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):
October 19, 1999
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THERMO TERRATECH INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9549 04-2925807
(State or other Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
85 First Avenue
Waltham, Massachusetts 02451
(Address of principal executive offices) (Zip Code)
(781) 370-1640
(Registrant's telephone number
including area code)
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This Form 8-K contains forward-looking statements that involve a number of
risks and uncertainties. Important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements are
set forth under the heading "Forward-looking Statements" in Exhibit 13 to Thermo
TerraTech Inc.'s Annual Report on Form 10-K for the year ended April 3, 1999.
These include risks and uncertainties relating to: dependence of the
Registrant's businesses on environmental regulation and on sales to government
entities; potential environmental, regulatory, and professional liability; the
availability of government funding; intense competition; the effect of seasonal
influences on the Registrant's performance; possible obsolescence of the
Registrant's services due to technological change; dependence on the
availability of certain raw materials; the Registrant's acquisition and spinout
strategies; development and commercialization of technology; the cash management
arrangement with Thermo Electron Corporation; and the potential impact of the
year 2000 on processing date-sensitive information.
Item 5. Other Events
On October 20, 1999, the Registrant issued a press release stating that it
has entered into a definitive agreement and plan of merger with its parent
corporation, Thermo Electron Corporation ("Thermo Electron"), under which Thermo
Electron would acquire all of the outstanding common stock, $.10 par value per
share (the "Common Stock"), held by the shareholders of the Registrant other
than Thermo Electron and its affiliates. The Registrant's board of directors
approved the merger agreement based on a recommendation of its special
committee, which was charged with representing the interests of the Registrant's
public shareholders.
Under the agreement, each share of Common Stock owned by public
shareholders would be exchanged for the equivalent of at least $7.25 per share
of Common Stock. The actual number of Thermo Electron shares to be issued to
Thermo TerraTech public shareholders will be determined at the time of the
merger transaction, according to the conditions outlined below.
(i) If during the 20 trading days immediately prior to the effective
date of the merger the average closing price of Thermo Electron common stock is
less than $18.125, Thermo TerraTech shareholders would receive Thermo Electron
common stock worth the equivalent of $7.25 per share of Common Stock. However,
Thermo Electron may elect to terminate the merger agreement if it would be
required to issue 1.8 million or more shares of Thermo Electron common stock in
the transaction.
(ii) If the average closing price of Thermo Electron common stock is
between $18.125 and $23.125, each share of Common Stock would be exchanged for
.4 shares of Thermo Electron common stock.
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(iii) If the average closing price of Thermo Electron common stock
is greater than $23.125, Thermo TerraTech shareholders would receive Thermo
Electron common stock worth the equivalent of $9.25 per share of Common Stock.
Any shares of the common stock of Thermo Electron would be offered only by
means of a prospectus.
The Registrant expects that the necessary filings with the Securities and
Exchange Commission (the "SEC") will be made shortly, and that proxy materials
for a special meeting will be mailed to stockholders of the Registrant promptly
after completion of SEC review. The completion of this transaction is subject to
certain customary conditions, including completion of review by the SEC of the
proxy statement regarding the proposed transaction. A copy of the merger
agreement is filed as an exhibit hereto. Thermo Electron, which owns
approximately 87% of the Common Stock, intends to vote all of its shares of
Common Stock in favor of approval of the merger agreement and, therefore,
stockholder approval is assured. The transaction is expected to close during the
first calendar quarter of 2000. Following the merger, the shares of Common Stock
would cease to be publicly traded.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired: not
applicable.
(b) Pro Forma Financial Information: not applicable.
(c) Exhibits:
2.1 Agreement and Plan of Merger dated as of October 19, 1999
by and among Thermo Electron Corporation, TTT Acquisition
Corporation and Thermo TerraTech Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 21st day of October, 1999.
THERMO TERRATECH INC.
By: /s/ Theo Melas-Kyriazi
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Theo Melas-Kyriazi
Chief Financial Officer
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THERMO ELECTRON CORPORATION
TTT ACQUISITION CORPORATION
AND
THERMO TERRATECH INC.
DATED AS OF OCTOBER 19, 1999
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TABLE OF CONTENTS
Page
ARTICLE I THE MERGER.........................................................2
1.1. The Merger.............................................................2
1.2. Effective Time; Closing................................................2
1.3. Effect of the Merger...................................................2
1.4. Certificate of Incorporation; Bylaws...................................3
1.5. Directors and Officers.................................................3
1.6. Effect on Capital Stock................................................3
1.7. Surrender of Certificates..............................................5
1.8. No Further Ownership Rights in TerraTech Common Stock..................6
1.9. Lost, Stolen or Destroyed Certificates.................................6
1.10. Dividends..............................................................7
1.11. Fractional Shares......................................................7
1.12. Closing of Transfer Books..............................................7
1.13. Taking of Necessary Action; Further Action.............................7
1.14 Tax Treatment..........................................................8
ARTICLE II REPRESENTATIONS AND WARRANTIES OF TERRATECH.......................8
2.1. Organization of TerraTech..............................................8
2.2. TerraTech Capital Structure............................................8
2.3. Authority..............................................................8
2.4. Board Approval.........................................................9
2.5. Fairness Opinion.......................................................9
2.6 Registration Statement; Proxy Statement/Prospectus.....................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND
MERGER SUB............................................................10
3.1. Organization..........................................................10
3.2. Authority.............................................................10
3.3. Capitalization........................................................11
3.4. Reports and Financial Statements......................................12
3.5 Merger Sub............................................................13
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3.6 Tax Treatment.........................................................13
3.7 Information Provided to Investment Bankers............................13
3.8 Litigation............................................................13
3.9 Compliance with Agreements............................................13
3.10 Registration Statement; Proxy Statement/Prospectus....................14
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME..............................14
4.1. Conduct of Business by TerraTech......................................14
4.2 Conduct of Business by Thermo Electron................................14
ARTICLE V ADDITIONAL AGREEMENTS.............................................15
5.1. Registration Statement; Other Filings.................................15
5.2. Meeting of TerraTech Stockholders.....................................16
5.3. Access to Information.................................................17
5.4. Public Disclosure.....................................................17
5.5. Legal Requirements....................................................17
5.6. Notification of Certain Matters.......................................18
5.7. Best Efforts and Further Assurances...................................18
5.8. Stock Option and Employee Stock Purchase Plans; Reservation of
Shares................................................................18
5.9. Thermo Electron Form S-8..............................................19
5.10 Thermo Electron Form S-3..............................................19
5.11. Indemnification; Insurance............................................19
5.12. Deferred Compensation Plan............................................21
5.13. Compliance by Merger Sub..............................................21
5.14 Tax Treatment.........................................................22
5.15 NYSE Listing..........................................................22
ARTICLE VI CONDITIONS TO THE MERGER.........................................22
6.1. Conditions to Obligations of Each Party to Effect the Merger..........22
6.2. Additional Conditions to Obligations of TerraTech.....................23
6.3. Additional Conditions to the Obligations of Thermo Electron and
Merger Sub............................................................24
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER...............................24
7.1. Termination...........................................................24
7.2. Notice of Termination; Effect of Termination..........................25
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7.3. Fees and Expenses.....................................................26
7.4. Amendment.............................................................26
7.5. Extension; Waiver.....................................................26
ARTICLE VIII GENERAL PROVISIONS.............................................26
8.1. Non-Survival of Representations and Warranties........................26
8.2. Notices...............................................................26
8.3. Counterparts..........................................................27
8.4. Entire Agreement......................................................27
8.5. Severability..........................................................28
8.6. Other Remedies; Specific Performance..................................28
8.7. Governing Law.........................................................28
8.8. Assignment............................................................28
8.9 Headings..............................................................28
Exhibit A - Form of Tax Opinion
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of October
19, 1999 is by and among Thermo Electron Corporation, a Delaware corporation
("Thermo Electron"), TTT Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of Thermo Electron ("Merger Sub"), and Thermo
TerraTech Inc., a Delaware corporation ("TerraTech").
RECITALS
A. Thermo Electron owns approximately 87% of the outstanding shares of
common stock, par value $.10 per share, of TerraTech (the "TerraTech Common
Stock"), and Thermo Electron desires to acquire all of the remaining outstanding
shares of TerraTech Common Stock.
B. Thermo Electron has formed the Merger Sub as a subsidiary with the
intent of causing it to merge with TerraTech, as described in this Agreement.
C. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), Thermo
Electron and TerraTech will enter into a business combination transaction
pursuant to which Merger Sub will merge with and into TerraTech (the "Merger").
D. The Board of Directors of Thermo Electron (i) has determined that the
Merger is consistent with and in furtherance of the long-term business strategy
of Thermo Electron, and (ii) has approved this Agreement, the Merger and the
other transactions contemplated by this Agreement.
E. The Board of Directors of TerraTech, on the recommendation of a special
committee of the Board of Directors (the "Special Committee"), consisting of a
director of TerraTech who is not an officer or director of Thermo Electron or an
officer of TerraTech, (i) has determined that this Agreement, including the
Exchange Ratio (as defined below), and the transactions contemplated by this
Agreement, are fair to, and in the best interests of, the stockholders of
TerraTech (other than Thermo Electron), (ii) has approved and declared the
advisability of this Agreement, the Merger and the other transactions
contemplated by this Agreement and (iii) has resolved to recommend the approval
and adoption of this Agreement by the stockholders of TerraTech.
F. Adams, Harkness & Hill ("AH&H") has delivered to the Special Committee,
for its consideration, and for delivery to the stockholders of TerraTech, its
written opinion that, subject to the various assumptions and limitations set
forth therein, as of the date of such opinion the consideration to be received
by the stockholders of TerraTech (other than Thermo Electron) is fair to such
stockholders from a financial point of view.
