-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J/6kDdwb1BOaS4t8sma3OHw6jyEApU554xchB/FLt0wxGdom4paMg6prCFE3jzyw T7jQe744ebwXGgQ5b4Mygg== 0000796038-95-000027.txt : 19951215 0000796038-95-000027.hdr.sgml : 19951215 ACCESSION NUMBER: 0000796038-95-000027 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19951208 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19951214 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMO PROCESS SYSTEMS INC CENTRAL INDEX KEY: 0000796038 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 042925807 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09549 FILM NUMBER: 95601593 BUSINESS ADDRESS: STREET 1: 12068 MARKET ST CITY: LIVONIA STATE: MI ZIP: 48150 BUSINESS PHONE: 6176221000 MAIL ADDRESS: STREET 1: 81 WYMAN STREET CITY: WALTHAM STATE: MA ZIP: 02254 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 8, 1995 ________________________________________ THERMO PROCESS SYSTEMS INC. (Exact name of Registrant as specified in its charter) Delaware 1-9549 04-2925807 (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification Number) incorporation or organization) 81 Wyman Street 02254 Waltham, Massachusetts (Zip Code) (Address of principal executive offices) (617) 622-1000 (Registrant's telephone number including area code) PAGE Item 2. Acquisition or Disposition of Assets ------------------------------------ On December 8, 1995, Thermo Process Systems Inc., through its Thermo Remediation Inc. subsidiary ("Thermo Remediation"), acquired all of the issued and outstanding capital stock of Remediation Technologies, Inc. ("RETEC") for a combination of cash and securities having an aggregate value of approximately $29.7 million. The purchase price consisted of approximately $18.5 million in cash and units consisting of (i) 227,250 shares of Thermo Remediation's common stock and (ii) warrants to purchase 75,750 additional shares of Thermo Remediation's common stock at an exercise price of $14.85 per share, such units having an aggregate value of approximately $3.7 million. In addition, Thermo Remediation assumed outstanding RETEC stock options and converted such options into options to purchase up to 897,000 shares of Thermo Remediation's common stock. As converted, such options have a weighted average exercise price of $4.24 per share and were valued in the aggregate at approximately $7.5 million. RETEC, based in Concord, Massachusetts, is an integrated environmental services firm, with 15 offices nationwide, that focuses primarily on the remediation of former and active industrial sites contaminated with organic wastes and residues. RETEC recorded revenues of approximately $39 million in the fiscal year ended December 31, 1994. The acquisition was made pursuant to an Agreement and Plan of Merger dated as of December 1, 1995 (the "Merger Agreement), among Thermo Remediation, TRI Acquisition Inc., a wholly owned subsidiary of Thermo Remediation ("Acquisition") and RETEC. Under the terms of the Merger Agreement, which became effective on December 8, 1995, (i) Acquisition merged with and into RETEC, (ii) outstanding shares of RETEC's common stock were canceled and converted into the right to receive the purchase price, (iii) each outstanding share of Acquisition's common stock was canceled and converted into one share of the common stock of RETEC, and (iv) RETEC became a wholly owned subsidiary of Thermo Remediation. The consideration paid for RETEC was based on Thermo Remediation's determination of the fair market value of RETEC's business, and the terms of the merger agreement were determined by arms' length negotiation among the parties. Thermo Remediation has no present intention to use RETEC's assets for purposes materially different from the purposes for which such assets were used prior to the acquisition. However, Thermo Remediation will review RETEC's business and assets, corporate structure, capitalization, operations, properties, policies, management and personnel and, upon completion of this review, may develop alternative plans or proposals, including mergers, transfers of a material amount of assets or other transactions or changes relating to such business. 2 PAGE Item 7. Financial Statements, Pro Forma Combined Condensed Financial ------------------------------------------------------------ Information and Exhibits ------------------------ (a) Financial Statements of Business Acquired: as it is impracticable to file such information at this time, it will be filed by amendment on or prior to February 21, 1996. (b) Pro Forma Combined Condensed Financial Information: as it is impracticable to file such information at this time, it will be filed by amendment on or prior to February 21, 1996. (c) Exhibits 2(a) Agreement and Plan of Merger dated as of the 1st day of December, 1995, by and among Thermo Remediation Inc., TRI Acquisition Inc. and Remediation Technologies, Inc. Schedules and exhibits to the agreement (each of which are identified in the agreement) are omitted in reliance on Rule 601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish such schedules and exhibits to the Commission supplementally upon request. 2(b) Escrow Agreement dated as of the 1st day of December, 1995, by and among Thermo Remediation Inc., Robert W. Dunlap and Thomas M. Zimmer, as Indemnification Representatives, and State Street Bank & Trust Company, as Escrow Agent. 2(c) Form of Non-Negotiable Common Stock Purchase Warrant 3 PAGE SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on this 13th day of December, 1995. THERMO PROCESS SYSTEMS INC. By: /s/ John P. Appleton John P. Appleton President and Chief Executive Officer 4 EX-2 2 EXHIBIT 2(a) AGREEMENT AND PLAN OF MERGER Agreement entered into as of December 1, 1995 by and among Thermo Remediation, Inc., a Delaware corporation (the "Buyer"), TRI Acquisition Inc., a Delaware corporation and a wholly-owned subsidiary of the Buyer (the "Transitory Subsidiary"), and Remediation Technologies, Inc., a Delaware corporation (the "Company"). The Buyer, the Transitory Subsidiary and the Company are referred to collectively herein as the "Parties." This Agreement contemplates a taxable merger of the Transitory Subsidiary into the Company. In such merger, the stockholders of the Company will receive cash and, if they file an election as set forth herein, capital stock of the Buyer in exchange for their capital stock of the Company. Now, therefore, in consideration of the representations, warranties and covenants herein contained, the Parties agree as follows. ARTICLE I THE MERGER 1.1 The Merger. Upon and subject to the terms and conditions of this Agreement, the Transitory Subsidiary shall merge with and into the Company (with such merger referred to herein as the "Merger") at the Effective Time (as defined below). From and after the Effective Time, the separate corporate existence of the Transitory Subsidiary shall cease and the Company shall continue as the surviving corporation in the Merger (the "Surviving Corporation"). The "Effective Time" shall be the time at which the Company and the Transitory Subsidiary file the certificate of merger or other appropriate documents prepared and executed in accordance with the relevant provisions of the Delaware General Corporation Law (the "Certificate of Merger") with the Secretary of State of the State of Delaware, or such later time as shall be agreed to by the Buyer and the Company and be specific in said Certificate of Merger. The Merger shall have the effects set forth in Section 259 of the Delaware General Corporation Law. 1.2 The Closing. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Hale and Dorr in Boston, Massachusetts, commencing at 1:00 p.m. local time on December 8, 1995, or, if all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby have not been satisfied or waived by such date, on such mutually agreeable later date as soon as practicable after the satisfaction or PAGE waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (the "Closing Date"). 1.3 Actions at the Closing. At the Closing, (a) the Company shall deliver to the Buyer and the Transitory Subsidiary the various certificates, instruments and documents referred to in Section 5.2, (b) the Buyer and the Transitory Subsidiary shall deliver to the Company the various certificates, instruments and documents referred to in Section 5.3, (c) the Company and the Transitory Subsidiary shall file with the Secretary of State of the State of Delaware the Certificate of Merger and (d) the Buyer, the Indemnification Representatives (as defined therein) and the Escrow Agent (as defined therein) shall execute and deliver the Escrow Agreement attached hereto as Exhibit A (the "Escrow Agreement") and the Buyer shall deliver to the Escrow Agent a bank check or funds by wire transfer in the aggregate amount of the Cash Consideration (as defined below) to be placed in escrow on the Closing Date pursuant to Section 1.11. 1.4 Additional Action. The Surviving Corporation may, at any time after the Effective Time, take any action, including executing and delivering any document, in the name and on behalf of either the Company or the Transitory Subsidiary, in order to consummate the transactions contemplated by this Agreement. 1.5 Conversion of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holder of any of the following securities: (a) Subject to Section 1.8 below, each share of Series A Common Stock, $.01 par value per share ("Series A Shares") and each share of Series B Common Stock, $.01 par value per share ("Series B Shares"), of the Company (collectively, "Company Shares") as to which an election has been made in accordance with Section 1.7 below and has not been revoked (the "Unit Election Shares") shall be converted into and shall represent the right to receive that fraction of a Unit (as defined below) determined by dividing the Outstanding Company Share Value (as defined below) by the Unit Value (as defined below). (b) Subject to Section 1.6 below, each Series A Share and each Series B Share other than the Unit Election Shares issued and outstanding immediately prior to the Effective Time (other than Company Shares owned beneficially by the Buyer or the Transitory Subsidiary, Dissenting Shares (as defined below) and Company Shares held in the Company's treasury) shall be converted into and shall represent the right to receive an amount of cash equal to the Outstanding Company Share Value. (c) For purposes of this Agreement: 2 PAGE (i) "Buyer Common Stock" shall mean shares of common stock, par value $.01 per share, of the Buyer; (ii) "Buyer Warrants" shall mean a warrant to acquire one share of Buyer Common Stock in the form attached hereto as Exhibit B; (iii) "Cash Consideration" shall mean $18,523,660; (iv) "Merger Consideration" shall mean the Cash Consideration and the Merger Units; (v) "Merger Units" shall mean 75,750 Units to be issued hereunder in the Merger; (vi) "Outstanding Company Share Value" shall mean the amount determined by dividing (A) the sum of the Cash Consideration and the aggregate Unit Value of the Merger Units, by (B) the number of Company Shares issued and outstanding immediately prior to the Effective Time (other than Company Shares owned beneficially by the Buyer or the Transitory Subsidiary and Company Shares held in the Company's treasury); and (vii) "Unit" shall mean a unit comprised of three shares of Buyer Common Stock and one Buyer Warrant; and (viii) "Unit Value" shall mean $49.00. (d) The number of Merger Units and the Unit Value shall be subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock between the date of this Agreement and January 3, 1996. (e) Each Company Share held in the Company's treasury immediately prior to the Effective Time and each Company Share owned beneficially by the Buyer or the Transitory Subsidiary shall be cancelled and retired without payment of any consideration therefor. (f) Each share of common stock, $.01 par value per share, of the Transitory Subsidiary issued and outstanding immediately prior to the Effective Time shall be converted into and thereafter evidence one share of common stock, $.01 par value per share, of the Surviving Corporation. (g) All of the Merger Units and all of the Cash Consideration shall initially be deposited in escrow. The Cash Consideration shall be deposited by the Buyer into escrow at the Closing. The Merger Units shall be issued by the Buyer, and shall be deposited by the Buyer into escrow on, but not before, January 3, 1996. Stockholders of record of the Company 3 PAGE immediately prior to the Effective Time ("Company Stockholders") shall be entitled to receive the Merger Consideration out of escrow on or after January 5, 1996, as set forth in the Escrow Agreement. 1.6 Dissenting Shares. (a) For purposes of this Agreement, "Dissenting Shares" means Company Shares held of record immediately prior to the Effective Time by a Company Stockholder who has not executed a written consent in favor of the adoption of this Agreement and the Merger (which such written consent in favor shall be deemed to have been given if a Form of Election is made in accordance with Section 1.7 below) and with respect to which appraisal shall have been duly demanded and perfected in accordance with Section 262 of the Delaware General Corporation Law and not effectively withdrawn or forfeited. Dissenting Shares shall not be converted into or represent the right to receive the Merger Consideration, unless such Company Stockholder shall have forfeited his right to appraisal under the Delaware General Corporation Law or effectively withdrawn his demand for appraisal. If such Company Stockholder has so forfeited or withdrawn his right to appraisal of Dissenting Shares, then (i) as of the occurrence of such event, such holder's Dissenting Shares shall cease to be Dissenting Shares and shall be converted into and represent the right to receive an amount of cash payable in respect of such Company Shares pursuant to Section 1.5(b), and (ii) promptly following the occurrence of such event, the Buyer shall deliver to the Escrow Agent under the Escrow Agreement (and, if the Escrow Agent has made a distribution to Company Stockholders in accordance with the terms of the Escrow Agreement, to the holders as appropriate) the cash payment to which such holder is entitled pursuant to Section 1.5(b). Any amount delivered to the Escrow Agent under this Section 1.6(a) shall be considered part of the Escrow Fund for all purposes of this Agreement. (b) Within two (2) business days of the effectiveness of any written consent of Company Stockholders approving the Merger and this Agreement, the Company shall send written notice of such approval to those Company Stockholders as required by Section 228 of the Delaware General Corporation Law. (c) The Company shall give the Buyer (i) prompt notice of any written demands for appraisal of any Company Shares, withdrawals of such demands, and any other instruments that relate to such demands received by the Company and (ii) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the Delaware General Corporation Law. The Company shall not, except with the prior written consent of the Buyer or as ordered by the Court, make any payment with respect to any demands for appraisal of Company Shares or offer to settle or settle any such demands. 4 PAGE 1.7 Procedure for Unit Election. (a) At the time of delivery of the Confidential Offering Memorandum/Information Statement provided for by Section 4.3(a) below, the Company will deliver to each holder of record of Company Shares a Unit election form (the "Form of Election"), providing such holder with the option to elect to receive whole (but not fractional) Units with respect to all or any portion of such holder's Company Shares. Any such election shall have been properly made only if duly completed and delivered to Robert W. Dunlap before the Effective Time. Any Form of Election may be revoked by the person submitting the same only by written notice received by Robert W. Dunlap prior to the Effective Time. In addition, all Forms of Election shall automatically be revoked if this Agreement is terminated for any reason. If a Form of Election is revoked, the certificate or certificates representing Company Shares ("Certificates") to which such Form of Election relates shall be promptly returned to the person submitting the same. The Company may determine whether or not any Form of Election has been properly made or revoked pursuant to this Section 1.7, and any such determination shall be conclusive and binding. If the Buyer determines that any Form of Election was not properly or timely made, the Company Shares covered thereby shall not be treated as Unit Election Shares, and shall be converted in the Merger as provided in Section 1.5(b) hereof. (b) The filing of a form of Election shall be deemed for all purposes (including without limitation the ability to seek appraisal rights under Section 262 of the Delaware General Corporation Law) to constitute a written consent in favor of the Merger and this Agreement. 1.8 Procedure for Proration. If the aggregate number of Company Shares for which Forms of Election have been filed and not revoked pursuant to Section 1.7 would not convert into a whole number of Units equal to the Merger Units, then each Company Stockholder filing a Form of Election shall be deemed to have filed (without any additional action on the part of the Company or such holder) a Form of Election with respect to that number of Unit Election Shares determined by multiplying (i) the number of Merger Units, by (ii) a fraction of which the numerator shall be the number of Unit Election Shares owned by such holder and the denominator shall be the aggregate number of Unit Election Shares owned by all Company Stockholders filing a Form of Election, rounded up or down as appropriate (as determined by the Buyer) so that the number of Unit Election Shares convert into the next higher or lower number of whole Units. 1.9 Exchange of Shares (a) Each holder of a Certificate, upon proper surrender thereof to the Buyer, shall be entitled to receive in exchange therefor (subject to any taxes required to be withheld 5 PAGE and in accordance with the procedures set forth in the Escrow Agreement) a pro rata share of the Merger Consideration issuable pursuant to Section 1.5. Until properly surrendered, each such Certificate shall be deemed for all purposes to evidence only the right to receive a portion of the Merger Consideration. Holders of Certificates shall not be entitled to receive Merger Consideration out of escrow until the later of (i) January 5, 1996 and (ii) the date such Certificates have been surrendered to the Buyer. The Buyer will notify the Escrow Agent of those Company Stockholders that have tendered Certificates (or Affidavits pursuant to Section 1.9(b) below). The Buyer shall transmit certificates representing Buyer Common Stock and Buyer Warrants representing the Merger Units within 5 business days of any request by the Escrow Agent. (b) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed, the Buyer shall issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration issuable in exchange therefor pursuant to Section 1.5. The Board of Directors of the Buyer will require the owner of such lost, stolen or destroyed Certificate to give the Buyer indemnity against any claim that may be made against the Buyer with respect to the Certificate alleged to have been lost, stolen or destroyed. 1.10 Dividends. No dividends or other distributions payable to the holders of record of Buyer Common Stock on or after the Closing Date and before January 3, 1996 shall be paid to former Company Stockholders in respect of Merger Units (which shall not be issued until January 3, 1996). Dividends or other distributions payable to the holders of record of Buyer Common Stock on or after January 3, 1996 shall not be paid to former Company Stockholders entitled by reason of the Merger to receive Merger Units until such holders surrender their Certificates in accordance with Section 1.9 of the Agreement. Upon such surrender, the Buyer shall pay or deliver to the persons in whose name the certificates representing such Merger Units are issued (including, without limitation, the Escrow Agent) any dividends or other distributions that are payable to the holders of record of Buyer Common Stock on or after January 3, 1996; provided that no such person shall be entitled to receive any interest on such dividends or other distributions. 1.11 Escrow. (a) On the Closing Date, the Buyer shall deliver to the Escrow Agent by check or wire transfer funds in the amount of the Cash Consideration and on, but not before, January 3, 1996 the Buyer shall deliver to the Escrow Agent certificates (issued in the name of the Escrow Agent or its nominee) representing the Buyer Common Stock and the Buyer Warrants comprising the Merger Units, for the purpose of securing the indemnification 6 PAGE obligations set forth in Article VI of the Agreement. The escrowed property shall be held by the Escrow Agent under the Escrow Agreement pursuant to the terms thereof. The escrowed property shall be held as a trust fund and shall not be the subject of any lien, attachment, trustee process or any other judicial process of any creditor of any party, and shall be held and disbursed solely for the purposes and in accordance with the terms of the Escrow Agreement. (b) The adoption of this Agreement and the approval of the Merger by the Company Stockholders shall constitute their approval of and agreement to be bound by the terms of the Escrow Agreement and of all of the arrangements relating thereto, including without limitation the placement of the Merger Consideration in escrow and the appointment of the Escrow Agent and the Indemnification Representatives pursuant to the terms thereof. 1.12 Options and Warrants. (a) As of the Effective Time, all options to purchase Company Shares issued by the Company pursuant to its stock option plans or otherwise ("Options"), whether vested or unvested, shall be assumed by the Buyer. Immediately after the Effective Time, each Option outstanding immediately prior to the Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Option at the Effective Time, such number of shares of Buyer Common Stock as is equal to the number of Company Shares subject to the unexercised portion of such Option multiplied by 2.2298 (the "Conversion Ratio"), with any fraction resulting from such multiplication to be rounded down to the nearest whole number. The exercise price per share of each such assumed Option shall be equal to the exercise price of such Option immediately prior to the Effective Time, divided by the Conversion Ratio, with such quotient rounded up to the nearest whole cent. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Internal Revenue Code of 1986 (as amended, the "Code"), if applicable, and all of the other terms of the Options shall otherwise remain unchanged. As part of the Merger, certain holders of the Options shall be given an opportunity to have their Options converted into Buyer Common Stock upon a conversion ratio equal to 2.5461, in return for executing an Optionee Consent Agreement in the form attached hereto as Exhibit C (an "Optionee Consent Agreement") whereby such holder agrees to participate in the Escrow Agreement and agrees to resale restrictions on shares of Buyer Common Stock acquired upon exercise of such Options. (b) As soon as practicable after the Effective Time, the Buyer or the Surviving Corporation shall deliver to the holders of Options appropriate notices setting forth such holders' rights pursuant to such Options, as amended by this Section 1.12, and the agreements evidencing such Options shall 7 PAGE continue in effect on the same terms and conditions (subject to the amendments provided for in this Section 1.12 and such notice). (c) The Buyer shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Buyer Common Stock for delivery upon exercise of the Options assumed in accordance with this Section 1.12. As soon as practicable following the Effective Time, the Buyer shall file a Registration Statement on Form S-8 (or any successor form) under the Securities Act of 1933 (as amended, the "Securities Act") with respect to all shares of Buyer Common Stock subject to such Options that may be registered on a Form S-8, and shall use its best efforts to maintain the effectiveness of such Registration Statement for so long as such Options remain outstanding. 