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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) July 18, 1994
THOMAS & BETTS CORPORATION
(Exact name of registrant as specified in its Charter)
New Jersey 1-4682 22-1326940
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
1555 Lynnfield Road, Memphis, Tennessee 38119
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (901) 682-7766
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On July 12, 1994, Thomas & Betts Corporation (the
"Corporation") and Vishay Intertechnology, Inc. ("Vishay") entered
into a Stock Purchase Agreement (the "Purchase Agreement") which
provided for (i) the sale by the Corporation of all of the issued
and outstanding shares of capital stock, consisting of 100 shares
of common stock, par value $.10 per share, of Vitramon,
Incorporated, a Delaware corporation and a wholly owned subsidiary
of the Corporation (with its subsidiaries, "Vitramon") and (ii) the
sale by the Corporation and Thomas & Betts Holdings (U.K.) Limited,
an English corporation and an indirect subsidiary of the
Corporation, of all of the issued and outstanding ordinary shares
of Vitramon, Limited, an English corporation ("VL" and, together
with Vitramon, the "Vitramon Entities"), to Vishay, for an
aggregate purchase price of $184,000,000. The Purchase Agreement,
which is attached as an exhibit hereto, is incorporated by
reference herein.
On July 18, 1994, the transaction was consummated.
The Vitramon Entities are engaged in the business of
designing, manufacturing and selling multilayer ceramic chip
capacitors. The Vitramon Entities have conducted their business
primarily in the U.S., Germany, France and England. For the fiscal
year ended January 2, 1994, the Vitramon Entities had annual sales
and operating income before allocated management fees of
approximately $118,000,000 and $18,500,000, respectively.
Item 7. Financial Statements and Exhibits
A. Financial Information:
1. Pro forma condensed balance sheet as of April 3,
1994. See Exhibit 7.
2. Pro forma condensed statements of income for the
fiscal quarter ended April 3, 1994 and the fiscal
year ended January 2, 1994. See Exhibit 7.
B. Exhibits:
Exhibit 2. Stock Purchase Agreement, dated as of July
12, 1994, between Thomas & Betts Corporation and Vishay
Intertechnology, Inc.
Exhibit 7. Pro forma condensed balance sheet as of April
3, 1994 and pro forma condensed statements of income for
the fiscal quarter ended April 3, 1994 and the fiscal
year ended January 2, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
THOMAS & BETTS CORPORATION
By:______________________________
James D. Hay
Vice President-General
Counsel
<PAGE>
EXHIBIT 2
STOCK PURCHASE AGREEMENT
Between
Thomas & Betts Corporation,
as Seller
and
Vishay Intertechnology, Inc.,
as Purchaser
Dated July 12, 1994
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TABLE OF CONTENTS
Sections Page
Index To Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . iv
1. Purchase and Sale of Stock. . . . . . . . . . . . . . . . . . . 2
2. Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Obligations at Closing; Further Assurances. . . . . . . . . . . 3
5. Representations and Warranties by Seller. . . . . . . . . . . . 5
5.1 Organization, Standing and
Qualification; Business . . . . . . . . . . . . . . 5
5.2 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Transactions with Certain Persons . . . . . . . . . . . . 7
5.4 Execution, Delivery and Performance of
Agreement; Authority; Consents
and Approvals . . . . . . . . . . . . . . . . . . . . . 9
5.5 Capitalization. . . . . . . . . . . . . . . . . . . . . . 10
5.6 Financial Statements. . . . . . . . . . . . . . . . . . . 11
5.7 Absence of Undisclosed Liabilities. . . . . . . . . . . . 13
5.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.9 Absence of Changes or Events. . . . . . . . . . . . . . . 16
5.10 Litigation. . . . . . . . . . . . . . . . . . . . . . . . 19
5.11 Compliance with Laws and Other Instruments. . . . . . . . 20
5.12 Title to and Condition of Properties. . . . . . . . . . . 21
5.13 Schedules . . . . . . . . . . . . . . . . . . . . . . . . 23
5.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 26
5.15 Patents, etc. . . . . . . . . . . . . . . . . . . . . . . 27
5.16 No Guaranties . . . . . . . . . . . . . . . . . . . . . . 28
5.17 Product Returns; Warranties . . . . . . . . . . . . . . . 29
5.18 Employee Benefit Plans. . . . . . . . . . . . . . . . . . 29
5.19 Labor Matters . . . . . . . . . . . . . . . . . . . . . . 40
5.20 Environmental Matters . . . . . . . . . . . . . . . . . . 42
5.21 No Brokers; Absence of Certain
Business Practices. . . . . . . . . . . . . . . . . 46
5.22 Vitramon Brazil . . . . . . . . . . . . . . . . . . . . . 47
5.23 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 47
6. Representations and Warranties by Purchaser . . . . . . . . . . 48
6.1 Organization. . . . . . . . . . . . . . . . . . . . . . . 48
6.2 Execution, Delivery and Performance
of Agreement. . . . . . . . . . . . . . . . . . . . 48
6.3 Litigation. . . . . . . . . . . . . . . . . . . . . . . . 49
6.4 Governmental Approvals and Filings. . . . . . . . . . . . 49
6.5 Purchase for Investment . . . . . . . . . . . . . . . . . 49
6.6 No Brokers. . . . . . . . . . . . . . . . . . . . . . . . 50
6.7 Financing . . . . . . . . . . . . . . . . . . . . . . . . 50
6.8 Breach. . . . . . . . . . . . . . . . . . . . . . . . . . 50
7. Conduct of Business Prior to Closing. . . . . . . . . . . . . . 50
8. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.1 Covenants of Seller and the Company . . . . . . . . . . . 54
8.1.1 Access to Information, Documents and
Premises. . . . . . . . . . . . . . . . . . . . 54
8.1.2 Directors Authorization. . . . . . . . . . . . . . 56
8.1.3 Certain Additional and Pro Forma Financial
Information . . . . . . . . . . . . . . . . . . 57
8.1.4 Elimination of Certain Liabilities . . . . . . . . 58
8.2 Covenant of Purchaser Regarding Financing . . . . . . . . 58
8.3 Covenants of Seller and Purchaser . . . . . . . . . . . . 59
8.3.1 Maintaining Representations and
Warranties . . . . . . . . . . . . . . . . . . 59
8.3.2 Facilitating the Transaction . . . . . . . . . . . 59
8.3.3 Changes in Representations and
Warranties . . . . . . . . . . . . . . . . . . 59
8.3.4 Title Insurance. . . . . . . . . . . . . . . . . . 60
8.3.5 Replacement Insurance. . . . . . . . . . . . . . . 62
8.3.6 Government Filings . . . . . . . . . . . . . . . . 62
8.3.7 Cooperation and Records Retention. . . . . . . . . 63
9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.1 General . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.2 Tax Sharing Agreements. . . . . . . . . . . . . . . . . . 66
9.3 Elections . . . . . . . . . . . . . . . . . . . . . . . . 66
9.4 Tax Refunds . . . . . . . . . . . . . . . . . . . . . . . 66
9.5 Post-Closing Matters. . . . . . . . . . . . . . . . . . . 67
10. Conditions Precedent to Purchaser's Obligations . . . . . . . . 69
11. Conditions Precedent to Seller's Obligations. . . . . . . . . . 72
12. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 73
13. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 88
14. Nature and Survival of Representations
and Warranties. . . . . . . . . . . . . . . . . . . . . . 89
15. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 92
16. Legal and Other Costs . . . . . . . . . . . . . . . . . . . . . 93
17. Public Announcements. . . . . . . . . . . . . . . . . . . . . . 95
18. Scope of Representations and Warranties . . . . . . . . . . . . 96
19. Non-Competition . . . . . . . . . . . . . . . . . . . . . . . . 96
19.1 Covenant. . . . . . . . . . . . . . . . . . . . . . . . . 96
19.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . 98
19.3 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 99
19.4 Non-Competition Severability. . . . . . . . . . . . . . . 100
20. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 100
Index To Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . iv
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INDEX TO DEFINED TERMS
Term Page No.(s)
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Base Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . .12
Basket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
Base Financial Statements. . . . . . . . . . . . . . . . . . . . . .12
Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Business Practices . . . . . . . . . . . . . . . . . . . . . . . . .65
Claim Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company's Assets . . . . . . . . . . . . . . . . . . . . . . . . . .22
Company's Defined Benefit Plan . . . . . . . . . . . . . . . . . . .33
Confidentiality Agreement. . . . . . . . . . . . . . . . . . . . . 100
Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
Cut-off Date . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
D&B Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Defaulting Party . . . . . . . . . . . . . . . . . . . . . . . . . .93
Dispute Period . . . . . . . . . . . . . . . . . . . . . . . . . . .87
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . .44
Environmental Permits. . . . . . . . . . . . . . . . . . . . . . . .45
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
ERISA Affiliate. . . . . . . . . . . . . . . . . . . . . . . . .39, 40
Fee Properties . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . .11
Former Employee. . . . . . . . . . . . . . . . . . . . . . . . . . .30
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Hazardous Substance. . . . . . . . . . . . . . . . . . . . . . . . .45
Indemnified Party. . . . . . . . . . . . . . . . . . . . . . . . . .87
Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . . .87
Indemnity Notice . . . . . . . . . . . . . . . . . . . . . . . . . .87
Instrument . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96
Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Interim Financial Statements . . . . . . . . . . . . . . . . . .12, 57
June Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Leased Properties. . . . . . . . . . . . . . . . . . . . . . . . . .60
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . .17
Non-Defaulting Party . . . . . . . . . . . . . . . . . . . . . . . .94
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . . .61
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
Pre-Closing Short Period . . . . . . . . . . . . . . . . . . . . . .65
Pre-Closing Taxes. . . . . . . . . . . . . . . . . . . . . . . . . .65
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Qualified Product List . . . . . . . . . . . . . . . . . . . . . . .21
RCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Representatives. . . . . . . . . . . . . . . . . . . . . . . . . . .53
Restricted Period. . . . . . . . . . . . . . . . . . . . . . . . . .96
Retiree Medical Plan . . . . . . . . . . . . . . . . . . . . . . . .37
Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 338(h)(10) Election. . . . . . . . . . . . . . . . . . . . .69
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Seller's Deferred Compensation Plan. . . . . . . . . . . . . . . . . 2
Seller's Defined Benefit Plan. . . . . . . . . . . . . . . . . . . .32
Seller's Equity Plans. . . . . . . . . . . . . . . . . . . . . . . .32
Site Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . .46
Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
TBHUK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
TBI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Territory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98
Third Party Claim. . . . . . . . . . . . . . . . . . . . . . . . . .79
Title Commitment . . . . . . . . . . . . . . . . . . . . . . . . . .60
Title Company. . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Title Defects. . . . . . . . . . . . . . . . . . . . . . . . . . . .62
Transfer Date. . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Transferred Subsidiaries . . . . . . . . . . . . . . . . . . . . . 7
UK Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
VL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
<PAGE>
<PAGE>
AGREEMENT dated July 12, 1994 by and between Thomas &
Betts Corporation ("Seller"), a New Jersey corporation having its
principal office at 1555 Lynnfield Road, Memphis, Tennessee 38119,
and Vishay Intertechnology, Inc. ("Purchaser"), a Delaware
corporation having its principal office at 63 Lincoln Highway,
Malvern, Pennsylvania 19355.
W I T N E S S E T H :
WHEREAS, Seller is the owner of all of the issued and
outstanding capital stock of Vitramon, Incorporated, a Delaware
corporation (the "Company"), and Thomas & Betts Holdings (U.K.)
Limited, an indirect subsidiary of Seller ("TBHUK"), and Seller are
the owners of all the issued and outstanding ordinary shares of
Vitramon Limited, an English corporation ("VL");
WHEREAS, the Company and VL are engaged in the design,
manufacture and sale of multilayer ceramic chip capacitors and
certain types of filters; and
WHEREAS, Purchaser desires to purchase from Seller and
TBHUK, and Seller and TBHUK desire to sell to Purchaser, all of the
issued and outstanding capital stock of the Company and VL,
respectively, on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each of the parties hereto, Seller
and Purchaser, intending to be legally bound, do hereby agree as
follows:
1. Purchase and Sale of Stock. Subject to and upon the
terms and conditions set forth in this Agreement, Seller hereby
agrees to (or to cause its subsidiaries to) sell, transfer, convey,
assign and deliver to Purchaser, and Purchaser hereby agrees to
purchase and accept delivery from Seller, at the Closing hereunder,
all of the issued and outstanding shares of capital stock of the
Company and of VL, consisting of 100 shares of common stock, par
value $.10 per share, of the Company (the "Stock"), and 25,000
shares, Pound 1 par value, of VL (the "U.K Shares"). Good and
valid title to the Stock and the U.K. Shares shall be transferred
free and clear of all liens, encumbrances, charges and claims
whatsoever, including any tax liens and charges.
2. Purchase Price. In consideration of the sale,
transfer, conveyance, assignment and delivery of the Stock and the
U.K. Shares by Seller to Purchaser hereunder, and in reliance upon
the representations and warranties made herein or pursuant hereto
by Seller, Purchaser will pay to Seller at the Closing a total
purchase price of $184,000,000 (the "Purchase Price"), $176,000,000
of which is allocable to, and deemed to be in consideration of, the
Stock (of which $32,000,000 is allocable to the Transferred
Subsidiaries (as defined in Section 5.2) excluding VL) and
$8,000,000 of which is allocable to, and deemed to be in
consideration of, the U.K. Shares, payable by wire transfer in
immediately available funds to a bank account of Seller in
accordance with written instructions of Seller given to Purchaser
at least 48 hours prior to the Closing.
3. Closing. The closing of the transactions
contemplated hereby (the "Closing") shall take place at 10:00 A.M.,
local time, on the 18th day of July, 1994 at the offices of Kramer,
Levin, Naftalis, Nessen, Kamin & Frankel, 919 Third Avenue, New
York, New York 10022, or at such other time and place as the
parties may agree upon. The day on which the Closing actually
takes place is herein sometimes referred to as the Closing Date.
In the event either of the parties is entitled not to close on the
scheduled date because a condition to its obligation to close set
forth in Sections 10 or 11 hereof has not been met (or waived by
the party or parties entitled to waive it), the other party may,
subject to Section 13(a)(ii) hereof, postpone the Closing, from
time to time, by giving at least three days prior notice to such
party, until the condition has been met (which all parties will use
their best efforts to cause to happen).
4. Obligations at Closing; Further Assurances. (a) At
the Closing, Seller will deliver or cause to be delivered to
Purchaser:
(i) stock certificates representing the
Stock and the U.K. Shares, duly endorsed in
blank or accompanied by stock powers or other
instruments of transfer duly executed in
blank, and accompanied by all requisite stock
transfer stamps;
(ii) resignations or removals of such of
the directors and officers of the Company and
each of the Transferred Subsidiaries (as
defined in Section 5.2 hereof) as shall have
been requested by Purchaser effective
immediately; and
(iii) certified copies of the certificate
of incorporation and by-laws, good standing
certificates (and to the extent in Seller's
possession) minute books, stock books and
stock transfer ledgers of the Company and each
Transferred Subsidiary, and all other
documents required to be delivered on or
before the Closing by Seller and the Company
to the Purchaser under the provisions of this
Agreement (to the extent not previously
delivered).
(b) At the Closing, Purchaser shall deliver, or cause to
be delivered, to Seller, the Purchase Price, and all other
documents required to be delivered on or before the Closing by
Purchaser to Seller (to the extent not previously delivered).
(c) At any time and from time to time after the Closing,
at Purchaser's reasonable request and without further considera-
tion, Seller will execute and deliver such other documents or
instruments of sale, transfer, conveyance, assignment, delivery and
confirmation, and deliver such other documents and take such other
action as may reasonably be necessary or desirable in order more
effectively to sell, transfer, convey, assign and deliver to
Purchaser and to confirm Purchaser's right, title and interest in
and to the Stock and the U.K. Shares and the transfer thereof to
Purchaser and (at no additional out-of-pocket expense to Seller) to
confirm the Company's right, title and interest in and to the
Company's Assets (as defined in Section 5.12(a) hereof) and to
enable Purchaser to exercise all rights with respect to the Stock,
the U.K. Shares and the Company's Assets and to otherwise carry out
Seller's obligations under this Agreement, and each party shall
take all further actions and execute and deliver such other
instruments that may be reasonably requested by the other party to
effectuate any other provision of this Agreement.
5. Representations and Warranties by Seller. Seller
hereby represents and warrants to Purchaser as follows:
5.1 Organization, Standing and Qualification; Business.
(a) Seller, the Company and each Transferred Subsidiary is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation as set
forth on Schedule 5.1(a). The Company and each Transferred
Subsidiary has all requisite corporate power and authority to carry
on its business as now being conducted and to own, lease or operate
its properties as and in the places where such business is now
conducted and such properties are now owned, leased or operated;
and except as disclosed on Schedule 5.1(a), each is duly qualified,
licensed or domesticated and in good standing as a foreign
corporation authorized to do business in the jurisdictions listed
on Schedule 5.1(a), which are the only jurisdictions where the
nature of the activities conducted by it or the character of the
properties owned, leased or operated by it require such
qualification, licensing or domestication. The Company has
delivered to Purchaser true and complete copies of its and each
Transferred Subsidiary's certificate of incorporation and all
amendments thereto and the by-laws of the Company and each
Transferred Subsidiary as presently in effect, certified as true,
complete and correct by its Secretary, and such by-laws are in full
force and effect as of the date hereof.
