Westinghouse or any of its
affiliates (the Foreign Continued Employees and such former
foreign employees, collectively, the "Foreign Plan
Participants") on substantially similar terms and conditions
to those provided to Foreign Plan Participants by
Westinghouse or its affiliates (other than a Sold
Subsidiary) under each Foreign Retirement Plan listed in
Schedule 4(n) as in effect immediately prior to the Closing
Date, and (ii) establish and adopt any necessary trust funds
or other funding vehicles to hold assets or reserves of New
Foreign Retirement Plans which are attributable to the
Foreign Plan Participants. Buyer or a Sold Subsidiary shall
take all action necessary to qualify or register each New
Foreign Retirement Plan and any related trusts with all
applicable regulatory authorities. Subject to
Section 9(n)(iii), effective as of the Closing Date, Buyer
or a Sold Subsidiary shall extend coverage under the
applicable New Foreign Retirement Plan to each such Foreign
Plan Participant to the extent that each such Foreign Plan
Participant shall then, or at some later date, satisfy the
eligibility and participation requirements of such New
Foreign Retirement Plan.
(C) Except as otherwise specifically provided in
this Section 9(n), effective as of the Closing Date, each
Foreign Plan Participant who is an active participant in any
Foreign Retirement Plan shall cease to be an active partici
pant thereunder, and all Foreign Plan Participants shall
become eligible to participate in an applicable New Foreign
Retirement Plan in accordance with the applicable provisions
of this Section 9(n) and the terms and conditions of such
plan.
(iii) Delayed Foreign Employees. Notwithstanding
the foregoing provisions of this Section 9, Foreign
Employees whose names are listed in Schedule 2(b)(iii) and
whose employment by Buyer or any Sold Subsidiary will be
delayed beyond the Closing Date due to applicable foreign
law (including, without limitation, due to the requirement
that Buyer establish separate legal entities as employer)
("Delayed Foreign Employees") will continue on the payroll
of Westinghouse or its affiliates and will continue to
participate in each of Westinghouse's or its affiliate's
employee benefit plans in which they are participating
immediately prior to the Closing Date until the applicable
date on which they first become eligible to become employed
by Buyer or any Sold Subsidiary (the "Delayed Transfer
Date"). Buyer will offer, or cause a Sold Subsidiary to
offer, employment on the applicable Delayed Transfer Date to
each such Delayed Foreign Employee then in employment, and
on and as of the applicable Delayed Transfer Date, each such
Delayed Foreign Employee will become a Continued Employee
for all purposes of the Agreement. Buyer will promptly
reimburse Westinghouse for 100% of the payroll, benefits
(including statutory benefits, severance and other
termination benefits) and other costs and expenses directly
or indirectly relating to Delayed Foreign Employees
consistent with past practice within 15 days following
receipt of each written notification (including reasonable
substantiation of costs and expenses) from Westinghouse or
any of its affiliates of such payroll, benefits and other
costs and expenses.
(o) No Right to Employment. Nothing herein
expressed or implied shall confer upon any of the employees
of Westinghouse, Buyer, or any of their affiliates, any
additional rights or remedies, including, without
limitation, any additional right to employment, or continued
employment for any specified period, of any nature or kind
whatsoever under or by reason of this Agreement.
(p) Multiemployer Plan Liability. Westinghouse
will be responsible for all liabilities (including
withdrawal liabilities) incurred under any multiemployer
plan covering employees of Westinghouse or its affiliates
other than Continued Employees with respect to the period
prior to the Closing Date.
10. Further Assurances. From time to time, as
and when requested by either party hereto, the other party
shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other
actions (subject to the provisions of Sections 8(a), 8(d)
and 8(e)), as such other party may reasonably deem necessary
to consummate the transactions contemplated by this
Agreement.
11. Indemnification. (a) Tax Indemnification.
Westinghouse shall indemnify Buyer, its affiliates
(including the Sold Subsidiaries) and each of their respec
tive officers, directors, employees, stockholders, agents
and representatives against and hold them harmless from
(i) all liability for Income Taxes of the Sold Subsidiaries
for the Pre-Closing Tax Period, (ii) all liability (as a
result of Treasury Regulation 1.1502-6(a) or otherwise)
for Taxes of Westinghouse or any other corporation which is
or has been affiliated with Westinghouse (other than the
Sold Subsidiaries), (iii) all liability for Income Taxes
resulting from the Section 338(g) and 338(h)(10) elections
(or any comparable elections under state or local Tax law)
contemplated by Section 12(a) of this Agreement for domestic
Sold Subsidiaries (excluding Thermo Puerto Rico), (iv) all
liability for Taxes attributable to a breach by Westinghouse
of its obligations under this Agreement, (v) all liability
for Taxes attributable to a breach of the representations
and warranties contained in Section 4(h)(iii), (vi) all
liability for Taxes attributable to a breach of the
representations and warranties contained in Section
4(h)(vii) to the extent that such breach causes Buyer not to
obtain tax benefits described in such Section that Buyer
would have received in the absence of such breach (or, if
less, the benefits that Seller currently receives) and
(vii) all liability for Taxes arising out of any
intercompany transactions, restructurings or reorganizations
of Thermo Ireland and related Irish corporations occurring
before the Closing Date which were not part of the
transactions contemplated by this Agreement ("Irish
Reorganization Taxes").
Notwithstanding the foregoing clauses (a)(i),
(ii) or (iii), Westinghouse shall not indemnify and hold
harmless Buyer and its affiliates and each of their
respective officers, directors, employees, stockholders,
agents and representatives and Buyer shall, and shall cause
the Sold Subsidiaries to, indemnify Westinghouse, its
affiliates and each of their respective officers, directors,
employees, stockholders, agents and representatives against
and hold them harmless from (i) all liability for Taxes of
the Sold Subsidiaries for the Post-Closing Tax Period,
(ii) all liability for Taxes arising from Buyer's 338(g)
election, if any, for foreign Sold Subsidiaries (including
Thermo Puerto Rico) but excluding any protective 338(g)
election pursuant to Section 12(j) and (iii) all liability
for Taxes attributable to a breach by Buyer of its
obligations under this Agreement.