1.13 Certificate of Incorporation. The Certificate of Incorporation of the Surviving Corporation shall be amended as of the Effective Time so as to read in its entirety as the form annexed hereto as Exhibit D. 1.14 By-laws. The By-laws of the Surviving Corporation shall be the same as the By-laws of the Transitory Subsidiary immediately prior to the Effective Time, except that the name of the corporation set forth therein shall be changed to the name of the Company. 1.15 Directors and Officers. The directors of the Transitory Subsidiary shall become the directors of the Surviving Corporation as of the Effective Time. The officers of the Company shall remain as officers of the Surviving Corporation after the Effective Time, retaining their respective positions. 1.16 No Further Rights. From and after the Effective Time, no Company Shares shall be deemed to be outstanding, and holders of Certificates shall cease to have any rights with respect thereto, except as provided herein or by law. 1.17 Closing of Transfer Books. At the Effective Time, the stock transfer books of the Company shall be closed and no transfer of Company Shares shall thereafter be made. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Exchange Agent, they shall be cancelled and exchanged for Merger Consideration in accordance with Section 1.5, subject to Section 1.11 and to applicable law in the case of Dissenting Shares. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to the Buyer that the statements contained in this Article II are true and correct, except as set forth in the disclosure schedule attached hereto 8 PAGE (the "Disclosure Schedule"). The Disclosure Schedule shall be initialed by the Parties and shall be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Article II, and the disclosures in any paragraph of the Disclosure Schedule shall qualify only the corresponding paragraph in this Article II. 2.1 Organization, Qualification and Corporate Power. The Company is a corporation duly organized, validly existing and in corporate and tax good standing under the laws of the State of Delaware. The Company is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the failure to be so qualified could have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company. The Company has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Company has furnished to the Buyer true and complete copies of its Certificate of Incorporation and By-laws, each as amended and as in effect on the date hereof. The Company is not in default under or in violation of any provision of its Certificate of Incorporation or By-laws. 2.2 Capitalization. The authorized capital stock of the Company consists of (i) 1,875,000 Series A Company Shares, of which 664,698 shares are issued and outstanding and 89,111 shares are held in the treasury of the Company, (ii) 125,000 Series B Company Shares, of which 125,000 shares are issued and outstanding and no shares are held in the treasury of the Company, and (iii) 1,000,000 shares of preferred stock, $.01 par value per share, of which no shares are outstanding or held in the treasury of the Company. Section 2.2 of the Disclosure Schedule sets forth a complete and accurate list of (i) all stockholders of the Company, indicating the type and number of Company Shares held by each stockholder, and (ii) all holders of Options and warrants to purchase Company Shares ("Warrants"), indicating the type and number of shares of Company Shares subject to each Option and Warrant. All of the issued and outstanding Company Shares are, and all Company Shares that may be issued upon exercise of Options and Warrants will be, duly authorized, validly issued, fully paid, nonassessable and free of all preemptive rights. There are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Company is a party or which are binding upon the Company providing for the issuance, disposition or acquisition of any of its capital stock, other than the Options and Warrants listed in Section 2.2 of the Disclosure Schedule. There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Company. There are no agreements, voting trusts, proxies, or understandings with respect to the voting, or registration under the Securities Act, of any Company Shares. All of the issued and outstanding Company Shares were issued in compliance with applicable federal and state securities laws. 9 PAGE 2.3 Authorization of Transaction. The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and, subject to the adoption of this Agreement and the approval of the Merger by a majority of the votes represented by the outstanding Company Shares entitled to vote on this Agreement and the Merger (the "Requisite Stockholder Approval"), the performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly and validly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. 2.4 Noncontravention. Subject to compliance with the applicable requirements of the Securities Act and any applicable state securities laws, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "Hart-Scott-Rodino Act") and the filing of the Certificate of Merger as required by the Delaware General Corporation Law, neither the execution and delivery of this Agreement by the Company, nor the consummation by the Company of the transactions contemplated hereby, will: (a) require on the part of the Company or on the part of RETEC/TETRA, L.C. ("R/T") or any corporation with respect to which the Company, directly or indirectly, has the power to vote or direct the voting of sufficient securities to elect a majority of the directors (any of the foregoing being referred to herein as a "Subsidiary") any filing with, or any permit, authorization, consent or approval of, any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency (a "Governmental Entity"); (b) conflict with or violate any provision of the charter or By-laws of the Company or any Subsidiary; (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest (as defined below) or other arrangement to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of their assets is subject, except real property leases set forth in Section 2.13 of the Disclosure Schedule and written arrangements relating to the projects listed in Section 2.14(a) of the Disclosure Schedule, as to which no representation or warranty is made in this clause (c); (d) result in the imposition of any Security Interest upon any assets of the Company or any Subsidiary; or (e) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, any Subsidiary or any of their properties or assets. 10 PAGE For purposes of this Agreement, "Security Interest" means any mortgage, pledge, security interest, encumbrance, charge, or other lien (whether arising by contract or by operation of law), other than (i) mechanic's, materialmen's, and similar liens, (ii) liens arising under worker's compensation, unemployment insurance, social security, retirement, and similar legislation, and (iii) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business consistent with past custom and practice (including with respect to frequency and amount) ("Ordinary Course of Business") of the Company and not material to the Company. Section 2.4 of the Disclosure Schedule sets forth a true, correct and complete list of all consents and approvals of non-governmental third parties that are required in connection with the consummation by the Company and the Subsidiaries of the transactions contemplated by this Agreement. 2.5 Subsidiaries. Section 2.5 of the Disclosure Schedule sets forth for each Subsidiary (a) its name and jurisdiction of incorporation, (b) the number of shares of authorized capital stock of each class of its capital stock, (c) the number of issued and outstanding shares of each class of its capital stock or the number of partnership interests or limited liability company interests, as applicable, the names of the holders thereof and the number of shares, partnership interests and limited liability company interests held by each such holder, (d) the number of shares of its capital stock held in treasury, and (e) its directors and officers. Each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. Each Subsidiary is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the failure to be so qualified could have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of such Subsidiary. Each Subsidiary has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Company has delivered or made available to the Buyer correct and complete copies of the charter and By-laws of each Subsidiary, as amended to date. No Subsidiary is in default under or in violation of any provision of its charter or By-laws. All of the issued and outstanding shares of capital stock of each Subsidiary are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. All shares of each Subsidiary that are held of record or owned beneficially by either the Company or any Subsidiary are held or owned free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws), claims, Security Interests, options, warrants, rights, contracts, calls, commitments, equities and demands. There are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Company or any Subsidiary is a party or which are binding on any of them providing for the issuance, disposition or 11 PAGE acquisition of any capital stock of any Subsidiary. There are no outstanding stock appreciation, phantom stock or similar rights with respect to any Subsidiary. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of any capital stock of any Subsidiary. The Company does not control directly or indirectly or have any direct or indirect equity participation in any corporation, partnership, trust, or other business association which is not a Subsidiary. 2.6 Reports and Financial Statements. (a) The Company has provided to the Buyer (i) the audited consolidated balance sheets and statements of income, changes in stockholders' equity and cash flows for each of the last five fiscal years for the Company and the Subsidiaries (or such shorter periods as such Subsidiaries have been in existence); and (ii) the unaudited consolidated balance sheet and statements of income, changes in stockholders' equity and cash flows as of and for the quarter ended as of September 30, 1995 (the "Most Recent Fiscal Quarter End"). Such financial statements (collectively, the "Financial Statements") have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods covered thereby, fairly present the financial condition, results of operations and cash flows of the Company and the Subsidiaries as of the respective dates thereof and for the periods referred to therein and are consistent with the books and records of the Company and the Subsidiaries, provided, however, that the Financial Statements referred to in clause (ii) above are subject to normal recurring year-end adjustments (which will not be material) and do not include footnotes. (b) The Company has provided to the Buyer (i) the audited balance sheets and statements of income, changes in stockholders' equity and cash flows for each of the last four fiscal years for R/T (or such shorter periods as R/T has been in existence); and (ii) the unaudited consolidated balance sheet and statements of income, changes in stockholders' equity and cash flows for R/T as of and for the quarter ended as of September 30, 1995 (the "Most Recent Fiscal Quarter End"). Such R/T financial statements (collectively, the "R/T Financial Statements") have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby, fairly present the financial conditions, results of operations and cash flows of R/T as of the respective dates thereof and for the periods referred to therein and are consistent with the books and records of R/T , provided, however, that the R/T Financial Statements referred to in clause (ii) above are subject to normal recurring year-end adjustments (which will not be material) and do not include footnotes. 12 PAGE 2.7 Absence of Certain Changes. Since the Most Recent Fiscal Quarter End, (a) there has not been any material adverse change in the assets, business, financial condition or results of operations of the Company or any Subsidiary, nor has there occurred any event or development which could reasonably be foreseen to result in such a material adverse change in the future, and (b) neither the Company nor any Subsidiary has taken any of the actions set forth in paragraphs (a) through (n) of Section 4.5. 2.8 Undisclosed Liabilities. None of the Company and its Subsidiaries has any liability, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the balance sheets referred to in clause (ii) of Section 2.6 (a) and (b) (the "Most Recent Balance Sheets"), (b) liabilities which have arisen since the Most Recent Fiscal Quarter End in the Ordinary Course of Business and which are similar in nature and amount to the liabilities which arose during the comparable period of time in the immediately preceding fiscal period and (c) contractual liabilities incurred in the Ordinary Course of Business which are not required by GAAP to be reflected on a balance sheet. 2.9 Tax Matters. (a) Each of the Company and the Subsidiaries has filed in a timely manner (including permitted exceptions) all Tax Returns (as defined below) that it was required to file and all such Tax Returns were correct and complete in all material respects. Each of the Company and the Subsidiaries has paid all Taxes (as defined below) that are shown to be due on any such Tax Returns. The unpaid Taxes of the Company and the Subsidiaries for tax periods through the date of the Most Recent Balance Sheets do not exceed the accruals and reserves for Taxes set forth on the Most Recent Balance Sheets. All Taxes that the Company or any Subsidiary is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Entity. There are no liens for taxes on the assets of the Company or any Subsidiary. For purposes of this Agreement, "Taxes" means all taxes, charges, fees, levies or other similar assessments or liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment, payroll and franchise taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof. For purposes of this Agreement, "Tax Returns" means all reports, returns, declarations, statements or other information required to be supplied to a taxing authority in connection with Taxes. 13 PAGE (b) The Company has delivered to the Buyer correct and complete copies of all federal income Tax Returns, examination reports and statements of deficiencies assessed against or agreed to by any of the Company or any Subsidiary since December 31, 1991. No federal income Tax Return of the Company has been audited by the Internal Revenue Service. No examination or audit of any Tax Returns of the Company or any Subsidiary by any Governmental Entity is currently in progress or, to the knowledge of the Company and the Subsidiaries, threatened or contemplated. Neither the Company nor any Subsidiary has waived any statute of limitations with respect to taxes or agreed to an extension of time with respect to a tax assessment or deficiency. (c) Neither the Company nor any Subsidiary is a "consenting corporation" within the meaning of Section 341(f) of the Code and none of the assets of the Company nor the Subsidiaries are subject to an election under Section 341(f) of the Code. Neither the Company nor any Subsidiary has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the Code. Neither the Company nor any Subsidiary is a party to any Tax allocation or sharing agreement. (d) Neither the Company nor any Subsidiary is or has ever been a member of an "affiliated group" of corporations (within the meaning of Section 1504 of the Code), other than a group of which only the Company and the Subsidiaries are members. Neither the Company nor any Subsidiary has made an election under Treasury Reg. Section 1.1502-20(g). Neither the Company nor any Subsidiary is or has been required to make a basis reduction pursuant to Treasury Reg. Section 1.1502-20(b) or Treasury Reg. Section 1.337(d)-2(b). (e) None of the assets of the Company nor any Subsidiary is property that the Company or any Subsidiary is required to treat as being owned by any other person pursuant to the "safe harbor lease" provisions of the former Section 168(f)(8) of the Code. None of the assets of the Company nor any Subsidiary directly or indirectly secures any debt the interest of which is tax exempt under Section 103(a) of the Code. None of the assets of the Company nor any Subsidiary is "tax exempt use property" within the meaning of Section 168(h) of the Code. Neither the Company nor any Subsidiary has agreed to make or is required to make any adjustment under Section 481 of the Code by reason of a change in accounting method or otherwise. Neither the Company nor any Subsidiary has participated in or will participate in an international boycott within the meaning of Section 999 of the Code. Neither the Company nor any Subsidiary has or has had a permanent establishment in any foreign country, as defined in any applicable treaty or convention between the United States and such foreign country. Neither the Company nor any Subsidiary is a party to any joint venture, partnership or 14 PAGE other arrangement or contract that could be treated as a partnership for federal income tax purposes. 2.10 Assets. Each of the Company and the Subsidiaries owns or leases all tangible assets necessary for the conduct of its businesses as presently conducted. Each such tangible asset is free from material defects, has been maintained in accordance with normal industry practice and is in good operating condition and repair (subject to normal wear and tear). No asset of the Company (tangible or intangible) is subject to any Security Interest. 2.11 Owned Real Property. None of the Company nor any Subsidiary owns any real property. 2.12 Intellectual Property. (a) Each of the Company and the Subsidiaries owns, or is licensed or otherwise possesses legally enforceable rights to use, all Intellectual Property (as defined below) that is used to conduct its business as currently conducted. For purposes of this Agreement, the term "Intellectual Property" means all (i) patents, patent applications, patent disclosures and all related continuation, continuation-in-part, divisional, reissue, reexamination, utility, model, certificate of invention and design patents, patent applications, registrations and applications for registrations, (ii) trademarks, service marks, trade dress, logos, trade names and corporate names and registrations and applications for registration thereof, (iii) copyrights and registrations and applications for registration thereof, (iv) mask works and registrations and applications for registration thereof, (v) computer software, data and documentation, (vi) trade secrets and confidential business information, whether patentable or unpatentable and whether or not reduced to practice, knowhow, manufacturing and production processes and techniques, research and development information, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (vii) other proprietary rights relating to any of the foregoing and (viii) copies and tangible embodiments thereof. Section 2.12 of the Disclosure Schedule lists (i) all patents and patent applications and all trademarks, registered copyrights, trade names and service marks owned by or licensed to the Company or any Subsidiary which are used in the business of the Company or the Subsidiaries, including the jurisdictions in which each such Intellectual Property right has been issued or registered or in which any such application for such issuance or registration has been filed, (ii) all material written licenses, sublicenses and other agreements to which the Company or a Subsidiary is a party and pursuant to which any person is authorized to use any Intellectual Property rights, and (iii) all material written licenses, sublicenses and other agreements as to which the Company or a Subsidiary is a party and pursuant to which the 15 PAGE Company or a Subsidiary is authorized to use any third party patents, trademarks or copyrights, including software ("Third Party Intellectual Property Rights") which are used in the business of the Company or any Subsidiary or which form a part of any product or service of the Company or any Subsidiary. The Company has made available to the Buyer correct and complete copies of all such patents, registrations, applications, licenses and agreements (as amended to date) and related documentation. Except pursuant to the Contracts listed on Section 2.14 of the Disclosure Schedule and except pursuant to the licenses listed on Section 2.12 of the Disclosure Schedule, neither the Company nor any Subsidiary has agreed to indemnify any person or entity for or against any infringement, misappropriation or other conflict with respect to any item of Intellectual Property that the Company or any Subsidiary owns or uses. Neither the Company nor any Subsidiary is a party to any oral license, sublicense or agreement which, if reduced to written form, would be required to be listed in Section 2.12 of the Disclosure Schedule under the terms of this Section 2.12(a). (b) None of the Company nor any Subsidiary is in breach of any license, sublicense or other agreement relating to the Intellectual Property or Third Party Intellectual Property Rights. None of the Company nor any Subsidiary will be in breach of any license, sublicense or other agreement relating to the Intellectual Property or Third Party Intellectual Property Rights as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except that no such representation or warranty is made herein with respect to Third Party Intellectual Property Rights comprised of commercially available, off-the-shelf software. (c) Neither the Company nor any of the Subsidiaries has been named in any suit, action or proceeding which involves a claim of infringement of any Intellectual Property right of any third party. The manufacturing, marketing, licensing or sale of the products or performance of the service offerings of the Company and the Subsidiaries do not infringe any Intellectual Property right of any third party; and to the knowledge of the Company and the Subsidiaries, the Intellectual Property rights of the Company and the Subsidiaries are not being infringed by activities, products or services of any third party. (d) Notwithstanding any other provision herein, the representations and warranties in this Section 2.12 shall only be applicable to patent rights of third parties which were matters of public record as of December 1, 1995. 