-----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, BdbQdxbC1BFNbkiOZNoscJqOqn914rmymAP5+4goGOlVtzrbJZj64pUDvEL5D1Yr rG3OH6n+MM6Wn1cA8kKhFQ== 0000950135-01-503619.txt : 20020411 0000950135-01-503619.hdr.sgml : 20020411 ACCESSION NUMBER: 0000950135-01-503619 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20011115 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20011116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMO ELECTRON CORP CENTRAL INDEX KEY: 0000097745 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 042209186 STATE OF INCORPORATION: DE FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08002 FILM NUMBER: 1794035 BUSINESS ADDRESS: STREET 1: 81 WYMAN ST STREET 2: P O BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02454-9046 BUSINESS PHONE: 7816221000 8-K 1 b41120tee8-k.txt THERMO ELECTRON CORPORATION 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): November 15, 2001 Thermo Electron Corporation - -------------------------------------------------------------------------------- (Exact name of Registrant as Specified in its Charter) Delaware 1-8002 04-2209186 - ---------------------------- ----------------------- ------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02454-9046 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 781-622-1000 Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address if Changed Since Last Report) ITEM 5: OTHER EVENTS. At 4 P.M. on November 15, 2001, Thermo Electron Corporation ("Thermo Electron") distributed as a dividend to its stockholders 0.1461 shares of common stock of Viasys Healthcare Inc. for each share of Thermo Electron common stock outstanding as of 4 P.M. Eastern time on November 7, 2001. This action completes the previously announced distribution described in Thermo Electron's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 12, 2001. The full text of Thermo Electron's press release dated November 16, 2001 relating to the completion of the spin-off distribution is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by this reference. ITEM 7: FINANCIAL STATEMENTS PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Business Acquired: Not applicable. (b) Pro Forma Financial Information: Not applicable. (c) Exhibits 99.1 Press Release dated November 16, 2001. 99.2 Plan of Agreement of Distribution dated November 15, 2001 by and between Thermo Electron Corporation and Viasys Healthcare Inc. 99.3 Tax Matters Agreement dated November 15, 2001 by and between Thermo Electron Corporation and Viasys Healthcare Inc. 99.4 Transition Services Agreement dated November 15, 2001 by and between Thermo Electron Corporation and Viasys Healthcare Inc. 99.5 Promissory Note issued by Viasys Healthcare Inc. to Thermo Electron. 2 SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THERMO ELECTRON CORPORATION Date: November 16, 2001 /s/ Theo Melas-Kyriazi ---------------------------------------- Name: Theo Melas-Kyriazi Title: Vice President and Chief Financial Officer 3 EXHIBIT INDEX DESCRIPTION Exhibit No. Description - ----------- ----------- 99.1 Press Release dated November 16, 2001. 99.2 Plan of Agreement of Distribution dated November 15, 2001 by and between Thermo Electron Corporation and Viasys Healthcare Inc. 99.3 Tax Matters Agreement dated November 15, 2001 by and between Thermo Electron Corporation and Viasys Healthcare Inc. 99.4 Transition Services Agreement dated November 15, 2001 by and between Thermo Electron Corporation and Viasys Healthcare Inc. 99.5 Promissory Note issued by Viasys Healthcare Inc. to Thermo Electron. 4 EX-99.1 3 b41120teex99-1.txt PRESS RELEASE DATED NOVEMBER 16, 2001 EXHIBIT 99.1 THERMO ELECTRON COMPLETES VIASYS HEALTHCARE SPINOFF Opening Trading Price for Thermo Adjusted to Reflect Share Distribution WALTHAM, Mass., November 16, 2001 - Thermo Electron Corporation (NYSE:TMO) announced today that it has distributed all of its shares of Viasys Healthcare Inc. (NYSE:VAS) as a tax-free dividend to Thermo Electron shareholders of record on November 7, 2001. The distribution took place at 4 p.m. yesterday. Shares of Thermo Electron common stock will commence trading this morning approximately $2.50 lower than yesterday's closing price of $24.06, reflecting the Viasys Healthcare spinoff. Viasys Healthcare "when issued" common stock closed yesterday at $17.20. Thermo Electron has distributed .1461 shares of Viasys Healthcare common stock for each share of Thermo Electron common stock. The ratio is based on the number of Thermo Electron and Viasys Healthcare shares outstanding on the November 7, 2001, record date. Thermo Electron's distribution agent, American Stock Transfer & Trust Company, has mailed to Thermo Electron shareholders entitled to the dividend an information statement containing details of the distribution and information about Viasys Healthcare, as well as stock certificates representing whole shares of Viasys Healthcare common stock being distributed (any fractional shares will be payable in cash). Checks representing fractional shares will be mailed separately. Thermo Electron Corporation is a global leader in providing technology-based instruments, components, and systems that offer total solutions for markets ranging from life sciences to telecommunications to food, drug, and