SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
March 16, 1994
___________________________________________
THERMO INSTRUMENT SYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9786 04-2925809
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification
Number)
504 Airport Road
Post Office Box 2108
Santa Fe, New Mexico 87504-2108
(Address of principal executive offices) (Zip Code)
(617) 622-1000
(Registrant's telephone number
including area code)
<PAGE>
FORM 8-K
Item 2.Acquisition or Disposition of Assets
On March 16, 1994, Thermo Instrument Systems Inc. ("Thermo Instrument" or the
"Company") acquired substantially all of the assets, subject to certain
liabilities, of the EnviroTech Controls, Noran Instruments, TN Technologies and
Tremetrics businesses of Baker Hughes Incorporated for a cash purchase price of
$87.3 million, subject to a post-closing adjustment. The purchase price was
based on the Company's determination of the fair value of the acquired
businesses and negotiations with Baker Hughes Incorporated. The acquired
businesses, which are part of the EnviroTech Measurements & Controls group of
Baker Hughes Incorporated, collectively design, manufacture and market a variety
of process control, process measurement and laboratory analytical products for
use in a wide range of industrial, energy, environmental and research
applications. The purchase price was funded from cash on hand.
Thermo Electron Corporation ("Thermo Electron"), the parent company of Thermo
Instrument, entered into an acquisition agreement with Baker Hughes Incorporated
in January 1994 with respect to this transaction and a related transaction in
which another Thermo Electron subsidiary, Thermedics Inc., acquired two
companies that are also part of the EnviroTech Measurements & Controls group.
Thermo Electron assigned its rights to acquire the respective businesses to the
Company and Thermedics Inc.
The Company has no present intention to use the equipment or other assets
acquired for purposes materially different from the purposes for which such
assets were used prior to the acquisition. However, the Company will review the
assets, corporate structure, capitalization, operations, properties, policies,
management and personnel of the acquired businesses and, upon completion of this
review, may develop alternative plans or proposals, including mergers, transfers
of a material amount of assets or other transactions or changes relating to the
businesses.
2<PAGE>
FORM 8-K
Item 7.Financial Statements, Pro Forma Combined Condensed Financial Information
and Exhibits
(a) Financial Statements of Business Acquired: as it is impracticable to
file such information at this time, it will be filed by amendment on
or prior to May 30, 1994.
(b) Pro Forma Combined Condensed Financial Information: as it is
impracticable to file such information at this time, it will be
filed by amendment on or prior to May 30, 1994.
(c) Exhibits
2.1 Asset and Stock Purchase Agreement between Thermo Electron
Corporation and Baker Hughes Incorporated dated January 28, 1994.
Pursuant to Item 601(b)(2) of Regulation S-K, schedules to this
Agreement have been omitted. The Company hereby undertakes to
furnish supplementally a copy of such schedules to the Commission
upon request
2.2 Assignment and Assumption Agreement dated March 16, 1994 among
Thermo Electron Corporation, Thermedics Inc. and Thermo Instrument
Systems Inc.
3<PAGE>
FORM 8-K
SIGNATURES
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, on this 31st day of March 1994.
THERMO INSTRUMENT SYSTEMS INC.
Paul F. Kelleher
------------------------------
Paul F. Kelleher
Chief Accounting Officer
4<PAGE>
Exhibit 2.1
ASSET AND STOCK PURCHASE AGREEMENT
FOR ENVIROTECH MEASUREMENTS & CONTROLS
BETWEEN
THERMO ELECTRON CORPORATION
AND
BAKER HUGHES INCORPORATED
<PAGE>
TABLE OF CONTENTS
Page
1. GENERAL...... ..................................... 1
1.1 Definitions ................................ 1
1.2 Schedules and Exhibits ..................... 13
1.3 U.S. Dollars ............................... 13
2. PURCHASE AND SALE ................................. 14
2.1 Agreement to Sell and to Purchase .......... 14
2.2 Transfer of Shares ......................... 14
2.3 Transfer of Assets ......................... 15
2.4 Payment of Purchase Price .................. 15
2.5 Assets Not Transferred ..................... 15
2.6 Documents of Transfer ...................... 16
2.7 Further Assurances ......................... 17
2.8 Restricted Assets .......................... 17
2.9 Intercompany Accounts and Cash ............. 20
3. ASSUMPTION OF CERTAIN LIABILITIES ................. 21
3.1 Liabilities Assumed ........................ 21
3.2 Liabilities Not Assumed .................... 21
3.3 Documents of Assumption .................... 23
3.4 Seller Obligations ......................... 23
3.5 Risk of Loss ............................... 23
4. PURCHASE PRICE MATTERS ............................ 24
4.1 Changes in Cash Position ................... 24
4.2 Allocation of Purchase Price ............... 26
4.3 Brokers .................................... 26
4.4 Transaction Taxes .......................... 27
5. REPRESENTATIONS AND WARRANTIES BY THE SELLER ...... 27
5.1 Organization, Good Standing and Qualification 27
5.2 Capital Stock and Ownership ................ 27
5.3 Authority .................................. 28
5.4 No Conflict; No Consents or Approvals ...... 29
5.5 Undisclosed Liabilities .................... 30
5.6 No Termination of Relationships ............ 30
5.7 Financial Statements ....................... 31
5.8 Tax Matters ................................ 31
5.9 Title to Properties ........................ 32
5.10 Real Estate ................................ 32
5.11 Real Property Leases ....................... 34
<PAGE>
5.12 Equipment Leases ........................... 35
5.13 Assets Used in the Business ................ 36
5.14 Accounts Receivable ........................ 36
5.15 Intellectual Property ...................... 36
5.16 Insurance Policies ......................... 39
5.17 Contracts .................................. 39
5.18 Inventory .................................. 41
5.19 Litigation ................................. 41
5.20 Compliance with Law ........................ 42
5.21 Absence of Subsequent Actions .............. 42
5.22 No Material Adverse Change ................. 44
5.23 Labor Matters .............................. 44
5.24 Domestic Employee Benefit Plans ............ 45
5.25 Foreign Employee Benefit Plans ............. 48
5.26 Indebtedness and Guaranties ................ 49
5.27 Product Warranty ........................... 49
5.28 Environmental Matters ...................... 49
5.29 Permits .................................... 51
5.30 Certain Business Relationships ............. 51
5.31 Books and Records .......................... 52
5.32 Customers and Suppliers .................... 52
5.33 Government Contracts ....................... 53
5.34 Recalls .................................... 53
5.35 Disclosure ................................. 53
6. REPRESENTATIONS AND WARRANTIES BY THE BUYER ....... 54
6.1 Organization and Good Standing ............. 54
6.2 Authority .................................. 54
6.3 No Conflict; No Consents or Approvals ...... 54
6.4 Investment Representation .................. 55
7. OTHER AGREEMENTS .................................. 55
7.1 Conduct of Business ........................ 55
7.2 Full Access and Supplying of Information ... 57
7.3 Filings and Authorizations ................. 58
7.4 Exclusivity ................................ 59
7.5 Bulk Sales ................................. 60
7.6 Employment of Business Work Force .......... 60
7.7 Employee Benefits .......................... 61
7.8 Retention of Records and Sharing of Data ... 69
7.9 Tax Matters ................................ 70
7.10 Insurance .................................. 78
7.11 Certain Trademark Matters .................. 79
7.12 Notices of Breaches; Updates ............... 79
7.13 Proprietary Information .................... 80
7.14 Solicitation and Hiring .................... 80
7.15 Non-Competition ............................ 81
7.16 Cooperation in Litigation .................. 81
7.17 Collection of Accounts Receivable .......... 82
7.18 Estoppel Certificates ...................... 82
-ii-<PAGE>
7.19 Non-Disturbance Agreements ................. 82
7.20 Master Service Agreements... ............... 82
7.21 Mountain View Premises... .................. 83
7.22 Termination of Certain Business Relationships. 83
7.23 Round Rock Property... ..................... 83
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
THE BUYER TO CLOSE ................................ 84
8.1 Fulfillment of the Seller's Covenants ...... 84
8.2 Accuracy of the Seller's Representations ... 84
8.3 Authorizations and Consents ............... 85
8.4 No Litigation .............................. 85
8.5 Seller's Certificates ...................... 85
8.6 Resignations ............................... 86
8.7 HSR Act and Similar Matters ................ 86
8.8 Leases ..................................... 86
8.9 Backlog .................................... 86
8.10 NRC Permits ................................ 86
8.11 BRC Permits ................................ 86
8.12 Product Liability Insurance... ............. 86
8.13 Round Rock Property... ..................... 87
9. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATION
TO CLOSE......... ................................. 87
9.1 Fulfillment of the Buyer's Covenants ....... 87
9.2 Accuracy of the Buyer's Representations .... 87
9.3 Authorizations and Consents ................ 87
9.4 No Litigation .............................. 87
9.5 Buyer's Certificates ....................... 88
9.6 HSR Act and Similar Matters ................ 88
9.7 Leases ..................................... 88
10. CLOSING..... ...................................... 88
11. INDEMNIFICATION ................................... 89
11.1 By the Seller .............................. 89
11.2 By the Buyer ............................... 90
11.3 Limitations on Indemnification ............. 90
11.4 Third-Party Claims ......................... 92
12. TERMINATION. ...................................... 94
12.1 Termination Events ......................... 94
12.2 Effect of Termination ...................... 95
13. MISCELLANEOUS ..................................... 95
13.1 Amendments ................................. 95
13.2 Notices .................................... 95
-iii-
<PAGE>
13.3 Expenses ................................... 96
13.4 Waiver ..................................... 96
13.5 Headings ................................... 96
13.6 Severability ............................... 96
13.7 Entire Agreement ........................... 97
13.8 Assignment ................................. 97
13.9 Governing Law; Time of the Essence ......... 97
13.10 Counterparts ............................... 97
13.11 Conditions and Documents ................... 97
13.12 Publicity .................................. 98
13.13 Confidential Information ................... 98
13.14 Specific Performance ....................... 98
13.15 Dispute Resolution ......................... 99
13.16 Legal Fees ................................. 100
13.17 Construction ............................... 100
-iv-<PAGE>
EXHIBITS
Exhibit A - Form of Foreign Share Purchase Agreement
Exhibit B - Form of Bill of Sale
Exhibit C - Form of Foreign Asset Purchase Agreement
Exhibit D - Form of Instrument of Assumption
Exhibit E - Trademark License Agreement
Exhibit F - Form of Estoppel Certificate
Exhibit G - Form of Subordination, Nondisturbance and
Attornment Agreement
Exhibit H - Form of Lease (for Coon Rapids, Minnesota facility)
Exhibit I - Form of Lease (for Rugby, England facility)
Exhibit J - Form of Sublease (for Amersfoort, Netherlands
shared facility)
SCHEDULES
Schedule 1 - List of Share Sellers, Foreign Companies,
Asset Sellers, Domestic Asset Sellers,
Domestic Businesses, Foreign Division Sellers
and Foreign Divisions
Schedule 1.1 - Liens or security interest
created since 9/30/93
Schedule 2.5 - Shell corporations
Schedule 2.8 - Restricted Assets
Schedule 3.4 - Seller Obligations
Schedule 4.1 - Confirmation Procedures for Final
Statement of Cash Position
Schedule 4.2 - Allocation of Purchase Price
Schedule 5.1 - Jurisdictions of incorporation
and qualification
Schedule 5.2 - Capital stock and ownership
Schedule 5.4 - Conflicts with material
contracts; required
governmental notices and
filings
Schedule 5.7 - Financial Statements
Schedule 5.8 - Tax matters
-v-<PAGE>
Schedule 5.10 - Owned Real Estate (including Seller's Real
Estate)
Schedule 5.11 - Leased Real Estate (including the Seller's
Leased Facilities)
Schedule 5.12 - Equipment leases
Schedule 5.15 - Intellectual Property
Schedule 5.16 - Insurance Policies
Schedule 5.17 - Material contracts
Schedule 5.19 - Litigation
Schedule 5.20 - Compliance with laws
Schedule 5.21 - Actions subsequent to 9/30/93
Schedule 5.23 - Labor matters
Schedule 5.24 - Domestic employee benefit
plans
Schedule 5.25 - Foreign employee benefit
plans
Schedule 5.26 - Indebtedness and guaranties
Schedule 5.27 - Product warranty matters
Schedule 5.28 - Environmental matters
Schedule 5.29 - Permits
Schedule 5.30 - Certain business relationships
Schedule 5.32 - Customer and supplier matters
Schedule 5.33 - Government contract matters
Schedule 5.34 - Recalls
Schedule 6.3 - Required governmental notices
and filings
Schedule 7.7 - List of Continuing Employees
Schedule 7.7(c) - Actuary's Letter
Schedule 7.7(f) - Seller's Severance Plans
-v-<PAGE>
Schedule 7.7(g) - Baker Hughes Incentive Bonus Plan
Schedule 7.18 - Principal Leases
Schedule 8.3 - Seller's consents and waivers required
as condition to closing
Schedule 8.12 - Seller's insurance policies
-vii-<PAGE>
ASSET AND STOCK PURCHASE AGREEMENT
ASSET AND STOCK PURCHASE AGREEMENT (this "Agreement") dated
as of January 28, 1994, between Baker Hughes Incorporated, a
corporation organized under the laws of Delaware (the "Seller"), and
Thermo Electron Corporation, a corporation organized under the laws
of Delaware (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell, transfer and assign the
business and operations of its measurements and controls group as an
ongoing entity while retaining the cash and substantially all of the
indebtedness of such group;
WHEREAS, the Seller desires to sell or cause to be sold, and the
Buyer desires to acquire, the Business, as hereinafter defined; and
WHEREAS, the Business will be transferred to the Buyer pursuant
hereto by means of a sale and purchase of Assets and Shares, as
hereinafter defined.
NOW, THEREFORE, the parties hereto agree as follows:
1. GENERAL.
1.1 Definitions. The terms defined in this Section 1, whenever
used in this Agreement, shall have the following meanings for all
purposes of this Agreement:
"Assets" means (A) all of the assets, properties and
rights, whether real, personal, tangible or intangible, of every
kind, nature and description, owned or held by the Foreign
Divisions and the Domestic Asset Sellers relating primarily to
the Business, including without limitation (i) all trade and
other accounts receivable and notes receivable; (ii) all
inventories of raw materials, work in process, finished goods,
supplies, packaging materials, spare parts and similar items;
(iii) all machinery, equipment, tools and tooling, furniture,
fixtures, leasehold improvements and motor vehicles; (iv) all
real property, leaseholds and subleaseholds in real property,
and easements, rights-of-way and other appurtenants thereto; (v)
all Proprietary Rights and associated goodwill; (vi) all rights
under contracts, agreements or instruments (including without
limitation the Restricted Assets to the extent provided in
Section 2.8); (vii) all claims, prepayments, refunds, causes of
action, choses in action, rights of recovery, rights of setoff
<PAGE>
and rights of recoupment, including all rights under warranties
but excluding any such items relating to Taxes for which the
Seller is liable pursuant to Section 7.9; (viii) all Permits;
(ix) all books, records, accounts, ledgers, files, documents,
correspondence, lists (customer or otherwise), product and sales
literature, drawings or specifications, employment records,
manufacturing and technical manuals, advertising and promotional
materials, studies, reports and other printed or written
materials; and (x) all claims and defenses relating to any of
the foregoing or to the Assumed Liabilities; and (B) the Seller's
Real Estate; but (C) excluding the Excluded Assets and any of
the Shares.
"Asset Seller" and "Asset Sellers" mean, respectively, each
of, and all of, the Seller, the Domestic Asset Sellers and the
Foreign Division Sellers.
"Assignable Restricted Assets" shall have the meaning given
such term in Section 2.8(a).
"Assumed Liabilities" shall have the meaning given such term
in Section 3.1.
"Autocon Claim" means the potential claim referenced in
Section III.C. of Schedule 5.19 and any and all suits, actions,
proceedings and claims arising out of such claim.
"Balance Sheet" means the audited combined balance sheet of
the Business as of September 30, 1993, prepared by the Seller and
audited by DT.
"Balance Sheet Date" means September 30, 1993.
"Bert Scott Lawsuit" means the lawsuit referenced in
Section I.B. of Schedule 5.19 and any and all suits, actions,
proceedings, investigations, claims, complaints, accusations,
liabilities and obligations arising out of such lawsuit or the
facts or actions allegedly giving rise to the claims in such
lawsuit.
"BRC" shall have the meaning given such term in Section
7.3(d).
"BRC Permits" shall have the meaning given such term in
Section 7.3(d).
"Business" means the measurements and controls group of
companies and divisions owned directly or indirectly by the
Seller on the date hereof which comprises the businesses and
operations conducted by the Foreign Companies, the Domestic Asset
Sellers and the Foreign Divisions (it being understood that the
term "Business" does not include the computer
2<PAGE>
peripherals distribution business conducted by certain of the
Domestic Asset Sellers, Foreign Division Sellers and/or Foreign
Companies).
"Buyer" means Thermo Electron Corporation, a Delaware
corporation.
"Buyer Tax Claim" shall have the meaning given such term in
Section 7.9(c)(i).
"Buyer's Canadian Plan" shall have the meaning given such
term in Section 7.7(c)(i).
"Buyer's South Africa Plan" shall have the meaning given
such term in Section 7.7(c)(vii).
"Buyer's Thrift Plan" shall have the meaning given such term
in Section 7.7(b).
"Buyer's U.K. Plan" shall have the meaning given such term
in Section 7.7(c)(ii).
"Carriers" shall have the meaning given such term in
Section 7.10.
"CERCLA" shall have the meaning given such term in Section
5.28.
"Closing" shall have the meaning given such term in Section
10.
"Closing Date" shall have the meaning given such term in
Section 10.
"Code" means the U.S. Internal Revenue Code of 1986, as
amended.
"Continuing Employee" shall have the meaning given such term
in Section 7.7(a).
"Designated Transferees" shall have the meaning given such
term in Section 13.8.
"DT" means Deloitte & Touche.
"Disclosure Schedule" means all the Schedules delivered by
the Seller pursuant to this Agreement and made a part hereof.
"Domestic Asset Seller" and "Domestic Asset Sellers" mean,
respectively, each of, and all of, the entities designated as
such in Schedule 1.
3<PAGE>
"Domestic Business" and "Domestic Businesses" mean,
respectively, the business and operations of each of, and all of,
the Domestic Asset Sellers.
"Encumbrances" shall have the meaning given such term in
Section 2.2.
"Endorsement" shall have the meaning given such term in
Section 8.12.
"Environmental Law" shall have the meaning given such term
in Section 5.28(a).
"Epsilon Industrial" shall have the meaning given such term
in the definition of "Principal Business Unit".
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means any entity which is a member of (i)
a controlled group of corporations (as defined in Section 414(b)
of the Code), (ii) a group of trades or businesses under common
control (as defined in Section 414(c) of the Code), or (iii) an
affiliated service group (as defined in Section 414(m) of the
Code or the regulations under Section 414(o) of the Code), any
of which includes the Seller, any Share Seller, any Asset Seller
or any Foreign Company.
"Excluded Assets" shall have the meaning given such term in
Section 2.5.
"Excluded Liabilities" shall have the meaning given such
term in Section 3.2.
"Excluded Litigation" means each of, and all of, the Bert
Scott Lawsuit, the Hilpisch Claim, the Johnsson Claim, the KECO
Lawsuit, the MISC Claim, the Meyer Claim and the Swarts Lawsuit.
"Export Control Investigation" shall have the meaning given
such term in Section 3.2.
"Final Statement of Cash Position" means a statement
prepared for the period beginning at the close of business on the
Balance Sheet Date and ending at 12:01 a.m. Eastern Time on the
Closing Date which sets forth (i) the aggregate of (a) the
distributions, dividends, advances, repayments or other payments
of cash or cash equivalents from the Business to the Seller or
any of the Seller's subsidiaries or affiliates which are not
constituents of the Business and (b) payments of cash or cash
equivalents with respect to Excluded
4<PAGE>
Liabilities, including without limitation cash used to pay Taxes
for which the Seller is liable under Section 7.9 but excluding
(i) payments with respect to Plans, Foreign Plans or Seller's
Welfare Plans and (ii) payments of claims for compensation or
benefits of any nature whatsoever, severance pay, termination
pay or pay in lieu of notice of any employees of the Business
with respect to services performed or terminations occurring
before the Closing Date, so long (in the case of both clauses
(i) and (ii)) as such payments are in the Ordinary Course of
Business (i.e., unrelated to the consummation of the
transactions contemplated by this Agreement or other
extraordinary events), reduced by (ii) the aggregate of (a) any
loans, advances or other payments of cash or cash equivalents to
or for the benefit of the Business by the Seller or any of the
Seller's subsidiaries or affiliates which are not constituents
of the Business, including without limitation cash used to pay
Taxes for which the Buyer is liable under Section 7.9, and (b)
increases in the outstanding balances of any overdraft facility,
bank credit line or third party indebtedness for money borrowed
not assumed by the Buyer and the proceeds of which increases are
paid to and used by the Business; provided, however, that
payments between the Balance Sheet Date and 12:01 a.m. Eastern
Time on the Closing Date by the Business to the Seller or any of
the Seller's subsidiaries or affiliates which are not
constituents of the Business or by the Seller or any of the
Seller's subsidiaries or affiliates which are not constituents of
the Business to the Business shall be excluded from the Final
Statement of Cash Position if such payments are on account of
the sale of products or the performance of services in the
Ordinary Course of Business.
"Financial Statements" means the audited combined balance
sheet of the Business as of September 30, 1993, and the audited
combined statements of operations, cash flows and stockholder's
equity of the Business for the year then ended, prepared by the
Seller and audited by DT and attached as Schedule 5.7.
"Foreign Asset Purchase Agreements" shall have the meaning
given such term in Section 2.3.
"Foreign Company" and "Foreign Companies" mean,
respectively, each of, and all of, the corporations designated as
such in Schedule 1.
"Foreign Country" means any country other than the U.S.
"Foreign Division" and "Foreign Divisions" mean,
respectively, each of, and all of, the unincorporated divisional
operations of the Foreign Division Sellers designated as such in
Schedule 1.
"Foreign Division Seller" and "Foreign Division Sellers"
mean, respectively, each of, and all of, the entities designated
as such in Schedule 1.
5<PAGE>
"Foreign Plans" shall have the meaning given such term in
Section 5.25.
"Foreign Retirement Plan" shall have the meaning given such
term in Section 5.25.
"Foreign Share Purchase Agreements" shall have the meaning
given such term in Section 2.2.
"Foreign Transition Period" shall have the meaning given
such term in Section 7.7(c)(x).
"Foreign Welfare Plan" shall have the meaning given such
term in Section 5.25.
"GAAP" shall have the meaning given such term in Section
5.7.
"Governmental Body" shall have the meaning given such term
in Section 5.19.
"Hilpisch Claim" means the claim referenced in Section II.A.
of Schedule 5.19 and any and all suits, actions, proceedings,
investigations, claims, complaints, accusations, liabilities and
obligations arising out of such claim.
"HSR Act" shall have the meaning given such term in Section
5.4(b).
"Income Taxes" means any Taxes assessable on, or measured
with respect to, net income.
"Indemnitee" shall have the meaning given such term in
Section 11.4.
"Indemnitor" shall have the meaning given such term in
Section 11.4.
"Intellectual Property" shall have the meaning given such
term in Section 5.15.
"Intended Uses" shall have the meaning given such term in
Section 5.10(a).
"Interim Period" means the period from the close of
business on the Balance Sheet Date through the end of the
Closing Date.
6<PAGE>
"Interim Period Operating Taxes" means the amount of any
Taxes other than Income Taxes attributable to the regular and
ordinary business operations of the Business during the Interim
Period (and therefore excluding, without limitation, Taxes
attributable to dispositions of assets other than in the Ordinary
Course of Business, withholding or other Taxes attributable to
dividends or distributions made to the Seller or its constituent
entities by the Business and other extraordinary events) computed
using the conventions for the allocation of Taxes set forth in
Section 7.9(a)(iii) hereof.
"IRS" means the U.S. Internal Revenue Service.
"ISRA" shall have the meaning given such term in Section
7.3(c).
"Johnsson Claim" means the lawsuit referenced in Section
I.D. of Schedule 5.19 and any and all suits, actions,
proceedings, investigations, claims, complaints, accusations,
liabilities and obligations arising out of such lawsuit or the
facts or actions allegedly giving rise to the claims in such
lawsuit, or any claim for compensation of any nature or amount
whatsoever by Jannick Johnsson against any constituent of the
Business arising out of or relating to the Employment and
Non-Competition Contract dated December 7, 1989 between Jannick
Johnsson and Baker CAC, a division of Baker Hughes Production
Tools, Inc., or any other agreement (written or otherwise)
between Jannick Johnsson and any constituent of the Business
entered into prior to the Closing Date.
"Joint Tax Claim" shall have the meaning given such term in
Section 7.9(c)(i).
"KECO Lawsuit" means the lawsuit referenced in Section I.E.
of Schedule 5.19 and any and all suits, actions, proceedings,
investigations, claims, complaints, accusations, liabilities and
obligations arising out of such lawsuit or the facts or actions
allegedly giving rise to the claims in such lawsuit.
"Laws and Regulations" shall have the meaning given such
term in Section 5.20.
"Leased Real Estate" means the real property listed on
Schedule 5.11, including without limitation the Seller's Leased
Facilities.
"Losses" shall have the meaning given such term in Section
11.1.
"Master Service Agreements" shall have the meaning given
such term in Section 7.20.
7<PAGE>
"Materials of Environmental Concern" shall have the meaning
given such term in Section 5.28(b).
"Meyer Claim" means the claim referenced in Section II.B.
of Schedule 5.19 and any and all suits, actions, proceedings,
investigations, claims, complaints, accusations, liabilities and
obligations arising out of such claim.
"MISC Claim" means the potential claim referenced in
Section IV.K. of Schedule 5.19 and any and all suits, actions,
proceedings, investigations, claims, complaints, accusations,
liabilities and obligations arising out of such potential claim.
"Mountain View Lease" shall have the meaning given such term
in Section 7.21.
"Mountain View Premises" shall have the meaning given such
term in Section 7.21.
"Neutral Auditors" shall have the meaning given such term in
Section 4.1(d).
"NJDEPE" shall have the meaning given such term in Section
7.3(c).
"Nonassignable Restricted Assets" shall have the meaning
given such term in Section 2.8(a).
"Noran France Lease" shall have the meaning given such term
in Section 2.8(e).
"Noran France Premises" shall have the meaning given such
term in Section 2.8(e).
"Noran Instruments" shall have the meaning given such term
in the definition of "Principal Business Unit".
"NRC" shall have the meaning given such term in Section
8.10.
"Ordinary Course of Business" means the ordinary course of
business of the Business consistent with past practice and
custom.
"Owned Real Estate" means the real property listed on
Schedule 5.10, including without limitation the Seller's Real
Estate.
"Permits" means all material permits, licenses,
registrations, certificates, orders, approvals, franchises,
8<PAGE>
variances and similar rights issued by or obtained from any
Governmental Body.
"Permitted Encumbrances" means (a) the Encumbrances
described on the Financial Statements and (b) the Permitted
Exceptions.
"Permitted Exceptions" means (a) liens for current Taxes and
assessments not yet delinquent or Taxes the validity of which are
being contested in good faith by appropriate proceedings, (b)
such restrictions, easements and customary utility easements, if
any, as do not materially impair the utility of the affected
properties in their Intended Uses in the Business, (c) liens of
employees, laborers, carriers, warehousemen, mechanics and
materialmen for current wages or accounts payable not yet
delinquent, (d) liens and charges incident to construction or
maintenance, which have either not been filed of record or have
been filed of record and are being contested in good faith by
appropriate action diligently pursued and have not yet proceeded
to judgment, (e) liens or security interests, if any, reflected
on, or in respect of liabilities reflected on, the Balance Sheet,
(f) liens or security interests created in the Ordinary Course
of Business subsequent to the Balance Sheet Date and listed on
Schedule 1.1, (g) liens or security interests created as a result
of deposits for workers' compensation, unemployment insurance,
surety bonds and leases, (h) landlord liens for rent not yet due
and payable and (i) liens or security interests created as a
result of capitalized lease obligations; provided that any
judicial proceedings intended to be referred to in subsections
(a) and (d) are set forth in Schedule 5.19.
"Person" means an individual, firm, corporation, division,
partnership, joint venture, unincorporated association,
government agency or political subdivision thereof, or other
entity.
"Plans" shall have the meaning given it in Section 5.24(a).
"Policies" shall have the meaning given such term in
Section 7.10.
"Post-Closing Periods" shall have the meaning given such
term in Section 7.9(a)(ii).
"Pre-Closing Periods" shall have the meaning given such term
in Section 7.9(a)(i).
"Principal Business Unit" means each of the following
constituents of the Business, each such constituent being
9<PAGE>
separated from the other constituents of the Business in the
manner utilized in the preparation of the unaudited
consolidating financial statements of EnviroTech Measurements &
Controls dated October 21, 1993 delivered by the Seller to the
Buyer: (i) the Foreign Companies, the Domestic Businesses and the
Foreign Divisions which collectively comprise EnviroTech
Controls; (ii) the Foreign Companies, the Domestic Businesses and
the Foreign Divisions which collectively comprise Noran
Instruments ("Noran Instruments"); (iii) the Foreign Companies,
the Domestic Businesses and the Foreign Divisions which
collectively comprise Ramsey Technologies ("Ramsey
Technologies"); and (iv) collectively, the Foreign Companies,
the Domestic Businesses and the Foreign Divisions which together
comprise TN Technologies ("TN Technologies"), Epsilon Industrial
("Epsilon Industrial") and Tremetrics ("Tremetrics").
"Principal Leases" shall have the meaning given such term in
Section 7.18.
"Proprietary Rights" means all (A) patents, patent
applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, re-examination,
utility, model, certificate of invention and design patents,
patent applications, registrations and applications for
registrations, (B) trademarks (except that the Buyer's rights to
the marks "ENVIROTECH", the "ENVIROTECH" logo, "BAKER CAC" and
"TRACOR EUROPA" shall be limited to the rights granted under the
Trademark License Agreement), service marks, trade dress, logos,
tradenames and corporate names and registrations and
applications for registration thereof, (C) copyrights and
registrations and applications for registration thereof, (D) mask
works and registrations and applications for registration
thereof, (E) computer software, data and documentation, (F) trade
secrets and confidential business information, whether
patentable or nonpatentable and whether or not reduced to
practice, know-how, manufacturing and product processes and
techniques, research and development information, copyrightable
works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and
supplier lists and information, (G) other proprietary rights
relating to any of the foregoing (including without limitation
remedies against infringements thereof and rights of protection
of interest therein under the laws of all jurisdictions) and (H)
copies and tangible embodiments thereof.