(b) Immediately after consummation of the transactions
contemplated by this Agreement, the Company and the Transferred
Subsidiaries will be able to conduct Seller's business involving
the design, manufacture and sale of multilayer ceramic chip
capacitors and certain types of filters (the "Business") in
substantially the same manner as the Company and the Transferred
Subsidiaries conducted the Business prior to the Closing, except to
the extent affected by the identity or legal or regulatory status
of Purchaser or its affiliates (as such term is understood under
U.S. securities law, "Affiliates").
(c) The books of account, minute books, stock certificate
books and stock transfer ledgers of the Company and the Transferred
Subsidiaries made available to Purchaser are complete and correct,
and there have been no transactions involving the business of the
Company or any Transferred Subsidiary which properly should have
been set forth therein and which have not been accurately so set
forth.
5.2 Subsidiaries. (a) The Company has no subsidiaries
except those listed on Schedule 5.2 (with VL, the "Transferred
Subsidiaries"). The Company has no interest, direct or indirect,
and has no commitment to purchase any interest, direct or indirect,
in any other corporation or in any partnership, joint venture or
other business enterprise or entity other than as set forth on
Schedule 5.2. The Business has not been conducted through any
direct or indirect subsidiary or affiliate of Seller other than the
Company and the Transferred Subsidiaries.
(b) Seller owns beneficially and of record all of the
outstanding capital stock of Thomas & Betts International, Inc. a
corporation organized under the laws of Delaware ("TBI"). As of
the date hereof, TBI and the Company together own beneficially and
of record all of the outstanding capital stock of TBHUK. Prior to
the Closing, the Company shall dividend to Seller all of the
outstanding capital stock of TBHUK it owns beneficially and of
record.
5.3 Transactions with Certain Persons. Except as set
forth on Schedule 5.3(a), during the past three years neither the
Company nor any Transferred Subsidiary has, directly or indirectly,
purchased, leased from or otherwise acquired any property or
obtained any services from, or sold, leased to or otherwise
disposed of any property or furnished any services to (except with
respect to remuneration for services rendered as a director,
officer or employee of the Company), in the ordinary course of
business or otherwise, Seller or any person, firm or corporation
which, directly or indirectly, alone or together with others,
controls, is controlled by or is under common control with the
Company or Seller (other than the Transferred Subsidiaries).
Except as set forth on Schedules 5.3(b) or 5.18(a), neither the
Company nor any Transferred Subsidiary owes any amount to, or has
any contract with Seller or any director, officer or employee of
Seller, the Company or any Transferred Subsidiary (other than
compensation for current services not yet due and payable and
reimbursement of expenses arising in the ordinary course of
business), and none of such persons (other than a Transferred
Subsidiary) owes any amount other than advances arising in the
ordinary course of business consistent with prior practice to the
Company. Except as set forth on Schedule 5.3(c), no part of the
property or assets of Seller or any direct or indirect subsidiary
or affiliate of Seller (other than the Transferred Subsidiaries) is
used by the Company or any Transferred Subsidiary. Neither Seller
nor any of its direct or indirect subsidiaries (other than the
Company and the Transferred Subsidiaries) owns, conducts or
operates any business involved directly in the design, manufacture
and sale of capacitors or other completed products of the Company
or the Transferred Subsidiaries.
5.4 Execution, Delivery and Performance of Agreement;
Authority; Consents and Approvals. (a) Neither the execution,
delivery nor performance of this Agreement by Seller will, with or
without the giving of notice or the passage of time, or both,
conflict with, result in a default, right to accelerate or loss of
rights under, or result in the creation of any lien, charge or
encumbrance on the property of the Company or the Transferred
Subsidiaries pursuant to any provision of Seller's, the Company's
or any Transferred Subsidiary's certificate of incorporation or by-
laws or any franchise, mortgage, deed of trust, lease, license,
agreement, law, ordinance, rule or regulation or any order,
judgment or decree to which Seller, the Company or any Transferred
Subsidiary is a party or by which any of them is bound. Seller has
the full corporate power and authority to execute and deliver this
Agreement and to carry out the transactions contemplated hereby,
including, without limitation, the transfer of the Stock and the
U.K. Shares to Purchaser pursuant hereto. All proceedings required
to be taken by Seller or its stockholders to authorize the
execution, delivery and performance of this Agreement have been
properly taken and this Agreement constitutes a valid and binding
obligation of Seller, enforceable against Seller in accordance with
its terms.
(b) Except as identified on Schedule 5.4(b) or disclosed
pursuant to Section 5.13 hereof, no filing with, and no permit,
authorization, consent, waiver or approval of, any governmental or
regulatory agency or any lender, trustee, security holder of
Seller, the Company or any of the Transferred Subsidiaries is
necessary in connection with the execution, delivery or performance
by Seller of this Agreement or for the consummation by it of the
transactions contemplated hereby.
5.5 Capitalization. All of the authorized capital stock
of the Company consists solely of 2,000,000 shares of common stock,
par value $.10 per share, of which 100 shares are issued and
outstanding as of the date of this Agreement. All of the
authorized capital stock of VL consists of 50,000 shares, par value
Pound 1 per share, of which 25,000 are issued and outstanding as of
the date of this Agreement. The issued and outstanding shares of
capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable and are owned beneficially and of
record by Seller. All of the issued and outstanding shares of
capital stock of each Transferred Subsidiary are duly authorized,
validly issued, fully paid and nonassessable and are owned
beneficially and, except as set forth in Schedule 5.5, of record by
the Company or in the case of the U.K. Shares, by TBHUK. Except as
set forth on Schedule 5.5, Seller has, and will have at the
Closing, valid title to the Stock, and the Company (or in the case
of the U.K. Shares, TBHUK) has, and will have at the Closing, valid
title to all of the capital stock of each of the Transferred
Subsidiaries, in each case free and clear of any liens, claims,
charges, security interests or other legal or equitable
encumbrances, including without limitation, any which affect
transferability. Except for this Agreement, there are no
outstanding (a) securities convertible into or exchangeable or
exercisable for the capital stock of the Company or any of the
Transferred Subsidiaries, (b) subscriptions, options, warrants,
calls, or other rights to purchase or subscribe for or otherwise
acquire capital stock of the Company or any of the Transferred
Subsidiaries or (c) contracts, demands, commitments, or other
agreements or arrangements of any character or nature whatever
under which the Company or any Transferred Subsidiary is or may
become required to issue, assign or transfer any shares of the
capital stock of the Company or any Transferred Subsidiary or
purchase or make payment in respect of any shares of its capital
stock, as the case may be, now or heretofore outstanding.
5.6 Financial Statements. Seller has delivered to
Purchaser copies (initialled by the Seller's Vice President of
Finance and identified with a reference to this Section 5.6) of the
following unaudited consolidated and consolidating financial
statements of the Company and the Transferred Subsidiaries
(hereinafter collectively referred to as the "Financial
Statements"), all of which have been prepared from the books and
records of the Company and the Transferred Subsidiaries and fairly
present, in all material respects, in accordance with generally
accepted accounting principles ("GAAP") consistently applied,
except as set forth therein and except that the financial
statements referred to below are not accompanied by footnotes and
the consolidating financial statements reflect application of a
materiality standard appropriate to the Company and the Transferred
Subsidiaries on a consolidated basis, the consolidated and
consolidating financial condition of the Company and the
Transferred Subsidiaries as at their respective dates and the
consolidated and consolidating results of their operations for the
periods covered thereby subject, except in the case of annual
financial statements, to year-end audit adjustments:
(i) unaudited consolidated and
consolidating balance sheet of the Company and
the Transferred Subsidiaries as at January 2,
1994 and December 31, 1992 and 1991, and the
Company's unaudited consolidated and
consolidating statements of earnings and
changes in financial position for each of the
three fiscal years then ended;
(ii) unaudited consolidated and
consolidating balance sheet of the Company and
the Transferred Subsidiaries as at April 3,
1994 (the "Base Balance Sheet"), and the
Company's unaudited consolidated and
consolidating statement of earnings and
changes in financial position for the fiscal
quarter then ended (collectively, the "Base
Financial Statements"); and
(iii) unaudited consolidated and
consolidating balance sheets of the Company
and the Transferred Subsidiaries as at each
of May 1, and May 29, 1994, and the
Company's unaudited consolidated and
consolidating statements of earnings and
changes in financial position for each
fiscal month then ended (collectively, with
the Financial Statements to be delivered
pursuant to Section 8.1.3(a) hereof, the
"Interim Financial Statements").
Except as expressly specified therein, such Interim Financial
Statements include all adjustments, which consist only of normal
recurring accruals, necessary for such fair presentation.
5.7 Absence of Undisclosed Liabilities. Except as
disclosed on Schedule 5.7, as of April 3, 1994, neither the Company
nor any of the Transferred Subsidiaries had any debts, liabilities,
claims, losses, damages, commitments, deficiencies or obligations
(whether absolute, accrued, contingent or otherwise) of any nature
whatsoever, or any other debts, liabilities or obligations relating
to or arising out of any act, transaction, circumstance or state of
facts which occurred or existed on or before April 3, 1994, whether
or not then known, due or payable, which are of a type that would
be required to be set forth on the Base Balance Sheet in accordance
with GAAP and have not been so set forth. This Section 5.7 shall
not apply to Taxes (as hereinafter defined).
5.8 Taxes. (a) "Taxes" shall mean all federal, state,
local and foreign taxes, including any interest or penalties,
imposed on or measured by income. "Group" shall mean, individually
and collectively, (i) Company, (ii) Seller, (iii) the Transferred
Subsidiaries and (iv) any individual, trust, corporation,
partnership or any other entity as to which Company or the
Transferred Subsidiaries may be liable for Taxes incurred by such
individual or entity either as a transferee, or pursuant to
Treasury Regulations Section 1.1502-6, or pursuant to any other
provision of federal, territorial, state, local or foreign law or
regulations.
(b) Seller, the Company, each of the Transferred
Subsidiaries, and any other subsidiary of Seller has filed (or will
file) within the time prescribed by law or regulations (taking into
account all available extensions) all required Tax returns or
reports ("Returns"). Each of Seller, the Company, the Transferred
Subsidiaries and any other subsidiary of Seller has paid in full
and on a timely basis all Taxes due and payable. There is no
audit, examination, deficiency or refund litigation pending or
threatened with respect to any Taxes of the Group that could result
in a determination that would have a Material Adverse Effect (as
defined in Section 10(c) hereof). All Taxes, interest, additions
and penalties due with respect to completed and settled
examinations or concluded litigation relating to it have been paid
in full or adequate provision has been made for any such Taxes on
the Base Balance Sheet (in each case in accordance with GAAP).
There are no liens for Taxes (other than for current Taxes not yet
due and payable) upon any assets of the Group.
(c) Except as set forth in Schedule 5.8(c), no rulings
have been issued by or agreements entered into with any tax
authority with respect to the Company or any of the Transferred
Subsidiaries that could affect the Company or any of the
Transferred Subsidiaries for periods ending after the Closing Date.
(d) Except as set forth in Schedule 5.8(d), neither the
Company nor any of the Transferred Subsidiaries (i) has granted any
power of attorney with respect to any matter relating to Taxes
which is currently in force or (ii) is a party to any agreement
providing for the allocation, sharing or indemnification of Taxes.
(e) Except as set forth in Schedule 5.8(e), neither the
Company nor any of the Transferred Subsidiaries (i) has assets
which directly or indirectly secure any debt the interest on which
is tax-exempt under section 103(a) of the Internal Revenue Code of
1986, as amended (the "Code"), (ii) has assets which constitute
"tax-exempt use property" within the meaning of section 168(h) of
the Code, (iii) has to the knowledge of Seller participated in an
international boycott within the meaning of section 999 of the Code
or (iv) is a party to any agreement, contract, arrangement or plan
that has resulted or would result, separately or in the aggregate,
in the payment of any "excess parachute payments" within the
meaning of section 280G of the Code or an excise tax to the
recipient of such payment pursuant to section 4999 of the Code.
(f) Seller is not a person other than a United States
person within the meaning of the Code.
(g) Seller represents it will file a consolidated
federal income tax return including the Company for the taxable
year immediately preceding the current taxable year and that Seller
is eligible to make an election under section 338(h)(10) of the
Code with respect to the Company.
(h) Seller shall make available to Purchaser all returns
filed by or on behalf of the Company and each Transferred
Subsidiary with respect to payroll and employee withholding taxes,
unemployment insurance, social security, sales and use taxes,
excise taxes, capital taxes, franchise taxes, gross receipt taxes,
occupation taxes, real and personal property taxes, value added
taxes, stamp taxes, transfer taxes, workers' compensation taxes,
taxes relating to Benefit Plans (as defined in Section 5.18) and
any other tax returns reasonably requested by Purchaser.
5.9 Absence of Changes or Events. Except as set forth
in Schedule 5.9, since April 3, 1994 and prior to the date hereof
the Company and each of the Transferred Subsidiaries has conducted
its business only in the ordinary course consistent with prior
practice and none of them has:
(a) incurred any obligation or liability, absolute,
accrued, known or unknown, contingent or otherwise,
whether due or to become due, except in the ordinary
course of business and consistent with its prior
practice, and except obligations or liabilities, in any
case or in the aggregate, that have not had or are not
reasonably likely to result in any material adverse
change in the business, results of operations or
financial condition of the Company and the Transferred
Subsidiaries, taken as a whole, (a "Material Adverse
Effect");
(b) discharged or satisfied any liabilities,
obligations, claims, liens, mortgages, charges, security
interests or other encumbrances (collectively, the
"Encumbrances") (other than those then required to be
discharged or satisfied by their terms), or paid any
obligation or liability, absolute, accrued, contingent or
otherwise, whether due or to become due, other than in
the ordinary course of business and consistent with its
prior practice;
(c) except for a $5,000,000 cash dividend paid by
the Company to Seller in May 1994 and the dividend by the
Company of shares of TBHUK prior to the Closing, declared
or made any payment of dividends or other distribution to
its stockholder (other than to the Company) or upon or in
respect of any shares of its capital stock, or purchased,
retired or redeemed, or obligated itself to purchase,
retire or redeem, any of its shares of capital stock;
(d) mortgaged, pledged or subjected to Encumbrance
any of its property, business or assets, tangible or
intangible, other than those Encumbrances permitted under
Section 5.12(a) hereof;
(e) sold, transferred, leased to others or
otherwise disposed of any of its assets, except in the
ordinary course of business consistent with prior
practice, or cancelled or compromised any debt or claim,
or waived or released any right of substantial value,
except in the ordinary course of business consistent with
prior practice;
(f) received any notice of termination of any
contract, lease or other agreement which, in any case or
in the aggregate, has had or is reasonably likely to
result in a Material Adverse Effect;
(g) transferred or granted any rights under, or
entered into any settlement regarding the breach or
infringement of, or entered into any agreement or
commitment relating to, any United States or foreign
license, patent, copyright, trademark, service mark,
trade name, invention or similar rights, or modified any
existing rights with respect thereto, except in the
ordinary course of business, consistent with prior
practice;
(h) made any change in the rate of compensation,
commission, bonus or other direct or indirect
remuneration payable or paid or agreed or orally promised
to pay, conditionally or otherwise, any bonus, extra
compensation, pension or severance or vacation pay, or
other payment under a Benefit Plan (as defined in Section
5.18), to any director, officer, employee, salesman,
distributor or agent, other than in the ordinary course
of business consistent with its prior practice;
(i) acquired any capital stock or other securities
of any corporation or any interest in any business
enterprise, or otherwise made any loan or advance to or
investment in any person, firm or corporation, except in
the ordinary course of business consistent with prior
practice;
(j) made any capital expenditures or capital
additions or betterments in excess of an aggregate of
$6,000,000;
(k) materially changed any of its material banking
or safe deposit arrangements;
(l) settled or agreed to settle or suffered any
materially adverse determination in any material
litigation, action or proceeding before any court or
governmental body;
(m) failed to replenish its inventories and
supplies in the ordinary course of business consistent
with its prior practice or made any change in its
selling, pricing, advertising or personnel practices
other than in the ordinary course of business;
(n) suffered any change, event or condition which,
in any case or in the aggregate, has had or is reasonably
likely to result in a Material Adverse Effect, including,
without limitation, any change in revenues, costs or
backlog, other than those changes, events or conditions
occurring as a result of general economic or financial
conditions or other developments that are not unique to
the Company and the Transferred Subsidiaries but also
have a significant negative impact on the passive
electronics components industry;
(o) entered into any significant transaction, con-
tract or legally binding commitment other than in the
ordinary course of business, consistent with prior
practice;
(p) made any change in any method of accounting or
auditing practices except as required by GAAP or
generally accepted auditing standards or made any change
in depreciation or amortization policies or rates adopted
by it or made any change in its method of carrying its
inventory on its books;
(q) except as required by this Agreement, amended
its certificate of incorporation or by-laws or merged
with or into or consolidated with any other person or
changed in any manner the rights of its outstanding
capital stock or the character of its business;
(r) incurred any material damage, destruction or
loss to any of the Company's Assets (as hereinafter
defined) by reason of fire, explosion, earthquake,
accident, casualty, requisition or taking of property by
any government or any agency of any government, flood,
windstorm, embargo, riot, act of God or any enemy, or
other similar casualty or event (whether or not the same
has been insured against); or
(s) entered into any agreement or made any legally
enforceable commitment to take any of the types of action
described in subsections (a), (b), (c), (d), (e), (g),
(h), (i), (j), (k), (l), (m), (o), (p) or (q) above.
5.10 Litigation. Except as set forth in Schedule 5.10,
there is no claim, legal action, suit, arbitration, governmental
investigation or other legal or administrative proceeding, nor any
order, decree, writ, award or judgment in progress, pending or in
effect, or to the knowledge of Seller threatened, against or
relating to the Company or any of the Transferred Subsidiaries, or
their respective officers, directors or employees (as such),
properties, assets or business or the transactions contemplated by
this Agreement.