beverage production. The company's powerful technologies help researchers sift through data to make discoveries that will fight disease or prolong life. They allow manufacturers to fabricate critical components required to increase the speed and quality of communications. And they automatically monitor and control online production to ensure that quality standards are met safely and efficiently. Thermo Electron, based in Waltham, Massachusetts, reported $2.3 billion in revenues in 2000 and employs approximately 12,000 people worldwide. For more information on Thermo Electron, visit http://www.thermo.com. The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth under the heading "Risk Factors" in the company's Annual Report on Form 10-K for the fiscal year ended December 30, 2000. These include risks and uncertainties relating to: integration of the company's instrument businesses, the ability to improve internal growth, liquidity and prospective performance of a subsidiary to be spun off, the company's guarantee of obligations of a subsidiary that was spun off, the effect of exchange rate fluctuations on international operations, potential impairment of goodwill, the need to develop new products and adapt to significant technological change, dependence on customers that operate in cyclical industries, the effect of changes in governmental regulations, and dependence on customers' capital spending policies and government funding policies. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. # # # EX-99.2 4 b41120teex99-2.txt PLAN AND AGREEMENT OF DISTRIBUTION, DATED 11/15/01 Exhibit 99.2 Execution Copy PLAN AND AGREEMENT OF DISTRIBUTION THIS PLAN AND AGREEMENT OF DISTRIBUTION (this "Agreement") is entered into as of November 15, 2001, between Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"), and Viasys Healthcare Inc., a Delaware corporation ("Viasys"). RECITALS WHEREAS, Thermo Electron is the holder of all of the issued and outstanding shares of Common Stock, $.01 par value per share, of Viasys ("Viasys Common Stock; and WHEREAS, Thermo Electron has contributed certain technology and certain assets to Viasys and intends to make other arrangements to establish Viasys as a separate enterprise for the purpose of engaging in the design, manufacture and sale of medical devices and instruments in the fields of respiratory care, neurocare and specialty medical products; and WHEREAS, it is the intention of Thermo Electron to distribute all of the issued and outstanding shares of Viasys Common Stock held by Thermo Electron to the stockholders of Thermo Electron (the "Distribution"); and WHEREAS, Thermo Electron and Viasys have determined that it is necessary and desirable to set forth the principal corporate transactions required to effect the Distribution and to set forth other agreements that will govern certain other matters following such Distribution; NOW, THEREFORE, in consideration of the mutual covenants and agreements made herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1 GENERAL. As used in this Agreement and the Exhibits hereto, the following terms shall have the following meanings: "Action" means any action, claim, suit, litigation, arbitration, inquiry, subpoena, discovery request, proceeding or investigation by or before any court or grand jury, any governmental or other regulatory or administrative agency or commission or any arbitration tribunal. "Active Employees" means, with respect to each Group, all employees actively engaged in the performance of services to, for or on behalf of any member of such Group as of the Distribution Date, including any employee who is not actively performing services because of (a) leave of absence or (b) disability, and the dependents of such persons (and, as applicable, the alternate payees of such persons). "Active Employees" includes, with respect to a Group, non-employee directors of Thermo Electron and Viasys providing services as a director to Thermo Electron or any member of the Thermo Electron Group and Viasys or any member of the Viasys Group, respectively, as of the Distribution Date. "Affiliate" means, with respect to any specified person, a person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person; provided, however, that Thermo Electron (and its Subsidiaries) shall not be deemed to be Affiliates of Viasys (and its Subsidiaries), and vice versa, for purposes of this Agreement. "Agent" means American Stock Transfer & Trust Company, as the distribution agent appointed by Thermo Electron to distribute the shares of Viasys Common Stock in connection with the Distribution. "Ancillary Agreements" means all of the agreements, instruments, understandings, assignments or other arrangements entered into in connection with the transactions contemplated hereby, including the Tax Matters Agreement, the Transition Services Agreement and the Promissory Note. "Code" means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder. "Commission" means the Securities and Exchange Commission. "Distributed Viasys per Share Amount" means the fraction of a share of Viasys Common Stock obtained by dividing the number of Distribution Shares (as defined in Section 4.1 hereof) by the total number of shares of Thermo Electron Common Stock outstanding as of 4:00 