"Purchase Price" shall have the meaning given such term in
Section 2.1.
10<PAGE>
"Ramsey Technologies" shall have the meaning given such
term in the definition of "Principal Business Unit".
"Relevant Period" shall have the meaning given such term in
Section 7.9(a)(iii).
"Restricted Assets" shall have the meaning given such term
in Section 2.8(a).
"Retirement Plans" shall have the meaning given such term in
Section 5.24.
"Round Rock Lease" shall have the meaning given such term in
Section 7.23(a).
"Round Rock Property" shall have the meaning given such term
in Section 7.23(a).
"Seller" means Baker Hughes Incorporated, a Delaware
corporation.
"Seller Leases" shall have the meaning given such term in
Section 8.8.
"Seller Obligations" shall have the meaning given such term
in Section 3.4.
"Seller Sublease" shall have the meaning given such term in
Section 8.8.
"Seller Tax Claim" shall have the meaning given such term in
Section 7.9(c)(i).
"Seller's Canadian Plan" shall have the meaning given such
term in Section 7.7(c)(i).
"Seller's Insurance Policy" shall have the meaning given
such term in Section 8.12.
"Seller's Knowledge" means the knowledge or awareness, after
reasonable inquiry, of (i) any officer of the Seller or any
officer of EnviroTech Measurements & Controls Company or (ii) the
principal executive officer or principal financial officer (or
persons with equivalent responsibilities) of any Principal
Business Unit (for this purpose only, treating TNTechnologies,
Epsilon Industrial and Tremetrics as separate Principal Business
Units).
"Seller's Leased Facilities" shall have the meaning given
such term in Section 5.11.
11<PAGE>
"Seller's Notice" shall have the meaning given such term in
Section 8.2.
"Seller's Real Estate" means the real property owned by the
Seller and listed on Schedule 5.10.
"Seller's Severance Plans" shall have the meaning given such
term in Section 7.7(f).
"Seller's South Africa Plan" shall have the meaning given
such term in Section 7.7(c)(vii).
"Seller's Thrift Plan" shall have the meaning given such
term in Section 7.7(b).
"Seller's U.K. Plan" shall have the meaning given such term
in Section 7.7(c)(ii).
"Seller's Welfare Plans" shall have the meaning given such
term in Section 7.7(d).
"Shares" means the outstanding shares of capital stock of
the Foreign Companies owned by any Share Seller.
"Share Seller" and "Share Sellers" mean, respectively, each
of, and all of, the Seller and the subsidiaries of the Seller
designated as such on Schedule 1.
"Shell Corporations" shall have the meaning given such term
in Section 2.5(f).
"Subsidiary" means (i) any corporation with respect to which
another corporation or entity, directly or indirectly, has the
power to vote or direct the voting of sufficient securities to
elect a majority of the directors or (ii) any corporation or
other entity with respect to which another corporation or entity,
directly or indirectly, owns 50% or more of the aggregate equity
interests.
"Swarts Lawsuit" means the lawsuit referenced in Section
II.D. of Schedule 5.19 and any and all suits, actions,
proceedings, investigations, claims, complaints, accusations,
liabilities and obligations arising out of such lawsuit or the
facts or actions allegedly giving rise to the claims in such
lawsuit.
"Tax Dispute" shall have the meaning given such term in
Section 7.9(c)(i).
"Taxes" means any and all federal, state, provincial, local
and foreign income, profits, franchise, sales, value added, use,
employment, payroll, transfer, occupation, real
12<PAGE>
property, personal property, severance, production, excise, gross
receipts, license, stamp, premium, customs, duties, capital
stock, windfall profit, environmental, withholding, social
security (or similar), unemployment, disability, sales, use,
transfer, registration, national insurance, alternative or add-on
minimum, estimated and other taxes, assessments, imposts, fees or
duties of any kind whatsoever (including any interest, additions
to tax and penalties with respect to any such tax), but excluding
all sales, value added, use, stamp, transfer and other taxes not
in the nature of income taxes, fees and duties (including any
interest, additions to tax and penalties with respect thereto)
imposed in connection with the consummation of the transactions
contemplated hereunder.
"Tax Returns" means all reports, returns, declarations, or
information returns or statements relating to Taxes.
"Termination Date" means May 31, 1994, unless the Buyer
receives a request for additional information or documentary
material pursuant to 16 C.F.R. 803.20 under the HSR Act and the
Buyer, in its sole discretion, elects to respond to such request,
in which case the "Termination Date" means August 1, 1994.
"Third-Party Claim" shall have the meaning given such term
in Section 11.4.
"TN Technologies" shall have the meaning given such term in
the definition of "Principal Business Unit".
"Trademark License Agreement" shall have the meaning given
such term in Section 7.11(a).
"Tremetrics" shall have the meaning given such term in the
definition of "Principal Business Unit".
"U.S." means the United States of America.
"VEBA" shall have the meaning given such term in Section
7.7(i).
1.2 Schedules and Exhibits. A "Schedule" which is identified in
this Agreement means part of the Disclosure Schedule prepared by the
Seller and delivered to the Buyer pursuant to this Agreement to
disclose factual matters concerning the Business. An "Exhibit" is an
agreement or other document attached hereto and made a part hereof.
1.3 U.S. Dollars. Unless otherwise indicated herein or on the
Schedules, all references to amounts in dollars ($) shall mean U.S.
dollars. For purposes of determining the application of the
13<PAGE>
terms of this Agreement to items denominated in a currency other than
U.S. dollars, the relevant currency shall be converted to U.S. dollars
at the applicable exchange rate published in the currency crossrate
table of The Wall Street Journal (New York edition) on the date of
this Agreement (or, if applicable, on the date as of which such
calculation is made).
2. PURCHASE AND SALE.
2.1 Agreement to Sell and to Purchase. In reliance upon the
representations and warranties of the Buyer contained herein, and on
the terms and subject to the conditions herein set forth, the Seller
agrees to sell, convey, assign, transfer and deliver, or cause to be
sold, conveyed, assigned, transferred and delivered, the Shares and
the Assets to the Buyer. In reliance upon the representations and
warranties of the Seller contained herein, and on the terms and
subject to the conditions herein set forth, the Buyer agrees to
purchase, or cause to be purchased, the Shares and the Assets and to
assume, or cause to be assumed, the Assumed Liabilities. In reliance
upon the representations and warranties of the Seller contained
herein, on the terms and subject to the conditions herein set forth,
and in consideration of the sale of the Shares and the Assets, the
Buyer agrees to pay an aggregate purchase price of $134,073,923,
subject to adjustment as provided in Section 4.1 (the "Purchase
Price"), and to assume the Assumed Liabilities.
2.2 Transfer of Shares. At the Closing, the Seller shall, or
shall cause each Share Seller to, execute and deliver to the Buyer a
certificate or certificates representing the Shares (in the case of
certificated Shares) together with duly executed stock powers, share
transfer forms, transfer deeds or other documents of transfer
sufficient to convey the Shares to the Buyer, and such other
instruments of conveyance as the Buyer may reasonably request in order
to effect the sale, transfer, conveyance and assignment to the Buyer
of good and marketable title to the Shares and so that, upon transfer
of the Shares, the Shares shall be free and clear of all claims,
liens, pledges, charges, encumbrances, equities, options, calls,
voting trusts, agreements, commitments, restrictions and other
security interests whatsoever ("Encumbrances"). At the Closing, the
Buyer and each Share Seller of Shares of a Foreign Company shall
execute and deliver a Share Purchase Agreement substantially in the
form attached hereto as Exhibit A (collectively, the "Foreign Share
Purchase Agreements"). In the event of any conflict or inconsistency
between the terms of a Foreign Share Purchase Agreement and the terms
of this Agreement, or in the event this Agreement addresses topics
not addressed by the Foreign Share Purchase Agreements, the terms of
this Agreement shall control. Without limiting the generality of the
foregoing, the parties acknowledge and agree that the Foreign Share
Purchase Agreements do not reflect the concepts of "Assets",
14
"Excluded Assets", "Excluded Liabilities" or "Assumed Liabilities" in
the manner provided in this Agreement, and that the provisions of
this Agreement shall constitute the definitive agreement between the
parties with respect to Assets, Excluded Assets, Excluded Liabilities
and Assumed Liabilities, notwithstanding any inconsistent or different
provisions in the Foreign Share Purchase Agreements.
2.3 Transfer of Assets. At the Closing, the Seller shall, or
shall cause each Asset Seller to, execute and deliver to the Buyer a
Bill of Sale substantially in the form attached hereto as Exhibit B
with respect to each of the Foreign Divisions and the Domestic
Businesses, and such other instruments of conveyance as the Buyer may
reasonably request in order to effect the sale, transfer, conveyance
and assignment to the Buyer of good and marketable title to the
Assets, free and clear of all Encumbrances other than Permitted
Encumbrances. At the Closing, the Buyer and each Foreign Division
Seller shall execute and deliver an Asset Purchase Agreement
substantially in the form attached hereto as Exhibit C (collectively,
the "Foreign Asset Purchase Agreements"). In the event of any
conflict or inconsistency between the terms of a Foreign Asset
Purchase Agreement and the terms of this Agreement, or in the event
this Agreement addresses topics not addressed by the Foreign Asset
Purchase Agreements, the terms of this Agreement shall control.
Without limiting the generality of the foregoing, the parties
acknowledge and agree that the Foreign Asset Purchase Agreements do
not reflect the concepts of "Assets", "Excluded Assets", "Excluded
Liabilities" or "Assumed Liabilities" in the manner provided in this
Agreement, and that the provisions of this Agreement shall constitute
the definitive agreement between the parties with respect to Assets,
Excluded Assets, Excluded Liabilities and Assumed Liabilities,
notwithstanding any inconsistent or different provisions in the
Foreign Asset Purchase Agreements.
2.4 Payment of Purchase Price. At the Closing, the Buyer shall
deliver to the Seller in immediately available funds by wire transfer
to the Seller's account for the benefit of the Seller, each Share
Seller and each Asset Seller (with Seller acting as agent for each)
the Purchase Price representing the consideration paid for the Shares
or the Assets transferred by each. The wire transfer shall be made
to the Seller's account at Northern Trust Company of Chicago, Account
Number 93343.
2.5 Assets Not Transferred. Notwithstanding the foregoing, the
Assets to be transferred shall not include the following (the
"Excluded Assets"):
(a) cash or cash equivalents (subject to the provisions of
Section 4.1);
15<PAGE>
(b) all of the rights, properties and assets used in the
Business which shall have been transferred or disposed of prior
to the Closing in transactions conducted in the Ordinary Course
of Business;
(c) all assets in the possession of the Business but owned
by third parties;
(d) all intercompany receivables, notes or loans between
(i) the Seller and its subsidiaries and affiliates which are not
constituents of the Business and (ii) the Business, provided
that such items shall not include trade payables or receivables
incurred for goods or services in the Ordinary Course of
Business;
(e) the assets which are listed on Part C of Schedule 2.8;
(f) the shares of the corporations identified on Schedule
2.5 as having de minimis assets (the "Shell Corporations") and
the shares of the Asset Sellers;
(g) the proceeds of the Autocon Claim to the extent that
such proceeds are attributable to losses, costs, damages,
liabilities and expenses relating to the operation of the
Business prior to October 1, 1993 (such losses, costs, damages,
liabilities and expenses to be allocated between the periods
prior to, and on and after, October 1, 1993 based on sales of
CAMCO Incorporated which, to the Seller's Knowledge at the time
of resolution of the Autocon Claim, were (or allegedly were) in
breach of the Asset Purchase Agreement among Autocon, Ltd., CAMCO
Incorporated and Baker CAC, a division of Baker Hughes Production
Tools, Inc.);
(h) all suits, actions, proceedings and claims of the
Business against any transporter of Materials of Environmental
Concern arising out of or relating to the transportation of
Materials of Environmental Concern prior to the Closing Date and
with respect to which the Seller has indemnified the Buyer under
Section 11; and
(i) the real estate owned by Ramsey Technology, Inc., a
California corporation, and to be leased to the Buyer pursuant
to a lease in the form attached hereto as Exhibit H.
2.6 Documents of Transfer. At the Closing, in addition to the
documents of transfer described in Sections 2.2 and 2.3, the Seller
will, or will cause each respective Share Seller or Asset Seller to:
(a) execute, acknowledge and deliver to the Buyer such
deeds, bills of sale, endorsements, assignments, stock
16<PAGE>
powers, share transfer forms and other good and sufficient
instruments of conveyance, sale, transfer and assignment, and
with all required federal, state, local, foreign and other
documentary and revenue stamps affixed, as shall be required in
order to effectively vest in the Buyer all of the Seller's, Share
Sellers' and Asset Sellers' right, title and interest in and to
the Assets or the Shares, as the case may be; and
(b) deliver to the Buyer all of the files, documents,
papers, contracts, agreements, legal descriptions, open books of
account or ledgers and documentation in support thereof, and all
other information appearing in writing and relating primarily to
the Business and which is in the Seller's or any Share Seller's
or Asset Seller's possession and the minute books and share
registers of the Foreign Companies.
2.7 Further Assurances. At the Closing and at any time or from
time to time thereafter, at the request of the Buyer and without
further consideration, the Seller shall, and shall cause each Share
Seller and Asset Seller to: (i) take such action as the Buyer may
reasonably determine is necessary to put the Buyer in actual
possession and operating control of the Business, Assets and Shares,
and (ii) execute, acknowledge and deliver such further instruments of
conveyance, sale, transfer and assignment as the Buyer may reasonably
request, and take such other action as the Buyer may reasonably
request, in order to more effectively convey, sell, transfer and
assign to the Buyer the Assets and the Shares, to evidence the Buyer's
rights to, title in and ownership of the Assets and the Shares and to
assist the Buyer in exercising all rights with respect thereto.
2.8 Restricted Assets.
(a) Schedule 2.8 lists each lease required to be listed on
Schedule 5.11, each equipment lease required to be listed on
Schedule 5.12, each license required to be listed on Schedule
5.15 and each contract required to be listed on Schedule 5.17
which is not capable of being validly assigned, transferred,
subleased or sublicensed without the consent or waiver of the
issuer thereof or the other party thereto or third person
(including a Governmental Body), or with respect to which such
assignment, transfer, sublease or sublicense or attempted
assignment, transfer, sublease or sublicense could constitute a
breach thereof or a violation of any law, decree, order,
regulation, rule, ordinance or other governmental edict (each
such license or contract is hereinafter referred to as a
"Restricted Asset"). For purposes of this Section 2.8,
"transfer" or similar words shall include a transfer resulting or
deemed to result under the terms of the Restricted Asset as a
consequence of the transfer of Shares to the Buyer. Part A of
17<PAGE>
Schedule 2.8 sets forth the Restricted Assets for which the
receipt of the necessary consents and waivers for the assignment,
transfer, sublease or sublicense of such Restricted Assets is a
condition precedent to the Buyer's obligations hereunder. Part B
of Schedule 2.8 sets forth the Restricted Assets as to which, if
the necessary consents and waivers are not received on or before
the Closing Date, this Agreement and the other documents and
instruments executed in connection herewith shall not constitute
an assignment, transfer, sublease or sublicense thereof, or an
attempted assignment, transfer, sublease or sublicense thereof.
Part C of Schedule 2.8 sets forth the Restricted Assets which
cannot be validly assigned or transferred as a matter of law, and
this Agreement and the other documents and instruments executed
in connection herewith shall not constitute an assignment or
transfer thereof. The Restricted Assets set forth on Parts A and
B of Schedule 2.8 are hereinafter referred to as "Assignable
Restricted Assets", and the Restricted Assets set forth on Part C
of Schedule 2.8 are hereinafter referred to as "Nonassignable
Restricted Assets".
(b) The Seller shall use reasonable efforts, and the Buyer
shall cooperate reasonably with the Seller, (i) to promptly
obtain the consents and waivers necessary to convey or cause to
be conveyed to the Buyer all of the Assignable Restricted
Assets, and (ii) as of and subject to the occurrence of the
Closing, to promptly convey or cause to be conveyed to the Buyer
the Assignable Restricted Assets for which the Seller has
received the necessary consents and waivers; provided, however,
that the Seller shall not, and shall cause the Asset Sellers not
to, amend or change any Assignable Restricted Asset without the
prior written consent of the Buyer unless the Seller reasonably
deems it necessary to preserve the value of the Restricted Asset.
The Seller shall, and shall cause the Asset Sellers to, cooperate
with the Buyer in making applications and filings or taking any
other action necessary for the Buyer to obtain such franchises,
licenses, permits or other instruments or agreements, if any, as
are substantially equivalent to the Nonassignable Restricted
Assets. In no event shall the Buyer's cooperation hereunder
require the Buyer to make any payments or incur any out-of-pocket
expenses, except that the Buyer shall reimburse the Seller on an
equitable basis for any consideration paid, with the prior
approval of the Buyer, to any person from whom a consent or
waiver is requested.
(c) To the extent that the consents and waivers necessary
to assign, transfer, sublease or sublicense the Assignable
Restricted Assets are not obtained, the Seller shall, commencing
on the Closing Date and continuing for the duration of each
Assignable Restricted Asset, use reasonable efforts to (i)
provide to the Buyer the benefits of any Assignable Restricted
18<PAGE>
Asset not assigned, transferred or subleased due to the Seller's
failure or inability to obtain such consent or waiver, (ii)
cooperate with the Buyer to reach a reasonable and lawful
arrangement designed to provide such benefits to the Buyer during
such period and (iii) enforce at the request of the Buyer, or
allow the Buyer to enforce (and, solely for such purpose, the
Seller hereby constitutes and appoints the Buyer as its true and
lawful attorney-in-fact until revoked in writing delivered by
the Seller to the Buyer), any rights of the Seller under any
Assignable Restricted Asset against the issuer thereof or the
other party or parties thereto (including the right to elect to
terminate such of the foregoing in accordance with the terms
thereof upon the request of the Buyer); provided, however, that
the reasonable costs and expenses of the Seller incurred at the
Buyer's request with respect to any of the actions contemplated
under (iii) above shall be promptly paid or reimbursed by the
Buyer to the Seller. At the end of such period, the Seller shall
have no further duties or obligations under this Section 2.8 with
respect to such Assignable Restricted Asset and the failure or
inability to obtain any necessary consent or waiver with respect
thereto shall not be a breach of this Agreement so long as the
Seller has carried out its obligations under this Section 2.8.
(d) To the extent that the Buyer is provided the benefits
pursuant to this Section 2.8 of any Assignable Restricted Asset,
the Buyer shall perform for the benefit of the issuer thereof, or
the other party or parties thereto, the obligations of the Seller
thereunder or in connection therewith, but only to the extent
that (i) such action by the Buyer would not result in any default
thereunder or in connection therewith and (ii) such obligation
would have been a liability of the Business but for the
non-assignability or non-transferability thereof; provided,
however, that if the Buyer shall fail to perform to the extent
required herein, the Seller shall thereafter cease to be
obligated under this Section 2.8 to provide the Buyer with any
benefits in respect of the Assignable Restricted Asset which is
the subject of such failure to perform unless and until such
situation is remedied or, at the sole option of the Seller, the
Buyer shall promptly pay or reimburse the Seller all costs
reasonably incurred by the Seller to remedy such failure to
perform during such period of failure of performance.
(e) In furtherance of the foregoing, the Seller has
informed the Buyer that the Seller cannot enter into a sublease
with the Buyer for the 873 square meter facility currently leased
by Noran Instruments at 25, Rue du Ventoux, Montagne Sud, France
(the "Noran France Premises") under a lease expiring on April 1,
1995 (the "Noran France Lease"). In order to provide the Buyer
with the use and occupancy of the Noran France Premises
19<PAGE>
after the Closing on the same basis as used and occupied by
Noran Instruments prior to the Closing, the Seller hereby agrees
that the Buyer shall be permitted, without cost or expense to
the Buyer, (i) to use and occupy 70% of the Noran France Premises
and (ii) to use all telephone, office and other equipment and
other facilities and amenities associated with the Noran France
Premises on the same basis as used and occupied by Noran
Instruments prior to the Closing. The Buyer's use and occupancy
of the Noran France Premises shall be in common with the Seller,
the Buyer and the Seller shall cooperate with one another
regarding the shared use of the Noran France Premises, and the
Buyer's use and occupancy of the Noran France Premises shall be
subject to all of the terms and conditions of the Noran France
Lease. The Buyer's use and occupancy of the Noran France
Premises shall commence upon the Closing and shall terminate no
later than April 1, 1995, or on such earlier date as the Buyer
may elect in its discretion. In the event that the Buyer is
prevented from using and occupying the Noran France Premises
through April 1, 1995, the Seller shall promptly make a cash
payment to the Buyer in an amount equal to (x) the number of days
between the Closing Date and April 1, 1995 during which the Buyer
is prevented from using and occupying the Noran France Premises
multiplied by (y) $50,000 divided by the number of days between
the Closing Date and April 1, 1995. The payment required by the
foregoing sentence shall be made by the Seller in immediately
available funds and no later than 30 days following the Seller's
receipt of notice from the Buyer of the amount due. Any payment
not made when due under the foregoing sentence shall bear
interest, compounded monthly on the last day of each calendar
month, from the due date at an interest rate equal to the prime
rate of Citibank, N.A. as announced from time to time.
2.9 Intercompany Accounts and Cash. Prior to or on the Closing
Date, the Seller shall net, to the extent possible, and settle,
forgive or contribute all intercompany accounts between (a) the Seller
and its subsidiaries and affiliates which are not constituents of the
Business and (b) the Foreign Companies and the Domestic Businesses,
except for trade accounts payable and receivable incurred in the
Ordinary Course of Business, which trade accounts payable and
receivable shall remain obligations or assets of the Business. The
effect of such settling and netting will be to remove as of the
Closing Date any intercompany account not reflected on the Balance
Sheet but which exists between (a) the Seller and its subsidiaries and
affiliates which are not constituents of the Business and (b) the
Business, except for trade accounts payable and receivables incurred
in the Ordinary Course of Business. Prior to the Closing Date, but
subject to the provisions of Section 4.1, all cash or cash equivalents
held by any Foreign Division, Domestic Business or Foreign
20<PAGE>
Company shall be deemed to be an asset of the Seller, and the Seller
may use such cash or cash equivalents to pay advances or make
dividends or distributions to the Seller or its constituent entities
without affecting the sale of the Business.
3. ASSUMPTION OF CERTAIN LIABILITIES.
3.1 Liabilities Assumed. On the Closing Date, subject to the
terms and conditions herein set forth, the Seller shall assign or
cause to be assigned to the Buyer, and the Buyer shall assume, all
liabilities of any nature, known or unknown, fixed, contingent or
otherwise, arising out of or relating primarily to the Business,
except for the Excluded Liabilities (the "Assumed Liabilities").
3.2 Liabilities Not Assumed. The Buyer shall not assume any
liabilities or obligations arising out of or relating to the
following, all of which shall remain obligations of the Seller (the
"Excluded Liabilities"):
(a) any release of any Materials of Environmental Concern
into the environment relating to the operation of the Business
prior to the Closing Date or the existence of any Materials of
Environmental Concern at any site on which the Business was
operated prior to the Closing Date or to which any such Materials
of Environmental Concern were transported or any violation of any
Environmental Law by Seller, any Share Seller, any Asset Seller
or any Foreign Company which occurred prior to the Closing Date,
but, except in the case of the matters described in Schedule
5.28, only to the extent that the Buyer's Losses arising from
such matters exceed $10,000 per release, existence or violation
(treating any series of related or similar releases, existences
or violations at a particular site as only one release or
violation for this purpose); provided, however, that liabilities
or obligations relating to any release or existence of Materials
of Environmental Concern or any violation of any Environmental
Law that arise solely as a result of an amendment, after the
Closing Date, of a federal, state or foreign statute, or the
enactment, after the Closing Date, of a new federal, state or
foreign statute, that imposes new and substantially different
liabilities or obligations that did not exist as of the Closing
Date shall, to the extent of the new or substantially different
liability or obligation only, be assumed by the Buyer and shall
constitute Assumed Liabilities.
(b) the Excluded Litigation;
(c) the investigation referenced in Section IV.D. of
Schedule 5.19 (the "Export Control Investigation") and any and
all suits, actions, proceedings, investigations, claims,
21<PAGE>
complaints, accusations, liabilities and obligations arising out
of or relating to the subject matter of the Export Control
Investigation;
(d) any and all Taxes of, or attributable to, the Business
with respect to Pre-Closing Periods to the extent the Seller is
liable for such Taxes under Section 7.9;
(e) any overdraft facility, bank credit line or third party
indebtedness for money borrowed to the extent not reflected on
the Balance Sheet;
(f) any and all liabilities relating to the business of
the Seller (or any of its subsidiaries or affiliates which are
not constituents of the Business) other than the Assumed
Liabilities;
(g) any claims against, or liabilities or obligations of,
any Plans or Foreign Plans not specifically assumed by the Buyer
pursuant to this Agreement or with respect to which this
Agreement provides that the Buyer is not liable, and any claims
for compensation or benefits of any nature whatsoever, severance
pay, termination pay or pay in lieu of notice of any employees of
the Business with respect to services performed or terminations
occurring on or before the Closing Date to the extent such
claims, in the aggregate, exceed the aggregate accruals and
reserves therefor shown in the financial and accounting records
of the Business at the Closing Date (to the extent that such
accruals and reserves have been determined in a manner
consistent with the Seller's past practices in establishing the
accruals and reserves therefor set forth on the Balance Sheet);
(h) any product liability claim, regardless of when
asserted, arising out of or related to the manufacture or sale
of (or agreements for the sale of) wellhead safety products by
any constituent of the Business prior to the Closing Date;
(i) liabilities and obligations under (i) the
Nonassignable Restricted Assets and (ii) the Assignable
Restricted Assets with respect to which the Seller does not
obtain the consents and waivers necessary to assign, transfer,
sublease or sublicense such Assignable Restricted Assets to the
Buyer and the Seller does not provide to the Buyer the benefits
of such Assignable Restricted Assets pursuant to Section 2.8(c);
and
(j) any and all suits, actions, proceedings,
investigations, claims, complaints, accusations, liabilities and
obligations arising out of or relating to the failure of TN
Technologies to comply prior to the Closing Date with any
22<PAGE>
provision of the federal Communications Act of 1934, as amended,
or any regulation promulgated thereunder.
3.3 Documents of Assumption. At the Closing, the assumption of
the Assumed Liabilities by the Buyer shall be evidenced by the
execution and delivery to the Seller of instruments of assumption
substantially in the form attached hereto as Exhibit D and such other
instruments as the Seller may reasonably request in order to effect
the assumption by the Buyer of the Assumed Liabilities.
3.4 Seller Obligations.
(a) After the Closing, the Buyer shall use such efforts as
it, in its sole discretion, deems reasonable to arrange over
time for the substitution of the Buyer for the Seller and its
subsidiaries and affiliates that are not constituents of the
Business on the agreements, obligations and liabilities in
respect of the Business listed on Schedule 3.4 ("Seller
Obligations") which are obligations of the Seller and its
subsidiaries and affiliates that are not constituents of the
Business; provided, however, that this Section 3.4(a) shall not
require (i) the Buyer to make any payments or (ii) the Buyer, or
allow the Seller, to amend the terms of any obligation of the
Business in any way to provide for less favorable terms either to
the Business or to any other obligor thereof. To the extent that
the Buyer is not substituted for the Seller and such
subsidiaries and affiliates on such Seller Obligations (and the
failure to be so substituted shall not be a breach of this
Agreement), or to the extent that the Seller and such
subsidiaries and affiliates are not relieved of such Seller
Obligations, the Buyer shall indemnify the Seller with respect
to such Seller Obligations in accordance with Section 11.
(b) If, at any time after the Closing, demand shall be made
of the Seller or any of its subsidiaries and affiliates that is
not a constituent of the Business for payment or performance
under any Seller Obligation, the Seller shall promptly notify the
Buyer of such demand in writing, and such demand shall be treated
as a Third-Party Claim in accordance with Section 11.4.
3.5 Risk of Loss. The risk of loss of any of the Assets shall
be the responsibility of the Buyer as of the Closing Date. Likewise,
the Foreign Companies are covered in part or in whole by insurance
policies of the Seller which coverage shall end as of the Closing
Date. All casualty or other losses of Assets or to the assets of the
Foreign Companies or to the Business occurring after such time shall
be the responsibility of the Buyer, whether or not the Buyer has
purchased or obtained any insurance coverage.
23<PAGE>
4. PURCHASE PRICE MATTERS.
4.1 Changes in Cash Position.
(a) The Seller agrees to reimburse the Buyer to the extent
that, at any time or from time to time after the Balance Sheet
Date through the Closing Date, (i) the Seller or its subsidiaries
or affiliates which are not constituents of the Business withdraw
or receive distributions, dividends, advances, repayments or
other payments of cash or cash equivalents from the Business and
(ii) the Business makes any payments of cash or cash equivalents
with respect to Excluded Liabilities, including without
limitation cash used to pay Taxes for which the Seller is liable
under Section 7.9 but excluding (i) payments with respect to
Plans, Foreign Plans or Seller's Welfare Plans and (ii) payments
of claims for compensation or benefits of any nature whatsoever,
severance pay, termination pay or pay in lieu of notice of any
employees of the Business with respect to services performed or
terminations occurring before the Closing Date, so long (in the
case of both clauses (i) and (ii)) as such payments are in the
Ordinary Course of Business (i.e., unrelated to the consummation
of the transactions contemplated by this Agreement or other
extraordinary events).
(b) The Buyer agrees to reimburse the Seller to the extent
that, at any time or from time to time after the Balance Sheet
Date through the Closing Date, (i) the Seller or its subsidiaries
or affiliates which are not constituents of the Business lend or
advance any cash or cash equivalents to or for the benefit of the
Business, including without limitation cash used to pay Taxes for
which the Buyer is liable under Section 7.9, or (ii) the
outstanding balances of any overdraft facility, bank credit line
or third party indebtedness for money borrowed not assumed by
the Buyer is increased and the proceeds of the increase are paid
to and used by the Business.
