AGREEMENT AND PLAN OF REORGANIZATION
AMONG
THERMEDICS DETECTION INC.,
ORION ACQUISITION INC.,
THERMEDICS INC.
AND
ORION RESEARCH INC.
_____________________________
Dated May 6, 1998
_____________________________
PAGE
TABLE OF CONTENTS
Page
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SECTION 1 - THE REORGANIZATION
1.1 The Merger
1.2 Effective Time
1.3 Closing
1.4 Certificate of Incorporation and By-Laws
1.5 Directors and Officers
1.6 Conversion of Stock
1.7 Payment for Orion Common Stock
1.8 Adjustments
1.9 Lost Certificates
1.10 No Fractional Shares
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF
THERMEDICS AND ORION
2.1 Organization and Qualification
2.2 Authority
2.3 Capitalization and Title to Shares
2.4 Subsidiaries and Other Affiliates
2.5 Financial Statements
2.6 Absence of Undisclosed Liabilities;
No Dealings with
Affiliates
2.7 Taxes
2.8 Properties
2.9 Hazardous Materials
2.10 Accounts Receivable
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2.11 Inventories
2.12 Purchase and Sale Commitments
2.13 Governmental Authorizations
2.14 Intellectual Property
2.15 Insurance
2.16 Employee Benefit Plans
2.17 Agreements and Documents
2.18 Validity
2.19 No Changes
2.20 Litigation or Proceedings
2.21 Compliance with Laws
2.22 Labor Matters
2.23 Recalls
2.24 Brokers and Finders
2.25 Powers of Attorney
2.26 No Termination of Relationship
2.27 All Information
2.28 Statements True and Correct
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF
DETECTION AND ACQUISITION
3.1 Organization
3.2 Authority
3.3 Statements True and Correct
SECTION 4 - COVENANTS AND AGREEMENTS
4.1 Conduct of Business
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4.2 Corporate Examinations and Investigations
4.3 Expenses
4.4 Authorization from Others
4.5 Consummation of Agreement
4.6 Further Assurances
4.7 Tax-Free Reorganization
4.8 Listing of Shares
4.9 Public Announcements and Confidentiality
4.10 No Solicitation
4.11 Indemnification
4.12 Participation in Employee Benefit Plans
4.13 Certain Tax Matters
SECTION 5 - CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF DETECTION AND ACQUISITION
TO CONSUMMATE THE MERGER
5.1 Representations, Warranties and Covenants
5.2 Articles of Merger
5.3 Certificates
SECTION 6 - CONDITIONS PRECEDENT TO THE
OBLIGATION OF THERMEDICS AND ORION
TO CONSUMMATE THE MERGER
6.1 Representations, Warranties and Covenants
6.2 Articles of Merger
6.3 Certificates
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SECTION 7 - TERMINATION, AMENDMENT AND WAIVER
7.1 Termination
7.2 Effect of Termination
7.3 Amendment
7.4 Waiver
SECTION 8 - MISCELLANEOUS
8.1 Notices
8.2 Survival and Materiality of Representations
8.3 Entire Agreement
8.4 Parties in Interest
8.5 No Implied Rights or Remedies
8.6 Headings
8.7 Severability
8.8 Counterparts
8.9 Further Assurances
8.10 Governing Law
PAGE
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
dated May 6, 1998 is among Thermedics Detection Inc.
("Detection"), a Massachusetts corporation, Orion Acquisition
Inc. ("Acquisition"), a Massachusetts corporation and a
wholly-owned subsidiary of Detection, Thermedics Inc.
("Thermedics"), a Massachusetts corporation, and Orion Research
Inc. ("Orion"), a Massachusetts corporation and a wholly-owned
subsidiary of Thermedics. The parties wish to effect the
acquisition of Orion by Detection through a merger of Acquisition
with and into Orion on the terms and conditions hereof. This
Agreement is intended to be a "plan of reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended (the "Code").
Accordingly, in consideration of the foregoing and the
mutual representations and covenants contained herein, the
parties hereto agree as follows:
SECTION 1 - THE REORGANIZATION
1.1 The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the Business
Corporation Law of the Commonwealth of Massachusetts (the
"BCLM"), Acquisition shall be merged with and into Orion (the
"Merger"). The Merger shall occur at the Effective Time (as
defined in Section 1.2). Following the Merger, Orion shall be
the surviving corporation (the "Surviving Corporation") and the
separate corporate existence of Acquisition shall cease.
1.2 Effective Time. As soon as practicable after the
execution of this Agreement and satisfaction or waiver of all
conditions to the Merger, the parties shall cause articles of
merger (the "Articles of Merger") with respect to the Merger to
be filed and recorded in accordance with Section 78 of the BCLM
and shall take all such further actions as may be required by law
to make the Merger effective. The Merger shall be effective at
such time as the Articles of Merger are duly filed with the
Secretary of State of the Commonwealth of Massachusetts in
accordance with the BCLM or at such later time as is specified in
the Articles of Merger (the "Effective Time"). The date on which
the Merger shall be effective is hereafter referred to as the
_Effective Date._
1.3 Closing. Immediately prior to the filing of the
-------
Articles of Merger, a closing (the "Closing") will be held at the
offices of Thermo Electron Corporation, 00 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx (or such other place as the parties may agree) for
PAGE
the purpose of confirming satisfaction or waiver of all
conditions to the Merger. The date on which the Closing occurs
is referred to herein as the "Effective Date."
1.4 Articles of Organization and By-Laws. The Articles of
Organization and By-laws of Acquisition, in each case as in
effect immediately prior to the Effective Time, shall be the
Articles of Organization and By-laws of the Surviving Corporation
immediately after the Effective Time.
1.5 Directors and Officers. The directors and officers of
Acquisition immediately prior to the Effective Time shall be the
directors and officers of the Surviving Corporation immediately
after the Effective Time.
1.6 Conversion of Stock.
At the Effective Time, by virtue of the Merger and
without any action on the part of Detection, Acquisition,
Thermedics or Orion:
(a) Each share of common stock of Orion ("Orion Common
Stock") outstanding immediately prior to the Effective Time,
other than (A) shares held by Orion as treasury stock or shares
held by any subsidiary of Orion and (B) shares owned beneficially
by Detection, Acquisition or any other subsidiary of Detection,
(the "Orion Shares") shall be converted into and become the right
to receive a pro rata share of a total of 5,961,225 shares (the
"Detection Shares") of common stock, $.10 par value per share, of
Detection ("Detection Common Stock"). The Detection Shares are
referred to herein as the "Merger Consideration."
(b) All shares of Orion Common Stock held at the
Effective Time by Orion as treasury stock or by a subsidiary of
Orion shall be canceled without any conversion thereof and no
payment shall be made with respect thereto.
(c) All shares of Orion Common Stock owned
beneficially at the Effective Time by Detection, Acquisition or
any other subsidiary of Detection shall be cancelled without any
conversion thereof and no payment shall be made with respect
thereto.
(d) Each share of the common stock of Acquisition
("Acquisition Common Stock") outstanding immediately prior to the
Effective Time shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, $0.10
par value per share, of the Surviving Corporation.