p.m., Boston Time, on the Distribution Record Date. "Distribution" has the meaning ascribed to it in the Recitals. "Distribution Date" means the date of effecting the Distribution, as determined by the Thermo Electron Board. "Distribution Record Date" means the date determined by the Thermo Electron Board as of which the holders of Thermo Electron Common Stock and their respective stock holdings shall be determined for purposes of distributing Viasys Common Stock to such Thermo Electron stockholders. "Exchange Act" means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder. "Form 10" means the Registration Statement on Form 10 to be filed by Viasys with the Commission to effect the registration of the Viasys Common Stock pursuant to the Exchange Act. "Group" means the Thermo Electron Group or the Viasys Group. "Indemnifiable Losses" means all losses, Liabilities, damages, claims, counterclaims, demands, judgments or settlements of any nature or kind, known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, including all reasonable costs and expenses (legal, accounting or otherwise as such costs are incurred) relating thereto, suffered by an Indemnitee, including any reasonable costs or expenses of enforcing any indemnity hereunder. "Indemnifying Party" means a Person who or which is obligated under this Agreement to provide indemnification. "Indemnitee" means a Person who or which may seek indemnification under this Agreement. "Information Statement" means the Information Statement, constituting a part of the Form 10, in the form to be distributed to the holders of Thermo Electron Common Stock in connection with the Distribution, and as it may be amended or supplemented subsequent to such dissemination. "IRS Ruling" means the letter dated February 2001 from the Internal Revenue Service to Thermo Electron in response to the Private Letter Ruling Request. "Liabilities" means any and all debts, liabilities and obligations, absolute or contingent, mature or unmature, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising (unless otherwise specified in this Agreement), and whether or not the same would properly be reflected on a balance sheet, including all costs and expenses relating thereto, and those debts, liabilities and obligations arising under any law, rule, regulation, Action, threatened Action, order or consent decree of any governmental entity or any award of any arbitrator of any kind, and those arising under any contract, commitment or undertaking. "Person" means an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization or a government or any department or agency thereof. "Private Letter Ruling Request" means Thermo Electron's Request for Rulings Filed Under Section 355 of the Code dated April 7, 2000 filed with the Internal Revenue Service in connection with the Distribution, as amended. "Promissory Note" means the promissory note of Viasys in favor of Thermo Electron substantially in the form attached hereto as Exhibit A, with such changes as may be mutually satisfactory to Thermo Electron and Viasys; such promissory note providing for, among other things, the repayment by Viasys to Thermo of a loan in the principal amount of $33.3 million. "Representative" means, with respect to any Person, any of such Person's directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives. "Securities Act" means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder. "Subsidiary" means, with respect to any specified Person, any corporation or other legal entity of which such Person or any of its Subsidiaries controls or owns, directly or indirectly, more than 50% of the stock or other equity interest entitled to vote on the election of members to the board of directors or similar governing body; provided, however, that for purposes of this Agreement, Viasys and the Viasys Subsidiaries shall not be deemed to be Subsidiaries of Thermo Electron or any of the Thermo Electron Subsidiaries. "Tax Matters Agreement" means the Tax Matters Agreement between Thermo Electron and Viasys substantially in the form attached hereto as Exhibit B, with such changes as may be mutually satisfactory to Thermo Electron and Viasys; such Tax Matters Agreement providing for, among other things, the allocation of certain liabilities with respect to federal, state and local income taxes and the procedures for filing returns with respect to such taxes. "Thermo Electron Board" means the Board of Directors of Thermo Electron or a committee thereof. "Thermo Electron Business" means all of the businesses and operations conducted at any time, whether prior to, on or after the Distribution Date, by any member of the Thermo Electron Group (including Kadant Inc. and its subsidiaries), other than the Viasys Business. "Thermo Electron Common Stock" means the Common Stock, $1.00 par value per share, of Thermo Electron. "Thermo Electron Group" means Thermo Electron and the Thermo Electron Subsidiaries. "Thermo Electron Indemnitees" means Thermo Electron, each Affiliate of Thermo Electron (including Kadant Inc. and its Subsidiaries) and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing. "Thermo Electron Subsidiaries" means all Subsidiaries of Thermo Electron, other than Viasys and the Viasys Subsidiaries. "Thermo Electron