G. The parties hereto intend that this transaction shall qualify for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
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H. Thermo Electron, TerraTech and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1. The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the DGCL, Merger Sub shall be merged with and into
TerraTech, the separate corporate existence of Merger Sub shall cease and
TerraTech shall continue as the surviving corporation. TerraTech as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
1.2. Effective Time; Closing. Subject to the provisions of this Agreement,
the Surviving Corporation shall cause the Merger to be consummated by filing a
Certificate of Merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware in accordance with the relevant provisions of the DGCL
(the time of such filing, or such later time as may be agreed in writing by the
parties and specified in the Certificate of Merger, being the "Effective Time"
and the date on which the Effective Time occurs being the "Effective Date") as
soon as practicable on the Closing Date (as herein defined). Unless the context
otherwise requires, the term "Agreement" as used herein refers collectively to
this Agreement and the Certificate of Merger. The closing of the Merger (the
"Closing") shall take place at the executive offices of Thermo Electron at a
time and date to be specified by the parties, which shall be no later than the
second business day after the satisfaction or waiver of the conditions set forth
in Article VI, or at such other time, date and location as the parties hereto
agree in writing (the "Closing Date"). At the Closing, (i) TerraTech shall
deliver to Thermo Electron the various certificates and instruments required
under Article VI, (ii) Thermo Electron and Merger Sub shall deliver to TerraTech
the various certificates and instruments required under Article VI and (iii)
TerraTech shall execute and file the Certificate of Merger with the Secretary of
State of the State of Delaware, in accordance with the applicable provisions of
the DGCL.
1.3. Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of TerraTech and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of TerraTech and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
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1.4. Certificate of Incorporation; Bylaws.
(a) Subject to the requirements of Section 5.11 hereof, at the
Effective Time, the Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation.
(b) Subject to the requirements of Section 5.11 hereof, the Bylaws
of Merger Sub, as in effect immediately prior to the Effective Time, shall be,
at the Effective Time, the Bylaws of the Surviving Corporation until thereafter
amended.
1.5. Directors and Officers. The directors of TerraTech immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, to serve until their respective successors are duly elected or
appointed and qualified. The officers of TerraTech immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, to serve
until their successors are duly elected or appointed or qualified.
1.6. Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, TerraTech or the
holders of any of the following securities:
(a) Exchange of TerraTech Common Stock. Subject to the balance of
this Section 1.6, each share of TerraTech Common Stock issued and outstanding
immediately prior to the Effective Time will be automatically converted into the
right to receive 0.4 share (subject to adjustment pursuant to Section 1.6(g)
hereof, the "Exchange Ratio") of the common stock, $1.00 par value, of Thermo
Electron (the "Thermo Common Stock"). As of the Effective Time, all such shares
of TerraTech Common Stock shall no longer be outstanding and shall be
automatically canceled and retired and shall cease to exist, and each holder of
a certificate representing any such shares of TerraTech Common Stock shall cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration (as defined in Section 1.7(b)) upon surrender of the certificate
representing such share of TerraTech Common Stock in the manner provided in
Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 1.9).
(b) Stock Options and Employee Stock Purchase Plan. All options to
purchase TerraTech Common Stock outstanding immediately prior to the Effective
Time under stock option plans maintained by TerraTech (including those plans
adopted when TerraTech was known as Thermo Process Systems Inc.), consisting of
the Thermo Process Systems Inc. Incentive Stock Option Plan, the Thermo Process
Systems Inc. Nonqualified Stock Option Plan, the Thermo Process Systems Inc.
Equity Incentive Plan and the Thermo Process Systems Inc. Directors Stock Option
Plan, each as amended (together, the "TerraTech Stock Option Plans"), shall be
converted into options to purchase Thermo Common Stock in accordance with
Section 5.8 hereof. All options to purchase shares of TerraTech Common Stock
under the Amended and Restated Thermo TerraTech Employees' Stock Purchase Plan
(the "TerraTech ESPP") shall be converted into options to purchase Thermo Common
Stock in accordance with Section 5.8 hereof.
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(c) Warrants. All warrants to purchase TerraTech Common Stock
outstanding immediately prior to the Effective Time shall be converted at the
Effective Time into warrants to purchase Thermo Common Stock. The number of
whole shares of Thermo Common Stock for which each warrant will be exercisable
(or will become exercisable in accordance with its terms) and the per share
exercise price for the shares of Thermo Common Stock issuable upon exercise of
such TerraTech warrant will be determined in accordance with the terms of such
warrants.
(d) Convertible Debentures. All TerraTech convertible debentures
(the "Convertible Debentures") issued pursuant to the Fiscal Agency Agreement
dated as of May 2, 1996 by and among TerraTech, Thermo Electron and Chase
Manhattan Bank (formerly Chemical Bank) as Fiscal Agent (the "Fiscal Agency
Agreement"), outstanding at the Effective Time shall remain the Convertible
Debentures of TerraTech, provided however, that in lieu of TerraTech Common
Stock being issuable upon conversion of such Convertible Debentures, after the
Effective Time, Thermo Common Stock shall be issuable upon conversion of such
Convertible Debentures in accordance with the terms of the Fiscal Agency
Agreement. At the Effective Time, the price at which the TerraTech Convertible
Debentures then outstanding will be convertible into Thermo Common Stock shall
be adjusted in accordance with the terms of the Fiscal Agency Agreement.
(e) Capital Stock of Merger Sub. Each share of common stock, par
value $.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into and become one validly issued, fully
paid and non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
(f) Treasury Stock; Stock Held By Thermo Electron. Notwithstanding
any other provision of this Agreement, each share of TerraTech Common Stock
issued and outstanding and owned by Thermo Electron or any wholly owned
subsidiary of Thermo Electron, together with all treasury shares held by
TerraTech immediately prior to the Effective Time shall cease to be outstanding,
and shall automatically be cancelled and retired without payment of any
consideration therefor, cash or otherwise, and cease to exist.
(g) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect fully the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities convertible
into, or exercisable or exchangeable for, TerraTech Common Stock or Thermo
Common Stock, as the case may be), recapitalization or other like change without
receipt of consideration with respect to either the TerraTech Common Stock or
the Thermo Common Stock occurring on or after the date hereof and prior to the
Effective Time. The Exchange Ratio shall also be subject to adjustment as
follows:
(i) In the event the average of the closing prices per share
of Thermo Common Stock as reported in the consolidated transaction reporting
system for each of the 20 consecutive trading days ending on the fifth trading
day prior to the Effective Time (the "Pre-Closing Average Price") multiplied by
the Exchange Ratio is less than $7.25, then the Exchange Ratio shall be adjusted
to be equal to $7.25 divided by the Pre-Closing Average Price, subject to the
provisions of Section 7.1(h).
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(ii) In the event the Pre-Closing Average Price multiplied by
the Exchange Ratio is greater than $8.50, then the Exchange Ratio shall be
adjusted to be equal to $8.50 divided by the Pre-Closing Average Price.
1.7. Surrender of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Thermo Electron
shall authorize Boston EquiServe to act as the exchange agent (the "Exchange
Agent") in the Merger. Immediately following the Effective Time, Thermo Electron
shall deposit with the Exchange Agent, for the benefit of the holders of shares
of TerraTech Common Stock, for exchange in accordance with the provisions of
this Article I, certificates representing the shares of Thermo Common Stock
issuable pursuant to this Agreement in exchange for outstanding shares of
TerraTech Common Stock. The Thermo Common Stock into which TerraTech Common
Stock shall be converted pursuant to the Merger shall be deemed to have been
issued at the Effective Time.
(b) Exchange Procedures. As soon as practicable after, and in no
event more than three business days after, the Effective Time, Thermo Electron
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of a certificate (a "Certificate" or the "Certificates")
representing TerraTech Common Stock (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall otherwise be in such form and have such other provisions as
Thermo Electron may reasonably specify and as are reasonably acceptable to
TerraTech, with the approval of the Special Committee) and (ii) instructions for
effecting the exchange of the Certificates for certificates representing shares
of Thermo Common Stock, as provided herein. Upon surrender of a Certificate for
cancellation to the Exchange Agent, together with such letter of transmittal
duly completed and validly executed in accordance with the instructions thereto,
the holder of such Certificate shall be entitled to receive in exchange therefor
(x) a certificate representing shares of Thermo Common Stock equal to the
Exchange Ratio multiplied by the number of shares of TerraTech Common Stock
represented by such Certificate (rounded down to the nearest whole share), (y)
any dividends or other distributions to which such holder is entitled pursuant
to Section 1.10 and (z) a check issued pursuant to Section 1.11 hereof for any
fractional share of Thermo Common Stock (the consideration specified in clauses
(x), (y) and (z) being collectively referred to herein as the "Merger
Consideration"), and the Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of shares of TerraTech Common
Stock which is not registered in the transfer records of TerraTech as of the
Effective Time, the Merger Consideration may be paid in accordance with this
Article I to a transferee if the Certificate evidencing such shares is presented
to the Exchange Agent, accompanied by all documents required by law to evidence
and effect such transfer pursuant to this Section. Until so surrendered, each
outstanding Certificate will be deemed from and after the Effective Time, for
all corporate purposes, to evidence only the right to receive shares of Thermo
Common Stock equal to the Exchange Ratio for each share of TerraTech Common
Stock represented on such Certificate, and the other Merger Consideration.
(c) Transfers of Ownership. If payment of the Exchange Ratio is to
be made to any person other than the person in whose name the Certificate
surrendered in exchange therefor is registered, it will be a condition of such
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payment that the Certificate so surrendered will be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
payment will have paid to Thermo Electron or any agent designated by it any
transfer or other taxes required by reason of payment to a person other than the
registered holder of the Certificate surrendered, or established to the
satisfaction of Thermo Electron or any agent designated by it that such tax has
been paid or is not payable.
