1 -- Exhibit 2.1 (Stock Purchase Agreement)
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
Between
Thomas & Betts Corporation,
as Seller
and
Vishay Intertechnology, Inc.,
as Purchaser
Dated July 12, 1994
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2 -- Exhibit 2.1 (Stock Purchase Agreement)
TABLE OF CONTENTS
Sections Page
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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
3 -- Exhibit 2.1 (Stock Purchase Agreement)
Sections Page
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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
4 -- Exhibit 2.1 (Stock Purchase Agreement)
Sections Page
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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
5 -- Exhibit 2.1 (Stock Purchase Agreement)
INDEX TO DEFINED TERMS
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Term Page No.(s)
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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
6 -- Exhibit 2.1 (Stock Purchase Agreement)
Term Page No.(s)
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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. . . . . . . . . . . . . . 32
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
7 -- Exhibit 2.1 (Stock Purchase Agreement)
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
8 -- Exhibit 2.1 (Stock Purchase Agreement)
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, (BPS)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
9 -- Exhibit 2.1 (Stock Purchase Agreement)
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
10 -- Exhibit 2.1 (Stock Purchase Agreement)
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
consideration, 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, trans-
fer, convey, assign and deliver to Purchaser and to confirm
Purchaser's right, title and interest in and to the Stock and the
11 -- Exhibit 2.1 (Stock Purchase Agreement)
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
12 -- Exhibit 2.1 (Stock Purchase Agreement)
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
13 -- Exhibit 2.1 (Stock Purchase Agreement)
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
14 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
15 -- Exhibit 2.1 (Stock Purchase Agreement)
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
16 -- Exhibit 2.1 (Stock Purchase Agreement)
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 (BPS) 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
17 -- Exhibit 2.1 (Stock Purchase Agreement)
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
18 -- Exhibit 2.1 (Stock Purchase Agreement)
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").
19 -- Exhibit 2.1 (Stock Purchase Agreement)
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
20 -- Exhibit 2.1 (Stock Purchase Agreement)
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
21 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
22 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
23 -- Exhibit 2.1 (Stock Purchase Agreement)
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;
24 -- Exhibit 2.1 (Stock Purchase Agreement)
(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,
contract or legally binding commitment other than in
25 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
26 -- Exhibit 2.1 (Stock Purchase 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.
27 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
28 -- Exhibit 2.1 (Stock Purchase Agreement)
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
29 -- Exhibit 2.1 (Stock Purchase Agreement)
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
outstanding 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
30 -- Exhibit 2.1 (Stock Purchase Agreement)
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 deducti-
ble 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 agree-
ments providing for the services of an inde-
pendent 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
31 -- Exhibit 2.1 (Stock Purchase Agreement)
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
32 -- Exhibit 2.1 (Stock Purchase Agreement)
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
33 -- Exhibit 2.1 (Stock Purchase Agreement)
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,
34 -- Exhibit 2.1 (Stock Purchase Agreement)
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
35 -- Exhibit 2.1 (Stock Purchase Agreement)
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
36 -- Exhibit 2.1 (Stock Purchase Agreement)
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
37 -- Exhibit 2.1 (Stock Purchase Agreement)
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
38 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
39 -- Exhibit 2.1 (Stock Purchase Agreement)
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):
40 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
41 -- Exhibit 2.1 (Stock Purchase Agreement)
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
42 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
43 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
44 -- Exhibit 2.1 (Stock Purchase 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
45 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
46 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
47 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
48 -- Exhibit 2.1 (Stock Purchase Agreement)
(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.
49 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
50 -- Exhibit 2.1 (Stock Purchase Agreement)
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
51 -- Exhibit 2.1 (Stock Purchase Agreement)
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, registrations 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.