5.11 Compliance with Laws and Other Instruments.
(a) The Company and each of the Transferred Subsidiaries has
complied with all existing laws (other than laws relating to Taxes,
military specifications, Employee Benefits Plans, Labor Laws and
Environmental Laws which are dealt with specifically in Sections
5.8, 5.11(b), 5.18, 5.19 and 5.20, hereof), rules, regulations,
ordinances, orders, judgments and decrees applicable to them,
except where the failure to comply has not had and is not
reasonably likely to result in a Material Adverse Effect. Neither
the ownership nor use of its properties nor the conduct of its
business by the Company or any of the Transferred Subsidiaries
conflicts with the rights of any other person, firm or corporation
or entity or violates, or with or without the giving of notice or
the passage of time, or both, will violate, conflict with or result
in a breach or default, right to accelerate or loss of rights
under, any term or provision of its certificate of incorporation or
by-laws, or, to the knowledge of Seller, any order, judgment,
restriction or decree to which the Company or any Transferred
Subsidiary is a party or by which it is bound or affected or by
which its properties may be bound or affected. None of the Seller,
the Company or any of the Transferred Subsidiaries has received any
notice of violation of any applicable regulation, ordinance or
other law, order or regulation, whether foreign, domestic, federal,
state or local, which is applicable to the business, operations,
properties or assets of the Company or the Transferred
Subsidiaries.
(b) The Company and each of the Transferred Subsidiaries
has complied with all specifications and other requirements of any
government or governmental agency, domestic or foreign, applicable
to the products manufactured by the Company and each of the
Transferred Subsidiaries and sold to such government or agency. In
addition, each of the Company and the Transferred Subsidiaries has
complied with all (i) government or military specifications or
requirements and Qualified Product Lists published from time to
time by the Defense Electronics Supply Center which are applicable
to products manufactured by the Business (the "Qualified Product
List") and (ii) established reliability, testing, quality assurance
or other similar procedures and/or regulations (including, but not
limited to, procurement regulations relating to the failure to
comply with such procedures and/or regulations) of the U.S.
Government (including, but not limited to, the Department of
Defense and NASA) or any foreign government incorporating such
standards applicable to any products manufactured by the Business
prior to the Closing. None of Seller, the Company or any of the
Transferred Subsidiaries is subject to any debts, liabilities or
obligations, whether civil or criminal, relating to or arising
under any contract or subcontract as a result of a failure to
comply with the foregoing.
5.12 Title to and Condition of Properties. (a) Subject
to the next sentence, the Company and each of the Transferred
Subsidiaries has good (and with respect to the Fee Properties, as
hereinafter defined, marketable and insurable) title to all the
properties and assets reflected in Schedules 5.13 (a) and (c)
(except property sold or retired after the date hereof in the
ordinary course of business, consistent with prior practice)
(collectively, the "Company's Assets"). None of the Company's
Assets is subject to any Encumbrance of any nature whatsoever,
direct or indirect, whether accrued, absolute, contingent or
otherwise, except (i) as expressly set forth in the Base Balance
Sheet as securing specific liabilities or as otherwise expressly
permitted by the terms hereof, or (ii) those imperfections of title
and encumbrances, if any, which (A) are not substantial in
character, amount or extent and do not detract from the value of
the properties of the Company taken as a whole and (B) do not
interfere with either the present and continued use of such
properties, taken as a whole, or the conduct of the Business in the
ordinary course.
(b) All of the properties and assets owned, leased or
used by the Company and the Transferred Subsidiaries, taken as a
whole, are in good operating condition and repair, ordinary wear
and tear excepted, and are suitable for the purposes used and are
adequate and sufficient for all current operations of the Company
and the Transferred Subsidiaries. There are no pending or, to the
knowledge of Seller or the Company, threatened condemnation,
eminent domain or annexation proceedings against any of such
properties and none of them or the improvements thereon violates
any applicable easement, deed restriction or other covenant,
restriction or agreement.
5.13 Schedules. Schedule 5.13 contains, as of the date
hereof, an accurate and complete list of:
(a) All real property (including fixtures
and improvements thereon) (i) owned by the
Company or any Transferred Subsidiary or which
is used by the Company or any Transferred
Subsidiary in connection with the operation of
its business, having a book value at April 3,
1994, or (ii) leased under leases providing for
any annual rental, in excess of $25,000.
(b) As of a date no earlier than
March 31, 1994, all of the Company's and the
Transferred Subsidiaries' receivables having a
book value at April 3, 1994 in excess of
$25,000 (which shall include accounts receiv-
able, loans receivable and any advances to
customers but shall not include any amounts
owing to or from Seller or any Transferred
Subsidiary), together with information as to
each such listed receivable that has been out-
standing for more than 60 days.
(c) All machinery, tools, equipment,
motor vehicles, rolling stock and other
tangible personal property (other than
inventory and supplies), owned, leased or used
by the Company or any Transferred Subsidiary,
except for items having a book value at April
3, 1994, or original price or leased under
leases providing for an annual rental of less
than $10,000.
(d) All patents, patent applications,
patent licenses, trademarks, trademark regis-
trations, and applications therefor, service
marks, service names, trade names, brand names,
copyright registrations, and applications
therefor, wholly or partially owned or held by
the Company or any Transferred Subsidiary or
used in the operation of the Business and
material thereto.
(e) All material fire, theft, property,
casualty, liability, workers' compensation,
directors and officers liability, surety bonds,
key man life insurance and other insurance
policies and binders insuring the Company or
any Transferred Subsidiary that are currently
in effect (the "Insurance"), specifying with
respect to each such policy the name of the
insurer, the risk insured against, the limits
of coverage, the deductible amount (if any),
the premium rate and the date through which
coverage will continue by virtue of premiums
already paid.
(f) All manufacturers sales
representatives agreements, distributor
agreements (including franchises) or agreements
providing for the services of an independent
contractor providing for aggregate payments in
excess of $20,000 to which the Company or any
Transferred Subsidiary is a party.
(g) Each contract with the United States
or any foreign government or any agency or
department of any thereof to which the Company
or any Transferred Subsidiary is a party.
(h) All loan agreements, indentures,
mortgages, pledges, conditional sale or title
retention agreements, security agreements,
equipment obligations, guaranties, leases or
lease purchase agreements to which the Company
or any Transferred Subsidiary is a party or by
which it or any of its property is bound having
(in the case of any indebtedness) a principal
amount or providing for (in the case of other
agreements) payments in excess of $100,000.
(i) All contracts, agreements and binding
commitments, whether or not fully performed,
pursuant to which the Company has acquired, in
the last three years from the date hereof,
capital stock or any other securities of any
corporation or any interest in any business
enterprise (other than any such acquisition or
interest in any Transferred Subsidiary), or
otherwise made any loan or advance to or
investment in any person, firm or corporation
(other than a Transferred Subsidiary or to
officers or employees in the ordinary course of
business, consistent with prior practice).
(j) All other contracts or agreements, to
which the Company or any Transferred Subsidiary
is a party or by which it or any of its
property is bound involving payments or
receipts by the Company or any Transferred
Subsidiary, as the case may be, of more than
$250,000 in any single case and which are not
terminable by the Company or any Transferred
Subsidiary on 30 days' or less notice without
any penalty or consideration.
(k) The names of all directors and
officers of the Company and each Transferred
Subsidiary; the name of each bank in which the
Company or any Transferred Subsidiary has an
account or safe deposit box and the names of
all persons authorized to draw thereon or have
access thereto; and the names of all persons,
if any, holding tax or other powers of attorney
from the Company or any Transferred Subsidiary.
All of the contracts, agreements, leases, licenses and commit-
ments required to be listed on Schedule 5.13 (other than those
which have been fully performed) as of the date hereof (i) are
valid, binding and enforceable against (A) the Company or a
Transferred Subsidiary, as the case may be, and (B) to Seller's
knowledge, the other party or parties thereto, as the case may
be, in accordance with their respective terms and (ii) are in
full force and effect. Except as specified in Schedule 5.13, no
contract, agreement, lease, license or binding commitment to
which the Company or any Transferred Subsidiary is a party
requires any consent or waiver to remain in full force and effect
as a result of the Closing. Except as disclosed in Schedule
5.13, there is not thereunder any existing default by the Company
or any Transferred Subsidiary, or event which, after notice or
lapse of time, or both, would constitute a default by the Company
or any Transferred Subsidiary or result in a right to accelerate
or loss of rights by the Company or any Transferred Subsidiary.
None of the existing or completed contracts of the Company or any
Transferred Subsidiary is subject to renegotiation with any
governmental body. In addition, except as disclosed on Schedule
5.13, no contract, agreement, lease, license or commitment to
which the Company or any Transferred Subsidiary is a party
contains any provision that would alter or amend any of the terms
thereof following the Closing as a result of the transfer of the
Stock or the U.K. Shares pursuant hereto. True and complete
copies of all such contracts, agreements, leases, licenses and
other documents listed on Schedule 5.13 (together with any and
all amendments thereto) have been made available to Purchaser.
5.14 Insurance. (a) Each Insurance policy is in full
force and effect as of the date of this Agreement and will be in
full force and effect until the Closing Date (with respect to any
Benefit Plan as defined in Section 5.18, on the Closing Date) and
is with financially sound and reputable insurers in accordance
with normal industry practice including self insurance.
(b) The Insurance provides adequate coverage for all
normal risks incident to the assets, properties and business
operations of the Company and the Transferred Subsidiaries.
(c) Except as set forth on Schedule 5.14 hereto,
Seller does not maintain any Insurance covering itself, its
direct and indirect subsidiaries or any affiliate that also
provides coverage for the Company and the Transferred
Subsidiaries.
(d) Seller has provided or made available to Purchaser
all workers' compensation ratings and unemployment insurance
ratings and contributions of the Company and each of the
Transferred Subsidiaries with respect to the employees of the
Company or Transferred Subsidiaries, as the case may be. Except
as disclosed on Schedule 5.14, neither Seller nor the Company has
any knowledge of any proposed increase therein or knows of any
conditions or circumstances (other than those applicable to
employees in such jurisdiction generally) applicable to the
Business which might result in such increase.
5.15 Patents, etc. Each of the Company and the
Transferred Subsidiaries owns or possesses the royalty free
licenses or other rights to use all copyrights, trademarks,
service marks, service names, trade names, patents, inventions,
trade secrets and other proprietary rights necessary to conduct
its business as it is presently operated. Neither the Company
nor any of the Transferred Subsidiaries is infringing upon or
otherwise acting adversely to any valid copyrights, trademarks,
trademark rights, service marks, service names, trade names,
patents, patent rights, inventions, licenses, trade secrets or
other legitimate proprietary rights owned by any other person or
persons, and there is no claim or action by any such person
pending, or to the knowledge of the Seller or the Company
threatened, with respect thereto. Except as disclosed on
Schedule 5.15, neither Seller nor any of its direct or indirect
subsidiaries (other than the Company and the Transferred
Subsidiaries) owns, or possesses licenses or other rights to use,
any valid copyrights, trademarks, service marks, service names,
trade names, patents, inventions, trade secrets and other
legitimate proprietary rights necessary for the conduct of the
Business.
5.16 No Guaranties. Except as disclosed on Schedule
5.16, and other than (a) Seller's guarantee of the obligations
and liabilities of the Company and the Transferred Subsidiaries
provided to Dun & Bradstreet, a copy of which guarantee is
attached hereto on Schedule 5.16 (the "D&B Letter"), (b) the
Company's guarantee of the obligations or liabilities of the
Transferred Subsidiaries and vice versa, (c) guarantees by the
Transferred Subsidiaries of obligations of other Transferred
Subsidiaries, and (d) endorsements for deposit or collection made
in the ordinary course, none of the obligations or liabilities of
the Company or any Transferred Subsidiary is guaranteed by any
other person, firm or corporation, nor has the Company or any
Transferred Subsidiary guaranteed or otherwise become
contingently liable for the obligations or liabilities of any
other person, firm or corporation.
5.17 Product Returns; Warranties. There are no
liabilities for product returns, warranty obligations or product
services other than those arising in the ordinary course of
business, consistent with Seller's and the Company's historical
practice relating to the Business. Except as disclosed on
Schedule 5.17, Seller has no knowledge of any threatened claim
for any (i) product returns, (ii) warranty obligations, or
(iii) product services, relating to the Business. True and
correct copies of the standard warranty provided by Seller, the
Company and the Transferred Subsidiaries on sales orders and
other related documents which are delivered in connection with
the Business have been made available to Purchaser. Except as
set forth on Schedule 5.17, the Company's usual and customary
practice is to include only such standard warranty.
5.18 Employee Benefit Plans. (a) Schedule 5.18(a)
sets forth a full and complete list of all compensation and
benefit plans, programs and other arrangements, whether or not in
writing, maintained by or to which the Company or any Transferred
Subsidiary contributes on behalf of any employee of the Company
or any Transferred Subsidiary (an "Employee") or any former
employee of the Company or any Transferred Subsidiary (a "Former
Employee") (or any dependent or beneficiary thereof) or with
respect to which the Company or any Transferred Subsidiary may
have any liability or obligation to an Employee or Former
Employee (or any dependent or beneficiary thereof), direct,
indirect, contingent or otherwise, including without limitation,
employment, consulting, independent contractor or deferred
compensation agreements, executive compensation, deferred
compensation, stock ownership, stock purchase, performance share,
bonus and other incentive plans, pension, profit sharing,
savings, thrift or retirement plans, employee stock ownership
plans, life, health, dental and disability plans, vacation,
severance pay, sick leave, tuition reimbursement and other
benefit plans, and any other employee benefit plan within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (collectively, the
"Benefit Plans"). True and complete copies of all the Benefit
Plans (including summaries of any unwritten Benefit Plans) and
any related trust agreements, insurance and other contracts and
other funding arrangements, summary plan descriptions and
summaries of material modifications relating to each Benefit
Plan, the three most recent annual reports which have been filed
with the Internal Revenue Service and Department of Labor with
respect to each Benefit Plan required to file such reports, all
collective bargaining agreements pursuant to which a Benefit Plan
is maintained or contributions to a Benefit Plan are made, and
favorable determination letters issued since 1984 for each
Benefit Plan and related trust that is intended to satisfy the
qualification requirements of sections 401(a) and 501(a) of the
Code have been provided to Purchaser.
(b) Seller, the Company and the Transferred
Subsidiaries have complied with all applicable laws and
regulations relating to the Benefit Plans, including but not
limited to ERISA and the Code, and with the terms of the Benefit
Plans. The Company and each of the Transferred Subsidiaries have
filed within the time prescribed by law or regulations all
returns and reports required pursuant to ERISA and the Code in
connection with Benefit Plans and all such returns and report are
complete and accurate. Neither Seller, the Company or any of the
Transferred Subsidiaries, has made any commitments with respect
to the Benefit Plans other than in accordance with a reasonable
interpretation of the terms of the Benefit Plans; there are no
actions, suits or claims pending or threatened against any
Benefit Plan or the assets of any Benefit Plan (other than
routine claims for benefits) or against any fiduciary of any
Benefit Plan with respect to such Benefit Plan; all payments due
under or pursuant to the Benefit Plans have been paid or are
properly accrued and reflected on the books and financial
statements of Seller, the Company and the Transferred
Subsidiaries.
(c) Neither Seller, the Company nor the Transferred
Subsidiaries have entered into any contractual obligations (as
such term is used in the Company's Benefit Plans) limiting the
Company's or a Transferred Subsidiary's right to amend or
terminate any Benefit Plan. The Balance Sheet reflects all
employer contributions required to be made to all Benefit Plans
to date to the extent required to be so reflected under GAAP.
Except for the Thomas & Betts Employees Pension Plan ("Seller's
Defined Benefit Plan"), Thomas & Betts Corporation Supplemental
Executive Investment Plan ("Seller's Deferred Compensation Plan")
the Thomas & Betts Corporation Executive Retirement Plan, the
Thomas & Betts Corporation 1993 Management Stock Ownership Plan,
the Thomas & Betts Corporation 1990 Stock Option Plan and the
Thomas & Betts Corporation 1985 Stock Option Plan (collectively,
"Seller's Equity Plans"), the Thomas & Betts Corporation
Executive Life Insurance Plan and the Thomas & Betts Corporation
Travel Accident Plan, all Employees are covered under benefit
plans sponsored solely by the Company or a Transferred
Subsidiary. Prior to the Closing Date, Seller will provide
written notice to each Employee covered under an employee benefit
plan sponsored by Seller that his active participation in such
plan shall cease as of the Closing Date. As of the Closing Date,
with the exception of the plans listed in the second preceding
sentence, no Employee will be covered under any employee benefit
plan sponsored by Seller. Neither Seller nor any Affiliate of
Seller (other than the Company, the Transferred Subsidiaries or
Mr. Robert Paquette), participates in a Benefit Plan sponsored by
the Company or a Transferred Subsidiary. On and after the
Closing Date, neither the Company, Transferred Subsidiaries nor
Buyer will be under any obligation to contribute to any employee
benefit plan maintained by Seller. Except for the Vitramon
Incorporated Retirement Trust ("Company's Defined Benefit Plan"),
no Benefit Plan sponsored by the Company or a Transferred
Subsidiary participates in a trust sponsored by any entity except
the Company or a Transferred Subsidiary.