1.7 Payment for Orion Common Stock.
(a) At the Effective Time, the stock transfer books of
Orion shall be closed and no transfers of Orion Common Stock may
be made thereafter. Promptly after the later of (i) the listing
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of the Detection Shares for trading on the American Stock
Exchange, Inc. ("AMEX"), as contemplated by Section 4.8 below,
and (ii) the proper surrender by Thermedics of such certificates
representing the Orion Shares, Detection shall cause its stock
transfer agent to issue and deliver to Thermedics a certificate
for the Detection Shares. It shall be a condition of such
payment and delivery that the surrendered certificate(s) be
properly endorsed or otherwise in proper form for transfer and
that Thermedics shall pay any transfer or other taxes required by
reason of such payment or delivery or establish, to the
satisfaction of Detection and the Surviving Corporation that such
tax has been paid or is not applicable. The date on which all of
the conditions to the issuance of the certificate representing
the Detection Shares shall have been met is referred to
hereinafter as the "Payment Date."
(b) Notwithstanding the provisions of subsection (a)
of this Section 1.7, in the event that, notwithstanding
Detection's best efforts, Detection is unable to obtain the
approval of its stockholders of the listing of the Detection
Shares for trading on AMEX on or before December 31, 1998, then,
on December 31, 1998, Detection will pay to Holdings the sum of
$65,800,000 in cash in lieu of issuing the Detection Shares.
1.8 Adjustments.
(a) In the event Detection shall declare, pay, make or
effect between the date of this Agreement and the Payment Date,
(i) any stock dividend or other distribution in respect of the
Detection Common Stock payable in shares of capital stock of
Detection, (ii) any stock split or other subdivision of
outstanding shares of Detection Common Stock into a larger number
of shares, (iii) any combination of outstanding shares of
Detection Common Stock into a smaller number of shares, (iv) any
reclassification of Detection Common Stock into other shares of
capital stock or securities, or (v) any exchange of the
outstanding shares of Detection Common Stock, in connection with
a merger or consolidation of Detection or sale by Detection of
all or part of its assets, for a different number or class of
shares of stock or securities of Detection or for the share of
the capital stock or other securities of any other corporation,
appropriate adjustment shall be made in the number of Detection
Shares to be issued in connection with the Merger as may be
required to put Holdings in the same position as if the record
date, with respect to any such transaction or transactions which
shall so occur, had been immediately after the Payment Date, or
otherwise to carry out the intents and purposes of this
Agreement.
(b) In the event Detection shall declare, pay, make or
effect between the date of this Agreement and the Payment Date
any dividend or other distribution in respect of the Detection
Common Stock payable in cash or other property other than in
shares of capital stock of Detection, then the Detection Shares
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to be issued in connection with the Merger shall be deemed to be
outstanding as of the record date with respect to any such
dividend or distribution, and the cash or other property
otherwise payable or distributable to Thermedics with respect to
such Detection Shares shall be held by Detection for the benefit
of Thermedics; and Detection shall take all actions reasonably
necessary to prevent such cash or other property from being or
becoming subject to any lien, security interest or other
encumbrance not for the benefit of Thermedics. Upon the issuance
of the Detection Shares to Thermedics pursuant to Section 1.7(a)
above, such cash or other property shall likewise be distributed
by Detection to Thermedics. In no event shall Thermedics be
entitled to receive interest on such dividends or distributions.
In the event that Detection pays Thermedics cash consideration
pursuant to Section 1.7(b) above, then such cash or other
property held by Detection on behalf of Thermedics shall not be
paid or distributed to Thermedics and Thermedics shall have no
further interest therein or claim thereto.
1.9 Lost Certificates. In the event any certificate
representing Thermedics' Orion Shares shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by Thermedics, Detection shall issue in exchange for such lost,
stolen or destroyed certificate the consideration payable in
exchange therefor pursuant to this Section 1.
1.10 No Fractional Shares. No certificates representing
fractional Detection Shares shall be issued upon the surrender
for exchange of the Orion Shares. No fractional interest shall
entitle the owner to vote or to any rights of a security holder.
In lieu of a fractional share, Thermedics will receive upon
surrender of the Orion Shares an amount in cash (without
interest) determined by multiplying such fraction by $11.0379.
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SECTION 2 - REPRESENTATIONS AND WARRANTIES OF
THERMEDICS AND ORION
Except as set forth on the disclosure schedule delivered to
Detection on the date hereof (the "Orion Disclosure Schedule"),
Thermedics and Orion, jointly and severally, represent and
warrant to Detection and Acquisition as follows. The term
"knowledge," when used in this Agreement, shall mean actual
knowledge after reasonable investigation.
2.1 Organization and Qualification.
(a) Each of Thermedics and Orion is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has full corporate power
and authority to own, lease and operate its assets and to carry
on its business as now being and as heretofore conducted. Each
of Thermedics and Orion is qualified or otherwise authorized to
transact business as a foreign corporation in all jurisdictions
in which such qualification or authorization is required by law,
except for jurisdictions in which the failure to be so qualified
or authorized would not have a material adverse effect on the
assets, properties, business, results of operations, condition
(financial or otherwise) or prospects of Orion (the "Business of
Orion").
(b) Thermedics and Orion have previously provided to
Detection true and complete copies of their charter and By-laws
as in effect on the date hereof, and neither of such corporations
is in default thereunder.
2.2 Authority. Each of Thermedics and Orion has full
right, power, capacity and authority to execute, deliver and
perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of
this Agreement, the filing of the Articles of Merger and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on
the part of Thermedics and Orion. This Agreement has been duly
and validly executed and delivered by each of Thermedics and
Orion and constitutes the valid and binding obligation of
Thermedics and Orion, enforceable against them in accordance with
the terms hereof. Neither the execution, delivery and
performance of this Agreement, the filing of the Articles of
Merger nor the consummation of the transactions contemplated
hereby will (i) conflict with or result in a violation, breach,
termination or acceleration of, or default under (or would result
in a violation, breach, termination, acceleration or default with
the giving of notice or passage of time, or both) any of the
terms, conditions or provisions of the Articles of Organization
or By-laws of Thermedics or Orion, as amended, or of any note,
bond, mortgage, indenture, license, agreement or other instrument
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or obligation to which either of Thermedics or Orion is a party
or by which either of Thermedics or Orion or any of their
respective properties or assets may be bound or affected; (ii)
result in the violation of any order, writ, injunction, decree,
statute, rule or regulation applicable to Thermedics or Orion or
any of their respective properties or assets; (iii) result in the
imposition of any lien, encumbrance, charge or claim upon any of
Thermedics' or Orion's assets; or (iv) entitle any employee to
severance or other payments by Orion or create any other
obligation to an employee. Except for the filing of the Articles
of Merger, no consent or approval by, or notification to or
filing with, any court, governmental authority or third party is
required in connection with the execution, delivery and
performance of this Agreement by Thermedics and Orion or the
consummation of the transactions contemplated hereby.
2.3 Capitalization and Title to Shares.
(a) The authorized capital stock of Orion consists of
200,000 shares of Orion Common Stock, of which 100 shares are
issued and outstanding as of the date hereof. Thermedics is the
record and beneficial owner of all of such issued and outstanding
shares. All of the issued and outstanding shares of the capital
stock of Orion are duly authorized and are validly issued, fully
paid, nonassessable and free of preemptive rights.
(b) Except as set forth above, there are not as of the
date hereof, and at the Effective Time there will not be, any
other shares of capital stock of Orion authorized or outstanding
or any subscriptions, options, conversion or exchange rights,
warrants, repurchase or redemption agreements, or other
agreements or commitments obligating Orion to issue, transfer,
sell, repurchase or redeem any shares of its capital stock or
other securities of Orion. To the knowledge of Thermedics and
Orion, there are no written shareholder agreements, voting
trusts, proxies or other agreements, instruments or
understandings with respect to the voting of the capital stock of
Orion. The books and records of Orion, including without
limitation the books of account, minute books, stock certificate
books and stock ledgers, are complete and correct and accurately
reflect the conduct of the business and affairs of Orion.