(c) In order to determine the amount owed, if any, by
either party under Sections 4.1(a) and (b), the Seller shall
prepare and deliver to the Buyer the Final Statement of Cash
Position within 30 days after the Closing Date. The Seller shall
cause DT to follow and implement the procedures set forth in
Schedule 4.1 with respect to the Final Statement of Cash Position
prepared by the Seller and to obtain from DT and deliver to the
Buyer with the Final Statement of Cash Position a certificate of
DT, based on the procedures set forth in Schedule 4.1,
confirming the accuracy of the Final Statement of Cash Position.
If the Final Statement of Cash Position as delivered by the
Seller shows an amount due from the Seller to the Buyer (i.e., if
the aggregate amount referred to in clause (i) of the definition
24<PAGE>
of "Final Statement of Cash Position" exceeds the aggregate
amount referred to in clause (ii) of such definition), the Seller
shall pay, by wire transfer or other delivery of immediately
available funds, such amount to the Buyer simultaneously with the
Seller's delivery to the Buyer of the Final Statement of Cash
Position and the certificate of DT.
(d) The amount set forth in such Final Statement of Cash
Position as required to be paid shall be conclusive unless the
Buyer delivers to the Seller within 30 days after receiving the
Final Statement of Cash Position a statement describing in
reasonable detail its objections thereto. The Buyer and the
Seller shall use reasonable efforts to resolve any such
objections and to agree upon the Final Statement of Cash
Position, but if they do not reach a final resolution within 30
days after the Seller has received the Buyer's statement of
objections, the Buyer and the Seller shall promptly select an
accounting firm mutually acceptable to them (the "Neutral
Auditors") to resolve any remaining objections. If the Buyer and
the Seller are unable to agree on the choice of Neutral Auditors,
they shall select as Neutral Auditors a nationally-recognized
accounting firm by lot (after excluding their respective regular
independent accounting firms). The Neutral Auditors shall
promptly determine whether the objections raised by the Buyer are
appropriate. The Final Statement of Cash Position shall be
adjusted in accordance with the Neutral Auditors' determination
and, as so adjusted, shall be conclusive and binding upon the
Buyer and the Seller.
(e) Commencing with the delivery of the Final Statement of
Cash Position and throughout the period of any dispute referred
to above, the Seller shall provide the Buyer and the Buyer's
independent accountants full access to the books, records,
facilities and employees of the Foreign Divisions, Domestic
Businesses and Foreign Companies and the work papers of DT and
shall cooperate fully with the Buyer and the Buyer's accountants
in order to enable them to analyze the Final Statement of Cash
Position; provided, however, that such access shall be allowed
only during normal business hours, with reasonable advance
notice and in such manner as not to interfere unreasonably with
the normal operations of the business of the Share Sellers and
Asset Sellers.
(f) The Buyer and the Seller shall share equally the fees
and expenses of the Neutral Auditors and DT under this Section
4.1.
(g) The party owing an amount to the other party based on
the Final Statement of Cash Position (which amount shall
constitute a change in the Purchase Price) shall pay such
amount, plus interest thereon, compounded monthly on the last
25<PAGE>
day of each calendar month, from the Closing Date at an interest
rate equal to the prime rate of Citibank, N.A. as announced from
time to time, to the other party, by wire transfer or other
delivery of immediately available funds, within three business
days after the date on which the Final Statement of Cash Position
is finally determined pursuant to this Section 4.1; provided,
however, that in the event the Seller owes an amount to the
Buyer based on the Final Statement of Cash Position, the payment
otherwise required to be made by the Seller to the Buyer
pursuant to this Section 4.1(g) shall be reduced by the amount
previously paid by the Seller to the Buyer pursuant to Section
4.1(c) above.
(h) Notwithstanding the foregoing, any payments between
the Balance Sheet Date and 12:01 a.m. Eastern Time on the Closing
Date by the Business to the Seller or any of the Seller's
subsidiaries or affiliates which are not constituents of the
Business or by the Seller or any of the Seller's subsidiaries or
affiliates which are not constituents of the Business to the
Business shall be excluded from the Final Statement of Cash
Position if such payments are on account of the sale of products
or the performance of services in the Ordinary Course of
Business.
4.2 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets and the Shares in accordance with Schedule
4.2 hereto. Any increase or decrease in the Purchase Price pursuant
to Section 4.1 shall be allocated among the Assets located in the U.S.
in proportion to the amounts allocated among all Assets located in the
U.S. on Schedule 4.2. Such allocation of any increase or decrease in
the Purchase Price shall be prepared by the Buyer and submitted in
writing to Seller within 30 days after the date on which the Final
Statement of Cash Position is finally determined pursuant to Section
4.1. If the Seller does not object in writing to such proposed
allocation within 30 days after receipt of the Buyer's written
proposal, the proposed allocation shall become final. If the Seller
makes timely objection to the Buyer's proposal, the Buyer and the
Seller shall have 30 days to reach agreement or the allocation shall
be submitted to the Neutral Auditors, whose determination shall be
final and whose fees and expenses shall be borne equally by the Buyer
and the Seller.
4.3 Brokers. Except for Lehman Brothers Inc. and Texas
Commerce Bank National Association, whose fees and expenses shall be
the sole responsibility of the Seller, the Seller represents and
warrants that it has not employed or incurred any liability to any
broker, agent or finder in connection with any transaction
contemplated by this Agreement. The Buyer represents and warrants
that it has not employed or incurred any liability to any broker,
agent or finder in connection with any transaction contemplated by
this Agreement.
26<PAGE>
4.4 Transaction Taxes. Any and all federal, state, county,
local or foreign sales, use, value added, excise, stamp, transfer and
other taxes not in the nature of income taxes, fees and duties
(including any interest, additions to tax and penalties with respect
thereto) and any and all transfer, recording or similar fees and
charges imposed in connection with the consummation of the
transactions contemplated hereunder shall be borne equally by the
Buyer and the Seller.
5. REPRESENTATIONS AND WARRANTIES BY THE SELLER.
The Seller, on behalf of itself, each Share Seller and each
Asset Seller, represents and warrants to the Buyer that the
statements contained in this Section 5 are true and correct, except as
set forth in the Disclosure Schedule. The Disclosure Schedule shall
be consecutively numbered by the Buyer and the Seller and shall be
arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Section 5. The Buyer shall be presumed
to have relied upon the representations and warranties contained
herein, notwithstanding any investigation of the Business made by the
Buyer prior to the Closing or the knowledge of the officers,
directors, stockholders, employees or agents of the Buyer.
5.1 Organization, Good Standing and Qualification. The Seller,
each Share Seller, each Asset Seller and each Foreign Company is a
corporation or other form of limited liability company duly
incorporated or otherwise duly organized, validly existing and in good
standing (in such jurisdictions where such concept is applicable)
under the laws of its respective jurisdiction of incorporation or
organization as set forth on Schedule 5.1. The Seller, each Share
Seller, each Asset Seller and each Foreign Company has all requisite
corporate power and authority to own or lease its properties and
carry on its business as presently conducted. The Seller, each Share
Seller, each Asset Seller and each Foreign Company is in good standing
as a foreign corporation and licensed or qualified to transact
business in the jurisdictions listed in Schedule 5.1, which are the
only jurisdictions in which the nature of the properties owned or
leased by it or the business transacted by it requires it to be so
licensed or qualified, except those jurisdictions, if any, in which
the failure so to qualify would not have a material adverse effect on
the business, assets, properties, financial condition or results of
operations of the affected Principal Business Unit.
5.2 Capital Stock and Ownership.
(a) The total number of shares of capital stock, and the
classes and par values thereof, which each Foreign Company is
authorized to issue, the number of such shares which are issued
27<PAGE>
and outstanding and the number of such outstanding shares owned,
directly or indirectly, legally or beneficially by the Seller (or
any subsidiary or affiliate of the Seller), any Share Seller or
any Foreign Company, the number of shares owned by the other
stockholders and the identities of the stockholders of such other
shares, are as set forth in Schedule 5.2.
(b) Except as set forth in Schedule 5.2, there are not
outstanding any (i) securities of any Foreign Company
convertible into or exchangeable for any shares of capital stock
or other securities of any such Foreign Company; (ii)
subscriptions, options, warrants or other rights, contingent or
otherwise, obligating any Foreign Company to issue or purchase or
entitling any third party to acquire from any Foreign Company any
shares of capital stock or other securities of any such Foreign
Company; or (iii) other than this Agreement, agreements or
understandings with respect to the voting, sale, transfer or
other restriction on shares of capital stock of any Foreign
Company to which the Seller, any Share Seller, any Asset Seller
or any Foreign Company is a party.
(c) The shares of capital stock of each Foreign Company
that are owned, directly or indirectly, by each Share Seller have
been duly authorized and validly issued, are fully paid,
non-assessable and free of preemptive rights.
(d) Each Share Seller holds good and marketable title to
the Shares being sold by it, free and clear of all Encumbrances.
The transfer of the Shares to the Buyer pursuant to this
Agreement will vest in the Buyer good, marketable, record and
beneficial title to the Shares, free and clear of all
Encumbrances.
(e) Except for the Shell Corporations, no Foreign Company
has any Subsidiary except as identified on Schedule 1. Except as
set forth in Schedule 5.2, no Foreign Company holds any direct or
indirect equity interest in any other corporation or other
entity, except for Subsidiaries and the Shell Corporations.
5.3 Authority.
(a) The Seller has all requisite corporate right, power,
capacity and authority to enter into, deliver and perform this
Agreement and any other agreement or document necessary to
perform this Agreement, the Seller, each Share Seller and each
Asset Seller has all requisite corporate right, power, capacity
and authority to consummate the transactions contemplated hereby,
and this Agreement, the Foreign Asset Purchase Agreements and the
Foreign Share Purchase Agreements have been (or, in the case of
the Foreign Asset Purchase Agreements and the
28<PAGE>
Foreign Share Purchase Agreements, will be at the Closing) duly
and validly executed and delivered by the Seller (or each Share
Seller of Shares of a Foreign Company or Foreign Division
Seller, as applicable) pursuant to all necessary corporate
action on the part of the Seller (or each Share Seller of Shares
of a Foreign Company or Foreign Division Seller, as applicable).
(b) This Agreement is, and upon execution and delivery at
the Closing each Foreign Asset Purchase Agreement and each
Foreign Share Purchase Agreement will be, legal, valid and
binding upon and enforceable against the Seller (or each Share
Seller of Shares of a Foreign Company or Foreign Division Seller,
as applicable) in accordance with its terms.
5.4 No Conflict; No Consents or Approvals.
(a) Neither the execution and delivery by the Seller of
this Agreement or any agreement, instrument or document
contemplated hereby, the consummation of the transactions
contemplated herein or therein by the Seller, any Share Seller
or any Asset Seller nor compliance by the Seller, any Share
Seller or any Asset Seller with any of the provisions hereof or
thereof will (i) conflict with, result in a violation or breach
of or constitute a default under (or would result in a
violation, breach or default with the giving of notice or the
passage of time or both) (A) the certificate of incorporation or
bylaws (or other similar charter or governing documents) of the
Seller, any Share Seller, any Asset Seller or any Foreign
Company, (B) except as set forth in Schedule 5.4, any contract,
understanding, commitment or agreement referred to in Schedule
5.17, or (C) any law, statute, ordinance, writ, injunction,
decree, rule, regulation or court or administrative order by
which the Seller, any Share Seller, any Asset Seller or any
Foreign Company (or any of the properties or assets of the
Business) is subject or bound; (ii) result in the creation or
imposition of, or give any party the right to create or impose,
any Encumbrance upon any of the Shares or any material
Encumbrance upon any of the Assets; or (iii) terminate, modify or
cancel, or give any other party the right to terminate, modify
or cancel, or require any notice, consent or waiver under, any
contract, understanding, commitment or agreement referred to in
Schedule 5.17; except, in the case of clauses (i)(C) and (iii),
such violations, breaches or defaults which would not have a
material adverse effect on the business, assets, properties,
financial condition or results of operations of the affected
Principal Business Unit.
(b) Except for applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
29<PAGE>
(the "HSR Act"), or as disclosed on Schedule 5.4 neither the
Seller, any Share Seller, any Asset Seller nor any Foreign
Company is required to submit any notice, report or other filing
with or to any Governmental Body in connection with the
execution, delivery or performance of this Agreement by the
Seller and the consummation of the transactions contemplated
hereby by the Seller, any Share Seller, any Asset Seller or any
Foreign Company.
(c) No litigation, claim, administrative proceeding or
other proceeding or governmental investigation is pending or, to
the Seller's Knowledge, threatened which would prevent or delay
the execution, delivery or performance of this Agreement or any
agreement, instrument or document contemplated hereby by the
Seller or the consummation by the Seller, the Share Sellers or
the Asset Sellers of the transactions contemplated hereby or
thereby.
(d) There are no Restricted Assets not listed in Part A of
Schedule 2.8 as to which the failure to obtain all necessary
consents and waivers for the assignment, transfer, sublease or
sublicense thereof as of the Closing could have a material
adverse effect on the business, assets, properties, financial
condition or results of operations of the affected Principal
Business Unit.
5.5 Undisclosed Liabilities. To the Seller's Knowledge, none
of the Principal Business Units has any material liability or
obligation of any nature, whether known or unknown, fixed, contingent
or otherwise, liquidated or unliquidated and whether due or to become
due, except for:
(a) liabilities and obligations reflected in the Balance
Sheet, other than those discharged since the Balance Sheet Date;
(b) liabilities and obligations incurred in the Ordinary
Course of Business since the Balance Sheet Date and that have not
been discharged;
(c) liabilities and obligations under any contract, lease
or other agreement to which a Foreign Company is a party;
(d) liabilities and obligations under any contract, lease
or other agreement which is part of the Assets; and
(e) the Excluded Liabilities.
5.6 No Termination of Relationships. As of the date hereof,
the Seller has not received any written notice that any relationship
between any Principal Business Unit and any material distributor,
30<PAGE>
customer, supplier or lender to such Principal Business Unit may be
terminated or adversely affected as a result of the execution of this
Agreement or the consummation of the transactions contemplated
hereby.
5.7 Financial Statements. Attached hereto as Schedule 5.7 are
the Financial Statements. The Financial Statements present fairly
the financial condition, results of operations and cash flows of the
Business as of the date and for the period indicated, have been
prepared in accordance with U.S. generally accepted accounting
principles ("GAAP") applied on a consistent basis, are consistent
with the books and records of the Business and have been audited
without qualification by DT.
5.8 Tax Matters. Except as set forth in Schedule 5.8:
(a) All material Tax Returns relating to, or including
items attributable to, the Business that were required to be
filed by the Seller, the Asset Sellers, the Foreign Companies or
their respective affiliates (taking into account all extensions)
on or before the date hereof have been filed and are accurate
and correct in all material respects, and all Taxes shown to be
due on such Tax Returns have been paid. No material deficiencies
for Taxes with respect to the Business (or for which any Foreign
Company may be liable) have been claimed, proposed or assessed
by any taxing authority or other Governmental Body against any
of the Share Sellers, Asset Sellers or Foreign Companies or any
current or prior affiliates thereof. The unpaid Taxes of the
Share Sellers, the Asset Sellers and the Foreign Companies
relating to the Business for taxable periods through the Balance
Sheet Date do not exceed the aggregate amount of the reserves
and accruals for Taxes set forth on the Balance Sheet (other
than the reserves and accruals set forth on the Balance Sheet
under the caption "Deferred Income Taxes"). All material Taxes
relating to the Business which are or were required by law to be
withheld or collected have been duly withheld or collected and,
to the extent required, have been paid to the proper
Governmental Body.
(b) The Seller has delivered or made available to the Buyer
for the taxable year ended September 30, 1992 all material
information pertaining to the activities, assets or other items
of each of the Foreign Companies, Domestic Businesses and
Foreign Divisions that was necessary (i) for the preparation of
any and all U.S. federal income Tax Returns that were required
to be filed by any Foreign Company or any other entity for such
periods or (ii) for the computation of any U.S. federal income
Taxes payable by any Foreign Company or other entity with respect
to such period, and all such information is true and complete in
all material respects.
31<PAGE>
(c) No Asset Seller or Foreign Company is a "consenting
corporation" within the meaning of Section 341(f) of the Code and
none of the Assets or assets of the Foreign Companies is subject
to an election under Section 341(f) of the Code. No Asset Seller
or Foreign Company has been a U.S. real property holding
corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section
897(c)(l)(A)(ii) of the Code. No Foreign Company has waived any
statute of limitations with respect to Taxes or agreed to an
extension of time with respect to a Tax assessment or deficiency.
5.9 Title to Properties.
(a) The Asset Sellers and Foreign Companies are the true
and lawful owners of, and have good and marketable title to, the
Assets and the other assets and properties shown on the Balance
Sheet or which are acquired by the Business after the Balance
Sheet Date, other than inventory and other assets sold or
otherwise disposed of in the Ordinary Course of Business after
the Balance Sheet Date, in each case free and clear of all
Encumbrances other than Permitted Encumbrances. Upon execution
and delivery by the Seller to the Buyer of the instruments of
conveyance referred to in Sections 10(b)(iii) and (iv), the
Buyer will become the true and lawful owner of, and will receive
good, marketable and, to the extent applicable, record title to,
the Assets, free and clear of all Encumbrances other than
Permitted Encumbrances.
(b) Other than the Leased Real Estate and equipment held
under leases entered into in the Ordinary Course of Business,
none of the assets in possession of the Business but owned by
third parties is material to the Business.
5.10 Real Estate. Schedule 5.10 lists and describes briefly all
real property included in the Assets or that any Foreign Company owns
as of the date hereof. With respect to each parcel of Owned Real
Estate:
(a) the identified owner has good and clear, record,
registered (where applicable) and marketable title to such
parcel, insurable by a recognized national title insurance
company (in the U.S. and such other jurisdictions where the
concept of title insurance is applicable) at standard rates, free
and clear of all Encumbrances, except for Permitted Encumbrances
which do not impair the use, occupancy or value of such parcel as
currently used or proposed to be used (the "Intended Uses");
(b) there are no (i) pending or, to the Seller's
Knowledge, threatened condemnation proceedings relating to such
parcel, (ii) pending or, to the Seller's Knowledge, threatened
32<PAGE>
litigation or administrative actions relating to such parcel, or
(iii) other matters materially adversely affecting the Intended
Uses, occupancy or value thereof;
(c) the legal description for such parcel contained in the
deed thereof describes such parcel fully and adequately; the
buildings and improvements may be used as of right under
applicable zoning and land use laws for the Intended Uses, and
such buildings and improvements are located within the boundary
lines of the described parcels of land, are not in violation of
current setback requirements, zoning laws and ordinances and do
not encroach on any easement which may burden the land; the land
does not serve any adjoining property for any purpose
inconsistent with the use of the land; and such parcel is not
located within any flood plain or subject to any similar type
restriction for which any permits or licenses necessary to the
use thereof have not been obtained;
(d) except as set forth in Schedule 5.10, there are no
leases, subleases, licenses or agreements, written or oral,
granting to any party or parties the right of use or occupancy of
any portion of such parcel;
(e) there are no outstanding options or rights of first
refusal to purchase such parcel, or any portion thereof or
interest therein;
(f) all facilities located on such parcel are supplied with
utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone,
sanitary sewer and storm sewer, all of which services are
adequate for the Intended Uses and in accordance with all
applicable Laws and Regulations and are provided via public roads
or via permanent, irrevocable, appurtenant easements benefiting
such parcel;
(g) such parcel abuts and has direct vehicular access to a
public road or access to a public road via a permanent,
irrevocable, appurtenant easement benefiting such parcel;
(h) there is no pending or, to the Seller's Knowledge, any
proposed proceeding to change or redefine the zoning
classification of all or any portion of the parcel;
(i) the improvements constructed on the parcel are in good
condition and proper order, free of roof leaks, insect
infestation and material construction defects, and all mechanical
and utility systems servicing such improvements are in good
condition and proper working order, free of material defects; and
33<PAGE>
(j) each parcel is an independent unit which does not rely
on any facilities (other than the facilities of public utility
and water companies) located on any other property (i) to fulfill
any zoning, building code or other municipal or governmental
requirement; (ii) for structural support or the furnishing of any
essential building systems or utilities, including but not limited
to electric, plumbing, mechanical, heating, ventilating, and air
conditioning systems; or (iii) to fulfill the requirements of any
lease. No building or other improvement not included in the
parcel relies on any part of the parcel to fulfill any zoning,
building code or other municipal or governmental requirement or
for structural support or the furnishing of any essential building
systems or utilities. Such parcel is assessed by local property
assessors as a tax parcel or parcels separate from all other tax
parcels.
5.11 Real Property Leases. Schedule 5.11 lists and describes
briefly all real property leased or subleased as of the date hereof to
a Foreign Company or to an Asset Seller which is the lessee or
sublessee with respect to a lease or sublease which is part of the
Assets and lists the term of such lease, any extension and expansion
options and the rent payable thereunder. Schedule 5.11 also lists and
describes briefly the real property owned by the Seller and to be
leased to the Buyer as of the Closing pursuant to the Seller Leases
(the "Seller's Leased Facilities"). The Seller has delivered to the
Buyer correct and complete copies of the leases and subleases (as
amended to date) listed in Schedule 5.11. With respect to each lease
and sublease of Leased Real Estate:
(a) the lease or sublease is legal, valid, binding,
enforceable and in full force and effect with respect to the
Seller, each Asset Seller and each Foreign Company which is a
party thereto and, to the Seller's Knowledge, with respect to
every other party thereto;
(b) each lease or sublease to which an Asset Seller is a
party is assignable by the Asset Seller to the Buyer without the
consent or approval of (except as set forth in Schedule 2.8) or
any payment to any party, all such leases or subleases (whether
the lessee is an Asset Seller or Foreign Company) will continue
to be legal, valid, binding, enforceable and in full force and
effect immediately following the Closing in accordance with the
terms thereof as in effect immediately prior to the Closing, and
the consummation of the transactions contemplated herein will
not conflict with, result in a violation or breach of or
constitute a default under (or would result in a violation,
breach or default with the giving of notice or the passage of time
or both) any such lease or sublease;
34<PAGE>
(c) neither the Seller, any Asset Seller nor any Foreign
Company nor, to the Seller's Knowledge, any other party is in
breach or default under any such lease or sublease, and no event
has occurred which, with notice and/or lapse of time, would
constitute such a breach or default;
(d) there are no disputes, oral agreements or forbearance
programs in effect as to the lease or sublease;
(e) neither the Seller, any Asset Seller nor any Foreign
Company has assigned, transferred, conveyed, mortgaged, deeded in
trust or encumbered any interest in the leasehold or subleasehold;
(f) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the
operation of said facilities;
(g) to the Seller's Knowledge, the owner of the facility
leased or subleased has good and clear record and marketable
title to the subject real property, free and clear of any
Encumbrance, except for recorded easements, covenants, and other
restrictions which do not impair the Intended Uses, occupancy or
value of the property subject thereto; and
(h) in connection with each Seller Lease, there is no
holder of any mortgage, deed of trust, superior security interest
or ground lease who may disturb the Buyer's use and occupancy of
the premises demised under such Seller Lease so long as Buyer
fulfills all of the obligations of the lessee thereunder within
applicable grace or cure periods.
5.12 Equipment Leases. Schedule 5.12 contains a list of all
equipment leases involving an annual expense per lease in excess of
$50,000 to which a Foreign Company is a lessee or an Asset Seller is
a lessee with respect to a lease which is part of the Assets. With
respect to each equipment lease listed in Schedule 5.12:
(a) the lease is legal, valid, binding, enforceable and in
full force and effect with respect to the Seller, each Asset
Seller and each Foreign Company which is a party thereto and, to
the Seller's Knowledge, with respect to every other party thereto;
(b) each lease to which an Asset Seller is a party is
assignable by the Asset Seller to the Buyer without the consent
or approval of or any payment to any party (except as set forth in
Schedule 2.8), all such leases (whether the lessee is an Asset
Seller or Foreign Company) will continue to be legal, valid,
binding, enforceable and in full force and effect immediately
following the Closing in accordance with the terms thereof as in
35<PAGE>
effect immediately prior to the Closing, and the consummation of
the transactions contemplated herein will not conflict with,
result in a violation or breach of or constitute a default under
(or would result in a violation, breach or default with the
giving of notice or the passage of time or both) any such lease;
and
(c) neither the Seller, any Asset Seller nor any Foreign
Company nor, to the Seller's Knowledge, any other party is in
breach or default under any such lease, and no event has occurred
which, with notice and/or lapse of time, would constitute such a
breach or default;
5.13 Assets Used in the Business. The Assets and the assets
owned by the Foreign Companies are sufficient for the conduct of the
Business as presently conducted. The tangible assets of the Business,
in the aggregate, are in good operating condition and repair (subject
to normal wear and tear). Each of the Shell Corporations has only de
minimis assets and does not conduct any operations.
5.14 Accounts Receivable. All accounts receivable of the
Business reflected on the Balance Sheet are valid receivables, arose
in the Ordinary Course of Business and, to the Seller's Knowledge,
are subject to no setoffs or counterclaims. All accounts receivable
reflected in the financial or accounting records of the Business that
have arisen since the Balance Sheet Date are valid receivables, arose
in the Ordinary Course of Business and, to the Seller's Knowledge,
are subject to no setoffs or counterclaims.
5.15 Intellectual Property.
(a) Schedule 5.15 contains a list of all of the following
that are owned or used by the Seller, any Foreign Company or any
Asset Seller in the Business: (i) patents and patent applications;
(ii) trademarks, tradenames and service marks and registrations
thereof and applications therefor; (iii) registered copyrights
and applications for copyright registration; and (iv) licenses
relating to any of the foregoing. Schedule 5.15 identifies the
owner of each item listed thereon and, in the case of
registrations and applications, the application or registration
number and date.
(b) The Seller, the Asset Sellers and the Foreign
Companies own or have the right to use all Proprietary Rights used
in the operation of the Business or necessary for the operation
of the Business (collectively, "Intellectual Property"). Upon
execution and delivery by the Seller to the Buyer of the
instruments of conveyance referred to in Sections 10(b)(iii) and
10(b)(iv), each item of Intellectual Property owned or used by the
Seller, the Asset Sellers and the Foreign Companies in the
36<PAGE>
operation of the Business as of the Closing (other than items of
Intellectual Property disposed of prior to the Closing in the
Ordinary Course of Business) will be owned or available for use
by the Buyer or the Foreign Companies on identical terms and
conditions immediately following the Closing, except as otherwise
indicated on Schedule 5.15. Each of the Seller, the Asset
Sellers and the Foreign Companies has taken reasonable measures
to protect the proprietary nature of the Intellectual Property
and to maintain in confidence the trade secrets and confidential
information that it owns or uses in the Business. To the Seller's
Knowledge, no other person or entity has any rights to any of the
Intellectual Property owned or used by the Seller, the Asset
Sellers or the Foreign Companies in the Business, except that the
Intellectual Property identified on Schedule 5.15 as licensed to
the Seller, the Asset Sellers or the Foreign Companies for use in
the Business is owned by the respective owners identified on
Schedule 5.15, and no other person or entity is infringing,
violating or misappropriating any of the Intellectual Property
used in the Business, except as otherwise indicated on Schedule
5.15.
(c) Except as set forth in Schedule 5.19, none of the
activities or business presently conducted by the Business or
conducted by the Business at any time since January 1, 1991 or,
to the Seller's Knowledge, conducted by the Business at any time
between January 1, 1988 and January 1, 1991 infringes or
violates, or constitutes a misappropriation of, any Proprietary
Rights of any other person or entity. Except as set forth in
Schedule 5.19, neither the Seller, any Asset Seller nor any
Foreign Company has received any complaint, claim or notice
alleging any such infringement, violation or misappropriation.
(d) Schedule 5.15 identifies each patent or registration
which has been issued to the Seller or any Asset Seller or Foreign
Company with respect to any of the Intellectual Property,
identifies each pending patent application or application for
registration which the Seller or any Asset Seller or Foreign
Company has made with respect to any of its Intellectual Property,
and identifies each license or other agreement pursuant to which
the Seller or any Asset Seller or Foreign Company has granted any
rights to any third party with respect to any of its Intellectual
Property. The Seller has delivered to the Buyer correct and
complete copies of all such patents, registrations, applications,
licenses and agreements (as amended to date) and has made
available to the Buyer correct and complete copies of all other
written documentation evidencing ownership of, and any claims or
disputes relating to, each such item. Except as set forth in
Schedule 5.15, with respect to each item of Intellectual Property
37<PAGE>
that the Seller or any Asset Seller or Foreign Company owns:
(i) the Seller or such Asset Seller or Foreign
Company possesses all right, title and interest in and to
such item;
(ii) such item is not subject to any outstanding
judgment, order, decree, stipulation or injunction; and
(iii) neither the Seller, any Asset Seller nor any
Foreign Company has agreed, except in the Ordinary Course
of Business in conjunction with product sales, to indemnify
any person or entity for or against any infringement,
misappropriation or other conflict with respect to such
item.
(e) Schedule 5.15 identifies each item of Intellectual
Property used in the operation of the Business at any time
during the period covered by the Financial Statements that is
owned by a party other than the Seller or such Asset Seller or
Foreign Company. The Seller has supplied the Buyer with correct
and complete copies of all licenses, sublicenses or other
agreements (as amended to date) pursuant to which the Seller or
any Asset Seller or Foreign Company uses such Intellectual
Property, all of which are listed on Schedule 5.15. Except as
set forth in Schedule 5.15, with respect to each such item of
Intellectual Property:
(i) the license, sublicense or other agreement,
covering such item is legal, valid, binding, enforceable and
in full force and effect with respect to the Seller, each
Asset Seller and each Foreign Company which is a party
thereto and, to the Seller's Knowledge, with respect to
every other party thereto;
(ii) except as set forth in Schedule 2.8, such
license, sublicense or other agreement to which an Asset
Seller is a party is assignable by the Asset Seller to the
Buyer without the consent or approval of or any payment to
any party, all such licenses, sublicenses and other
agreements (whether an Asset Seller or a Foreign Company is
a party thereto) will continue to be legal, valid, binding,
enforceable and in full force and effect immediately
following the Closing in accordance with the terms thereof
as in effect immediately prior to the Closing, and the
consummation of the transactions contemplated herein will
not conflict with, result in a violation or breach of or
constitute a default under (or would result in a violation,
breach or default with the giving of notice or the passage
of time or both) any such license, sublicense or other
agreement;
38<PAGE>
(iii) except as set forth in Schedule 5.15, neither the
Seller, any Asset Seller nor any Foreign Company nor, to
the Seller's Knowledge, any other party is in breach or
default under any such license, sublicense or other
agreement, and no event has occurred which, with notice
and/or lapse of time, would constitute such a breach or
default or permit termination, modification or acceleration
thereunder;
(iv) to the Seller's Knowledge, the underlying item of
Intellectual Property is not subject to any outstanding
judgment, order, decree, stipulation or injunction; and
(v) neither the Seller, any Asset Seller nor any
Foreign Company has agreed, except in the Ordinary Course
of Business in conjunction with product sales, to indemnify
any person or entity for or against any interference,
infringement, misappropriation or other conflict with
respect to such item.