2.13 Real Property Leases. Section 2.13 of the Disclosure Schedule lists all real property leased or subleased to the Company or any Subsidiary. The Company has made available to the Buyer correct and complete copies of the leases and subleases (as amended to date) listed in Section 2.13 of the Disclosure 16 PAGE Schedule. With respect to each lease and sublease listed in Section 2.13 of the Disclosure Schedule: (a) To the Company's knowledge, the lease or sublease is the legal, valid and binding obligation of each party thereto, enforceable and in full force and effect against each such party; (b) None of the Company nor any Subsidiary party to such lease or sublease is in breach or default, and no event has occurred which, with notice or lapse of time, would constitute a breach or default by the Company or such Subsidiary or permit termination, modification, or acceleration by any other party thereunder and, to the Company's knowledge, no other party to such lease or sublease is in breach or default, and no event has occurred which, with notice or lapse of time, would constitute a breach or default by such other party or permit termination, modification or acceleration by the Company or any Subsidiary thereunder; (c) there are no disputes, oral agreements or forbearance programs in effect as to the lease or sublease; (d) neither the Company nor any Subsidiary has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold; (e) to the Company's knowledge all facilities leased or subleased thereunder are supplied with utilities and other services reasonably necessary for the operation of said facilities; and (f) all facilities leased or subleased thereunder are free from material defects, have been maintained in accordance with normal industry practice, are in good operating condition and repair (subject to normal wear and tear) and are suitable for the purposes for which they presently are used. 2.14 Contracts. Section 2.14 of the Disclosure Schedule lists the following information or written arrangements (including without limitation written agreements) to which the Company or any Subsidiary is a party: (a) any project where the Company or any Subsidiary provided services to third parties in 1995 or have obligations to provide services in the future, arranged by project number and including the name of the client and a brief description of the project, as well as similar project information for calendar years 1990 through 1994, inclusive; (b) any written arrangement (or group of related written arrangements) for the lease of personal property (other than office equipment) from or to third parties providing for lease payments in excess of $10,000 per annum; 17 PAGE (c) any written arrangement (or group of related written arrangements) for the purchase or sale of raw materials, commodities, supplies, products or other personal property or for the furnishing or receipt of services (i) which calls for performance over a period of more than one year, (ii) which involves more than the sum of $10,000, or (iii) in which the Company or any Subsidiary has granted manufacturing rights, "most favored nation" pricing provisions or marketing or distribution rights relating to any products or territory or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party; (d) any written arrangement establishing a partnership or joint venture; (e) any written arrangement (or group of related written arrangements) under which it has created, incurred, assumed, or guaranteed (or may create, incur, assume, or guarantee) indebtedness (including capitalized lease obligations) involving more than $10,000 or under which it has imposed (or may impose) a Security Interest on any of its assets, tangible or intangible; (f) any written arrangement concerning confidentiality (other than those listed in response to clause (a) above) or noncompetition; (g) any written arrangement involving any of the Company Stockholders or their affiliates, as defined in Rule 12b-2 under the Securities Exchange Act of 1934 (as amended, the "Exchange Act") ("Affiliates") that will not be terminated in its entirety before or upon the Effective Time; (h) any written arrangement (other than real estate leases or employee benefit plans or those listed in response to clause (a) above) under which the consequences of a default or termination could have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company or any Subsidiary; and (i) any other written arrangement (or group of related written arrangements) either involving more than $10,000 or not entered into in the Ordinary Course of Business, other than real estate leases or employee benefit plans. The Company has made available for inspection by the Buyer a correct and complete copy of each written arrangement (as amended to date) listed in Section 2.14 of the Disclosure Schedule. With respect to each written arrangement so listed: (i) to the Company's knowledge, the written arrangement or contract listed is the legal, valid and binding obligation of each party thereto and enforceable and in full force and effect against each such party; (ii) with respect to all such written arrangements other 18 PAGE than those listed on Section 2.14 of the Disclosure Schedule in response to clause (a) above, no action or consent of any other party thereto is required in order for the written arrangement to continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect prior to the Closing; (iii) with respect to those written arrangements listed in response to clause (a) above, the Company has no knowledge or belief that the execution and delivery of this Agreement by the Company or the consummation of the transactions contemplated hereby will result in any other party to such written arrangements seeking to terminate or modify the terms of such arrangement; and (iv) none of the Company nor any Subsidiary party to such written arrangement is in material breach or default, and no event has occurred which with notice or lapse of time would constitute a material breach or default by the Company or such Subsidiary or permit termination, modification, or acceleration by any other party under the written arrangement and, to the Company's knowledge, no other party to such written arrangement is in breach or default, and no event has occurred which, with notice or lapse of time, would constitute a breach or default by such other party or permit termination, modification or acceleration by the Company or any Subsidiary thereunder. Neither the Company nor any Subsidiary is a party to any oral contract, agreement or other arrangement which, if reduced to written form, would be required to be listed in Section 2.14 of the Disclosure Schedule under the terms of this Section 2.14. 2.15 Accounts Receivable. All accounts receivable of the Company and the Subsidiaries reflected on the Most Recent Balance Sheet are valid receivables subject to no setoffs or counterclaims and are current and collectible consistent with past practices, net of the applicable reserve for bad debts on the Most Recent Balance Sheet. All accounts receivable reflected in the financial or accounting records of the Company that have arisen since the Most Recent Fiscal Quarter End are valid receivables subject to no setoffs or counterclaims and are collectible, net of a reserve for bad debts in an amount proportionate to the reserve shown on the Most Recent Balance Sheet. 2.16 Powers of Attorney. There are no outstanding powers of attorney executed on behalf of the Company or any Subsidiary. 2.17 Insurance. Section 2.17 of the Disclosure Schedule lists, or the Company has otherwise made available to the Buyer, each insurance policy (including fire, theft, casualty, general liability, workers compensation, business interruption, environmental, product liability and automobile insurance policies and bond and surety arrangements) to which the Company or any Subsidiary has been a party, a named insured, or otherwise the beneficiary of coverage at any time within the past three years. The Company has previously made such policies available to the Buyer through the Company's insurance broker. 19 PAGE Neither the Company nor any Subsidiary (i) is in breach or default (including with respect to the payment of premiums or the giving of notices) under any such policy, and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default or permit termination, modification or acceleration, under any such policy, or (ii) has received any notice from the insurer disclaiming coverage or reserving rights with respect to a particular claim or any such policy in general. Neither the Company nor any Subsidiary has incurred any loss, damage, expense or liability covered by any such insurance policy for which it has not properly asserted a claim under such policy. Each of the Company and the Subsidiaries is covered by insurance in scope and amount sufficient to satisfy the insurance provision of each written arrangement listed or required to be listed in Section 2.14 of the Disclosure Schedule. 2.18 Litigation. Section 2.18 of the Disclosure Schedule identifies, and contains a brief description of, (a) any unsatisfied judgment, order, decree, stipulation or injunction and (b) any claim, complaint, action, suit, proceeding, hearing or investigation of or in any Governmental Entity or before any arbitrator to which the Company or any Subsidiary is a party or, to the knowledge of the Company and the Subsidiaries, is threatened to be made a party. 2.19 Employees. Section 2.19 of the Disclosure Schedule contains a list of all current employees of the Company and each Subsidiary, along with the position and the annual rate of compensation of each such person. Each principal and associate of the Company and the Subsidiaries has entered into a confidentiality/assignment of inventions agreement with the Company or a Subsidiary, a copy of which has previously been delivered to the Buyer. To the knowledge of the Company and its Subsidiaries, no key employee or group of employees has any plans to terminate employment with the Company or any Subsidiary. Neither the Company nor any Subsidiary is a party to or bound by any collective bargaining agreement, nor has any of them experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. The Company and the Subsidiaries have no knowledge of any organizational effort made or threatened, either currently or within the past two years, by or on behalf of any labor union with respect to employees of the Company or any Subsidiary. 2.20 Employee Benefits. (a) Section 2.20(a) of the Disclosure Schedule contains a complete and accurate list of all Employee Benefit Plans (as defined below) maintained, or contributed to, by the Company, any Subsidiary, or any ERISA Affiliate (as defined below). For purposes of this Agreement, "Employee Benefit Plan" means any "employee pension benefit plan" (as defined in 20 PAGE Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), any "employee welfare benefit plan" (as defined in Section 3(1) of ERISA), and any other written or oral plan, agreement or arrangement involving direct or indirect compensation, including without limitation insurance coverage, severance benefits, disability benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement compensation. For purposes of this Agreement, "ERISA Affiliate" means any entity which is a member of (i) a controlled group of corporations (as defined in Section 414(b) of the Code), (ii) a group of trades or businesses under common control (as defined in Section 414(c) of the Code), or (iii) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code), any of which includes the Company or a Subsidiary. Complete and accurate copies of (i) all Employee Benefit Plans which have been reduced to writing, (ii) written summaries of all unwritten Employee Benefit Plans, (iii) all related trust agreements, insurance contracts and summary plan descriptions, and (iv) all annual reports filed on IRS Form 5500, 5500C or 5500R for the last five plan years for each Employee Benefit Plan, have been delivered to the Buyer. Each Employee Benefit Plan has been administered in all material respects in accordance with its terms and each of the Company, the Subsidiaries and the ERISA Affiliates has in all material respects met its obligations with respect to such Employee Benefit Plan and has made all required contributions thereto. The Company and all Employee Benefit Plans are in compliance in all material respects with the currently applicable provisions of ERISA and the Code and the regulations thereunder. (b) There are no investigations by any Governmental Entity, termination proceedings or other claims (except claims for benefits payable in the normal operation of the Employee Benefit Plans and proceedings with respect to qualified domestic relations orders), suits or proceedings against or involving any Employee Benefit Plan or asserting any rights or claims to benefits under any Employee Benefit Plan that could give rise to any material liability. (c) All the Employee Benefit Plans that are intended to be qualified under Section 401(a) of the Code have received determination letters from the Internal Revenue Service to the effect that such Employee Benefit Plans are qualified and the plans and the trusts related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, no such determination letter has been revoked and revocation has not been threatened, and no such Employee Benefit Plan has been amended since the date of its most recent determination letter or application therefor in any respect, and no act or omission has occurred, that would adversely affect its qualification or materially increase its cost. 21 PAGE (d) Neither the Company, any Subsidiary, nor any ERISA Affiliate has ever maintained an Employee Benefit Plan subject to Section 412 of the Code or Title IV of ERISA. (e) At no time has the Company, any Subsidiary or any ERISA Affiliate been obligated to contribute to any "multi-employer plan" (as defined in Section 4001(a)(3) of ERISA). (f) There are no unfunded obligations under any Employee Benefit Plan providing benefits after termination of employment to any employee of the Company or any Subsidiary (or to any beneficiary of any such employee), including but not limited to retiree health coverage and deferred compensation, but excluding continuation of health coverage required to be continued under Section 4980B of the Code and insurance conversion privileges under state law. (g) No act or omission has occurred and no condition exists with respect to any Employee Benefit Plan maintained by the Company, any Subsidiary or any ERISA Affiliate that would subject the Company, any Subsidiary or any ERISA Affiliate to any material fine, penalty, tax or liability of any kind imposed under ERISA or the Code. (h) No Employee Benefit Plan is funded by, associated with, or related to a "voluntary employee's beneficiary association" within the meaning of Section 501(c)(9) of the Code. (i) No Employee Benefit Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits the Company from amending or terminating any such Employee Benefit Plan. (j) Section 2.20(j) of the Disclosure Schedule discloses each: (i) agreement with any director, executive officer or other key employee of the Company or any Subsidiary (A) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving the Company or any Subsidiary of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) providing severance benefits or other benefits after the termination of employment of such director, executive officer or key employee; (ii) agreement, plan or arrangement under which any person may receive payments from the Company or any Subsidiary that may be subject to the tax imposed by Section 4999 of the Code or included in the determination of such person's "parachute payment" under Section 280G of the Code; and (iii) agreement or plan binding the Company or any Subsidiary, including without limitation any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan, or any Employee Benefit Plan, any of the benefits of which 22 PAGE will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement. 2.21 Environmental Matters. (a) Each of the Company and the Subsidiaries has complied with all Environmental Laws (as defined below) applicable to their business operations and the Services (as defined below) they provide, except for violations of Environmental Laws that do not and will not, individually or in the aggregate, have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company and the Subsidiaries. For purposes of this Agreement, "Environmental Law" means any federal, state or local law, statute, rule or regulation or the common law relating to the environment or occupational health and safety, including without limitation any statute, regulation or order pertaining to (i) treatment, storage, disposal, generation and transportation of Materials of Environmental Concern (as defined below); (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of Materials of Environmental Concern, including without limitation emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wildlife, marine sanctuaries and wetlands, including without limitation all endangered and threatened species; (vi) storage tanks, vessels and containers; (vii) underground and other storage tanks or vessels, abandoned, disposed or discarded barrels, containers and other closed receptacles; (viii) health and safety of employees and other persons; and (ix) manufacture, processing, use, distribution, treatment, storage, disposal, transportation or handling of Materials of Environmental Concern. For purposes of this Agreement, "Services" means any and all services provided by the Company or any Subsidiary to its clients including but not limited to (i) consulting services; (ii) project coordination, oversight and/or management; (iii) remediation services; (iv) treatment, storage, disposal or other handling of Materials of Environmental Concern; (v) arranging for the treatment, storage, disposal or other handling of Materials of Environmental Concern; (vi) transportation of Materials of Environmental Concern; and (vii) correspondence, meetings and other dealings with Governmental Entities. As used above, the terms "release" and "environment" shall have the meaning set forth in the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"). (b) There have been no releases by the Company or any Subsidiary of any Materials of Environmental Concern into the environment at any parcel of real property or any facility formerly or currently owned or leased by the Company or a 23 PAGE Subsidiary, except for those that would not, individually or in the aggregate, have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company and the Subsidiaries. There have been no releases of any Materials of Environmental Concern into the environment by the Company or any Subsidiary at any parcel of real property or any facility at which the Company or a Subsidiary formerly provided or is currently providing Services, or for which the Company or any Subsidiary may have any material liability under any Environmental Law. With respect to any such releases of Materials of Environmental Concern, the Company or such Subsidiary has given all required notices to Governmental Entities (copies of which have been provided to the Buyer), except where the failure to give such notice would not, individually or in the aggregate, have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company and the Subsidiaries. Neither the Company nor any Subsidiary is aware of any other releases of Materials of Environmental Concern for which material liability can be imposed on the Company or the Subsidiary under any Environmental Law. For purposes of this Agreement, "Materials of Environmental Concern" means any chemicals, pollutants or contaminants, hazardous substances (as such term is defined under CERCLA), solid wastes and hazardous wastes (as such terms are defined under the federal Resource Conservation and Recovery Act), toxic materials, industrial materials, oil or petroleum and petroleum products, or any other material subject to regulation under any Environmental Law. (c) There is no pending or, to the knowledge of the Company and the Subsidiaries, threatened civil or criminal litigation, written notice of violation or noncompliance, formal administrative or judicial proceeding, claim, cause of action, liability, investigation, citation, order, consent order, consent decree, inquiry or information request by any Governmental Entity, involving the Company or any Subsidiary, except those that will not, individually or in the aggregate, have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company and the Subsidiaries, relating to any of the following: (i) violation of any Environmental Law; (ii) violation of any permit, license or registration issued under any Environmental Law; (iii) the disposal, discharge or release of Materials of Environmental Concern, whether or not in compliance with Environmental Laws; (iv) the generation, storage, treatment, transportation, reclamation, recycling or other handling of Materials of Environmental Concern, whether or not in compliance with Environmental Laws; (v) the ownership, operation or use of any landfill, surface impoundment, pit, pond, lagoon, underground injection well, waste pile, land treatment unit, wastewater treatment plant, air pollution control equipment, or any other unit used for the storage, disposal, handling or treatment of Materials of Environmental Concern; (vi) the exacerbation of previously existing environmental contamination; (vii) exposure 24 PAGE to any Materials of Environmental Concern, noises, odors, or vibrations at or from any real property or facility formerly or currently owned or leased by the Company or a Subsidiary or at which the Company or a Subsidiary is providing Services; or (viii) the providing of negligent Services. Without limiting the foregoing, none of the Company nor any Subsidiary has been named a "potentially responsible party" or has received any correspondence or notice that it may be named a "potentially responsible party." (d) The Company and the Subsidiaries possess all permits, licenses and/or registrations required under Environmental Laws for their business operations and the Services they provide, including permits, licenses and/or registrations required for equipment owned and/or operated by the Company and the Subsidiaries, and all such permits, licenses and/or registrations are valid and in full force and effect. Set forth in Section 2.21(d) of the Disclosure Schedule is a list of all violations by the Company and its Subsidiaries of any terms, conditions or requirements of such permits, licenses and/or registrations since the date of incorporation of the Company. (e) Set forth in Section 2.21(e) of the Disclosure Schedule is a list of all environmental reports, investigations, audits, assessments, surveys and analyses, relating to premises currently or previously owned or occupied by the Company or a Subsidiary which the Company has possession of or access to. Complete and accurate copies of each such report, or the results of each such investigation have been provided to the Buyer. (f) To the knowledge of the Company and its Subsidiaries, all entities, including without limitation transporters, treatment, storage and disposal facilities, and remediation companies, used by the Company or a Subsidiary, or recommended by the Company or a Subsidiary while providing Services, for the transportation, storage, disposal, treatment or other handling of Materials of Environmental Concern possess all permits, licenses and registrations required under Environmental Laws, except those of which the failure to possess would not, individually or in the aggregate, have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company and the Subsidiaries. To the knowledge of the Company, there is no previous, pending or threatened civil or criminal litigation, written notice of violation or noncompliance, formal administrative or judicial proceeding, investigation, citation, order, consent order, consent decree, inquiry or information request by any Governmental Entity, relating to such entities for any violations of Environmental Laws, except with respect to violations which, individually or in the aggregate, would not have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company and the Subsidiaries. 25 PAGE 2.22 Legal Compliance. Each of the Company and the Subsidiaries, and the conduct and operations of their respective businesses, are in compliance with each law (including rules and regulations thereunder) of any federal, state, local or foreign government, or any Governmental Entity, which is applicable to the Company or such Subsidiary or business, except for any violation of or default under a law which reasonably may be expected not to have a material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company or such Subsidiary. 