Trademarks" means the "Thermo" name and logo and related tradenames and marks used in the Viasys Business as of the Distribution Date. "Third-Party Claim" means any claim, suit, arbitration, injury, proceeding or investigation by or before any court, any governmental or other regulatory or administrative agency or commission or any arbitration tribunal asserted by a Person who or which is neither a party hereto nor an Affiliate of a party hereto. "TMO Letter of Credit Guarantees" means all of the obligations of any member of the Viasys Group under all letters of credit and other borrowings of any member of the Viasys Group that are subject to any guarantee, covenant, indemnity, letter of comfort or similar assurance provided by any member of the Thermo Electron Group (other than members of the Viasys Group) and that are outstanding as of the Distribution Date. "Transition Services Agreement" means the Transition Services Agreement between Thermo Electron and Viasys substantially in the form attached hereto as Exhibit C, with such changes as may be mutually satisfactory to Thermo Electron and Viasys; such Transition Services Agreement providing for Thermo Electron's provision to Viasys of various administrative services, including certain tax and legal, stock plan related, financial and other services. "Viasys Assets" means all of the assets owned by any member of the Viasys Group immediately prior to the Distribution Date, excluding items to be retained by any member of the Thermo Electron Group pursuant to the Ancillary Agreements. "Viasys Board" means the Board of Directors of Viasys. "Viasys Business" means all of the businesses and operations conducted at any time, whether prior to, on or after the Distribution Date by any member of the Viasys Group, regardless of whether such businesses and operations were conducted prior to the Distribution Date by such member of the Viasys Group or by a predecessor, including Thermo Electron. "Viasys Common Stock" has the meaning ascribed to it in the Recitals. "Viasys Exchange Ratio" means a fraction, (a) the numerator of which is the closing sale price per share of Thermo Electron Common Stock (trading "regular way") on The New York Stock Exchange at the close of regular trading hours on the Distribution Date and (b) the denominator of which is the opening sale price per share of Viasys Common Stock on the New York Stock Exchange at the commencement of regular trading hours on the date that is the next business day after the Distribution Date. "Viasys Group" means Viasys and the Viasys Subsidiaries. "Viasys Indemnitees" means Viasys, each Affiliate of Viasys and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing. "Viasys Subsidiaries" means all Subsidiaries of Viasys. ARTICLE II ACKNOWLEDGMENT OF MATERIAL FACTS 2.1 ORGANIZATION. Thermo Electron and Viasys acknowledge that each is duly organized, validly existing and in good standing under the laws of the State of Delaware, with requisite corporate power to own their respective properties and assets and to carry on their respective businesses as presently conducted or contemplated. Thermo Electron is the owner of all of the issued and outstanding shares of Viasys Common Stock. ARTICLE III PRELIMINARY ACTION 3.1 COOPERATION PRIOR TO THE DISTRIBUTION. (a) Ancillary Agreements. Thermo Electron and Viasys shall use their respective reasonable efforts to cause, simultaneously with the execution and delivery of this Agreement, the execution and delivery by Thermo Electron and Viasys, or their respective Affiliates, of the Ancillary Agreements and any other agreements, instruments or other documents deemed necessary or desirable by the applicable parties to establish and govern their post-Distribution relationships. (b) Form 10. Thermo Electron and Viasys have prepared, and Viasys has filed with the Commission, the Form 10, which includes the Information Statement, setting forth appropriate disclosure concerning Viasys, the Distribution and any other appropriate matters required to be stated therein. Thermo Electron and Viasys shall use their respective reasonable efforts to cause the Form 10 to become effective under the Exchange Act as promptly as reasonably practicable, and thereafter Thermo Electron or its agent shall promptly mail the Information Statement to all of the appropriate holders of Thermo Electron Common Stock. (c) Listing. Thermo Electron and Viasys shall prepare, and Viasys shall file and pursue, an application to effect the listing of the Viasys Common Stock on the New York Stock Exchange. (d) Blue Sky. Thermo Electron and Viasys shall use reasonable efforts to take all such actions as may be necessary or appropriate under state securities and blue sky laws in connection with the transactions contemplated by this Agreement. 