5.16 Insurance Policies.
(a) Schedule 5.16 sets forth a list (including the name of
the insurer, the name of the policyholder, the name of each
insured, the policy number and periods of coverage, the scope of
coverage and a description of any retroactive premium adjustments
or other loss-sharing arrangements) of all material policies of
fire, theft, casualty, liability, burglary, fidelity, workers
compensation, business interruption, environmental, product
liability, automobile and other forms of insurance under which
the Seller, any Share Seller, any Asset Seller or any Foreign
Company with respect to the Business has been a party, a named
insured or otherwise the beneficiary of coverage at any time since
May 24, 1990. Except as set forth in Schedule 5.16, neither the
Seller, any Share Seller, any Asset Seller nor any Foreign
Company has, with respect to the Business, received any notice
from the insurer under any such policy disclaiming coverage,
reserving rights with respect to a particular claim or such policy
in general, or cancelling or materially amending any such policy.
(b) All premiums due and payable for such insurance
policies have been duly paid, and such policies or extensions or
renewals thereof in such amounts will be outstanding and duly in
full force without interruption until the Closing Date.
5.17 Contracts. Schedule 5.17 contains a list of the following
contracts, understandings, commitments and agreements (written or
oral) relating to the Business:
39<PAGE>
(a) all contracts, leases, understandings or commitments,
whether in the Ordinary Course of Business or not: (i) involving
a present or future obligation to purchase, lease or deliver goods
or services of an amount or value in excess of $250,000 each; or
(ii) which limit or restrict the ability of the Business to
compete anywhere in the world; or (iii) which establish a
partnership or joint venture;
(b) all bonus, incentive or deferred compensation
arrangements relating to the Business, all profit sharing,
pension, multi-employer pension, vacation, group insurance or
employee welfare plans or other similar plans or fringe benefits;
(c) all collective bargaining agreements or other
contracts or commitments to or with any labor union, employee
representative or group of employees;
(d) each employment contract, and each other contract,
agreement or commitment to or with individual employees, agents,
representatives or consultants for a remuneration which exceeds
or will exceed in accordance with its terms $50,000 per annum or
$100,000 during its duration;
(e) any arrangement under which any Foreign Company,
Domestic Business or Foreign Division has created, incurred,
assumed or guaranteed indebtedness (including capitalized lease
obligations) involving more than $100,000;
(f) each sales representative, distributorship or other
agreement providing for the distribution or marketing of products
(i) under which revenue to the Business during its fiscal year
ended September 30, 1993 exceeded $100,000 or (ii) which is not
terminable by the constituent of the Business which is a party
thereto without penalty or breach upon no more than 60 days'
prior notice to the other party thereto; and
(g) any other arrangement under which the consequences of a
default or termination would have a material adverse effect on
the business, assets, properties, financial condition or results
of operations of any Principal Business Unit, or which gives or
could give any other party thereto the right to cause the
transactions contemplated by this Agreement to be rescinded
following consummation, or which involves more than $250,000 or
which was entered into other than in the Ordinary Course of
Business (with each agreement, contract or commitment between any
Foreign Division, Domestic Business or Foreign Company and any
Governmental Body separately identified).
40<PAGE>
The Seller has delivered to the Buyer a correct and complete copy
of each written arrangement (as amended to date) listed in Schedule
5.17. With respect to each written arrangement so listed: (i) the
written arrangement is legal, valid, binding and enforceable and in
full force and effect with respect to the Seller, each Asset Seller
and each Foreign Company which is a party thereto and, to the
Seller's Knowledge, with respect to every other party thereto; (ii)
each written arrangement to which an Asset Seller is a party is
assignable by the Asset Seller to the Buyer without the consent or
approval of or any payment to any party, all such written
arrangements (whether an Asset Seller or a Foreign Company is party)
will continue to be legal, valid, binding and enforceable and in full
force and effect immediately following the Closing in accordance with
the terms thereof as in effect immediately prior to the Closing
(except as set forth in Schedule 2.8), and the consummation of the
transactions contemplated herein will not conflict with, result in a
violation or breach of or constitute a default under (or would result
in a violation, breach or default with the giving of notice or the
passage of time or both) any such written arrangement; and (iii)
neither the Seller, any Asset Seller nor any Foreign Company nor, to
the Seller's Knowledge, any other party is in breach or default, and
no event has occurred which, with notice and/or lapse of time, would
constitute such a breach or default or permit termination,
modification or acceleration, under the written arrangement. Neither
the Seller, any Asset Seller nor any Foreign Company is a party to
any oral contract, agreement or other arrangement which, if reduced to
written form, would be required to be listed in Schedule 5.17 under
the terms of this Section 5.17.
5.18 Inventory. The value of the inventory of the Business as
stated on the Balance Sheet reflects the lower of cost or market for
such inventory as applied in accordance with GAAP. All inventory of
the Business reflected on the Balance Sheet consists of a quality and
quantity usable and saleable in the Ordinary Course of Business,
except for obsolete items and items of below-standard quality, all of
which have been written-off or written-down to net realizable value on
the Balance Sheet. All inventory of the Business purchased since the
Balance Sheet Date consists of a quality and quantity usable and
saleable in the Ordinary Course of Business. With respect to
inventory on order to be purchased by any Asset Sellers or Foreign
Companies with respect to the Business and in the hands of suppliers
for which the Business is committed as of the date hereof or the
Closing Date, such inventory is expected to be usable in the Ordinary
Course of Business as presently being conducted.
5.19 Litigation. Schedule 5.19 describes all suits, actions,
proceedings, investigations, claims, complaints and accusations
pending or, to the Seller's Knowledge, threatened against the
41<PAGE>
Business, the Assets or the Shares, or, to the Seller's Knowledge,
any basis for any of the foregoing, and to which the Seller, any
Asset Seller, Share Seller or Foreign Company is or would be a party,
in any court or before any industrial tribunal or arbitration panel of
any kind or before or by any federal, provincial, state, local,
foreign, regulatory or other government, governmental agency,
department, commission, board, bureau, instrumentality, authority or
body ("Governmental Body"). None of the matters described on Schedule
5.19 is reasonably expected to have a material adverse effect on the
business, assets, properties financial condition or results of
operations of the affected Principal Business Unit. There is no
outstanding order, writ, injunction, decree, judgment or award by any
court, arbitration panel, industrial tribunal or Governmental Body
against or affecting the Business, the Assets or the Shares.
5.20 Compliance with Law. Except as set forth in Schedule 5.20
or in the other Schedules to this Agreement: (a) the Seller, each
Share Seller, each Asset Seller and each Foreign Company has, in all
material respects, complied and is in compliance in all material
respects with all U.S. and foreign laws (including without limitation
the U.S. Foreign Corrupt Practices Act and the U.S. Occupational
Safety and Health Act and regulations thereunder), rules, decrees,
regulations, ordinances and orders ("Laws and Regulations") which
affect or relate to this Agreement, the transactions contemplated
hereby or the conduct of the Business, the Assets or the Shares; (b)
the Seller, each Share Seller, each Asset Seller and each Foreign
Company has filed with the proper authorities all material statements
and reports required by all applicable Laws and Regulations relating
to the Business, the Assets or the Shares; and (c) neither the Seller,
any Share Seller, any Asset Seller nor any Foreign Company has
received notice of any violation of any material Laws and Regulations
relating to the Business, the Assets or the Shares.
5.21 Absence of Subsequent Actions. Except as set forth in
Schedule 5.21, since the Balance Sheet Date, no Asset Seller, Share
Seller or Foreign Company has with respect to the Business (and, in
the case of clause (xvii) below, there has not been since the Balance
Sheet Date):
(a) incurred any liability or the basis therefor, including
without limitation any liability for or in respect of borrowed
money, in excess of $50,000 in the aggregate, except current
liabilities incurred, and liabilities under contracts entered
into, in the Ordinary Course of Business;
(b) discharged or satisfied any claim with respect to
borrowed money, or paid any obligation or liability (fixed or
contingent) for money borrowed other than current liabilities
shown on the Balance Sheet and current liabilities incurred since
the Balance Sheet Date in the Ordinary Course of Business;
42<PAGE>
(c) purchased any shares of capital stock or other
securities;
(d) changed its fiscal year end from September 30;
(e) mortgaged, pledged or subjected to any material claim
any portion of its assets, tangible or intangible, other than
Permitted Encumbrances;
(f) made any material additions to or sold, assigned,
transferred or otherwise disposed of any of its tangible assets
or canceled any debts or claims, in whole or in part, except in
each case in the Ordinary Course of Business or as contemplated by
Section 2.9;
(g) sold, assigned, licensed, sublicensed or transferred any
Intellectual Property, except for licenses of Intellectual
Property in the Ordinary Course of Business in conjunction with
product sales;
(h) made any single capital expenditure or commitment
therefor in excess of $100,000 or aggregate capital expenditures
in excess of $400,000;
(i) suffered any non-operating loss in excess of $100,000;
(j) made any change in compensation of any director or
executive officer (or employee of similar station) except for
increases which are both (i) in the Ordinary Course of Business
and (ii) in the aggregate, not at an annual rate in excess of 5%
of the aggregate annual rate of compensation paid to such persons
as of the Balance Sheet Date;
(k) made or agreed to make any charitable contribution or
pledge therefor in excess of $50,000 in the aggregate, or incurred
any other non-business expense;
(l) changed its credit policy as to sale of inventories or
collection of receivables;
(m) decreased in any material respect expenditures with
respect to promotion and advertising or maintenance and repairs;
(n) entered into any joint venture, partnership or similar
arrangement;
(o) amended, modified or terminated any contract,
understanding, commitment or agreement referred to in Schedule
5.17;
43<PAGE>
(p) authorized or issued any recall notice for any of its
products or initiated any safety inquiry or investigation;
(q) received notice of any litigation, any warranty claim
(other than in the Ordinary Course of Business) or any products
liability claim related to the Business;
(r) any material reduction in the rate of, or gross margins
associated with, firm bookings or orders for the products and
services of the Business, or any material deterioration in the
backlog level of the Business;
(s) taken any of the other actions set forth in Section
7.1(a);
(t) entered into any other material transaction (except for
the transactions contemplated by this Agreement) other than in
the Ordinary Course of Business; or
(u) agreed to do any of the things listed in clauses (a)
through (t) of this Section 5.21.
5.22 No Material Adverse Chang_
e. Since the Balance Sheet Date,
there has not been any material adverse change in the business,
assets, properties, financial condition or results of operations of
any Principal Business Unit, other than as a result of factors
affecting the economy generally or affecting the industry in which
any Principal Business Unit operates generally.
5.23 Labor Matters.
(a) Schedule 5.23 contains a list of all employees of the
Business whose current annual rate of compensation (including for
this purpose any bonus expected to be earned for the current
year) exceeds $80,000. To the Seller's Knowledge, each such
employee of the Business has entered into a confidentiality and
assignment of inventions agreement with the Seller or the
applicable Asset Seller, Foreign Division, Domestic Business or
Foreign Company. To the Seller's Knowledge, no key employee or
group of employees of the Business has any plans to terminate
employment with the Seller or any Foreign Division, Domestic
Business or Foreign Company (other than for the purpose of
accepting employment with the Buyer following the Closing).
Except as set forth in Schedule 5.23, neither the Seller, any
Share Seller, any Asset Seller nor any Foreign Company is a party
to or bound by any collective bargaining agreement or national
labor union agreement, nor has any of them experienced any
strikes, material grievances, material claims of unfair labor
practices or other material collective bargaining disputes, with
respect to the Business. There is no organizational effort
presently being made or, to the Seller's Knowledge, threatened by
44<PAGE>
or on behalf of any labor union with respect to any employees of
the Business.
(b) There are not in existence and, to the Seller's
Knowledge, there are not threatened any (i) work stoppages or
strikes involving employees of the Business, (ii) material
grievance, arbitration proceedings or proceedings before any
industrial tribunal arising out of collective bargaining
agreements, national labor union agreements or otherwise covering
employees of the Business, (iii) material unfair labor practice
complaints against any of the Foreign Companies, Asset Sellers,
Foreign Divisions or Domestic Businesses or (iv) organizational
drive.
(c) The Seller, each Share Seller and each Asset Seller
with respect to the Business and each Foreign Company is in
compliance, in all material respects, with all federal, state,
foreign and municipal laws respecting employment and employment
practices, terms and conditions of employment and wages and hours,
and is not engaged in any unfair labor practice, and there are no
arrears in the payment of wages, social security taxes or
national insurance contributions.
(d) Except as otherwise specifically provided in Section
7.7, neither the execution and delivery by the Seller of this
Agreement or any agreement, instrument or document contemplated
hereby, the consummation of the transactions contemplated herein
or therein by the Seller, any Share Seller, any Asset Seller or
any Foreign Company nor compliance by the Seller, any Share
Seller, any Asset Seller or any Foreign Company with any of the
provisions hereof or thereof will subject the Buyer, any Foreign
Company or any Assets to liability to any employee of the
Business for severance or other payments or compensation of any
nature whatsoever, including any increase in benefits.
5.24 Domestic Employee Benefit Plans.
(a) Schedule 5.24 lists (i) all employee benefit plans (as
defined in Section 3(3) of ERISA) and all written or oral plans,
agreements or arrangements relating to the Business and involving
direct or indirect compensation, including without limitation
insurance coverage, disability benefits, bonus, deferred
compensation, incentive compensation, severance or termination
pay, post-retirement compensation, change in control
compensation, death benefit, stock purchase, phantom stock, stock
appreciation and stock option plans or arrangements, and (ii) each
other employee benefit plan, agreement or arrangement which
obligates or may reasonably be expected to obligate the Business
to pay more than $100,000 annually, maintained or contributed to
by or on behalf of the Seller, the Asset Sellers, the Share
Sellers or the Foreign Companies applicable to employees of the
45<PAGE>
Business employed in the U.S. (the "Plans"). Each of the Plans
which is an "employee pension benefit plan" as such term is
defined in Section 3(2) of ERISA (collectively, the "Retirement
Plans") and any corresponding trust intended to qualify under
Sections 401(a) and 501(a) of the Code do so qualify. The IRS has
issued a favorable determination letter with respect to such
qualification of each Retirement Plan, no such determination
letter has been revoked and no such revocation has been
threatened, and nothing has occurred since the date of each such
most recent determination letter that could reasonably be
expected to cause the relevant Retirement Plan or trust to lose
such qualification or exemption. Each of the Plans has been
administered, in all material respects, in compliance with its
terms and the requirements of all applicable Laws and
Regulations, including without limitation ERISA and the Code, and
all required contributions to each Plan have been made. The
Seller has heretofore delivered to the Buyer true and complete
copies of all of the written Plans and written summaries of the
oral Plans and, where applicable, related trusts, including all
amendments, as well as, with respect to each Plan required to file
such report and description, the most recent report on Form 5500
and summary plan description, and the most recent IRS
determination letter regarding each of the Retirement Plans.
(b) With respect to each Retirement Plan, neither the
Seller, any Asset Seller, any Share Seller, any Foreign Company,
any ERISA Affiliate nor, to the knowledge of the Seller, any
trustee or administrator of any Retirement Plan, has engaged in a
"prohibited transaction", as defined in Section 4975 of the Code,
or a transaction prohibited by Section 406 of ERISA, that could
give rise to any material tax or penalty under such Section 4975.
(c) Except as described in Schedule 5.24, there are no
inquiries or investigations by the IRS, the U.S. Department of
Labor or the Pension Benefit Guaranty Corporation, no termination
proceedings and no actions, suits or claims (other than claims
for benefits) pending or, to the Seller's Knowledge, threatened
against any Plan (or the Seller or any Foreign Company, Share
Seller or Asset Seller with respect thereto) or the assets
thereof.
(d) Neither the Seller, any Asset Seller, any Share
Seller, any Foreign Company nor any ERISA Affiliate has ever
maintained an employee benefit plan subject to Section 412 of the
Code or Title IV of ERISA which would subject any Foreign Company
or the Assets to any liability resulting from an accumulated
funding deficiency (as defined for purposes of Section 412 of the
Code) or termination respecting such employee benefit plan.
46<PAGE>
(e) Neither the Seller, any Asset Seller, any Share
Seller, any Foreign Company nor any ERISA Affiliate contributes
to or has an obligation to contribute to, and has not at any time
within six years prior to the Closing Date contributed to or had
an obligation to contribute to, a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA. No complete withdrawal or
partial withdrawal (as defined for purposes of Sections 4203 and
4205 of ERISA, respectively) has occurred with respect to a
multiemployer plan to which any of the Seller, any Share Seller,
any Asset Seller, any Foreign Company or any ERISA Affiliate was
ever obligated to contribute which would subject any Foreign
Company or the Assets to liability from such complete withdrawal
or partial withdrawal.
(f) Except as set forth in Schedule 5.24, there are no
unfunded obligations under any Plan providing benefits after
termination of employment to any employee or former employee of
the Business (or to any beneficiary of any such employee or
former employee), including but not limited to retiree health
coverage and deferred compensation, but excluding continuation of
health coverage required to be continued under Section 4980B of
the Code and insurance conversion privileges under state law.
(g) Except as set forth in Schedule 5.24, no act or
omission has occurred and no condition exists with respect to any
employee benefit plan maintained by the Seller, any Asset Seller,
any Share Seller, any Foreign Company or any ERISA Affiliate that
would subject any Foreign Company or the Assets to any material
fine, penalty, tax or liability of any kind imposed under ERISA or
the Code.
(h) Except as set forth in Schedule 5.24, no Plan, plan
documentation or agreement, summary plan description or other
written communication distributed generally to employees of the
Business by its terms prohibits the amendment or termination of
any such Plan.
(i) Schedule 5.24 discloses each: (i) agreement with any
director, executive officer or other key employee of the Business
(A) the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction
involving the Business of the nature of any of the transactions
contemplated by this Agreement, (B) providing any term of
employment or compensation guarantee or (C) providing severance
benefits or other benefits after the termination of employment of
such director, executive officer or key employee; (ii) agreement,
plan or arrangement under which any person may receive payments
from the Seller or any Share Seller, Asset Seller or Foreign
Company that may be subject to the tax imposed by Section 4999 of
47<PAGE>
the Code or included in the determination of such person's
"parachute payment" under Section 280G of the Code; and (iii)
agreement or plan binding the Seller or any Share Seller, Asset
Seller or Foreign Company, including without limitation any stock
option plan, stock appreciation right plan, restricted stock plan,
stock purchase plan, severance benefit plan or employee benefit
plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by
this Agreement.
5.25 Foreign Employee Benefit Plans. Schedule 5.25 lists (i)
each non-governmental retirement plan maintained or contributed to by
or on behalf of the Seller, the Asset Sellers, the Share Sellers or
the Foreign Companies applicable to employees of the Business located
outside of the U.S. (a "Foreign Retirement Plan") and (ii) each
non-governmental non-industry welfare benefit plan maintained or
contributed to by or on behalf of the Seller, the Asset Sellers, the
Share Sellers or the Foreign Companies applicable to employees of the
Business located outside of the U.S. and which, in the case of clause
(ii), obligates or may reasonably be expected to obligate the
Business to pay more than $100,000 annually (a "Foreign Welfare
Plan"). Except as set forth in Schedule 5.25, each such Foreign
Retirement Plan and Foreign Welfare Plan (collectively, the "Foreign
Plans") has been administered, in all material respects, in
compliance with its terms and the requirements of all applicable Laws
and Regulations, and all required contributions to each Foreign Plan
have been made. The Seller has heretofore delivered to the Buyer
true and complete copies of all of the written Foreign Plans and
written summaries of the oral Foreign Plans and, where applicable,
related trusts, including all amendments. There are no inquiries or
investigations by any foreign Governmental Body, no termination
proceedings and no actions, suits or claims (other than claims for
benefits) pending or, to the Seller's Knowledge, threatened against
any Foreign Plan (or the Seller or any Foreign Company, Share Seller
or Asset Seller with respect thereto) or the assets thereof. Except
as set forth in Schedule 5.25, there are no unfunded obligations
under any Foreign Plan providing benefits after termination of
employment to any employee or former employee of the Business (or to
any beneficiary of any such employee or former employee), including
but not limited to retiree health coverage and deferred compensation,
but excluding insurance conversion privileges under applicable
foreign law. No Foreign Plan, plan documentation or agreement,
summary plan description or other written communication distributed
generally to employees of the Business by its terms prohibits the
amendment or termination of any such Foreign Plan. All reports, forms
and other documents required to be filed or advisable to be filed
48<PAGE>
with any governmental entity with respect to each Foreign Plan have
been timely filed and are accurate.
5.26 Indebtedness and Guaranties. Schedule 5.26 sets forth a
true and complete list, including the names of the parties thereto,
of all material debt instruments, loan agreements, indentures,
guaranties or other written obligations which relate to (i)
indebtedness for borrowed money, (ii) money loaned to others or (iii)
the performance of any obligation relating to the Business, provided
that the Seller shall not be required to list any such obligations
which are general corporate obligations of the Seller, which are not
secured by any of the Assets, the assets of the Foreign Companies or
the Shares and which do not constitute an Assumed Liability. All of
the aforesaid items were entered into in the Ordinary Course of
Business, are valid and binding, in full force and effect and are
enforceable in accordance with their respective terms; and there
exists no breach or default, or any event which with notice or lapse
of time or both, would constitute a breach or default by any party
thereto.
5.27 Product Warranty. The standard terms and conditions of
sale or lease of each Foreign Division, Domestic Business and Foreign
Company are attached to Schedule 5.27, although the Buyer
acknowledges that such terms are sometimes negotiated on a case by
case basis. Schedule 5.27 sets forth the aggregate expenses incurred
by the Asset Sellers and Foreign Companies in fulfilling their
obligations under their guaranty, warranty, right of return and
indemnity provisions during the three fiscal years preceding the
Closing and, to the Seller's Knowledge, there is no reason why such
expenses should materially increase as a percentage of sales in the
future.
5.28 Environmental Matters.
(a) Except as set forth in Schedule 5.28, the Seller, each
Share Seller, each Asset Seller and each Foreign Company has
complied in all material respects with all Environmental Laws
relating to the Business. Except as set forth in Schedule 5.28,
there is no pending or, to the Seller's Knowledge, threatened
civil or criminal litigation, written notice of violation, formal
administrative proceeding or investigation, inquiry or
information request by any Governmental Body relating to any
Environmental Law involving or relating to the Business. For
purposes of this Agreement, "Environmental Law" means any
federal, state, foreign or local law, statute, rule or regulation
or the common law relating to the environment, including without
limitation any statute, regulation or order pertaining to (i)
treatment, storage, disposal, generation or transportation of
hazardous substances or solid or hazardous waste; (ii) air, water
and noise pollution; (iii) groundwater and soil contamination;
(iv) the release or threatened release into the environment of
49<PAGE>
hazardous substances, or solid or hazardous waste, including
without limitation emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals; (v)
the protection of wildlife, marine sanctuaries and wetlands,
including without limitation all endangered and threatened
species; (vi) above ground or underground storage tanks, vessels
and containers; (vii) abandoned, disposed or discarded barrels,
tanks, vessels, containers and other closed receptacles; and
(viii) manufacture, processing, use, distribution, treatment,
storage, disposal, transportation or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous
substances or oil or petroleum products or solid or hazardous
waste. As used herein, the terms "release" and "environment"
shall have the meaning set forth in the federal Comprehensive
Environmental Compensation, Liability and Response Act of 1980
("CERCLA").
(b) Except as set forth in Schedule 5.28, there have been
no releases in a reportable quantity of any Materials of
Environmental Concern into the environment at any parcel of real
property or any facility (i) currently owned or operated by the
Seller, any Share Seller or any Asset Seller relating to the
Business, (ii) currently owned or operated by any Foreign
Company, (iii) formerly owned, operated or controlled by the
Seller, any Share Seller or any Asset Seller relating to the
Business during the period of its ownership, operation or control
or (iv) formerly owned, operated or controlled by any Foreign
Company during the period of its ownership, operation or control.
With respect to any such releases in a reportable quantity of
Materials of Environmental Concern, the Seller, each Share
Seller, each Asset Seller and each Foreign Company has given all
required notices to Governmental Bodies (copies of which have
been provided to the Buyer). Except as set forth in Schedule
5.28, to the Seller's Knowledge there have been no releases of
Materials of Environmental Concern at parcels of real property or
facilities other than those owned, operated or controlled by the
Seller, any Share Seller or any Asset Seller relating to the
Business or by any Foreign Company that could affect the
Business. For purposes of this Agreement, "Materials of
Environmental Concern" means any chemicals, pollutants or
contaminants, hazardous substances (as such term is defined under
CERCLA), solid wastes and hazardous wastes (as such terms are
defined under the federal Resources Conservation and Recovery
Act), radioactive materials, toxic materials, oil or petroleum
and petroleum products.
(c) To the Seller's Knowledge, set forth in Schedule 5.28
is a list of all environmental reports, investigations and audits
relating to premises (i) currently owned or operated by the
Seller, any Share Seller or any Asset Seller relating to the
Business or (ii) currently owned or operated by any Foreign
50<PAGE>
Company, in each of the foregoing cases whether conducted by or
on behalf of the Seller, any Share Seller, Asset Seller, any
Foreign Company or a third party, and whether done at the
initiative of the Seller, any Share Seller, any Asset Seller or
any Foreign Company or directed by a Governmental Body or other
third party. Complete and accurate copies of each such report,
or the results of each such report, investigation or audit, have
been provided to the Buyer (except that only summaries of the
results of statistical information resulting from physical
monitoring or testing have been provided to the Buyer).
(d) Set forth in Schedule 5.28 is a list of all of the
solid and hazardous waste transporters and treatment, storage and
disposal facilities that have been utilized by the Seller, any
Share Seller or any Asset Seller relating to the Business since
May 24, 1990 or by any Foreign Company since May 24, 1990 or, to
the Seller's Knowledge, at any time prior to May 24, 1990.
Neither the Seller, any Share Seller, any Asset Seller nor any
Foreign Company has received written notice of any material
environmental liability of any such transporter or facility.
5.29 Permits. Schedule 5.29 sets forth a list of all Permits
(including without limitation Permits issued or required under
Environmental Laws and Permits relating to the occupancy or use of
owned or leased real property) issued to or held by the Seller, any
Share Seller, any Asset Seller or any Foreign Company relating to the
Business. Such listed Permits are the only Permits that are required
for the conduct of the business of each Principal Business Unit.
Each such Permit is in full force and effect and no suspension or
cancellation of such Permit is threatened and there is no basis for
believing that such Permit will not be renewable upon expiration.
Except as set forth in Schedule 5.29, each such Permit held by an
Asset Seller is assignable by the Asset Seller to the Buyer without
the consent or approval of or any payment to any party, all such
Permits (whether held by an Asset Seller or Foreign Company) will
continue to be in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect immediately
prior to the Closing, and the consummation of the transactions
contemplated herein will not conflict with, result in a violation or
breach of or constitute a default under (or would result in a
violation, breach or default with the giving of notice or the passage
of time or both) any such Permit.
5.30 Certain Business Relationships. No affiliate of the Seller
or of any Share Seller or Asset Seller (a) owns any property or
right, tangible or intangible, which is used in the Business, (b) has
any claim or cause of action against the Assets, any Foreign Company
or the assets of any Foreign Company, or (c) except in the Ordinary
Course of Business in conjunction with product sales, owes any money
51<PAGE>
to any Foreign Company. Schedule 5.30 describes all contracts,
understandings, commitments and agreements (written or oral) among or
between the Seller, any Share Seller, any Asset Seller and/or any
Foreign Company relating to the Business.
5.31 Books and Records. The books, records, accounts, ledgers
and files with respect to the Business of the Seller and each Asset
Seller and Foreign Company are accurate and complete in all material
respects and have been maintained in accordance with good business
and bookkeeping practices in all material respects. The books and
records of each Foreign Division, Domestic Business and Foreign
Company, including without limitation its books of account, stock
certificate books, stock ledgers and/or share registers, are complete
and correct in all material respects and accurately reflect in all
material respects the conduct of the business and affairs of such
Foreign Division, Domestic Business and Foreign Company. The minute
books and other similar records of each Foreign Company contain true
and complete records of all actions taken at any meetings of such
Foreign Company's stockholders, Board of Directors, Managing Board,
Supervisory Board or any committee thereof and of all written
consents executed in lieu of the holding of any such meeting.
5.32 Customers and Suppliers. No unfilled customer orders or
commitments obligating any Foreign Division, Domestic Business or
Foreign Company to process, manufacture or deliver products or
perform services, which orders or commitments are material,
individually or in the aggregate, to any Principal Business Unit,
will result in a loss to such Foreign Division, Domestic Business or
Foreign Company upon completion of performance. To the Seller's
Knowledge, no purchase orders or commitments of any Foreign Division,
Domestic Business or Foreign Company, which orders or commitments are
material, individually or in the aggregate, to any Principal Business
Unit, are in excess of normal requirements, nor are prices provided
therein in excess of current market prices for the products or
services to be provided thereunder. No material supplier of any
Foreign Division, Domestic Business or Foreign Company has indicated
within the past year that it will stop, or decrease the rate of,
supplying materials, products, or services to such Foreign Division,
Domestic Business or Foreign Company and no material customer of any
Foreign Division, Domestic Business or Foreign Company has indicated
within the past year that it will stop, or decrease the rate of,
buying materials, products or services from such Foreign Division,
Domestic Business or Foreign Company. Schedule 5.32 sets forth a
list of (a) each customer that accounted for more than 2% of the
combined revenues of the Business during the last full fiscal year
and the amount of revenues accounted for by such customer during each
such period and (b) each supplier that is the sole supplier of any
significant product or component to any Foreign Division, Domestic
Business or Foreign Company. Except as set forth on Schedule 5.32,
52<PAGE>
there are no suppliers to any Foreign Division, Domestic Business or
Foreign Company of significant goods or services with respect to
which practical alternative sources of supply, or comparable
products, are not available on comparable terms and conditions.