(d) On or prior to the Closing Date, Seller covenants
and agrees to cause a trust to be established (the "Vitramon
Trust") to which the assets of the Company's Defined Benefit
Plan, currently held in the master trust established by agreement
between Seller and The Northern Trust Company ("Northern") dated
June 1, 1982 (the "Master Trust"), shall be transferred. Seller
and Purchaser agree that they shall take such actions as are
appropriate in order for the transfer described in the preceding
sentence to be accomplished as follows (subject to any
modification to which the Seller and Purchaser may mutually agree
in writing):
(i) on the "Transfer Date", which shall be on or
before the Closing Date, cash equal to the value (as
determined by Northern as of June 30, 1994) of the
interest of the Company's Defined Benefit Plan in the
Master Trust (the "June Value") shall be transferred
from the Master Trust to the Vitramon Trust, and
(ii) as soon as practicable following July 31, 1994,
the amount by which the Final Transfer Amount (as
defined below) exceeds the June Value shall be
transferred from the Master Trust to the Vitramon Trust
or, if there is no such amount, the amount (if any) by
which the June Value exceeds the Final Transfer Amount
shall be transferred from the Vitramon Trust to the
Master Trust.
The Final Transfer Amount shall be:
(A) the June Value, appropriately adjusted for plan
distributions and administrative expenses, increased (or
decreased) by
(B) the investment gain (or loss) experienced by the Master
Trust (as determined by Northern) for the month of July 1994
multiplied by the product of (x) a fraction the numerator of
which is the number of days in July 1994 that preceded the
Transfer Date and the denominator of which is 31 and (y) a
fraction the numerator of which is the June Value and the
denominator of which is the value of the assets of the
Master Trust as of June 30, 1994 (as determined by
Northern).
(e) Each Benefit Plan which is not a plan qualified
under section 401(a) of the Code, but which is intended to meet
the requirements for tax-favored treatment under section 79, 104,
105 or 106 of the Code, complies in all respects with the
requirements of such section.
(f) Each Benefit Plan which is intended to be
"qualified" within the meaning of section 401(a) of the Code (and
the exempt trust thereunder) has been determined by the Internal
Revenue Service to satisfy the qualification requirements of
sections 401(a) and 501(a) of the Code and each such Benefit Plan
(and related trust) complies with such qualification requirements
without being aggregated with any other employee benefit plan.
(g) No "reportable event" within the meaning of
section 4043(b) of ERISA has occurred with respect to the
Company's Defined Benefit Plan. The Pension Benefit Guaranty
Corporation ("PBGC") has not instituted proceedings to terminate
the Company's Defined Benefit Plan. The Company's Defined
Benefit Plan has no accumulated or waived funding deficiency
within the meaning of section 412 of the Code nor has any
extension of any amortization period within the meaning of
section 412 of the Code or 302 of ERISA been applied for with
respect thereto. All applicable premiums required to be paid to
the PBGC prior to the Closing Date with respect to the Company's
Defined Benefit Plan have been paid. No facts exist with respect
to the Company's Defined Benefit Plan which would give rise to a
termination proceeding which would result in liability under
section 4068 of ERISA or a lien on the assets of the Company or
a Transferred Subsidiary under section 4068 of ERISA on or prior
to the Closing Date.
(h) With respect to each Benefit Plan, no party in
interest or disqualified person (as defined in section 3(14) of
ERISA and section 4975 of the Code, respectively) has at any time
engaged in a transaction which could subject Seller, the Company
or any Transferred Subsidiary, directly or indirectly, to a Tax,
penalty or liability for prohibited transactions imposed by
section 406 of ERISA or section 4975 of the Code. No fiduciary
(as defined in section 3(21) of ERISA) with respect to any
Benefit Plan has breached any of the responsibilities or
obligations imposed upon fiduciaries under Title I of ERISA.
(i) During the seven-year period preceding the date of
this Agreement, neither Seller, the Company nor any Transferred
Subsidiary has ever contributed to, or withdrawn in a complete or
partial withdrawal from, any multiemployer plan (within the
meaning of Subtitle E of Title IV of ERISA) or incurred
contingent liability under section 4204 of ERISA.
(j) Except for the Vitramon, Incorporated Retiree
Medical Benefits Plan ("Retiree Medical Plan"), no Benefit Plan
sponsored by the Company or any Transferred Subsidiary, other
than the Company's Defined Benefit Plan, the Vitramon,
Incorporated Thrift Plan, and the Supplemental Retirement Plan of
Vitramon North America, provides for the payment of retiree or
post-termination benefits other than as required under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, or any similar state law. The Retiree Medical Plan was
amended effective January 1, 1993 and under the terms of the
Plan, all Former Employees who were eligible to enroll in the
Plan have done so and no other individual is or will be eligible
to enroll in the Retiree Medical Plan.
(k) Except as disclosed on Schedule 5.18(k), since
April 3, 1994 neither Seller, the Company nor any Transferred
Subsidiary has adopted any increase in benefits under a Benefit
Plan or agreed to the creation of any new benefits or any
increase in benefits under any Benefit Plan or change in employee
coverage which would increase the expense of maintaining any such
Benefit Plan or proposed any such actions under circumstances in
which it would reasonably be expected that such proposal would be
implemented.
(l) Except as disclosed on Schedule 5.18(l), the
consummation of the transactions contemplated by this Agreement
will not result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any
benefits or compensation payable in respect of any employee.
(m) No employee or former employee of Seller, the
Company or any Transferred Subsidiary will be entitled to any
severance benefits under the terms of any Benefit Plan solely by
reason of the consummation of the transactions contemplated by
this Agreement.
(n) Each of Seller, the Company and the Transferred
Subsidiaries has complied with the notice and continuation
requirements of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, and the regulations thereunder,
applicable to it with respect to any Benefit Plan.
(o) During the seven-year period preceding the date of
this Agreement, no actual or contingent liability under Title IV
of ERISA, section 302 of ERISA or section 412 of the Code to any
person, including the PBGC (other than for premiums), has been,
and no such liability is reasonably expected to be, incurred by
Seller, the Company or any Transferred Subsidiary with respect to
any Benefit Plan , or any other employee benefit plan (as defined
in section 3(3) of ERISA) currently or previously maintained or
contributed to by Seller, the Company, any Transferred Subsidiary
or any "ERISA Affiliate" (as hereinafter defined), as a result
of, or arising from, any events that have occurred prior to the
date of this Agreement or that will have occurred prior to or on
the Closing Date or by reason of the consummation of the
transactions contemplated by this Agreement. "ERISA Affiliate"
means any trade or business, whether or not incorporated, which
together with Seller, the Company or a Transferred Subsidiary, is
treated as a "single employer" within the meaning of section
414(b), (c), (m) or (o) of the Code or section 4001 of ERISA.
(p) No event has occurred prior to the date of this
Agreement and no condition presently exists with respect to the
Benefit Plans that would subject Purchaser, the Company or a
Transferred Subsidiary to any liability for any tax under section
4971, 4972, 4975, 4976, 4977, 4978, 4979, 4979A, 4980, 4980B or
5000 of the Code, or to a fine under section 502(c) of ERISA.
(q) Except as set forth on Schedule 5.18(q), no leased
employee (within the meaning of section 414(n) or (o) of the
Code) performs any services for Seller, the Company or any
Transferred Subsidiary with respect to the Business.
(r) Seller has delivered or made available to
Purchaser a claims run from one or more insurance brokers with
respect to workers compensation claims filed by employees of the
Company and the Transferred Subsidiaries during the period from
January 1, 1989 through April 30, 1994.
(s) No circumstances exist that could result in
Purchaser, the Company or a Transferred Subsidiary having any
liability, including but not limited to any successor liability,
with respect to any Benefit Plan that is or was maintained by
Seller or any "ERISA Affiliate" of Seller other than the Company
or a Transferred Subsidiary.
5.19 Labor Matters. (a) Each of the Company and the
Transferred Subsidiaries is in compliance with all applicable
laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours, and is not engaged
in any unfair labor practice.
(b) Except as disclosed on Schedule 5.19(b), there are
no complaints or charges against the Company or any Transferred
Subsidiary pending or, to the knowledge of Seller, threatened
before the National Labor Relations Board or any state, local or
foreign labor agency involving or affecting the Company or the
Transferred Subsidiaries.
(c) There are no strikes, slowdowns, work stoppages,
or other labor troubles pending or, to the knowledge of Seller,
threatened with respect to the Employees and none of the above
has occurred or, to the knowledge of Seller, has been threatened
since April 3, 1994.
(d) There is no representation claim or petition
pending before the National Labor Relations Board and to the
knowledge of Seller no attempt to organize for collective
bargaining purposes is being made or is threatened respecting the
Employees.
(e) No collective bargaining agreement is currently in
effect or being negotiated by Seller, the Company or the
Transferred Subsidiaries with respect to the Employees; neither
Seller, the Company nor any of the Transferred Subsidiaries has
any obligation to negotiate any collective bargaining agreement
with respect to the Employees, and none of the Seller, the
Company and the Transferred Subsidiaries has encountered any
labor union organizing activity with respect to the Company and
each of the Transferred Subsidiaries.
(f) No charges with respect to or relating to the
Company or any of the Transferred Subsidiaries are pending before
the Equal Employment Opportunity Commission, or any state, local
or foreign agency responsible for the prevention of unlawful
employment practices.
(g) None of Seller, the Company or the Transferred
Subsidiaries has received notice of the intent of any federal,
state, local or foreign agency responsible for the enforcement of
labor or employment laws to conduct an investigation of or
relating to the Company or any of the Transferred Subsidiaries
and, to the knowledge of Seller, no such investigation is in
progress.
(h) Schedule 5.19 sets forth for each Employee whose
total compensation for the year ended January 2, 1994 exceeded
$75,000 the (A) employment date, (B) title or position, (C)
yearly salary rates and bonus, incentive payments for the year
ended January 2, 1994 and (D) accrued vacation and sick days not
taken.
5.20 Environmental Matters. (a) Except as set forth
on Schedule 5.20:
(i) The Company and the Transferred Subsidiaries
have obtained or applied for all Environmental Permits,
as defined below, as are presently required for the
lawful operation of the Business.
(ii) The Company and the Transferred Subsidiaries
are (A) in compliance with all terms and conditions of
the Environmental Permits, and are in compliance with
and are not in default under any Environmental Laws, as
defined below, (B) not subject to any court order or
order of any federal, state or local government body or
agency with respect to any Environmental Laws, and (C)
have not received written notice of a violation by or
claim against the Company under any Environmental Laws.
(iii) There have been no Releases by the Company
or any of the Transferred Subsidiaries in the conduct
of the Business of any Hazardous Substances (A) into,
on or under any of the properties owned or operated (or
formerly owned or operated) by the Company, including
those of the Transferred Subsidiaries or (B) into, on
or under any other properties, including, without
limitation, landfills in which Hazardous Substances
have been Released.
(iv) No properties have been used at any time by
the Company as a landfill or storage, treatment or
disposal site for any Hazardous Waste as defined under
RCRA.
(v) There is no known damaged or friable asbestos
or asbestos-containing material contained in any of the
buildings or structures covered by this Agreement.
There are no claims, suits or proceedings by any
employee pending or, to the knowledge of Seller,
threatened against either Company or any Transferred
Subsidiary and relating to the Company's Assets or the
Business that are premised on the exposure to asbestos
or asbestos-containing material.
(b) For purposes of this Agreement, the capitalized
terms used in this Agreement shall have the meanings set forth
below. When used herein, the singular includes the plural as the
context requires:
(i) "Environment" means all air, surface water,
groundwater, drinking water or land, including land
surface or subsurface.
(ii) "Environmental Laws" means all foreign,
federal, state or local environmental, land use,
health, chemical use, safety and sanitation laws,
statutes, ordinances, rules, regulations (including,
without limitation, with respect to the Business,
specific licenses, permits, authorizations, directives,
approvals, consents, court orders, injunctions or
decrees, orders or agreements with governmental
agencies) and codes, as in effect on the date hereof,
relating to health, safety or the protection of the
Environment and/or governing the discharge of
pollutants or the use, storage, treatment, generation,
transportation, processing, handling, production or
disposal of Hazardous Substances, including but not
limited to the Resource Conservation and Recovery Act
of 1976 as amended ("RCRA"), the Clean Air Act as
amended, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, the
Toxic Substances Control Act as amended, the
Occupational Safety and Health Act of 1970 and state
and foreign statutes similar to or based upon the
foregoing.
(iii) "Environmental Permits" means all approvals,
authorizations, consents, permits, licenses, registra-
tions and certificates required by any applicable
Environmental Laws relating to: (A) pollution or
protection of the Environment including those relating
to the emission, Release or discharge of any Hazardous
Substances into the Environment, (B) the use,
treatment, storage, disposal, generation, transport or
handling of Hazardous Substances, or (C) the ownership,
use, operation, cleanup or remediation of the Fee
Properties or Leased Properties.
(iv) "Hazardous Substance" means, without
limitation, any flammable explosives, radon,
radioactive materials, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and
petroleum products (including but not limited to waste
petroleum and petroleum products), methane, hazardous
materials, hazardous wastes, pollutants, contaminants
and hazardous or toxic substances, as defined in or
regulated under any applicable Environmental Laws.
(v) "Release" means any past or present spilling,
leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or
disposing of a Hazardous Substance into the
Environment.
(vi) "Site Conditions" means, with respect to any
real property, conditions of the Environment of such
property which (A) are in existence as of the Closing
Date or (B) become manifest after the Closing Date, and
have been caused by Releases of Hazardous Substances to
the Environment existing or occurring at or prior to
the Closing Date.
5.21 No Brokers; Absence of Certain Business
Practices. Except for Merrill Lynch & Co., whose fees,
commissions and expenses are the sole responsibility of Seller,
neither Seller, the Company, any Transferred Subsidiary nor any
of their respective officers, directors or Representatives (as
defined in Section 7(c)) has employed any investment banker,
business consultant, broker or finder or incurred any liability
for any investment banking, business consultant, brokerage or
finders' fee or commission in connection with the execution or
delivery of this Agreement or the consummation of the
transactions contemplated hereby. None of the Company, any
Transferred Subsidiary, or any officer, employee or agent of the
Company or any Transferred Subsidiary, nor, to the knowledge of
Seller, any other person acting on its or their behalf, has,
directly or indirectly, within the past five years given or
agreed to give any gift or similar benefit to any representative
of a customer or supplier or a governmental employee for the
purpose of obtaining or retaining the Business which (i) is
unlawful, (ii) if not given in the past, would likely have had a
Material Adverse Effect or (iii) if not continued in the future,
would be reasonably likely to result in a Material Adverse Effect
or would be reasonably likely to subject the Company to suit or
penalty in any private or governmental litigation or proceeding.
5.22 Vitramon Brazil. Set forth on Schedule 5.22 is
an estimate of the out-of-pocket costs (including write offs of
assets at book value) net of reserves accrued therefor as of May
29, 1994, necessary to terminate and discontinue the operations
of Vitramon do Brasil Ltda., a Brazilian limited liability
company and one of the Transferred Subsidiaries. Seller
estimates that such costs will not exceed $1.6 million in the
aggregate. Such estimate has been prepared in good faith.
5.23 Disclosure. No representation or warranty by
Seller contained in this Agreement or in any Instrument contains
or will contain any untrue statement of a material fact, or omits
or will omit to state any material fact required to make the
statements herein or therein contained not misleading.
6. Representations and Warranties by Purchaser.
Purchaser represents and warrants to Seller as follows:
6.1 Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws
of Delaware and has all requisite corporate power and authority
to enter into this Agreement and to carry out the transactions
contemplated hereby.
6.2 Execution, Delivery and Performance of Agreement.
Neither the execution, delivery nor performance of this Agreement
by Purchaser will, with or without the giving of notice or the
passage of time, or both, conflict with, result in a default,
right to accelerate or loss of rights under, or result in the
creation of any lien, charge or encumbrance pursuant to, any
provision of Purchaser's certificate of incorporation or by-laws
or any franchise, mortgage, deed of trust, lease, license,
agreement, law, ordinance, rule or regulation or any order,
judgment or decree to which Purchaser is a party or by which it
is bound. Purchaser has full corporate power and authority to
enter into this Agreement and to carry out the transactions
contemplated hereby, all proceedings required to be taken by
Purchaser to authorize the execution, delivery and performance of
this Agreement have been properly taken and this Agreement con-
stitutes a valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms.
6.3 Litigation. There is no suit in progress, pending
or in effect, or to the knowledge of Purchaser threatened,
against or relating to Purchaser in connection with or relating
to the transactions contemplated by this Agreement.
6.4 Governmental Approvals and Filings. Except for
filings pursuant to the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, filings with the French government and filings under
the Connecticut Property Transfer Law, Connecticut General
Statutes Subsections 22a-134a to 22a-134e, including "Form
III,"no consent, approval or action of, filing with or notice to
any governmental or regulatory authority on the part of Purchaser
is required in connection with the execution, delivery and
performance of this Agreement or the consummation of the
transactions contemplated hereby.
6.5 Purchase for Investment. The Stock and the U.K.
Shares will be acquired by Purchaser for its own account for the
purpose of investment, it being understood that the right to
dispose of such Stock shall be entirely within the discretion of
Purchaser. Purchaser will refrain from transferring or otherwise
disposing of any of the Stock, the U.K. Shares, or any interest
in the Stock or the U.K. Shares, in such manner as to cause
Seller to be in violation of the registration requirements of the
Securities Act of 1933, as amended, or applicable state
securities or blue sky laws.
6.6 No Brokers. Neither the Purchaser nor any of its
officers, directors or Representatives has employed any
investment banker, business consultant, broker or finder or
incurred any liability for any investment banking, business
consultant, brokerage or finders' fee or commission in connection
with the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby.