(d) No Liability. Notwithstanding anything to the contrary in this
Section 1.7, neither the Exchange Agent, Thermo Electron, the Surviving
Corporation nor any party hereto shall be liable to a holder of shares of
TerraTech Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(e) Responsibility; Term. During the term of its engagement, the
Exchange Agent shall be responsible for delivering certificates representing
Thermo Common Stock and the other Merger Consideration to the holders of
properly endorsed Certificates that are returned to the Exchange Agent. Promptly
following the date that is six months after the Effective Date, the Exchange
Agent shall, upon request by Thermo Electron, deliver to Thermo Electron all
cash, Certificates, certificates representing shares of Thermo Common Stock and
other documents in its possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each
holder of a Certificate formerly representing shares of TerraTech Common Stock
may surrender such Certificate to Thermo Electron and (subject to applicable
abandoned property, escheat and similar laws) receive in exchange therefor the
Merger Consideration represented by such Certificate, without any interest
thereon.
1.8. No Further Ownership Rights in TerraTech Common Stock. The Thermo
Common Stock and cash, if any, delivered to the holders of TerraTech Common
Stock upon the surrender of shares of TerraTech Common Stock in accordance with
the terms hereof shall be deemed to have been delivered in full satisfaction of
all rights pertaining to such shares of TerraTech Common Stock.
1.9. Lost, Stolen or Destroyed Certificates. In the event any Certificates
shall have been lost, stolen or destroyed, the Exchange Agent shall deliver the
certificates representing Thermo Common Stock and the other Merger Consideration
in respect of such lost, stolen or destroyed Certificates, upon the making of an
affidavit of that fact by the holder thereof; provided, however, that, as a
condition precedent to the payment thereof, the owner of such lost, stolen or
destroyed Certificates shall deliver a bond in such sum as Thermo Electron or
the Exchange Agent may reasonably direct as indemnity against any claim that may
be made against Thermo Electron or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed, unless Thermo
Electron waives such requirement in writing.
1.10. Dividends. No dividends or other distributions that are payable to
the holders of record of Thermo Common Stock as of a date on or after the
Effective Time shall be paid to the holders of TerraTech Common Stock entitled
by reason of the Merger to receive Thermo Common Stock until such holders
surrender their Certificates in accordance with Section 1.7(b) or provide an
affidavit and indemnity in accordance with Section 1.9. Upon such surrender, the
Exchange Agent or Thermo Electron (in the event that the Exchange Agent's term
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has expired), shall pay or deliver to the persons in whose name the certificates
representing such Thermo Common Stock are issued any dividends or other
distributions that are payable to the holders of record of Thermo Common Stock
as of a date on or after the Effective Time and which were paid or delivered
between the Effective Time and the time of such surrender; provided that no such
person shall be entitled to receive any interest on such dividends or other
distributions.
1.11. Fractional Shares. No certificates or scrip representing fractional
shares of Thermo Common Stock shall be issued to holders of TerraTech Common
Stock upon the surrender for exchange of Certificates, and such holders of
TerraTech Common Stock shall not be entitled to any voting rights, rights to
receive any dividends or distributions or other rights as a stockholder of
Thermo Electron with respect to any fractional shares of Thermo Common Stock
that would otherwise be issued to such holders of TerraTech Common Stock. In
lieu of any fractional shares of Thermo Common Stock that would otherwise be
issued, each holder of TerraTech Common Stock that would have been entitled to
receive a fractional share of Thermo Common Stock shall, upon proper surrender
of such person's Certificates, receive a cash payment (rounded to the nearest
cent) equal to the closing price per share of Thermo Common Stock as reported in
the consolidated transaction reporting system on the trading day immediately
preceding the Closing Date, multiplied by the fraction of a share that such
holder of TerraTech Common Stock would otherwise be entitled to receive.
1.12. Closing of Transfer Books. At the Effective Time, the stock transfer
books of TerraTech shall be closed and no transfer of TerraTech Common Stock
shall thereafter be made. If, after the Effective Time, Certificates are
presented to Thermo Electron, they shall be canceled and exchanged for the
Merger Consideration in accordance with Article I.
1.13. Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of TerraTech and Merger Sub, the officers and directors of the
Surviving Corporation are fully authorized in the name of TerraTech and Merger
Sub or otherwise to take, and will take, all such lawful and necessary action,
so long as such action is consistent with this Agreement.
1.14 Tax Treatment. The Merger is intended to constitute a tax-free
reorganization under Section 368(a) of the Code. The parties hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Section 368(a) of
the Code and the regulations thereunder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TERRATECH
TerraTech represents and warrants to Thermo Electron and Merger Sub as
follows:
2.1. Organization of TerraTech. TerraTech and each of its subsidiaries is
a corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, has the corporate or similar power to own, lease and operate its
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property and to carry on its business as now being conducted and as proposed by
TerraTech to be conducted, and is duly qualified to do business and in good
standing as a foreign corporation or other legal entity in each jurisdiction in
which the failure to be so qualified would have a Material Adverse Effect on
TerraTech. In this Agreement, the term "Material Adverse Effect" used in
reference to TerraTech means any event, change or effect, that is or is
reasonably likely to be, individually or in the aggregate with other events,
changes or effects, materially adverse to the financial condition, assets,
liabilities, results of operations or business of TerraTech and its
subsidiaries, taken as a whole.
2.2. TerraTech Capital Structure. The authorized capital stock of
TerraTech consists of 75,000,000 shares of Common Stock, par value $.10 per
share, of which there were 19,072,133 shares issued and outstanding as of
October 2, 1999, and 511,640 shares in treasury as of October 2, 1999. All
outstanding shares of TerraTech Common Stock are duly authorized, validly
issued, fully paid and non-assessable and are not subject to preemptive rights
created by statute, the Certificate of Incorporation or Bylaws of TerraTech or
any agreement or document to which TerraTech is a party or by which it is bound.
As of October 2, 1999, an aggregate of 2,038,550 shares of TerraTech Common
Stock, net of exercises, were reserved for issuance to employees, consultants
and non-employee directors pursuant to the TerraTech Stock Option Plans, under
which options were outstanding for an aggregate of 1,628,725 shares as of such
date. As of October 2, 1999, an aggregate of 700,500 shares of TerraTech Common
Stock were reserved for issuance upon the exercise of warrants and an aggregate
of 7,034,592 shares of TerraTech Common Stock were reserved for issuance upon
the conversion of the Convertible Debentures. All shares of TerraTech Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and non-assessable.
2.3. Authority.
(a) TerraTech has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of TerraTech, subject only to the adoption of this
Agreement by TerraTech's stockholders and the filing and recording of the
Certificate of Merger pursuant to the DGCL. Under the DGCL, TerraTech's
stockholders may adopt this Agreement by vote of the holders of a majority of
the outstanding shares of TerraTech Common Stock. This Agreement has been duly
executed and delivered by TerraTech, and assuming the due authorization,
execution and delivery by Thermo Electron and Merger Sub, constitutes the valid
and binding obligation of TerraTech, enforceable in accordance with its terms.
The execution and delivery of this Agreement by TerraTech do not, and the
performance of this Agreement by TerraTech will not, (i) conflict with or
violate the Certificate of Incorporation or Bylaws of TerraTech or (ii) subject
to obtaining the adoption by TerraTech's stockholders of this Agreement as
contemplated in Section 5.2 and compliance with the requirements set forth in
Section 2.3(b) below, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to TerraTech or any of its material subsidiaries
or by which its or their respective properties is bound, except, with respect to
clause (ii), for any such conflicts, violations, defaults or other occurrences
that would not have a Material Adverse Effect on TerraTech or the Surviving
Corporation.
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(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental or regulatory body or authority or
instrumentality ("Governmental Entity") is required by or with respect to
TerraTech in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, except for (i) the filing
of the Certificate of Merger with the Secretary of State of Delaware, (ii) the
filing by TerraTech and Thermo Electron of the Proxy Statement and the
Registration Statement (as defined in Section 5.1), respectively, with the U.S.
Securities and Exchange Commission ("SEC") in accordance with the Securities Act
of 1933, as amended (the "Securities Act") and the Securities Exchange Act of
1934, as amended (the "Exchange Act") and (iii) such other consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal and state securities laws.
2.4. Board Approval. The Board of Directors of TerraTech, upon
recommendation of the Special Committee that this Agreement, including the
Exchange Ratio, is fair to, and in the best interests of, the stockholders of
TerraTech (other than Thermo Electron), has, as of the date of this Agreement,
unanimously (i) adopted a resolution approving this Agreement and declaring its
advisability, (ii) determined that the Merger is fair to, and in the best
interests of, TerraTech and its stockholders, and (iii) determined to recommend
that the stockholders of TerraTech approve this Agreement.
2.5. Fairness Opinion. The Special Committee has received an opinion from
AH&H dated October 19, 1999 that, as of such date, the consideration to be
received by TerraTech's stockholders in the Merger is fair, from a financial
point of view, to TerraTech's stockholders other than Thermo Electron.
2.6 Registration Statement; Proxy Statement/Prospectus. The information
supplied by TerraTech for inclusion in the Registration Statement (including any
information incorporated by reference in the Registration Statement from other
filings made by TerraTech with the SEC) shall not, at the time the Registration
Statement becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements included therein not misleading. Other than with
respect to the information supplied by Thermo Electron and/or Merger Sub, the
Proxy Statement shall not, on the date the Proxy Statement is first mailed to
stockholders, at the time of the TerraTech Stockholders' Meeting (as defined in
Section 5.1(b)) or at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading. The Proxy
Statement will comply (other than with respect to information relating to Thermo
Electron and/or Merger Sub) as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND MERGER SUB
Thermo Electron and Merger Sub, jointly and severally, represent and
warrant to TerraTech as follows:
3.1. Organization. Thermo Electron is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, each has the corporate power
to own, lease and operate its property and to carry on its business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would have a Material Adverse Effect on Thermo
Electron. In this Agreement, the term "Material Adverse Effect" used in
reference to Thermo Electron means any event, change or effect, that is or is
reasonably likely to be, individually or in the aggregate with other events,
changes or effects, materially adverse to the financial condition, assets,
liabilities, results of operations or business of Thermo Electron and its
subsidiaries, taken as a whole.