In the case of any taxable period that begins
before and ends after the Closing Date (a "Straddle
Period"):
(i) the Income Taxes of the Sold Subsidiaries for
the Pre-Closing Tax Period shall be computed as if such
taxable period ended as of the close of business on the
Closing Date; and
(ii) any Income Taxes of the Sold Subsidiaries not
allocated to the Pre-Closing Tax Period under
clause (i) of this sentence shall be allocated to the
Post-Closing Tax Period.
To the extent not susceptible to allocation under the
methodology described in the preceding sentence, such
Straddle Period Taxes shall be apportioned on the basis of
elapsed days.
Westinghouse's indemnity obligation in respect of Income
Taxes for a Straddle Period shall initially be effected by
its payment to Buyer of the excess of (x) such Income Taxes
for the Pre-Closing Tax Period over (y) the amount of such
Income Taxes paid by Westinghouse or any of its affiliates
(other than the Sold Subsidiaries) at any time plus the
amount of such Income Taxes paid by any of the Sold Subsi
diaries on or prior to the Closing Date. Westinghouse shall
initially pay such excess to Buyer within 30 days after the
return, report or form with respect to the final liability
for such Income Taxes is required to be filed (or, if later,
is actually filed). If the amount of such Income Taxes paid
by Westinghouse or any of its affiliates (other than the
Sold Subsidiaries) at any time plus the amount of such
Income Taxes paid by any of the Sold Subsidiaries on or
prior to the Closing Date exceeds the amount payable by
Westinghouse pursuant to the preceding sentence, Buyer shall
pay to Westinghouse the amount of such excess within 30 days
after the return, report or form with respect to the final
liability for such Income Taxes is required to be filed (or,
if later, is actually filed). The payments to be made
pursuant to this paragraph by Westinghouse or Buyer with
respect to a Straddle Period shall be appropriately adjusted
to reflect any final determination (which shall include the
execution of Form 870-AD or successor form) with respect to
Income Taxes for such Straddle Period.
(b) Other Indemnification by Westinghouse.
Westinghouse shall indemnify Buyer, its affiliates
(including the Sold Subsidiaries) and each of their respec
tive officers, directors, employees, stockholders, agents
and representatives against and hold them harmless from any
loss, liability, claim, damage or expense (including
reasonable legal fees and expenses (including such fees and
expenses incurred to enforce the rights set forth herein to
the extent such rights are successfully enforced)) suffered
or incurred by any such indemnified party to the extent
arising from (i) any breach of any representation or
warranty of Westinghouse which survives the Closing
contained in this Agreement or in any certificate delivered
pursuant hereto, (ii) any breach of any covenant of
Westinghouse contained in this Agreement, (iii) any
liability or obligation of the Sold Subsidiaries to the
extent that such liability or obligation does not arise out
of or relate to the Thermo King Business or the assets or
operations thereof before, on or after the Closing Date
(including any assets or operations disposed of prior to the
Closing Date), (iv) the Reorganization (excluding those
liabilities and obligations specifically contemplated by
this Agreement to be transferred to a Sold Subsidiary or
that otherwise would have been incurred or arisen but for
the consummation of the Reorganization), (v) the
Westinghouse Distribution (as defined in Section 27)
(excluding those liabilities and obligations that otherwise
would have been incurred or arisen but for the consummation
of the Westinghouse Distribution), (vi) any violation of
Environmental Law, including any claim by a Governmental
Entity based on any violation of Environmental Law as to
which the applicable statute of limitations had not expired
on or before the Closing Date, such Environmental Law as is
enforced or interpreted as of the Closing Date by the
Governmental Entity with primary jurisdiction over such
violation, by the Sold Subsidiaries on or prior to the
Closing Date and arising from the operation of the business
as then conducted by the Sold Subsidiaries, (vii) the
presence of Hazardous Materials at, on or under or migrating
from (A) any of the Sold Subsidiary Properties or properties
owned or operated by the Sold Subsidiaries that were sold or
transferred during the period from January 1, 1992 to the
Closing Date, and (B) any properties owned or operated by
the Sold Subsidiaries that were sold or transferred prior to
January 1, 1992, in each case in concentrations or amounts
that are required by a Governmental Entity to be removed,
remediated, treated or abated under authority of
Environmental Law, as enforced or interpreted as of the
Closing Date by the appropriate Governmental Entity and
(viii) any off-site transportation, disposal or arrangement
for disposal of Hazardous Materials by any Sold Subsidiary
on or prior to the Closing Date; provided, however, that
Westinghouse shall not have any liability under clause (i)
of this sentence unless the aggregate of all losses,
liabilities, claims, damages and expenses relating thereto
for which Westinghouse would, but for this proviso, be
liable exceeds on a cumulative basis an amount equal to
$25,000,000 (the "Rep Basket"), and then only to the extent
of such excess; provided, further, however, that
Westinghouse shall not have liability under clauses (vi),
(vii)(A) or (viii) of this sentence unless the aggregate of
all losses, liabilities, claims, damages and expenses
relating thereto for which Westinghouse would, but for this
proviso, be liable exceeds on a cumulative basis an amount
equal to $5,000,000 (the "Environmental Basket"), and then
only to the extent of such excess; provided, further,
however, that Westinghouse shall not have any liability
under clause (vii)(B) of this sentence unless the aggregate
of all losses, liabilities, claims, damages and expenses
relating thereto for which Westinghouse would, but for this
proviso, be liable exceeds on a cumulative basis an amount
equal to $10,000,000, and then only to the extent of such
excess; provided, further, however, that Westinghouse's
aggregate liability under clauses (i), (ii) and (iv) through
(viii) of this sentence shall in no event exceed the
Purchase Price. Any claims for losses, liabilities, claims,
damages and expenses which are applied against the
Environmental Basket shall also be applied against the Rep
Basket up to an aggregate reduction in the Rep Basket of
$5,000,000. In the event that $25,000,000 or more of
losses, liabilities, claims, damages and expenses are
applied against the Rep Basket, then the Environmental
Basket shall be eliminated. In no event shall Westinghouse
be obligated to indemnify Buyer or any other person with
respect to any matter to the extent that such matter was
reflected in the calculation of the adjustment to the
Purchase Price, if any, pursuant to Section 2(d). This
paragraph shall have no application to Taxes, except that
clause (i) shall be applicable in accordance with its terms
to a breach by Westinghouse relating to Taxes of its
representation in Section 4(g)(ii) (unless such Taxes are
already indemnified for by Westinghouse or Buyer pursuant to
Section 11(a)).