2.4 Subsidiaries and Other Affiliates.
(a) The Orion Disclosure Schedule sets forth all
Subsidiaries of Orion and the jurisdiction in which each is
incorporated. All shares of the capital stock of each Subsidiary
owned by Orion are owned free and clear of any charges, liens,
encumbrances, security interests or adverse claims. As used in
this Agreement, "Subsidiary" means any corporation or other legal
entity of which a party to this Agreement owns, directly or
indirectly, fifty percent (50%) or more of the stock or other
equity interest entitled to vote for the election of directors
and representations, warranties and covenants referring to Orion
PAGE
contained herein shall be deemed to mean Orion and each of its
Subsidiaries, both separately and together as a consolidated
whole, unless and except to the extent expressly indicated
otherwise.
(b) There are not as of the date hereof, and at the
Effective Time there will not be, any other shares of capital
stock of any Subsidiary of Orion authorized or outstanding or any
subscriptions, options, conversion or exchange rights, warrants,
repurchase or redemption agreements, or other agreements or
commitments obligating any Subsidiary of Orion to issue,
transfer, sell, repurchase or redeem any shares of its capital
stock or other securities. There are no shareholder agreements,
voting trusts, proxies or other agreements, instruments or
understandings with respect to the voting of the capital stock of
any Subsidiary of Orion.
(c) Except for its Subsidiaries, Orion does not,
directly or indirectly, own any material equity interest in any
corporation, partnership, joint venture or other entity.
2.5 Financial Statements. Orion has delivered to Detection
prior to the execution of this Agreement true and complete copies
of: (a) the audited consolidated balance sheet of Orion as at
January 3, 1998 (the "Balance Sheet"), (b) Orion's audited
consolidated statements of earnings and cash flows for the fiscal
year ended January 3, 1998, (c) the audited consolidated balance
sheet of Orion as at December 28, 1996, and (d) Orion's audited
consolidated statements of earnings and cash flows for the fiscal
year ended December 28, 1996 (collectively, the "Financial
Statements"). The Financial Statements have been prepared from,
and are in accordance with, the books and records of Orion and
fairly present the financial condition, results of operations,
and cash flows of Orion as at the dates and for the periods
indicated, in each case in accordance with generally accepted
accounting principles applied on a basis consistent with previous
years.
2.6 Absence of Undisclosed Liabilities; No Dealings with
Affiliates. As of the date of the Balance Sheet, Orion had no
material liabilities or obligations of any nature, whether
accrued, absolute, contingent or otherwise and whether due or to
become due (including without limitation, liabilities as
guarantor or otherwise with respect to obligations of others or
liabilities for taxes due or then accrued or to become due),
required to be reflected or disclosed on the Balance Sheet that
were not adequately reflected or reserved against on the Balance
Sheet. Orion has no liabilities of the type required to be
reflected or disclosed on a balance sheet in accordance with
generally accepted accounting principles, other than liabilities
(i) adequately reflected or reserved against on the Balance
Sheet, (ii) incurred since the date of the Balance Sheet in the
ordinary course of business and consistent with past practice,
(iii) that would not, in the aggregate, have a material adverse
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effect on the Business of Orion, or (iv) disclosed in this
Agreement. Orion does not have any contractual arrangement with
or commitment to or from any of its stockholders, officers,
management, directors or employees (or their family members)
other than such as may have been entered into in the normal
course of employment, including, without limiting the generality
of the foregoing, being directly or indirectly a joint investor
or coventurer with respect to, or owner, lessor, lessee, licenser
or licensee of, any real or personal property, tangible or
intangible, owned or used by, or a lender to or debtor of, Orion.
2.7 Taxes. Orion has accurately prepared and duly and
timely filed all federal, state, local or foreign tax and other
returns and reports (_Tax Returns_) which were required to be
filed, in respect of all income, franchise, excise, sales, use,
property (real and personal), payroll and other taxes, levies,
imports, duties, license and registration fees, charges or
withholdings of any nature whatsoever (collectively "Taxes_).
None of the federal, state, local or foreign Tax returns of Orion
has been audited or examined by the governmental authority having
jurisdiction. No waivers of any statutes of limitation are in
effect in respect of any Taxes. There are no claims pending or,
to the best of its knowledge, threatened, against Orion for past
due Taxes. All Taxes incurred but not yet due have been fully
accrued on the books of Orion or full reserves have been
established therefor; the reserves indicated on the Balance Sheet
are also adequate to cover all Taxes that may become payable by
Orion in future periods in respect of any transactions or sales
occurring on or prior to the date of the Balance Sheet. Without
limiting the generality of the foregoing, Orion has withheld or
collected from each payment made to each of its employees,
consultants or non-U.S. payees, the amount of all Taxes required
to be withheld or collected therefrom, and has paid the same to
the proper tax receiving officers or authorized depositories.
Orion has no liability for Taxes of any person other than Orion
(a) under Regulation Sec. 1.1502-6 (or any similar provision of
federal, state, local or foreign law, (b) as a transferee or
successor, (c) by contract or (d) otherwise.
2.8 Properties. Except as set forth on the Orion
Disclosure Schedule, Orion owns and has good title to all of the
assets and properties reflected as owned by it on the Balance
Sheet or acquired by Orion since the date of the Balance Sheet
(except personal property sold or otherwise disposed of in the
ordinary course of business since the date of the Balance Sheet),
free and clear of any lien, claim or other encumbrance, except
for (i) the liens, claims or other encumbrances reflected on the
Balance Sheet, (ii) assets and properties disposed of, or subject
to purchase or sales orders, in the ordinary course of business
since the date of the Balance Sheet, (iii) liens, claims or other
encumbrances securing the liens of materialmen, carriers,
landlords and like persons, all of which are not yet due and
payable, (iv) liens for taxes not yet delinquent and (v) liens,
claims, other encumbrances or defects in title that, in the
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aggregate, are not material to the Business of Orion. Orion owns
or has a valid leasehold interest in all of the buildings,
structures, leasehold improvements, equipment and other tangible
property material to the Business of Orion, all of which are in
good and sufficient operating condition and repair, ordinary wear
and tear excepted, for the conduct of its business in accordance
with past practices and Orion has not received notice that any of
such property is in violation in any material respect of any
existing law or any building, zoning, health, safety or other
ordinance, code or regulation.
2.9 Hazardous Materials.
(a) Orion has previously made available to Detection a
true and correct list of all Hazardous Materials (as hereinafter
defined) generated, used, handled or stored by Orion, the proper
disposal of which will require any material expenditure by Orion.
There has been no generation, use, handling, storage or disposal
of any Hazardous Materials in violation of common law or any
applicable environmental law at any site owned or premises leased
by Orion during the period of Orion's ownership or lease that
could have a material adverse effect on the Business of Orion.
Nor has there been or is there threatened any release of any
Hazardous Materials on or at any such site or premises during
such period in violation of common law or any applicable
environmental law or which created or will create an obligation
to report or remediate such release, which release or failure to
report or remediate could have a material adverse effect on the
Business of Orion. For purposes of this Agreement, "Hazardous
Material" means any medical waste, flammable, explosive or
radioactive material, or any hazardous or toxic waste, substance
or material, including substances defined as "hazardous
substances," "hazardous materials," "solid waste" or "toxic
substances" under any applicable laws or ordinances relating to
hazardous or toxic materials and substances, air pollution
(including noise and odors), water pollution, liquid and solid
waste, pesticides, drinking water, community and employee health,
environmental land use management, stormwater, sediment control,
nuisances, radiation, wetlands, endangered species, environmental
permitting, petroleum products, and all rules and regulations
promulgated pursuant to any such laws and ordinances.