2.23 Permits. Section 2.23 of the Disclosure Schedule sets forth a list of all permits, licenses, registrations, certificates, orders or approvals from any Governmental Entity (including without limitation those issued or required under Environmental Laws and those relating to the occupancy or use of owned or leased real property) ("Permits") issued to or held by the Company or any Subsidiary. Such listed Permits are the only Permits that are required for the Company and the Subsidiaries to conduct their respective businesses as presently conducted or as proposed to be conducted, except for those the absence of which would not have any material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Company and the Subsidiaries. Each such Permit is in full force and effect and, to the best of the knowledge of the Company or any Subsidiary, no suspension or cancellation of such Permit is threatened and there is no basis for believing that such Permit will not be renewable upon expiration. Each such Permit will continue in full force and effect following the Closing. 2.24 Certain Business Relationships With Affiliates. No Affiliate of the Company or of any Subsidiary (a) owns any property or right, tangible or intangible, which is used in the business of the Company or any Subsidiary, (b) has any claim or cause of action against the Company or any Subsidiary, or (c) owes any money to the Company or any Subsidiary. Section 2.24 of the Disclosure Schedule describes any transactions or relationships between the Company and any Affiliate thereof which are reflected in the statements of operations of the Company included in the Financial Statements. 2.25 Brokers' Fees. Neither the Company nor any Subsidiary has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement. 2.26 Books and Records. The minute books and other similar records of the Company and each Subsidiary contain true and complete records of all actions taken at any meetings of the Company's or such Subsidiary's stockholders, Board of Directors or any committee thereof and of all written consents executed in lieu of the holding of any such meeting. The books and records of the Company and each Subsidiary accurately reflect in all 26 PAGE material respects the assets, liabilities, business, financial condition and results of operations of the Company or such Subsidiary and have been maintained in accordance with good business and bookkeeping practices. 2.27 Customers and Suppliers. No purchase order or commitment of the Company or any Subsidiary is in excess of normal requirements, nor are prices provided therein in excess of market prices for the products or services to be provided thereunder at the time the purchase order or commitment was entered into. No material supplier of the Company or any Subsidiary has indicated within the past year that it will stop, or decrease the rate of, supplying materials, products or services to them and no material customer of the Company or any Subsidiary has indicated within the past year that it will stop, or decrease the rate of, buying, leasing or licensing materials, products or services from them. Section 2.27 of the Disclosure Schedule sets forth a list of (a) each customer that accounted for more than 5% of the consolidated revenues of the Company during the last full fiscal year or the interim period through the Most Recent Fiscal Quarter End and the amount of revenues accounted for by such customer during each such period and (b) each supplier that is the sole supplier of any significant product or component to the Company or a Subsidiary. 2.28 Banking Facilities. Section 2.28 of the Disclosure Schedule sets forth a true, correct and complete list of: (a) each bank, savings and loan or similar financial institution at which the Company or any Subsidiary has an account, safety deposit box, line of credit or credit facility and the numbers of the accounts or safety deposit boxes maintained by the Company or any Subsidiary thereat and details, including terms, of any line of credit or credit facility; and (b) the names of all persons authorized to draw on each such account or to have access to any such safety deposit box facility, together with a description of the authority (and conditions thereof, if any) of each such person with respect thereto. 2.29 Powers of Attorney and Suretyships. Except as set forth in Section 2.29 of the Disclosure Schedule, none of the Company or any Subsidiary has any general or special powers of attorney outstanding (whether as grantor or grantee thereof) or has any obligation or liability (whether actual, accrued, accruing, contingent or otherwise) as guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the obligation of any person, corporation, partnership, joint venture, association, organization or other entity, except as endorser or maker of checks or letters of credit, respectively, endorsed or made in the Ordinary Course of Business. 27 PAGE 2.30 Backlog. Section 2.30 of the Disclosure Schedule contains an accurate list of all commitments for the Company's services that make up the Company's backlog as of October 31, 1995 as well as the sum of such backlog, which was at least $18,000,000. All such orders and commitments and any Company quotations for work which are outstanding at that time contain terms and conditions that are consistent with the Company's practices over the past year. 2.31 Company Action. The Board of Directors of the Company, at a meeting duly called and held, has by the majority vote of all directors present (i) determined that the Merger is fair and in the best interests of the Company and its stockholders, (ii) adopted this Agreement in accordance with the provisions of the Delaware General Corporation Law, and (iii) directed that this Agreement and the Merger be submitted to the Company Stockholders for their adoption and approval and resolved to recommend that Company Stockholders vote in favor of the adoption of this Agreement and the approval of the Merger. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE TRANSITORY SUBSIDIARY Each of the Buyer and the Transitory Subsidiary represents and warrants to the Company as follows: 3.1 Organization. Each of the Buyer and the Transitory Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation. 3.2 Capitalization. The authorized capital stock of the Buyer consists of 20,000,000 shares of Buyer Common Stock, of which 12,366,033 shares were issued and outstanding and 402 shares were held in the treasury of the Buyer as of November 30, 1995. As of November 30, 1995 there were no outstanding or authorized options, warrants, rights, agreements or commitments to which the Buyer was a party of which were binding upon the Buyer providing for the issuance, disposition or acquisition of any of its capital stock, other than (i) options to acquire an aggregate of 805,500 shares of Buyer Common Stock outstanding pursuant to Employee Benefit Plans adopted by the Buyer and options to acquire an additional 849,260 shares of Buyer Common Stock reserved for issuance pursuant to such plans, and (ii) 2,387,236 shares of Buyer Common Stock reserved for issuance to Thermo Process Systems, Inc. upon conversion of the Buyer's $2,650,000 principal amount 3.875% subordinated convertible note due 2000 and reserved for issuance to others upon conversion of the Buyer's $37,950,000 principal amount 4 7/8% subordinated convertible debentures due 2000. There are no agreements, voting trusts, proxies, or understandings with respect to the voting, or registration under the Securities Act, of any shares of Buyer 28 PAGE Common Stock to which the Buyer is a party. All of the issued and outstanding shares of Buyer Common Stock were issued in compliance with applicable federal and state securities laws. All of the issued and outstanding shares of Buyer Common Stock are duly authorized, validly issued, fully paid, nonassessable and free of all preemptive rights. All of the shares of Buyer Common Stock comprising the Merger Units and issuable upon exercise of the Buyer Warrants will be, when issued in accordance with this Agreement and the Buyer Warrants, duly authorized, validly issued, fully paid, nonassessable and free of all preemptive rights. 3.3 Authorization of Transaction. Each of the Buyer and the Transitory Subsidiary has all requisite power and authority to execute and deliver this Agreement and (in the case of the Buyer) the Escrow Agreement and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and (in the case of the Buyer) the Escrow Agreement by the Buyer and the Transitory Subsidiary and the performance of this Agreement and (in the case of the Buyer) the Escrow Agreement the consummation of the transactions contemplated hereby and thereby by the Buyer and the Transitory Subsidiary have been duly and validly authorized by all necessary corporate action on the part of the Buyer and Transitory Subsidiary. This Agreement has been duly and validly executed and delivered by the Buyer and the Transitory Subsidiary and constitutes a valid and binding obligation of the Buyer and the Transitory Subsidiary, enforceable against them in accordance with its terms. 3.4 Noncontravention. Subject to compliance with the applicable requirements of the Securities Act and any applicable state securities laws, the Hart-Scott-Rodino Act and the filing of the Certificate of Merger as required by the Delaware General Corporation Law, neither the execution and delivery of this Agreement or (in the case of the Buyer) the Escrow Agreement by the Buyer or the Transitory Subsidiary, nor the consummation by the Buyer or the Transitory Subsidiary of the transactions contemplated hereby or thereby, will (a) conflict or violate any provision of the charter or By-laws of the Buyer or the Transitory Subsidiary, (b) require on the part of the Buyer or the Transitory Subsidiary any filing with, or permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of, create in any party any right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest or other arrangement to which the Buyer or Transitory Subsidiary is a party or by which either is bound or to which any of their assets are subject, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Buyer or the Transitory Subsidiary or any of their properties or assets. 29 PAGE 3.5 Reports and Financial Statements. The Buyer has previously furnished to the Company complete and accurate copies, as amended or supplemented, of its (a) Annual Report on Form 10-K for the fiscal year ended March 31, 1995 as filed with the SEC, and (b) all other reports filed by the Buyer under Section 13 of the Exchange Act with the SEC since March 31, 1995 (such reports are collectively referred to herein as the "Buyer Reports"). The Buyer Reports constitute all of the documents required to be filed by the Buyer under Section 13 of the Exchange Act with the SEC since March 31, 1995. As of their respective dates, the Buyer Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements of the Buyer included in the Buyer Reports (i) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (ii) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto, and in the case of quarterly financial statements, as permitted by Form 10-Q under the Exchange Act), (iii) fairly present the consolidated financial condition, results of operations and cash flows of the Buyer as of the respective dates thereof and for the periods referred to therein, and (iv) are consistent with the books and records of the Buyer. 3.6 Absence of Material Adverse Changes. Since March 31, 1995, there has not been any material adverse change in the assets, business, financial condition or results of operations of the Buyer, nor has there occurred any event or development which could reasonably be foreseen to result in such a material adverse change in the future. 3.7 Brokers' Fees. Neither the Buyer nor the Transitory Subsidiary has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement, except for a fee payable by the Buyer to Redloh Associates. ARTICLE IV COVENANTS 4.1 Best Efforts. Each of the Parties shall use its best efforts, to the extent commercially reasonable, to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement; provided, however, that notwithstanding anything in this Agreement to the contrary, the Buyer shall not be required to sell or dispose of or hold separately (through a trust or 30 PAGE otherwise) any assets or businesses of the Buyer or its Affiliates. 4.2 Notices and Consents. The Company shall use its best efforts to obtain, at its expense, all such waivers, permits, consents, approvals or other authorizations from third parties required as a condition to the obligation of any party hereto to consummate the Merger and all of the foregoing from Governmental Entities, and to effect all such registrations, filings and notices with or to third parties required as a condition to the obligation of any party hereto to consummate the Merger and all of the foregoing with Governmental Entities, as may be required by or with respect to the Company in connection with the transactions contemplated by this Agreement (including without limitation those listed in Section 2.22 of the Disclosure Schedule). 4.3 Confidential Offering Memorandum and Information Statement. (a) The Buyer and the Company shall jointly prepare appropriate materials for the purpose of making disclosure of the Merger and the Merger Consideration (including the Merger Units) to and soliciting the written consents of Company Stockholders in favor of the adoption of this Agreement (including without limitation the matters referred to in Section 1.12 and Article VI). Such materials shall be in the form of a joint confidential offering memorandum and information statement (the "Offering Memorandum/Information Statement") which shall contain the information concerning the Buyer, the Transitory Subsidiary and the Company required under Regulation D promulgated under the Securities Act ("Regulation D") (including without limitation, Rule 502(b)(2) thereof) and Form of Election and form of written consent soliciting written consents from Company Stockholders in favor of the Merger and this Agreement. (b) Promptly following the execution of this Agreement, the Company will circulate to each Company Stockholder and each holder of an Option or Warrant the Offering Memorandum/Information Statement (which may include by reference, materials filed by the Buyer under the Exchange Act previously sent to Company Stockholders and holders of Options and Warrants) and, pursuant thereto and in accordance with the Delaware General Corporation Law, shall solicit the written consents from Company Stockholders in favor of the adoption of this Agreement and the approval of the Merger. (c) The Company shall comply with all applicable provisions of and rules under the Securities Act in the preparation and distribution of the Offering Memorandum/Information Statement and the solicitation of written consents thereunder. Without limiting the foregoing, the Company shall ensure that the information in the Offering Memorandum/Information Statement relating to the Company or 31 PAGE furnished by the Company in writing for inclusion therein does not, as of the date on which it is distributed to Company Stockholders, and as of the date of taking of action by written consent, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. (d) The Buyer shall comply with all applicable provisions of and rules under the Securities Act and state securities laws in the preparation and distribution of the Offering Memorandum/Information Statement and the offering and issuance of the Merger Units. Without limiting the foregoing, the Buyer shall ensure that the Offering Memorandum/Information Statement does not, as of the date on which it is distributed to Company Stockholders, and as of the date of the taking of action by written consent, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading (provided that the Buyer shall not be responsible for the accuracy or completeness of any information relating to the Company or any other information furnished by the Company in writing for inclusion therein). (e) The Company, acting through its Board of Directors, shall include in the Information Statement the recommendation of its Board of Directors that the Company Stockholders consent to the adoption of this Agreement and the approval of the Merger, and shall otherwise use its best efforts to obtain the Requisite Stockholder Approval. 4.4 Hart-Scott-Rodino Act. Each of the Parties has filed the Notification and Report Forms and related material required to be filed with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the Hart-Scott-Rodino Act, and each shall use its best efforts to obtain an early termination of the applicable waiting period, and shall make any further filings or information submissions pursuant thereto that may be necessary, proper or advisable; provided, however, that the Buyer shall not be obligated to respond to formal requests for additional information or documentary material pursuant to 16 C.F.R. 803.20 under the Hart-Scott-Rodino Act except to the extent it elects to do so in its sole discretion. 4.5 Operation of Business. Except as contemplated by this Agreement, during the period from the date of this Agreement to the Effective Time, the Company shall (and shall cause each Subsidiary to) conduct its operations in the Ordinary Course of Business and in compliance with all applicable laws and regulations and, to the extent consistent therewith, use all reasonable efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees 32 PAGE and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Effective Time or termination of this Agreement pursuant to Section 7.1 hereof, neither the Company nor any Subsidiary shall, without the written consent of the Buyer: (a) issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) or authorize the issuance, sale or delivery of, or redeem or repurchase, any stock of any class or any other securities or any rights, warrants or options to acquire any such stock or other securities (except pursuant to the conversion or exercise of convertible securities, Options or Warrants outstanding on the date hereof), or amend any of the terms of any such convertible securities, Options or Warrants; (b) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock; (c) create, incur or assume any debt not currently outstanding (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity; (d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement of the type described in Section 2.21(j) or (except for normal increases in the Ordinary Course of Business) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any benefit not required by the terms in effect on the date hereof of any existing Employee Benefit Plan; (e) acquire, sell, lease, encumber or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of any Subsidiary or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of assets in the Ordinary Course of Business; (f) amend its charter or By-laws; (g) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP; 33 PAGE (h) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business; (i) mortgage or pledge any of its property or assets or subject any such assets to any Security Interest; (j) sell, assign, transfer or license any Intellectual Property, other than in the Ordinary Course of Business; (k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material contract or agreement; (l) make or commit to make any capital expenditure in excess of $5,000 per item; (m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue or (ii) any of the conditions to the Merger set forth in Article V not being satisfied; or (n) agree in writing or otherwise to take any of the foregoing actions. 4.6 Full Access. The Company shall (and shall cause each Subsidiary to) permit representatives of the Buyer to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of the Company and the Subsidiaries) to all premises, properties, financial and accounting records, contracts, other records and documents, and personnel, of or pertaining to the Company and each Subsidiary. 4.7 Notice of Breaches. The Company shall promptly deliver to the Buyer written notice of any event or development that would (a) render any statement, representation or warranty of the Company in this Agreement (including the Disclosure Schedule) inaccurate or incomplete in any material respect, or (b) constitute or result in a breach by the Company of, or a failure by the Company to comply with, any agreement or covenant in this Agreement applicable to such party. The Buyer or the Transitory Subsidiary shall promptly deliver to the Company written notice of any event or development that would (i) render any statement, representation or warranty of the Buyer or the Transitory Subsidiary in this Agreement inaccurate or incomplete in any material respect, or (ii) constitute or result in a breach by the Buyer or the Transitory Subsidiary of, or a failure by the Buyer or the Transitory Subsidiary to comply with, any agreement or covenant in this Agreement applicable to such party. No such disclosure shall be deemed to avoid or cure any such misrepresentation or breach. 34 PAGE 4.8 Exclusivity. The Company shall not, and the Company shall use its best efforts to cause its Affiliates and each of its officers, directors, employees, representatives and agents not to, directly or indirectly, (a) encourage, solicit, initiate, engage or participate in discussions or negotiations with any person or entity (other than the Buyer) concerning any merger, consolidation, sale of material assets, tender offer, recapitalization, accumulation of Company Shares, proxy solicitation or other business combination involving the Company, any Subsidiary or any division of the Company or any Subsidiary or (b) provide any non-public information concerning the business, properties or assets of the Company or any Subsidiary to any person or entity (other than the Buyer). 4.9 Execution of Non-Competition Agreements. The Company shall use its reasonable efforts to have those employees set forth in Schedule 4.09 execute a Non-Competition Agreement substantially in the form of Exhibit E hereto prior to the Closing. 4.10 Listing of Merger Units. The Buyer shall use its best efforts to list the Buyer Common Stock comprising the Merger Units and issuable upon exercise of the Buyer Warrants on the American Stock Exchange on or before the effectiveness of the Registration Statements (as defined below). 4.11 Registration of Buyer Common Stock Comprising the Merger Units and Issuable Upon Exercise of the Buyer Warrants. (a) Within 30 days after the Effective Date, the Buyer shall file, and shall use its best efforts to have declared effective as promptly as practicable thereafter, a "shelf" registration statement (the "Unit Registration Statement") on Form S-3 pursuant to Rule 415 (or similar rule that may be adopted by the Securities and Exchange Commission (the "SEC") under the Securities Act for the resale by those Company Stockholders receiving Merger Units of the shares of Buyer Common Stock initially comprising the Merger Units (the "Initial Registrable Shares"). Except as set forth below, the Buyer agrees to use its best efforts to keep the Unit Registration Statement continuously effective and usable for resale of the Initial Registrable Shares for a period of 36 months after its effectiveness or if shorter when (i) all the Initial Registrable Shares have been sold pursuant to the Unit Registration Statement or (ii) the first date after the second anniversary of the Effective Time on which the largest number of Initial Registrable Shares then held by any former Company Stockholder constitutes less than 1% of the then outstanding shares of Buyer Common Stock. 