3.2 CONSENTS. Each party hereto understands and agrees that no party hereto is, in this Agreement or in any other agreement or document contemplated by this Agreement or otherwise, representing or warranting in any way that the obtaining of any consents or approvals, the execution and delivery of any agreements or the making of any filings or applications contemplated by this Agreement will satisfy the provisions of any or all applicable agreements or the requirements of any or all applicable laws or judgments except as expressly represented, warranted or covenanted herein or in the Ancillary Agreements. Notwithstanding the foregoing, the parties shall use reasonable efforts to obtain all consents and approvals, to enter into all agreements and to make all filings and applications which may be required for the consummation of the transactions contemplated by this Agreement, including, without limitation, all applicable regulatory filings or consents under federal or state laws and all necessary consents, approvals, agreements, filings and applications. ARTICLE IV THE DISTRIBUTION 4.1 THE DISTRIBUTION. (a) Prior to the Distribution Date Thermo Electron shall deliver to Viasys the certificates representing all of the outstanding shares of Viasys Common Stock owned by Thermo Electron as of 4:00 p.m., Boston Time on the Distribution Date (the "Distribution Shares"), and Viasys shall cancel such certificates. In exchange therefor, and upon receipt from the Agent of a certificate as to the number of shares of Thermo Electron Common Stock outstanding as of the Distribution Record Date, Viasys shall deliver to the Agent on the Distribution Date on behalf of Thermo Electron and for the benefit of the holders of record of Thermo Electron Common Stock as of the Distribution Record Date, an omnibus stock certificate representing the Distribution Shares. Effective as of 4:00 p.m., Boston Time, on the date of the delivery of such omnibus stock certificate to the Agent, ownership of the Viasys Common Stock held by Thermo Electron shall pass to Thermo Electron's stockholders. Thermo Electron shall instruct the Agent to distribute, beginning on or promptly following the Distribution Date, to such holders of Thermo Electron Common Stock on the Distribution Record Date, certificates representing the Distributed Viasys per Share amount for every share of Thermo Electron Common Stock outstanding as of the Distribution Record Date. Viasys agrees to provide to the Agent sufficient certificates in such denominations as the Agent may request in order to effect the Distribution. All of the Distribution Shares shall be fully paid, nonassessable and free of preemptive rights. Holders of Thermo Electron Common Stock shall not be required to pay cash or other consideration for the Distribution Shares. (b) No fractional shares of Viasys Common Stock will be received by Thermo Electron stockholders. Instead, each Thermo Electron stockholder that would otherwise be entitled to a fractional share of Viasys Common Stock shall be entitled to receive a cash payment in lieu thereof, which payment shall represent such stockholder's proportionate interest in the net proceeds from the sale by the Agent on behalf of all such Thermo Electron stockholders of the aggregate fractional shares of Viasys Common Stock that such stockholders would otherwise be entitled to receive. Any such sale shall be made by the Agent within five business days after the Distribution Date. 4.2 THERMO ELECTRON BOARD ACTION. (a) The Thermo Electron Board shall establish in its sole discretion and in accordance with all applicable rules of the New York Stock Exchange, the Distribution Record Date, the Distribution Date and all appropriate procedures in connection with the Distribution. (b) After the declaration of the Distribution and until the Distribution Date, in its sole discretion for any reason, the Thermo Electron Board may rescind the declaration of the Distribution and postpone, withdraw, cancel or abandon the Distribution for any reason and simultaneously terminate this Agreement and the Ancillary Agreements. In the event of such termination, no party hereto or to any Ancillary Agreement shall have any Liability to any Person by reason of this Agreement or any Ancillary Agreement. ARTICLE V SURVIVAL, ASSUMPTION AND INDEMNIFICATION 5.1 SURVIVAL OF AGREEMENTS. All covenants and agreements of the parties hereto contained in this Agreement shall survive the Distribution Date. 5.2 ASSUMPTION AND INDEMNIFICATION. (a) Except as specifically otherwise provided in the Ancillary Agreements, Thermo Electron shall indemnify, defend and hold harmless the Viasys Indemnitees from and against (1) all Indemnifiable Losses arising from or relating to the Thermo Electron Business, whether such Indemnifiable Losses relate to events, occurrences or circumstances occurring or existing, or whether such Indemnifiable Losses are asserted, before or after the Distribution Date; (2) all Indemnifiable Losses incurred by Viasys as a consequence of any misstatement or omission of a material fact with respect to Thermo Electron based on information supplied by Thermo Electron in any documents or filings prepared for purposes of compliance or qualification under applicable securities laws in connection with the Distribution, and related transactions, including without limitation, the Information Statement and the Form 10; and (3) all Indemnifiable Losses arising from any breach of or failure to perform any obligation on the part of any member of Thermo Electron Group contained in this Agreement or any of the Ancillary Agreements. (b) Except as specifically otherwise provided in the Ancillary Agreements, Viasys shall indemnify, defend and hold harmless the Thermo Electron Indemnitees