(b) Orion has previously made available to Detection
copies of all documents concerning any environmental or health
and safety matter that could have a material adverse effect on
the Business of Orion, if any, and copies of any environmental
audits or risk assessments, site assessments, documentation
regarding off-site disposal of Hazardous Materials, spill control
plans and material correspondence with any governmental authority
regarding the foregoing.
2.10 Accounts Receivable. All accounts and notes
-------------------
receivable of Orion shown on the Balance Sheet and all accounts
and notes receivable acquired by Orion subsequent to the date of
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the Balance Sheet have arisen in the ordinary course of business
and have been collected, or are in the process of collection and
are collectible in the ordinary course of business and in any
event within nine months from the Effective Date, in the
aggregate recorded amounts thereof, less the applicable
allowances reflected on the Balance Sheet with respect to the
accounts and notes receivable shown thereon, or set up consistent
with past practice on the books of Orion with respect to the
accounts and notes receivable acquired subsequent to the date of
the Balance Sheet.
2.11 Inventories. All Inventories (as defined below) of
Orion are of a quality and quantity usable and saleable in the
ordinary course of business, except for obsolete items and items
of below- standard quality, all of which are in the aggregate
immaterial to the Business of Orion. Items included in such
Inventories are carried on the books of Orion, and are valued on
the Balance Sheet, at the lower of cost or market. The value of
obsolete materials and materials of below-standard quality or
quantity has been written down on Orion's books of account to
realizable market value. The term "Inventories" includes all
stock of raw materials, work-in-process and finished goods,
including but not limited to finished goods purchased for resale,
held by Orion for manufacturing, assembly, processing, finishing,
sale or resale to others, from time to time in the ordinary
course of business of Orion in the form in which such inventories
then are held or after manufacturing, assembling, finishing,
processing, incorporating with other goods or items, refining or
the like.
PAGE
2.12 Purchase and Sale Commitments. No outstanding
purchase commitments by Orion are in excess of the normal,
ordinary and usual requirements of Orion, and the aggregate of
the contract prices to which Orion has agreed in any outstanding
purchase commitments is not so excessive when compared with
current market prices for the relevant commodities or services
that a material loss is likely to result. No outstanding sales
commitment by Orion obligates Orion to sell any product or
service at a price which, because of currently prevailing and
projected costs of materials or labor, is likely to result, when
all such sales commitments are taken in the aggregate, in a
material loss to Orion. There are no suppliers to Orion of
significant goods or services with respect to which practical
alternative sources of supply, or comparable products, are not
available on comparable terms and conditions.
2.13 Governmental Authorizations. Orion has all
governmental permits, licenses, franchises, concessions, zoning
variances and other approvals, authorizations and orders
(collectively "Permits") material to the Business of Orion. Such
Permits constitute all the permits which are required under all
applicable local, state, federal or foreign laws and regulations
for the operation of the Business of Orion. All such Permits are
presently in full force and effect, Orion is in compliance with
the requirements thereof, no suspension or cancellation of any of
them is threatened so far as is known to Orion, and the Merger
will not adversely affect the validity or effectiveness of, and
will not require, for retention thereof after the Merger, the
consent or approval of any party to, or any other person or
governmental authority having jurisdiction of, any such Permit.
Orion has no knowledge of any fact or circumstance which would
prevent, limit or restrict it from continuing to operate its
business in the present manner, and no new requirements
pertaining to the manner of operating its business have been
issued or announced by any governmental authority during the past
year nor are there any disputes pending between Orion and any
governmental authority relating to Orion's operations as
presently being conducted or actively considered. Orion has
furnished or made available to Detection all reports and
applications filed by it with any governmental authority in the
last three years.
2.14 Intellectual Property. Orion owns, or is licensed to
use, or otherwise has the right to use all patents, trademarks,
service marks, trade names, trade secrets, franchises, and
copyrights, and all applications for any of the foregoing, and
all technology, know-how and processes necessary for the conduct
of its businesses as now conducted (collectively, the
"Proprietary Rights"). A list of all such copyrights,
trademarks, tradenames and patents, and all applications
therefor, has been furnished or made available to Detection.
Orion is not aware of any claim by any third party that the
Business of Orion as currently conducted or proposed to be
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conducted infringes upon the unlicensed Proprietary Rights of
others, nor has Orion received any notice or claim from any third
party of such infringement by Orion. Orion is not aware of any
infringement by any third party on, or any competing claim of
right to use or own any of, the Proprietary Rights of Orion.
Orion has the right to use, free and clear of claims or rights of
others, all customer lists and computer software material to its
business as presently conducted. To the best knowledge of Orion,
none of the activities of the employees of Orion on behalf of
Orion violates any agreements or arrangements which any such
employees have with former employers in a way which is materially
adverse to the Business of Orion.
2.15 Insurance. Orion is not in default with respect to any
provisions of any policy of general liability, fire, title or
other form of insurance held by it, is current in the payment of
all premiums due on such insurance and has not failed to give any
notice or present any claim thereunder in due and timely fashion,
except for claims that are immaterial in both the nature of the
claim and in the amount of such claim. Orion maintains insurance
on all of its assets and its business (including products
liability insurance) from insurers which to its knowledge are
financially sound and reputable, in amounts and coverages and
against the kinds of risks and losses reasonably prudent to be
insured against by corporations engaged in the same or similar
businesses. No basis exists which would jeopardize the coverage
under any such insurance. No such insurance will be terminated
or cancelled by reason of the execution, delivery and performance
of this Agreement, the filing of the Articles of Merger or the
consummation of the transactions contemplated hereby. Orion has
previously furnished or made available to Detection all policies
of general liability, fire, title or other forms of insurance
held by Orion and a description of all claims pending thereunder
other than health or dental insurance claims.
2.16 Employee Benefit Plans.
(a) Orion has made available or furnished to Detection
true and complete copies of each pension, profit-sharing,
deferred compensation, incentive compensation, severance pay,
retirement, welfare benefit or other plan or arrangement
providing benefits to employees or retirees, including both those
that do and do not constitute employee benefit plans within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), currently maintained
or contributed to by Orion or Thermedics for the benefit of
Orion's employees or retirees (each, a "Plan").
(b) Except as set forth on the Orion Disclosure
Schedule, (i) each such Plan that is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA is being
operated and administered in compliance with Section 401(a) of
the Code, a favorable determination letter has been obtained from
the Internal Revenue Service (the "IRS") for such Plan, and there
PAGE
is no accumulated funding deficiency, as defined in Section
302(a)(2) of ERISA or Section 412 of the Code, with respect to
such Plan; (ii) there has been no non-exempt "prohibited
transaction" within the meaning of Section 406 of ERISA or
Section 4975 of the Code involving the assets of any Plan nor any
"reportable event" within the meaning of Section 4043 of ERISA
with respect to any Plan; (iii) all required employer
contributions to such Plan have been made (or, in the case of
contributions not yet due, have been accrued on the Balance
Sheet); (iv) Orion has made available to Detection as to each
such Plan a true and correct copy of (w) the annual report (Form
5500) filed with the IRS for each of the three most recent plan
years, (x) each plan, trust agreement, group annuity contract and
insurance contract, if any, relating to such Plan, (y) each
actuarial report prepared for each of the last three years for
each Plan and (z) each summary plan description distributed to
participants in each Plan and each summary of material
modifications to each Plan (as defined in ERISA); and (v) each
such Plan is, and at all relevant times has been, in compliance
with ERISA, the Code and the terms of such Plan. Neither Orion,
Thermedics nor any Subsidiary of Thermedics has ever participated
in a "multiemployer pension plan" as defined in Section 3(37) of
ERISA.