35 PAGE (b) Prior to the initial exercisability of the Buyer Warrants, the Buyer shall file, and shall use its best efforts to have declared effective as promptly as practicable thereafter, a "shelf" registration statement (the "Warrant Registration Statement") pursuant to Rule 415 (or similar rule that may be adopted by the SEC) under the Securities Act for the issuance of shares of Buyer Common Stock upon exercise of the Buyer Warrants (the "Warrant Registrable Shares"). Except as set forth below, the Buyer agrees to use its best efforts to keep the Warrant Registration Statement continuously effective and usable until the earlier of (i) the exercise of all Buyer Warrants that may be exercised or (ii) the expiration of the Buyer Warrants. (c) Buyer shall use its best efforts to qualify all initial Registrable Shares and Warrant Registrable Shares (collectively, the "Registrable Shares") under any applicable state securities laws; provided, however, that Buyer shall not be required to qualify as a foreign corporation or execute a general consent to service of process in any jurisdiction. (d) From time to time, the Buyer will amend or supplement the Unit Registration Statement and the Warrant Registration Statement (collectively, the "Registration Statements") and any prospectus contained therein to the extent necessary to comply with the Securities Act and any applicable state securities statute or regulations. The Buyer will also provide the holder of Registrable Shares with as many copies of the prospectus contained in the appropriate Registration Statement and such other documents as such holder may reasonably request (including without limitation a copy of all documents filed with and correspondence from or to the SEC in connection with the appropriate Registration Statement). (e) The Buyer shall be entitled to (i) postpone the filing or effectiveness of the Registration Statements or (ii) if effective, elect that the Registration Statements not be usable and require each Company Stockholder seeking to sell Initial Registrable Shares pursuant to the Unit Registration Statement or to acquire Warrant Registrable Shares pursuant to the Warrant Registration Statement to suspend sales or purchases pursuant to any prospectus contained therein, for a reasonable period of time, but not in excess of 60 days (a "Blackout Period"), if the Buyer determines in good faith that the registration and distribution of Registrable Shares (or the use of the Registration Statements or any related prospectus) would interfere with any pending material acquisition, material corporate reorganization or any other material corporate development involving the Buyer or any of its subsidiaries or would require premature disclosure thereof. The Buyer shall promptly give each Company Stockholder seeking to sell or purchase Registrable Shares pursuant to the Registration Statements written notice of such determination, containing a general statement of the reasons for such postponement or restriction on use and an approximation of the anticipated delay; 36 PAGE provided, however, that the aggregate number of days included in all Blackout Periods during any consecutive 12 months shall not exceed 120 days. (f) If (i) the Buyer shall file a registration statement (other than in connection with the registration of securities issuable pursuant to an employee stock option, stock purchase or similar plan or pursuant to a merger, exchange offer or a transaction of the type specified in Rule 145(a) under the Securities Act) with respect to Buyer Common Stock and (ii) with reasonable prior notice, the Buyer (in the case of a non-underwritten offering by the Buyer pursuant to such Initial registration statement) advises Company Stockholder seeking to sell Initial Registrable Shares pursuant to the Unit Registration Statement or to sell Warrant Registrable Shares following the exercise of Buyer Warrants in writing that a public sale or distribution of such Registrable Shares would adversely affect such offering or the managing underwriter (in the case of an underwritten offering by the Buyer pursuant to such registration statement) advises Company Stockholders seeking to sell such Registrable Shares in writing that such public sale or distribution would adversely affect such offering, then each Company Stockholder seeking to sell Initial Registrable Shares pursuant to the Unit Registration Statement or to sell Warrant Registrable Shares following the exercise of Buyer Warrants shall, to the extent not prohibited by applicable law, (x) refrain from effecting any public sale or distribution of such Registrable Shares commencing on the effectiveness of such registration statement, (y) be entitled to include such Registrable Shares in such registration statement, subject to customary underwriter cut back, and sell such Registrable Shares pursuant thereto, and (z) sign a customary lock-up agreement with the managing underwriter (in the case of an underwritten offering) or the Buyer of scope and duration identical to the scope and duration of the lock-up agreement signed by the Buyer and each director and executive officer of the Buyer, but in no event to exceed 90 days. (g) Each Company Stockholder seeking to sell Initial Registrable Shares pursuant to the Unit Registration Statement shall provide in writing all information reasonably requested by the Buyer for inclusion in or in connection with the Unit Registration Statement and any such information shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (h) The Buyer will indemnify and hold harmless each holder of Registrable Shares (including any broker or dealer through whom such shares may be sold) and each person, if any, who controls such holder or any such broker or dealer within the meaning of Section 15 of the Securities Act from and against any and all losses, claims, damages, expenses or liabilities, joint 37 PAGE or several, to which they or any of them become subject under the Securities Act, applicable state securities laws or under any other statute or at common law or otherwise, as incurred, and, except as hereinafter provided, will reimburse each such holder and each such controlling person, if any, for any legal or other expenses reasonably incurred by them or any of them in connection with investigating or defending any actions whether or not resulting in any liability insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statements, in any preliminary or amended preliminary prospectus or in the final prospectus (or the Registration Statements or any such prospectus as from time to time amended or supplemented by the Buyer), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, or any violation by the Buyer of any rule or regulations promulgated under the Securities Act or any state securities laws applicable to the Buyer and relating to action or inaction required of the Buyer in connection with such registration. Notwithstanding the foregoing, the Buyer shall have no obligation to indemnify any such holder or controlling person if: (i) such untrue statement or omission was made in such Registration Statement, preliminary or amended preliminary prospectus or final prospectus in reliance upon and in conformity with information furnished in writing to the Buyer in connection therewith by such holder of Registrable Shares (in the case of indemnification of such holder) or such controlling person (in the case of indemnification of such controlling person) expressly for use therein, or (ii) such untrue statement or alleged untrue statement or omission or alleged omission was contained in a preliminary prospectus and corrected in a final or amended prospectus copies of which were delivered to such holder of Registrable Shares on a timely basis, and such holder of Registrable Shares failed to deliver a copy of the final or amended prospectus at or prior to the confirmation of the sale of the Registrable Shares to the person asserting any such loss, claim, damage or liability in any case where such delivery is required by the Securities Act. (i) Each holder of the Registrable Shares so registered will indemnify and hold harmless the Buyer, each of its directors, each of its officers who have signed or otherwise participated in the preparation of the Registration Statements and each person, if any, who controls the Buyer within the meaning of Section 15 of the Securities Act from and against any and all losses, claims, damages, expenses or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, applicable state securities law or under any other statute or at common law or otherwise, and, except as hereinafter provided, will reimburse the Buyer and each such director, officer, or controlling person for any legal or other expenses reasonably incurred by them or any of them in connection 38 PAGE with investigating or defending any actions whether or not resulting in any liability, insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon any untrue statement of a material fact contained in the Registration Statements, in any preliminary or amended preliminary prospectus or in the final prospectus (or in the Registration Statements or any such prospectus as from time to time amended or supplemented) or arise out of or are based upon the omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, but only to the extent that such statement or omission was made in reliance upon and in conformity with information furnished in writing to the Buyer in connection therewith by such holder of Registrable Shares expressly for use therein. The Company Stockholders' obligations hereunder shall be limited to an amount equal to the proceeds received by such holder of Registrable Shares sold in or following any such registration. (j) If any action or proceeding (including any governmental investigation) shall be brought or asserted against any person entitled to indemnification under the provisions in this Section 4.11 (an "Indemnitee") in respect of which indemnity may be sought form any party who has agreed to provide such indemnification in this Section 4.11 (an "Indemnitor"), the Indemnitor shall assume the defense thereof, including the employment of counsel selected by the Indemnitor and shall assume the payment of all expenses. Such Indemnitee shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnitee. The Indemnitor shall not be liable for any settlement of any such action or proceedings effected without its written consent, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such action or proceeding, the Indemnitor shall indemnify and hold harmless such Indemnitee from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. (k) In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which the Buyer or any holder of Registrable Shares makes a claim for indemnification pursuant to this Section 4.11 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding that this Section 4.11 provides for indemnification, in such case, then the Buyer and such holder of Registrable Shares will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of the Buyer on the one hand and of the holder of Registrable Shares on the other in 39 PAGE connection with the statements or omission which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations or, if the allocation provided herein is not permitted by applicable law, in such proportion as shall be appropriate to reflect the relative benefits received by the Buyer and any holder of Registrable Shares form the offering of the securities covered by such Registration Statements. The relative fault of the Buyer on the one hand and of the holder of Registrable Shares on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Buyer on the one hand or by the holder of Registrable Shares on the other, and each party's relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (i) no such holder of Registrable Shares will be required to contribute any amount in excess of the proceeds received by such holder of Registrable Shares offered by it pursuant to the Unit Registration Statement or sold following the acquisition thereof pursuant to the Warrant Registration Statement; and (ii) no person or entity guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act will be entitled to contribution from any person or entity who was no guilty of such fraudulent misrepresentation. (l) The Buyer shall timely file with the SEC such information as the SEC may require under Section 13 or 15(d) of the Exchange Act; and in such event, the Buyer shall use its best efforts to take all action pursuant to Rule 144(c) as may be required as a condition to the availability of Rule 144 under the Securities Act (or any successor exemptive rule hereinafter in effect) with respect to Buyer Common Stock. The Buyer shall furnish to any holder of Registrable Shares forthwith upon request (i) a written statement by the Buyer as to its compliance with the reporting requirements of Rule 144(c), (ii) a copy of the most recent annual or quarterly report of the Buyer as filed with the SEC, and (iii) such other publicly-filed reports and documents as a holder may reasonable request in availing itself of any rule or regulation of the SEC allowing a holder to sell any such Registrable Shares without registration. (m) The Buyer shall bear all costs and expenses of such registration, including, but not limited to, printing, legal and accounting expenses, SEC and NASD filing fees and all related "Blue Sky" fees and expenses, provided, however, that the Buyer shall have no obligation to pay or otherwise bear any portion of the underwriters' commissions or discounts attributable to the Registrable Shares being offered and sold by the Company Stockholders, or the fees and expenses of any counsel or other advisor for the Company Stockholders in connection with such registration. 40 PAGE 4.12 Continuation of Insurance. Until the second anniversary of the Effective Date and provided that such insurance is available, the Buyer will maintain insurance policies in place insuring the Surviving Corporation and liabilities of the Company in scope and at levels no less than that currently in effect for the Company, including "tail" coverage for such policies, where applicable, to the year currently covered by the Company's policies. If during such two year period a claim for indemnification is made hereunder or under the Escrow Agreement, and such claim may be covered by any of such insurance policies such policies will be continued in force to provide recovery if necessary to do so. 4.13 No Short Selling. The Company and the Buyer shall use their reasonable best efforts to ensure that no Company Stockholder receiving Units and no holder of an Option engage in short sales of Buyer Common Stock following the Effective Time. ARTICLE V CONDITIONS TO CONSUMMATION OF MERGER 5.1 Conditions to Each Party's Obligations. The respective obligations of each Party to consummate the Merger are subject to the satisfaction of the following conditions: (a) this Agreement and the Merger shall have received the Requisite Stockholder Approval; (b) all applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been terminated; (c) no action, suit or proceeding shall be pending or threatened by or before any Governmental Entity wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation or (iii) affect adversely the right of the Buyer to own, operate or control any of the assets and operations of the Surviving Corporation and the Subsidiaries following the Merger, and no such judgment, order, decree, stipulation or injunction shall be in effect; and (d) the Registrable Shares shall have been authorized for listing on the American Stock Exchange upon official notice of issuance. 5.2 Conditions to Obligations of the Buyer and the Transitory Subsidiary. The obligation of each of the Buyer and the Transitory Subsidiary to consummate the Merger is subject to the satisfaction of the following additional conditions: 41 PAGE (a) Company Stockholders holding in the aggregate at least 95% of the outstanding Company Shares shall have delivered effective written consents in favor of the Merger and this Agreement; (b) the Company and the Subsidiaries shall have obtained all of the waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2; (c) the representations and warranties of the Company set forth in Article II shall be true and correct when made on the date hereof and shall be true and correct as of the Effective Time as if made as of the Effective Time, except for representations and warranties made as of a specific date, which shall be true and correct as of such date; (d) the Company shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Effective Time; (e) the Company shall have delivered to the Buyer and the Transitory Subsidiary a certificate (without qualification as to knowledge or materiality or otherwise) to the effect that each of the conditions specified in clauses (a) and (c) of Section 5.1 and clauses (a) through (d) of this Section 5.2 is satisfied in all respects; (f) the Buyer and the Transitory Subsidiary shall have received from counsel to the Company an opinion with respect to the matters set forth in Exhibit F attached hereto, addressed to the Buyer and the Transitory Subsidiary and dated as of the Closing Date; (g) Messrs. Robert W. Dunlap, John R. Ryan, Michael D. Knupp and Andrew C. Middleton shall have executed non-competition agreements substantially in the form of Exhibit E hereto; (h) Not more than 35 Company Stockholders that are not "accredited investors" (as defined in Regulation D) shall have filed Forms of Election to receive Merger Units; (i) Company Stockholders shall have filed and not revoked Forms of Election sufficient for all Merger Units to be allocated pursuant to Section 1.8 at the Effective Time; (j) Each holder of an Option electing to be subject to certain restrictions as set forth in Section 1.12(a) shall have executed a Optionee Consent Agreement; (k) The Escrow Agreement shall have been executed and delivered by or on behalf of all Company Stockholders; 42 PAGE (l) the Buyer and the Transitory Subsidiary shall have received the resignations, effective as of the Effective Time, of each director of the Company and the Subsidiaries (other than R/T); (m) No holder of an Option shall have exercised any such Option between the execution of this Agreement and the Effective Time; (n) All unexercised Warrants shall have been terminated or exercised in full and the Company shall have obtained any necessary consent of the holder of such Warrants to such termination and to the assumption and amendment of Options as contemplated by Section 1.12 hereof (unless such consent is not required under the terms of the applicable agreement, instrument or plan). (o) All agreements between the Company and the Company Stockholders, or among the Company Stockholders (other than the Escrow Agreement) shall have been terminated prior or shall terminate effective upon the Effective Time; and (p) all actions to be taken by the Company in connection with the consummation of the transactions contemplated hereby and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby shall be reasonably satisfactory in form and substance to the Buyer and the Transitory Subsidiary. 5.3 Conditions to Obligations of the Company. The obligation of the Company to consummate the Merger is subject to the satisfaction of the following additional conditions: (a) the representations and warranties of the Buyer and the Transitory Subsidiary set forth in Article III shall be true and correct when made on the date hereof and shall be true and correct as of the Effective Time as if made as of the Effective Time, except for representations and warranties made as of a specific date, which shall be true and correct as of such date; (b) each of the Buyer and the Transitory Subsidiary shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Effective Time; (c) each of the Buyer and the Transitory Subsidiary shall have delivered to the Company a certificate (without qualification as to knowledge or materiality or otherwise) to the effect that each of the conditions specified in clauses (c) and (d) of Section 5.1 and clauses (a) and (b) of this Section 5.3 is satisfied in all respects; 43 PAGE (d) the Company shall have received from counsel to the Buyer and the Transitory Subsidiary an opinion with respect to the matters set forth in Exhibit G attached hereto, addressed to the Company and dated as of the Closing Date; and (e) all actions to be taken by the Buyer and the Transitory Subsidiary in connection with the consummation of the transactions contemplated hereby and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby shall be reasonably satisfactory in form and substance to the Company. ARTICLE VI INDEMNIFICATION 6.1 Of the Buyer and the Company. If the Closing occurs, the Buyer, the Company and each Subsidiary shall be indemnified and held harmless from and against any and all claims, damages, losses, diminution of value, liabilities, costs and expenses (including, without limitation, settlement costs and any legal, accounting, consulting or other fees or expenses for investigating or defending any actions or threatened actions) whether or not involving a third-party claim (collectively, the "Damages") arising out of, constituting or related to each and all of the following: (a) any misrepresentation or breach of any representation or warranty made by the Company in Section 2 of this Agreement or in any statement, certificate or Schedule furnished by the Company pursuant to this Agreement; (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement (other than Section 4.13 hereof) or any other agreement, instrument or document contemplated by this Agreement; (c) resulting from (i) any release of any Materials of Environmental Concern into the environment relating to the operation of the business of the Company or any Subsidiary or any predecessor business or company of the Company or any Subsidiary prior to the Closing Date (including without limitation with respect to the transportation of Materials of Environmental Concern or the off-site storage, treatment, reclamation, recycling or disposal thereof); (ii) any release of any Materials of Environmental Concern at any location prior to the Closing Date if such release could give rise under any Environmental Law to liability on the part of the Company or any Subsidiary or any predecessor business or company of the Company or any Subsidiary; or (iii) any violation of any Environmental Law by the Company or any Subsidiary or any predecessor business or company of the Company or any Subsidiary which occurred prior to the Closing Date; 44 PAGE (d) any liability for Taxes relating to operation of the Company or any Subsidiary for any period prior to the Closing (except to the extent of reserves specifically therefor on the Most Recent Balance Sheet); (e) resulting from any failure of any Company Stockholders to have good, valid and marketable title to the issued and outstanding Company Shares held by such Company Stockholders, free and clear of all liens, claims, pledges, options, adverse claims or charges of any nature whatsoever; or (f) resulting from any claim by a stockholder or former stockholder of the Company, or any other person, firm, corporation or entity, seeking to assert, or based upon: (i) ownership or rights to ownership of any shares of capital stock of or equity interest in the Company; (ii) any rights under the Certificate of Incorporation or By-laws of the Company; or (iii) any claim that his, her or its shares were wrongfully repurchased by the Company at any time prior to the Closing. The obligations of the Company Stockholders to indemnify and hold harmless the Buyer, the Company and each Subsidiary shall in each case be joint and several obligations, except that the liability of each Company Stockholder with respect to Damages specified in Section 6.1(e) shall be several, and not joint. 