5.33 Government Contracts. No Foreign Division, Domestic
Business or Foreign Company has been suspended or debarred from
bidding on contracts or subcontracts with any Governmental Body; no
such suspension or debarment has been initiated or, to the Seller's
Knowledge, threatened; and the consummation of the transactions
contemplated by this Agreement will not result in any such suspension
or debarment of any Foreign Division, Domestic Business or Foreign
Company (assuming that no such suspension or debarment will result
solely from the identity of the Buyer). Except as set forth on
Schedule 5.33, no Foreign Division, Domestic Business or Foreign
Company has been audited or investigated or is now being audited or,
to the Seller's Knowledge, investigated by the U.S. Government
Accounting Office, the U.S. Department of Defense or any of its
agencies, the Defense Contract Audit Agency, the U.S. Department of
Justice, the Inspector General of any U.S. Governmental Body, any
similar agencies or instrumentalities of any foreign Governmental
Body, or any prime contractor with a Governmental Body nor, to the
Seller's Knowledge, has any such audit or investigation been
threatened. To the Seller's Knowledge, there is no valid basis for
(a) the suspension or debarment of any Foreign Division, Domestic
Business or Foreign Company from bidding on contracts or subcontracts
with any Governmental Body or (b) any claim pursuant to an audit or
investigation by any of the entities named in the foregoing sentence.
Except as set forth on Schedule 5.33, no Foreign Division, Domestic
Business or Foreign Company has any agreements, contracts or
commitments which require it to obtain or maintain a security
clearance with any Governmental Body.
5.34 Recalls. To the Seller's Knowledge, there is no basis for
the recall, withdrawal or suspension of any approval by any
Governmental Body with respect to any product or service sold or
proposed to be sold by the Business. None of the products or
services of the Business is subject to any recall proceedings and, to
the Seller's Knowledge, no such proceedings have been threatened.
Except as set forth on Schedule 5.34, since May 24, 1990 no product
or service of the Business has ever been recalled.
5.35 Disclosure. No representation or warranty by the Seller
contained in this Agreement, and no statement contained in the
Disclosure Schedule or any other document, certificate or other
instrument delivered to or to be delivered by or on behalf of the
Seller pursuant to this Agreement, contains any untrue statement of a
material fact or omits to state any material fact necessary, in light
of the circumstances under which it was made, in order to make the
statements herein or therein not misleading. The Seller has
53<PAGE>
disclosed to the Buyer all material information relating to the
Business or the transactions contemplated by this Agreement.
6. REPRESENTATIONS AND WARRANTIES BY THE BUYER.
The Buyer represents and warrants to the Seller that the
statements contained in this Section 6 are true and correct. The
Seller shall be presumed to have relied upon the representations and
warranties contained herein, notwithstanding any investigation of the
Buyer made by the Seller prior to the Closing or the knowledge of the
officers, directors, stockholders, employees or agents of the Seller.
6.1 Organization and Good Standing. The Buyer is a corporation
duly incorporated, validly existing and in good standing under the
laws of Delaware. Each Designated Transferee of the Buyer will be a
corporation duly incorporated and validly existing and, where such
concept exists, will be in good standing under the laws of its
jurisdiction of incorporation.
6.2 Authority.
(a) The Buyer has all requisite corporate right, power,
capacity and authority to enter into, deliver and perform this
Agreement and any other agreement or document necessary to
perform this Agreement. This Agreement has been duly and
validly executed and delivered by the Buyer pursuant to all
necessary corporate action on the part of the Buyer.
(b) This Agreement is legal, valid and binding upon and
enforceable against the Buyer in accordance with its terms.
6.3 No Conflict; No Consents or Approvals.
(a) Neither the execution and delivery by the Buyer of
this Agreement, the consummation of the transactions
contemplated herein by the Buyer nor compliance by the Buyer
with any of the provisions hereof will conflict with, result in
a violation or breach of or constitute a default under (or would
result in a violation, breach or default with the giving of
notice or the passage of time or both) (i) the certificate of
incorporation or bylaws of the Buyer, (ii) any material
contract, agreement, indenture, note, license or other
instrument or obligation of the Buyer or (iii) any law, statute,
ordinance, writ, injunction, decree, rule, regulation or court
or administrative order by which the Buyer (or any of the
properties or assets of the Buyer) is subject or bound; except,
in the case of (iii), such violations, breaches or defaults
which would not have a material adverse effect on the business,
assets, properties, financial condition or results of operations
of the Buyer.
54<PAGE>
(b) Except for applicable requirements of the HSR Act, or
as disclosed in Schedule 6.3, the Buyer is not required to
submit any notice, report or other filing with any Governmental
Body in connection with the execution, delivery or performance
of this Agreement by the Buyer and the consummation of the
transactions contemplated hereby by the Buyer.
(c) No litigation, claim, administrative proceeding or
other proceeding or governmental investigation is pending or, to
the Buyer's knowledge, threatened which would prevent or delay
the execution, delivery or performance of this Agreement or any
agreement, instrument or document contemplated hereby by the
Buyer or the consummation by the Buyer of the transactions
contemplated hereby or thereby.
6.4 Investment Representation. The Buyer and each of its
Designated Transferees (if any) is acquiring the Shares for its own
account for investment and not with a view to, or for sale in
connection with, any distribution thereof, nor with any present
intention of distributing the same.
7. OTHER AGREEMENTS.
7.1 Conduct of Business.
(a) Except to the extent waived or consented to in writing
by the Buyer, and except for transfers of shares of capital
stock of entities that are not constituents of the Business to
entities that are not constituents of the Business, during the
period from the date of this Agreement to the Closing, the
Seller shall, and shall cause each Share Seller, each Asset
Seller and each Foreign Company to, conduct the Business only in
the Ordinary Course of Business and in compliance with all
applicable Laws and Regulations and, to the extent consistent
therewith, use all reasonable efforts to preserve intact the
current business organization of the Business, keep the physical
assets of the Business in good working condition, keep available
the services of the current officers and employees of the
Business and preserve the relationships of the Business with
customers, suppliers and others having business dealings with
the Business to the end that the goodwill and ongoing business
of the Business shall not be impaired. Without limiting the
generality of the foregoing, prior to the Closing, without the
written consent of the Buyer, the Seller shall not, and shall
cause each Share Seller, each Asset Seller and each Foreign
Company not to, with respect to the Business:
(i) acquire, sell, lease, encumber or dispose of
any assets or any shares or other equity interests in or
55<PAGE>
securities of any corporation, partnership, association or
other business organization or division thereof, other than
purchases and sales of assets in the Ordinary Course of
Business;
(ii) except in the Ordinary Course of Business: (A)
create, incur or assume any debt not currently outstanding
(including obligations in respect of capital leases); (B)
assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise)
for the obligations of any other person; or (C) make any
loans, advances or capital contributions to, or investments
in, any other person;
(iii) enter into, adopt or amend any Plan or Foreign
Plan or any employment or severance agreement or
arrangement of the type described in Section 5.24(i) or
increase in any manner the compensation or fringe benefits
of, or modify the employment terms of, its directors,
officers or employees, generally or individually, or pay
any benefit not required by the terms in effect on the date
hereof of any existing Plan or Foreign Plan or, except in
the Ordinary Course of Business, hire any new employees or
consultants;
(iv) change its accounting methods, principles or
practices, except insofar as may be required by a generally
applicable change in GAAP;
(v) discharge or satisfy any Encumbrance or pay any
obligation or liability other than in the Ordinary Course
of Business;
(vi) mortgage or pledge any of its property or assets
relating to the Business or subject any such assets to any
Encumbrance other than Permitted Encumbrances;
(vii) sell, assign, transfer or license any
Intellectual Property, except for licenses of Intellectual
Property in the Ordinary Course of Business in conjunction
with product sales;
(viii) enter into, amend, terminate, take or omit to
take any action that would constitute a violation of or
default under, or waive any rights under, any contract,
agreement or Permit relating to the Business if such
violation, default or waiver would have a material adverse
effect on any Principal Business Unit;
(ix) make or commit to make any capital expenditure in
excess of $100,000 per item or, when added to capital
56<PAGE>
expenditures made since the Balance Sheet Date, in excess
of $400,000 in the aggregate;
(x) make any change in the present pricing practices
for goods sold by the Business, except in the Ordinary
Course of Business;
(xi) take any action or fail to take any action
permitted by this Agreement if such action or failure to
take action would result in (i) any of the representations
and warranties of the Seller set forth in this Agreement
becoming untrue or (ii) any of the conditions to the
Closing set forth in Section 8 not being satisfied; or
(xii) agree in writing or otherwise to take any of the
foregoing actions.
(b) The Seller shall promptly notify the Buyer of any
lawsuits, claims, proceedings or investigations which are
threatened or commenced against the Business, any Share Seller,
any Asset Seller or any Foreign Company or their respective
stockholders, officers or directors between the date of this
Agreement and the Closing Date which may affect the transactions
contemplated by this Agreement or materially affect the
business, assets, properties, financial condition or results of
operations of any Principal Business Unit.
(c) The Seller agrees to remit, and agrees to cause the
Asset Sellers and the Share Sellers to remit, to the Buyer all
amounts received after the Closing Date which were intended to
be transferred as part of the Business; the Buyer agrees to
remit to the Seller all amounts received after the Closing Date
relating to matters of the Seller's or its subsidiaries'
businesses but which were not intended to be transferred with
the Business.
(d) During the period from the date of this Agreement to
the Closing, the Seller shall, and shall cause each Share
Seller, Asset Seller and Foreign Company to, (i) unless
instructed otherwise by the Buyer, accept customer orders in the
Ordinary Course of Business, and (ii) cooperate with the Buyer
in communicating with suppliers and customers to accomplish the
transfer of the Assets to and the purchase of the Business by
the Buyer on the Closing Date.
7.2 Full Access and Supplying of Information. Prior to the
Closing, the Seller shall (and shall cause each Share Seller, each
Asset Seller and each Foreign Company to) permit representatives of
the Buyer to have full access to all premises, properties, financial
and accounting records, contracts, other records and documents and
personnel of or pertaining to the Business; provided, however, that
57<PAGE>
such access shall be allowed only during normal business hours, with
reasonable advance notice and in such manner as not to interfere
unreasonably with the normal business operations of the Business.
Prior to the Closing, the Seller shall also furnish to the Buyer or
its representatives complete and accurate information as the Buyer
may request in connection with any review, investigation or
examination of the books and records, accounts, contracts,
properties, assets, operations and facilities of or relating to the
Business. In connection therewith, the Seller shall direct and
authorize its independent public accountants to make available to the
Buyer and to the independent public accountants representing the
Buyer all working papers pertaining to the examination and audit by
such accountants of the Business. Costs reasonably incurred by the
Seller to third parties at the Buyer's request arising from or due to
the Buyer's review of the Business shall be paid by the Buyer.
7.3 Filings and Authorizations.
(a) Each of the Seller and the Buyer, as promptly as
practicable after the date hereof, shall file any Notification
and Report Forms and related material that it may be required to
file with the Federal Trade Commission and the Antitrust
Division of the U.S. Department of Justice under the HSR Act,
shall use its best efforts to obtain an early termination of the
applicable waiting period and shall make any further filings or
information submissions pursuant thereto that may be necessary,
proper or advisable. Notwithstanding any other provision in
this Agreement, the Buyer shall not be obligated to respond to
formal requests for additional information or documentary
material pursuant to 16 C.F.R. 803.20 under the HSR Act except
to the extent it elects to do so in its sole discretion.
(b) Each of the Seller and the Buyer, as promptly as
practicable after the date hereof, (i) shall make, or cause to
be made, all such filings and submissions required under laws,
rules and regulations applicable to it, or to its subsidiaries
and affiliates, as may be required for it to consummate the
purchase and sale of the Assets and the Shares in accordance
with the terms of this Agreement; (ii) shall use its best
efforts to obtain, or cause to be obtained, all authorizations,
approvals, consents and waivers from all persons and
Governmental Bodies necessary to be obtained by it, or its
subsidiaries or affiliates, in order for it so to consummate
such transfer; and (iii) shall use its best efforts to take or
cause to be taken all other actions necessary, proper or
advisable in order for it to fulfill its obligations hereunder.
Notwithstanding the foregoing, the Buyer shall not be required
to sell or dispose of or hold separately (through a trust or
otherwise) any assets or businesses of the Buyer, its affiliates
58<PAGE>
or the Business. The Seller and the Buyer will coordinate and
cooperate with one another in exchanging such information and
supplying such reasonable assistance as may be reasonably
requested by each in connection with the foregoing.
(c) As promptly as practicable following the date hereof,
the Seller shall undertake and shall cause each Foreign Company,
each Asset Seller and each Share Seller to undertake all actions
and filings necessary to comply with all applicable provisions
and requirements of the Industrial Site Recovery Act, N.J.S.A.
C.13:1K-6 ("ISRA"), with respect to any Assets located in the
State of New Jersey that are subject to ISRA requirements. Such
actions and filings shall include, but are not limited to,
immediate submission of (i) a notice to the New Jersey
Department of Environmental Protection and Energy ("NJDEPE")
regarding the transfer of ownership and operations of Assets or
assets of a Foreign Company located in the State of New Jersey,
and (ii) a Remediation Agreement, including a demonstration that
a remediation funding source has been established. Such
submissions shall be made unless the Seller reasonably
demonstrates that an alternative method of compliance with
ISRA's requirements will ensure an earlier Closing Date.
Regardless of the method of ISRA compliance chosen, the Seller
shall obtain from the NJDEPE, prior to the Closing, all
consents, approvals, authorizations and waivers required by ISRA
covering the transactions contemplated by this Agreement.
Notwithstanding any other provision of this Agreement, the
Seller shall retain, at its sole cost and expense, all
responsibility for compliance with any and all ISRA obligations
required by the NJDEPE for the transfer of the Assets or assets
of any Foreign Company located in the State of New Jersey from
and after the Closing.
(d) As promptly as practicable following the date hereof,
the Seller shall file all applications with the Texas Bureau of
Radiation Control ("BRC"), in form and substance satisfactory to
the BRC, for the transfer or issuance to the Buyer of all BRC
permits necessary for TNTechnologies to continue to operate after
the Closing Date to the maximum extent allowed by the comparable
BRC permits held by or on behalf of TN Technologies on the date
hereof (the "BRC Permits"). The BRC Permits shall allow
materials covered by the BRC Permits to be stored and used in
the manufacture, calibration, demonstration, service and
distribution of products. The Seller (and each Share Seller and
Asset Seller) and the Buyer shall cooperate and consult with
each other to arrange for the transfer or issuance to the Buyer
of the BRC Permits.
7.4 Exclusivity. The Seller shall not and shall cause the Asset
Sellers, the Share Sellers, the Foreign Companies and the Seller's
59<PAGE>
other affiliates not to, and shall cause each of its officers,
directors, employees, representatives and agents not to, directly or
indirectly, (a) encourage, solicit, initiate, engage or participate
in discussions or negotiations with any person or entity (other than
the Buyer) concerning any merger, consolidation, sale of assets,
tender offer, recapitalization, accumulation of shares of stock,
proxy solicitation or other business combination involving the
Business, any Foreign Division, any Domestic Business or any Foreign
Company or any material portion thereof or (b) provide any non-public
information concerning the Business to any person or entity (other
than the Buyer). The Seller shall immediately notify the Buyer of,
and shall disclose to the Buyer all details of, any inquiries,
discussions or negotiations of the nature described in this Section
7.4.
7.5 Bulk Sales. It may not be practicable to comply or attempt
to comply with the procedures of the bulk sales or bulk transfers
acts or laws of any or all of the states or other jurisdictions in
which the Assets are situated (or of any state or jurisdiction) which
may be asserted to be applicable to the transactions contemplated
hereby. The Buyer and the Seller therefore waive any requirements
for compliance with any or all of such laws.
7.6 Employment of Business Work Force. Prior to the Closing,
but effective as of and conditioned on the occurrence of the Closing,
the Buyer shall make an offer of employment at will to each employee
of the Asset Sellers employed in the Business who on the Closing Date
is actively at work or absent due to short-term (six months or less)
sick leave, maternity leave, jury duty or similar short-term leave
and, upon acceptance by such employee, enter into an at will
employer-employee relationship with such employee. Except as
otherwise specifically required by applicable law, the Buyer shall
not have any obligation to employ or offer employment to any
employees of the Asset Sellers employed in the Business other than as
provided in the preceding sentence. The terms of said offer of the
Buyer to each such employee shall include the payment of compensation
which is substantially equivalent to the compensation being provided
to such employee immediately prior to the Closing Date; provided,
however, that the Buyer shall have complete discretion to change any
of the terms or conditions of employment, compensation or benefits at
any time after the Closing Date. The parties hereto do not intend to
create any third-party beneficiary rights respecting any employee as
a result of the provisions herein and specifically hereby negate any
such intention. The Seller and each Asset Seller hereby consent to
the hiring by the Buyer of employees of the Asset Sellers as
contemplated by this Section 7.6 and waive, with respect to the
employment of such employees, any claims or rights that the Seller or
any Asset Seller may have against the Buyer or any such employee
60<PAGE>
under any non-competition, confidentiality or employment agreement.
7.7 Employee Benefits. Contingent upon the occurrence of the
Closing:
(a) Benefits. Except as to employees of the Business to
whom the Buyer is not required to extend an offer of employment
as provided in Section 7.6, the Buyer shall cause each employee
employed in the Business by the Asset Sellers, the Share Sellers
or the Foreign Companies immediately prior to the Closing, as
described in Schedule 7.7, and who accepts employment with Buyer
pursuant to Section 7.6 or who remains employed by a Foreign
Company immediately following the Closing (a "Continuing
Employee"), to be provided with benefits, in the aggregate, on a
basis substantially consistent with the Buyer's normal
practices. Notwithstanding the foregoing, except as required by
Section 7.7(g) with respect to Pre-Closing Periods, the Buyer
expressly reserves the right to modify or terminate any benefit
plan or program at any time or from time to time.
(b) Thrift Plan. Effective as of the Closing Date, the
Seller shall cause each of the Continuing Employees to have a
fully nonforfeitable right to the Continuing Employee's account
balance under the Baker Hughes Incorporated Thrift Plan (the
"Seller's Thrift Plan"). The Buyer shall take all action
necessary and appropriate to extend coverage, effective as of
July 1, 1994, under the Thermo Electron Corporation Money Match
Plus 401(k) Plan (the "Buyer's Thrift Plan") to the Continuing
Employees having account balances under the Seller's Thrift Plan
as of the Closing Date. Such Continuing Employees shall be
credited under the Buyer's Thrift Plan, for eligibility and
vesting purposes, with the service credited under the terms of
the Seller's Thrift Plan. The Seller shall provide the Buyer
with all such information as is necessary for the Buyer to carry
out its obligations under the foregoing sentence. The Seller
shall cause to be made any matching or regular contributions
that are required under the Seller's Thrift Plan for the period
prior to the Closing Date and the Buyer shall have no
responsibility therefor. Each Continuing Employee shall be
permitted to make a lump sum withdrawal of his or her account
balance under the Seller's Thrift Plan. The Buyer shall cause
the Buyer's Thrift Plan to accept any direct rollovers with
respect to a Continuing Employee from the Seller's Thrift Plan
to the Buyer's Thrift Plan. The Buyer agrees to establish an
arrangement under which any Continuing Employee may provide for
payroll withholding for the purpose of repaying any loan made
prior to the Closing Date to such Continuing Employee by the
Seller's Thrift Plan.
61<PAGE>
(c) Foreign Retirement Plans. The following provisions
shall apply to the non-governmental Foreign Retirement Plans
respecting the Business:
(i) Pension Plans (Canada). Effective as of the
Closing Date, the Seller shall cause each of the
Continuing Employees to have a fully nonforfeitable right
to the Continuing Employee's account balance under the
Baker Hughes Canada, Inc. Employee Pension Plan and
Retirement Savings Plan (the "Seller's Canadian Plan"). As
soon as practicable after, but effective as of, the Closing
Date, the Buyer shall take all action necessary and
appropriate to extend coverage under a new or existing
pension plan, qualified under the Income Tax Act (Canada)
(the "Buyer's Canadian Plan"), to the Continuing Employees
covered under the Seller's Canadian Plan as of the Closing
Date. Such Continuing Employees shall be credited with
service, for eligibility and vesting purposes, with the
service credited under the terms of the Seller's Canadian
Plan. As soon as practicable following the Closing Date
and the establishment of the Buyer's Canadian Plan, but no
earlier than 60 days after the Closing Date, the Seller
shall cause to be transferred from the trustee of the
Seller's Canadian Plan to the trustee of the Buyer's
Canadian Plan an amount in cash or in kind (with any
in-kind transfer to be agreed upon by Seller and Buyer)
equal to the aggregate account balances of such Continuing
Employees under the Seller's Canadian Plan determined as of
the Closing Date in accordance with the methods of
valuation set forth in the Seller's Canadian Plan. If the
transfer of an account balance is not permitted under the
applicable law or under the terms of Seller's Canadian
Plan, such account balance shall remain in Seller's
Canadian Plan and the Buyer shall have no responsibility
therefor. From and after the date of permissible
transfers, and except as provided in the preceding
sentence, the Buyer shall cause the Buyer's Canadian Plan
to assume the obligations of the Seller's Canadian Plan
with respect to benefits accrued by such Continuing
Employees under the Seller's Canadian Plan, and the
Seller's Canadian Plan shall cease to be responsible
therefor.
(ii) Pension Plan (United Kingdom). Effective as of
the Closing Date, the Seller shall cause each of the
Continuing Employees to have a fully nonforfeitable right
to the Continuing Employee's account balance under the
Baker Hughes U.K. Pension Plan (the "Seller's U.K. Plan").
As soon as practicable after, but effective as of, the
Closing Date, the Buyer shall take all action necessary and
appropriate to extend coverage under a new or existing
62<PAGE>
pension plan, approved by the U.K. Inland Revenue (the
"Buyer's U.K. Plan"), to the Continuing Employees covered
under the Seller's U.K. Plan as of the Closing Date. Such
Continuing Employees shall be credited with service, for
eligibility and vesting purposes, with the service credited
under the terms of the Seller's U.K. Plan. As soon as is
practicable following the Closing Date and the
establishment of the Buyer's U.K. Plan, but no earlier than
60 days after the Closing Date, the Seller shall cause to
be transferred from the trustee of the Seller's U.K. Plan
to the trustee of the Buyer's U.K. Plan an amount in cash
or kind (with any in-kind transfer to be agreed upon by
Seller and Buyer) equal to the aggregate account balances
of such Continuing Employees under the Seller's U.K. Plan,
taking into account any existing final salary guarantees,
determined in accordance with the methods of valuation set
forth in the Actuary's Letter executed by an actuary
designated by the Buyer and an actuary designated by the
Seller in the form attached hereto as Schedule 7.7(c).
From and after the date of such transfer, the Buyer shall
cause the Buyer's U.K. Plan to assume the obligations of
the Seller's U.K. Plan with respect to benefits accrued by
the Continuing Employees under the Seller's U.K. Plan, and
the Seller's U.K. Plan shall cease to be responsible
therefor.
(iii) Superannuation Plan (Australia). Effective as of
the Closing, the Buyer shall assume sponsorship of and all
responsibilities and obligations of the constituents of the
Business relating to the Continuing Employees in Australia
under the Capita Portable Superannuation Plan.
(iv) Supplemental Annuity Plan (Italy). Effective as
of the Closing, the Buyer shall assume sponsorship of and
all responsibilities and obligations of the constituents of
the Business relating to the accounts of the Continuing
Employees in Italy under the Provident Fund managed by
Johnson & Higgins.
(v) Supplemental Pension Plan (Netherlands/Ramsey).
Effective as of the Closing, the Buyer shall assume
sponsorship of and all responsibilities and obligations
under the Individual Pension Policies taken out with
Nationale - Nederlanders by the constituents of the
Business relating to the Continuing Employees in the
Netherlands.
(vi) Supplemental Pension Plan (Netherlands/Tracor
Europa). Effective as of the Closing, the Buyer shall
assume sponsorship of and all responsibilities under the
63<PAGE>
group annuity policies maintained by the constituents of
the Business relating to the Continuing Employees in the
Netherlands.
(vii) Pension Fund (South Africa). As soon as
practicable after, but effective as of the Closing Date,
the Buyer shall take all action necessary and appropriate
to extend coverage under a new defined contribution plan,
qualified under the laws of South Africa (the "Buyer's
South Africa Plan"), to the Continuing Employees covered
under the Seller's Envirotech Pension Fund (the "Seller's
South Africa Plan"). As soon as practicable following the
Closing Date and the establishment of the Buyer's South
Africa Plan, the Seller shall cause to be transferred from
the Seller's South Africa Plan an amount in cash or in kind
(with any in-kind transfer to be agreed upon by the Seller
and the Buyer) an amount equal to the aggregate accrued
benefits under the Seller's South Africa Plan of each
Continuing Employee who consents to such a transfer. The
amount to be transferred for each Continuing Employee who
consents to such a transfer shall be determined by an
actuary designated by the Buyer and an actuary designated
by the Seller.
(viii) Supplemental Pension Plan (France). Effective as
of the Closing, the Buyer shall (a) assume sponsorship of
and all responsibilities and obligations under pension
arrangements under AGIRC and ARRCO maintained by the
constituents of the Business relating to the Continuing
Employees in France and (b) assume sponsorship of and all
responsibilities under pension arrangements under AGIRC and
ARRCO maintained by the constituents of the Business
relating to the Continuing Employees in France.
(ix) Severance Plan (Japan). Effective as of the
Closing, the Buyer shall assume sponsorship of and all
responsibilities and obligations under the Severance Pay
Scheme maintained at the date hereof by the constituents of
the Business relating to the Continuing Employees in Japan.
(x) Transition Period for Foreign Plans.
Notwithstanding the foregoing, the Seller shall make such
arrangements as may be necessary for the Continuing
Employees to remain in the Foreign Plans for such period,
as the Buyer shall elect, of up to 180 days after the
Closing Date (the "Foreign Transition Period"), and the
Buyer shall bear the cost of such coverage for the
Continuing Employees during the Foreign Transition Period
at the contribution rate for each such Foreign Plan being
64<PAGE>
paid by the Seller on the date of this Agreement, unless
such rate is changed (upward or downward) by the Buyer
after the date hereof, in which event the Buyer shall bear
the cost of such coverage for the Continuing Employees
during the Foreign Transition Period at the changed
contribution rate. Notwithstanding the preceding sentence,
if one or both of the agreements between the Buyer's
actuary and the Seller's actuary contemplated under
Sections 7.7(c)(ii) and 7.7(c)(vii) provides a mechanism
for cost determination, the provisions of such agreement or
agreements shall control.
(d) Welfare Plans.
(i) Benefits Continuation. Effective as of the
Closing, (A) the Seller shall cause each Continuing
Employee to cease to participate in each welfare benefit
plan sponsored by the Asset Sellers, the Share Sellers
and/or their affiliates (the "Seller's Welfare Plans") and
(B) the Buyer shall cause each such Continuing Employee to
be covered by the welfare benefit plans required to be
provided by the Buyer to the Continuing Employees in
accordance with Section 7.7(a) of this Agreement.
(ii) Long-Term Disability and Certain Other Benefits.
The Seller shall be liable for claims for benefits (other
than for short-term disability, workers' compensation and
medical (including vision care and prescription drugs) and
dental benefits) by employees of the Business (active or
inactive) and by terminated employees previously employed
in the Business under the Seller's Welfare Plans arising
out of occurrences prior to the Closing Date. In this
regard, but not by way of limiting the foregoing, the
Seller shall be liable for the long-term disability
benefits for those employees of the Business receiving or
eligible to receive long- term disability benefits as of the
Closing Date, including without limitation those employees
of the Business in the long-term disability elimination
period (which employees shall receive long-term disability
benefits from the Seller upon the conclusion of the
applicable elimination period); provided, however that the
Seller's obligation to provide long-term disability
benefits shall cease with respect to any such employee of
the Business who subsequently becomes employed by the
Buyer.
(iii) Short-Term Disability and Workers' Compensation
Benefits. The Seller shall be liable for claims for
short-term disability benefits and workers' compensation
benefits under the Seller's Welfare Plans by employees of
65<PAGE>
the Business (active or inactive) and by terminated
employees previously employed in the Business with respect
to payments otherwise due prior to the Closing Date. The
Buyer shall be liable for claims for short-term disability
benefits and workers' compensation benefits under the
Seller's Welfare Plans by Continuing Employees with respect
to payments otherwise due on or after the Closing Date.
(iv) Medical and Dental Benefits. The Seller shall
be liable for claims for medical (including vision care and
prescription drugs) and dental benefits incurred by
employees of the Business (active or inactive) and by
terminated employees previously employed in the Business
(and their respective covered dependents) under the
Seller's Welfare Plans with respect to services and
treatment rendered prior to the Closing Date; provided,
however, that the preceding provisions shall not alter any
deadlines for submission of claims set forth in the
Seller's Welfare Plans or increase any benefits, rights or
remedies of the Continuing Employees under the Seller's
Welfare Plans. The Buyer shall cause each of the
Continuing Employees to be granted credit under the Buyer's
medical and dental plans, for the year during which the
Closing Date occurs, with any deductibles already incurred
by such Continuing Employees for such year under the plans
of the Asset Sellers, the Share Sellers and/or their
affiliates, but only if and to the extent that the amount
of such incurred deductibles has been provided to the Buyer
within 180 days after the Closing Date, and the Buyer shall
cause there to be waived any pre-existing condition
restrictions under the Buyer's medical and dental plans to
the extent necessary to provide immediate coverage under
the Buyer's medical and dental plans. The Buyer shall make
available to the Continuing Employees (and their covered
dependents) a group health plan (or plans) having a level
of benefits such that the actual coverage of a Continuing
Employee (or any of his or her covered dependents) under
such group health plan (or plans) would, if the Continuing
Employee had made an election under Section 4980 B(f) of
the Code or Part 6 of Title I of ERISA with respect to any
group health plan maintained by the Seller, any Asset
Seller or any Share Seller, constitute an event described
in Section 4980B(f)(2)(B)(iv) of the Code and Section
602(2)(D) of ERISA. The Buyer shall have no obligation to
provide health benefits to any Continuing Employee who
declines to be covered under such group health plan (or
plans) and, if the Buyer complies with the requirements of
the preceding sentence, the Buyer shall have no further
obligation or responsibility to the Seller, any Asset
66<PAGE>
Seller, any Share Seller or any Continuing Employee under
Section 4980B of the Code or Part 6 of Title I of ERISA
with respect to the transactions contemplated by this
Agreement.