6.7 Financing. Purchaser knows of no reason why it
should not be able to obtain sufficient financing to pay the
Purchase Price and to make all other necessary payments of fees
and expenses in connection with the transactions contemplated by
this Agreement.
6.8 Breach. As of the date hereof, Purchaser has no
actual knowledge of any material (i) misrepresentation, (ii)
breach of warranty or (iii) nonfulfillment or failure to be
performed of any covenant or agreement by Seller in connection
with the consummation of the transactions contemplated hereby.
7. Conduct of Business Prior to Closing. (a) Prior
to the Closing, Seller shall cause the Company and each of the
Transferred Subsidiaries to conduct their business and affairs
only in the ordinary course and consistent with prior practice
and Seller shall cause the Company and each of the Transferred
Subsidiaries to use commercially reasonable efforts to maintain,
keep and preserve their assets and properties taken as a whole in
good condition and repair, ordinary wear and tear excepted, and
maintain insurance thereon in accordance with present practices,
and Seller will use, and shall cause the Company to use, its
commercially reasonable efforts to (i) preserve the business and
organization of the Company and the Transferred Subsidiaries
intact, (ii) keep available to Purchaser, subject to removals and
retirements in the ordinary course, the services of the present
employees, agents and independent contractors of the Company and
the Transferred Subsidiaries, (iii) preserve for the benefit of
Purchaser the goodwill of suppliers, customers, landlords and
others having significant business relations with the Company and
the Transferred Subsidiaries and (iv) cooperate with Purchaser
and use reasonable efforts to assist Purchaser in obtaining the
consent of any landlord or other party to any lease or contract
with the Company or any of the Transferred Subsidiaries where the
consent of such landlord or other party may be required by reason
of the transactions contemplated hereby, all to the extent the
Company believes to be in the best interests of the Company and
the Transferred Subsidiaries. Without limiting the generality of
the foregoing, prior to the Closing and subsequent to the date
hereof, the Seller shall not allow the Company nor any of the
Transferred Subsidiaries to, without Purchaser's prior written
approval:
(i) change its certificate of incor-
poration or by-laws or merge or consolidate
or obligate itself to do so with or into any
other entity;
(ii) enter into any contract, agree-
ment, commitment or other understanding or
arrangement of the type required to be
listed under subsections (f), (g), (h), (i)
or (j) of Schedule 5.13 hereof;
(iii) adopt any new plan or
arrangement for the benefit of any employee
of the Company or any Transferred Subsidiary
or materially amend any Benefit Plan or any
benefit plan or arrangement maintained by
the Company or any Transferred Subsidiary
other than amendments (A) required to be
made under applicable laws or regulations or
(B) as contemplated under the terms of this
Agreement;
(iv) other than actions taken by the
Company pursuant to Section 8.1.4(b),
perform, take any action or intentionally
incur or permit to exist any of the acts,
transactions, events or occurrences of the
type (A) described in subsections (a), (b),
(c) (other than a dividend by the Company to
Seller of the TBHUK shares owned by the
Company), (d), (e), (g), (i), (j), (k), (l),
(m), (o), (p) or (s) of Section 5.9 hereof
which would have been inconsistent with the
representations and warranties set forth
therein had the same occurred after April 3,
1994, and prior to the date hereof, or
(B) described in Section 5.3 hereof which
would be required to be set forth on
Schedule 5.3 if it had taken place during
the past three years;
(v) grant any increase in the compen-
sation, commissions or bonus opportunities
payable to or to become payable to any
Employee, excluding any increases in the
ordinary course of business consistent with
prior practice;
(vi) enter into any new compensation
arrangement with any director, officer or
Employee or pay or agree to pay any pension,
retirement allowance or other employee
benefit to any director, officer or Employee
(whether past or present) or declare,
approve or make any deposit into or
contribution or payment to any Benefit Plan,
other than any such actions taken in the
normal course of business or which are
necessary in order to comply with applicable
law; or
(vii) increase the regularly scheduled hours per
week for any Employee if such increase would result in
such Employee becoming eligible to participate in any
Benefit Plan, other than any such increase in the
ordinary course of business consistent with prior
practice.
(b) In the event that during the period between the
date hereof and the Closing Date, all or any significant portion
of the properties of the Company or any Transferred Subsidiary is
damaged by fire or other casualty, Seller shall promptly give
notice thereof to Purchaser.
(c) Neither Seller, the Company, their respective
Affiliates nor any of the officers, directors, employees,
representatives or agents of, or professional advisors
(collectively, the "Representatives") to, Seller, the Company or
their respective Affiliates, shall, directly or indirectly,
solicit, initiate, participate in discussions with, provide any
information or assistance to (including, but not limited to,
affording access to the properties, books and records of the
Company or any of its subsidiaries or otherwise relating to the
Company's Assets or the Business) or enter into any agreement or
series of agreements with any person or persons (other than
Purchaser) concerning any transaction that would result, directly
or indirectly, in the transfer to any such person or persons of
control of the Business or any substantial part thereof other
than pursuant to this Agreement.
8. Covenants.
8.1 Covenants of Seller. Seller hereby covenants and
agrees as follows:
8.1.1 Access to Information, Documents and Premises.
Prior to the Closing and upon reasonable notice:
(a) Seller shall, and shall cause the Company and each
of the Transferred Subsidiaries to, give Purchaser and
Purchaser's Representatives full access, upon reasonable
prior notice and during normal business hours, to the
officers and other personnel of the Company and the
Transferred Subsidiaries and all properties, documents,
contracts, books, records and Returns of the Company and the
Transferred Subsidiaries (including, without limitation,
books and records relating to backlog, payroll and personnel
matters), but only to the extent that such access does not
unreasonably interfere with the business and operations of
the Company or any Transferred Subsidiary, and will furnish
or cause to be furnished to Purchaser copies of such
documents (certified by Seller's officers if so requested)
and such information with respect to the Business, the
Company's Assets and the affairs of the Company and the
Transferred Subsidiaries as Purchaser may from time to time
reasonably request, except to the extent that furnishing any
such information or data would violate any law, regulation,
order, contract or license applicable to Seller, the Company
or any Transferred Subsidiary or by which any of their
respective assets and properties is bound.
(b) Seller shall, and shall cause the Company and each
of the Transferred Subsidiaries to, allow Purchaser and
Purchaser's Representatives to enter upon the real
properties of the Company and the Transferred Subsidiaries
upon reasonable prior notice and during normal business
hours, to conduct inspections of the real properties of the
Company and the Transferred Subsidiaries or to conduct other
studies, including, without limitation, monitoring existing
test wells and examining all documents, and such other non-
destructive tests as Purchaser may deem necessary to
determine the environmental condition of the real properties
of the Company and the Transferred Subsidiaries, but only to
the extent that such access does not unreasonably interfere
with the business and operations of the Company or any
Transferred Subsidiary and does not involve sampling without
Seller's written consent; such inspection rights shall
include Purchaser's right to request information from the
appropriate governmental agencies to determine whether the
real properties of the Company and the Transferred
Subsidiaries are in compliance with all applicable laws,
rules, regulations, orders, decrees, judgments, injunctions,
notices or demand letters.
(c) Subject to Section 14(c) hereof, neither the
furnishing of any information to Purchaser pursuant to this
Section 8.1.1 or any other investigation by Purchaser shall
affect Purchaser's right to rely on any representation or
warranty made in this Agreement or in any certificate
furnished or to be furnished by Seller to Purchaser in
connection herewith or pursuant hereto.
8.1.2 Directors Authorization. At or prior to the
Closing, Seller will deliver to Purchaser a true, correct
and complete copy of the resolutions of the Board of
Directors of Seller approving the execution and delivery of
this Agreement and the consummation of all of the
transactions contemplated hereby, duly certified by an
officer of Seller.
8.1.3 Certain Additional and Pro Forma Financial
Information.
(a) No later than 15 business days following the end
of each fiscal month from July 3, 1994 to the Closing,
Seller shall deliver to Purchaser unaudited consolidated and
consolidating balance sheets of the Company and the
Transferred Subsidiaries as of the last day of the month
then ended and unaudited consolidated and consolidating
statements of earnings and changes in financial position of
the Company for the one month then ended (collectively, with
the Financial Statements described in Section 5.6(iii)
hereof, the "Interim Financial Statements"). The Interim
Financial Statements will be prepared from the books and
records of the Company and the Transferred Subsidiaries and
will fairly present, in all material respects, in accordance
with GAAP consistently applied except as set forth therein
and except that such financial statements will not be
accompanied by footnotes, the consolidated and consolidating
financial condition of the Company and the Transferred
Subsidiaries as at their respective dates and the
consolidated results of their operations for the periods
covered thereby subject to year-end adjustments. Such
statements of earnings will not contain any items of special
or nonrecurring income or loss, except as expressly
specified therein to the extent required by GAAP, and such
interim financial statements will include all adjustments
necessary for such fair presentation.
8.1.4 Elimination of Certain Liabilities. Prior to
Closing, Seller shall extinguish and release or arrange to
be released all liabilities as of the Closing Date of the
Company and the Transferred Subsidiaries identified on the
Base Balance Sheet as "Current Portion Long Term Debt,"
"Intercompany Payables," "Long Term Debt - T&B" and "Long
Term Debt - Comm" (excluding capitalized leases included
therein) from sources other than the Company's assets except
for $2,023,884 (plus (a) any additional interest accruals
thereon up to the Closing and (b) amounts paid by Seller on
the Company's behalf to third parties in the ordinary course
of business consistent with prior practice) of "Intercompany
Payables" that shall be paid from the Company's assets. If
the repayment of such amount causes the Company to go into
an overdraft position, such overdraft will be for the
account of Purchaser.
8.2 Covenant of Purchaser Regarding Financing.
Purchaser hereby covenants and agrees that it shall use its best
efforts to obtain the necessary financing to enable Purchaser to
pay the Purchase Price for the Stock and the U.K. Shares.
8.3 Covenants of Seller and Purchaser. Seller and
Purchaser hereby covenant and agree as follows (except pursuant
to Section 8.3.7, during the period before Closing):
8.3.1 Maintaining Representations and Warranties.
Each party hereto shall use its commercially reasonable
efforts to satisfy the conditions to the other party's
obligation to consummate the transactions contemplated by
this Agreement and shall refrain from taking any action that
could reasonably be expected to result in the nonfulfillment
of such conditions.
8.3.2 Facilitating the Transaction. Subject to the
terms and conditions herein provided, each of the parties
hereto agrees to use its respective commercially reasonable
efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated
by this Agreement.
8.3.3 Changes in Representations and Warranties. Each
party hereto shall give the other party prompt written
notice of any known change in any of the information
contained in the representations and warranties made in this
Agreement or the Schedules referred to herein which occurs
prior to the Closing; provided, however, that subject to
Section 14(c) hereof, neither the supplementing or amending
of any Schedules by Seller, nor the discovery of any matters
by Purchaser in the course of its investigations, shall be
deemed to cure any breach of any representation or warranty
made in this Agreement or such Schedules to have been
disclosed as of the date of this Agreement or to constitute
any waiver by Purchaser of any of its rights hereunder, and
Purchaser shall be entitled to rely on such representations
or warranties.
8.3.4 Title Insurance. (a) Purchaser has ordered
from Chicago Title Insurance Company (the "Title Company")
title insurance reports, certificates and/or commitments
(the "Title Commitment") for owner's title insurance
policies with respect to the real properties of the Company
set forth on Schedule 8.3.4 (the "Fee Properties") and for
leasehold title insurance policies with respect to any real
properties that constitute part of the Company's Assets and
are leased (the "Leased Properties") and has furnished
copies of such Title Commitment to Seller. Within five (5)
days after the date hereof, Purchaser shall give Seller
notice of any Encumbrances disclosed by such Title
Commitment that are not:
(i) an Encumbrance set forth on Schedule 8.3.4,
true and complete copies (or if copies are unavailable,
descriptions) of which have been made available to
Purchaser;
(ii) an Encumbrance (including but not limited to
easements, quasi-easements, restrictions, rights of
way, land use ordinances and zoning plans) that does
not materially detract from the value of or materially
interfere with the use, operation or enjoyment of the
Fee Properties or Leased Properties as a whole in
substantially the same manner as same were used,
operated or enjoyed by the Company on April 3, 1994;
(iii) an Encumbrance for Taxes and assessments
not yet due and payable or being contested in good
faith;
(iv) mechanics', materialmen's, workers',
repairmen's, warehousemen's, carriers' liens and other
similar Encumbrances arising in the ordinary course of
business which, in the aggregate, do not exceed
$10,000;
(v) the standard exceptions to title that appear
as a part of Chicago Title Insurance Company's printed
form of title insurance policy and that are not
customarily removed by the Company furnishing an
affidavit of title (except that the foregoing shall be
limited to matters that would not result in loss or
removal of any improvements on the Fee Properties or
the Leased Properties);
(vi) Encumbrances reflected on the Balance Sheet;
and
(vii) any Encumbrance which, at no additional cost
to Purchaser, the Title Company shall have agreed
either to (A) affirmatively insure Purchaser by
endorsement or otherwise against the adverse effect
thereof (including the collection of such Encumbrance
or forfeiture or impairment of any rights of Purchaser
with respect to the affected Property), or (B) omit
such Encumbrance as an exception to the title policy.
The matters described in clauses (i) through (vii) above are
referred to hereafter as "Permitted Encumbrances." Seller
shall use commercially reasonable efforts to eliminate any
Encumbrance of which Purchaser has given notice that is not
a Permitted Encumbrance (collectively, "Title Defects") on
or before the Closing Date. The failure by Purchaser to
give such notice shall be deemed a waiver by Purchaser of
Purchaser's rights with respect thereto.
8.3.5 Replacement Insurance. Seller will cooperate
with Purchaser in obtaining, at Purchaser's expense,
replacement insurance policies, effective as of the Closing
Date, affording coverage to the Company and the Transferred
Subsidiaries comparable to that afforded by the policies
listed in Schedule 5.14.
8.3.6 Government Filings. Purchaser and Seller shall
promptly prepare and duly file appropriate applications to
obtain any consent, approval or authorization of any
governmental authority, domestic or foreign, required to be
obtained in connection with the taking of any action
contemplated by this Agreement. Each of the parties will
cooperate with each other, will furnish such information and
will take such further action as may be required diligently
to prosecute any such required application and shall use its
best efforts to obtain any such consent, approval or
authorization.
8.3.7 Cooperation and Records Retention. (a) Seller
and Purchaser shall (i) each provide the other with such
assistance as may reasonably be requested by the other in
connection with the preparation of any Return, audit or
other examination by any tax authority or judicial or
administrative proceedings relating to liability for Taxes,
(ii) each retain and provide the other with any records or
other information which may be relevant to such Return,
audit or examination, proceeding or determination, and (iii)
each provide the other with any final determination of any
such audit or examination, proceeding or determination that
affects any amount required to be shown on any Return of the
other for any period. Purchaser shall, with Seller's
assistance as may reasonably be required, make the filing
with the State of Connecticut described in Section 6.4.
(b) Purchaser shall retain, and shall cause Company to
retain, and Seller shall retain, until the applicable statutes of
limitations (including any extensions) have expired, copies of
all Returns, supporting work schedules and other records or
information that may be relevant for all Tax periods or portions
thereof ending before or including the Closing Date.
9. Taxes.
9.1 General. Seller shall, and shall cause the
Company to, prepare and timely file all Returns and amendments
thereto required to be filed by or for the Company and the
Transferred Subsidiaries for periods ending on or before the
Closing Date and timely pay all Taxes shown thereon as due and
payable. Purchaser will be given a reasonable opportunity to
review such Returns, and, at Seller's reasonable request, and
subject to Purchaser's review of such returns, Purchaser shall
cause the Company to sign such returns prepared by Seller for
pre-closing periods not due to be filed until after the Closing
Date to the extent the Company's signature is required by the
applicable law. Seller shall pay all Taxes of the Group arising
from or relating to the transactions contemplated by this
Agreement, including any Taxes resulting from the Section
338(h)(10) Election (as hereinafter defined). Any amount of
current domestic Taxes reserved for in the Base Balance Sheet
(including any additional current domestic Tax reserves accrued
between April 3, 1994 and the Closing Date) shall be paid by the
Company and the Transferred Subsidiaries to Seller prior to the
Closing Date. To appropriately apportion any Taxes relating to
a period that includes (but that would not, but for this section,
close on) the Closing Date, the parties hereto will treat for all
purposes the Closing Date as the last day of a taxable period of
the Company and each Transferred Subsidiary, and such period
shall be treated as a "Pre-Closing Short Period" for purposes of
this Agreement. All Taxes attributable to the periods prior to
and including the Closing Date, including Taxes for a Pre-Closing
Short Period, shall be treated as "Pre-Closing Taxes" for
purposes of this Agreement and shall be payable by Seller,
provided that Seller shall pay any foreign Pre-Closing Taxes only
if, and to the extent that, those Taxes exceed current Tax
Reserves of the Company and the Transferred Subsidiaries for
foreign Taxes. Foreign Taxes attributable to a Pre-Closing Short
Period will be determined in accordance with the past Business
Practices (defined below) of the Company and the Transferred
Subsidiaries and in accordance with the applicable Tax rates in
effect on the Closing Date. For purposes of this paragraph,
"Business Practices" shall mean the past dividend policies and
Tax elections of the Company and the Transferred Subsidiaries.