6.2 Of the Company Stockholders. If the Closing occurs, the Buyer hereby agrees to indemnify and hold harmless each Company Stockholder from and against all Damages arising out of or related to each and all of the following: (a) any misrepresentation or breach of any representation or warranty made by the Buyer in this Agreement; (b) any breach of any covenant, agreement or obligation of the Buyer contained in this Agreement or any other agreement, instrument or document contemplated by this Agreement; (c) any misrepresentation contained in any statement, certificate or schedule furnished by the Buyer pursuant to this Agreement or in connection with the transactions contemplated by this Agreement; or (d) except as otherwise provided herein (including without limitation in Section 6.1), the Company's operation after the Closing (provided that no such indemnification shall be provided with respect to any facts which would require indemnification of the Buyer or the Company in Section 6.1 if a claim was made therefor within the periods set forth in Section 6.5). 45 PAGE 6.3 Claims for Indemnification. (a) Whenever any claim shall arise for indemnification under this Section 6, the party seeking indemnification (the "Indemnified Party"), shall promptly notify the party from whom indemnification is sought (the "Indemnifying Party") of the claim and, when known, the facts constituting the basis for such claim with as much specificity and particularity as practicable under the circumstances; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. (b) All claims for indemnification not involving any claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in the Escrow Agreement. (c) In the event of any such claim for indemnification hereunder resulting from or in connection with any claim or legal proceeding by a third party, the notice shall specify, if known, the amount or an estimate of the amount of the liability arising therefrom and shall include copies of all suit, service and claim documents. The Indemnified Party shall not settle or compromise any claim by a third party for which it is entitled to indemnification hereunder without the prior written consent, which shall not be unreasonably withheld or delayed, of the Indemnifying Party; provided, however, that if suit shall have been instituted against an Indemnified Party and the Indemnifying Party shall not have taken control of such suit after notification thereof as provided in Section 6.4 of this Agreement, the Indemnified Party shall have the right to settle or compromise such claim as provided in Section 6.4. The Indemnification Representative shall have the power and authority to bind all the Company Stockholders for all purposes of this Section 6. (d) The parties agree that, prior to submitting any claim for indemnification under this Article VI, they shall use reasonable efforts to determine the amount, if any, by which their losses would be offset by an Indemnified Party's recovery of insurance proceeds and reduction of tax liabilities and to provide the Indemnifying Party notice of and a description of such determination. All claims for indemnification shall provide for appropriate adjustments as a result of such reductions. 6.4 Defense by the Indemnifying Party. In connection with any claim which may give rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a person other than the Indemnified Party, the Indemnifying Party may, upon written notice to the Indemnified Party, assume the defense of any such claim or legal proceeding if the Indemnifying Party acknowledges to the Indemnified Party in writing the obligation of the Indemnifying Party to indemnify the Indemnified Party with 46 PAGE respect to all elements of such claim. If the Indemnifying Party assumes the defense of any such claim or legal proceeding, the Indemnifying Party shall select counsel reasonably acceptable to the Indemnified Party to conduct the defense of such claims or legal proceedings and shall take all steps necessary in the defense or settlement thereof. The Indemnifying Party shall bear its costs and expenses incurred in connection with its defense of any claim under this Section 6.4, provided that, if the Buyer of the Company is the Indemnified Party, the Indemnifying Party, if it assumes the control of such claim, may be reimbursed for its reasonable out-of-pocket costs in connection with such defense from the amounts then held pursuant to the Escrow Agreement pursuant to the procedures set forth therein. The Indemnifying Party shall not consent to a settlement of, or the entry of any judgment arising from, any such claim or legal proceeding, without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed) unless the terms thereof provide for the unconditional release and discharge of the Indemnified Party; provided that if the Indemnified Party is the Buyer or the Company, the Indemnifying Party shall not consent to a settlement of, or the entry of any judgment arising from, any such claim or legal proceeding without the consent of the Buyer where the Buyer or the Company shall have reasonably demonstrated that the circumstances surrounding such settlement or judgment could result in an adverse impact upon the business, operations, assets or financial position of the Buyer, the Company or any Subsidiary. The Indemnified Party shall be entitled to participate in (but not control) the defense of any such action, with its own counsel and at its own expense (except that the Indemnifying Party will be responsible for the fees and expenses of the separate co-counsel to the extent the Indemnified Party reasonably concludes that the counsel the Indemnifying Party has selected has a conflict of interest). If the Indemnifying Party does not assume the defense of any such claim or litigation resulting therefrom as provided in this Section 6.4 within thirty (30) days after the date that the Indemnified Party has given notice of the claim to the Indemnifying Party: (a) the Indemnified Party may defend against such claim or litigation in such manner as he or it may deem appropriate, including, but not limited to, settling such claim or litigation on such terms as the Indemnified Party may deem appropriate; and (b) the Indemnifying Party shall be entitled to participate in (but not control) the defense of such action, with his or its counsel and at his or its own expense. 6.5 Survival. The representations and warranties of the Company set forth in this Agreement shall survive the Closing and the consummation of the transactions contemplated hereby and continue until 24 months after the Closing Date and shall not be affected by any examination made for or on behalf of the Buyer or the knowledge of any of the Buyer's officers, directors, stockholders, employees or agents. Notwithstanding the foregoing, the representations and warranties contained in Section 2.2 relating to capitalization and the representations 47 PAGE and warranties contained in Section 2.9 relating to tax matters shall survive the Closing and the consummation of the transactions contemplated thereby and continue until 90 days after the expiration of the applicable statute of limitations relating to such representations and the representations and warranties contained in Section 2.3 relating to authorization of the Merger shall survive without limitation. If a notice is given in accordance with the Escrow Agreement before expiration of such periods, then (notwithstanding the expiration of such time period) the representation or warranty applicable to such claim shall survive until, but only for purposes of, the resolution of such claim. No claim for indemnification may be made except within the time periods specified herein. 6.6 Limitations. Notwithstanding anything to the contrary herein, (a) the aggregate liability of the Company Stockholders for Damages under this Article VI shall not exceed the Escrow Property (as defined in the Escrow Agreement), except with respect to claims made in connection with the breaches of representations and warranties in Section 2.2 and 2.3, or pursuant to Section 6.1(d), (e) or (f), as to which such liability shall not be limited to the Escrow Property, but shall not exceed the Cash Consideration and Merger Units (or proceeds from the sale thereof) received by the Company Stockholders hereunder, and (b) except for claims pursuant to Section 9.11, the Buyer shall not receive indemnification under this Article VI unless and until the aggregate Damages exceed $300,000 (at which point the Buyer shall be indemnified for the aggregate Damages (subject to the limitation in the foregoing clause (a)), and not just the amounts in excess of $300,000). Except with respect to claims based on fraud, the rights of the Indemnified Persons under this Article VI shall be the exclusive remedy of the Indemnified Persons with respect to claims resulting from or relating to any misrepresentation, breach of warranty or failure to perform any covenant or agreement of the Company contained in this Agreement. No Company Stockholder shall have any right of contribution against the Company with respect to any breach by the Company of any of its representations, warranties, covenants or agreements. In any circumstances in which the Company Stockholders may be liable for amounts in excess of the Escrow Property, recovery shall be had first against the Escrow Property, as appropriate, and second (to the extent the Escrow Property is insufficient to satisfy such claims) from the remaining Cash Consideration and Merger Units (or proceeds from the sale thereof). 48 PAGE ARTICLE VII TERMINATION 7.1 Termination of Agreement. The Parties may terminate this Agreement prior to the Effective Time (whether before or after Requisite Stockholder Approval) as provided below: (a) the Parties may terminate this Agreement by mutual written consent; (b) the Buyer may terminate this Agreement by giving written notice to the Company in the event the Company is in breach, and the Company may terminate this Agreement by giving written notice to the Buyer and the Transitory Subsidiary in the event the Buyer or the Transitory Subsidiary is in breach, of any material representation, warranty or covenant contained in this Agreement, and such breach is not remedied within 10 days of delivery of written notice thereof; (c) the Buyer may terminate this Agreement by giving written notice to the Company if the Closing shall not have occurred on or before December 31, 1995 by reason of the failure of any condition precedent under Section 5.1 or 5.2 hereof (unless the failure results primarily from a breach by the Buyer or the Transitory Subsidiary of any representation, warranty or covenant contained in this Agreement); (d) the Company may terminate this Agreement by giving written notice to the Buyer and the Transitory Subsidiary if the Closing shall not have occurred on or before December 31, 1995 by reason of the failure of any condition precedent under Section 5.1 or 5.3 hereof (unless the failure results primarily from a breach by the Company of any representation, warranty or covenant contained in this Agreement); or 7.2 Effect of Termination. If any Party terminates this Agreement pursuant to Section 7.1, all obligations of the Parties hereunder shall terminate without any liability of any Party to any other Party (except for any liability of any Party for breaches of this Agreement). ARTICLE VIII DEFINITIONS For purposes of this Agreement, each of the following defined terms is defined in the Section of this Agreement indicated below. Defined Term Section Affiliate 2.15(f) 49 PAGE Average Price of Buyer Common Stock 1.5(c) Buyer Introduction Buyer Common Stock 1.5(a) Buyer Reports 3.5 Buyer Warrants 1.5(c) Cash Consideration 1.5(c) CERCLA 2.22(a) Certificate of Merger 1.1 Certificates 1.7(a) Closing 1.2 Closing Date 1.2 Code 1.13(a) Company Introduction Company Shares 1.5(a) Company Stockholder 1.5(a) Conversion Ratio 1.13(a) Damages 6.1 Disclosure Schedule Article II Dissenting Shares 1.6(a) Effective Time 1.1 Employee Benefit Plan 2.21(a) Environmental Law 2.22(a) ERISA 2.21(a) ERISA Affiliate 2.21(a) Escrow Agreement 1.3 Escrow Agent 1.3 Exchange Act 2.14(g) Exchange Agent 1.3 Financial Statements 2.6 Form of Election 1.7(a) GAAP 2.6 Governmental Entity 2.4 Hart-Scott-Rodino Act 2.4 Indemnification Representatives 1.3 Indemnified Persons 6.1 Intellectual Property 2.12(a) Intended Uses 2.11(a) Materials of Environmental Concern 2.22(b) Merger 1.1 Merger Consideration 1.5(c) Merger Units 1.5(c) Most Recent Balance Sheet 2.8 Most Recent Fiscal Quarter End 2.7 Offering Memorandum/Information Statement 4.3(a) Optionee Consent Agreement 1.13(a) Options 1.13(a) Ordinary Course of Business 2.4 Outstanding Company Share Value 1.5(c) Party Introduction Permit 2.24 Registrable Shares 4.11 Registration Statement 4.12(a) Requisite Stockholder Approval 2.3 50 PAGE R/T 2.4 SEC 4.11 Securities Act 1.13(c) Security Interest 2.4 Series A Shares 1.5(a) Series B Shares 1.5(a) Services 2.21(a) Subsidiary 2.4 Surviving Corporation 1.1 Taxes 2.9(a) Tax Returns 2.9(a) Third Party Intellectual Property Rights 2.12(a) Transitory Subsidiary Introduction Unit 1.5(c) Unit Election Shares 1.5(a) Unit Value 1.5(c) Warrants 1.13(d) ARTICLE IX MISCELLANEOUS 9.1 Press Releases and Announcements. No Party shall issue any press release or public disclosure relating to the subject matter of this Agreement without the prior approval of the other Parties; provided, however, that any Party may make any public disclosure it believes in good faith is required by law or regulation (in which case the disclosing Party shall advise the other Parties and provide them with a copy of the proposed disclosure prior to making the disclosure). 9.2 No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns; provided, however, that the provisions in Article I concerning issuance of the Merger Units and in Section 4.11 concerning registration rights are intended for the benefit of the Company Stockholders. 9.3 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, with respect to the subject matter hereof. 9.4 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Parties; provided that the Transitory Subsidiary may assign its rights, interests and obligations hereunder to an Affiliate of the Buyer. 51 PAGE 9.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 9.6 Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 9.7 Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly delivered two business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below: If to the Company: Copy to: Remediation Technologies, Inc. Van Wert & Zimmer, P.C. Damonmill Square One Militia Drive 9 Pond Lane Lexington, MA 02173 Concord, MA 01741 Attn: Thomas M. Zimmer Attn: Robert W. Dunlap If to the Buyer: Copy to: Thermo Remediation, Inc. Thermo Remediation, Inc. c/o Thermo Electron Corporation c/o Thermo Electron 81 Wyman Street Corporation Waltham, MA 02254 81 Wyman Street Attn: Seth Hoogasian, Esq. Waltham, MA 02254 General Counsel Attn: Dr. John P. Appleton If to the Transitory Subsidiary: Copy to: TRI Acquisition Inc. TRI Acquisition Inc. c/o Thermo Electron Corporation c/o Thermo Electron 81 Wyman Street Corporation Waltham, MA 02254 81 Wyman Street Attn: Seth Hoogasian, Esq. Waltham, MA 02254 General Counsel Attn: Dr. John P. Appleton Any Party may give any notice, request, demand, claim, or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have 52 PAGE been duly given unless and until it actually is received by the party for whom it is intended. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth. 9.8 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws (and not the law of conflicts) of the Commonwealth of Massachusetts. 9.9 Amendments and Waivers. The Parties may mutually amend any provision of this Agreement at any time prior to the Effective Time; provided, however, that any amendment effected subsequent to the Requisite Stockholder Approval shall be subject to the restrictions contained in the Delaware General Corporation Law. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. 9.10 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed. 9.11 Expenses. Except as set forth in the Escrow Agreement, each of the Parties shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby; provided, however, that if the Merger is consummated, the Company and the Subsidiaries shall not incur more than an aggregate of $100,000 in out-of-pocket fees and expenses (including legal and accounting, but excluding internal marketing and analysis fees and expenses) in connection with the Merger, and any fees and expenses incurred by the Company or its Subsidiaries in excess of such amount shall be recovered by the Buyer pursuant to the 53 PAGE Escrow Agreement without regard to the provisions of the first sentence of Section 6.6. 9.12 Specific Performance. Each of the Parties acknowledges and agrees that one or more of the other Parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter (subject to the provisions of Section 9.13), in addition to any other remedy to which it may be entitled, at law or in equity. 9.13 Submission to Jurisdiction. Each of the Parties (a) submits to the jurisdiction of any state or federal court sitting in Massachusetts in any action or proceeding arising out of or relating to this Agreement, (b) agrees that all claims in respect of the action or proceeding may be heard and determined in any such court, and (c) agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other Party with respect thereto. Any Party may make service on another Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 9.7. Nothing in this Section 9.13, however, shall affect the right of any Party to serve legal process in any other manner permitted by law. 9.14 Construction. The language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any Party. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. 9.15 Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. 54 PAGE IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written. THERMO REMEDIATION, INC. By:/s/ John P. Appleton Title: Chairman and Chief Executive Officer TRI ACQUISITION INC. By:/s/ Norman A. Pedersen Title: Vice President REMEDIATION TECHNOLOGIES, INC. By:/s/ Robert W. Dunlap Title: President The undersigned, being the duly elected Vice President of TRI Acquisition Inc., hereby certifies that this Agreement has been adopted by a majority of the votes represented by the outstanding shares of capital stock of TRI Acquisition Inc. entitled to vote on this Agreement. /s/ Norman A. Pedersen Vice President The undersigned, being the duly elected Secretary of Remediation Technologies, Inc., hereby certifies that this Agreement has been adopted by the written consent of shareholders owning a majority of the issued and outstanding Company Shares entitled to grant a consent for the approval of this Agreement. /s/ Thomas M. Zimmer Secretary 55 EX-2 3 EXHIBIT 2(b) ESCROW AGREEMENT This Escrow Agreement (the "Agreement") is entered into as of December 8, 1995, by and among Thermo Remediation Inc., a Delaware corporation (the "Buyer"), Robert W. Dunlap and Thomas M. Zimmer (the "Indemnification Representatives"), those persons or entities set forth in Schedule I hereto and State Street Bank and Trust Company, a Massachusetts trust company (the "Escrow Agent"). WHEREAS, the Buyer and Remediation Technologies, Inc. (the "Company") have entered into an Agreement and Plan of Merger dated December 1, 1995 (the "Merger Agreement") by and among the Company, the Buyer and a subsidiary of the Buyer, pursuant to which such subsidiary will be merged into the Company which, as the surviving corporation (the "Surviving Corporation"), will become a wholly-owned subsidiary of the Buyer. WHEREAS, the Merger Agreement provides that an escrow account will be established to secure the indemnification obligations to the Buyer in Article VI of the Merger Agreement on the terms and conditions set forth herein. WHEREAS, the parties hereto desire to establish the terms and conditions pursuant to which such escrow account will be established and maintained. NOW, THEREFORE, the parties hereto hereby agree as follows: 1. Defined Terms. Capitalized terms used in this Agreement and not otherwise defined shall have the meanings given them in the Merger Agreement. 2. Consent of Company Stockholders. By virtue of the Company Stockholders' approval of the Merger Agreement, and/or by their execution of Forms of Election and/or Optionee Consent Agreements, Company Stockholders set forth in Schedule I hereto, as such schedule may be amended, (the "Indemnifying Stockholders") have consented to: (a) the indemnification of the Buyer, the Company and the Subsidiaries as set forth in Article VI of the Merger Agreement; and (b) their agreement to be bound by the terms of this Escrow Agreement and to be a party hereto with the same force and effect as if they were a signatory hereto, including without limitation (i) the establishment of this escrow to secure the indemnification obligations to the Buyer under Article VI of the Merger Agreement in the manner set forth herein, and (ii) the appointment of the Indemnification Representatives as their representatives for purposes of this Agreement and as attorneys-in-fact and agents for and on behalf of each Indemnifying Stockholder, and the taking by the PAGE Indemnification Representatives of any and all actions and the making of any decisions required or permitted to be taken or made by them under this Agreement. 3. Escrow and Indemnification. (a) Escrow of Shares, Warrants and Cash. On the Closing Date, the Buyer shall deposit with the Escrow Agent a check issued in the name of the Escrow Agent in the amount of Cash Consideration (the "Escrow Cash") and on, but not before, January 3, 1996 the Buyer shall deposit with the Escrow Agent shares of Buyer Common Stock and Buyer Warrants comprising the Merger Units (the "Escrow Units"), which shall be registered in the name of the Escrow Agent or its nominee. The Escrow Units and the Escrow Cash are collectively referred to herein as the "Escrow Property." The Buyer may from time to time deposit additional Escrow Property with the Escrow Agent, as provided under Optionee Consent Agreements being executed by the Buyer and certain individuals in connection with the Merger. The Buyer shall be entitled to a pro rata distribution of the Escrow Cash to reflect the payment of any amounts to a Dissenting Stockholder. As any such Escrow Property is deposited or withdrawn, Schedule I shall be appropriately modified by the Indemnification Representative and provided to the Escrow Agent. The Escrow Property shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party hereto. The Escrow Agent agrees to accept delivery of the Escrow Property and to hold the Escrow Property in an escrow account (the "Escrow Account"), subject to the terms and conditions of this Agreement. (b) Investment of Escrow Cash. The Escrow Agent shall invest the Escrow Cash as directed in writing by the Indemnification Representatives in any of the following: (i) obligations issued by The United States of America or an agency or instrumentality thereof and guaranteed by The United States of America; (ii) certificates of deposit of, or interest bearing deposits with, national banks or corporations endowed with trust powers, including the Escrow Agent, having capital and surplus in excess of $100,000,000; (iii) commercial paper that at the time of investment is rated A-1 by Standard & Poor's Corporation or P-1 by Moody's Investor Services, Inc.; (iv) repurchase agreements with any bank or corporation described in Section 3(b)(ii) hereof, or registered broker-dealers, fully secured by obligations described in Section 3(b)(i) hereof; or 2 PAGE (v) an insured money market account offered by the Escrow Agent ("IMMA"). (c) Indemnification. The Buyer, the Company and the --------------- Subsidiaries shall be held harmless from and against specified Damages as set forth in Article VI of the Merger Agreement. The Escrow Property shall be security for such indemnity obligation, subject to the limitations, and in the manner provided, in this Agreement. (d) Interest, Dividends, Etc. Any securities, cash dividends or property (other than securities) distributable on or after January 3, 1996 in respect of or in exchange for any of the Escrow Units, whether by way of stock dividends, stock splits or otherwise, shall be delivered to the Escrow Agent, who shall hold such securities, cash dividends or property (other than securities) in the Escrow Account. Such securities shall be issued in the name of the Escrow Agent or its nominee and all such securities, cash dividends or property (other than securities) shall be considered Escrow Property for purposes hereof. Any interest on the Escrow Cash on or after January 3, 1996 shall be added to the Escrow Property and for tax reporting purposes shall be allocable to the Indemnifying Stockholders. Any interest on the Escrow Cash prior to January 3, 1996 shall be distributed to and for tax purposes shall be allocable to the Buyer. The Escrow Units shall not be considered as outstanding securities of the Buyer for any purpose (including for entitlement to dividends) prior to January 3, 1996. For tax purposes, the Escrow Property shall be deemed to be the property of the Buyer until January 3, 1996, and all parties hereto shall file all their tax returns consistent with such treatment. The parties hereto agree to supply the Escrow Agent with an original, signed IRS Form W-9 or its equivalent. (e) Voting of Shares. The Indemnification Representatives shall have the right, in their sole discretion, on behalf of the Indemnifying Stockholders, to direct the Escrow Agent in writing as to the exercise of any voting rights pertaining to the Escrow Units on or after January 3, 1996, and the Escrow Agent shall comply with any such written instructions. In the absence of such instructions, the Escrow Agent shall not vote any of the Escrow Units. The Indemnification Representatives shall have no obligation to solicit consents or proxies from the Indemnifying Stockholders for purposes of any such vote. (f) Transferability. The respective interests of the Indemnifying Stockholders in the Escrow Property shall not be assignable or transferable, other than by operation of law. Notice of any such assignment or transfer by operation of law shall be given to the Escrow Agent and the Buyer, and no such assignment or transfer shall be valid until such notice is given. 