3.2. Authority.
(a) Each of Thermo Electron and Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Thermo Electron and
Merger Sub, subject only to the filing and recording of the Certificate of
Merger pursuant to the DGCL. This Agreement has been duly executed and delivered
by each of Thermo Electron and Merger Sub and, assuming the due authorization,
execution and delivery of this Agreement by TerraTech, this Agreement
constitutes the valid and binding obligation of each of Thermo Electron and
Merger Sub, enforceable in accordance with its terms. The execution and delivery
of this Agreement by each of Thermo Electron and Merger Sub do not, and the
performance of this Agreement by each of Thermo Electron and Merger Sub will
not, (i) conflict with or violate the Certificate of Incorporation or Bylaws of
Thermo Electron or the Certificate of Incorporation or Bylaws of Merger Sub or
of any material subsidiary, direct or indirect, of Thermo Electron (each, a
"Material Thermo Subsidiary"), (ii) subject to compliance with the requirements
set forth in Section 3.2(b) below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Thermo Electron or any
Material Thermo Subsidiaries (including Merger Sub, but excluding TerraTech and
its wholly owned subsidiaries) or by which its or any of their respective
properties is bound or affected, or (iii) result in any breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or impair Thermo Electron's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Thermo
Electron or any Material Thermo Subsidiaries (including Merger Sub, but
excluding TerraTech and its wholly owned subsidiaries) pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Thermo Electron or any
Material Thermo Subsidiaries (including Merger Sub, but excluding TerraTech and
its wholly owned subsidiaries) is a party or by which Thermo Electron or any
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Material Thermo Subsidiaries (including Merger Sub, but excluding TerraTech and
its wholly owned subsidiaries) or its or any of their respective properties are
bound or affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, defaults or other occurrences that would not have a
Material Adverse Effect on Thermo Electron.
(b) All shares of Thermo Common Stock issuable in accordance with
this Agreement, and shares of Thermo Common Stock which will be subject to
issuance pursuant to the TerraTech Stock Option Plans, the TerraTech ESPP, the
Convertible Debentures and the warrants issued by TerraTech, each as assumed by
Thermo Electron pursuant to this Agreement will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Thermo Electron or any other agreement or document to which Thermo Electron
is a party or by which it is bound.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required by
or with respect to Thermo Electron or Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Certificate of Merger with
the Secretary of State of Delaware, (ii) the filing of the Proxy Statement and
the Registration Statement (as defined in Section 5.1) with the SEC in
accordance with the Securities Act and the Exchange Act, and (iii) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable federal and state securities laws.
3.3 Capitalization.
(a) The authorized capital stock of Thermo Electron consists of
350,000,000 shares of Thermo Common Stock, par value $1.00 per share, of which
there were 158,236,781 shares issued and outstanding as of October 2, 1999, and
9,011,451 shares in treasury as of October 2, 1999, and 50,000 shares of
preferred stock, $100 par value per share, of which 40,000 shares have been
designated Series B Junior Participating Preferred Stock, none of which are
issued and outstanding. All of the outstanding shares of Thermo Common Stock are
duly authorized, validly issued, fully paid and non-assessable and are not
subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Thermo Electron or any agreement or document to which
Thermo Electron is a party or by which it is bound. As of October 2, 1999, an
aggregate of 15,653,373 shares of Thermo Common Stock, net of exercises, were
reserved for issuance to employees, consultants and non-employee directors
pursuant to stock option plans maintained by Thermo Electron, under which
options are outstanding for an aggregate of 11,912,116 shares. As of October 2,
1999, an aggregate of 15,476,191 shares of Thermo Common Stock were reserved for
issuance upon the conversion of convertible debentures issued by Thermo
Electron. All shares of Thermo Common Stock subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and non-assessable. There are no bonds, debentures, notes or other indebtedness
of Thermo Electron issued and outstanding which have rights to vote in the
election of directors of Thermo Electron. Except as set forth in the Thermo
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Reports (as defined in Section 3.4) filed prior to the date of this Agreement,
there are no other material outstanding options, warrants, equity securities,
subscriptions, calls, rights, commitments or agreements of any character to
which Thermo Electron or any of its subsidiaries is a party or by which it is
bound, obligating Thermo Electron to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
securities of Thermo Electron or obligating Thermo Electron to grant or enter
into any such option, warrant, equity security, call, right, commitment or
agreement.
(b) Since July 3, 1999, there have been no material issuances of
options, warrants, equity securities, subscriptions, calls, rights, commitments
or agreements of any character to which Thermo Electron or any of its
subsidiaries is a party or by which it is bound, obligating Thermo Electron to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other equity securities of Thermo Electron or
obligating Thermo Electron to grant or enter into any such option, warrant,
equity security, call, right, commitment or agreement.
(c) As of the date of this Agreement, no Stock Acquisition Date or
other event that would result in the occurrence of a Distribution Date has
occurred (as such terms are defined in the Rights Agreement dated January 19,
1996, as amended, by and between Thermo Electron and BankBoston, N.A. (the
"Rights Agreement")), with respect to the rights to purchase a unit consisting
of one ten-thousandth of a share of Thermo Electron's Series B Junior
Participating Preferred Stock pursuant to the Rights Agreement.
3.4 Reports and Financial Statements. Thermo Electron has filed all
material forms, reports and documents required to be filed by it with the SEC
since January 1, 1997. Thermo Electron has made available to TerraTech complete
and accurate copies, as amended or supplemented, of (a) its Annual Report on
Form 10-K for the fiscal year ended January 2, 1999 as filed with the SEC, and
(b) all other reports filed by Thermo Electron with the SEC under Sections 13 or
14 of the Exchange Act since January 2, 1999 (such reports are collectively
referred to herein as the "Thermo Reports"). No event has occurred since July 3,
1999 which will be required to be reported by Thermo Electron on a report
required to be filed under Sections 13 or 14 of the Exchange Act. Without
limitation of the foregoing, since July 3, 1999, there has been no change in the
business, financial condition or results of operations of Thermo Electron that
has resulted or is reasonably likely to result in a Material Adverse Effect on
Thermo Electron. As of their respective dates, the Thermo Reports (i) complied
in all material respects with the requirements of the Exchange Act and the
applicable rules of the SEC thereunder and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited financial
statements and unaudited interim financial statements of Thermo Electron
included in the Thermo Reports (in each case including the notes thereto) (i)
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, (ii) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered thereby (except as may be indicated therein or in the notes thereto, and
in the case of quarterly financial statements, as permitted by Form 10-Q under
the Exchange Act), (iii) fairly present, in all material respects, the
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consolidated financial condition, results of operation and cash flows of Thermo
Electron as of the respective dates thereof and for the periods referred to
therein, and (iv) are consistent with the books and records of Thermo Electron.
There are no liabilities of Thermo Electron which are not disclosed in the
Thermo Reports which would be reasonably likely to have a Material Adverse
Effect on Thermo Electron.
3.5 Merger Sub. Since the date of its incorporation, Merger Sub has not
engaged in any activities other than in connection with or as contemplated by
this Agreement.
3.6 Tax Treatment. As of the Effective Time, all representations contained
in the Representation Letters delivered to Hale and Dorr LLP pursuant to Section
6.1(d) shall be true, correct and complete in all material respects.
Stockholders of TerraTech are each third party beneficiaries of this Section 3.6
and may seek relief for breach hereof in their own names.
3.7 Information Provided to Investment Bankers. To the knowledge of Thermo
Electron, the information provided by Thermo Electron and TerraTech to AH&H in
connection with the Merger does not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. For purposes of the foregoing sentence, any
projections or forward-looking statements shall not be deemed to be statements
of material facts; however, the projections were prepared in good faith and
based on assumptions that were reasonable at the time such projections were
prepared, given the information known by management at such time. Furthermore,
it is recognized that such projections and forward-looking statements do not
constitute any warranty as to the future performance of Thermo Electron or
TerraTech and that actual results may vary from projected results.
3.8 Litigation. Except as discussed in the Thermo Reports, there are no
suits, actions, arbitrations, demands, claims or proceedings pending, or to the
knowledge of Thermo Electron, threatened against Thermo Electron or any
subsidiary of Thermo Electron which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect on Thermo Electron.
3.9 Compliance with Agreements. The treatment provided for herein with
respect to outstanding Convertible Debentures, options (both under the TerraTech
Stock Option Plans and the TerraTech ESPP) and warrants of TerraTech is in
compliance with the applicable agreements and instruments governing such
securities. No consent or approval of the holders of such instruments is
required in connection with the transactions contemplated by this Agreement.
3.10 Registration Statement; Proxy Statement/Prospectus. Other than with
respect to the information supplied by TerraTech, the Registration Statement
shall not, at the time the Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements included therein not
misleading. The information supplied by Thermo Electron for inclusion in the
Proxy Statement (including any information incorporated by reference in the
Proxy Statement from other filings made by Thermo Electron with the SEC) shall
not, on the date the Proxy Statement is first mailed to stockholders, at the
time of the TerraTech Stockholders' Meeting or at the Effective Time, contain
any untrue statement of a material fact or omit to state any material fact
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required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not false or
misleading. The Proxy Statement will comply (with respect to information
relating to Thermo Electron) as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1. Conduct of Business by TerraTech. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, TerraTech shall, except
for such actions which are contemplated by this Agreement or reasonably
appropriate in connection with the transactions contemplated by this Agreement,
and except as consented to by Thermo Electron, carry on its business in the
usual, regular and ordinary course, in substantially the same manner as
heretofore conducted, pay its debts and taxes when due subject to good faith
disputes over such debts or taxes, pay or perform other material obligations
when due, and use its commercially reasonable efforts consistent with past
practices and policies to preserve intact its present business organization,
keep available the services of its present officers and employees and preserve
its relationships with customers, suppliers, distributors, licensors, licensees,
and others with which it has business dealings.