Notwithstanding any other provision of this Agreement, Seller
shall have no liability for underaccrual of Taxes payable or an
overaccrual of Taxes receivable by any Transferred Subsidiary
resulting from a change of the past Business Practices of the
Company and the Transferred Subsidiaries following the Closing
Date. Seller shall file all Pre-Closing Short Period Tax
Returns. Purchaser shall prepare and timely file all returns and
reports required to be filed with respect to any transfer and
sales taxes arising from or relating to the transaction
contemplated by this Agreement. Seller shall have a reasonable
opportunity to review such returns or reports. Seller shall,
upon Purchaser's demand, reimburse Purchaser for one-half of the
amount of any such taxes.
9.2 Tax Sharing Agreements. All tax-sharing
agreements or similar arrangements with respect to or involving
the Company or the Transferred Subsidiaries shall be terminated
as to them prior to the Closing Date, and, after the Closing
Date, the Company or the Transferred Subsidiaries shall not be
bound thereby or have any liability thereunder for amounts due in
respect of periods prior to the Closing Date.
9.3 Elections. No new elections with respect to
Taxes, or any changes in current elections with respect to Taxes,
of the Company or the Transferred Subsidiaries which may have an
effect on the Company or the Transferred Subsidiaries for periods
ending after the Closing Date shall be made after the date of
this Agreement without the prior written consent of Purchaser.
9.4 Tax Refunds. Seller shall be entitled to all
refunds with respect to Pre-Closing Taxes. If in any period
ending after the Closing Date the Company or any of the
Transferred Subsidiaries earns any credit or recognizes any loss
which cannot be applied against its tax liability for such
period, and is permitted by law to carry back such credit or loss
to a period ending on or prior to the Closing Date, and if the
Group receives a tax refund (whether actually received or applied
in reduction of any Taxes) for the period to which such credit or
loss is properly carried back, the benefit of which the Group
would not have had but for the carryback from the Company or any
Transferred Subsidiary, then Seller shall promptly remit to
Purchaser the amount of such tax refund. In the event a tax
benefit realized by Seller under this section 9.4 is later
reduced upon a final determination by a taxing authority,
Purchaser shall promptly remit to Seller the amount of such
reduction in tax benefit upon Seller's written request therefor.
In connection with this Section 9.4, Seller and Purchaser agree
that they will cooperate with each other in causing their
respective affiliates and representatives to promptly and timely
proceed in connection with (i) the preparation and filing of, and
(ii) any administrative or judicial proceedings involving, any
return of tax or information filed or required to be filed by or
for the Group, the Company, any Transferred Subsidiary or
Purchaser.
9.5 Post-Closing Matters.
(a) Purchaser and the Company agree to give Seller
prompt written notice of receipt of oral or written notice of any
tax examinations, claims, settlements, proposed adjustments or
related matters that may affect Pre-Closing Taxes. Seller shall
have the right to sole control regarding any audit or examination
by any taxing authority, initiating any claim for refund, filing
any amended return, and contesting, resolving and defending
against any assessment, notice of deficiency or other adjustment
or proposed adjustment relating to any Pre-Closing Taxes, except
that with respect to any matter that may affect the Taxes of
Purchaser, the Company or any Transferred Subsidiary for any
period ending after the Closing Date, Purchaser and the Company
shall participate with Seller in control of such matters.
(b) Purchaser and the Company shall file and
control any Returns required to be filed by the Company and the
Transferred Subsidiaries for periods ending after the Closing
Date (including Returns in jurisdictions that do not accept Pre-
Closing Short Period Tax Returns to be filed by Seller pursuant
to Section 9.1 hereof). Seller agrees that it shall provide, and
shall cause its accountants and other Representatives to provide,
to Purchaser on a timely basis the information, including but not
limited to all work papers and records relating to the Company
and the Transferred Subsidiaries, that it or the accountants or
other Representatives have within their control and that may be
reasonably necessary or related to (i) the preparation of any and
all Returns, information returns and reports required to be filed
by Purchaser or the Company and (ii) audits or other tax
determinations or proceedings by or before governmental agencies,
such information to be provided in the form in which it has in
the past been maintained by Seller, its accountants or other
representative.
(c) Seller shall timely take any and all actions
necessary to effect elections with respect to the Company under
Code section 338(h)(10) (and the Treasury Regulations promulgated
thereunder) and any comparable provisions of state, local or
foreign law (collectively and separately, the "Section 338(h)(10)
Election"). Purchaser shall be responsible for, and control, the
preparation and filing of such election. The allocation of
Purchase Price among the assets of the Company shall be made in
accordance with Code section 338 and 1060 and any comparable
provisions of state, local or foreign law, as appropriate. The
Purchase Price shall be allocated consistently with the
allocations in Section 2 of this Stock Purchase Agreement, and
Seller and Purchaser shall file in all respects and for all
purposes consistently with such allocation. Seller shall execute
and deliver to Purchaser such documents or forms as are required
by applicable law for an effective Section 338(h)(10) Election.
10. Conditions Precedent to Purchaser's Obligations.
All obligations of Purchaser hereunder are subject, at the option
of Purchaser, to the fulfillment of each of the following condi-
tions at or prior to the Closing, and Seller shall exert
commercially reasonable efforts to cause each such condition to
be so fulfilled:
(a) The representations and warranties of Seller
contained herein and in any Instrument (i) taken as a whole shall
be true and correct when made, (ii) shall be deemed to have been
made again at and (except those which are made as of a specific
earlier date) as of the date of the Closing, and, (iii) taken as
a whole, shall then be true and correct, in each case in all
respects material to the business, results of operations and
financial condition of the Company and the Transferred
Subsidiaries taken as a whole.
(b) All covenants, agreements and obligations required
by the terms of this Agreement to be performed by Seller at or
before the Closing shall have been duly and properly performed in
all respects material to the business, results of operations and
financial condition of the Company and the Transferred
Subsidiaries taken as a whole.
(c) Since the date of this Agreement, except for
transactions to take place pursuant hereto at or before the
Closing, there shall not have occurred a Material Adverse Effect,
other than as a result of general economic or financial
conditions or other developments that are not unique to the
Company and the Transferred Subsidiaries but also have a
significant negative impact on the passive electronics components
industry.
(d) There shall be delivered to Purchaser a cer-
tificate executed by the President and Secretary of Seller and
the Company, dated the date of the Closing, certifying that the
conditions set forth in paragraphs (a), (b) and (c) of this
Section 10 have been fulfilled.
(e) All other Instruments required to be delivered to
Purchaser at or prior to the Closing shall have been so
delivered.
(f) Purchaser shall have received an opinion of
Seller's counsel, dated the date of the Closing, substantially in
accordance with Exhibit 10(f) annexed hereto.
(g) Seller and the Company shall have obtained the
permits, authorizations, consents, waivers and approvals
described in Section 5.4(b).
(h) Purchaser shall have available financing in an
amount sufficient to consummate the transaction contemplated
hereby, or the unavailability of such financing shall result from
the failure of one of the conditions of this Section 10 (or the
identical condition in a loan agreement entered into by Purchaser
to obtain such financing) to be fulfilled at the time of Closing.
(i) Purchaser shall have received written resignations
of all the directors and officers of the Company and the
Transferred Subsidiaries as shall have been requested by
Purchaser, or Seller shall have provided for their removal.
(j) There shall not have occurred prior to the Closing
and be continuing on the Closing Date: (i) the declaration of
any banking moratorium or suspension of payments in respect of
banks in the United States; (ii) any general suspension of
trading in, or limitation on prices for, securities on any United
States national securities exchange or in the over-the-counter
market; (iii) the commencement of a war, armed hostilities or any
other national or international crisis directly or indirectly
involving the United States; or (iv) any limitation (whether or
not mandatory) by any governmental, regulatory or administrative
agency or authority on banks or other lending institutions in the
United States.
11. Conditions Precedent to Seller's Obligations. All
obligations of Seller hereunder are subject, at the option of
Seller, to the fulfillment of each of the following conditions at
or prior to the Closing, and Purchaser shall exert commercially
reasonable efforts to cause each such condition to be so
fulfilled:
(a) All representations and warranties of Purchaser
contained herein or in any Instrument taken as a whole shall be
true and correct when made and shall be deemed to have been made
again at and as of the date of the Closing, and shall then be
true and correct in all material respects.
(b) All covenants, agreements and obligations required
by the terms of this Agreement to be performed by Purchaser at or
before the Closing shall have been duly and properly performed in
all material respects.
(c) There shall be delivered to Seller a certificate
executed by the Vice President and Secretary of Purchaser, dated
the date of the Closing, certifying that the conditions set forth
in paragraphs (a) and (b) of this Section 11 have been fulfilled.
(d) All other documents required to be delivered by
Purchaser to Seller at or prior to the Closing shall have been so
delivered.
(e) Seller shall have received an opinion of Pur-
chaser's counsel, dated the date of the Closing, substantially in
accordance with Exhibit 11(e) annexed hereto.
12. Indemnification. (a) Seller hereby indemnifies
and agrees to hold Purchaser harmless from, against and in
respect of (and shall reimburse Purchaser for):
(i) any and all loss, liability or
damage suffered or incurred by Purchaser,
the Company or any Transferred Subsidiary by
reason of (A) any untrue representation by
Seller contained herein, (B) breach of any
warranty by Seller contained herein, (C)
nonfulfillment of any covenant or agreement
by Seller contained herein or in any
Instrument or (D) those environmental
matters described in Sections 12(b) and
12(c); and
(ii) any and all actions, suits, proceed-
ings, claims, demands, assessments, judgments,
penalties and fines, and reasonable out-of-pocket
costs and expenses, including, without limitation,
reasonable legal fees and expenses, incident to
any of the foregoing or incurred in investigating
or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity
(collectively with the amounts in (i) above, the
"Costs").
Except as provided in Sections 12(b), 12(c), 12(m) and
12(n), no amounts of indemnity shall be payable under Sections
12(a)(i) and 12(a)(ii) until and only to the extent that the
aggregate dollar amount of all such Costs suffered or incurred by
Purchaser, the Company and any Transferred Subsidiary (excluding
such Costs indemnified under Sections 12(b), 12(c), 12(m) and
12(n)) exceeds $3,500,000 (the "Basket"). The amount of money
that Seller shall be obligated to pay to Purchaser under this
Section 12 shall not exceed $19,000,000.
(b) Seller hereby indemnifies and agrees to hold
Purchaser harmless from, against and in respect of, and shall
reimburse Purchaser for one hundred percent (100%) of the Costs
suffered or incurred by Purchaser, the Company or any Transferred
Subsidiary relating to Environmental Laws, without regard to the
Basket with respect to:
(i) penalties, fines or other punitive sanctions
imposed upon Purchaser, the Company or any Transferred
Subsidiary by a governmental authority as a result of
non-compliance with Environmental Laws prior to the
Closing Date and up to the amount of such fines that
are allocable to the period prior to the Closing Date
to the extent that such penalties, fines or other
punitive sanctions are imposed with respect to the
operations of facilities owned by the Company or any
Transferred Subsidiary as of the Closing Date; and
(ii) any liability under Environmental Laws that
may arise at any time for the off-site Release of
Hazardous Substances by the Company or any Transferred
Subsidiary provided that the Release that is the basis
of any such claim occurred prior to the Closing Date.
"Off-site Release" shall refer to Releases on, at,
under or about properties that are not currently
operated by the Company or any Transferred Subsidiary
as of the Closing Date.
(c) Seller hereby indemnifies and agrees to hold
Purchaser harmless from, against and in respect of and shall
reimburse Purchaser for (i) one hundred percent (100%) of the
Costs suffered or incurred by Purchaser, the Company or any
Transferred Subsidiary up to $1,000,000, (ii) fifty percent (50%)
of the Costs suffered or incurred by Purchaser, the Company or
any Transferred Subsidiary from $1,000,000 to $13,000,000 and
(iii) fifty percent (50%) of the Costs suffered or incurred by
Purchaser, the Company or any Transferred Subsidiary in excess of
$16,000,000 (subject, however, to Seller's aggregate maximum
indemnification of Purchaser of $19,000,000 as set forth in
Section 12(a) above) to the extent attributable to the following:
(i) a breach of any representation in Section
5.20;
(ii) any Site Condition that existed before the
Closing Date at any facilities currently operated by
the Company or any Transferred Subsidiary, whether or
not disclosed in Schedule 5.20, that is required by a
governmental authority to be investigated, removed or
remediated, or is the basis of a third-party claim
against the Company or any Transferred Subsidiary; and
(iii) all capitalized costs (other than the Costs
described in Section 12(b)) required to be incurred by
Purchaser, the Company or any Transferred Subsidiary to
ensure that the facilities owned or operated by the
Company or any Transferred Subsidiary as of the Closing
Date are capable of consistently achieving compliance
with the requirements of Environmental Laws that are
applicable and enforceable as of the Closing Date
(including the Consent Order of December 1993) to
achieve customary output under normal operating
conditions.
(d) Sections 12(b) and 12(c) constitute Purchaser's,
the Company's and each of the Transferred Subsidiary's exclusive
remedy relating to Costs suffered or incurred by them arising in
any way out of the Release of Hazardous Substances, Site
Conditions, breaches of representations in Section 5.20 hereof,
third-party claims relating to Hazardous Substances, or otherwise
pursuant to or arising under Environmental Laws, and Purchaser,
the Company and the Transferred Subsidiaries are hereby precluded
from asserting (and hereby waive the right to assert) any such
claims against Seller or any of its Affiliates, whether at law or
in equity, for such matter. Notwithstanding anything to the
contrary contained in this Agreement, no amounts of indemnity
shall be payable under Sections 12(b) and 12(c) for
(i) Costs to comply with future Environmental
Laws or current Environmental Laws which are not yet
effective or applicable to the Company;
(ii) Costs with respect to Releases or Site
Conditions first occurring after the Closing Date,
provided, however that to the extent that a Release or
Site Condition occurred prior to the Closing Date,
Costs shall be indemnified as provided in Section
12(c);
(iii) Costs which would otherwise be indemnified
under Section 12(b) or 12(c) but for which proper
accounting reserves have been established by the
Company on or prior to April 3, 1994; and
(iv) ordinary or usual costs associated with the
ongoing operation of the Business and not specifically
arising due to non-compliance with Environmental Laws
prior to the Closing Date (including without
limitation, the costs of monitoring, sampling and
analysis required under any Environmental Permit, and
the cost of disposal of Hazardous Substances generated
by the Company as a result of ongoing operations).
(e) Purchaser hereby indemnifies and agrees to hold
Seller harmless from, against and in respect of (and shall on
demand reimburse Seller for):
(i) any and all loss, liability or damage
suffered or incurred by Seller by reason of any
untrue representation, breach of warranty or
nonfulfillment of any covenant or agreement by
Purchaser contained herein or in any Instrument
delivered to Seller pursuant hereto, as well as by
reason of the D&B Letter, solely as it relates to
the Company and any Transferred Subsidiary;
(ii) Costs with respect to Releases and Site
Conditions occurring after the Closing Date, including
without limitation, those occurring in connection with
investigations, excavations or other remediation
activities addressing Releases or Site Conditions that
occurred or existed prior to the Closing Date; and
(iii) any and all actions, suits, pro-
ceedings, claims, demands, assessments,
judgments, penalties, fines, costs and
expenses, including, without limitation,
reasonable legal fees and expenses, incident
to any of the foregoing or incurred in
investigating or attempting to avoid the
same or to oppose the imposition thereof, or
in enforcing this indemnity.
(f) No amounts of indemnity shall be payable under
Sections 12(e) for Purchaser's breach of any representation or
warranty contained in Section 6(i) until and only to the extent
that the dollar amount of all such losses, liabilities or damages
suffered or incurred by Seller exceeds $3,500,000. The amount of
money that Purchaser shall be obligated to pay Seller under this
Section 12 shall not exceed $19,000,000.
(g) Notwithstanding anything to the contrary contained
in this Agreement, neither party shall be liable to the other
party for any consequential damages resulting from its
misrepresentation, breach of warranty or failure to perform any
of its obligations under this Agreement.
(h) Notwithstanding anything to the contrary contained
in this Agreement, no amounts of indemnity shall be payable as a
result of any claim in respect of any Costs arising under this
Section 12:
(i) with respect to any claim for indemnification
hereunder, unless the Indemnified Party has given the
Indemnifying Party a Claim Notice or Indemnity Notice,
as applicable, with respect to such claim, setting
forth in reasonable detail the specific facts and
circumstances pertaining thereto, (A) as soon as
practical following the time at which the Indemnified
Party discovered such claim (except to the extent the
Indemnifying Party is not prejudiced by any delay in
the delivery of such notice) and (B) in any event prior
to the applicable date as of which the indemnity with
respect to such claim expires under Section 14(b);
(ii) with respect to any Costs that the
Indemnified Party had an opportunity, but failed, in
good faith to mitigate, including but not limited to
its failure to use commercially reasonable efforts to
recover under a policy of insurance or under a
contractual right of set-off or indemnity, to the
extent that failure to so mitigate would result in a
reduction in damages recoverable under applicable
principles of contract law; or
(iii) with respect to any Costs suffered,
incurred or sustained by Purchaser or to which it
becomes subject, to the extent such Costs arise from or
were caused by actions taken or failed to be taken by
Purchaser or any of its Affiliates after the Closing.
(i) All claims for indemnification by any Indemnified
Party under Section 12 will be asserted and resolved as follows:
(i) In the event any claim or demand in respect
of which an Indemnified Party might seek indemnity
under Section 12 is asserted against or sought to be
collected from such Indemnified Party by an individual,
corporation, partnership, organization, association,
governmental or regulatory authority or trust (a
"Person") other than by Seller, Purchaser or any
Affiliate of Seller or Purchaser (a "Third Party
Claim"), the Indemnified Party shall deliver a Claim
Notice with reasonable promptness to the Indemnifying
Party. The Indemnifying Party will notify the
Indemnified Party as soon as practicable within the
Dispute Period whether the Indemnifying Party disputes
the liability to the Indemnified Party under Section 12
and whether the Indemnifying Party desires, at its sole
cost and expense, except as provided herein, to defend
the Indemnified Party against such Third Party Claim.