3 PAGE 4. Administration of Escrow Account. The Escrow Agent shall administer the Escrow Account as follows: (a) If the Buyer, the Company or any Subsidiary has incurred or suffered Damages for which it is entitled to indemnification under Article VI of the Merger Agreement, it shall, prior to the expiration of the representation, warranty, covenant or agreement to which such claim relates, give written notice of such claim (a "Claim Notice") to the Indemnification Representatives and the Escrow Agent. The Buyer may make a Claim Notice only based upon a good faith belief that it has incurred Damages for which it is entitled to indemnification under Article VI of the Merger Agreement. Each Claim Notice shall state the amount of claimed Damages (the "Claimed Amount") and the basis for such claim. The date on which all of the representations, warranties, covenants and agreements of the Company expire in accordance with Section 6.5 of the Merger Agreement shall be referred to herein as the "Termination Date." (b) Claims for indemnification involving a claim or legal proceeding by a third party shall be made in accordance with the procedures set forth in Article VI of the Merger Agreement. For indemnification claims not involving any claim or legal proceeding by a third party, the procedures herein shall apply. Within 30 days after delivery of a Claim Notice the Indemnification Representatives shall provide to the Buyer, with a copy to the Escrow Agent, a written response (the "Response Notice") in which the Indemnification Representatives shall: (i) agree that Escrow Property having a Fair Market Value (as computed pursuant to Section 6) equal to the full Claimed Amount may be released from the Escrow Account to the Buyer, (ii) agree that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount (the "Agreed Amount") may be released from the Escrow Account to the Buyer, or (iii) contest that any of the Escrow Property may be released from the Escrow Account to the Buyer. The Indemnification Representatives may contest the release of Escrow Property having a Fair Market Value equal to all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Buyer is entitled to indemnification under Article VI of the Merger Agreement. If no Response Notice is delivered by the Indemnification Representatives within such 30-day period, the Indemnification Representatives shall be deemed to have agreed that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released to the Buyer from the Escrow Account. (c) If the Indemnification Representatives in the Response Notice agree (or are deemed to have agreed) that Escrow Property having a Fair Market Value equal to all of the Claimed Amount may be released from the Escrow Account to the Buyer, the Escrow Agent shall, promptly following the earlier of the required delivery date for the Response Notice or the delivery of the Response Notice, transfer, deliver and assign to the Buyer 4 PAGE such amount of Escrow Property held in the Escrow Account which has a Fair Market Value equal to the Claimed Amount (or such lesser amount of Escrow Property as is then held in the Escrow Account). The relative amount of Escrow Cash and Escrow Units to be released shall be determined in accordance with the provisions of Section 5 below. (d) If the Indemnification Representatives in the Response Notice agree that Escrow Property having a Fair Market Value equal to part, but not all, of the Claimed Amount may be released from the Escrow Account to the Buyer, the Escrow Agent shall promptly following the delivery of the Response Notice transfer, deliver and assign to the Buyer such amount of Escrow Property held in the Escrow Account which has a Fair Market Value equal to the Agreed Amount (or such lesser amount of Escrow Property as is then held in the Escrow Account). The relative amount of Escrow Cash and Escrow Units to be released shall be determined in accordance with the provisions of Section 5 below. (e) If the Indemnification Representatives in the Response Notice contest the release of Escrow Property having a Fair Market Value equal to all or part of the Claimed Amount (the "Contested Amount"), the Indemnification Representatives and the Buyer shall attempt promptly and in good faith to agree upon the rights of the parties with respect to the Contested Amount. If the Indemnification Representatives and the Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and the Escrow Agent shall transfer, assign and deliver to the Buyer an amount of Escrow Property which has a Fair Market Value equal to the amount so agreed. The relative amount of Escrow Cash and Escrow Units to be released shall be determined in accordance with the provisions of Section 5 below. If no such agreement can be reached after good faith negotiation over a period of 30 days (or such longer period as the Buyer and the Indemnification Representatives may mutually agree), the matter shall be settled by binding arbitration in Boston, Massachusetts. All claims shall be settled by a single arbitrator mutually agreeable to the Buyer and the Indemnification Representatives, or if they cannot agree to a single arbitrator in 30 days, by three arbitrators, in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the "AAA Rules"). If a single arbitrator has not been mutually agreed upon, the Indemnification Representatives and the Buyer shall each designate one arbitrator within 60 days of the delivery of the Indemnification Representatives' Response Notice contesting the Claimed Amount. The Indemnification Representatives and the Buyer shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided, however, that (i) failing such agreement within 90 days of delivery of the Indemnification Representatives' Response Notice, the third arbitrator shall be appointed in accordance with the AAA Rules, and (ii) if either the Indemnification Representatives or the 5 PAGE Buyer fail to timely designate an arbitrator, the dispute shall be resolved by the one arbitrator timely designated. The Indemnifying Stockholders and the Buyer shall pay the fees and expenses of their respectively designated arbitrators and shall bear equally the fees and expenses of the third arbitrator (or of the sole arbitrator, in the event a single arbitrator decides the matter). The Indemnification Representatives and the Buyer shall cause the arbitrators to decide the matter to be arbitrated pursuant hereto within 60 days after the appointment of the last arbitrator. The arbitrators' decision shall relate solely to whether the Buyer, the Company and/or the Subsidiary is entitled to receive the Contested Amount (or a portion thereof) pursuant to the applicable terms of the Merger Agreement and this Agreement. The final decision of the arbitrator, or the majority of the arbitrators in the case of three arbitrators, shall be furnished to the Indemnification Representatives, the Buyer and the Escrow Agent in writing and shall constitute a conclusive determination of the issue in question, binding upon the Indemnification Representatives, the Indemnifying Stockholders, the Buyer, the Company, the Subsidiaries and the Escrow Agent, and shall not be contested by any of them. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. (f) After delivery of a Response Notice that the Claimed Amount is contested by the Indemnification Representatives, the Escrow Agent shall continue to hold in the Escrow Account an amount of Escrow Property having a Fair Market Value sufficient to cover the Contested Amount (up to the amount of Escrow Property then available in the Escrow Account), notwithstanding the occurrence of a release date (as set forth in Section 5 below), until (i) delivery of a copy of a settlement agreement executed by the Buyer and the Indemnification Representatives setting forth instructions to the Escrow Agent as to the release of Escrow Property, if any, that shall be made with respect to the Contested Amount, or (ii) delivery of a copy of the final award of the arbitrator, or a majority of the arbitrators in the case of three arbitrators, setting forth instructions to the Escrow Agent as to the release of Escrow Property, if any, that shall be made with respect to the Contested Amount. The Escrow Agent shall thereupon release Escrow Property from the Escrow Account (to the extent Escrow Property is then held in the Escrow Account) in accordance with such agreement or instructions. (g) If, as a result of any third party claim or legal proceeding subject to the indemnification procedures set forth in the Merger Agreement, any settlement has been entered into, or any judgment entered in favor of any third party (which is not subject to further appeal), the Buyer, the Company or any Subsidiary may give notice of the resulting Damages to the Escrow Agent and the Escrow Agent shall, promptly following the receipt of such notice, transfer, deliver and assign to the Buyer such amount of Escrow Property held in the Escrow Account which has a 6 PAGE Fair Market Value equal to such Damages (or such lesser amount of Escrow Property as is then held in the Escrow Account). The relative amounts of Escrow Cash and Escrow Units to be released shall be determined in accordance with the provisions of Section 5 below. (h) In the event that, at the time that the Escrow Agent is to release any amounts to the Buyer hereunder, signatories to Optionee Consent Agreements would be required to forfeit certain stock options, the Buyer and the Indemnification Representatives agree that they will in good faith determine the value of such forfeitures and issue joint written instructions to the Escrow Agent identifying an adjustment to be made in the amounts of the Escrow Property to be distributed to the Buyer hereunder. 5. Release of Escrow Property. (a) Promptly after January 5, 1996, the Escrow Agent shall distribute to the Indemnifying Stockholders Escrow Property having a Fair Market Value equal to the difference between (i) 80% of the Escrow Property initially deposited with the Escrow Agent and (ii) any amounts previously distributed from the Escrow Fund in payment of any indemnification obligation to the Buyer under Article VI of the Merger Agreement (the "Initial Distribution"). Notwithstanding the foregoing, if the Buyer has previously given a Claim Notice which has not then been resolved in accordance with Section 4 or the terms of the Merger Agreement (as applicable), the Escrow Agent shall only distribute under this subsection 5(a) Escrow Property having a Fair Market Value equal to the difference between (x) the Fair Market Value of the Initial Distribution, and (y) the Claimed Amount. (b) Promptly after the first anniversary of the Effective Time, the Escrow Agent shall distribute to the Indemnifying Stockholders Escrow Property having a Fair Market Value equal to the difference between (i) 10% of the Escrow Property initially deposited with the Escrow Agent, and (ii) any amounts previously distributed from the Escrow Fund in payment of any indemnification obligation to the Buyer under Article VI of the Merger Agreement, except to the extent such amounts had previously reduced the Initial Distribution (the "Second Distribution"). Notwithstanding the foregoing, if the Buyer has previously given a Claim Notice which has not then been resolved in accordance with Section 4 or the Terms of the Merger Agreement (as applicable) or otherwise fully reserved for in connection with a distribution under subsection 5(a) above, the Escrow Agent shall only distribute under this subsection 5(b) Escrow Property having a Fair Market value equal to the difference between (x) 10% of the Fair Market Value of the Escrow Property initially deposited with the Escrow Agent, and (y) the Claimed Amount (or such portion thereof as has not been fully reserved for in connection with a distribution under subsection 5(a) above). 7 PAGE (c) Promptly after the Termination Date, the Escrow Agent shall distribute to the Indemnifying Stockholders all of the Escrow Property then held in escrow. Notwithstanding the foregoing, if the Buyer has previously given a Claim Notice which has not then been resolved in accordance with Section 4 or the terms of the Merger Agreement (as applicable), the Escrow Agent shall retain in the Escrow Account after the Termination Date an amount of Escrow Property having a Fair Market Value equal to the Claimed Amount covered by any Claim Notice which has not then been resolved. Any funds so retained in escrow shall be disbursed in accordance with the terms of the resolution of such claims. (d) Any distribution of all or a portion of the Escrow Property to the Indemnifying Stockholders shall be made in accordance with the percentage interests set forth opposite such holders' respective names on Schedule I attached hereto; provided, however, (i) that the Escrow Agent shall withhold the distribution of the portion of the Escrow Property otherwise distributable to Indemnifying Stockholders who have not, according to written notice provided by the Buyer to the Escrow Agent, prior to such distribution, surrendered their respective Certificates pursuant to the terms and conditions of the Merger Agreement; (ii) that such Schedule I shall be appropriately revised in the event the Buyer deposits additional Escrow Property with the Escrow Agent pursuant to the Merger Agreement or Optionee Consent Agreements following the date of this Agreement; (iii) that Escrow Units shall only be distributed to those Indemnifying Stockholders listed in Schedule I as entitled to receive Escrow Units (the "Unit Stockholders"); (iv) that, with respect to the Initial Distribution, the Indemnification Representatives shall direct the Escrow Agent in writing the relative amount of the Escrow Cash and whole Escrow Units to distribute to the Unit Stockholders (consistent with the provisions of subsection 5(a) hereof); and (v) that Unit Stockholders shall thereafter receive Escrow Cash and Escrow Units in proportion to the relative Fair Market Value of Escrow Cash and Escrow Units held on their behalf in escrow hereunder immediately after the Initial Distribution (with any fractional Escrow Units rounded down to the next whole Escrow Unit). Any property withheld pursuant to clause (i) above shall be delivered to the Buyer promptly after the Termination Date, and shall be delivered by the Buyer to the Indemnifying Stockholders to whom such property would have otherwise been distributed upon surrender of their respective Certificates. Distributions to the Indemnifying Stockholders shall be made by mailing stock certificates and Buyer Warrants and/or cash to such holders at their respective addresses shown on Schedule I (or such other address as may be provided in writing to the Escrow Agent by any such holder). No fractional Escrow Units shall be distributed to Indemnifying Stockholders pursuant to this Agreement. Instead, the Buyer shall redeem such Escrow Units for an amount equal to their Fair Market Value and the Escrow Agent shall distribute cash in lieu thereof. The Buyer will cooperate with the Escrow 8 PAGE Agent and will make available certificates for Buyer Common Stock and Buyer Warrants in such denominations and in such names as may be required to effectuate any distributions hereunder. 6. Valuation of Escrow Shares. For purposes of this Agreement, the Fair Market Value of each Escrow Unit shall be $49.00, the Fair Market Value of each Warrant shall be $4.00, and the Fair Market Value of the Buyer Common Stock shall be $15.00 per share. 7. Fees and Expenses of Escrow Agent. The Buyer agrees to pay or reimburse the Escrow Agent for any legal fees and expenses incurred in connection with the preparation of this Agreement and to pay the Escrow Agent's reasonable compensation for its normal services hereunder in accordance with the attached Schedule II, which may be subject to change on an annual basis. The Escrow Agent shall be entitled to reimbursement on demand for all expenses incurred in connection with the administration of the escrow created hereby which are in excess of its compensation for normal services hereunder, including without limitation, payment of any legal fees and expenses incurred by the Escrow Agent in connection with the resolution of any claim by any party hereunder. 8. Responsibility of the Escrow Agent. (a) The Escrow Agent may act upon any instrument or other writing believed by it in good faith to be genuine and to have been signed or presented by the proper person and shall have no responsibility for determining the accuracy thereof. The Escrow Agent shall not be liable to any party hereto in connection with the performance of its duties hereunder, except for its own gross negligence, bad faith or willful misconduct. The Escrow Agent's duties shall be determined only with reference to this Agreement and applicable laws and the Escrow Agent is not charged with knowledge of, or any duties or responsibilities in connection with, any other document or agreement. If in doubt as to its duties and responsibilities hereunder, the Escrow Agent may consult with counsel of its choice and shall be protected in any action reasonably taken or omitted in connection with the advice or opinion of such counsel. (b) If any party to this Agreement disagrees on anything connected with this escrow, (i) the Escrow Agent will not have to settle the matter, (ii) the Escrow Agent may wait for a settlement by appropriate legal proceedings or other means it may require, and in such event it will not be liable for damages, (iii) if the Escrow Agent intervenes in or is made a party to any legal proceedings, it will be entitled to such reasonable compensation for services, costs and attorney's fees as the court may award, and (iv) the Escrow Agent is entitled to hold assets deposited in escrow hereunder pending settlement of the disagreement by any of the above means. 9 PAGE (c) The Escrow Agent is to act as a depository agent only and is hereby relieved of any liability in connection with any representations made by the other parties hereto or any of their agents. The Escrow Agent shall not be responsible for and shall not be under a duty to examine any other agreement. 9. Indemnification of Escrow Agent. Neither the Escrow Agent nor any of its directors, officers or employees shall be liable to anyone for any action taken or omitted to be taken by it or any of its directors, officers or employees hereunder except in the case of gross negligence, bad faith or willful misconduct. Buyer and Indemnifying Stockholders, jointly and severally, covenant and agree to indemnify the Escrow Agent and hold it harmless without limitation from and against any loss, liability or expense of any nature incurred by the Escrow Agent arising out of or in connection with this Agreement or with the administration of its duties hereunder, including, but not limited to, legal fees and expenses and other costs and expenses of defending or preparing to defend against any claim of liability in the premises, unless such loss, liability or expense shall be caused by the Escrow Agent's gross negligence, bad faith or willful misconduct. In no event shall the Escrow Agent be liable for indirect, punitive, special or consequential damages. 10. Resignation of the Escrow Agent. The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving not less than 60 days prior written notice of such resignation to the Buyer and the Indemnification Representatives, which notice shall specify the date when such resignation shall take effect. Upon such notice, the Buyer and the Indemnification Representatives shall jointly appoint a successor to the Escrow Agent. If the Buyer and the Indemnification Representatives are unable to agree upon a successor to the Escrow Agent within 30 days after such notice, the Escrow Agent may apply to a court of competent jurisdiction for such appointment. The Escrow Agent shall continue to serve until its successor delivers to the Buyer and the Indemnification Representatives a duly executed instrument of acceptance of the terms and conditions of this Agreement and receives the Escrow Property. The provisions of Section 9 hereof shall survive the resignation or removal of the Escrow Agent or the termination of this Escrow Agreement. 