Notwithstanding anything herein to the contrary,
but subject to the terms and conditions of Section 11(b),
including Buyer's waiver of all other rights and remedies,
clauses (vi), (vii) and (viii) of Section 11(b) is Buyer's
sole and exclusive remedy for any matter arising out of, or
in any matter relating to, Environmental Law under this
Agreement.
Buyer acknowledges and agrees that, should the
Closing occur, its sole and exclusive remedy with respect to
any and all claims relating to this Agreement, the trans
actions contemplated hereby, the Sold Subsidiaries and their
assets, liabilities and business (other than claims in
respect of fraud) shall be pursuant to the indemnification
provisions set forth in this Section 11. In furtherance of
the foregoing, Buyer hereby waives, from and after the
Closing, to the fullest extent permitted under applicable
law, any and all rights, claims and causes of action (other
than claims in respect of fraud) it, any of its affiliates
(including any Sold Subsidiary) or any of their respective
officers, directors, employees, stockholders, agents or
representatives may have against Westinghouse and its
affiliates arising under or based upon any Federal, state,
local or foreign statute, law, ordinance, rule or regulation
(including any relating to environmental matters or arising
under or based upon common law or otherwise) or otherwise
(except pursuant to the indemnification provisions set forth
in this Section 11).
(c) Other Indemnification by Buyer. Buyer shall,
and shall cause the Sold Subsidiaries to, indemnify
Westinghouse, its affiliates and each of their respective
officers, directors, employees, stockholders, agents and
representatives against and hold them harmless from any
loss, liability, claim, damage or expense (including
reasonable legal fees and expenses (including such fees and
expenses incurred to enforce the rights set forth herein to
the extent such rights are successfully enforced)) suffered
or incurred by any such indemnified party to the extent
arising from i) any breach of any representation or warranty
of Buyer which survives the Closing contained in this
Agreement or in any certificate delivered pursuant hereto,
(ii) any breach of any covenant of Buyer contained in this
Agreement, (iii) any Schedule 2(b)(v) Contract or any Credit
Support Arrangement or other guarantee (including of
performance under contracts or agreements) or obligation to
assure performance given or made by Westinghouse or one of
its subsidiaries with respect to any obligation or liability
of any Sold Subsidiary set forth in clause (iv) below,
(iv) except to the extent otherwise expressly provided
pursuant to Section 11(b), all obligations and liabilities
of whatever kind and nature, primary or secondary, direct or
indirect, absolute or contingent, known or unknown, whether
or not accrued, whether arising before, on or after the
Closing Date, of any Sold Subsidiary, including any such
obligations or liabilities contained in any Contract or any
license, lease, contract, commitment, agreement or
instrument that, because it fails to meet the relevant
threshold amount or term or otherwise, is not included
within the definition of Contracts, or, with respect to
events occurring after the Closing Date, under the Benefit
Plans set forth in Schedule 4(n) which is expressly assumed
by Buyer pursuant to Section 9 or any employee benefit plans
established by Buyer pursuant to Section 9 hereof (collec
tively, the "Assumed Plans") (in each case other than items
for which indemnification is provided under Section 11(b),
to the extent of such indemnification), (v) any discon
tinuance, suspension or modification on or after the Closing
Date of any Assumed Plan. This paragraph shall have no
application to Taxes, except that clause (iv) shall be
applicable in accordance with its terms to any obligation of
a Sold Subsidiary relating to Taxes (unless such Taxes are
already indemnified for by Westinghouse or Buyer pursuant to
Section 11(a)).
(d) Losses Net of Insurance, etc.; No Conse
quential Damages. The amount of any loss, liability, claim,
damage, expense or Tax (collectively, a "Loss") for which
indemnification is provided under this Section 11 shall be
net of any amounts actually recovered by the indemnified
party under insurance policies with respect to such Loss and
shall not be (i) increased to take account of any net Tax
cost incurred by the indemnified party arising from the
receipt of indemnity payments hereunder or (ii) reduced to
take account of any net Tax benefit realized by the
indemnified party arising from the incurrence or payment of
any such Loss. Any indemnity payment under this Agreement
shall be treated as an adjustment to the Adjusted Purchase
Price for United States Federal income tax purposes, unless
a final determination (which shall include the execution of
a Form 870-AD or successor form) with respect to the indemni
fied party or any of its affiliates causes any such payment
not to be treated as an adjustment to the Adjusted Purchase
Price for United States Federal income tax purposes.
Notwithstanding anything to the contrary contained herein,
no indemnification shall be provided for under this
Section 11 in respect of any consequential damages.
(e) Termination of Indemnification. The obliga
tions to indemnify and hold harmless a party hereto
(i) pursuant to Section 11(a), shall terminate at the time
the applicable statutes of limitations with respect to the
Tax liabilities in question expire (giving effect to any
extension thereof), (ii) pursuant to Sections 11(b)(i) and
11(c)(i), shall terminate when the applicable representation
or warranty terminates pursuant to Section 16,
(iii) pursuant to Section 11(b)(vi), (vii) and (viii) shall
terminate five years following the Closing, and
(iv) pursuant to the other clauses of Section 11(b) and
11(c), shall not terminate; provided, however, that as to
clauses (i), (ii) and (iii) of this sentence such
obligations to indemnify and hold harmless shall not
terminate with respect to any item as to which the person to
be indemnified or the related party thereto shall have,
before the expiration of the applicable period, previously
made a claim by delivering a notice of such claim (stating
in reasonable detail the basis of such claim) to the
indemnifying party.