(v) Transition Period. Notwithstanding the
foregoing, the Seller shall make such arrangements as may
be necessary for the U.S. Continuing Employees to remain as
participants of the Seller's Welfare Plans for a period of
up to 90 days after the Closing Date (as the Buyer shall
elect) and the Buyer shall bear the cost of such coverage
for the U.S. Continuing Employees during such period as
follows:
(i) The Buyer shall pay the out-of-pocket cost of actual
claims for the U.S. Continuing Employees (and their
covered dependents) incurred and paid after the
Closing Date under the Seller's Group Medical Benefits
Plan and Group Dental Plan plus an administrative fee
of 7.5% of actual claims; and
(ii) The Buyer shall pay the premium cost for participation
of the U.S. Continuing Employees (and their covered
dependents) in any HMO's and in any other of the
Seller's Welfare Plans other than the Seller's Group
Medical Benefits Plan and Group Dental Plan.
(e) Retiree Medical, Dental and Life Benefits. The Seller
shall be liable for medical, dental and life insurance coverage
under the Seller's Welfare Plans after termination of employment
to employees of the Business whose employment terminated prior
to the Closing Date and to those employees of the Business who
are eligible therefor as of the Closing Date. Prior to the
Closing Date, the Seller agrees to notify all employees of the
Business that such coverage for all employees of the Business
will be terminated upon the Closing Date and that coverage for
the Continuing Employees described in the preceding sentence
will be provided by the Seller upon retirement from the Buyer
and/or its affiliates. The Buyer agrees to provide notice to
the Seller of such retirements for purposes of the preceding
sentence.
(f) Severance Arrangements. Effective as of the Closing
Date, the Buyer and/or its affiliates shall provide to the U.S.
Continuing Employees severance benefits under the Buyer's
various severance benefit plans and arrangements commensurate
with the severance benefits provided to similarly situated
employees of the Buyer under such severance benefit plans and
arrangements, and shall cause to be recognized under the Buyer's
various severance benefit plans and arrangements all service by
67<PAGE>
the Continuing Employees recognized under the Seller's severance
plans in effect on the Closing Date with respect to the
Continuing Employees as described in Schedule 7.7(f) (the
"Seller's Severance Plans").
(g) Incentive Bonus Plan. Effective as of the Closing
Date, the Buyer or the Foreign Companies shall assume the
liabilities and obligations under the Baker Hughes Incentive
Bonus Plan, consisting solely of the letter agreements, as
amended, with certain executive employees of the Business listed
on Schedule 7.7(g) (which letter agreements provide for bonuses
based solely on the regular operations of the Business through
the Closing Date and not the sale of the Business or any other
event not in the Ordinary Course of Business), to the extent of
the accruals and reserves therefor shown in the financial and
accounting records of the Business at the Closing Date (to the
extent that such accruals and reserves have been determined in a
manner consistent with the Seller's past practices in
establishing the accruals and reserves therefor set forth on the
Balance Sheet).
(h) Multiemployer Plans. The Buyer, the Foreign Companies
and/or their affiliates shall not assume any obligation or
liability imposed under Section 4201 of ERISA. The Buyer, the
Foreign Companies and/or their affiliates shall not be obligated
under any agreement described in Section 4204 of ERISA.
(i) VEBA. Any assets in the Baker Hughes Incorporated
Employees Benefit Trust ("VEBA") as of the Closing Date
attributable to the Business shall inure to the benefit of the
remaining eligible employees (other than the Continuing
Employees) benefiting under the VEBA.
(j) No Third Party Rights. Notwithstanding any other
provision of this Agreement, the parties hereto do not intend to
create any third party beneficiary rights respecting any
Employee or former employee as a result of the provisions herein
and specifically hereby negate any such intention. Without
intending to limit the generality of the preceding sentence,
nothing contained in this Agreement shall, under any
circumstances whatsoever, be construed as, expressly or
impliedly, constituting or creating any employment contract,
offer of employment, promise of continuing employment, promise
of employee benefits or other obligation of any other kind of or
by the Buyer to, or in favor of, any employees of the Business,
and the Buyer, the Foreign Companies, and/or their affiliates
expressly disclaim any and all liability to any such third party
arising out of this Agreement.
68<PAGE>
(k) Limitation on the Buyer's Liability. The Buyer shall
have no liability with respect to the following:
(i) Any claims for benefits under the Seller's
Welfare Plans specifically assumed by the Seller, the Asset
Sellers, the Share Sellers or their affiliates or for which
this Agreement provides that the Seller, the Asset Sellers,
the Share Sellers and/or their affiliates shall be liable
or would be liable if such claims were timely submitted.
(ii) The provision of medical, dental, life insurance
or other benefits under Seller's Welfare Plans to any
employee of the Business whose employment terminated prior
to the Closing Date or as a result of the transactions
contemplated by this Agreement or to any Continuing
Employee after termination of employment, except as
provided in Section 7.7(d)(iii) or as may be required under
Section 4980B of the Code and Part 6 of Title I of ERISA or
by applicable state law.
(iii) Any severance benefits arising under any of the
Plans or Foreign Plans, the Seller's Severance Plan, any
agreement to which any constituent of the Business is a
party or otherwise as a result of the transactions
contemplated by this Agreement or any bonuses based on the
sale of the Business or any other event not in the Ordinary
Course of Business.
7.8 Retention of Records and Sharing of Data.
(a) The Buyer shall and shall cause each Foreign Company,
each Foreign Division and each Domestic Business to retain for a
period of seven years after the Closing Date or longer if
required by any applicable statute of limitations the books and
records relating to the Business transferred pursuant to this
Agreement (unless the Seller requests a longer period, in which
case such books and records shall be stored by the Buyer at the
Seller's expense), and, during normal business hours, with
reasonable advance notice and in such manner as not to interfere
unreasonably with the normal business operations of the Buyer,
to (i) give the Seller and its authorized representatives
reasonable access to the books, records, offices and other
facilities and properties of the Foreign Companies, Foreign
Divisions and Domestic Businesses relating to the operation of
the Business prior to the Closing Date, (ii) permit the Seller
to make such inspections (and copies of any documents at the
Seller's expense) thereof as the Seller may reasonably request,
and (iii) furnish the Seller with such financial and operating
data and other information relating to the Seller's
responsibilities with respect to the business, operations and
69<PAGE>
properties of the Business prior to the Closing Date as the
Seller may from time to time reasonably request, including data
and information needed for financial and tax reporting and
statutory filings.
(b) The Seller shall and shall cause each Share Seller and
Asset Seller to retain for a period of seven years after the
Closing Date (or longer if required by any applicable statute of
limitations) the books and records relating to the Business that
are retained by the Seller, any Share Seller or any Asset Seller
pursuant to the terms of this Agreement (unless the Buyer
requests a longer period, in which case such books and records
shall be stored by the Seller at the Buyer's expense), and,
during normal business hours, with reasonable advance notice and
in such manner as not to interfere unreasonably with the normal
operations of the business of the Share Sellers and Asset
Sellers, to (i) give the Buyer and its authorized
representatives reasonable access to (A) such books, records,
offices and other facilities and properties and (B) the work
papers of its accountants relating to the operation of the
Business prior to the Closing Date, (ii) permit the Buyer to
make such inspections (and copies of any documents at the
Buyer's expense) thereof as the Buyer may reasonably request,
and (iii) furnish the Buyer with such financial and operating
data and other information as the Buyer may from time to time
reasonably request in order to comply with its obligations under
applicable securities, tax, environmental, employment or other
Laws and Regulations. Without limiting the generality of the
foregoing, the Seller shall make available to the Buyer such
financial information and reasonable assistance with respect to
the Business as is reasonably necessary for the Buyer to prepare
on a timely basis the financial statements required by Item 2 of
Form 8-K with respect to the transactions contemplated by this
Agreement (it being understood that the Buyer anticipates
needing to prepare two sets of financial statements, one for the
combined operations of Ramsey Technologies and Epsilon
Industrial and one for the combined operations of the Business
excluding Ramsey Technologies and Epsilon Industrial).
(c) Promptly upon request by the Buyer made at any during
the three-year period following the Closing Date, the Seller
shall authorize the release to the Buyer of all files pertaining
to the Business held by any Governmental Body.
7.9 Tax Matters. Contingent upon the occurrence of the
Closing:
70<PAGE>
(a) Liability.
(i) Except as provided in Section 4.4 hereof and
Section 7.9(a)(ii) below, the Seller shall be liable for
any and all claims, losses, liabilities, obligations,
damages, impositions, assessments, demands, judgments,
settlements, costs and expenses (including reasonable
attorneys', accountants' and experts' fees and expenses and
any applicable assessments of interest and penalties) with
respect to Taxes (other than Interim Period Operating
Taxes) attributable to the Business or for which any
Foreign Company may be liable with respect to any and all
periods, or portions thereof, ending on or before the
Closing Date ("Pre-Closing Periods"); provided, however,
that Seller shall only be liable for any such Taxes to the
extent that the aggregate amount of such Taxes exceeds the
aggregate amount of the reserves and accruals for Taxes set
forth on the Balance Sheet (other than the reserves and
accruals set forth on the Balance Sheet under the caption
"Deferred Income Taxes").
(ii) Except as provided in Section 4.4 hereof, the
Buyer shall be liable for any and all claims, losses,
liabilities, obligations, damages, impositions,
assessments, demands, judgments, settlements, costs and
expenses (including reasonable attorneys', accountants' and
experts' fees and expenses and any applicable assessments
of interest and penalties) with respect to (A) Taxes
attributable to the Business with respect to any and all
periods, or portions thereof, beginning after the Closing
Date ("Post-Closing Periods"), (B) Interim Period Operating
Taxes and (C) Taxes (other than Interim Period Operating
Taxes) attributable to the Business with respect to any and
all Pre-Closing Periods to the extent that the aggregate
amount of such Taxes is equal to or less than the aggregate
amount of the reserves and accruals for Taxes set forth on
the Balance Sheet other than under the caption "Deferred
Income Taxes".
(iii) In the case of any Tax that is attributable to a
period which includes two or more of (x) a Pre-Closing
Period exclusive of all or any portion of the Interim
Period included in such Pre-Closing Period, (y) an Interim
Period or applicable portion thereof or (z) a Post-Closing
Period, for purposes of determining the amount of such Tax
that is attributable to a Pre-Closing Period versus a
Post-Closing Period or to the Interim Period versus a
period other than the Interim Period (any of the foregoing
periods being hereinafter referred to as a "Relevant
71<PAGE>
Period"), the following rules shall apply:
(A) In the case of ad valorem Taxes imposed on
the Assets or any Domestic Asset Seller, any Foreign
Division Seller or any Foreign Company and franchise
or similar Taxes imposed on any Foreign Company
based on capital (including net worth or long-term
debt) or number of shares of stock authorized,
issued or outstanding, the portion attributable to
each Relevant Period shall be the amount of such
Taxes for the entire taxable period multiplied by a
fraction, the numerator of which is the number of
days in the Relevant Period and the denominator of
which is the number of days in the entire taxable
period.
(B) In the case of any Tax not described in
Section 7.9(a)(iii)(A) above, the portion
attributable to each Relevant Period shall be
determined on the basis of an interim closing of the
books of the Foreign Company, Foreign Division or
Domestic Business as of the end of the last day of
each Relevant Period. For purposes of this Section
7.9(a)(iii)(B), the liability for such Tax with
respect to the Relevant Period shall be the product
of (i) such Tax for the entire taxable period
multiplied by (ii) a fraction, the numerator of
which is the hypothetical Tax for such Relevant
Period (determined on the basis of such interim
closing of the books, without annualization) and the
denominator of which is the sum of such numerator
plus the aggregate amount of the hypothetical Tax
for each other Relevant Period (determined on the
basis of such interim closing of the books, without
annualization) contained in the taxable period. The
hypothetical Tax for any period shall in no case be
less than zero.
(b) Cooperation.
(i) The Buyer will grant or cause to be granted
to the Seller or the Seller's representatives reasonable
access to all of the information, books and records
relating to the Business within its possession or control
(including, without limitation, Tax work papers, Tax
Returns and correspondence with taxing authorities),
including the right to take extracts therefrom and make
copies thereof at the Seller's expense, to the extent
reasonably necessary in connection with Taxes of, or
attributable to, the Business attributable to Pre-Closing
72<PAGE>
Periods and shall furnish the cooperation of such personnel
and affiliates of the Buyer as the Seller may reasonably
request in connection therewith; provided, however, that
such access shall be allowed only during normal business
hours, with reasonable advance notice and in such manner as
not to interfere unreasonably with the normal business
operations of the Buyer. Without limiting the generality
of the preceding sentence, and with respect to any Tax
Return of the Seller, any Asset Seller, any Share Seller,
any Foreign Company or any of their respective affiliates
that includes any Pre- Closing Period of the Business, the
Buyer agrees to make available to the Seller, on a basis
consistent with the information required by the Seller to
be furnished to it by its subsidiaries and other
affiliates, all information within the Buyer's possession
or control which may be reasonably necessary to prepare any
such Tax Return and such other information relating to the
Business as the Seller shall reasonably request from time
to time. Without limiting the generality of the preceding
sentence, the Buyer agrees to prepare and deliver to the
Seller all of the Tax packages relating to the Business and
furnished by the Seller to the Buyer in connection with
the Seller's preparation of any such Tax Return that
includes a Pre-Closing Period of the Business (which Tax
packages shall be furnished to the Buyer in a manner
consistent with the Seller's past practices in furnishing
Tax packages to the Business), including without limitation
the international and domestic Tax packages for the short
period beginning on October 1, 1993 and ending on the
Closing Date, which the Buyer shall use its best efforts to
complete and deliver to the Seller no later than September
30, 1994; provided, however, that if the Seller shall have
delivered a written notice or instruction to the Buyer
specifying a later date for completion of such Tax package,
the Buyer shall use its best efforts to complete and
deliver to the Seller such Tax package no later than such
later date; provided further, however, that notwithstanding
anything contained in the foregoing provisions of this
sentence to the contrary, the Seller shall be entitled to
deliver a written notice or instruction to the Buyer
specifying a date for completion and delivery of such Tax
package, or portion thereof, by the Buyer to the Seller
that is earlier than September 30, 1994 to the extent the
due date for filing the Tax Return to which such Tax
package, or a portion thereof, relates makes it necessary
or advisable that such Tax package, or portion thereof, be
completed by such earlier date, in which case the Buyer
shall use all reasonable efforts to complete and deliver to
73<PAGE>
the Seller such Tax package no later than such earlier
date.
(ii) The Seller, the Asset Sellers and the Share
Sellers will grant or cause to be granted to the Buyer or
the Buyer's representatives reasonable access to all of the
information, books and records relating to the Business
(including, without limitation, Tax work papers, Tax
Returns and correspondence with taxing authorities) within
the possession or control of the Seller, any Share Seller
or any Asset Seller, including the right to take extracts
therefrom and make copies thereof at the expense of the
Buyer, to the extent reasonably necessary in connection
with Post-Closing Period Taxes and Pre-Closing Period Taxes
for which the Buyer may be liable pursuant to Section
7.9(a)(ii) hereof, and shall furnish the assistance and
cooperation of such personnel of the Seller, the Share
Sellers and the Asset Sellers as the Buyer may reasonably
request in connection therewith; provided, however, that
such access shall be allowed only during normal business
hours, with reasonable advance notice and in such manner as
not to interfere unreasonably with the normal business
operations of the Seller, the Share Sellers or the Asset
Sellers.
(iii) Without limiting the generality of the foregoing
provisions of this Section 7.9(b), the Seller (and each
Share Seller and Asset Seller) and the Buyer shall
cooperate and consult in good faith with each other during
the course of the preparation of foreign, federal, state
and local income Tax Returns which include Pre-Closing
Periods and to the extent appropriate shall use their best
efforts to agree on the inclusion of items of income,
deduction, gain, loss and credit for each Pre-Closing
Period so as to properly reflect such items attributable to
such Pre-Closing Period in a manner consistent with past
practices.
(c)Tax Contests.
(i) If any taxing authority proposes any
adjustment or questions the treatment of any item, which
adjustment or question could, if pursued successfully,
result in or give rise to solely a claim (a "Seller Tax
Claim") against the Seller by the Buyer under Section
7.9(a), solely a claim (a "Buyer Tax Claim") against the
Buyer by the Seller under Section 7.9(a), or both a Seller
Tax Claim and a Buyer Tax Claim (a "Joint Tax Claim"), then
the party hereto first receiving notice of such adjustment
or question (a "Tax Dispute") shall
74<PAGE>
promptly notify the other party hereto in writing of such
Tax Dispute.
(ii) In the case of either a Seller Tax Claim or a
Buyer Tax Claim, other than a Joint Tax Claim, that relates
to a taxable period that ended on or before the Closing
Date, the Seller shall have the right, at its sole cost and
expense, to control the defense, prosecution, settlement or
compromise of the Tax Dispute underlying such Seller Tax
Claim or Buyer Tax Claim; provided, however, that in any
event the Seller shall not, without the Buyer's prior
written consent (which consent shall not be unreasonably
withheld), enter into any settlement or compromise of such
Tax Dispute that would require a payment of more than
$5,000. In the case of a Seller Tax Claim that relates to
a Foreign Company with respect to a taxable period that
begins on or before the Closing Date and ends after the
Closing Date, and subject to the provisions of this Section
7.9(c)(ii), the Buyer shall have the right, at its sole
cost and expense, to control the defense, prosecution,
settlement and/or compromise of the Tax Dispute underlying
such Seller Tax Claim; provided, however, that if such Tax
Dispute relates to a Tax Return, or a taxable period of,
any of the Seller, the Asset Sellers, the Share Sellers or
any of their respective affiliates (including, without
limitation, a Tax Dispute that relates to such a Tax Return
by reason of the inclusion therein of the Business or any
portion thereof), the Seller shall have the right, at any
time and at its election, to exercise full control over the
defense, prosecution, settlement or compromise of such Tax
Dispute if such defense, prosecution, settlement or
compromise would have a material adverse effect on the
defense, prosecution, settlement or compromise of any other
liability for, or issue concerning, Taxes of the Seller,
the Asset Sellers, the Share Sellers or any of their
respective affiliates, but if the Seller elects to exercise
such control, the Seller will not, without the Buyer's
prior written consent (which consent shall not be
unreasonably withheld), enter into any settlement or
compromise of such Tax Dispute that would have a material
adverse effect on the business, assets, properties,
financial condition or results of operations of any
Principal Business Unit; and provided further, however,
that in any event, the Buyer will not, without the Seller's
prior written consent (which consent shall not be
unreasonably withheld), enter into any settlement or
compromise of such Tax Dispute that would require a payment
of more than $5,000.
75<PAGE>
(iii) In the case of any Seller Tax Claim, Buyer Tax
Claim or Joint Tax Claim relating to a Post-Closing Period,
the Buyer shall have the right, at its sole cost and
expense, to control the defense, prosecution, settlement or
compromise of the Tax Dispute underlying such Tax Claim.
(iv) In the case of a Joint Tax Claim not described in
Section 7.9(c)(iii) above, the Buyer and the Seller shall
consult and cooperate with each other in good faith in
order to effectively defend, prosecute, settle or
compromise the Tax Dispute underlying such Joint Tax Claim
and to mutually agree on the handling thereof; provided,
however, that in no event will such Tax Dispute be settled
or compromised in a manner that would have a material
adverse effect on a party hereto without the prior written
consent of such party (which consent shall not be
unreasonably withheld). Each of the Seller and the Buyer
shall pay its own costs and expenses relating to the
handling of any Tax Dispute underlying a Joint Tax Claim.
(v) The party hereto that controls a Tax Dispute
under the provisions of Section 7.9(c)(ii) or 7.9(c)(iii)
shall keep the other party hereto informed of all events
and developments relating to such Tax Dispute and the other
party hereto, or its authorized representatives, shall be
entitled, at its own expense, to attend (but not control)
all conferences, meetings and proceedings relating to such
Tax Dispute.
(d) No Carrybacks. The Buyer agrees that to the maximum
extent permitted by applicable law, neither the Buyer nor any of
the Buyer's affiliates or subsidiary corporations (including,
with respect to Post-Closing Periods, the Foreign Companies, the
Foreign Divisions and the Domestic Businesses) will carry back
to any taxable period of the Seller or any of its subsidiaries
or affiliates (including, with respect to Pre-Closing Periods,
the Foreign Companies, the Foreign Divisions and the Domestic
Businesses) any loss, credit, or deduction incurred or generated
in, or attributable to, any Post-Closing Period that would
affect any Tax Return of the Seller or any of its subsidiaries
or affiliates, and the Buyer agrees to make or exercise, or
cause to be made or exercised, any and all necessary or
permitted elections or options available under applicable law to
avoid any such carry back.
(e) Termination of Tax Sharing Agreements. Except as
provided in this Agreement, any and all Tax allocation
agreements, Tax sharing agreements, intercompany agreements, or
other agreements or arrangements to which any of the Foreign
76<PAGE>
Companies, Foreign Divisions or Domestic Businesses are parties
and relating to any Tax matters shall be terminated with respect
to the Foreign Companies, Foreign Divisions and Domestic
Businesses as of the day before the Closing Date, and from and
after the Closing Date will have no further force or effect for
any taxable period (whether current, future, or past taxable
periods).
(f) Post-Closing Events Affecting Section 1248 Amounts and
Foreign Taxes Paid.
(i) The Buyer agrees not to take, or cause or be
taken, any of the following actions in respect of any of
the Foreign Companies that would have the effect of
reducing the earnings and profits of any Foreign Company
for its taxable year in which the Closing Date occurs below
the level that would otherwise be attributable to the stock
of such Foreign Company under Section 1248 of the Code if
such taxable year had ended on the Closing Date: (A) the
payment of an actual or constructive dividend; (B) the
triggering of a deemed dividend under Section 956 of the
Code; (C) a sale of stock subject to Section 304 of the
Code; (D) the reorganization of a Foreign Company; and (E)
changes in accounting methods.
(ii) The Buyer agrees (A) to use reasonable efforts to
avoid any reduction in the amount of foreign Income Taxes
paid by any of the Foreign Companies for Pre-Closing
Periods and (B) if a net operating loss is incurred by a
Foreign Company (or an affiliate of the Buyer), to elect to
forego any carryback of such loss to Pre-Closing Periods of
the Foreign Company if local law provides an election to
use the amount of such loss as a carryforward. If a net
operating loss is incurred by a Foreign Company (or an
affiliate of the Buyer) that is required to be carried back
and results in a reduction in the foreign Taxes paid by a
Foreign Company during a Pre-Closing Period, the Buyer will
pay to the Seller an amount equal to any disallowance of
the amount of any foreign tax credits (within the meaning
of Subpart A of Part III of Subchapter N of the Code)
previously claimed by the Seller to the extent such
disallowance is attributable to the portion of the
aggregate reduction in foreign Tax paid equal to the
excess, if any, of the aggregate reduction over the
aggregate reduction that would have resulted if (x) the
deductions, if any, attributable to the acquisition
financing incurred in acquiring the Business were zero, and
(y) the net operating loss carrybacks, if any, of
affiliates of the Buyer were zero.
77<PAGE>
(iii) Notwithstanding anything to the contrary
expressed or implied herein, the Buyer shall not make any
election under Section 338 of the Code; provided, however,
that the Buyer may make such election and shall not be
liable to the Seller, any Asset Seller or any Share Seller
for any increases in any Taxes payable by any of them as a
result of such election if such election is necessary in
order for the Buyer to obtain (as of the Closing Date) an
adjusted basis in the Assets for federal income tax
purposes equal to the purchase price of such Assets.
(g) Disputes. Disputes between the Buyer and the Seller
with respect to any item covered by this Section 7.9 (including
the amount of any payments due to the other party or to a taxing
authority) shall be resolved as promptly as possible. A dispute
shall be deemed to exist to the extent one party does not
affirmatively agree with the position held by the other party.
In the event of a dispute, the party disputing the position
taken by the other party shall notify such other party of the
dispute within 10 days of being notified of such other party's
position. If such dispute is not resolved within 30 days of the
receipt of such notice, such dispute shall be resolved pursuant
to the procedures set forth in Section 4.1(d) hereof.
(h) Payments. Any payment required under this Section 7.9
shall be made by the Buyer or the Seller, as the case may be, in
immediately available funds and no later than 10 days following
the receipt of notice from the other party of the amount due.
Any payment not made when due under this Section 7.9 shall bear
interest, compounded monthly on the last day of each calendar
month, from the due date at an interest rate equal to the prime
rate of Citibank, N.A. as announced from time to time.
(i) Survival of Agreements. All covenants and agreements
set forth in this Section 7.9 shall survive the Closing Date
until 20 calendar days after the expiration of all applicable
statutes of limitation (including any and all extensions
thereof).
(j) Conflict. In the event of a conflict between the
provisions of this Section 7.9 and other provisions of this
Agreement, the provisions of this Section 7.9 shall control.
7.10 Insurance. The parties recognize that the Seller has
obtained various insurance policies (the "Policies") from carriers
(the "Carriers") providing insurance coverages for businesses
conducted by the Seller, its subsidiaries and companies associated
therewith. The parties also recognize that included in the assets of
the Business are applicable rights (subject to certain obligations)
78<PAGE>
under existing Policies arranged for by the Seller in respect of the
Business (including the insured's right to defense and indemnity by
the Carrier, subject to the insured's duty to give notice and
cooperate and the insured's liability for deductible amounts, defense
costs, premiums and administrative fees) and that, to the extent so
provided under the terms and conditions of individual Policies,
certain elements of such insurance coverages for periods prior to the
Closing Date may survive thereafter for the benefit of the Business
and the Buyer.
7.11 Certain Trademark Matters.
(a) The Buyer and the Seller shall, at the Closing, enter
into a Trademark License Agreement with respect to the
"ENVIROTECH", the "ENVIROTECH" logo, "BAKER CAC" and "TRACOR
EUROPA" marks substantially in the form attached hereto as
Exhibit E (the "Trademark License Agreement").
(b) The Seller agrees, for itself and on behalf of its
subsidiaries and affiliates, not to use, after the Closing Date,
any trademark (other than "ENVIROTECH", the "ENVIROTECH" logo,
"BAKER CAC" and "TRACOR EUROPA") previously or currently used in
the Business or any trademark or name confusingly similar to any
of the foregoing. The Seller shall promptly amend the
certificate of incorporation and other corporate records of its
subsidiaries and affiliates as necessary to comply with this
provision.
7.12 Notice of Breaches; Updates.
(a) The Seller shall promptly deliver to the Buyer written
notice of any event or development that would (i) render any
statement, representation or warranty of the Seller in this
Agreement (including exceptions set forth in the Disclosure
Schedule) inaccurate or incomplete in any material respect, or
(ii) constitute or result in a breach by the Seller of, or a
failure by the Seller to comply with, any agreement or covenant
in this Agreement applicable to the Seller. No such disclosure
shall be deemed to avoid or cure any such misrepresentation or
breach.
(b) The Buyer shall promptly deliver to the Seller written
notice of any event or development that would (i) render any
statement, representation or warranty of the Buyer in this
Agreement inaccurate or incomplete in any material respect, or
(ii) constitute or result in a breach by the Buyer of, or a
failure by the Buyer to comply with, any agreement or covenant
in this Agreement applicable to the Buyer. No such disclosure
shall be deemed to avoid or cure any such misrepresentation or
breach.
79<PAGE>
(c) The Seller shall deliver to the Buyer, as promptly as
practicable following the end of each calendar month ending
after the date of this Agreement and prior to the Closing Date,
and in any event at least as soon as made available internally
within the Buyer, an unaudited combined statement of operations
of the Business, and such other internal financial information
as is ordinarily prepared by the Seller with respect to the
Business, for such month, in each case prepared in accordance
with GAAP (except for the absence of footnotes).
7.13 Proprietary Information. From and after the Closing, the
Seller shall, and shall cause the Asset Sellers, the Share Sellers
and its other affiliates to, hold in confidence all knowledge,
information and documents of a confidential nature or not generally
known to the public with respect to the Business or the Buyer or the
Buyer's business (including without limitation the financial
information, technical information or data relating to the products
of the Business and the names of customers of the Business) and shall
not disclose or make use of the same without the written consent of
the Buyer, except to the extent that such knowledge, information or
documents shall have become public knowledge other than through a
breach of this Agreement by the Seller.
7.14 Solicitation and Hiring. For a period of two years after
the Closing Date, the Seller shall not, and shall cause its
affiliates not to, either directly or indirectly as a stockholder,
investor, partner, director, officer, employee or otherwise, (a)
solicit or attempt to induce any Restricted Employee to terminate his
or her employment with the Buyer or any affiliate of the Buyer or (b)
hire or attempt to hire any Restricted Employee; provided, however,
that it shall not be a breach of this Section 7.14 for the Seller to
place employment advertisements in newspapers and other mass media
and to hire Restricted Employees (other than Restricted Employees
whose annual rate of compensation (including for this purpose any
bonus expected to be earned for the current year) exceeds $80,000 as
of the date of this Agreement) who respond to such advertisements.
For purposes of this Agreement, a "Restricted Employee" shall mean
any person, other than employees terminated by the Buyer, who either
(i) was an employee of the Buyer or any affiliate of the Buyer on
either the date of this Agreement or the Closing Date or (ii) was an
employee of the Seller or any Foreign Division, Domestic Business or
Foreign Company on either the date of this Agreement or the Closing
Date and, if an employee of a Foreign Division or Domestic Business,
received an employment offer from the Buyer within five business days
following the Closing Date.