(A) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that
the Indemnifying Party desires to defend the
Indemnified Party with respect to the Third Party
Claim pursuant to this Section 12(i), then the
Indemnifying Party will have the right to defend
(with counsel reasonably satisfactory to the
Indemnified Party), at the sole cost and expense
of the Indemnifying Party, except as provided
herein, such Third Party Claim by all appropriate
proceedings, which proceedings will be vigorously
and diligently prosecuted by the Indemnifying
Party to a final conclusion or will be settled at
the discretion of the Indemnifying Party,
provided the Indemnifying Party pays any judgment
or settlement that results therefrom or obtains a
general release in favor of Purchaser, the Company
and the Transferred Subsidiaries or otherwise with
the consent of the Indemnified Party, which
consent shall not be unreasonably withheld. The
Indemnifying Party will have full control of such
defense and proceedings, including any settlement
thereof; provided, however, that the Indemnified
Party may, at the sole cost and expense of the
Indemnified Party, except as provided herein, at
any time prior to the Indemnifying Party's
delivery of the notice referred to in the first
sentence of this Section 12(i)(A), file any
motion, answer or other pleadings or take any
other action that the Indemnified Party reasonably
believes to be necessary or appropriate to protect
its interests and not being materially prejudicial
to the Indemnifying Party (it being understood and
agreed that, except as provided in Section
12(i)(B) below, if an Indemnified Party takes any
such action that is materially prejudicial and
causes a final adjudication that is adverse to the
Indemnifying Party, the Indemnifying Party will be
relieved of its obligations hereunder with respect
to the portion of such Third Party Claim
prejudiced by the Indemnified Party's action, in
which case the Indemnified Party and not the
Indemnifying Party may defend); and provided
further, that if requested by the Indemnifying
Party, the Indemnified Party will, at the sole
cost and expense of the Indemnifying Party except
as provided herein, cooperate with the
Indemnifying Party and its counsel in contesting
any Third Party Claim that the Indemnifying Party
elects to contest, or, if appropriate and related
to the Third Party Claim in question, in making
any counterclaim against the Person asserting the
Third Party Claim, or any cross-complaint against
any Person (other than the Indemnified Party or
any of its Affiliates). Notwithstanding the
foregoing, and subject to the next sentence, the
Indemnified Party may take over the control of the
defense or settlement of a Third Party Claim if it
irrevocably waives its right to indemnity under
Section 12 with respect to such Third Party Claim.
In the event, however, a Third Party Claim is
asserted that is reasonably likely to materially
adversely affect the continuing operation of a
material portion of the Company's business, the
Indemnified Party may notify the Indemnifying
Party within the Dispute Period that the
Indemnified Party elects to assume joint control
with the Indemnifying Party of the defense or
settlement of such Third Party Claim (in which
case the Indemnifying Party may not have sole
control and the Indemnifying Party and the
Indemnified Party shall cooperate with each other
reasonably and in good faith in such defense,
prosecution and settlement), and the right to
indemnification under this Section 12 shall remain
in effect.
(B) If the Indemnifying Party fails to
notify the Indemnified Party within the Dispute
Period that the Indemnifying Party desires to
defend the Third Party Claim pursuant to this
Section 12(i), or if the Indemnifying Party gives
such notice but fails to prosecute vigorously and
diligently or settle the Third Party Claim, of if
the Indemnifying Party fails to give any notice
whatsoever within the Dispute Period, then the
Indemnified Party will have the right to defend,
at the sole cost and expense of the Indemnifying
Party, except as provided herein, the Third Party
Claim by all appropriate proceedings, which
proceedings will be vigorously and diligently
prosecuted by the Indemnified Party to a final
conclusion or will be settled at the discretion of
the Indemnified Party (with the consent of the
Indemnifying Party, which consent shall not be
unreasonably withheld). The Indemnified Party
will have full control of such defense and
proceedings, including (except as provided in
Section 12(i)(A)) any settlement thereof;
provided, however, that if requested by the
Indemnified Party, the Indemnifying Party will, at
the sole cost and expense of the Indemnifying
Party, except as provided herein, cooperate with
the Indemnified Party and its counsel in
contesting any Third Party Claim which the
Indemnified Party is contesting, or if appropriate
and related to the Third Party Claim in question,
in making any counterclaim against the Person
asserting the Third Party Claim, or any cross-
complaint against any Person (other than the
Indemnifying Party or any of its Affiliates).
Notwithstanding the foregoing provisions of this
Section 12(i)(B), if the Indemnifying Party has
notified the Indemnified Party within the Dispute
Period that the Indemnifying Party disputes its
liability hereunder to the Indemnified Party with
respect to such Third Party Claim and if such
dispute is resolved in favor of the Indemnifying
Party in the manner provided in Section 12(i)(C)
below, the Indemnifying Party will not be required
to bear the costs and expenses of the Indemnified
Party's defense pursuant to this Section 12(i)(B)
or of the Indemnifying Party's participation
therein at the Indemnified Party's request, and
the Indemnified Party will reimburse the
Indemnifying Party in full for all reasonable
costs incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying
Party may participate in, but not control, any
defense or settlement controlled by the
Indemnified Party pursuant to this Section
12(i)(B), and the Indemnifying Party will bear its
own costs and expenses with respect to such
participation.
(C) If the Indemnifying Party notifies the
Indemnified Party that it does not dispute its
liability to the Indemnified Party with respect to
the Third Party Claim or fails to notify the
Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes its
liability to the Indemnified Party with respect to
such Third Party Claim, the Costs in the amount
specified in the Claim Notice will be conclusively
deemed a liability of the Indemnifying Party and
the Indemnifying Party shall pay the amount of
such Costs to the Indemnified Party on demand to
the extent provided herein. If the Indemnifying
Party has timely disputed its liability with
respect to such claim, the Indemnifying Party and
the Indemnified Party will proceed in good faith
to negotiate a resolution of such dispute, and if
not resolved through negotiations within the
Resolution Period, such dispute shall be resolved
by arbitration in accordance with subsection (i)
of Section 20. Upon any final determination that
the Indemnifying Party is not liable with respect
to such claim, the Indemnified Party may take over
the control of the defense or settlement of such
claim if it irrevocably waives its right to
indemnity under Section 12.
(ii) In the event any Indemnified Party has a
claim under this Section 12 against any Indemnifying
Party that does not involve a Third Party Claim, the
Indemnified Party shall deliver an Indemnity Notice
with reasonable promptness to the Indemnifying Party.
If the Indemnifying Party notifies the Indemnified
Party that it does not dispute the claim described in
such Indemnity Notice or fails to notify the
Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes the claim described in such
Indemnity Notice, the Costs in the amount specified in
the Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under this Section
12 and the Indemnifying Party shall pay the amount of
such Costs to the Indemnified Party on demand to the
extent provided herein. If the Indemnifying Party has
timely disputed its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party
will proceed in good faith to negotiate a resolution of
such dispute, and if not resolved through negotiations
within the Resolution Period, such dispute shall be
resolved by arbitration in accordance with subsection
(i) of Section 20.
(iii) In the event of any loss, liability or
damages resulting from a misrepresentation, breach of
warranty or nonfulfillment or failure to be performed
of any covenant or agreement contained in this
Agreement or in any Instrument, as to which an
Indemnified Party would be entitled to a claim of
indemnity under this Section 12 but for the fact that
the Costs suffered or incurred by Purchaser, the
Company or any Transferred Subsidiary do not exceed
$3,500,000 in the aggregate, such Indemnified Party may
nevertheless deliver a written notice to the
Indemnifying Party containing the information that
would be required in a Claim Notice or an Indemnity
Notice, as applicable, with respect to such Costs. In
the case of a Claim Notice, the provisions of Section
12(i)(A) will be applicable. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute
the claim described therein or fails to notify the
Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes the claim described in such
Claim Notice or Indemnity Notice, as the case may be,
the Costs specified in the notice will be conclusively
deemed to have been incurred by the Indemnified Party
for purposes of making the determination as to whether
the $3,500,000 threshold referred to above has been
met. If the Indemnifying Party has timely disputed the
claim described in such Claim Notice or Indemnity
Notice, as the case may be, the Indemnifying Party and
the Indemnified Party will proceed in good faith to
negotiate a resolution of such dispute, and if not
resolved through negotiations within the Resolution
Period, such dispute shall be resolved by arbitration
in accordance with subsection (i) of Section 20.
(iv) In the event of any claim, counterclaim or
crossclaim for indemnity under this Section 12, each
party agrees to give to the other party and its
Representatives reasonable access to the relevant
books, documents and records, and to cause its
officers, employees, agents and other representatives
to cooperate fully, in connection with the prosecution
or defense of such claim, counterclaim or crossclaim,
to the extent such requesting party reasonably deems
necessary in connection with its rights and obligations
under this Section 12.
(j) In case any event shall occur which would
otherwise entitle either party to assert a claim for
indemnification hereunder, no Costs shall be deemed to have been
sustained by such party to the extent of (i) the then present
value of any actual tax savings realized by such party with
respect thereto or (ii) any proceeds received by such party from
any insurance policies with respect thereto.
(k) To the extent permitted by law, the indemnities
set forth in this Section 12 shall be the exclusive remedies of
Purchaser and Seller for any misrepresentation, breach of
warranty or nonfulfillment or failure to be performed of any
covenant or agreement contained in this Agreement or any
Instrument delivered pursuant hereto, and, absent fraud, the
parties shall not be entitled to a rescission of this Agreement
or to any further indemnification rights or claims of any nature
whatsoever in respect thereof, all of which the parties hereto
hereby waive.
(l) Notwithstanding anything to the contrary contained
herein, the provisions of this Section 12 shall apply only if the
Closing takes place and the transactions contemplated hereby are
consummated.
(m) Notwithstanding anything to the contrary contained
in this Agreement, Seller shall continue to control and shall
indemnify and hold Purchaser harmless from (and shall on demand
reimburse Purchaser for) all Costs suffered or incurred by
Purchaser, the Company or any Transferred Subsidiary relating to
the action entitled Jean Barilla and George Barilla v. Vitramon,
Inc. et al. (and any amendment thereof or any claim relating
thereto) and none of the other rights of Purchaser or the
limitations on Seller's obligation to indemnify and to hold
Purchaser harmless from, against and in respect of all Costs
contained in this Section 12, including, without limitation, the
Basket, the $19,000,000 limitation on liabilities and the period
of survival described in Section 14, shall apply to the
provisions of this Section 12(m).
(n) Notwithstanding anything to the contrary contained
in this Agreement, the Basket and the $19,000,000 limitation on
liabilities shall not apply to any Costs suffered or incurred by
Purchaser, the Company or any Transferred Subsidiary as a result
of or arising out of a failure by Seller to perform or fulfill
each of its obligations to transfer money or extinguish
liabilities under Sections 5.18(d), 8.1.4 and 9.1.
(o) For purposes of this Section 12:
"Claim Notice" means written notification pursuant
to Section 12(i) of a Third Party Claim as to which indemnity
under this Section 12 is sought by an Indemnified Party,
enclosing a copy of all papers served, if any, and specifying the
nature and basis for such Third Party Claim and for the
Indemnified Party's claim against the Indemnifying Party under
this Section 12, together with the amount or, if not then
reasonably ascertainable, the estimated amount, determined in
good faith, of such Third Party Claim.
"Cut-off Date" means, with respect to any
representation, warranty, covenant or agreement contained in this
Agreement, the date on which such representation, warranty,
covenant or agreement ceases to survive as provided in Section
14(b).
"Dispute Period" means the period ending 60 days
following receipt by the Indemnifying Party of either a Claim
Notice or an Indemnity Notice.
"Indemnified Party" means the party to this
Agreement claiming indemnification under any provision of this
Section 12.
"Indemnifying Party" means the party to this
Agreement against which a claim for indemnification is being
asserted under any provision of this Section 12.
"Indemnity Notice" means written notification
pursuant to Section 12(i)(ii) of a claim for indemnity under this
Section 12 by an Indemnified Party, specifying the nature of and
basis for such claim, together with the amount or, if not then
reasonably ascertainable, the estimated amount determined in good
faith, of such claim.
13. Termination. (a) This Agreement may be
terminated and the transactions contemplated hereby may be
abandoned prior to the Closing solely:
(i) by the mutual written consent of Purchaser and
Seller;
(ii) by Seller or Purchaser if the Closing Date shall
not have occurred on or before August 11, 1994; provided,
however, that the right to terminate this Agreement under
this clause (ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has
been the cause of the failure of the Closing Date to occur
on or before such date; and
(iii) by Purchaser if on the Closing Date any of the
conditions provided for in Section 10 have not been met and
have not been waived by Purchaser, or by Seller if on the
Closing Date any of the conditions provided for in Section
11 have not been met and have not been waived by Seller.
(b) In the event of the termination and abandonment
of this Agreement pursuant to this Section 13, subject to Section
13(c), this Agreement shall forthwith become void and have no
effect, without any liability on the part of any party hereto or
its Affiliates, directors, officers or stockholders except the
provisions with respect to expenses in Section 16 and
confidentiality in Section 20 shall continue to apply following
any such termination.
(c) If Seller terminates this Agreement pursuant to
clauses (ii) or (iii) of Section 13(a) following a material
breach by Purchaser of the representations and warranties
contained in Section 6 taken as a whole, or a failure by
Purchaser to perform any material covenant or agreement in all
material respects, then Purchaser shall have 30 days from the
date of termination to provide conclusive evidence to Seller that
it is immediately able to cure the breach or perform the covenant
or agreement that gave rise to the termination. If Purchaser is
unable to give such conclusive evidence to Seller, then Purchaser
shall, within one business day after such thirty-day period, pay
to the Seller in cash a termination fee of $7,500,000.
14. Nature and Survival of Representations and
Warranties. (a) Each representation, warranty, indemnity,
covenant and agreement made by Seller or Purchaser in this
Agreement or in any certificate delivered by or on behalf Seller
or Purchaser pursuant to this Agreement shall be deemed the
representation, warranty, indemnity, covenant and agreement of
Seller or Purchaser, as the case may be.
(b) The representations and warranties of Seller
contained in Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 5.9,
5.11(a), 5.12, 5.13 (excluding 5.13(b)), 5.14, 5.16, 5.17, 5.21,
5.22, and in Section 5.23 to the extent it relates to the
foregoing Sections, and of Purchaser contained in Article 6, and
the other covenants and agreements of the parties relating
thereto to be performed prior to Closing, shall survive the
Closing Date and shall expire on December 31, 1994 (except that
Seller's representation contained in Section 5.16 relating to the
D&B Letter shall expire three months following the Closing Date).
The representations and warranties of Seller contained in
Sections 5.10, 5.11(b), 5.15, 5.18, 5.19 and 5.20, and in Section
5.23 to the extent it relates to the foregoing Sections, and the
other covenants and agreements of Seller relating thereto to be
performed prior to the Closing shall survive the Closing Date and
shall expire on the second anniversary of the Closing Date.
Notwithstanding the foregoing, Purchaser's right to claim
indemnification for Seller's obligations under Section 12(c)
shall expire on the second anniversary of the Closing Date and
Purchaser's right to claim indemnification for Seller's
obligations under Section 12(b) shall expire on the seventh
anniversary of the Closing Date, whether or not such obligations
arise out of a breach of a representation or warranty contained
in Section 5.20. The representations and warranties of Seller
contained in Section 5.8 and in Section 5.23 hereof to the extent
it relates to Section 5.8 hereof, and the other covenants and
agreements of Seller relating thereto to be performed prior to
the Closing, shall survive the Closing Date and shall expire
thirty days following the expiration of the relevant statute of
limitation. The representations and warranties of Seller
contained in Section 5.13(b) shall not survive the Closing.
Seller's right to claim indemnification for Purchaser's
obligations under Section 12(e)(ii) and, to the extent it relates
thereto, Section 12(e)(iii), shall expire on the second
anniversary of the Closing Date.
(c) In the event that at or prior to Closing,
Purchaser obtains actual knowledge of a misrepresentation, breach
of warranty or nonfulfillment or failure to be performed of a
covenant or agreement by Seller (a "Breach"), then the following
procedures shall apply:
(i) If such Breach was disclosed by Seller to
Purchaser, such disclosure shall (A) set forth in
reasonable detail the specific facts and circumstances
relating to the Breach to the extent known to Seller
and (B) contain a representation and warranty by Seller
that such Breach would not result in non-satisfaction
of the conditions set forth in Sections 10(a) or (b) of
this Agreement, as the case may be.
(ii) If such Breach was disclosed by Purchaser to
Seller, such disclosure shall (A) set forth in
reasonable detail the specific facts and circumstances
relating to the Breach to the extent known to Purchaser
and (B) contain a demand that Seller represent and
warrant that (x) it did not have actual knowledge of
the Breach prior to signing this Agreement and (y) such
Breach would not result in non-satisfaction of the
conditions set forth in Sections 10(a) or (b) of this
Agreement, as the case may be.
(iii) If Seller does not provide all of the
representations and warranties specified in clauses (i)
or (ii) above, then Purchaser may elect either to (A)
terminate the Agreement pursuant to Section 13(a)
hereof or (B) proceed to Closing, in which case it
shall waive its right to seek indemnity from Seller for
any loss, liability or damage resulting from the Breach
following the Closing.
(iv) If Seller makes all the representations and
warranties specified in clauses (i) or (ii) above, then
Purchaser shall be required to proceed to Closing, but
shall retain all of its rights with respect to
obtaining indemnification from Seller for any loss,
liability or damage resulting from the Breach.