from and against (1) all Indemnifiable Losses arising from or relating to the Viasys Business, whether such Indemnifiable Losses relate to events, occurrences or circumstances occurring or existing, or whether such Indemnifiable Losses are asserted, before or after the Distribution Date; (2) all Indemnifiable Losses incurred by Thermo Electron as a consequence of any misstatement or omission of a material fact with respect to Viasys based on information supplied by Viasys in any documents or filings prepared for purposes of compliance or qualification under applicable securities laws in connection with the Distribution and related transactions, including without limitation, the Information Statement and the Form 10; (3) all Indemnifiable Losses arising from any breach of or failure to perform any obligation on the part of any member of the Viasys Group contained in this Agreement or any of the Ancillary Agreements; and (4) all Indemnifiable Losses arising from or relating to any obligations of any member of the Thermo Electron Group or its Representatives under any TMO Letter of Credit Guarantees. (c) If any Indemnifiable Loss arises from or relates to both the Thermo Electron Business and the Viasys Business, Thermo Electron shall indemnify the Viasys Indemnitees against any portion of such Indemnifiable Loss that pertains more directly to the Thermo Electron Business than to the Viasys Business, and Viasys shall indemnify the Thermo Electron Indemnitees against any portion of such Indemnifiable Loss that pertains more directly to the Viasys Business than to the Thermo Electron Business. (d) Notwithstanding anything to the contrary set forth herein, indemnification relating to any arrangements between any member of the Thermo Electron Group and any member of the Viasys Group (or any unit of the Viasys Business) for the provision after the Distribution of goods and services shall be governed by the terms of such arrangements and not by this Section. 5.3 PROCEDURES FOR INDEMNIFICATION FOR THIRD-PARTY CLAIMS. (a) Viasys shall, and shall cause the other Viasys Indemnitees to, notify Thermo Electron in writing promptly after learning of any Third-Party Claim for which any Viasys Indemnitee intends to seek indemnification from Thermo Electron under this Agreement. Thermo Electron shall, and shall cause the other Thermo Electron Indemnitees to, notify Viasys in writing promptly after learning of any Third-Party Claim for which any Thermo Electron Indemnitee intends to seek indemnification from Viasys under this Agreement. The failure of any Indemnitee to give such notice shall not relieve any Indemnifying Party of its obligations under this Article V except to the extent that such Indemnifying Party or its Affiliate is actually prejudiced by such failure to give notice. Such notice shall describe such Third-Party Claim in reasonable detail considering the information provided to the Indemnitee. (b) Except as otherwise provided in subsection (c) of this Section 5.3, an Indemnifying Party may, by notice to the Indemnitee and to Viasys, if Thermo Electron is the Indemnifying Party, or to Thermo Electron, if Viasys is the Indemnifying Party, at any time after receipt by such Indemnifying Party of such Indemnitee's notice of a Third-Party Claim, undertake (itself or through another member of its Group) the defense or settlement of such Third-Party Claim. If an Indemnifying Party undertakes the defense of any Third-Party Claim, such Indemnifying Party shall thereby admit its obligation to indemnify the Indemnitee against such Third-Party Claim, and such Indemnifying Party shall control the investigation and defense or settlement thereof, except that such Indemnifying Party shall not require any Indemnitee, without its prior written consent, to take or refrain from taking any action in connection with such Third-Party Claim, or make any public statement, which such Indemnitee reasonably considers to be against its interest, nor shall the Indemnifying Party, without the prior written consent of the Indemnitee and of Viasys, if the Indemnitee is a Viasys Indemnitee, or of Thermo Electron, if the Indemnitee is a Thermo Electron Indemnitee, consent to any settlement that does not include as a part thereof an unconditional release of the Indemnitees from liability with respect to such Third-Party Claim or that requires the Indemnitee or any of its Representatives or Affiliates to make any payment that is not fully indemnified under this Agreement or to submit to any non-monetary remedy; and subject to the Indemnifying Party's control rights, as specified herein, the Indemnitees may participate in such investigation and defense, at their own expense. (c) With respect to any Third-Party Claim, if there is a material conflict of interest between the Indemnifying Party and the Indemnitees involved, neither the Indemnifying Party nor the Indemnitees shall be entitled to control the defense or settlement thereof. If an Indemnitee notifies an Indemnifying Party of a Third-Party Claim pursuant to this Section 5.3, and the Indemnifying Party does not take control of the defense or settlement thereof, or prior to the time that it does so take control, neither the Indemnifying Party nor the Indemnitees shall be entitled to control