4.2 Conduct of Business by Thermo Electron. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement pursuant to its terms or the Effective Time, Thermo Electron (i)
shall, except for such actions which are contemplated by this Agreement or
reasonably appropriate in connection with the transactions contemplated by this
Agreement, or which are undertaken in connection with the Merger or with the
reorganization of Thermo Electron and its subsidiaries as publicly announced or
as disclosed to AH&H prior to the date of this Agreement, carry on its business
materially in the usual, regular and ordinary course, in substantially the same
manner as heretofore conducted, pay its debts and taxes when due subject to good
faith disputes over such debts or taxes, pay or perform other material
obligations when due, and use its commercially reasonable efforts consistent
with past practices and policies to preserve intact its present business
organization, keep available the services of its present officers and employees
and preserve its relationships with customers, suppliers, distributors,
licensors, licensees, and others with which it has business dealings; and (ii)
shall not, and shall not permit any Material Thermo Subsidiary to, take any
action which would make any of the representations and warranties of Thermo
Electron contained herein untrue or cause Thermo Electron not to be in
compliance with any covenant set forth herein.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. Registration Statement; Other Filings. (a) As promptly as practicable
after the execution of this Agreement, TerraTech and Thermo Electron will
jointly prepare and file with the SEC a preliminary proxy statement (with
appropriate requests for confidential treatment) relating to the Merger and this
Agreement (such proxy statement, as amended or supplemented, the "Proxy
Statement"), and Thermo Electron will prepare and file with the SEC a
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registration statement on Form S-4 (the "Registration Statement"), in which the
Proxy Statement shall be included as a prospectus. Thermo Electron will use
reasonable best efforts to cause the Registration Statement to be declared
effective under the Securities Act as soon as practicable after such filing, and
will take all actions required under applicable federal or state securities laws
in connection with the issuance of Thermo Common Stock in the Merger. Each party
will notify the other promptly upon the receipt of any comments from the SEC or
its staff and of any request by the SEC or its staff or any other government
officials for amendments or supplements to the Proxy Statement, the Registration
Statement or any other filing or for additional information and will supply the
other party with copies of all correspondence between such party or any of its
representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Registration
Statement, the Proxy Statement or the Merger. Whenever any event occurs that is
required to be set forth in an amendment or supplement to the Registration
Statement or the Proxy Statement, the relevant party will promptly inform the
other party of such occurrence and cooperate in filing with the SEC or its staff
or any other government officials, and/or mailing to stockholders of TerraTech,
such amendment or supplement.
(b) The information supplied by TerraTech for inclusion in the
Registration Statement (including any information incorporated by reference in
the Registration Statement from other filings made by TerraTech with the SEC)
will not, at the time the Registration Statement (including any amendments or
supplements thereto) is declared effective by the SEC, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The information
supplied by TerraTech for inclusion in the Proxy Statement to be sent to the
stockholders of TerraTech in connection with the meeting of TerraTech's
stockholders to consider the adoption of this Agreement and approval of the
Merger (the "TerraTech Stockholders' Meeting") (including any information
incorporated by reference in the Proxy Statement from other filings made by
TerraTech with the SEC) will not, on the date the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to TerraTech
stockholders, at the time of the TerraTech Stockholders' Meeting and at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or shall omit to state any material fact necessary in
order to make the statements made therein not false or misleading in light of
the circumstances under which they were made, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the TerraTech Stockholders' Meeting which has
become false or misleading.
(c) The information supplied by Thermo Electron and Merger Sub for
inclusion in the Registration Statement (including any information incorporated
by reference in the Registration Statement from other filings made by Thermo
Electron with the SEC) will not, at the time the Registration Statement
(including any amendments or supplements thereto) is declared effective by the
SEC, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The information supplied by Thermo Electron and Merger Sub for
inclusion in the Proxy Statement to be sent to the stockholders of TerraTech in
connection with the TerraTech Stockholders' Meeting (including any information
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incorporated by reference in the Proxy Statement from other filings made by
Thermo Electron with the SEC) will not, on the date the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to TerraTech
stockholders, at the time of the TerraTech Stockholders' Meeting and at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or shall omit to state any material fact necessary in
order to make the statements made therein not false or misleading in light of
the circumstances under which they were made, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the TerraTech Stockholders' Meeting which has
become false or misleading.
(d) The Proxy Statement will include the recommendation of the
Special Committee in favor of approval of this Agreement (except that the
Special Committee may withdraw, modify or refrain from making such
recommendation to the extent that the Special Committee determines after
consultation with outside legal counsel that failure to do so would be
inconsistent with the Special Committee's fiduciary duties under applicable
law).
(e) The Proxy Statement will include the recommendation of the Board
of Directors of TerraTech in favor of approval of this Agreement (except that
the Board of Directors of TerraTech may withdraw, modify or refrain from making
such recommendation to the extent that the Board determines after consultation
with outside legal counsel that failure to do so would be inconsistent with the
Board's fiduciary duties under applicable law).
(f) To the extent that the Special Committee or the Board withdraws,
modifies or refrains from making their respective recommendations pursuant to
Sections 5.1(d) or (e) hereof, the Proxy Statement will reflect such action.
5.2. Meeting of TerraTech Stockholders. Promptly after the date hereof,
TerraTech will take all action necessary in accordance with the DGCL and its
Certificate of Incorporation and Bylaws to convene the TerraTech Stockholders'
Meeting to be held as promptly as practicable for the purpose of voting upon
this Agreement. Unless the Special Committee determines after consultation with
outside legal counsel that to do so would be inconsistent with the Board's or
the Special Committee's fiduciary duties under applicable law, TerraTech will
use its reasonable best efforts to solicit from its stockholders proxies in
favor of the approval of this Agreement and the Merger, and will take all other
action necessary or advisable to secure the vote or consent of its stockholders
required by the DGCL to obtain such approvals. Thermo Electron shall vote, or
cause to be voted, all of the TerraTech Common Stock then owned by it and any of
its subsidiaries in favor of the approval of this Agreement and the Merger.
5.3. Access to Information. Subject to applicable legal restrictions, each
of the parties hereto will afford the other (including, in the case of
TerraTech, the Special Committee) and each of their respective accountants,
counsel and other representatives reasonable access during normal business hours
to the properties, books, records and personnel of each of them during the
period prior to the Effective Time to obtain all information concerning the
their respective businesses, including the status of their respective product
development efforts, properties, results of operations and personnel, as each of
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them may reasonably request. Each of the parties hereto agrees that it will, and
will cause its representatives and agents to, keep all such information
confidential and will not, and will cause its representatives or agents not to,
use any information obtained pursuant to this Section 5.3 for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. Notwithstanding the foregoing, none of the parties hereto shall be
required to keep confidential any information (i) which is or becomes generally
available to the public, other than by wrongful disclosure by the disclosing
party in violation of this Agreement or (ii) which becomes available to the
disclosing party on a nonconfidential basis from a source other than the
nondisclosing party or any officer or director of such party.
5.4. Public Disclosure. Thermo Electron and TerraTech will consult with
each other before issuing any press release or otherwise making any public
statement with respect to the Merger or this Agreement and will not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with a national
securities exchange. Promptly upon the execution hereof, the parties shall
jointly make a press release with respect to the transactions contemplated by
this Agreement, in form reasonably satisfactory to the Special Committee, and
TerraTech shall, within five days after the execution hereof, file with the SEC
a Current Report on Form 8-K, which shall attach as an exhibit this Agreement.
5.5. Legal Requirements. Subject to the terms of this Agreement, each of
Thermo Electron, Merger Sub and TerraTech will take all reasonable actions
necessary or desirable to comply promptly with all legal requirements that may
be imposed on them with respect to the consummation of the transactions
contemplated by this Agreement (including furnishing all information required in
connection with approvals of or filings with any Governmental Entity, and
including using its reasonable best efforts to defend any litigation prompted
hereby) and will promptly cooperate with and furnish information to any party
hereto necessary in connection with any such requirements imposed upon any of
them or their respective subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement.
5.6. Notification of Certain Matters. Subject to the terms of this
Agreement, Thermo Electron and Merger Sub will give prompt notice to TerraTech,
and TerraTech will give prompt notice to Thermo Electron, of the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (a) any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at any time from
the date of this Agreement to the Effective Time, or (b) any material failure of
Thermo Electron and Merger Sub or TerraTech, as the case may be, or of any
officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement. From the date of this Agreement until the Effective Time, Thermo
Electron will give prompt notice to TerraTech (including, without limitation,
the Special Committee) of any written offers or indications of interest it
receives from a prospective purchaser of any material properties or assets of
TerraTech or its subsidiaries, which set forth a proposed purchase price greater
than $3 million or in which the book value of the assets being sold is greater
than $3 million, other than sales of assets and services in the ordinary course
of business. Notwithstanding the above, the delivery of any notice pursuant to
this section will not limit or otherwise affect the remedies available hereunder
to the party receiving such notice or the conditions to such party's obligation
to consummate the Merger.
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5.7. Best Efforts and Further Assurances. Subject to the respective rights
and obligations of Thermo Electron and TerraTech under this Agreement, each of
the parties to this Agreement will use its reasonable best efforts to effectuate
the Merger and the other transactions contemplated hereby and to fulfill and
cause to be fulfilled the conditions to closing under this Agreement, it being
understood that such efforts shall not include any obligation to settle any
litigation prompted hereby. Subject to the terms hereof, each party hereto, at
the reasonable request of another party hereto, will execute and deliver such
other instruments and do and perform such other acts and things as may be
reasonably necessary or desirable for effecting completely the consummation of
the transactions contemplated hereby.