(c) Except as set forth on the Orion Disclosure
Schedule, Orion has no obligation to provide any welfare benefits
to retired or former employees other than continuation of welfare
benefits as required by applicable law.
(d) Orion has no liability under or with respect to
any employee benefit plans or arrangements that it no longer
maintains or in which it no longer participates.
2.17 Agreements and Documents. Orion has previously
furnished or made available to Detection true, correct and
complete copies of each document that is referred to or otherwise
related to any of the following items referred to in this Section
2.17:
(a) each document related to interests in real
property owned, leased or otherwise used or claimed by Orion;
PAGE
(b) (i) each agreement of Orion made in the ordinary
course of business which involves aggregate future payments by or
to Orion of more than one hundred fifty thousand dollars
($150,000) in the case of payments to Orion (including current
firm purchase orders for Orion products), seventy five thousand
dollars ($75,000) in the case of payments by Orion, or any
agreement made in the ordinary course of business whose term
extends beyond one year after the date hereof; (ii) each
agreement containing any covenant restricting the freedom of
Orion to compete in any line of business or with any person; and
(iii) each agreement of Orion not made in the ordinary course of
business which is or was to be performed after the date hereof;
(c) all employment or similar compensation agreements
of Orion which may not be terminated by Orion without penalty
within thirty days after the Closing;
(d) all bonus, incentive compensation, deferred
compensation, profit-sharing, stock option, retirement, pension,
severance, indemnification, insurance, death benefit or other
fringe benefit plans, agreements or arrangements of Orion (or
applying to Orion) in effect, or under which any amounts remain
unpaid, on the date hereof or to become effective after the date
hereof;
(e) all labor unions or other organizations
representing, purporting to represent or attempting to represent
any employees of Orion, and all collective bargaining agreements
of Orion with any labor unions or other representatives or
employees;
(f) each agreement or other instrument or arrangement
defining the terms on which any indebtedness of Orion (or a
guarantee by Orion of indebtedness) is or may be issued; and
(g) the names and addresses of all banks in which
Orion has accounts or lines of credit, and with respect to each
such account or line of credit, the names of all persons
authorized to drawn thereon.
Orion is not a party to any oral contract or agreement
which would be required to have been furnished or made available
to Detection under this Section 2.17 had such contract or
agreement been committed to writing.
2.18 Validity. There is no default or claimed or purported
or alleged default, or basis on which with notice or lapse of
time or both (including notice of this Agreement), a default
would exist, in any obligation on the part of any party
(including Orion) to be performed under any lease, contract,
plan, policy or other instrument or arrangement referred to in
Section 2.17 or otherwise in this Agreement.
PAGE
2.19 No Changes. Since the date of the Balance Sheet there
has not been:
(a) any material adverse change in the Business of
Orion;
(b) any material damage, destruction or loss (whether
or not covered by insurance) adversely affecting the Business of
Orion;
(c) any declaration, setting aside or payment of any
dividend, or other distribution, in respect of Orion's capital
stock or any direct or indirect redemption, purchase or other
acquisition of such stock;
(d) any option to purchase Orion's capital stock
granted to any person, or any employment or deferred compensation
agreement entered into between Orion and any of its stockholders,
officers, directors, employees or consultants;
(e) any issuance or sale by Orion of any stock, bonds
or other corporate securities, or any partial or complete
formation, acquisition, disposition or liquidation of Orion;
(f) any labor union activity (including without
limitation any negotiation, or request for negotiation, with
respect to any union representation or any labor contract)
respecting Orion;
(g) any statute, rule or regulation, or, to the best
of Orion's knowledge, any government policy, adopted which may
materially and adversely affect the Business of Orion;
(h) any mortgage, lien, attachment, pledge,
encumbrance or security interest created on any asset, tangible
or intangible, of Orion, or assumed, either by Orion or by
others, with respect to any such assets;
(i) any indebtedness or other liability or obligation
(whether absolute, accrued, contingent or otherwise) incurred, or
other transaction (except that reflected in this Agreement)
engaged in, by Orion, except those in the ordinary course of
business that are individually, or in the aggregate to one group
of related parties, less than ten thousand dollars ($10,000);
(j) any obligation or liability discharged or
satisfied by Orion, except items included in current liabilities
shown on the Balance Sheet and current liabilities incurred since
the date of the Balance Sheet in the ordinary course of business
which are individually, or in the aggregate to one group of
related parties, less than ten thousand dollars ($10,000) in
amount;
(k) any sale, assignment, lease, transfer or other
PAGE
disposition of any tangible asset of Orion, except in the
ordinary course of business, or any sale, assignment, lease,
transfer or other disposition of any of its patents, trademarks,
trade names, brand names, copyrights, licenses or other
intangible assets;
(l) any amendment, termination or waiver of any
material right belonging to Orion;
(m) any increase in the compensation or benefits
payable or to become payable by Orion to any of its officers or
employees;
(n) any transaction or contract with Thermedics; or
(o) any other action or omission by Orion, or the
passage of any resolution, other than in the ordinary course of
business.
2.20 Litigation or Proceedings. Orion is not engaged in, or
a party to, or, to the best of Thermedics' or Orion's knowledge,
threatened with, any claim or legal action or other proceeding
before any court, any arbitrator of any kind or any governmental
authority, nor does any basis for any claim or legal action or
other proceeding or governmental investigation exist. There are
no orders, rulings, decrees, judgments or stipulations to which
Orion is a party by or with any court, arbitrator or governmental
authority affecting the Business of Orion.
2.21 Compliance with Laws. Orion (i) has not been and is
not in violation of any applicable building, zoning, occupational
safety and health, pension, export control, environmental or
other federal, state, local or, to the best of its knowledge,
foreign, law, ordinance, regulation, rule, order or governmental
policy applicable to the Business of Orion; (ii) has not received
any complaint from any governmental authority, and to the best
knowledge of Orion, none is threatened, alleging that Orion has
violated any such law, ordinance, regulation, rule, order or
governmental policy; (iii) has not received any notice from any
governmental authority of any pending proceedings to take all or
any part of the properties of Orion (whether leased or owned) by
condemnation or right of eminent domain and, to the best
knowledge of Orion, no such proceeding is threatened; and (iv) is
not a party to any agreement or instrument, or subject to any
charter or other corporate restriction or judgment, order, writ,
injunction, rule, regulation, code or ordinance, which materially
and adversely affects, or might reasonably be expected materially
and adversely to affect the Business of Orion.
2.22 Labor Matters. There are no labor organizing
activities, election petitions or proceedings, labor strikes,
disputes, slowdowns, work stoppages or unfair labor practice
complaints pending or, to the best of Orion's knowledge,
threatened against Orion or between Orion and any of its
PAGE
employees.
2.23 Recalls. There is no basis for the recall, withdrawal
or suspension of any approval by any governmental authority with
respect to any product sold or proposed to be sold by Orion.
None of Orion's products is subject to any recall proceedings and
to the best of its knowledge no such proceedings have been
threatened. No product of Orion has ever been recalled.