(f) Procedures Relating to Indemnification (Other
than under Section 11(a)). In order for a person (the
"indemnified party") to be entitled to any indemnification
provided for under this Agreement (other than under Sec
tion 11(a)) in respect of, arising out of or involving a
claim or demand made by any person against the indemnified
party (a "Third Party Claim"), such indemnified party must
notify the indemnifying party in writing, and in reasonable
detail, of the Third Party Claim within 20 business days
after receipt by such indemnified party of written notice of
the Third Party Claim; provided, however, that failure to
give such notification shall not affect the indemnification
provided hereunder unless the indemnifying party shall have
been materially prejudiced as a result of such failure
(except that the indemnifying party shall not be liable for
any expenses incurred during the period in which the indem
nified party failed to give such notice except for the
reasonable expenses of investigation of such claim).
Thereafter, the indemnified party shall deliver to the
indemnifying party, within 10 business days after the
indemnified party's receipt thereof, copies of all notices
and documents (including court papers) received by the
indemnified party relating to the Third Party Claim, except
those separately addressed to the indemnifying party.
If a Third Party Claim is made against an indemni
fied party, the indemnifying party shall be entitled to
participate in the defense thereof and, if it so chooses, to
assume the defense thereof with counsel selected by the
indemnifying party. The indemnifying party shall have
30 days (or if the indemnified party shall not be actually
prejudiced by a longer period, such longer period) from
notification of such Third Party Claim to notify the
indemnified party (i) whether or not the indemnifying party
disputes the liability of the indemnifying party to the
indemnified party hereunder with respect to such Third Party
Claim and (b) whether or not it elects to assume the defense
of the indemnified party. The indemnifying party may not
assume the defense of any such Third Party Claim unless and
until it acknowledges its indemnification obligation in
writing. All costs and expenses incurred by the
indemnifying party in defending such Third Party Claim shall
be a liability of, and shall be paid by, the indemnifying
party. Should the indemnifying party so elect to assume the
defense of a Third Party Claim, the indemnifying party shall
not be liable to the indemnified party for any legal
expenses subsequently incurred by the indemnified party in
connection with the defense thereof, except as provided
below. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the
defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the indemnifying
party, it being understood that, except as provided below,
the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses
of counsel employed by the indemnified party (i) for any
period during which the indemnifying party has failed to
assume the defense thereof (other than during the period
prior to the time the indemnified party shall have given
notice of the Third Party Claim as provided above except for
the reasonable expenses of investigation of such claim) or
(ii) if the indemnified party has been advised by its
counsel that representation of such parties by the same
counsel would be inappropriate under applicable standards of
professional conduct due to actual or potential conflicts of
interest or inconsistent defenses between the indemnified
party and the indemnifying party and the indemnified party
notifies the indemnifying party in writing that the
indemnified party elects to employ separate counsel at the
expense of the indemnifying party, in which case the
indemnifying party shall no longer have either the right or
the obligation to assume and continue the defense of such
action on behalf of the indemnified party.
If the indemnifying party elects to assume or
prosecute the defense of any Third Party Claim, the
indemnifying party shall defend or prosecute such defense in
good faith and all of the indemnified parties shall
reasonably cooperate with the indemnifying party in the
defense or prosecution thereof. Such cooperation shall
include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records
and information which are reasonably relevant to such Third
Party Claim, and making employees available on a mutually
convenient basis to provide additional information and
explanation of any material provided hereunder or to testify
at proceedings relating to such Third Party Claim. Whether
or not the indemnifying party shall have assumed the defense
of a Third Party Claim, the indemnified party shall not
admit any liability with respect to, or settle, compromise
or discharge, such Third Party Claim without the
indemnifying party's prior written consent (which consent
shall not be unreasonably withheld). If the indemnifying
party shall have assumed the defense of a Third Party Claim,
the indemnified party shall agree to any settlement,
compromise or discharge of a Third Party Claim which the
indemnifying party may recommend and which by its terms
(i) obligates the indemnifying party to pay the full amount
of the liability in connection with such Third Party Claim
and (ii) does not obligate the indemnified party to take any
action or impose any future restrictions on the indemnified
party.
(g) Other Claims. In the event any indemnified
party should have a claim against any indemnifying party
under Section 11(b) or 11(c) that does not involve a Third
Party Claim being asserted against or sought to be collected
from such indemnified party, the indemnified party shall
deliver notice of such claim with reasonable promptness to
the indemnifying party. The failure by any indemnified
party so to notify the indemnifying party shall not relieve
the indemnifying party from any liability which it may have
to such indemnified party under Section 11(b) or 11(c),
unless the indemnifying party shall have been materially
prejudiced by such failure. If the indemnifying party does
not notify the indemnified party within 30 calendar days
following its receipt of such notice that the indemnifying
party disputes its liability to the indemnified party under
Section 11(b) or 11(c), such claim specified by the
indemnified party in such notice shall be conclusively
deemed a liability of the indemnifying party under
Section 11(b) or 11(c) and the indemnifying party shall pay
the amount of such liability to the indemnified party on
demand or, in the case of any notice in which the amount of
the claim (or any portion thereof) is estimated, on such
later date when the amount of such claim (or such portion
thereof) becomes finally determined. If the indemnifying
party has timely disputed its liability with respect to such
claim, as provided above, the indemnifying party and the
indemnified party shall proceed in good faith to negotiate a
resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved by litigation
in an appropriate court of competent jurisdiction.
(h) Procedures Relating to Indemnification of Tax
Claims. If a party indemnified against a Tax liability
under Section 11(a) (the "tax indemnified party") has notice
of a formal or informal claim for such Tax liability by any
taxing authority, which, if successful, might result in an
indemnity payment to such party, the tax indemnified party
shall promptly notify the party obligated to make such
payment (the "tax indemnifying party") in writing of such
claim (a "Tax Claim"). If notice of a Tax Claim of which
the tax indemnified party has notice is not given to the tax
indemnifying party within a sufficient period of time to
allow the tax indemnifying party to effectively contest such
Tax Claim, or in reasonable detail to apprise the tax indem
nifying party of the nature of the Tax Claim, in each case
taking into account the facts and circumstances with respect
to such Tax Claim, the tax indemnifying party shall not be
liable to the tax indemnified party to the extent that the
position of the tax indemnifying party is prejudiced as a
result thereof.