5.8. Stock Option and Employee Stock Purchase Plans; Reservation of
Shares.
(a) At the Effective Time, each outstanding option to purchase
shares of TerraTech Common Stock (each a "TerraTech Stock Option") under the
TerraTech Stock Option Plans, whether or not exercisable, will be assumed by
Thermo Electron. Each TerraTech Stock Option so assumed by Thermo Electron under
this Agreement will continue to have, and be subject to, the same terms and
conditions set forth in the applicable TerraTech Stock Option Plan immediately
prior to the Effective Time (including, without limitation, any repurchase
rights), except that (i) each TerraTech Stock Option will be exercisable (or
will become exercisable in accordance with its terms) for that number of whole
shares of Thermo Common Stock equal to the product of the number of shares of
TerraTech Common Stock that were issuable upon exercise of such TerraTech Stock
Option immediately prior to the Effective Time multiplied by the Exchange Ratio
and (ii) the per share exercise price for the shares of Thermo Common Stock
issuable upon exercise of such assumed TerraTech Stock Option will be equal to
the quotient determined by dividing the exercise price per share of TerraTech
Common Stock at which such TerraTech Stock Option was exercisable immediately
prior to the Effective Time by the Exchange Ratio, rounded up to the nearest
whole cent. After the Effective Time, Thermo Electron will issue to each holder
of an outstanding TerraTech Stock Option a notice describing the foregoing
assumption of such TerraTech Stock Option by Thermo Electron.
(b) At the Effective Time, each outstanding option to purchase
shares of TerraTech Common Stock (each, a "TerraTech ESPP Stock Option") under
the TerraTech ESPP will be assumed by Thermo Electron. Each TerraTech ESPP Stock
Option so assumed by Thermo Electron will continue to have, and be subject to,
the same terms and conditions as are set forth in the TerraTech ESPP immediately
prior to the Effective Time except that (i) the assumed option shall be
exercisable (or will become exercisable in accordance with its terms) for that
number of whole shares of Thermo Common Stock equal to the product of the number
of shares of TerraTech Common Stock that would have been issuable upon exercise
of such TerraTech ESPP Stock Option multiplied by the Exchange Ratio; (ii) the
purchase price per share of Thermo Common Stock shall be the lower of (A)
eighty-five percent (85%) of (x) the per-share Market Value of TerraTech Common
Stock on the Grant Date divided by (y) the Exchange Ratio, with the resulting
price rounded up to the nearest whole cent, and (B) eighty-five percent (85%) of
the Market Value of Thermo Common Stock as of the Exercise Date; and (iii) the
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$25,000 limit under Section 9.2(i) of the TerraTech ESPP shall be applied by
taking into account Thermo Electron's assumption of the TerraTech ESPP Stock
Options in accordance with the Code and applicable regulations. For purposes of
this subsection, "Market Value," "Grant Date," and "Exercise Date" shall have
the meaning given them in the TerraTech ESPP.
(c) Thermo Electron will reserve sufficient shares of Thermo Common
Stock for issuance under this Section 5.8 and pursuant to conversion of the
Convertible Debentures and the exercise of warrants issued by TerraTech.
5.9. Thermo Electron Form S-8. Thermo Electron agrees to file a
registration statement on Form S-8 or, if possible, an amendment to Thermo
Electron's then effective registration statement on Form S-8, for the shares of
Thermo Common Stock issuable with respect to the assumed TerraTech Stock Options
and the assumed TerraTech ESPP Stock Options within five (5) business days of
the Effective Time, and shall keep such registration statement effective for so
long as any such options remain outstanding.
5.10. Thermo Electron Form S-3. Thermo Electron agrees to file, promptly
after the date of this Agreement, a registration statement on Form S-3 to cover
the shares of Thermo Common Stock issuable upon the exercise of the warrants
issued by TerraTech (the "Warrant Share S-3"), and shall keep such Warrant Share
S-3 effective until all of the shares of Thermo Common Stock covered thereby
have been sold pursuant thereto or until, by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect, the shares of Thermo Common
Stock covered thereby are no longer required to be registered for the public
sale thereof by the holders of such securities or the warrants have expired by
their terms.
5.11. Indemnification; Insurance.
(a) The Certificate of Incorporation and Bylaws of the Surviving
Corporation will contain the provisions with respect to indemnification and
elimination of liability for monetary damages set forth in the Certificate of
Incorporation and Bylaws of TerraTech, which provisions will not be amended,
repealed or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who, as of the date hereof and at any time from the date hereof to
the Effective Time, were directors or officers of TerraTech, unless such
modification is required by law. The Surviving Corporation shall, and Thermo
Electron will cause the Surviving Corporation to, fulfill and honor in all
respects the indemnification obligations of TerraTech pursuant to the provisions
of the Certificate of Incorporation and the Bylaws of TerraTech as in effect on
the date of this Agreement.
(b) For a period of six (6) years after the Effective Time, Thermo
Electron shall cause the Surviving Corporation to, either directly or through
participation in Thermo Electron's umbrella policy, maintain in effect a
directors' and officers' liability insurance policy covering those TerraTech
directors and officers currently covered by Thermo Electron's liability
insurance policy with coverage no less favorable in amount and scope than
existing coverage for such TerraTech directors and officers (which coverage may
be an endorsement extending the period in which claims may be made under such
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existing policy); provided, however, that in no event shall the Surviving
Corporation be required to expend to maintain or procure insurance coverage
pursuant to this Section 5.11, directly or through participation in Thermo
Electron's policy, an amount per annum in excess of 175% of the current annual
premiums, as adjusted for inflation each year, allocable and payable by
TerraTech (the "Maximum Premium") with respect to such insurance, or, if the
cost of such insurance exceeds the Maximum Premium, the maximum amount of
coverage that can be purchased or maintained for the Maximum Premium.
(c) TerraTech shall, to the fullest extent permitted under
applicable law and regardless of whether the Merger becomes effective, indemnify
and hold harmless Polyvios Vintiadis ("Vintiadis") against all costs and
expenses (including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action or omission in
Vintiadis' capacity as a director (including, without limitation, as a member of
the Special Committee) or fiduciary of TerraTech (including, without limitation,
in connection with the transactions contemplated by this Agreement) occurring
on, before or after the Effective Time (or, if this Agreement is terminated
without the Merger becoming effective, occurring on, before or after the date of
such termination), until the expiration of the statute of limitations relating
thereto (and shall pay any expenses in advance of the final disposition of such
action or proceeding to Vintiadis to the fullest extent permitted under
applicable law, upon receipt from Vintiadis of an undertaking (which need not be
secured or subject to a bond or other requirement) to repay any advanced
expenses if it shall ultimately be determined that Vintiadis is not entitled to
be indemnified against such expenses). If the Merger becomes effective, Thermo
Electron shall be jointly and severally responsible, to the fullest extent
permitted by applicable law (it being understood that applicable law may permit
Thermo Electron to indemnify or advance expenses to Vintiadis under
circumstances in which TerraTech could not do so), for the indemnification and
advancement of expenses obligations provided for in the first sentence of this
Section 5.11(c). If the Merger does not become effective, Thermo Electron shall
have the same responsibilities set forth in the immediately preceding sentence,
except that Thermo Electron shall have no responsibility for indemnifying or
advancing expenses to Vintiadis with respect to matters that do not arise out of
or pertain to the work of the Special Committee, this Agreement or the
transactions contemplated hereby. In the event of any claim, action, suit,
proceeding or investigation covered by this Section 5.11(c), (i) TerraTech,
Thermo Electron and the Surviving Corporation, as the case may be, shall pay the
reasonable fees and expenses of counsel selected by Vintiadis, promptly after
statements therefor are received, and (ii) TerraTech, Thermo Electron and the
Surviving Corporation shall cooperate in the defense of any such matter;
provided, however, that neither TerraTech nor Thermo Electron nor the Surviving
Corporation shall be liable for any settlement effected without Thermo
Electron's prior written consent (such consent not to be unreasonably withheld
or delayed); and provided, further, that , in the event any claim for
indemnification is asserted or made within the period prior to the expiration of
the applicable statute of limitations, all rights to indemnification in respect
of such claim shall continue until the disposition of such claim. In connection
with Thermo Electron or the Surviving Corporation making any payment or
advancing any funds pursuant to this Section 5.11(c), Thermo Electron or the
Surviving Corporation, as the case may be, shall be entitled to require
Vintiadis to use commercially reasonable efforts, at the cost and expense of
Thermo Electron and the Surviving Corporation, to cause Thermo Electron or the
Surviving Corporation, as the case may be, to be subrogated to Vintiadis' rights
under any insurance coverage maintained by the Surviving Corporation, Thermo
Electron or any of their respective affiliates with respect to the underlying
subject matter of, and to the extent of, such payment or advance.
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(d) In the event TerraTech, Thermo Electron or the Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or (ii)
transfers all or substantially all of its properties or assets to any person,
then, and in each such case, proper provision shall be made so that the
successors and assigns of TerraTech, Thermo Electron and the Surviving
Corporation, as the case may be, shall assume the obligations set forth in this
Section 5.11.
(e) Heirs, representatives and estates of the officers and directors
of TerraTech (including, without limitation, Vintiadis) shall have the right to
enforce the obligations arising under this Section 5.11.
(f) The rights of the officers and directors of TerraTech
(including, without limitation, Vintiadis) under this Section 5.11 are in
addition to any rights of such persons under separate indemnification agreements
any such persons may have with TerraTech and/or Thermo Electron, under the
Certificate of Incorporation or Bylaws of TerraTech or Thermo Electron or
otherwise.