80<PAGE>
7.15 Non-Competition.
(a) For a period of five years after the Closing Date, the
Seller shall not, and shall cause its affiliates not to, either
directly or indirectly as a stockholder, investor, partner,
director, officer, employee, consultant or otherwise, (i)
develop, manufacture, market or sell any product which is
competitive with any product manufactured, sold or developed (or
under development) by the Business on or prior to the Closing
Date, (ii) render or market any service which is competitive
with any service rendered or marketed by the Business on or
prior to the Closing Date, or (iii) engage in any business
competitive with the Business as conducted on the date of this
Agreement or as of the Closing Date, in the U.S. or any other
country in which the Business was conducted during the two years
prior to the Closing Date; provided, however, that it shall not
be a breach of this Section 7.15(a) for the Seller to make an
acquisition (whether by purchase of assets, stock or otherwise)
of an interest in, or any investment in, in either case whether
directly or indirectly, any business or entity that derives 20%
or less of its gross revenues from activities described in the
foregoing clauses (i), (ii) or (iii), so long as the portion or
portions of the acquired or investee business or entity that
derives revenues from activities described in the foregoing
clauses (i), (ii) or (iii) is sold or otherwise divested within
18 months after the date of such acquisition or investment.
(b) The Seller agrees that the duration and geographic
scope of the non-competition provision set forth in this Section
7.15 are reasonable. In the event that any court determines
that the duration or the geographic scope, or both, are
unreasonable and that such provision is to that extent
unenforceable, the parties agree that the provision shall remain
in full force and effect for the greatest time period and in the
greatest area that would not render it unenforceable. The
parties intend that this non-competition provision shall be
deemed to be a series of separate covenants, one for each and
every county of each and every state of the U.S. and each and
every political subdivision of each and every country outside
the U.S. where this provision is intended to be effective.
7.16 Cooperation in Litigation. From and after the Closing
Date, each party shall fully cooperate with the other in the defense
or prosecution of any litigation or proceeding already instituted or
which may be instituted hereafter against or by such other party
relating to or arising out of the conduct of the Business by the
Seller or the Buyer or their respective affiliates prior to or after
the Closing Date (other than litigation arising out the transactions
contemplated by this Agreement). The party requesting such
81<PAGE>
cooperation shall pay the reasonable out-of-pocket expenses incurred
in providing such cooperation (including legal fees and
disbursements) by the party providing such cooperation and by its
officers, directors, employees and agents, but shall not be
responsible for reimbursing such party or its officers, directors,
employees and agents for their time spent in such cooperation.
7.17 Collection of Accounts Receivable. The Seller agrees that
it shall, and shall cause the Share Sellers and the Asset Sellers to,
forward promptly to the Buyer any monies, checks or instruments
received by any of them after the Closing Date with respect to the
accounts receivable purchased by the Buyer pursuant to this
Agreement. The Seller shall, and shall cause the Share Sellers and
the Asset Sellers to, provide to the Buyer such reasonable assistance
as the Buyer may request with respect to the collection of any such
accounts receivable, provided the Buyer pays the reasonable
out-of-pocket expenses of the Seller and its officers, directors and
employees incurred in providing such assistance.
7.18 Estoppel Certificates. The Seller shall use its best
efforts to obtain and deliver to the Buyer, prior to the Closing, an
estoppel certificate in substantially the form attached hereto as
Exhibit F for each of the leases listed on Schedule 7.18 (the
"Principal Leases"); provided, however, that the Seller shall not be
required to make any payments to any person from whom an estoppel
certificate is requested in consideration of the issuance thereof.
Such estoppel certificates shall disclose no material default by the
landlord or the tenant under such Principal Leases and shall not
contain any information which is inconsistent with the Seller's
representations and warranties with respect to such Principal Leases
set forth in Section 5.11 hereof.
7.19 Non-Disturbance Agreements. The Seller shall use its best
efforts to obtain and deliver to the Buyer, prior to the Closing, a
Subordination, Nondisturbance and Attornment Agreement in
substantially the form attached hereto as Exhibit G from the holder
of each mortgage, deed of trust, superior security interest and
ground lease in connection with each Principal Lease; provided,
however, that the Seller shall not be required to make any payments
to any person from whom a Subordination, Nondisturbance and
Attornment Agreement is requested in consideration of the issuance
thereof.
7.20 Master Service Agreements. With respect to products
actually sold or contracted to be sold by the Business prior to the
Closing under master service agreements to which the Seller is a
party ("Master Service Agreements"), the Seller shall, commencing on
the Closing Date and continuing for the duration of the Master
Service Agreements, use reasonable efforts to (i) provide to the
Buyer the benefits of the Master Service Agreements, (ii)cooperate
with the
82<PAGE>
Buyer to reach a reasonable and lawful arrangement designed to
provide such benefits to the Buyer during such period and (iii)
enforce at the request of the Buyer, or allow the Buyer to enforce
(and, solely for such purpose, the Seller hereby constitutes and
appoints the Buyer as its true and lawful attorney-in-fact until
revoked in writing delivered by the Seller to the Buyer), any rights
of the Seller under the Master Service Agreements against the other
party or parties thereto (including the right to elect to terminate
such of the foregoing in accordance with the terms thereof upon the
request of the Buyer); provided, however, that the reasonable costs
and expenses of the Seller incurred at the Buyer's request with
respect to any of the actions contemplated under (iii) above shall be
promptly paid or reimbursed by the Buyer to the Seller.
7.21 Mountain View Premises. The Buyer shall have the right,
exercisable upon written notice to the Seller at any time prior to or
at the Closing, to exclude from the Assets the lease (the "Mountain
View Lease") under which Spectrace Instruments, Inc. leases the
premises at 345 East Middlefield Road, Mountain View, California (the
"Mountain View Premises"). In the event that the Buyer elects to
exclude the Mountain View Lease from the Assets, then, effective as
of the Closing:
(i) the Mountain View Premises shall not constitute Leased Real Estate
and the Mountain View Lease shall be deleted from Schedule
5.11;
(ii) for a period of six months after the Closing, the Buyer shall pay
the Seller $12,500 per month and shall reimburse the
Seller for all real estate taxes, operating expenses and
other similar operating costs arising after the Closing
Date specified to be paid by the tenant in the Mountain
View Lease as it exists on the date hereof; and
(iii) the Seller shall cooperate reasonably with the Buyer in making
arrangements for the relocation of the operations of the
Business conducted at the Mountain View Premises promptly
after the Closing.
7.22 Termination of Certain Business Relationships. Effective
as the Closing, the Seller shall terminate or cause the termination
of all contracts, understandings, commitments and agreements listed
on Schedule 5.30.
7.23 Round Rock Property.
(a) Prior to the Closing, the Seller shall use its best
efforts to subdivide the 12.5 acre hazardous waste storage
facility located in Round Rock, Texas adjacent to the
TNTechnologies facility described on Schedule 5.11 (the
83<PAGE>
"Round Rock Property") from the undivided land of which it is a
part. In the event the Seller is unable to subdivide the Round
Rock Property prior to the Closing, the Buyer and the Seller
shall, at the Closing, enter into a lease (the "Round Rock
Lease") of the Round Rock Property (i) having a term of 99 years,
(ii) requiring the Buyer to pay rent of $1.00 per year to the
Seller, and (iii) requiring the Buyer to be responsible for all
real estate taxes, operating expenses and other operating costs
arising after the Closing Date associated with the Round Rock
Property.
(b) The Seller shall inform the Buyer in writing at least
five business days prior to the Closing whether the Seller will
have subdivided the Round Rock Property prior to the Closing. If
such notice states that the Seller will not be able to subdivide
the Round Rock Property prior to the Closing, such notice shall
be accompanied by the proposed form of Round Rock Lease, which
shall be reasonably satisfactory to the Buyer, and the Buyer and
the Seller shall use their respective best efforts to agree on
the final form of the Round Rock Lease prior to the Closing.
Upon the execution of the Round Rock Lease at the Closing, (i)
the Round Rock Lease shall be deemed to be a Seller Lease, (ii)
the Round Rock Property shall be deemed to be part of the
Seller's Leased Facilities and (iii) the Round Rock Property
shall no longer be deemed to be part of the Assets or Seller's
Real Estate.
(c) If the Round Rock Property is not subdivided prior to
the Closing, from and after the Closing the Seller shall continue
to use its best efforts to subdivide the Round Rock Property. If
the Seller is able to subdivide the Round Rock Property within 99
years after the Closing, the Seller shall convey the Round Rock
Property to the Buyer without the payment of any further
consideration by the Seller. Upon such conveyance, the Round
Rock Lease shall automatically terminate, and the Round Rock
Property shall thereafter be deemed to be part of the Assets and
the Seller's Real Estate.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER TO CLOSE.
The obligation of the Buyer to close the transactions
contemplated by this Agreement shall be subject to the satisfaction
of each of the following conditions precedent:
8.1 Fulfillment of the Seller's Covenants. The Seller shall
have fulfilled or complied with each covenant, obligation and
agreement required to be fulfilled or complied with by it prior to
the Closing Date under this Agreement.
8.2 Accuracy of the Seller's Representations. The
representations and warranties of the Seller contained in this
84<PAGE>
Agreement shall be true and correct on the date when made and shall
be true and correct on the Closing Date (unless a representation is
made as of a specific date, and in such event it shall be true and
correct as of such date); provided, however, that in the event the
Seller has provided the Buyer with written notice prior to the
Closing Date of an event or development arising after the date hereof
and prior to the Closing Date that causes any representation or
warranty of the Seller in this Agreement not to be true and correct
on the Closing Date (a "Seller's Notice"), then the Buyer shall, in
its sole discretion, either (i) elect not to close the transactions
contemplated by this Agreement by reason of the failure of the
condition to Closing specified in this Section 8.2 to be satisfied,
or (ii) elect to close the transactions contemplated by this
Agreement, notwithstanding the failure of the condition to Closing
specified in this Section 8.2 to be satisfied, in which event the
Buyer shall be deemed to have waived the condition to Closing
specified in this Section 8.2 with respect to the matters specified
in the Seller's Notice and shall not seek or be entitled to
indemnification under Section 11 with respect to the matters
specified in the Seller's Notice.
8.3 Authorizations and Consents. Except as provided in Section
2.8, the Seller, each Foreign Company, each Asset Seller and each
Share Seller shall have obtained and made all governmental or other
authorizations, approvals, consents, permits, waivers and filings
which are necessary under all applicable Laws and Regulations for the
consummation by the Seller of the transactions contemplated by this
Agreement. The Seller, each Foreign Company, each Asset Seller and
each Share Seller shall have obtained all necessary consents and
waivers for the assignment, transfer, sublease or sublicense of the
Restricted Assets listed in Part A of Schedule 2.8 and the
authorizations, approvals, consents, permits and waivers listed on
Schedule 8.3.
8.4 No Litigation. No injunction shall be outstanding which
would prevent consummation of the transactions contemplated by this
Agreement. No action, suit or proceeding shall be pending by or
before any Governmental Body, with respect to which the Buyer shall
have received a written opinion of outside counsel (a copy of which
shall be provided to the Seller) concluding that the plaintiff has a
reasonable probability of prevailing, and wherein an unfavorable
judgment, order, decree, stipulation or injunction would (i) cause
the transactions contemplated by this Agreement to be rescinded
following consummation, (ii) subject the Buyer to damages in excess
of $2,000,000 or (iii) affect adversely the right of the Buyer to
own, operate or control the Business following the Closing.
8.5 Seller's Certificates. The Seller shall have delivered to
the Buyer a certificate (without qualification as to knowledge or
materiality or otherwise) dated the Closing Date and executed by an
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executive officer of the Seller (i) to the effect that each of the
conditions specified in Sections 8.1, 8.2, 8.3, 8.4 and 8.9 is
satisfied in all respects and (ii) attaching thereto a true and
correct copy of the resolutions of the Board of Directors of the
Seller and each Share Seller and Asset Seller authorizing the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
8.6 Resignations. The Buyer shall have received the
resignations of each of the directors and officers of each Foreign
Company whose resignation has been requested by the Buyer at least
ten business days prior to the Closing Date.
8.7 HSR Act and Similar Matters. All applicable waiting
periods (and any extensions thereof) under the HSR Act shall have
expired or otherwise been terminated, all necessary authorizations,
approvals, consents, permits or waivers under any similar foreign
laws shall have been obtained, and the Buyer shall have obtained the
prior authorization of the Direction du Tresor of the Minister of
Finance of France for the acquisition of the Shares of Ramsey France
S.A.R.L.
8.8 Leases. The Seller and the Buyer shall have entered into
leases in the forms attached hereto as Exhibit H and Exhibit I (the
"Seller Leases"). The Seller and the Buyer shall have entered into a
sublease in the form attached hereto as Exhibit J (the "Seller
Sublease").
8.9 Backlog. The backlog of firm orders of the Business as of
the Closing Date shall be at least $27,000,000.
8.10 NRC Permits. The Nuclear Regulatory Commission ("NRC")
shall have granted to the Buyer those permits necessary for Noran
Instruments and TN Technologies to continue to operate after the
Closing Date to the maximum extent allowed by the comparable NRC
permits held by or on behalf of Noran Instruments and TNTechnologies
on the date hereof. Such NRC permits shall allow materials covered
by the permits to be stored and used in the manufacture, calibration,
demonstration and service of products and, in the case of
TNTechnologies only, distribution of products.
8.11 BRC Permits. The BRC shall have approved the transfer or
issuance to the Buyer of the BRC Permits.
8.12 Product Liability Insurance. The Buyer shall have (i) been
named as an additional insured under the Seller's insurance policies
listed on Schedule 8.12 which shall cover
the matters set forth therein solely with respect to the Business
(with any out-of-pocket cost to obtain such naming to be
paid by the Buyer) and (ii) obtained an endorsement (the
"Endorsement") to the Seller's general liability insurance
policy issued by American International Specialty Lines Insurance
86<PAGE>
Co. and Ambrit International Insurance, Inc. (the "Seller's Insurance
Policy") providing $25,000,000 of coverage for the matters set forth
in the Seller's Insurance Policy. The Endorsement shall be solely
for the Buyer's benefit (and not the Seller's) and shall cover claims
made in the first five years following the Closing Date relating to
pre-Closing occurrences relating to the Business. The Buyer shall
reimburse the Seller for its actual out-of-pocket cost in obtaining
the Endorsement. The Buyer acknowledges that the Endorsement is
subject to a $2,500,000 deductible unless the Buyer otherwise
acquires insurance to provide for such deductible amount. The Buyer
further acknowledges that if the Endorsement is exhausted by the
Buyer, the Buyer shall not have claims against any additional portion
or endorsement of the Seller's Insurance Policy.
8.13 Round Rock Property. The Round Rock Property shall have
been subdivided and conveyed to the Buyer as part of the Assets or
the Seller and the Buyer shall have entered into the Round Rock
Lease.
9. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATION TO CLOSE.
The obligation of the Seller to close the transactions
contemplated by this Agreement shall be subject to the satisfaction
of each of the following conditions precedent:
9.1 Fulfillment of the Buyer's Covenants. The Buyer shall have
fulfilled or complied with each covenant, obligation and agreement
required to be fulfilled or complied with by it prior to the Closing
Date under this Agreement.
9.2 Accuracy of the Buyer's Representations. The
representations and warranties of the Buyer contained in this
Agreement shall be true and correct on the date when made and shall
be true and correct on the Closing Date (unless a representation is
made as of a specific date, and in such event it shall be true and
correct as of such date).
9.3 Authorizations and Consents. The Buyer shall have obtained
and made all governmental or other authorizations, approvals,
consents, permits, waivers and filings which are necessary under all
applicable Laws and Regulations for the consummation by the Buyer of
the transactions contemplated by this Agreement.
9.4 No Litigation. No injunction shall be outstanding which
would prevent consummation of the transactions contemplated by this
Agreement. No action, suit or proceeding shall be pending by or
before any Governmental Body, with respect to which the Seller shall
have received a written opinion of outside counsel (a copy of which
shall be provided to the Buyer) concluding that the plaintiff has a
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reasonable probability of prevailing, and wherein an unfavorable
judgment, order, decree, stipulation or injunction would (i) cause
the transactions contemplated by this Agreement to be rescinded
following consummation, or (ii) subject the Seller to damages in
excess of $2,000,000.
9.5 Buyer's Certificates. The Buyer shall have delivered to
the Seller a certificate (without qualification as to knowledge or
materiality or otherwise) dated the Closing Date and executed by an
executive officer of the Buyer (i) to the effect that each of the
conditions specified in Sections 9.1 through 9.4 is satisfied in all
respects and (ii) attaching thereto a true and correct copy of the
resolutions of the Board of Directors of the Buyer authorizing the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
9.6 HSR Act and Similar Matters. All applicable waiting
periods (and any extensions thereof) under the HSR Act shall have
expired or otherwise been terminated, all necessary authorizations,
approvals, consents, permits or waivers under any similar foreign
laws shall have been obtained, and the Buyer shall have obtained the
prior authorization of the Direction du Tresor of the Minister of
Finance of France for the acquisition of the Shares of Ramsey France
S.A.R.L.
9.7 Leases. The Seller and the Buyer shall have entered into
the Seller Leases and the Seller Sublease.
10. CLOSING.
(a) Subject to the conditions set forth in Sections 8 and
9, the consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the
Buyer at 10:00 a.m., local time, on the later of (i) February 28,
1994 or (ii) the fifth business day following satisfaction or
waiver of each of the conditions contained in this Agreement, or
on such other date as the Buyer and the Seller may mutually agree
(such date being herein called the "Closing Date"). Failure to
close on such date shall not relieve either party hereto of its
obligations under this Agreement. All transactions at the
Closing shall be deemed to take place simultaneously at 12:01
a.m. Eastern Time on the Closing Date, and no transaction shall
be deemed to have been completed and no document or certificate
shall be deemed to have been delivered until all transactions are
completed and all documents are delivered.
(b) At the Closing:
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(i) the Seller shall deliver to the Buyer the
various certificates, instruments and documents referred to
in Section 8;
(ii) the Buyer shall deliver to the Seller the various
certificates, instruments and documents referred to in
Section 9;
(iii) the Seller shall cause each Share Seller to
execute and deliver to the Buyer the certificates, stock
powers, share transfer forms, deeds of transfer and other
documents referred to in Sections2.2 and 2.6(a);
(iv) the Seller shall cause each Asset Seller to
execute and deliver to the Buyer the Bills of Sale and
other documents referred to in Sections 2.3 and 2.6(a);
(v) the Buyer shall execute and deliver to the Seller
the instruments of assumption and other documents referred
to in Section 3.3;
(vi) the Buyer and the Seller shall execute and
deliver the Trademark License Agreement;
(vii) the Buyer shall pay to the Seller the Purchase
Price as specified in Section 2.1;
(viii) the Seller shall deliver to the Buyer, or
otherwise put the Buyer in possession and control of, all
of the assets of the Business of a tangible nature; and
(ix) the Buyer and the Seller shall execute and
deliver to each other a cross-receipt evidencing the
transactions referred to above.
11. INDEMNIFICATION.
11.1 By the Seller. The Seller shall indemnify the Buyer in
respect of, and hold the Buyer harmless against, any and all debts,
obligations and other liabilities (whether absolute, accrued,
contingent, fixed or otherwise, or whether known or unknown, or due
or to become due or otherwise), monetary damages, forfeitures, fines,
fees, penalties, interest obligations, deficiencies, losses and
expenses (including without limitation amounts paid in settlement,
interest, court costs, costs of investigators, fees and expenses of
attorneys, accountants, financial advisors and other experts, and
other expenses of litigation, investigations, inquiries by
Governmental Bodies or related proceedings) ("Losses") incurred or
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suffered by the Buyer or any affiliate of the Buyer resulting from,
relating to or constituting:
(a) any misrepresentation or breach of warranty of the
Seller contained in this Agreement; provided, however, that the
Buyer shall not make any claim for indemnification with respect
to (i) the matters set forth in the memorandum prepared by the
Buyer dated December 1, 1993 and entitled "Financial
Deficiencies/Required Adjustments Ramsey Technology, Inc." or
(ii) overstatement of inventory on the Balance Sheet resulting
from excess and/or obsolete inventory;
(b) any failure to perform any covenant or agreement of
the Seller contained in this Agreement; and
(c) any Excluded Liabilities.
11.2 By the Buyer. The Buyer shall indemnify the Seller in
respect of, and hold the Seller harmless against, any and all Losses
incurred or suffered by the Seller or any affiliate thereof resulting
from, relating to or constituting:
(a) any misrepresentation or breach of warranty of the
Buyer contained in this Agreement;
(b) any failure to perform any covenant or agreement of
the Buyer contained in this Agreement;
(c) any Assumed Liabilities;
(d) any and all Taxes to the extent specified in Section
7.9(a)(ii) hereof;
(e) any claims against, or liabilities or obligations of,
any Plans or Foreign Plans specifically assumed by the Buyer
pursuant to this Agreement, and any claims for compensation,
severance pay, termination pay or pay in lieu of notice made by
any employees of the Business with respect to services performed
or terminations occurring after the Closing Date; and
(f) any Seller Obligations.
11.3 Limitations on Indemnification.
(a) Except as provided in Section 11.3(d)(ii), each
party's obligation to indemnify the other for Losses arising
under Section 11.1(a) or Section 11.2(a), as the case may be,
shall be limited as to amount, as follows:
(i) The Indemnitor shall not be required to
indemnify the Indemnitee for any Losses except to the
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extent that the amount of such Losses, when added to the
aggregate amount of all other Losses indemnifiable under
this Section 11, exceeds $2,500,000;
(ii) To the extent that the amount of any Losses,
which when added to the aggregate amount of all other
Losses indemnifiable under this Section 11 exceeds
$2,500,000, the Indemnitor shall indemnify the Indemnitee
for such Losses in excess of $2,500,000 and less than
$65,000,000; and
(iii) The Indemnitor shall not be required to indemnify
the Indemnitee for any Losses which, when added to the
aggregate amount of all other Losses indemnifiable under
this Section 11, exceed $65,000,000.
(b) Any indemnifiable liability or reimbursement under
this Section 11 shall be limited to the amount of Losses
sustained by the Indemnitee net of any applicable insurance
payment made to or tax benefit received by the Indemnitee.
(c) Except as provided in Section 7.9(i) and Section
11.3(d)(i), neither the Seller nor the Buyer shall be entitled to
make any claim for indemnification arising under Section 11.1(a)
or Section 11.2(a), as the case may be, after the second
anniversary of the Closing Date, unless the Seller or the Buyer,
as the case may be, shall have asserted such claim for
indemnification prior to such date, in which event such claim
shall survive until the resolution thereof. If a claim for
indemnification is asserted prior to the applicable expiration
date, then (notwithstanding the expiration of such time period)
the representation or warranty applicable to such claim shall
survive until the resolution of such claim.
(d) Notwithstanding any other provision to the contrary:
(i) the representations contained in Section 5.2,
Section 5.3, Section 5.4 (to the extent that any
misrepresentation or breach of warranty arising under
Section 5.4 relates to the right of any person or entity,
including without limitation any Governmental Body, to
cause the transactions contemplated by this Agreement to be
rescinded following consummation), Section 5.9 and Section
5.28 shall survive without time limit; and
(ii) subject to the provisions of Section 11.3(a)(i),
the maximum amount of Losses for which an Indemnitor shall
be liable shall be $134,073,923 with respect to Losses
arising from breaches of the representations contained in
Section 4.3, Section 5.2, Section 5.3 and Section 5.4
91<PAGE>
(to the extent that any misrepresentation or breach of
warranty arising under Section 5.4 relates to the right of
any person or entity, including without limitation any
Governmental Body, to cause the transactions contemplated
by this Agreement to be rescinded following consummation).
(e) Except with respect to claims based on fraud, the
rights of the Buyer and the Seller under this Section 11 shall be
the exclusive remedy of the Buyer and the Seller, respectively,
with respect to claims resulting from or relating to any
misrepresentation, breach of warranty or failure to perform any
covenant or agreement of the Seller or the Buyer, respectively,
contained in this Agreement (provided that nothing contained in
this Agreement shall limit or restrict any right or remedy the
Buyer may have under any Environmental Law).
11.4 Third-Party Claims.
(a) In the event that any legal proceedings shall be
instituted or any claim or demand shall be asserted by any Person
(a "Third-Party Claim") in respect of which indemnification may
be sought by any party or parties from any other party or parties
under the provisions of this Section 11, the party or parties
seeking indemnification (collectively, the "Indemnitee") shall
cause written notice of the assertion of any Third-Party Claim of
which it has knowledge that is covered by this indemnity to be
forwarded promptly to the party or parties from which
indemnification is sought (collectively, the "Indemnitor");
provided that the failure of an Indemnitee to give timely notice
shall not affect rights to indemnification hereunder except to
the extent that the Indemnitor has been damaged by such failure.
The Indemnitor shall have the right, at its option and at its
own expense, to be represented by counsel of its choice and to
participate in the defense, negotiation and/or settlement of any
Third-Party Claim.
(b) In connection with any Third-Party Claim, the
Indemnitor, at the sole cost and expense of the Indemnitor, may,
upon written notice to the Indemnitee, assume the defense of any
such Third-Party Claim if (x) the Indemnitor acknowledges in
writing the obligation of the Indemnitor to indemnify in
accordance with the terms of this Agreement the Indemnitee with
respect to such Third-Party Claim, (y) the Third-Party Claim
seeks monetary damages solely and (z) an adverse resolution of
the Third-Party Claim would not have a material adverse effect on
the goodwill or reputation of any Principal Business Unit, on the
future conduct of the business of any Principal Business Unit by
the Buyer or its affiliates; provided, however, that the
Indemnitee may participate in any such proceeding with counsel of
92<PAGE>
its choice and at its own expense; and provided further, however,
that if the Indemnitor assumes control of such defense and the
Indemnitee reasonably concludes that the Indemnitor and the
Indemnitee have conflicting interests or different defenses
available with respect to such action, suit or proceeding, the
reasonable fees and expenses of counsel to the Indemnitee shall
be considered "Losses" for purposes of this Agreement. The party
controlling such defense shall keep the other party advised of
the status of such action, suit or proceeding and the defense
thereof and shall consider in good faith recommendations made by
the other party with respect thereto.
(c) The Indemnitee shall not agree to any settlement of
such action, suit or proceeding without the prior written consent
of the Indemnitor, which shall not be unreasonably withheld,
unless the Indemnitee waives any right to indemnity therefor by
the Indemnitor. Notwithstanding the foregoing, if a customer or
a supplier of the Business asserts that the Buyer is liable to
such customer or supplier for a monetary or other obligation
which may constitute or result in Losses for which the Buyer may
be entitled to indemnification pursuant to this Section 11 and
the Buyer reasonably determines that it has a valid business
reason to fulfill such obligations, then (x) the Buyer shall be
entitled to satisfy such obligation without prior notice to or
consent from the Seller, (y) the Buyer may make a claim for
indemnification pursuant to this Section 11 and (z) the Buyer
shall be reimbursed, in accordance with the provisions of this
Section 11, for any such Losses for which is entitled to
indemnification pursuant to the provisions of this Section 11;
provided, however, that if the Buyer makes a claim for
indemnification in accordance with this sentence the Seller shall
not be deemed to have waived any defense to such claim by the
Buyer, notwithstanding the Buyer's prior satisfaction of the
obligation for which indemnification is sought, and it shall not
be a defense to the Buyer's claim for indemnification that the
Buyer has satisfied the obligation for which indemnification is
sought.
(d) After final judgment or award shall have been rendered
by a court, arbitration board or administrative agency of
competent jurisdiction and the expiration of the time in which to
appeal therefrom, or a settlement shall have been consummated, or
the Indemnitee and the Indemnitor shall have arrived at a
mutually binding agreement with respect to each separate matter
indemnified by the Indemnitor, the Indemnitee shall forward to
the Indemnitor notice of any sums due and owing by the Indemnitor
with respect to such matter and the Indemnitor shall pay all of
the sums so owing to the Indemnitee by check within 10 days after
the date of such notice.
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(e) Notwithstanding any other provision of this Section 11
to the contrary, with respect to the Export Control
Investigation: (i) the Seller shall retain sole control of the
defense of the Export Control Investigation, unless it fails to
proceed with such defense, in which event such defense may be
assumed by the Buyer at the Seller's sole expense upon written
notice to the Seller; (ii) the Seller shall provide the Buyer
with copies of all correspondence, requests for information,
responses, notices and other written materials sent by or
received by Seller or its counsel promptly after such materials
are sent or received by the Seller or its counsel; (iii) the
Buyer shall be entitled to participate in the Export Control
Investigation, including without limitation through attendance at
all meetings relating to the Export Control Investigation or
negotiations for its settlement or resolution, and the right to
discuss with the Seller's counsel matters relating to the Export
Control Investigation; (iv) to the extent practicable, the Buyer
shall have the right to review and comment on all correspondence
and other written materials to be sent by the Seller or its
counsel with respect to the Export Control Investigation prior to
the time of sending; (v) the Seller shall not agree to any
settlement or other disposition of the Export Control
Investigation without the prior written consent of the Buyer,
unless such settlement or other disposition does not impose any
costs, obligations or restrictions on the Buyer or any of its
affiliates and could not have a material adverse effect on the
future conduct of the business of any Principal Business Unit or
the conduct of the business of the Buyer by the Buyer or its
affiliates; and (vi) if the Seller fails to proceed with the
defense of the Export Control Investigation and the Buyer assumes
such defense upon written notice to the Seller, the Seller shall
thereafter reimburse the Buyer for the reasonable fees and
expenses of its counsel in connection with such defense.
12. TERMINATION.
12.1 Termination Events. Subject to the other provisions of
this Section 12, this Agreement may, by written notice given at or
prior to the Closing in the manner hereinafter provided, be
terminated and abandoned:
(a) By either the Seller or the Buyer if a material
default or breach shall be made by the other with respect to the
due and timely performance of any of its covenants and agreements
contained herein, or with respect to the due compliance with any
of its representations and warranties contained in Sections 4.3
and 5 or 6, as the case may be, and such default has not been
waived;
94<PAGE>
(b) (i) by the Buyer if all of the conditions set forth in
Section 8 shall not have been satisfied on or before the
Termination Date, other than through failure of the Buyer to
fully comply with its obligations hereunder, or shall not have
been waived by it on or before such dates; or (ii) by the Seller,
if all of the conditions set forth in Section 9 shall not have
been satisfied on or before the Termination Date, other than
through failure of the Seller to fully comply with its
obligations hereunder, or shall not have been waived by it on or
before such dates; or
(c) by mutual written consent of the Seller and the Buyer.