52 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
53 -- Exhibit 2.1 (Stock Purchase Agreement)
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
54 -- Exhibit 2.1 (Stock Purchase Agreement)
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 pur-
suant to, any provision of Purchaser's certificate of incorpor-
ation 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
55 -- Exhibit 2.1 (Stock Purchase Agreement)
Agreement constitutes 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 sections 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,
56 -- Exhibit 2.1 (Stock Purchase Agreement)
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
57 -- Exhibit 2.1 (Stock Purchase Agreement)
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
58 -- Exhibit 2.1 (Stock Purchase Agreement)
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
59 -- Exhibit 2.1 (Stock Purchase Agreement)
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
60 -- Exhibit 2.1 (Stock Purchase Agreement)
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
61 -- Exhibit 2.1 (Stock Purchase Agreement)
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
62 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
63 -- Exhibit 2.1 (Stock Purchase Agreement)
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
64 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
65 -- Exhibit 2.1 (Stock Purchase Agreement)
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;
66 -- Exhibit 2.1 (Stock Purchase Agreement)
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
67 -- Exhibit 2.1 (Stock Purchase Agreement)
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
68 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
69 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
70 -- Exhibit 2.1 (Stock Purchase Agreement)
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
71 -- Exhibit 2.1 (Stock Purchase Agreement)
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
72 -- Exhibit 2.1 (Stock Purchase Agreement)
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
73 -- Exhibit 2.1 (Stock Purchase Agreement)
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
74 -- Exhibit 2.1 (Stock Purchase Agreement)
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
75 -- Exhibit 2.1 (Stock Purchase Agreement)
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 conditions at or prior to the Closing, and Seller
76 -- Exhibit 2.1 (Stock Purchase Agreement)
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
77 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
78 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
79 -- Exhibit 2.1 (Stock Purchase Agreement)
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
80 -- Exhibit 2.1 (Stock Purchase Agreement)
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
81 -- Exhibit 2.1 (Stock Purchase Agreement)
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
82 -- Exhibit 2.1 (Stock Purchase Agreement)
$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.
83 -- Exhibit 2.1 (Stock Purchase Agreement)
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;
84 -- Exhibit 2.1 (Stock Purchase Agreement)
(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,
proceedings, 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
85 -- Exhibit 2.1 (Stock Purchase Agreement)
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
86 -- Exhibit 2.1 (Stock Purchase Agreement)
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
87 -- Exhibit 2.1 (Stock Purchase Agreement)
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
88 -- Exhibit 2.1 (Stock Purchase Agreement)
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
89 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
90 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
91 -- Exhibit 2.1 (Stock Purchase Agreement)
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
92 -- Exhibit 2.1 (Stock Purchase Agreement)
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
93 -- Exhibit 2.1 (Stock Purchase Agreement)
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
94 -- Exhibit 2.1 (Stock Purchase Agreement)
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
95 -- Exhibit 2.1 (Stock Purchase Agreement)
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
96 -- Exhibit 2.1 (Stock Purchase Agreement)
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
97 -- Exhibit 2.1 (Stock Purchase Agreement)
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)
98 -- Exhibit 2.1 (Stock Purchase Agreement)
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
99 -- Exhibit 2.1 (Stock Purchase Agreement)
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
100 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
Defaulting 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
101 -- Exhibit 2.1 (Stock Purchase Agreement)
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.
102 -- Exhibit 2.1 (Stock Purchase 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;
103 -- Exhibit 2.1 (Stock Purchase Agreement)
(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.
104 -- Exhibit 2.1 (Stock Purchase Agreement)
(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
105 -- Exhibit 2.1 (Stock Purchase Agreement)
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 granting of such injunctive relief against
Seller.
106 -- Exhibit 2.1 (Stock Purchase Agreement)
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
jurisdiction, 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
107 -- Exhibit 2.1 (Stock Purchase Agreement)
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
documents as may be reasonably requested by any other party in
order to carry out the provisions and purposes of this
Agreement.
108 -- Exhibit 2.1 (Stock Purchase 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.
109 -- Exhibit 2.1 (Stock Purchase Agreement)
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