5.12. Deferred Compensation Plan. Subject to obtaining the consents of the
affected participants, at the Effective Time, the TerraTech Deferred
Compensation Plan for Directors (the "Deferred Compensation Plan") will
terminate, and TerraTech will distribute to each participant the sum in cash
equal to the balance of stock units credited to his or her deferred compensation
account under the Deferred Compensation Plan as of the Effective Time multiplied
by the Exchange Ratio.
5.13 Compliance by Merger Sub. Thermo Electron shall cause Merger Sub to
timely perform and comply with all of its obligations under or related to this
Agreement.
5.14 Tax Treatment. From and after the date of this Agreement until the
Effective Time, neither Thermo Electron nor Merger Sub will take, or permit any
of Thermo Electron's direct or indirect subsidiaries to take, any action that
would cause the Merger not to be a tax-free reorganization under Section 368(a)
of the Code. Notwithstanding anything in this Agreement to the contrary, this
Section 5.14 shall survive the Closing and shall apply without regard to any
disclosure made on behalf of Thermo Electron or Merger Sub. Stockholders of
TerraTech are each third party beneficiaries of this Section 5.14 and may seek
relief for breach hereof in their own names.
5.15 NYSE Listing. Thermo Electron shall use its best efforts to cause all
shares of Thermo Common Stock issuable to stockholders of TerraTech, and all
shares of Thermo Common Stock which will be subject to issuance pursuant to the
TerraTech Stock Option Plans, the TerraTech ESPP, the Convertible Debentures and
the warrants issued by TerraTech, each as assumed by Thermo Electron pursuant to
this Agreement, to be authorized for listing on the New York Stock Exchange.
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ARTICLE VI
CONDITIONS TO THE MERGER
6.1. Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) No Order. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
(b) Registration Statements. The Registration Statement and the
Warrant Share S-3 shall have been declared effective by the SEC and no stop
order suspending the effectiveness of the Registration Statement or the Warrant
Share S-3 shall have been issued and no proceedings for that purpose shall have
been initiated or threatened by the SEC.
(c) NYSE Listing. The Thermo Common Stock issuable to holders of
TerraTech Common Stock and all shares of Thermo Common Stock which will be
subject to issuance pursuant to the TerraTech Stock Option Plans, the TerraTech
ESPP, the Convertible Debentures and the warrants issued by TerraTech, each as
assumed by Thermo Electron pursuant to this Agreement, shall have been
authorized for listing on the New York Stock Exchange.
(d) Tax Opinion. TerraTech and Thermo Electron shall have received
an opinion from Hale and Dorr LLP, dated the Closing Date, in substantially the
form attached to this Agreement, regarding certain tax matters relating to the
transactions contemplated under this Agreement, including that the Merger will
be treated for federal income tax purposes as a tax-free reorganization within
the meaning of Section 368(a) of the Code, in form and substance reasonably
satisfactory to TerraTech (including the Special Committee) and Thermo Electron.
Such opinion shall be based upon factual representations (reasonably
satisfactory to TerraTech (including the Special Committee) and Thermo Electron)
from TerraTech and Thermo Electron contained in certain letters to be delivered
to Hale and Dorr LLP (the "Representation Letters").
(e) Stockholder Approval. This Agreement shall have been approved
and adopted by the requisite vote under the DGCL by the stockholders of
TerraTech.
(f) Rights Agreement. No Stock Acquisition Date or other event that
would result in the occurrence of a Distribution Date shall have occurred (as
such terms are defined in the Rights Agreement), with respect to the rights to
purchase a unit consisting of one ten-thousandth of a share of Thermo Electron's
Series B Junior Participating Preferred Stock pursuant to the Rights Agreement.
6.2. Additional Conditions to Obligations of TerraTech. The obligations of
TerraTech to consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, exclusively by TerraTech
(provided that the Special Committee shall have consented in writing to any such
waiver):
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(a) Representations and Warranties. The representations and
warranties of Thermo Electron and Merger Sub contained in this Agreement shall
be true and correct in all material respects (other than those already qualified
by a materiality standard, which shall be true and correct in all respects) on
and as of the Effective Time, except for changes expressly contemplated by this
Agreement and except for those representations and warranties that address
matters only as of a particular date (which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Effective Time; and TerraTech shall have received a certificate to such
effect signed on behalf of Thermo Electron by the President, Chief Executive
Officer or Vice President of Thermo Electron.
(b) Agreements and Covenants. Thermo Electron and Merger Sub shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them on
or prior to the Effective Time, and TerraTech shall have received a certificate
to such effect signed on behalf of Thermo Electron by the President, Chief
Executive Officer or Vice President of Thermo Electron.
(c) Fairness Opinion. At the time of mailing of the Proxy Statement
to the stockholders of TerraTech and at the Effective Time, AHH shall have
reaffirmed orally the fairness opinion previously prepared and delivered by it
to the Special Committee and AHH shall not have withdrawn such opinion.
(d) State Securities Laws. Any and all necessary state securities
approvals for the issuance of Thermo Common Stock pursuant to this Agreement
shall have been obtained.
6.3. Additional Conditions to the Obligations of Thermo Electron and
Merger Sub. The obligations of Thermo Electron and Merger Sub to consummate and
effect the Merger shall be subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any of which may be waived,
in writing, exclusively by Thermo Electron:
(a) Representations and Warranties. The representations and
warranties of TerraTech contained in this Agreement shall be true and correct in
all material respects (other than those already qualified by a materiality
standard, which shall be true and correct in all respects) on and as of the
Effective Time, except for changes contemplated by this Agreement and except for
those representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such particular
date), with the same force and effect as if made on and as of the Effective
Time, except, in all such cases, where the failure to be so true and correct
would not have a Material Adverse Effect on TerraTech; and Thermo Electron and
Merger Sub shall have received a certificate to such effect signed on behalf of
TerraTech by the President, Chief Executive Officer or Vice President of
TerraTech.
(b) Agreements and Covenants. TerraTech shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and Thermo Electron shall have received a certificate to such
effect signed on behalf of TerraTech by the President, Chief Executive Officer
or Vice President of TerraTech.
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(c) No Withdrawal of Special Committee Recommendation. The Special
Committee shall not have withdrawn its recommendation to the Board of Directors
of TerraTech as set forth in Section 2.4 hereof.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time of the Merger, whether before or after approval of this
Agreement by the stockholders of TerraTech:
(a) by mutual written consent duly authorized by the Boards of
Directors of Merger Sub and TerraTech (upon approval of the Special Committee);
(b) by either TerraTech (at the direction of the Special Committee)
or Merger Sub if the Merger shall not have been consummated by March 31, 2000;
provided, however, that the right to terminate this Agreement under this Section
7.1(b) shall not be available to any party whose action or failure to act has
been a principal cause of or resulted in the failure of the Merger to occur on
or before such date if such action or failure to act constitutes a breach of
this Agreement;
(c) by either TerraTech (upon approval of the Special Committee) or
Merger Sub if a court of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action (an "Order"), in any case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger, which
order, decree or ruling is final and nonappealable;
(d) by either TerraTech (upon approval of the Special Committee) or
Merger Sub if the required approval of the stockholders of TerraTech
contemplated by this Agreement shall not have been obtained by reason of the
failure to obtain the required vote upon a vote taken at a meeting of
stockholders duly convened therefor or at any adjournment thereof (provided that
the right to terminate this Agreement under this Section 7.1(d) shall not be
available to TerraTech where the failure to obtain stockholder approval of
TerraTech shall have been caused by the action or failure to act of TerraTech in
breach of this Agreement and the right to terminate this Agreement under this
Section 7.1(d) shall not be available to Merger Sub where the failure to obtain
the requisite vote by the stockholders of TerraTech shall have been caused by
the failure of Thermo Electron or any direct or indirect subsidiary of Thermo
Electron (whether or not wholly-owned) to vote its shares of TerraTech Common
Stock in favor of the Merger and this Agreement);
(e) by TerraTech if the Special Committee determines after
consultation with outside legal counsel that failure to do so would be
inconsistent with the Board's or the Special Committee's fiduciary duties under
applicable law;
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(f) by TerraTech (upon approval of the Special Committee), upon a
breach of any representation, warranty, covenant or agreement on the part of
Thermo Electron or Merger Sub set forth in this Agreement, if (i) as a result of
such breach the conditions set forth in Section 6.2(a) or Section 6.2(b) would
not be satisfied as of the time of such breach and (ii) such breach shall not
have been cured by Thermo Electron or Merger Sub within ten (10) business days
following receipt by Thermo Electron of written notice of such breach from
TerraTech; or
(g) by Merger Sub, upon a breach of any representation, warranty,
covenant or agreement on the part of TerraTech set forth in this Agreement, if
(i) as a result of such breach the conditions set forth in Section 6.3(a) or
Section 6.3(b) would not be satisfied as of the time of such breach and (ii)
such breach shall not have been cured by TerraTech within ten (10) business days
following receipt by TerraTech of written notice of such breach from Merger Sub.
(h) by Merger Sub at the direction of Thermo Electron if, as a
result of an adjustment in the Exchange Ratio pursuant to Section 1.6(g) hereof,
Thermo Electron would be required to issue more than 1,800,000 shares of Thermo
Common Stock (exclusive of shares issuable upon the exercise of options or
warrants or the conversion of convertible debentures outstanding on the date of
this Agreement; and subject to adjustment for any stock split, reverse stock
split, stock dividend, recapitalization or other like change).