2.24 Brokers and Finders. Neither Orion nor Thermedics has
employed any broker, agent or finder or incurred any liability on
behalf of Orion or for any brokerage fees, agents' commissions or
finders' fees in connection with the transactions contemplated
hereby.
2.25 Powers of Attorney. Orion has no powers of attorney
or similar authorizations outstanding.
2.26 No Termination of Relationship. As of the date hereof,
Thermedics and Orion are unaware, and have no reason to expect,
that any relationship between Orion and a distributor, customer,
supplier, lender, employee or other person will be terminated or
adversely affected as a result of the Merger.
2.27 All Information. Detection has been furnished in
writing prior to the execution of this Agreement all information
as to the Business of Orion material to a reasonable buyer's
determination to enter into this Agreement and to consummate the
transactions contemplated hereby.
2.28 Statements True and Correct. The statements contained
herein or in any written documents prepared and delivered by or
on behalf of Thermedics or Orion pursuant to the terms hereof are
true, complete and correct in all material respects, and such
documents do not omit any material fact required to be stated
herein or therein or necessary to make the statements contained
herein or therein not misleading.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF
DETECTION AND ACQUISITION
Detection and Acquisition, jointly and severally, represent
and warrant to Thermedics and Orion as follows.
3.1 Organization. Each of Detection and Acquisition is a
corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation and has full
corporate power and authority to own, lease and operate its
assets and to carry on its business as now being and as
heretofore conducted. All outstanding shares of Acquisition
capital stock are owned by Detection, free and clear of any
charges, liens, encumbrances, security interests or adverse
claims.
PAGE
3.2 Authority. Each of Detection and Acquisition has full
right, power, capacity and authority to execute, deliver and
perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of
this Agreement, the filing of the Articles of Merger and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on
the part of Detection and Acquisition. This Agreement has been
duly and validly executed and delivered by each of Detection and
Acquisition and constitutes the valid and binding obligation of
Detection and Acquisition, enforceable against them in accordance
with the terms hereof. Neither the execution, delivery and
performance of this Agreement, the filing of the Articles of
Merger nor the consummation of the transactions contemplated
hereby will (i) conflict with or result in a violation, breach,
termination or acceleration of, or default under (or would result
in a violation, breach, termination, acceleration or default with
the giving of notice or passage of time, or both) any of the
terms, conditions or provisions of the Articles of Organization
or By-laws of Detection, as amended, or Articles of Organization
or By-laws of Acquisition, as amended, or of any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation to which either Detection or Acquisition is a party or
by which Detection or Acquisition or any of their respective
properties or assets may be bound or affected; (ii) result in the
violation of any order, writ, injunction, decree, statute, rule
or regulation applicable to Detection or Acquisition or any of
their respective properties or assets; or (iii) result in the
imposition of any lien, encumbrance, charge or claim upon any of
Detection's or Acquisition's assets. Except for the filing of
the Articles of Merger and the listing of the Detection Shares
for trading on the AMEX, no consent or approval by, or
notification to or filing with, any court, governmental authority
or third party is required in connection with the execution,
delivery and performance of this Agreement by Detection and
Acquisition or the consummation of the transactions contemplated
hereby.
3.3 Statements True and Correct. The statements contained
herein or in any written documents prepared and delivered by or
on behalf of Detection or Acquisition pursuant to the terms
hereof are true, complete and correct in all material respects,
and such documents do not omit any material fact required to be
stated herein or therein or necessary to make the statements
contained herein or therein not misleading.
SECTION 4 - COVENANTS AND AGREEMENTS
4.1 Conduct of Business. Except with the prior written
consent of Detection, which will not be unreasonably withheld or
delayed, and except as otherwise contemplated herein, during the
period from the date hereof to the Effective Time, Thermedics and
PAGE
Orion shall observe the following covenants:
(a) Affirmative Covenants Pending Closing. Thermedics
and Orion shall:
(i) Preservation of Personnel. Use all reasonable
efforts to preserve intact Orion's business organization and
keep available the services of Orion's present employees, in
each case in accordance with past practice, it being
understood that Orion's termination of employees with poor
performance ratings shall not constitute a violation of this
covenant;
(ii) Insurance. Use all reasonable efforts to
keep in effect casualty, public liability, worker's
compensation and other insurance policies applicable to
Orion in coverage amounts not less than those in effect at
the date of this Agreement;
(iii) Preservation of the Business; Maintenance
of Properties. Use all reasonable efforts to preserve the
Business of Orion, advertise, promote and market its
products and services in accordance with past practices over
the last twelve months, keep its properties intact, preserve
its goodwill, maintain all physical properties in such
operating condition as will permit the conduct of Orion's
business on a basis consistent with past practice;
(iv) Intellectual Property Rights. Use all
reasonable efforts to preserve and protect Orion's
Proprietary Rights; and
(v) Ordinary Course of Business. Operate Orion's
business solely in the ordinary course.
(b) Negative Covenants Pending Closing. Thermedics
and Orion will not:
(i) Disposition of Assets. Sell or transfer, or
mortgage, pledge or create or permit to be created any lien
on, any of Orion's assets other than sales or transfers in
the ordinary course of business or the creation of liens
under existing arrangements disclosed hereunder and liens
permitted under Section 2.8;
(ii) Liabilities. Permit Orion to (A) incur
any obligation or liability other than in the ordinary
course of business, (B) incur any indebtedness for borrowed
money in excess of $100,000 or (C) enter into any contracts
or commitments involving payments by Orion of $100,000 or
more other than purchase orders and commitments for
inventory, materials and supplies in the ordinary course of
business;
PAGE
(iii) Compensation. Except as required by
applicable law or any existing employment or severance
agreement, (A) change the compensation or fringe benefits of
any Orion officer, director, employee or agent, except for
ordinary merit increases for employees other than officers
based on periodic reviews in accordance with past practices,
or (B) enter into or modify any employment, severance or
other agreement with any officer, director or employee of
Orion or any benefit plan (it being understood that Orion's
hiring of at will employees in the ordinary course of
business shall not constitute a violation of this covenant)
or (C) enter into or modify any agreement with any
consultant, except for agreements terminable upon not more
than one year's notice that are consistent with Orion's past
practices with respect to consulting agreements.
(iv) Capital Stock. Make any change in the
number of shares of Orion's capital stock authorized, issued
or outstanding or grant any option, warrant or other right
to purchase, or to convert any obligation into, shares of
Orion's capital stock, or declare or pay any dividend or
other distribution with respect to any shares of Orion's
capital stock, or sell or transfer any shares of its capital
stock;
(v) Charter and By-Laws. Amend the Articles of
Organization or By-laws of Orion;
(vi) Acquisitions. Make any material
acquisition of property other than in the ordinary course of
the Business of Orion; or
(vii) License Agreements. Enter into or modify
any license, technology development or technology transfer
agreement between Orion and any other person or entity.
4.2 Corporate Examinations and Investigations. Prior to
the Effective Time, Detection shall be entitled, through its
employees and representatives, to have such access to the assets,
properties, business and operations of Orion, as is reasonably
necessary or appropriate in connection with its investigation of
Orion with respect to the transaction contemplated hereby. Any
such investigation and examination shall be conducted at
reasonable times and under reasonable circumstances so as to
minimize any disruption to or impairment of Orion's business and
each party shall cooperate fully therein. No investigation by
Detection shall diminish or obviate any of the representations,
warranties, covenants or agreements of Thermedics or Orion
contained in this Agreement. In order that Detection may have
full opportunity to make such investigation, Thermedics and Orion
shall furnish the representatives of Detection with all such
information and copies of such documents concerning its affairs
as Detection may reasonably request and cause their officers,
employees, consultants, agents, accountants and attorneys to
PAGE
cooperate fully with Detection's representatives in connection
with such investigation.