the defense or settlement thereof. In any such event, the Indemnifying Parties and the Indemnitees involved shall each be entitled to conduct their own investigation and defense, but the parties shall cooperate to conduct such investigation and defense as efficiently as possible. No Indemnitee may compromise or settle any Third-Party Claim described in this subsection as to which indemnification from an Indemnifying Party has or will be sought under this Agreement without the prior written consent of such Indemnifying Party. (d) If an Indemnifying Party is required to indemnify any Indemnitees with respect to a Third-Party Claim described in subsection (c) of this Section 5.3, such Indemnifying Party shall pay the reasonable attorneys' fees and expenses of one law firm representing the Indemnitees involved in each jurisdiction with respect thereto. (e) Viasys shall, and shall cause the other Viasys Indemnitees to, and Thermo Electron shall, and shall cause the other Thermo Electron Indemnitees to, make available to each other, their counsel and other Representatives, all information and documents reasonably available to them which relate to any Third-Party Claim, and otherwise cooperate as may reasonably be required in connection with the investigation, defense and settlement thereof. 5.4 REMEDIES CUMULATIVE. The remedies provided in this Article V shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any other remedies against any Indemnifying Party. However, the procedures set forth in Section 5.3 shall be the exclusive procedures governing any indemnity action brought under this Agreement or otherwise and relating to a Third-Party Claim, except as otherwise specifically provided in any of the Ancillary Agreements. 5.5 RELEASE OF PRE-DISTRIBUTION CLAIMS. (a) Except as provided in Section 5.5(c), effective as of the Distribution Date, Viasys does hereby, for itself and each other member of the Viasys Group, and their respective Affiliates, successors and assigns, remise, release and forever discharge Thermo Electron, the members of the Thermo Electron Group, their respective Affiliates, successors and assigns, and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution Date, including in connection with the actions or decisions taken or omitted to be taken in connection with, and the other activities relating to, the structuring or implementation of the Distribution and the transfer of the Viasys Assets to the Viasys Group and the assumption by the Viasys Group of the Viasys Liabilities. (b) Except as provided in Section 5.5(c), effective as of the Distribution Date, Thermo Electron does hereby, for itself and each other member of the Thermo Electron Group, their respective Affiliates, successors and assigns, remise, release and forever discharge Viasys, the respective members of the Viasys Group, their respective Affiliates, successors and assigns, and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution Date, including in connection with the transactions and all other activities to implement the Distribution and the transfer of the Viasys Assets to the Viasys Group and the assumption by the Viasys Group of the Viasys Liabilities. (c) Nothing contained in Section 5.5(a) or (b) shall impair any right of any Person to enforce this Agreement or the Ancillary Agreements, or any agreements, arrangements, commitments or understandings that are referred to herein or therein as not terminating as of the Distribution Date, in each case in accordance with its terms. Without limiting the foregoing, nothing contained in Section 5.5(a) or (b) shall release any Person from: (i) any Liability provided in or resulting from any agreement among any members of the Thermo Electron Group or the Viasys Group that is specified in Section 9.4(b) or in Schedule 9.4(b) as not to terminate as of the Distribution Date; (ii) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement; (iii) any Liability that the parties may have with respect to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement, which Liability shall be governed by the provisions of this Article V, or, if applicable, by the appropriate provisions of the Ancillary Agreements; or (iv) any Liability the release of which would result in the release of any Person other than a Person released pursuant to Section 5.5(a) or (b). (d) Viasys shall not make, and shall not permit any member of the Viasys Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Thermo Electron, any member of the Thermo Electron Group, or any other Person released pursuant to Section 5.5(a), with respect to any Liabilities released pursuant to Section 5.5(a). Thermo Electron shall not make, and shall not permit any member of the Thermo Electron Group, to make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Viasys or any member of the Viasys Group, or any other Person released pursuant to Section 5.5(b), with respect to any Liabilities released pursuant to Section 5.5(b). (e) It is the intent of each of Thermo Electron and Viasys by virtue of the provisions of this Section 5.5 to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Distribution Date, between or among Viasys or any member of the Viasys Group, on the one hand, and Thermo Electron or any member of the Thermo