7.2. Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice by the terminating party to the other parties hereto
(or, in the case of a termination pursuant to Section 7.1(f) or 7.1(g), the
expiration of the ten business day period referred to therein). In the event of
the termination of this Agreement as provided in Section 7.1, this Agreement
shall be of no further force or effect, except that (i) the confidentiality
obligations of each party hereto contained in Section 5.3, the obligations
contained in Section 5.11, and the provisions of Sections 7.2, 7.3 and 8.1 shall
survive any such termination and (ii) nothing herein shall relieve any party
from liability for any willful and material breach of this Agreement.
7.3. Fees and Expenses. All fees and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses, whether or not the Merger is consummated.
7.4. Amendment. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto; provided, however, that
TerraTech may not amend this Agreement without the approval of the Special
Committee.
7.5. Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein; provided, however, that TerraTech may not take any
such actions without the approval of the Special Committee. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
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ARTICLE VIII
GENERAL PROVISIONS
8.1. Non-Survival of Representations and Warranties. The representations
and warranties of TerraTech, Thermo Electron and Merger Sub contained in this
Agreement (other than those contained in Section 3.6) shall terminate at the
Effective Time, and only the covenants that by their terms, or as the context
requires, survive the Effective Time shall survive the Effective Time.
8.2. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Thermo Electron or Merger Sub, to:
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: President
Telephone: (781) 622-1000
Facsimile: (781) 622-1283
with a copy (which shall not constitute notice to Thermo
Electron or Merger Sub) to:
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Attention: General Counsel
Telephone: (781) 622-1000
Facsimile: (781) 622-1283
(b) if to TerraTech, to:
Thermo TerraTech Inc.
85 First Avenue
Waltham, MA 02451
Attention: President
Telephone: (781) 370-1640
Facsimile: (781) 370-1615
with a copy (which shall not constitute notice to
TerraTech) to:
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
Attention: William P. Gelnaw, Jr., Esq.
Telephone: (617) 248-5000
Facsimile: (617) 248-4000
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8.3. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.4. Entire Agreement. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein (a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, with the exception of the agreements relating to the Convertible
Debentures, the TerraTech ESPP, the TerraTech Stock Option Plans, the warrants
issued by TerraTech, the Deferred Compensation Plan, and any agreements relating
to indemnification of members of the Board; and (b) are not intended to confer
upon any other person any rights or remedies hereunder, except as set forth or
otherwise contemplated herein. Notwithstanding the foregoing, Section 5.11
hereof is intended to be for the benefit of, and may be enforced by, those
individuals who, as of the date hereof and at any time from the date hereof to
the Effective Time, were directors or officers of TerraTech.
8.5. Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.6. Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
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8.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law
thereof, except to the extent that the DGCL applies.
8.8. Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties.
8.9 Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
[The rest of this page intentionally left blank.]
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IN WITNESS WHEREOF, Thermo Electron, Merger Sub and TerraTech have caused
this Agreement to be signed by themselves or their duly authorized respective
officers, all as of the date first written above.
THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
-----------------------------------
Name: Theo Melas-Kyriazi
Title: Vice President and Chief
Financial Officer
TTT ACQUISITION CORPORATION
By: /s/ Theo Melas-Kyriazi
-----------------------------------
Name: Theo Melas-Kyriazi
Title: president
THERMO TERRATECH INC.
By: /s/ Kenneth J. Apicerno
-----------------------------------
Name: Kenneth J. Apicerno
Title: Treasurer
29
<PAGE>
EXHIBIT A
----------
H&D Draft of 10/18/99
[Hale and Dorr LLP letterhead]
October ___, 1999
Thermo Electron Corporation
81 Wyman Street
Waltham, MA 02454
Thermo TerraTech Inc.
85 First Avenue
Waltham, MA 02451
Re: Merger Pursuant to Agreement and Plan of Merger by and Among
Thermo Electron Corporation, TTT Acquisition Corporation, and Thermo
TerraTech Inc.
Ladies and Gentlemen:
This opinion is being delivered to you in connection with the filing of a
registration statement (the "Registration Statement") on Form S-4, which
includes the Joint Proxy Statement and Prospectus relating to the Agreement and
Plan of Merger dated as of October [__], 1999 (the "Merger Agreement"), by and
among Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"),
TTT Acquisition Corporation, a Delaware corporation and wholly owned subsidiary
of Thermo Electron ("Merger Sub"), and Thermo TerraTech Inc., a Delaware
corporation ("TerraTech"). Pursuant to the Merger Agreement, Merger Sub will
merge with and into TerraTech (the "Merger"). Except as otherwise provided,
capitalized terms not defined herein have the meanings set forth in the Merger
Agreement and the exhibits thereto or in the letters delivered to Hale and Dorr
LLP by Thermo Electron and TerraTech containing certain representations of
Thermo Electron and TerraTech relevant to this opinion (the "Representation
Letters"). All section references, unless otherwise indicated, are to the United
States Internal Revenue Code of 1986, as amended (the "Code").
In our capacity as counsel to Thermo Electron in the Merger, and for
purposes of rendering this opinion, we have examined and relied upon the
Registration Statement, the Merger Agreement and the exhibits thereto, the
Representation Letters, and such other documents as we considered relevant to
our analysis. In our examination of documents, we have assumed the authenticity
of original documents, the accuracy of copies, the genuineness of signatures,
and the legal capacity of signatories
<PAGE>
Thermo Electron Corporation
Thermo TerraTech Inc.
October ___, 1999
Page 2
We have assumed that all parties to the Merger Agreement and to any other
documents examined by us have acted, and will act, in accordance with the terms
of such Merger Agreement and documents and that the Merger will be consummated
at the Effective Time pursuant to the terms and conditions set forth in the
Merger Agreement without the waiver or modification of any such terms and
conditions. Furthermore, we have assumed that all representations contained in
the Merger Agreement, as well as those representations contained in the
Representation Letters, are, and at the Effective Time will be, true and
complete in all material respects, and that any representation made in any of
the documents referred to herein "to the best of the knowledge and belief" (or
similar qualification) of any person or party is correct without such
qualification. We have also assumed that as to all matters for which a person or
entity has represented that such person or entity is not a party to, does not
have, or is not aware of, any plan, intention, understanding, or agreement,
there is no such plan, intention, understanding, or agreement. We have not
attempted to verify independently such representations, but in the course of our
representation, nothing has come to our attention that would cause us to
question the accuracy thereof.
The conclusions expressed herein represent our judgment as to the proper
treatment of certain aspects of the Merger under the income tax laws of the
United States based upon the Code, Treasury Regulations, case law, and rulings
and other pronouncements of the Internal Revenue Service (the "IRS") as in
effect on the date of this opinion. No assurances can be given that such laws
will not be amended or otherwise changed prior to the Effective Time, or at any
other time, or that such changes will not affect the conclusions expressed
herein. Nevertheless, we undertake no responsibility to advise you or your
shareholders of any developments after the Effective Time in the application or
interpretation of the income tax laws of the United States.
Our opinion represents our best judgment of how a court would decide if
presented with the issues addressed herein and is not binding upon either the
IRS or any court. Thus, no assurances can be given that a position taken in
reliance on our opinion will not be challenged by the IRS or rejected by a
court.
This opinion addresses only the specific United States federal income tax
consequences of the Merger set forth below, and does not address any other
federal, state, local, or foreign income, estate, gift, transfer, sales, use, or
other tax consequences that may result from the Merger or any other transaction
(including any transaction undertaken in connection with the Merger). We express
no opinion regarding the tax consequences of the Merger to shareholders of
TerraTech that are subject to special tax rules (including insurance companies,
tax-exempt organizations, financial institutions, broker-dealers, foreign
persons, stockholders who own their stock as part of a hedge, appreciated
financial position, straddle or conversion transaction, stockholders who do not
<PAGE>
Thermo Electron Corporation
Thermo TerraTech Inc.
October ___, 1999
Page 3
own their stock as a capital asset and stockholders who have acquired their
stock upon the exercise of employee options or otherwise as compensation), and
we express no opinion regarding the tax consequences of the Merger arising in
connection with the ownership of options or warrants for TerraTech stock.
On the basis of, and subject to, the foregoing, and in reliance upon the
representations and assumptions described above, we are of the following
opinion:
1. The Merger will constitute a reorganization within the meaning of
Section 368(a);
2. No gain or loss will be recognized by Thermo Electron, Merger Sub, or
TerraTech as a result of the Merger;
3. No gain or loss will be recognized by the shareholders of TerraTech upon
the exchange of TerraTech stock solely for shares of Thermo Electron stock in
the Merger;
4. Cash received by the shareholders of TerraTech in lieu of fractional
shares of Thermo Electron stock will be treated as received as a distribution in
redemption of such fractional shares, subject to the provisions of Section 302,
as if such fractional shares had been issued in the Merger and then redeemed by
Thermo Electron;
5. The tax basis of the shares of Thermo Electron stock received by the
shareholders of TerraTech in the Merger will be equal to the tax basis of the
shares of TerraTech stock exchanged therefor in the Merger, reduced by any basis
allocable to a fractional share of Thermo Electron stock treated as sold or
exchanged under Section 302; and
6. The holding period for the shares of Thermo Electron stock received by
the shareholders of TerraTech will include the holding period for the shares of
TerraTech stock exchanged therefor in the Merger, provided that the shares of
TerraTech stock are held as capital assets at the Effective Time.
No opinion is expressed as to any federal income tax consequence of the
Merger except as specifically set forth herein, and this opinion may not be
relied upon except with respect to the consequences specifically discussed
herein.
<PAGE>
Thermo Electron Corporation
Thermo TerraTech Inc.
October ___, 1999
Page 4
This opinion is intended solely for the purpose of inclusion as an exhibit
to the Registration Statement. It may not be relied upon for any other purpose
or by any other person or entity, other than you and your shareholders, and may
not be made available to any other person or entity without our prior written
consent. We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name in the
Registration Statement in connection with references to this opinion and the tax
consequences of the Merger. In giving this consent, however, we do not hereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
HALE AND DORR LLP