11. Liability and Authority of Indemnification Representatives; Successors and Assignees. (a) The Indemnification Representatives shall incur no liability to the Indemnifying Stockholders with respect to any action taken or suffered by them in reliance upon any note, direction, instruction, consent, statement or other documents believed by them to be genuinely and duly authorized, nor for other action or inaction except their own willful misconduct or gross negligence. The Indemnification Representatives may, in all questions arising under the Escrow Agreement, rely on the advice of counsel and for anything done, omitted or suffered in 10 PAGE good faith by the Indemnification Representatives based on such advice, the Indemnification Representatives shall not be liable to the Indemnifying Stockholders. (b) In the event of the death or permanent disability of either Indemnification Representative, or his resignation as an Indemnification Representative, a successor Indemnification Representative shall be appointed by the other Indemnification Representative or, absent such appointment, a successor Indemnification Representative shall be elected by a majority vote of the Indemnifying Stockholders, with each such Indemnifying Stockholder (or his or her successors or assigns) to be given a vote equal to the number of votes represented by the Company Shares held by such Indemnifying Stockholder immediately prior to the Effective Time. Each successor Indemnification Representative shall have all of the power, authority, rights and privileges conferred by this Agreement upon the original Indemnification Representatives, and the term "Indemnification Representatives" as used herein shall be deemed to include any and all successor Indemnification Representatives. (c) The Indemnification Representatives, acting jointly but not singly, shall have full power and authority to represent the Indemnifying Stockholders, and their successors, with respect to all matters arising under this Agreement and all actions taken by any Indemnification Representative hereunder shall be binding upon the Indemnifying Stockholders, and their successors, as if expressly confirmed and ratified in writing by each of them. Without limiting the generality of the foregoing, the Indemnification Representatives, acting jointly but not singly, shall have full power and authority to interpret all of the terms and provisions of this Agreement, to compromise any claims asserted hereunder and to authorize payments to be made with respect thereto, on behalf of the Indemnifying Stockholders and their successors. All actions to be taken by the Indemnification Representatives hereunder shall be evidenced by, and taken upon, the written direction of both of them. 12. Amounts Payable by Indemnifying Stockholders. The fees and out-of-pocket expenses incurred by the Indemnifying Stockholders in resolving Claim Notices under this Agreement and in defending third party claims in connection with Article VI of the Merger Agreement shall be payable solely as follows. The Indemnification Representatives shall notify the Escrow Agent of any such fees and expenses incurred by the Indemnifying Stockholders prior to making payment thereof, with a copy of such notice to the Buyer. On the sixth business day after the delivery of such notice, the Escrow Agent shall disburse Escrow Cash and the Buyer will redeem the Escrow Units, as is necessary to raise an amount necessary to pay such fees and expenses, and shall disburse such amounts to the party to whom such amount is owed in accordance with the instructions of the Indemnification Representatives; provided that if the Buyer delivers to the Escrow Agent (with a copy to the Indemnification 11 PAGE Representatives), within five business days after delivery of such notice by the Indemnification Representatives, a written notice contesting the legitimacy or reasonableness of such fees and expenses, then the Escrow Agent shall not make such disbursement and such dispute shall be resolved by the Buyer and the Indemnification Representatives in accordance with the procedures set forth in Section 4(e). 13. Termination. This Agreement shall terminate upon the later of the Termination Date or the distribution by the Escrow Agent of all of the Escrow Property in accordance with this Agreement. 14. Notices. All notices, instructions and other communications given hereunder or in connection herewith shall be in writing. Any such notice, instruction or communication shall be sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii) via a reputable nationwide overnight courier service, in each case to the address set forth below. Any such notice, instruction or communication shall be deemed to have been delivered two business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide overnight courier service. If to the Buyer: Thermo Remediation Inc. 81 Wyman Street Waltham, MA 02254-9046 Attention: President with a copy to: Hale and Dorr 60 State Street Boston, MA 02109 Attention: David E. Redlick, Esq. If to the Indemnification Representatives: Robert W. Dunlap Thomas M. Zimmer c/o Van Wert & Zimmer One Militia Drive Lexington, MA 02173 If to the Escrow Agent: State Street Bank and Trust Company Two International Place Boston, MA 02110 Attention: Corporate Trust Department 12 PAGE Any party may give any notice, instruction or communication in connection with this Agreement using any other means (including personal delivery, telecopy or ordinary mail), but no such notice, instruction or communication shall be deemed to have been delivered unless and until it is actually received by the party to whom it was sent. Any party may change the address to which notices, instructions or communications are to be delivered by giving the other parties to this Agreement notice thereof in the manner set forth in this Section 14. 15. General. (a) Governing Law, Assigns. This Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts without regard to conflict-of-law principles and shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. (b) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (c) Entire Agreement. Except for those provisions of the Merger Agreement and the Optionee Consent Agreements referenced herein, this Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter of this Agreement and supersedes all prior agreements or understandings, written or oral, between the parties with respect to the subject matter hereof. (d) Waivers. No waiver by any party hereto of any condition or of any breach of any provision of this Escrow Agreement shall be effective unless in writing. No waiver by any party of any such condition or breach, in any one instance, shall be deemed to be a further or continuing waiver of any such condition or breach or a waiver of any other condition or breach of any other provision contained herein. (e) Amendment. This Agreement may be amended only with the written consent of the Buyer, the Escrow Agent and the Indemnification Representatives. (f) Force Majeure. Neither the Buyer, nor the Indemnification Representatives, nor the Escrow Agent shall be responsible for delays or failures in performance resulting from acts beyond their control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disaster. 13 PAGE (g) Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications which may hereafter be executed, and (b) certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, optical disk, micro-card, miniature photographic or other similar process. The parties hereto agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction shall likewise be admissible in evidence. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. THERMO REMEDIATION INC. By: /s/ John P. Appleton /s/ Thomas M. Zimmer THOMAS M. ZIMMER /s/ Robert W. Dunlap ROBERT W. DUNLAP EACH INDEMNIFYING STOCKHOLDER AS SET FORTH IN SCHEDULE I AND EACH PARTY TO AN OPTIONEE CONSENT AGREEMENT By: /s/ Robert W. Dunlap ROBERT W. DUNLAP ATTORNEY-IN-FACT STATE STREET BANK AND TRUST COMPANY By: /s/ Mark Nelson 14 EX-2 4 EXHIBIT 2(c) THIS WARRANT IS NOT TRANSFERABLE AND THE EXERCISE HEREOF IS LIMITED AS SET FORTH IN SECTIONS 1 AND 2 OF THIS WARRANT. THE SHARES OF COMMON STOCK ISSUED UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT. Warrant No. ____ Number of Shares:________ (subject to adjustment) Date of Issuance: December __, 1995 THERMO REMEDIATION, INC. Non-Negotiable Common Stock Purchase Warrant (Void after December __, 2003) Thermo Remediation Inc., a Delaware Corporation (the "Company"), for value received, hereby certifies that __________________________ (the "Registered Holder"), is entitled, subject to the terms and conditions set forth below, to purchase from the Company, at any time or from time to time on or after three years from the date of issuance set forth above (the "Date of Issuance") and on or before eight years from the Date of Issuance, at not later than 5:00 p.m. (Boston, Massachusetts time), ________ shares of Common Stock, $0.01 par value per share, of the Company, at a purchase price of $14.85 per share. This warrant is one of a series of warrants comprising a part of units (the "Units") issued by the Company in consideration for the acquisition (by merger) of Remediation Technologies, Inc. by the Company. Each individual Unit is comprised of three shares of Common Stock and a warrant to purchase one share of Common Stock on the terms described below. This warrant comprises a part of a number of Units equal to the number of shares of Common Stock set forth above. This warrant is hereinafter referred to as the "Warrant," and the shares purchasable upon exercise of this Warrant and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant, are hereinafter referred to as the "Warrant Shares" and the "Purchase Price," respectively. PAGE 1. Exercise. (a) Subject to the termination event and restrictions described herein, this Warrant may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant, with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder or by such Registered Holder's successor by will or the laws of descent and distribution, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full of the Purchase Price payable in respect of the number of Warrant Shares purchased upon such exercise, either in lawful money of the United States or by delivery to the Company of shares of Common Stock already owned by the Registered Holder having a fair market value equal in amount to such purchase price. (b) The Registered Holder may, at its option, elect to pay some or all of the Purchase Price payable upon an exercise of this Warrant by cancelling a portion of this Warrant exercisable for such number of Warrant Shares as is determined by dividing (i) the total Purchase Price payable in respect of the number of Warrant Shares being purchased upon such exercise by (ii) the excess of the Fair Market Value per share of Common Stock as of the effective date of exercise, as determined pursuant to subsection 1(c) below (the "Exercise Date") over the Purchase Price per share. If the Registered Holder wishes to exercise this Warrant pursuant to this method of payment with respect to the maximum number of Warrant Shares purchasable pursuant to this method, then the number of Warrant Shares so purchasable shall be equal to the total number of Warrant Shares, minus the product obtained by multiplying (x) the total number of Warrant Shares by (y) a fraction, the numerator of which shall be the Purchase Price per share and the denominator of which shall be the Fair Market Value per share of Common Stock as of the Exercise Date. The Fair Market Value per share of Common Stock shall be determined as follows: (i) If the Common Stock is listed on a national securities exchange, the NASDAQ National Market System, the NASDAQ system or another nationally recognized exchange or trading system as of the Exercise Date, the Fair Market Value per share of Common Stock shall be deemed to be the last reported sale price per share of Common Stock thereon on the Exercise Date; or, if no such price is reported on such date, such price on the next preceding business day (provided that if no such price is reported on the next preceding business day, the Fair Market Value per share of Common Stock shall be determined pursuant to clause (ii)). (ii) If the Common Stock is not listed on a national securities exchange, the NASDAQ National Market System, the NASDAQ system or another nationally recognized exchange or trading system as of the Exercise Date, the Fair Market Value per share of Common Stock shall be deemed to be the amount most PAGE recently determined by the Board of Directors to represent the fair market value per share of the Common Stock (including without limitation a determination for purposes of granting Common Stock options or issuing Common Stock under an employee benefit plan of the Company); and, upon request of the Registered Holder, the Board of Directors (or a representative thereof) shall promptly notify the Registered Holder of the Fair Market Value per share of Common Stock. Notwithstanding the foregoing, if the Board of Directors has not made such a determination within the three-month period prior to the Exercise Date, then (A) the Fair Market Value per share of Common Stock shall be the amount next determined by the Board of Directors to represent the fair market value per share of the Common Stock (including without limitation a determination for purposes of granting Common Stock options or issuing Common Stock under an employee benefit plan of the Company), (B) the Board of Directors shall make such a determination within 15 days of a request by the Registered Holder that it do so, and (C) the exercise of this Warrant pursuant to this subsection 1(b) shall be delayed until such determination is made. (c) Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in subsection 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in subsection 1(d) below shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates. (d) As soon as practicable after the exercise of this Warrant in full or in part, and in any event within 10 days thereafter, the Company, at its expense, will cause to be issued in the name of, and delivered to, the Registered Holder: (i) a certificate or certificates for the number of full Warrant Shares to which such Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof; and (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of Warrant Shares equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the sum of (a) the number of such shares purchased by the Registered Holder upon such exercise, plus (b) the number of Warrant Shares (if any) covered by the portion of this Warrant cancelled in payment of the Purchase Price payable upon such exercise pursuant to subsection 1(b) above, plus (c) the number of Warrant Shares as to which this PAGE Warrant has previously been terminated pursuant to Section 2 below. 2. Termination Events. Notwithstanding the rights described in Section 1, upon any disposition, transfer or hypothecation by the Registered Holder of any shares of Common Stock comprising a portion of any Unit of which this Warrant also comprises a part, prior to three years from the Date of Issuance, this Warrant shall automatically terminate and be null and void with respect to that number of shares of Common Stock determined by dividing (x) the number of such shares of Common Stock so disposed of, transferred or hypothecated by (y) 3 (the "Factor"), with any fraction determined thereby rounded up to the next nearest whole number. 3. Adjustments. (a) If outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price and the Factor in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced and increased, respectively. If outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price and the Factor in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased and reduced, respectively. When any adjustment is required to be made in the Purchase Price, the number of Warrant Shares purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment. (b) If there shall occur any capital reorganization or reclassification of the Company's Common Stock (other than a change in par value or a subdivision or combination as provided for in subsection 3(a) above), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, then, as part of any such reorganization, reclassification, consolidation, merger or sale, as the case may be, the Board of Directors of the Company shall either provide (i) that lawful provision shall be made so that the Registered Holder of this Warrant shall have the right thereafter to receive upon the exercise hereof the kind and amount of shares of stock or other securities or property which such Registered Holder would have been entitled to receive if, immediately prior to any such reorganization, reclassification, consolidation, merger or sale, as the case may be, such PAGE Registered Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of this Warrant, or (ii) that this Warrant shall become exercisable in full (to the extent not previously terminated pursuant to Section 2 above) immediately prior to and shall terminate in its entirety to the extent not exercised upon, such reorganization, reclassification, consolidation, merger or sale (provided that the Registered Holder shall be given ten (10) days prior notice of any determination by the Board of Directors under this clause (ii)). In any such case described in clause (i) above, appropriate adjustment (as reasonably determined in good faith by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder of this Warrant, such that the provisions set forth in this Section 3 (including provisions with respect to adjustment of the Purchase Price and the Factor) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of this Warrant. (c) When any adjustment is required to be made in the Purchase Price and the Factor, the Company shall promptly mail to the Registered Holder a certificate setting forth the Purchase Price and the Factor after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property into which this Warrant shall be exercisable following the occurrence of any of the events specified in subsection 3(a) or (b) above. 4. Fractional Shares. The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the Fair Market Value per share of Common Stock, as determined pursuant to subsection 1(b) above. 5. Prohibitions on Transfer; Additional Limitations on Exercise. (a) This Warrant may not be assigned or transferred, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, may only be exercised by the Registered Holder during his lifetime and thereafter may only be exercised by the person to whom it is transferred by will or the laws of descent and distribution. (b) This Warrant shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the Warrant Shares issuable upon exercise of this Warrant upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any PAGE other condition is necessary as a condition of, or in connection with, the issuance or purchase of Warrant Shares hereunder, this Warrant may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, or satisfaction of such condition shall have been effected or obtained on conditions acceptable to the Board of Directors. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification, or to satisfy such condition. (c) Each certificate representing Warrant Shares, unless registered pursuant to an effective registration statement filed with the Securities and Exchange Commission, shall bear a legend substantially in the following form: "The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be offered, sold or otherwise transferred, pledged or hypothecated unless and until such securities are registered under such Act or an opinion of counsel satisfactory to the Company is obtained to the effect that such registration is not required." The foregoing legend shall be removed from the certificates representing any Warrant Shares, at the request of the holder thereof, at such time as they become eligible for resale pursuant to Rule 144(k) under the Act. 6. No Impairment. The Company will not, by amendment of its charter or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment. 7. Notices of Record Date, etc. In case: (a) the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right; or (b) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company; or PAGE (c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at least ten (10) days prior to the record date or effective date for the event specified in such notice and, in the case of a notice pursuant to subsection 7(b) above, shall state whether this Warrant is to be assumed by the successor entity or is to terminate prior thereto pursuant to subsection 3(b) above. 8. Reservation of Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, such number of Warrant Shares and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant. 9. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue to and in the name of the Registered Holder, in lieu thereof, a new Warrant of like tenor. 10. Warrant Register. The Company will maintain a register containing the names and addresses of the Registered Holders of this Warrant. Any Registered Holder may change its or his address as shown on the warrant register by written notice to the Company requesting such change. 11. Mailing of Notices, etc. All notices and other communications from the Company to the Registered Holder of this Warrant shall be in writing and shall be deemed effective (i) upon delivery by hand, (ii) two business days after deposit with an express courier service for delivery no later than two business days after such deposit, addressed to the Registered PAGE Holder at the address set forth on the warrant register maintained by the Company or (iii) upon confirmation of transmittal by telecopy to the Registered Holder, with a copy sent in accordance with the preceding clause (ii), to the telecopy number set forth on the warrant register maintained by the Company. All notices and other communications from the Registered Holder of this Warrant to the Company shall be in writing and shall be deemed effective (i) upon delivery by hand, (ii) two business days after deposit with an express courier service for delivery no later than two business days after such deposit, addressed to the Company at its principal office set forth below or (iii) upon confirmation of transmittal by telecopy, with a hard copy sent in accordance with the preceding clause (ii), to the telecopy number of the Company set forth below. A copy of any notice or communication delivered to the Company shall be delivered concurrently to Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, Attention: David E. Redlick, Esq. (Telecopy No. (617) 526-5000). If the Company should at any time change the location of its principal office to a place other than as set forth below or change its telecopy number to a number other than as set forth below, it shall give prompt written notice to the Registered Holder of this Warrant in the manner prescribed herein, and thereafter all references in this Warrant to the location of its principal office or telecopy number at the particular time shall be as so specified in such notice. 12. Change or Waiver. Changes in or additions to this Warrant may be made or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon written consent of the Company and the Registered Holder or Holders of Warrants then outstanding representing a majority of the shares of Common Stock issuable upon exercise of the Warrants; provided, however, that no change, addition, omission or waiver which causes any change in or in any way affects or impairs the obligation of the Company in respect of the number of shares purchasable or the price per share payable upon exercise of this Warrant, or causes any change in this Section 12, shall be made without the written consent of the holder of this Warrant. 13. Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant. 14. Governing Law. This Warrant will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. PAGE Thermo Remediation Inc. By:________________________ [Corporate Seal] Title:_________________ ATTEST: ------------------------- PAGE EXHIBIT A PURCHASE FORM To:_________________ Dated: December __, 199_ The undersigned, pursuant to the provisions set forth in the attached Warrant (No. ___), hereby irrevocably elects to purchase _____ shares of the Common Stock covered by such Warrant. The undersigned herewith makes payment of $____________, representing the full purchase price for such shares at the price per share provided for in such Warrant. Such payment takes the form of (check applicable box or boxes): $_________ in lawful money of the United States, and/or $_________ in shares of Common Stock, and/or the cancellation of such portion of the attached Warrant as is exercisable for a total of ______ Warrant Shares (using a Fair Market Value of $_______ per share for purposes of this calculation). The undersigned hereby certifies that _____ shares of Common Stock issued as part of the Units comprised, in part, by this Warrant were transferred prior to December __, 1998. Signature:__________________________ Address:____________________________ ---------------------------- -----END PRIVACY-ENHANCED MESSAGE-----