With respect to any Tax Claim (other than a Tax
Claim relating solely to Taxes of any of the Sold Subsid
iaries for a Straddle Period), the tax indemnifying party
shall control all proceedings taken in connection with such
Tax Claim (including selection of counsel) and, without
limiting the foregoing, may in its sole discretion pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with any taxing authority with
respect thereto, and may, in its sole discretion, either pay
the Tax claimed and sue for a refund where applicable law
permits such refund suits or contest the Tax Claim in any
permissible manner. Notwithstanding the foregoing, the tax
indemnifying party and the tax indemnified party shall
jointly control all proceedings taken in connection with any
Tax Claim relating solely to Taxes of any Sold Subsidiary
for a Straddle Period or any Tax Claim that has any effect
(other than direct liability for any Taxes for which
indemnity is provided) on the tax indemnified party in the
reasonable judgment of the tax indemnified party.
The tax indemnified party and its affiliates shall
cooperate with the tax indemnifying party in contesting any
Tax Claim, which cooperation shall include, without
limitation, retaining and (upon the tax indemnifying party's
request) providing to the tax indemnifying party records and
information which are reasonably relevant to such Tax Claim,
and making employees available on a mutually convenient
basis to provide additional information or explanation of
any material provided hereunder or to testify at proceedings
relating to such Tax Claim. The tax indemnifying party
shall reimburse the tax indemnified party for reasonable
third party legal fees and expenses arising from any Tax
Claim not controlled (either solely or jointly) by such tax
indemnifying party.
In no case shall the tax indemnified party settle
or otherwise compromise any Tax Claim without the tax
indemnifying party's prior written consent. Neither party
shall settle a Tax Claim relating solely to Taxes of any of
the Sold Subsidiaries for a Straddle Period without the
other party's prior written consent.
(i) Mitigation. Westinghouse and Buyer shall
cooperate with each other with respect to resolving any
claim or liability with respect to which one party is
obligated to indemnify the other party, its affiliates or
their respective officers, directors, employees, stock
holders, agents or representatives hereunder, including by
making commercially reasonably efforts to mitigate or
resolve any such claim or liability; provided that any
incremental loss, liability, claim, damage or expense
incurred as a result of any such mitigation action taken by
an indemnified party shall be subject to the indemnification
provisions of this Section 11.
12. Tax Matters. (a) Buyer shall (i) timely
make an election under Section 338(g) of the Code (and any
comparable election under state or local Tax law) with
respect to each of the domestic Sold Subsidiaries (other
than Thermo Puerto Rico), (ii) join Westinghouse in timely
making an election under Section 338(h)(10) of the Code (and
any comparable election under state or local Tax law) with
respect thereto and (iii) cooperate with Westinghouse in the
completion and timely filing of such elections in accordance
with the provisions of Temporary Regulation 1.338(h)(10)-1
(or any comparable provisions of state or local Tax law) or
any successor provision. Westinghouse and Buyer agree that
the Purchase Price allocable to the Direct Sold Subsidiaries
pursuant to Section 1, together with applicable liabilities,
shall be further allocated among the assets of those Sold
Subsidiaries that are subject to the Section 338(h)(10)
election described in this Section 12(a) or that are
referred to in Section 12(j), as mutually agreed by the
parties prior to Closing. After the final determination of
the Adjusted Purchase Price, Buyer and Westinghouse will
mutually agree on adjustments to the allocations set forth
in Schedules 1 (and any allocations among the assets of the
Sold Subsidiaries) to reflect the difference between the
Purchase Price and the Adjusted Purchase Price. Neither
Westinghouse nor Buyer (nor any of their respective
affiliates) shall take any position on any Tax return or
with any taxing authority that is inconsistent with the
allocations agreed to prior to Closing as so adjusted.
(b) For any Straddle Period of any of the Sold
Subsidiaries, Buyer shall timely prepare all Tax returns,
reports and forms required to be filed and shall provide
Westinghouse with copies thereof no later than 30 days
before the due date (including extensions) for filing.
After Buyer receives Westinghouse's approval (which shall
not be unreasonably withheld), Buyer shall timely file such
returns, reports and forms with the appropriate authorities
and shall pay all Taxes due with respect thereto; provided
that Westinghouse shall reimburse Buyer (in accordance with
the procedures set forth in Section 11(a)) for any amount
owed by Westinghouse pursuant to Section 11(a) with respect
to Income Taxes for the taxable periods covered by such
returns, reports or forms. For any taxable period of any of
the Sold Subsidiaries that ends on or before the Closing
Date, where returns are not required to be filed (or Tax is
not required to be paid) until after the Closing Date,
(i) with respect to Income Taxes, Westinghouse shall timely
prepare and file with the appropriate authorities all
returns, reports and forms required to be filed, and shall
pay all Taxes due with respect to such returns, reports and
forms and (ii) with respect to Taxes other than Income
Taxes, Buyer shall timely prepare and file with the
appropriate authorities all returns, reports and forms
required to be filed, and shall pay all Taxes due with
respect to such returns, reports and forms. Westinghouse
and Buyer agree to cause the Sold Subsidiaries to file all
Tax returns, reports and forms for any period that includes
the Closing Date on the basis that the relevant taxable
period ended as of the close of business on the Closing
Date, unless the relevant taxing authority will not accept a
return, report or form filed on that basis.
(c) Westinghouse, each of the Sold Subsidiaries
and Buyer shall reasonably cooperate, and shall cause their
respective affiliates, officers, employees, agents, auditors
and representatives reasonably to cooperate, in preparing
and filing all returns, reports and forms relating to Taxes,
including maintaining and making available to each other all
records necessary in connection with Taxes and in resolving
all disputes and audits with respect to all taxable periods
relating to Taxes. Westinghouse and Buyer recognize that
Westinghouse and its affiliates will need access, from time
to time, after the Closing Date, to certain accounting and
Tax records and information held by the Sold Subsidiaries to
the extent such records and information pertain to events
occurring prior to the Closing Date; therefore, Buyer
agrees, and agrees to cause each of the Sold Subsidiaries,
to use its reasonable best efforts to properly retain and
maintain such records until such time as Westinghouse agrees
that such retention and maintenance is no longer necessary.