4.3 Expenses. Whether or not the Merger is consummated,
Detection, Thermedics and Orion shall bear their respective
expenses incurred in connection with the preparation, execution
and performance of this Agreement and the transactions
contemplated hereby, including without limitation, all fees and
expenses of agents, representatives, counsel and accountants.
4.4 Authorization from Others. Prior to the Effective
Date, the parties shall use all reasonable efforts to obtain all
authorizations, consents and permits of others required to permit
the consummation of the transactions contemplated by this
Agreement.
4.5 Consummation of Agreement. Each party shall use all
reasonable efforts to perform and fulfill all conditions and
obligations to be performed and fulfilled by it under this
Agreement and to ensure that to the extent within its control or
capable of influence by it, no breach of any of its respective
representations, warranties and agreements hereunder occurs or
exists on or prior to the Effective Time, all to the end that the
transactions contemplated by this Agreement shall be fully
carried out in a timely fashion.
4.6 Further Assurances. Each of the parties shall execute
such documents, further instruments of transfer and assignment
and other papers and take such further actions as may be
reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby.
4.7 Tax-Free Reorganization. Detection, Acquisition,
Thermedics and Orion agree that no party shall take any action
directly or indirectly that would prevent the Merger from
qualifying as a tax-free reorganization under Section 368(a) of
the Code.
4.8 Listing of Shares. Promptly after the Effective Date,
Detection shall take all action necessary in accordance with
applicable law to convene a meeting of its stockholders to be
held for the purpose of approving the listing of the Detection
Shares for trading upon AMEX in accordance with Section 712 of
AMEX's Listing Standards, Policies and Requirements. Orion
acknowledges and agrees that such meeting may be held subsequent
to Detection's 1998 annual meeting. In connection with such
meeting, Detection's Board of Directors shall recommend to the
Detection stockholders the approval of the listing of the
Detection Shares pursuant to this Agreement. Detection shall use
all reasonable efforts to obtain all votes and approvals of the
Detection stockholders necessary for the listing of the Detection
Shares and all related matters under the BCLM, and its Articles
of Organization and By-laws. Thermedics hereby agrees to vote
all of the shares of Detection Common Stock held by it as of the
PAGE
record date of any such meeting in favor of the listing of the
Detection Shares and all such related matters.
4.9 Public Announcements and Confidentiality. Any press
release or other information to the press or any third party with
respect to this Agreement or the transactions contemplated hereby
shall require the prior approval of Detection and Orion, which
approval shall not be unreasonably withheld, provided that a
party shall not be prevented from making such disclosure as it
shall be advised by counsel is required by law.
4.10 No Solicitation. Thermedics and Orion will not (i)
solicit or initiate discussions with any person, other than
Detection, relating to the possible acquisition of Orion or all
or a material portion of the assets or any of the capital stock
of Orion or any merger or other business combination with Orion
(an "Acquisition Transaction") or (ii) except to the extent
reasonably required by fiduciary obligations under applicable law
as advised by legal counsel, participate in any negotiations
regarding, or furnish to any other person information with
respect to, any effort or attempt by any other person to do or to
seek any Acquisition Transaction. Thermedics and Orion agree to
inform Detection within one business day of its receipt of any
offer, proposal or inquiry relating to any Acquisition
Transaction.
4.11 Indemnification.
(a) Right to Indemnification. Detection and
Thermedics (as the case may be, the "Indemnitee") shall be
indemnified on its respective demand made to the other (the
"Indemnitor") for the full amount of all damages (as defined
below) suffered by it as a direct or indirect result of:
(i) the inaccuracy of any representation or
warranty made by the Indemnitor in or pursuant to this
Agreement; and
(ii) any failure by the Indemnitor to perform
any obligation or comply with any covenant or agreement
specified in this Agreement.
For the purpose of this Section 4.11, (a) references to Detection
shall be deemed to mean Detection and Acquisition; (b) the term
"damages" shall be determined and computed by reference to the
effect of the compensable event on the Indemnitee, and shall be
deemed to include (i) all losses, liabilities, expenses or costs
incurred by the Indemnitee, including reasonable attorneys' fees,
and (ii) interest at a rate per annum equal to that announced
from time to time by BankBoston as its "base rate" (or the legal
rate of interest, if lower) from the date 30 days after notice of
any such claim for indemnification is given to the Indemnitor, or
if an unliquidated claim, from such later date as the claim is
liquidated, to the date full indemnification is made therefor;
PAGE
and (c) damages shall not include any amounts for which the
Indemnitee actually receives payment under an insurance policy,
excluding self-insured amounts and deductible amounts.
(b) Indemnification Procedures. The Indemnitee shall
give the Indemnitor notice of any claim, action or proceeding by
a third party which is reasonably likely to result in a claim for
indemnification under this Section 4.11. The Indemnitor shall
have the right, at its expense, to defend, contest, protest,
settle and otherwise control the resolution of any such claim,
action or proceeding. The Indemnitee shall have the right to
participate in any such legal proceeding, subject to the
Indemnitor's right of control thereof, at the expense of the
Indemnitee and with counsel selected by the Indemnitee.
(c) Limitations on Indemnification. Detection's and
Thermedics' rights to be indemnified pursuant to Section 4.11
shall survive the Effective Date of this Agreement indefinitely.
4.12 Participation in Employee Benefit Plans. Thermedics
and Orion will take whatever actions may be required to continue
in effect without interruption the participation of Orion in the
employee benefit plans in which Orion is participating as of the
Effective Date, until such time as Orion may choose not to
participate in those plans.
4.13 Certain Tax Matters.
(a) Allocation of Certain Taxes. In the case of any
Tax that is attributable to a taxable period which begins before
the Effective Date and ends after the Effective Date, the amount
of Taxes attributable to the period prior to the Effective Date
(the _Pre-Effective Period_) and the period subsequent to the
Effective Date (the _Post-Effective Period_) shall be determined
as follows:
(i) Thermedics and Detection agree that if Orion
is permitted but not required under applicable foreign,
state or local Tax laws to treat the Effective Date as the
last day of a taxable period, Thermedics and Detection shall
treat such day as the last day of a taxable period.
(ii) Except to the extent provided in clause
(i) of this subsection 4.13(a), in the case of ad valorem
Taxes imposed on Orion and franchise or similar Taxes
imposed on Orion based on capital (including net worth or
long-term debt) or number of shares of stock authorized,
issued or outstanding, such Taxes shall be allocated between
the Pre-Effective Period and the Post-Effective Period based
upon the respective number of days in each such period.
(iii) Except to the extent provided in clauses
(i) and (ii) of this subsection 4.13(a), all other Taxes
shall be allocated between the Pre-Effective Period and the
PAGE
Post-Effective Period based upon an interim closing of the
books of Orion as of the end of the day of the Effective
Date, and the computation of the Tax for each resulting
period as if the period were a separate taxable period;
provided, however, that in no event shall the hypothetical
Tax for any period be less than zero.
(b) Tax Sharing Agreements. Any Tax sharing agreement
between Orion and Thermedics or any other related corporation
shall be terminated as of the Effective Date and, after the
Effective Date, Orion shall not be bound thereby or have any
liability thereunder.