12.2 Effect of Termination. In the event this Agreement is
terminated pursuant to Section 12.1, all further obligations of the
parties hereunder shall terminate; provided, however, that if this
Agreement is so terminated by one party pursuant to Section 12.1(a)
or 12.1(b)(i) or (ii) because one or more of the conditions to such
party's obligations hereunder is not satisfied as a result of the
other party's failure to comply with its obligations under any
provision of this Agreement, it is expressly agreed and understood
that such party's right to pursue all legal remedies for breach of
contract or otherwise, including, without limitation, damages
relating thereto, shall also survive such termination unimpaired. No
termination of this Agreement shall act to terminate or otherwise
impair the obligations set forth in Sections 13.3, 13.12 and 13.13.
13. MISCELLANEOUS.
13.1 Amendments. This Agreement may be amended only by a
written agreement signed by the Seller and the Buyer.
13.2 Notices. All notices, requests, demands and other
communications made in connection with this Agreement shall be in
writing and shall be deemed to have been duly given on the date
delivered, if delivered personally or sent by telecopier or facsimile
machine to the persons identified below, or three days after mailing
in the U.S. mail if mailed by certified or registered mail, postage
prepaid, return receipt requested, addressed as follows, or one
business day after mailing by overnight courier, addressed as
follows:
(a) if to the Buyer:
Thermo Electron Corporation
81 Wyman Street
Waltham, Massachusetts 02254
Attention: General Counsel
Facsimile: (617) 622-1283
95<PAGE>
with a copy to:
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
Attention: David E. Redlick, Esq.
Facsimile: (617) 526-5000
(b) if to the Seller:
Baker Hughes Incorporated
3900 Essex Lane, Suite 1200
Houston, Texas 77027
Attention: Chief Financial Officer
Facsimile: (713) 439-8157
with a copy to:
Baker Hughes Incorporated
3900 Essex Lane, Suite 1200
Houston, Texas 77027
Attention: General Counsel
Facsimile: (713) 439-8699
Such addresses may be changed, from time to time, by means of a
notice given in the manner provided in this Section 13.2.
13.3 Expenses. Except as otherwise provided herein, each party
to this Agreement shall pay its own costs and expenses (including all
legal, accounting, broker, finder and investment banker fees)
relating to this Agreement, the negotiations leading up to this
Agreement and the transactions contemplated by this Agreement.
13.4 Waiver. Waiver of any term or condition of this Agreement
by any party shall only be effective if in writing and shall not be
construed as a waiver of any subsequent breach or failure of the same
term or condition, or a waiver of any other term or condition of this
Agreement.
13.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
13.6 Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the court making the
96<PAGE>
determination of invalidity or unenforceability shall have the power
to reduce the scope, duration or area of the term or provision, to
delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified after the expiration
of the time within which the judgment may be appealed.
13.7 Entire Agreement. This Agreement, including the Exhibits
and Schedules hereto, constitutes the entire agreement, and
supersedes all other prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the
subject matter thereof.
13.8 Assignment. This Agreement shall not be assigned by either
the Buyer or the Seller or by operation of law or otherwise, except
that the Buyer may assign some or all of its rights, interests and/or
obligations hereunder to one or more affiliates of the Buyer
("Designated Transferees"). If the Buyer assigns any of its rights,
interests and/or obligations hereunder to one or more Designated
Transferees, then, unless the context otherwise requires, all
references herein to the Buyer shall mean and include the respective
Designated Transferees.
13.9 Governing Law; Time of the Essence. This Agreement shall
be governed by, and construed in accordance with, the laws of the
State of Delaware as to all matters and issues relating to the
transactions contemplated by this Agreement, including but not
limited to, matters and issues of validity, construction, effect,
performance and remedies. Time is of the essence in the performance
of this Agreement.
13.10 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which shall constitute one and the same
agreement.
13.11 Conditions and Documents. All parties shall use their best
efforts to satisfy the conditions to Closing and otherwise consummate
the transactions contemplated by this Agreement, including the
execution of such documents as may be reasonably necessary to
effectuate the purposes of this Agreement. Without limiting the
generality of the foregoing, the Seller shall cause each Share Seller
and Asset Seller to execute such documents, and to take such actions,
as may be necessary to enable the Seller to carry out its obligations
hereunder and to consummate the transactions contemplated hereby.
97<PAGE>
13.12 Publicity. Until the business day after the Closing Date
and except for any public disclosure which the Buyer or the Seller in
good faith believes is required by law or applicable stock exchange
rules, neither party shall issue any press release regarding the
transactions contemplated hereby, without the prior written approval
of the other party, which shall not be unreasonably withheld. The
parties hereto shall issue a mutually acceptable press release as
soon as practicable after the execution of this Agreement and as soon
as practicable after the Closing.
13.13 Confidential Information. In connection with the
negotiation of this Agreement and the consummation of the
transactions contemplated hereby, each party hereto will have access
to data and confidential information relating to the other party.
Each party hereto shall treat such data and information as
confidential, preserve the confidentiality thereof and not duplicate
or use such data or information, except in connection with the
transactions contemplated hereby, and in the event of the termination
of this Agreement for any reason whatsoever, each party hereto shall
return to the other all documents, work papers and other material
(including all copies thereof) obtained in connection with the
transactions contemplated hereby and will use reasonable efforts,
including instructing its employees who have had access to such
information, to keep confidential and not to use any such data or
information; provided, however, that such obligations shall not apply
to any data and information (i) which, at the time of disclosure, is
available publicly, (ii) which, after disclosure, becomes available
publicly through no fault of the receiving party, (iii) which the
receiving party knew or to which the receiving party had access prior
to disclosure by the disclosing party, (iv) which is required by law,
regulation or exchange rule, or in connection with legal process, to
be disclosed, (v) which is disclosed by a receiving party to its
attorneys or accountants, who shall respect the above restrictions,
or (vi) which is obtained in connection with any Tax matters and is
disclosed in connection with the filing of Tax Returns or claims for
refund or in conducting an audit or other proceeding.
13.14 Specific Performance. Each party acknowledges and agrees
that the other party would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with
their specific terms or otherwise are breached. Accordingly, each
party agrees that the other party shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms
and provisions hereof in any action instituted in any court of any
foreign country, the U.S. or any state thereof having jurisdiction
over the parties and the matter, in addition to any other remedy to
which it may be entitled, at law or in equity.
98<PAGE>
13.15 Dispute Resolution.
(a) General. In the event that any dispute should arise
between the Buyer and the Seller with respect to any matter
covered by this Agreement, other than the calculation of the Final
Statement of Cash Position (as to which any dispute shall be
resolved solely as provided in Section 4.1), the Buyer and the
Seller shall resolve such dispute in accordance with the
procedures set forth in this Section 13.15.
(b) Consent of the Parties. In the event of any dispute
between the parties with respect to any matter covered by this
Agreement, the parties shall first use their best efforts to
resolve such dispute between themselves. If the parties are
unable to resolve the dispute within 30 calendar days after the
commencement of efforts to resolve the dispute, the dispute may be
submitted to arbitration in accordance with Section 13.15(c).
(c) Arbitration.
(i) Either the Buyer or the Seller may submit any
matter referred to in Section 13.15(a) to arbitration by
notifying the other party hereto, in writing, of such
dispute. Within 10 days after receipt of such notice, the
Buyer and the Seller shall designate in writing one
arbitrator to resolve the dispute; provided, that if the
parties hereto cannot agree on an arbitrator within such
10-day period, the arbitrator shall be selected by the
American Arbitration Association. The arbitrator so
designated shall not be an employee, consultant, officer,
director or stockholder of any party hereto or any
affiliate of any party to this Agreement.
(ii) Within 15 days after the designation of the
arbitrator, the arbitrator, the Buyer and the Seller shall
meet, at which time the Buyer and the Seller shall be
required to set forth in writing all disputed issues and a
proposed ruling on each such issue.
(iii) The arbitrator shall set a date for a hearing,
which shall be no later than 30 days after the submission
of written proposals pursuant to Section 13.15(c)(ii), to
discuss each of the issues identified by the Buyer and the
Seller. Each such party shall have the right to be
represented by counsel. The arbitration shall be governed
by the rules of the American Arbitration Association;
provided, that the arbitrator shall have sole discretion
with regard to the admissibility of evidence.
99<PAGE>
(iv) The arbitrator shall use his or her best efforts
to rule on each disputed issue within 30 days after the
completion of the hearings described in Section
13.15(c)(iii). The determination of the arbitrator as to
the resolution of any dispute shall be binding and
conclusive upon all parties hereto. All rulings of the
arbitrator shall be in writing and shall be delivered to
the parties hereto.
(v) The prevailing party in any arbitration shall be
entitled to an award of reasonable attorneys' fees incurred
in connection with the arbitration. The non-prevailing
party shall pay such fees, together with the fees of the
arbitrator and the costs and expenses of the arbitration.
(vi) Any arbitration pursuant to this Section 13.15
shall be conducted in Washington, D.C. Any arbitration
award may be entered in and enforced by any court having
jurisdiction thereover and shall be final and binding upon
the parties.
(vii) Notwithstanding the foregoing, nothing in this
Section 13.15 shall be construed as limiting in any way the
right of a party to seek injunctive relief under Section
13.14 with respect to any actual or threatened breach of
this Agreement, including without limitation an actual or
threatened breach of Sections 7.14 or 7.15, from a court of
competent jurisdiction.
13.16 Legal Fees. In the event of any litigation between the
Seller and the Buyer arising out of this Agreement, the party
prevailing in such litigation shall be entitled to have its
reasonable attorneys' fees and expenses reimbursed by the other
party.
13.17 Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction shall be
applied against either party. Any reference to any federal, state,
local or foreign statute or law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context
requires otherwise.
100<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
THERMO ELECTRON CORPORATION
By:____________________________
Name:__________________________
Title:_________________________
BAKER HUGHES INCORPORATED
By:____________________________
Name:__________________________
Title:_________________________
101<PAGE>
FIRST AMENDMENT TO ASSET
AND STOCK PURCHASE AGREEMENT
AMENDMENT (the "Amendment") dated as of March 16, 1994, between Baker
Hughes Incorporated, a corporation organized under the laws of Delaware (the
"Seller"), and Thermo Electron Corporation, a corporation organized under the
laws of Delaware (the "Buyer").
W I T N E S S E T H :
WHEREAS, the Buyer and the Seller have entered into an Asset and Stock
Purchase Agreement dated as of January 28, 1994 (the "Agreement"); and
WHEREAS, the Buyer and the Seller desire to amend the Agreement as set
forth in this Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized words and terms used in this Amendment and not defined
herein shall have the respective meanings ascribed to them in the Agreement.
2. Section 2.1 of the Agreement is hereby amended by deleting
$134,073,923 and substituting therefor $128,389,033.
3. The following shall be inserted as Section 7.24 of the Agreement:
"7.24 Insurance.
(a) With respect to the $25,000,000 of insurance coverage
to be provided to the Buyer under the Seller's Insurance Policy
pursuant to Section 8.12, the Seller shall pay to the Buyer, from time
to time, all amounts not recoverable by the Buyer under the Seller's
Insurance Policy solely as a result of the Seller's self-insured
retention under such policy. For each claim payable to the Buyer
under the Seller's Insurance Policy, the Seller shall pay to the Buyer
the amount of such self-insured retention related to such claim at the
time payment is made under the Seller's Insurance Policy. The Seller
may elect to obtain coverage for some or all of such self-insured
retention from a third party insurer; provided that the cost to the
Buyer described in Section 8.12 shall not be affected thereby.
(b) The Buyer has advised the Seller that the Buyer has
obtained an insurance policy to insure itself against the $2,500,000
deductible referred to in Section 8.12 of the Agreement. The Seller
hereby undertakes to inform its insurers that the Buyer has obtained
this policy, so that the Seller's insurers will not assert that the
$2,500,000 deductible is applicable over and above the coverage
provided by the policy obtained by the Buyer."
<PAGE>
4. The following shall be inserted as Section 7.25 of the Agreement:
"7.25 Argentina Assets
(a) The Seller shall use its best efforts to liquidate the
Assets related to the operation of the Business in Argentina
(collectively, the "Argentina Assets"). All proceeds, net of
reasonable and customary liquidation expenses, of such liquidation
shall be promptly remitted to the Buyer upon their receipt by the
Seller.
(b) At any time after six months from the Closing Date, at the
request of the Buyer, the Seller shall transfer to the Buyer the
Argentina Assets then remaining unliquidated. The Seller hereby
assigns to the Buyer any rights or claims relating to the Argentina
Assets."
5. Section 8.8 is hereby amended by deleting the first sentence of such
section in its entirety and substituting therefor the following:
"The Seller and the Buyer shall have entered into leases in the forms
attached hereto as Exhibit H, Exhibit I and Exhibit K (the "Seller
Leases")."
The form of lease attached to this Amendment as Exhibit 1 shall be deemed to be
Exhibit K to the Agreement.
6. Section 10 is hereby amended by inserting as subparagraph (c) thereto
the following:
"(c) Notwithstanding the foregoing in this Section 10, the
consummation of the transactions contemplated by this Agreement with
respect to the business and operations of Ramsey Technologies in South
Africa (the "South Africa Closing") shall take place promptly following the
receipt by Thermedics (South Africa) Pty. Ltd. ("Thermedics (South
Africa)") of sufficient capital (the "Capital Requirement") to satisfy
South African laws and regulations relating to the acquisition by
Thermedics (South Africa) of such business and operations. The Buyer shall
use its best efforts promptly to satisfy the Capital Requirement. All
references in the Agreement to the "Closing" and the "Closing Date" in a
context which relates to the business and operations of Ramsey Technologies
in South Africa or the transfer of such business and operations to the
Buyer shall mean in such context the South Africa Closing and the date on
which the South Africa Closing occurs, respectively. All actions set forth
in subparagraph (b) above which would have otherwise been required to be
taken by the Buyer or the Seller at the Closing with respect to the
transfer of the business and operations of Ramsey Technologies in South
Africa shall be required to be taken at the South Africa Closing,
including, without limitation, payment by the Buyer to the Seller of
$213,730 of the Purchase Price allocated to such business and operations."
7. Section 2.5 is hereby amended by adding the following subparagraphs
(j) and (k):
"(j) the real estate owned by Baker Hughes Oilfield Operations, Inc.,
a California corporation, and to be leased to the Buyer pursuant to a lease
in the form attached hereto as Exhibit K.
<PAGE>
(k) the Argentina Assets (as defined in Section 7.25), except for
the proceeds therefrom and rights and claims relating thereto as described
in Section 7.25."
8. The following shall be inserted as Section 7.26 of the Agreement:
"7.26 Indemnification for Failure to Obtain Certain Consents. The
Seller hereby agrees to indemnify, and hold harmless, the Buyer from and
against all Losses (as defined in Section 11.1) incurred by the Buyer or
any affiliate of the Buyer as a result of the Seller not receiving (i) the
consent to the assignment of the Ramsey Technologies facility in
Amersfoort, The Netherlands from the landlord of such facility prior to the
Closing Date and (ii) the consent to the sub-lease of the Tracor Europa
B.V. facility in Amersfoort, The Netherlands from the landlord of such
facility prior to the Closing Date."
9. The Schedules to the Agreement corresponding to the Schedules attached
hereto as Exhibit 2 are hereby deleted and the corresponding Schedules in
Exhibit 2 are substituted therefor.
10. The following shall be inserted as Section 7.27 of the Agreement:
"7.27 Closing Documents. The Seller shall use its best efforts
after the Closing Date to provide to the Buyer, as soon as practicable
after the Closing, with each of the closing documents listed on the
international closing checklist attached hereto as Exhibit L that are not
provided to the Buyer at the Closing."
Exhibit 3 attached to this Amendment shall be deemed to be Exhibit L to the
Agreement.
11. The following shall be inserted as Section 7.28 of the Agreement:
"7.28 UK Leases.
(a) Until such time as the Lease for Unit A2 Swift Park, Old
Leicester Road, Rugby, Warwickshire CV21 1DZ, shall be executed, Thermedics
Limited shall be permitted by Baker Hughes Limited to occupy the premises
as Licensee upon the same terms as contained in the agreed form of Lease
upon payment of a license fee equivalent to the rent payable under the
Lease.
(b) Until such time as the License of the Landlord for Unit 15
Chamberlayne Road, Moreton Hall Industrial Estate, Bury St. Edmonds,
Suffolk, shall be issued and the assignment of the leasehold interest
executed, Thermo Electron Limited shall be permitted by Baker Hughes
Limited to occupy the premises as Licensee upon the same terms as contained
in Lease upon payment of a license fee equivalent to the rent payable under
the Lease."
12. Section 13 of the Agreement is incorporated herein by reference.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed on the day and year first above written.
THERMO ELECTRON CORPORATION
By:________________________
Name: Conan R. Deady
Title: Associate General Counsel
BAKER HUGHES CORPORATION
By:________________________
Name: Eric L. Mattson
Title: Vice President and
Chief Financial Officer
<PAGE>
Exhibit 2.2
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Agreement is made as of the 16th day of March, 1994 among Thermo
Electron Corporation, a Delaware corporation ("TMO"), Thermo Instrument Systems
Inc., a Delaware corporation ("THI"), and Thermedics Inc., a Massachusetts
corporation ("TMD"). Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Asset and Stock Purchase Agreement
(the "Agreement") dated January 28, 1994 between TMO and Baker Hughes
Incorporated ("Baker").
WHEREAS, TMO has entered into the Agreement ; and
WHEREAS, TMO desires to assign all of its rights and obligations under the
Agreement to THI and TMD, and THI and TMD desire to assume such rights and
obligations;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Assignment.
1.1 To THI. TMO hereby assigns to THI all of TMO's rights under the
Agreement to purchase the Assets that relate primarily to the Business other
than the business of Ramsey Technologies and Epsilon Industrial, and all other
rights, claims and defenses of TMO incident thereto.
1.2 To TMD. TMO hereby assigns to TMD all of TMO's rights under the
Agreement to purchase the Assets and the Shares that relate primarily to the
business of Ramsey Technologies and Epsilon Industrial, and all other rights,
claims and defenses of TMO incident thereto.
1.3 Mixed Assets. The parties acknowledge that certain Assets to be
purchased under the Agreement may not fall clearly within the obligations
described in either Section 1.1 or 1.2 above. However, THI and TMD acknowledge
that the intent of this Agreement is for them to obtain all Assets to be
purchased by TMO under the Agreement. In order to give effect to this intent,
with respect to any Assets that do not fall clearly under either Section 1.1 or
Section 1.2 ("Mixed Assets"), THI and TMD agree that each shall reasonably
cooperate with the other toward the end that each party shall realize relative a
benefit from any Mixed Asset proportionate to such party's proportionate
obligation to pay the Purchase Price as provided in Section 2.5.
-1-<PAGE>
2. Assumption.
2.1 By THI. THI hereby assumes all of TMO's obligations under the
Agreement that relate to the acquisition of the Business other than the business
of Ramsey Technologies and Epsilon Industrial (collectively, the "THI
Obligations"), including, without limitation, all of TMO's obligations with
respect to any Assumed Liabilities that relate primarily to the Business other
than the business of Ramsey Technologies and Epsilon Industrial.
2.2 By TMD. TMD hereby assumes all of TMO's obligations under the
Agreement that relate to the acquisition of the business of Ramsey Technologies
and Epsilon Industrial (collectively, the "TMD Obligations"), including, without
limitation, all of TMO's obligations with respect to any Assumed Liabilities
that relate primarily to the business of Ramsey Technologies and Epsilon
Industrial.
2.3. Mixed Obligations. The parties acknowledge that certain
obligations of TMO under the Agreement, including its obligations with respect
to certain Assumed Liabilities, may not fall clearly within the obligations
described in either Section 2.1 or Section 2.2 above. However, THI and TMD
acknowledge that the intent of this Agreement is for them to obtain all rights
and assume all obligations of TMO under the Agreement. In order to give effect
to this intent, with respect to all obligations of TMO under the Agreement that
do not fall clearly under either Section 2.1 or Section 2.2 ("Mixed
Obligations"), THI and TMD agree as follows:
(a) with respect to monetary obligations, THI and TMD shall each
bear a percentage of such obligations equal to (i) the amount of the Purchase
Price to be paid by such party pursuant to Section 2.5, divided by (ii) the
Purchase Price;
(b) with respect to non-monetary obligations, THI and TMD shall
each reasonably cooperate with the other to perform such obligations; and
(c) with respect to any category of Assumed Liabilities that have
been assumed only to the extent of applicable book reserves (e.g., certain tax
liabilities) and which do not fall clearly within either Section 2.1 or Section
2.2, paragraph (a) of this Section 2.3 shall apply.
2.4. Changes in Cash Position. The rights and obligations of THI and
TMD under Section 4.1 of the Agreement shall be divided as follows:
(a) A net amount owed to Baker or due from Baker, as the case may
be, will be calculated with respect to each of THI and TMD as if each was the
only Buyer for purposes of Section 4.1. Each calculation shall take into
account, for each party only such amounts loaned by Baker to, or withdrawn by
Baker from the portion of the Business to be acquired by such party. The amount
calculated for each of THI and TMD pursuant to this paragraph (a) is referred to
as the "Cash Adjustment Amount." The Cash Adjustment Amount shall be a positive
number to the extent Baker owes money to THI or TMD and negative to the extent
THI or TMD owes money to Baker; and
(b) In the event that an amount is owed by TMO to Baker under
Section 4.1 of the Agreement, then THI and TMD each shall pay such amount up to
the amount of such party's negative Cash Adjustment Amount. In addition, to the
extent that the amount paid by either THI or TMD to Baker pursuant to the
preceding sentence is less than such party's negative Cash Adjustment Amount
because the other party has a positive Cash Adjustment Amount, the difference
-2-<PAGE>
between the amount paid to Baker and such party's negative Cash Adjustment
Amount shall be paid to the other party; and
(c) In the event that an amount is owed by Baker to TMO under
Section 4.1 of the Agreement, then THI and TMD shall each be entitled to receive
a portion of such amount equal to such party's positive Cash Adjustment Amount.
To the extent that either THI or TMD does not ;receive all of its positive Cash
Adjustment Amount pursuant to the preceding sentence because the other party has
a negative Cash Adjustment Amount, the other party shall pay such negative Cash
Adjustment Amount to such party.
2.5 Payment of Purchase Price. TMD shall be obligated to pay Baker
$41,100,000 of the Purchase Price and THI shall be obligated to pay Baker the
balance of the Purchase Price.
2.6. Allocation of Purchase Price. THI and TMD each agrees to allocate
the portion of the Purchase Price paid by it for the Assets and/or Shares
acquired by it in a manner consistent with the allocation contained in Schedule
4.2 to the Agreement.
3. Allocation of Certain Rights Under Section 11 of Agreement. Under
Section 11.3(a)(i) of the Agreement, TMO is not entitled to indemnification from
Baker until the total amount of certain Losses incurred by TMO exceeds $2.5
million (the "Basket") and, except under certain circumstances, TMO is not
entitled to indemnification from Baker for Losses in excess of $65 million (the
"Cap"). The parties agree that THI and TMD each should bear only a
proportionate amount of the Basket and a proportionate amount of the risk that
aggregate indemnified Losses exceed the Cap. Therefore, the parties agree as
follows:
(a) Until the aggregate amount of Losses incurred by THI and TMD equals
or exceeds the Basket: (i) TMD will bear the first $755,000 of Losses incurred
by it; (ii) THI will bear the first $1,735,000 of Losses incurred by it; and
(iii) TMO will indemnify THI and TMD for any Losses incurred by them in excess
of the amounts specified in (i) and (ii) above. After the aggregate amount of
Losses incurred by THI and TMD equals or exceeds the Basket, each of such
parties shall be entitled to exercise its right to indemnification from Baker
pursuant to Section 11 of the Agreement; provided, however, that TMO shall be
subrogated to the rights of each of such parties, but only to the extent that
(A) such party has not incurred the amount of Losses to be borne by such party
under (i) or (ii), as the case may be, of the preceding sentence, and (B) TMO
has indemnified the other party pursuant to (iii) of the preceding sentence.
(b) After the aggregate amount of Losses for which THI and TMD are
indemnified by Baker equals the Cap, THI and TMD shall each indemnify the other
for the Losses incurred by the other for which the other would be entitled to
indemnification from Baker in the absence of the Cap, but only to the extent
that the indemnifying party has been indemnified by Baker for Losses in excess
of $45,110,000, if THI is the indemnifying party, or $19,890,000, if TMD is the
indemnifying party.
4. Allocation of Certain Obligations under Section 11 of the Agreement.
Under Section 11.3(a)(i) of the Agreement, Baker is not entitled to
indemnification from TMO until the total amount of Losses incurred by Baker
exceeds the Basket. THI and TMD agree that, after the total Losses incurred by
Baker exceeds the Basket, each party should indemnify Baker only for the amount
by which the Losses caused by such party exceed such party's proportionate share
of the Basket ($1,735,000 for THI and $765,000 for TMD). Therefore, THI and TMD
agree that, after Baker's Losses equal or exceed the Basket, if either party has
caused Baker Losses in excess of such party's proportionate share of the Basket,
-3-<PAGE>
then such party shall reimburse the other party for amounts paid by the other
party to indemnify Baker for Losses caused by such other party, but only to the
extent that the total amount of Baker Losses caused by the other party is less
than such other party's proportionate share of the Basket.
5. Representations and Warranties.
5.1 Representations of THI. THI represents and warrants to TMD and TMO
that (a) THI has all requisite right, power, capacity and authority to enter
into, deliver and perform this Agreement, (b) this Agreement has been duly and
validly executed and delivered by THI pursuant to all necessary corporate action
of THI and (c) this Agreement is a legal, valid and binding obligation of THI,
enforceable against THI in accordance with its terms.
5.2 Representations of TMD. TMD represents and warrants to THI and TMO
that (a) TMD has all requisite right, power, capacity and authority to enter
into, deliver and perform this Agreement, (b) this Agreement has been duly and
validly executed and delivered by TMD pursuant to all necessary corporate action
of TMD and (c) this Agreement is a legal, valid and binding obligation of TMD,
enforceable against TMD in accordance with its terms.
5.3 Representations of TMO. TMO represents and warrants to THI and TMD
that (a) TMO has all requisite right, power, capacity and authority to enter
into, deliver and perform this Agreement, (b) this Agreement has been duly and
validly executed and delivered by TMO pursuant to all necessary corporate action
of TMO, (c) this Agreement is a legal, valid and binding obligation of TMO,
enforceable against TMO in accordance with its terms and (d) TMO has all
requisite power and authority under the Agreement to assign its rights and
obligations under the Agreement to THI and TMD as provided herein.
6. Indemnification.
6.1 By THI. THI shall indemnify TMO and TMD from, and hold them
harmless against, all claims, demands, liabilities, expenses, losses, costs or
damages, including reasonable attorneys' fees (collectively, "Costs"), incurred
by them resulting from or relating to: (a) the THI Obligations, (b) any failure
by THI to perform any obligation under this Agreement, or (c) the inaccuracy of
any representation or warranty of THI in this Agreement.
6.2 By TMD. TMD shall indemnify TMO and THI from, and hold them
harmless against, all Costs incurred by them resulting from or relating to: (a)
the TMD Obligations, (b) any failure by TMD to perform any obligation under this
Agreement, or (c) the inaccuracy of any representation or warranty of TMD in
this Agreement.
6.3 By TMO. TMO shall indemnify THI and TMD from, and hold them
harmless against, all Costs incurred by them resulting from or relating to: (a)
any failure by TMO to perform any obligation under this Agreement, (b) any
breach by TMO of the Agreement prior to the date of this Agreement, (c) any
breach by TMO of any representation or warranty contained in the Agreement to
the extent such representation or warranty relates to TMO or affiliates of TMO
other than THI and TMD, or (d) the inaccuracy of any representation or warranty
of TMO in this Agreement.
6.4 By THI and TMD. THI and TMD shall, jointly and severally,
indemnify TMO from, and hold it harmless against, all Costs incurred by it
resulting from or relating to Mixed Obligations.
6.5 Third Party Claims. In the event that any legal proceedings shall
be instituted or any claim or demand shall be asserted by any third party in
-4-<PAGE>
respect of which indemnification may be sought by any party hereto from any
other party hereto, such parties shall follow the procedures set forth in
Section 11.4 of the Agreement.
7. Further Assurances. TMO shall execute such further instruments of
transfer and conveyance or take such further action as THI or TMD shall
reasonably request in order to give effect to the assignment of TMO's rights to
acquire the Assets and the Shares and TMO's other rights under the Agreement.
THI and TMD shall execute such further instruments of assumption or other
documents or take such other action as TMO shall reasonably request in order to
give effect to the assumption by THI and TMD of TMO's obligations to assume the
Assumed Liabilities and TMO's other obligations under the Agreement.
8. Notices. All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be delivered by hand or mailed by
first class certified or registered mail, return receipt requested, postage
prepaid:
If to TMO, at:
81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
Attention: General Counsel
If to THI, at:
504 Airport Road
P.O. Box 2108
Santa Fe, New Mexico 87504-2108
Attention: President
If to TMD, at:
470 Wildwood Street
P.O. Box 2697
Woburn, MA 01888-2697
Attention: President
If to THI or TMD, also with a copy to:
9. Governing Law. This Agreement will be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
10. Counterparts This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11. Fees and Expenses. THI and TMD will split all fees and expenses
including legal fees) in proportion to the amount of the Purchase Price to be
paid by each; provided, however, that if fees and expenses are incurred in a
country in which either THI or TMD but not the other purchases Assets or Shares,
then such party shall bear all of the fees and expenses associated with that
country.
12. Effectiveness. This Agreement shall be deemed to become effective
immediately prior to the Closing.
-5-<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the ____
day of March, 1994.
THERMO ELECTRON CORPORATION
By_________________________________
Name:
Title________________________________
THERMO INSTRUMENT SYSTEMS INC.
By_________________________________
Name:
Title________________________________
THERMEDICS INC.
By_________________________________
Name:
Title________________________________