Additionally, Westinghouse shall provide to Buyer at Buyer's
request all documentation supporting (i) Thermo Puerto
Rico's tax position in Puerto Rico and (ii) Thermo Ireland's
tax position in Ireland.
(d) Any refunds or credits of Income Taxes (or
other Taxes indemnified by Westinghouse under
Section 11(a)), on the one hand, or other Taxes, on the
other hand, of any of the Sold Subsidiaries for any taxable
period ending on or before the Closing Date shall be for the
account of Westinghouse or Buyer, respectively. Any refunds
or credits of Taxes of any of the Sold Subsidiaries for any
taxable period beginning after the Closing Date (unless
indemnified by Westinghouse under Section 11(a)) shall be
for the account of Buyer. Any refunds or credits of Income
Taxes (or other Taxes indemnified by Westinghouse under
Section 11(a)), on the one hand, or other Taxes, on the
other hand, of any of the Sold Subsidiaries for any Straddle
Period shall be equitably apportioned between Westinghouse
and Buyer, or shall be for the account of Buyer,
respectively. Buyer shall, if Westinghouse so requests and
at Westinghouse's expense, cause any of the Sold
Subsidiaries to file for and obtain any refunds or credits
to which Westinghouse is entitled under this Section 12(d).
Buyer shall permit Westinghouse to control and settle the
prosecution of any such refund claim and, where deemed
appropriate by Westinghouse, shall cause each of the Sold
Subsidiaries to authorize by appropriate powers of attorney
such persons as Westinghouse shall designate to represent
such Sold Subsidiary with respect to such refund claim.
Buyer shall cause each of the Sold Subsidiaries to forward
to Westinghouse any such refund within 10 days after the
refund is received (or reimburse Westinghouse for any such
credit within 10 days after the credit is allowed or applied
against other Tax liability). Westinghouse and Buyer shall
treat any payments under the preceding sentence that
Westinghouse shall receive pursuant to this Section 12(d) as
an adjustment to the Adjusted Purchase Price for
United States Federal income tax purposes, unless a final
determination (which shall include the execution of a Form
870-AD or successor form) with respect to the Buyer or any
of its affiliates causes any such payment not to be treated
as an adjustment to the Adjusted Purchase Price for United
Stated Federal income tax purposes. Notwithstanding the
foregoing, the control of the prosecution of a claim for
refund of Taxes paid pursuant to a deficiency assessed
subsequent to the Closing Date as a result of an audit shall
be governed by the provisions of Section 11(h).
(e) Westinghouse shall be responsible for filing
any amended consolidated, combined or unitary Income Tax
returns for taxable years ending on or prior to the Closing
Date which are required as a result of examination
adjustments made by the Internal Revenue Service or by the
applicable state, local or foreign taxing authorities for
such taxable years as finally determined. For those juris
dictions in which separate Income Tax returns are filed by
any of the Sold Subsidiaries, any required amended returns
resulting from such examination adjustments, as finally
determined, shall be prepared by Westinghouse and furnished
to such Sold Subsidiary for approval (which approval shall
not be unreasonably withheld), signature and filing at least
30 days prior to the due date for filing such returns.
(f) All transfer, documentary, sales, use, regis
tration, stock transfer Taxes and other such Taxes
(including all applicable real estate transfer or gains
Taxes) and related fees (including any penalties, interest,
additions to Tax, additional amounts due or similar items
with respect thereto) incurred in connection with this
Agreement and the transactions contemplated hereby shall be
shared equally by Buyer and Westinghouse, and Westinghouse
and Buyer shall cooperate in timely making all filings,
returns, reports and forms as may be required to comply with
the provisions of such Tax laws.
(g) Westinghouse shall deliver to Buyer at the
Closing a certificate in form and substance reasonably
satisfactory to Buyer, duly executed and acknowledged,
certifying any facts that would exempt the transactions
contemplated hereby from withholding pursuant to the
provisions of the Foreign Investment in Real Property Tax
Act.
(h) On the Closing Date, Buyer shall cause each
of the Sold Subsidiaries to conduct its business in the
ordinary course in substantially the same manner as
presently conducted and on the Closing Date shall not permit
any of the Sold Subsidiaries to effect any extraordinary
transactions (other than any such transactions expressly
required by applicable law or by this Agreement or, subject
to Section 12(j), Section 338(g) elections for foreign Sold
Subsidiaries) that could result in Tax liability to
Westinghouse, any affiliate of Westinghouse or any of the
Sold Subsidiaries in excess of Tax liability associated with
the conduct of the business of the Sold Subsidiaries in the
ordinary course.
(i) Westinghouse shall cause the provisions of
any Tax sharing agreement between Westinghouse and any of
its affiliates (other than the Sold Subsidiaries), on the
one hand, and any of the Sold Subsidiaries, on the other
hand, to be terminated on or before the Closing Date.
(j) Buyer acknowledges that Westinghouse intends
to elect under Treasury Regulation Section 301.7701-3(c) to
treat Thermo King Do Brasil, Ltda., Thermo King Czech
Republic, s.r.o., Westinghouse Electric GmbH and Westing
house Electric Ireland Limited as branches of the applicable
Sellers for United States Federal income tax purposes, such
election to be effective on or before the Closing Date.
Buyer will not take any tax reporting position inconsistent
with such election and will not, for six months after the
Closing Date, permit the corporation (which may be a foreign
corporation) purchasing the stock in any such entity to take
any action that would be treated for United States Federal
income tax purposes as a transfer of such assets to a
different related corporation; provided, however, that Buyer
may make a protective Section 338(g) election with respect
to any such purchased corporations, subject to
Westinghouse's reasonable review.
13. Assignment. This Agreement and the rights
and obligations hereunder shall not be assignable or trans
ferable by Westinghouse or Buyer without the prior written
consent of the other party hereto; provided, however, that
Buyer may assign its right to purchase any of the Shares
hereunder to one or more subsidiaries of Buyer without the
prior written consent of Westinghouse except that Buyer may
only assign its right to purchase the Shares of Dalian if
such assignment does not affect Westinghouse's and Buyer's
ability to obtain the approval described in paragraph 4 of
Schedule 4(b); provided further, however, that no assignment
shall limit or affect the assignor's obligations hereunder.