(c) Waivers of Carrybacks. Orion and Thermedics
agree, to the maximum extent permitted, to elect to waive the
carryback of any loss, credit or deduction incurred in or
attributable to any taxable period (or portion thereof) after the
Effective Date to any taxable period (or portion thereof) prior
to the Effective Date.
SECTION 5 - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
DETECTION AND ACQUISITION TO CONSUMMATE THE MERGER
The obligation of Detection and Acquisition to consummate
the Merger is subject to the satisfaction or waiver, at or before
the Effective Time, of the following conditions:
5.1 Representations, Warranties and Covenants. The
representations and warranties of Thermedics and Orion contained
in this Agreement shall be true and correct in all material
respects on and as of the Effective Time with the same force and
effect as though made on and as of the Effective Time (with such
exceptions as may be permitted under or contemplated by this
Agreement) and there shall not have been any material adverse
change in the Business of Orion since the date hereof.
Thermedics and Orion shall have performed and complied in all
material respects with all covenants and agreements required by
this Agreement to be performed or complied with by them on or
prior to the Effective Time and shall have obtained all required
consents and approvals. Thermedics and Orion shall have
delivered to Detection a certificate, dated the Effective Time,
to the foregoing effect.
5.2 Articles of Merger. Orion shall have executed and
delivered the Articles of Merger.
5.3 Certificates. Thermedics and Orion shall have
furnished Detection and Acquisition with such certificates of
public officials and of Thermedics and Orion officers as may be
reasonably requested by Detection and Acquisition.
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATION OF
PAGE
THERMEDICS AND ORION TO CONSUMMATE THE MERGER
The obligation of Thermedics and Orion to consummate the
Merger is subject to the satisfaction or waiver, at or before the
Effective Time, of the following conditions:
PAGE
6.1 Representations, Warranties and Covenants. The
representations and warranties of Detection and Acquisition
contained in this Agreement shall be true and correct in all
material respects on and as of the Effective Time with the same
force and effect as though made on and as of the Effective Time
(with such exceptions as may be permitted under or contemplated
by this Agreement) and there shall not have been any material
adverse change in the Business of Detection since the date
hereof. Detection shall have performed and complied in all
material respects with all covenants and agreements required by
this Agreement to be performed or complied with by it on or prior
to the Effective Time and shall have obtained all required
consents and approvals. Detection and Acquisition shall have
delivered to Orion a certificate, dated the Effective Time, to
the foregoing effect.
6.2 Articles of Merger. Acquisition shall have executed
and delivered the Articles of Merger.
6.3 Certificates. Detection and Acquisition shall have
furnished Thermedics and Orion with such certificates of public
officials and of Detection and Acquisition officers as may be
reasonably requested by Thermedics and Orion.
SECTION 7 - TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time as follows:
(a) by Thermedics upon written notice to Detection if
Detection or Acquisition has materially breached any
representation, warranty, covenant or agreement contained herein
and has not cured such breach within ten (10) business days of
receipt of written notice from Thermedics;
(b) by Detection upon written notice to Thermedics if
Thermedics or Orion has materially breached any representation,
warranty, covenant or agreement contained herein and has not
cured such breach within ten (10) business days of receipt of
written notice from Detection;
(c) by either party if any court of competent
jurisdiction or United States governmental body shall have issued
an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Merger and such order,
decree or ruling shall have become final and nonappealable; or
(d) at any time with the written consent of Thermedics
and Detection.
7.2 Effect of Termination. If this Agreement is
terminated as provided in Section 7.1, this Agreement shall
PAGE
forthwith become void and have no effect, without liability on
the part of any party, its directors, officers or stockholders,
other than the provisions of this Section 7.2, Section 4.3
relating to expenses and Section 4.9 relating to publicity and
confidentiality to the extent provided therein. Nothing
contained in this Section 7.2 shall relieve any party from
liability for any breach of this Agreement occurring before such
termination.
7.3 Amendment. This Agreement may not be amended except
by an instrument signed by each of the parties hereto.
7.4 Waiver. At any time, any party hereto may (a) extend
the time for the performance of any of the obligations or other
acts of any other party hereto or (b) waive compliance with any
of the agreements of any other party or any conditions to its own
obligations, in each case only to the extent such obligations,
agreements and conditions are intended for its benefit; provided
that any such extension or waiver shall be binding upon a party
only if such extension or waiver is set forth in a writing
executed by such party.
SECTION 8 - MISCELLANEOUS
8.1 Notices. All notices, requests, demands, consents and
other communications which are required or permitted hereunder
shall be in writing, and shall be deemed given when actually
received or if earlier, one day after deposit with a nationally
recognized air courier or express mail, charges prepaid or three
days after deposit in the U.S. mail by certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to Detection or Acquisition:
Thermedics Detection Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
With a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
If to Thermedics or Orion:
Thermedics Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
PAGE
With a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
or to such other address as any party hereto may designate in
writing to the other parties, specifying a change of address for
the purpose of this Agreement.
8.2 Survival and Materiality of Representations. Each of
the representations, warranties and agreements made by the
parties hereto shall be deemed material and shall survive the
Effective Date and the consummation of the transactions
contemplated hereby. All statements contained in any certificates
or other instruments delivered by or on behalf of the
parties pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed material and shall constitute
representations and warranties by the person making such
statement.
8.3 Entire Agreement. This Agreement, including the
exhibits, the Orion Disclosure Schedule and the other documents
referred to herein, supersedes any and all oral or written
agreements or understandings heretofore made relating to the
subject matter hereof and constitutes the entire agreement of the
parties relating to the subject matter hereof.
8.4 Parties in Interest. All covenants and agreements,
representations and warranties contained in this Agreement made
by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the parties hereto, and their respective
successors, assigns, heirs, executors, administrators and
personal representatives, whether so expressed or not.
8.5 No Implied Rights or Remedies. Except as otherwise
expressly provided herein, nothing herein expressed or implied is
intended or shall be construed to confer upon or to give any
person, firm or corporation, other than the parties hereto, any
rights or remedies under or by reason of this Agreement.
8.6 Headings. The headings in this Agreement are inserted
for convenience of reference only and shall not be a part of or
control or affect the meaning hereof.
8.7 Severability. If any provision of this Agreement
shall be declared void or unenforceable by any judicial or
administrative authority, the validity of any other provision
shall not be affected thereby.
8.8 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original,
PAGE
but all of which together shall constitute one and the same
instrument.
8.9 Further Assurances. Thermedics and Orion will execute
and furnish to Detection and Acquisition all documents and will
do or cause to be done all other things that Detection may
reasonably request from time to time in order to give full effect
to this Agreement and to effectuate the intent of the parties.
8.10 Governing Law. This Agreement shall be governed by
the law of the Commonwealth of Massachusetts applicable to
agreements made and to be performed wholly within such
jurisdiction, without regard to the conflicts of laws provisions
thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the date first written above.
THERMEDICS DETECTION INC. ORION ACQUISITION INC.
By: /s/Xxxxx Xxxxxxxxxx By: Xxxx X. Xxxx
Name: Xxxxx Xxxxxxxxxx Name: /s/ Xxxx X. Xxxx
Title: President Title: President
THERMEDICS INC. ORION RESEARCH INC.
By: /s/ Xxxx X. Xxxxxx By: Xxxxx Xxxxxxxxxx
Name: Xxxx X. Xxxxxx Name:
/s/ Xxxxx Xxxxxxxxxx
Title: President Title: President