(v) If Purchaser obtains actual knowledge of a
Breach and Seller does not have actual knowledge
thereof, then if Purchaser fails to notify Seller of
such Breach pursuant to clause (ii) above, Purchaser
shall be deemed to have waived such Breach.
(vi) The representations and warranties made by
Seller pursuant to clauses (i) and (ii) above shall
survive the Closing Date and shall expire six months
after the date of this Agreement; provided, however,
that this provision shall not otherwise affect
Purchaser's rights under Sections 12 and 14(b) of this
Agreement.
15. Notices. Any notice or consent hereunder shall be
in writing and hand delivered or sent by registered or certified
mail, return receipt requested, or by Federal Express or other
similar courier service or by facsimile, as follows:
if to Seller:
Thomas & Betts Corporation
1555 Lynnfield Road
Memphis, Tennessee 38119
Attn: President
Fax: 901-685-1988
with a copy to:
Thomas & Betts Corporation
1555 Lynnfield Road
Memphis, Tennessee 38119
Attn: Vice President-General Counsel
Fax: 901-680-5960
and
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
Attn: Lawrence Lederman, Esq.
Fax: 212-530-5219
if to Purchaser:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, Pennsylvania 19355
Attn: Avi D. Eden, Esq.
Fax: 215-296-0657
with a copy to:
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
919 Third Avenue
New York, New York 10022
Attn: Scott S. Rosenblum, Esq.
Fax: 212-688-2119
or at such other address (or to such other person's attention) as
shall be specified by like notice. Any notice shall be deemed to
have been duly given to the party to whom it is directed upon
actual receipt by such party (or its agent for notices
hereunder). Notwithstanding the foregoing, notice sent by
recognized overnight carrier shall be conclusively presumed to
have been received when signed by a representative of the
recipient and notice sent by fax transmission shall be
conclusively deemed to have been received upon receipt of
answerback confirmation.
16. Legal and Other Costs. (a) In the event that any
party (the "Defaulting Party") defaults in its obligations under
this Agreement and, as a result thereof, the other party (the
"Non-Defaulting Party") seeks to enforce its rights hereunder
against the Defaulting Party, then, in addition to all damages
and other remedies to which the Non-Defaulting Party is entitled
hereunder by reason of such default, the Defaulting Party shall
promptly pay to the Non-Defaulting Party an amount equal to all
reasonable costs and expenses (including reasonable attorneys'
fees) paid or incurred by the Non-Defaulting Party in connection
with such enforcement, subject to the limitations of Section 12
hereof.
(b) In the event that the Non-Defaulting Party is
entitled to receive an amount of money by reason of the Default-
ing Party's default hereunder, then, in addition to such amount
of money, the Defaulting Party shall promptly pay to the Non-
Defaulting Party a sum equal to interest on such amount of money
accruing at the rate of 1.5% per month (but if such rate is not
permitted under the laws of the State of New York, then at the
highest rate which is permitted to be paid under the laws of the
State of New York) during the period between the date such
payment should have been made hereunder and the date of the
actual payment thereof.
(c) Except as provided in this Section 16 or otherwise
in this Agreement, each party hereto shall pay its own legal,
accounting and other expenses in connection with the preparation,
negotiation, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
17. Public Announcements. At all times at or before
the Closing, Seller and Purchaser will not issue or make any
reports, statements or releases to the public or generally to the
employees, customers, suppliers or other persons to whom the
Company and the Transferred Subsidiaries sell goods or provide
services or with whom the Company and the Transferred
Subsidiaries otherwise have significant business relationships
with respect to this Agreement or the transactions contemplated
hereby without the consent of the other, which consent shall not
be unreasonably withheld. If either party is unable to obtain
the approval of its public report, statement or release from the
other party and such report, statement or release is, in the
opinion of legal counsel to such party, required by law in order
to discharge such party's disclosure obligations, then such party
may make or issue the legally required report, statement or
release and promptly furnish the other party with a copy thereof.
Seller and Purchaser will also obtain the other party's prior
approval, which approval shall not be unreasonably withheld, of
any press release to be issued immediately following the
execution of this Agreement or the Closing hereunder with respect
to the transactions contemplated by this Agreement.
18. Scope of Representations and Warranties. Neither
party makes any representation and warranties whatsoever, express
or implied, except for those representations and warranties (a)
contained in this Agreement, in the Exhibits and Schedules hereto
and in the Closing Certificates to be delivered pursuant to
Sections 10(d) and 11(c) hereto or (b) explicitly identified by
the person making such representation, as a representation and
warranty under this Agreement in any other agreement, document,
certificate or instrument delivered in connection herewith
(collectively, "Instrument").
19. Non-Competition.
19.1 Covenant. (a) Seller hereby agrees that for a
period of five years following the Closing Date (the "Restricted
Period") neither the Seller nor any of its subsidiaries, whether
acting individually or through any joint venture or one or more
third parties, shall:
(i) own, manage, operate, control, or engage in
the ownership, management, operation or control of or
have any interest in, as a stockholder, partner or
otherwise, any business, entity or enterprise that
engages in the Business within the Territory (as
hereinafter defined) during the Restricted Period;
(ii) interfere in any material respect with any
contractual relationship of the Business with any
customer or supplier of the Business; or
(iii) solicit the employment of any person who at
the time is, or at any time within the prior three
months shall have been, an employee of the Business
(other than one who resigns voluntarily prior to any
such solicitation or is terminated by the Business
after the Closing Date).
(b) Notwithstanding anything to the contrary contained
herein, this agreement is not intended to and shall not be
construed as prohibiting Seller or any of its Affiliates from:
(i) purchasing products of the Business for
such Person's own use;
(ii) acquiring the beneficial ownership of
less than 5% of the equity securities of any
publicly traded corporation; or
(iii) acquiring any business, entity or
enterprise which, as an incidental portion of its
business, engages in the Business, provided,
however, that Seller promptly divests itself of
such portion following the acquisition thereof.
(c) For purposes of this Agreement, the "Territory"
shall mean any state or territory of the United States and any
foreign country or any foreign territory.
19.2 Confidentiality. Seller acknowledges that
certain information relating to the Business is confidential and
that such information is a special, valuable and major asset of
the Business, and that wrongful use or disclosure of any such
confidential information would cause Purchaser immediate and
irreparable harm. Seller hereby agrees that during the
Restricted Period, it will not, and will cause its officers,
employees, agents, representatives, subsidiaries and other
Affiliates not to disclose to others, directly or indirectly, any
confidential information relating to the Business (including,
without limitation, any confidential information relating to
programs, techniques or work products, any trade secrets, any
reports, recommendations or conclusions or any information as to
present or future business plans or finances, or with respect to
any products, services, suppliers, customers or prospective
customers relating to the Business) without the prior written
consent of the Purchaser (a) except as may be necessary to comply
with any applicable law, governmental order or regulation (and in
any such case only after affording the Purchaser the opportunity
to review the text of such disclosure before it is made) and (b)
except for information which is or becomes publicly available
other than as a result of a breach by Seller of the provisions
hereof.
19.3 Remedies. Seller hereby acknowledges, represents
and warrants to Purchaser that the provisions of Sections 19.1
and 19.2 are reasonable in all respects and necessary and
appropriate to protect the legitimate business interests of
Purchaser in connection with the Business. The parties
acknowledge that any breach or violation, or threatened breach or
violation, of any provision of such Sections may cause Purchaser
immediate and irreparable harm that cannot be adequately
compensated by money damages. In any such event, Purchaser
shall, in addition to all other rights or remedies available at
law or in equity, be entitled to obtain any injunctive relief
without having to prove the inadequacy of the available remedies
at law or any actual damages to restrain any breach or violation,
or threatened breach or violation, of such Sections by Seller.
Any remedy sought or obtained by Purchaser shall not be
considered either exclusive or a waiver of the rights of
Purchaser or any other person to assert any other remedies they
have in law or equity. In any proceeding upon a motion for any
such injunctive relief, Seller's ability to answer in damages
shall not be a bar, or be interposed as a defense, to the grant-
ing of such injunctive relief against Seller.
19.4 Non-Competition Severability. If any provision
of this Section 19 is determined to be invalid, unenforceable or
excessive in scope by any court or other body of competent juris-
diction, such provision shall be ineffective only to the most
limited extent so as not to render the agreement not to compete
unenforceable, and the remaining provisions shall remain in full
force and effect as if this Section 19 had been constructed with
the invalid, unenforceable or excessive provision so limited.
20. Miscellaneous. (a) This Agreement and the letter
agreement dated May 27, 1994 between Seller and Purchaser (the
"Confidentiality Agreement") constitute the entire agreement of
the parties with respect to the subject matter hereof and
thereof, supersede all prior understandings, whether written or
oral, with respect thereto and may not be modified, amended or
terminated except by a written agreement specifically referring
to this Agreement or the Confidentiality Agreement, as the case
may be, signed by all of the parties hereto. Nothing herein
expressed or implied is intended to or shall be construed to
confer upon or give any Person other than the parties hereto,
their successors or permitted assigns, any rights or remedies
under or by reason of this Agreement.
(b) No waiver of any provision hereof or of any breach
or default hereunder shall be considered valid unless in a
writing specifically identifying such provision, breach or
default and signed by the party giving such waiver, and no such
waiver shall be deemed a waiver of any other provision or any
subsequent breach or any other default of the same or similar
nature.
(c) Neither this Agreement nor any right, interest or
obligation hereunder may be assigned by either party without the
prior consent of the other, and any attempt to do so will be
void, except that Purchaser may assign its rights and delegate
the performance of its obligations hereunder to a directly or
indirectly wholly-owned subsidiary that agrees in writing to be
bound by all the terms hereof, but no such assignment or
delegation shall relieve Purchaser of its obligations hereunder.
(d) The section and paragraph headings contained
herein are for the purposes of convenience only and are not
intended to define or limit the contents of said sections or
paragraphs, or otherwise affect the meaning or interpretation of
this Agreement.
(e) Each party hereto shall cooperate, shall take such
further action and shall execute and deliver such further docu-
ments as may be reasonably requested by any other party in order
to carry out the provisions and purposes of this Agreement.
(f) This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one
original.
(g) This Agreement and all amendments thereof shall be
governed by and construed in accordance with the law of the State
of New York applicable to contracts made and to be performed
entirely therein.
(h) Should any provision of this Agreement be
determined to be invalid, it shall be severed from this Agreement
and the remaining provisions hereof shall remain in full force
and effect as if this Agreement had been executed with the
invalid portion eliminated.
(i) Any dispute or controversy arising with respect to
a claim of indemnification hereunder, including, without
limitation, any dispute concerning the scope of this arbitration
clause, shall be settled by arbitration in New York City by a
panel of three arbitrators in accordance with the rules of the
American Arbitration Association. Judgment upon the award
rendered by the arbitrators shall be final, conclusive and
binding on the parties and may be entered in and enforced to the
fullest extent of the law by any court having jurisdiction
thereof, and the parties hereby consent to the jurisdiction of
the New York courts for this purpose.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
THOMAS & BETTS CORPORATION
By: /s/ James D. Hay
Name: James D. Hay
Title: Vice President-
General Counsel
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Felix Zandman
Name: Felix Zandman
Title: President, Chief
Executive Officer
<PAGE>
EXHIBIT 7
THOMAS & BETTS CORPORATION
Unaudited Pro Forma Financial Information
Effective July 18 1994, Thomas & Betts Corporation (the
"Corporation") sold Vitramon Inc. and Vitramon Limited (U.K.)
("Vitramon"), to Vishay Intertechnology, Inc. for $184 million.
The gain on the sale of Vitramon, net of transaction expenses and
income taxes, will approximate $60 million; such gain is not
reflected in the accompanying pro forma consolidated statements
of income.
The following unaudited pro forma financial statements were
prepared as if the sale of Vitramon was effective as of January
1, 1993 for purposes of the pro forma condensed consolidated
statements of income for the year ended January 2, 1994 and the
quarter ended April 3, 1994 and as of April 3, 1994 for the pro
forma condensed consolidated balance sheet. These statements do
not purport to represent what the Corporation's financial
position or results of operations would actually have been if the
sale had in fact occurred on these dates or to project the
Corporation's financial position or results of operations as of
any future date or period. Additional information regarding the
Corporation's actual results of operations for the periods
presented may be obtained from the respective filings on Form 10-
K and Form 10-Q.
<PAGE>
<PAGE>
THOMAS & BETTS CORPORATION
Pro Forma Condensed Consolidated Balance Sheet
April 3, 1994
(Unaudited)
<TABLE>
<CAPTION>
In thousands Thomas & Pro Forma Adjustments Thomas &
Betts Vitramon(1) Betts
Historical Historical Other (2) Pro Forma
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 76,509 $ (14,589) $ 61,920
Marketable securities 31,081 31,081
Accounts receivable 171,941 (17,020) 154,921
Inventories 212,442 (20,077) 192,365
Deferred income taxes 14,625 (2,021) $ 1,755 (d) 14,359
Prepaid expenses 8,379 (686) 7,693
Total Current Assets 514,977 (54,393) 1,755 462,339
Property, plant and equipment 608,362 (92,117) 516,245
Less accumulated depreciation 300,560 (47,406) 253,154
Net property, plant and equipment 307,802 (44,711) 263,091
Intangible assets - net 308,042 308,042
Other assets 36,765 (949) 35,816
TOTAL ASSETS $1,167,586 $(100,053) $ 1,755 $1,069,288
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 15,522 $ - $ 15,522
Current maturities of long-term bank debt 11,377 (1,909) 9,468
Accounts payable 85,844 (37,149) 30,544 (b) 79,239
Accrued liabilities 76,858 (5,339) 71,519
Income taxes 12,460 (2,397) 39,159 (c) 51,269
2,047 (d)
Dividends payable 10,729 - 10,729
Total Current Liabilities 212,790 (46,794) 71,750 237,746
Long-term bank debt 396,783 (13,790) (170,261)(a) 212,732
Deferred income taxes 26,909 (1,550) (292)(d) 25,067
Other long-term liabilities 26,513 (1,269) - 25,244
Shareholders' equity 504,591 (36,650) 100,558 (e) 568,499
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,167,586 $(100,053) $ 1,755 $1,069,288
<FN>
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
THOMAS & BETTS CORPORATION
Pro Forma Consolidated Statement of Income
Quarter ended April 3, 1994
(Unaudited)
<TABLE>
<CAPTION>
Thomas & Pro Forma Adjustments Thomas &
Betts Vitramon(1) Betts
Historical Historical Other (2) Pro Forma
<S> <C> <C> <C> <C>
NET SALES $ 282,837 $ (34,575) $ 248,262
COSTS AND EXPENSES
Cost of sales 190,729 (23,743) 166,986
Marketing, general and administrative 55,086 (5,436) 1,569 (b) 51,219
Research and development 6,148 (1,092) 5,056
251,963 (30,271) 1,569 223,261
Earnings from operations 30,874 (4,304) (1,569) 25,001
Other expense - net 9,688 (656) 379 (b)
(1,181)(a) 8,230
Earnings before income taxes 21,186 (3,648) (767) 16,771
Income taxes 7,309 (1,676) 69 (d) 5,702
NET EARNINGS $ 13,877 $ (1,972) $ (836) $ 11,069
Earnings per share $ 0.73 $ 0.58
Average shares outstanding 19,019 19,019
<FN>
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.
/TABLE
<PAGE>
<PAGE>
THOMAS & BETTS CORPORATION
Pro Forma Condensed Consolidated Statement of Income
Year ended January 2, 1994
(Unaudited)
<TABLE>
<CAPTION>
Thomas & Pro Forma Adjustments Thomas &
Betts Vitramon(1) Betts
Historical Historical Other (2) Pro Forma
<S> <C> <C> <C> <C>
NET SALES $1,075,903 $(118,394) $ 957,509
COSTS AND EXPENSES
Cost of sales 710,089 (81,512) 628,577
Marketing, general and administrative 225,883 (20,236) 5,783 (b) 211,430
Research and development 22,564 (3,900) 18,664
958,536 (105,648) 5,783 858,671
Earnings from operations 117,367 (12,746) (5,783) 98,838
Other expense - net 38,923 (3,313) 1,586 (b) 32,799
(4,397)(a)
Earnings before income taxes 78,444 (9,433) (2,972) 66,039
Income taxes 23,533 (4,773) (269)(d) 18,491
NET EARNINGS BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 54,911 $ (4,660) $ (2,703) $ 47,548
Earnings per share before cumulative
effect of accounting change $ 2.91 $ 2.52
Average shares outstanding 18,837 18,837
<FN>
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.
/TABLE
<PAGE>
<PAGE>
THOMAS & BETTS CORPORATION
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
(1) Reflects the deletion of the historical financial statements of
Vitramon.
(2) Reflects additional pro forma adjustments necessary to present
the financial position and results of operations of the
Corporation.
(a) Use of the net proceeds from the sale to reduce the
Corporation's long-term debt outstanding under its
revolving term credit facility: reduction in related
interest expense is based on average rates of interest of
3.5 percent in 1993 and 3.7 percent in 1994.
(b) Elimination of intercompany balances due the Corporation
from Vitramon. It is assumed that the consolidated
general and administrative expenses giving rise to
management fees allocated to Vitramon would not be
significantly reduced.
(c) Accrual of income tax liability payable by the Corporation
from the gain on the sale of Vitramon.
(d) Adjustments to income tax liability and expense accounts
to give pro forma effect to the sale of Vitramon.
(e) Adjustments reflecting the sum of the pro forma net gain
and the equity of Vitramon.