Any attempted assignment or transfer in violation of this
Section 13 shall be void.
14. No Third-Party Beneficiaries. Except as
provided in Section 11, this Agreement is for the sole
benefit of the parties hereto and their permitted assigns
and nothing herein expressed or implied shall give or be
construed to give to any person, other than the parties
hereto and such assigns, any legal or equitable rights
hereunder.
15. Termination. (a) Notwithstanding anything
contained herein to the contrary, this Agreement may be
terminated and the transactions contemplated hereby aban
doned at any time prior to the Closing:
(i) by mutual written consent of Westinghouse and
Buyer;
(ii) by Westinghouse if any of the conditions set
forth in Section 3(b) shall have become incapable of
fulfillment, and shall not have been waived by
Westinghouse;
(iii) by Buyer if any of the conditions set forth
in Section 3(a) shall have become incapable of fulfill
ment, and shall not have been waived by Buyer; or
(iv) by either party hereto, if the Closing does
not occur on or prior to March 31, 1998;
provided, however, that the party seeking termination
pursuant to clause (ii), (iii) or (iv) is not in breach in
any material respect of any of its representations,
warranties, covenants or agreements contained in this
Agreement.
(b) In the event of termination by Westinghouse
or Buyer pursuant to this Section 15, written notice thereof
shall forthwith be given to the other party and the transac
tions contemplated by this Agreement shall be terminated,
without further action by either party. If the transactions
contemplated by this Agreement are terminated as provided
herein:
(i) Buyer shall return all documents and other
material received from Sellers and the Sold Subsi
diaries relating to the transactions contemplated
hereby, whether so obtained before or after the
execution hereof, to Westinghouse, except to the extent
(and only for so long as) retention thereof is
necessary to pursue any rights or claims Buyer may have
against Westinghouse hereunder; and
(ii) all confidential information received by
Buyer with respect to the businesses of Westinghouse
and its subsidiaries (including the Sold Subsidiaries)
shall be treated in accordance with the Confidentiality
Agreement, which shall remain in full force and effect
notwithstanding the termination of this Agreement.
(c) If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described
in this Section 15, this Agreement shall become null and
void and of no further force or effect, except for the
provisions of (i) Section 7(a) relating to the obligation of
Buyer to keep confidential certain information and data
obtained by it, (ii) Section 8(c) relating to publicity,
(iii) Section 17 relating to certain expenses,
(iv) Section 23 relating to finder's fees and broker's
fees, (v) Sections 13 and 18 through 26 relating to
miscellaneous provisions and (vi) this Section 15. Nothing
in this Section 15 shall be deemed to release either party
from any liability for any breach by such party of the terms
and provisions of this Agreement or to impair the right of
either party to compel specific performance by the other
party of its obligations under this Agreement.
16. Survival of Representations and Warranties.
The representations and warranties in this Agreement and in
any certificate delivered pursuant hereto (in each case
other than the representations and warranties relating to
Taxes and environmental matters) shall survive the Closing
solely for purposes of Sections 11(b) and (c) and shall
terminate at the close of business eighteen months following
the Closing Date. The representations and warranties (other
than those contained in Sections 4(h)(iii) and (vii))
relating to Taxes in this Agreement and in any certificate
delivered pursuant thereto shall terminate at the close of
business on the Closing Date. The representations and
warranties contained in Section 4(h)(iii) and in any
certificate delivered pursuant thereto shall terminate at
the close of the applicable statute of limitations relating
to the underlying Tax liability. The representations and
warranties contained in Section 4(h)(vii) shall terminate 30
days after a final determination by the Puerto Rican or
Irish taxing authorities concerning the eligibility of
Thermo Puerto Rico or Thermo Ireland, respectively, for the
applicable tax benefits. The representations and warranties
relating to environmental matters in this Agreement shall
not survive the Closing.
17. Expenses. Whether or not the transactions
contemplated hereby are consummated, and except as otherwise
specifically provided in this Agreement, all costs and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such costs or expenses.
18. Amendments. No amendment, modification or
waiver in respect of this Agreement shall be effective
unless it shall be in writing and signed by both parties
hereto (or, in the case of a waiver, by the waiving party).
19. Notices. All notices or other communications
required or permitted to be given hereunder shall be in
writing and shall be delivered by hand or sent by telecopy
or sent, postage prepaid, by registered, certified or
express mail or reputable overnight courier service and
shall be deemed given when so delivered by hand, or, if
telecopied, when receipt is confirmed or, if mailed,
three days after mailing (one business day in the case of
overnight courier service), as follows:
(i) if to Buyer,
Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Telecopy No.: (201) 573-3400
Attention: Vice President and
General Counsel
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Telecopy No.: (212) 455-2502
Attention: James Cotter, Esq.; and
(ii) if to Westinghouse,
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222-1384
Telecopy No.: (412) 642-5224
Attention: Louis J. Briskman, Esq.
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Telecopy No.: (212) 474-3700
Attention: Peter S. Wilson, Esq.
or to such other address as any party shall have designated
by written notice to the other party.
20. Interpretation; Exhibits and Schedules;
Certain Definitions. (a) When a reference is made in this
Agreement to a Section, a Schedule or an Exhibit, such
reference shall be to a Section of, or a Schedule or an
Exhibit to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed
by the words "without limitation". The words "hereof",
"herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
When used in this Agreement, the phrase "generally accepted
accounting principles" shall mean generally accepted
accounting principles in the United States. The phrase
"made available" in this Agreement shall mean that the
information referred to has been made available if requested
by the party to whom such information is to be made
available. All terms defined in this Agreement shall have
the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this
Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as
to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to
herein or in any agreement or instrument that is referred to
herein means such agreement, instrument or statute as from
time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of
comparable successor statutes and references to all
attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors
and assigns and, in the case of an individual, to his heirs
and estate, as applicable. To the extent applicable, any
matter set forth in a Schedule shall be deemed to be set
forth in all other Schedules.
(b) For all purposes hereof:
(i) an "affiliate" of any person means another
person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under
common control with, such first person;
(ii) "knowledge" of Westinghouse means the actual
knowledge after due inquiry of the individuals listed
in Schedule 20(b);
(iii) "material" means (except when used with
respect to Buyer) material to the business or financial
condition of the Sold Subsidiaries, taken as a whole;
(iv) "person" means any individual, firm, corpora
tion, partnership, joint stock company, limited
liability company, trust, joint venture, Governmental
Entity or other entity; and
(v) a "subsidiary" of any person means another
person, an amount of the voting securities, other
voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if
there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indi
rectly by such first person.
21. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be consid
ered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each
of the parties and delivered (including by telecopy) to the
other party.
22. Entire Agreement. This Agreement and the
Confidentiality Agreement contain the entire agreement and
understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter. Neither
party shall be liable or bound to any other party in any
manner by any representations, warranties or covenants
relating to such subject matter except as specifically set
forth herein or in the Confidentiality Agreement.
23. Fees. Each party hereto hereby represents
and warrants that (a) the only brokers or finders that have
acted for such party in connection with this Agreement or
the transactions contemplated hereby or that may be entitled
to any brokerage fee, finder's fee or commission in respect
thereof are Evercore Partners Inc. and J.P. Morgan
Securities Inc. with respect to Westinghouse and Merrill
Lynch & Co. with respect to Buyer and (b) each party shall
pay all fees or commissions which may be payable to the firm
so named with respect to such party.
24. Severability. If any provision of this
Agreement (or any portion thereof) or the application of any
such provision (or any portion thereof) to any person or
circumstance shall be held invalid, illegal or unenforceable
in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect
any other provision hereof (or the remaining portion there
of) or the application of such provision to any other
persons or circumstances.
25. Consent to Jurisdiction. Each of Westing
house and Buyer irrevocably submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of
New York, New York County, and (b) the United States
District Court for the Southern District of New York, for
the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated
hereby. Each of Westinghouse and Buyer further agrees that
service of any process, summons, notice or document by
United States registered mail to such party's respective
address set forth in Section 19 shall be effective service
of process for any action, suit or proceeding in New York
with respect to any matters to which it has submitted to
jurisdiction in this Section 25. Each of Westinghouse and
Buyer irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contem
plated hereby in (i) the Supreme Court of the State of
New York, New York County, or (ii) the United States
District Court for the Southern District of New York, and
hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such
action, suit or proceeding brought in any such court has
been brought in an inconvenient forum.
26. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of
the State of New York applicable to contracts made and to be
performed entirely within such State, without regard to the
conflicts of law principles of such State.
27. Westinghouse Spin-Off. (a) Buyer
acknowledges that prior to the Closing Westinghouse may
consummate the spin-off of its power-related businesses (the
"Westinghouse Distribution"). Westinghouse and Buyer agree
that except as set forth in this Section 27 the consummation
of the Westinghouse Distribution shall not in any way affect
the terms and conditions of this Agreement or the rights and
obligations of the parties hereto.
(b) In the event that the Westinghouse Distribu
tion is consummated prior to the Closing, (i) Westinghouse
will cause each of Westinghouse Electric S.A. and
Westinghouse Holdings Corporation to transfer (by way of
dividends and capital contributions) all the shares of
capital stock of or other equity interests in each Direct
Sold Subsidiary owned by it to any of Westinghouse, Sabroe
Reefer Cool, Inc., Westinghouse Industries, Inc. or Thermo
King Corporation and following such transfers Westinghouse
Electric S.A. and Westinghouse Holdings Corporation shall no
longer be Sellers or Selling Subsidiaries for the purposes
of this Agreement, (ii) each Direct Sold Subsidiary the
capital stock of or other equity interests in which is
transferred to Sabroe Reefer Cool, Inc. or Thermo King
Corporation pursuant to clause (i), following such transfer,
shall be an Other Sold Subsidiary (and no longer a Direct
Sold Subsidiary) for the purposes of this Agreement and such
capital stock or other equity interests shall no longer be
Shares for the purposes of this Agreement, (iii) the
Purchase Price shall be reallocated among the Sold
Subsidiaries that are then Direct Sold Subsidiaries, and
among the assets of the Direct Sold Subsidiaries and Other
Sold Subsidiaries, in a manner based on the allocations in
Sections 1 and 12(a) of this Agreement but changed solely to
reflect the change in structure and (iv) Westinghouse will
provide to Buyer an appropriate update to Exhibit A and
Schedule 4(e). Regardless of whether the Westinghouse
Distribution is consummated prior to or following the
Closing, Westinghouse shall, prior to the Westinghouse
Distribution, cause the corporation the stock of which is to
be distributed in the Westinghouse Distribution to become
bound by Section 5(j) of this Agreement as if such
corporation were Westinghouse. Buyer agrees that no
representation, warranty, covenant or agreement of Westing
house contained in this Agreement shall be considered to
have been breached as a result of any action taken pursuant
to this Section 27 so long as the Closing is not materially
delayed thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION,
by
/s/ Frederic G. Reynolds
Name: Frederic G. Reynolds
Title: Executive Vice President
INGERSOLL-RAND COMPANY,
by
/s/ Daniel E. Kletter
Name: Daniel E. Kletter
Title: Vice President
EXHIBIT A
TO THE STOCK
PURCHASE AGREEMENT
Selling Subsidiaries
Westinghouse Industries, Inc.
Westinghouse Holdings Corporation
Westinghouse Electric S.A.
Direct Sold Subsidiaries
Sabroe Reefer Cool, Inc.
Thermo King Corporation
Westinghouse de Puerto Rico, Inc.
Reftrans, S.A.
Thermo King Container-Denmark A/S
Thermo King Czech Republic, s.r.o.
Thermo King-Dalian Transport Refrigeration Company, Limited
Thermo King Do Brasil, Ltda.
Westinghouse Electric GmbH
Westinghouse Electric Ireland Limited
Other Sold Subsidiaries
Thermo King Trading Company
Thermo King SVC, Inc.