Electron Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the Distribution Date), except as expressly set forth in Section 5.5(c). At any time, at the request and expense of any other party, each party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions hereof. ARTICLE VI ADDITIONAL ASSURANCES 6.1 MUTUAL ASSURANCES. Thermo Electron and Viasys agree to cooperate with respect to the implementation of this Agreement and the Ancillary Agreements and to execute such further documents and instruments as may be necessary to confirm the transactions contemplated hereby. Such cooperation may include joint meetings with corporate partners, suppliers, customers and others to assure the orderly transition of the business and assets contemplated hereby; provided, however, that nothing herein shall be deemed to obligate either Thermo Electron or Viasys to take any action or reach any understandings which may violate any applicable laws. Pursuant to the Tax Matters Agreement, Thermo Electron and Viasys agree that they will not take any action inconsistent with the facts and representations set forth in the Private Letter Ruling Request and the IRS Ruling and will use their reasonable efforts to cause such facts to remain true and correct and, if either Thermo Electron or Viasys shall take any such inconsistent action, or fail to use such reasonable efforts, it will indemnify the other party for any expense or Liability incurred as a consequence thereof. Thermo Electron and Viasys also agree that the Distribution is intended to qualify under Section 355 of the Code, and that the characterization of the transactions contemplated hereunder for tax purposes and the liability of the parties for taxes shall be governed by the Tax Matters Agreement. Except as otherwise specifically provided herein or as agreed between the parties from time to time, Thermo Electron and Viasys shall bear their own expenses associated with the Distribution. ARTICLE VII CONDITIONS TO EFFECTIVENESS OF DISTRIBUTION The Distribution shall be subject to the implementation of the portions of this Agreement which are contemplated to become effective prior to the Distribution and to the satisfaction or waiver of the following conditions: 7.1 BOARD APPROVAL. This Agreement and the Ancillary Agreements (including exhibits and schedules) shall have been approved by the Thermo Electron Board and the Viasys Board and shall have been executed and delivered by appropriate officers of Thermo Electron and Viasys. 7.2 SECURITIES LAWS COMPLIANCE. The transactions contemplated hereby shall be in compliance with applicable federal and state securities laws. 7.3 FORM 10 EFFECTIVE. The Form 10 shall have become effective under the Exchange Act, no temporary restraining order or injunction with respect thereto shall be in effect and no proceeding seeking such relief or seeking to suspend or otherwise rescind the effectiveness of the Form 10 shall be pending or threatened. 7.4 CONSENTS. Thermo Electron shall have received such consents, and shall have received executed copies of such agreements or amendments of agreements, as it shall deem necessary in connection with the completion of the transactions contemplated by this Agreement. 7.5 IRS RULING. The facts and representations set forth in the IRS Ruling, insofar as they relate to the Distribution, shall be true and accurate as of the Distribution Date. 7.6 OTHER INSTRUMENTS. All action and other documents and instruments deemed necessary or advisable in connection with the transactions contemplated hereby shall have been taken or executed, as the case may be, in form and substance reasonably satisfactory to Thermo Electron and Viasys. 7.7 LEGAL PROCEEDINGS. No legal proceedings affecting or arising out of the transactions contemplated hereby or which could otherwise affect Thermo Electron or Viasys in a materially adverse manner shall have been commenced or threatened against Thermo Electron, Viasys or the directors or officers of either Thermo Electron or Viasys. 7.8 MATERIAL CHANGES. No material adverse change shall have occurred with respect to Thermo Electron or Viasys, the securities markets or general economic or financial conditions which shall, in the reasonable judgment of Thermo Electron and Viasys, make the transactions contemplated by this Agreement inadvisable. 7.9 NOTICE OF RECORD DATE. Thermo Electron shall have provided (a) The New York Stock Exchange with the prior written notice of the Distribution Record Date as provided by Rule 10b-17 of the Exchange Act and the rules and regulations of The New York Stock Exchange, (b) any and all notices required in connection with the Distribution under the Thermo Electron (i) 4-1/4% Convertible Subordinated Debentures due 2003, (ii) 4-1/2% Senior Convertible Debentures due 2003 (formerly Thermo Instrument Systems Inc.), (iii) 4% Convertible Subordinated Debentures due 2005 (formerly Thermo Instrument Systems Inc.), (iv) 0% Convertible Subordinated Debentures due 2003 (formerly Thermedics Inc.), (v) 2-7/8% Convertible Subordinated Debentures due 2003 (formerly Thermedics Inc.), (vi) 4-7/8% Convertible Subordinated Debentures due 2004 (formerly Thermo Ecotek Corporation), (vii) 4-5/8% Convertible Subordinated Debentures due 2003 (formerly Thermo TerraTech Corporation), and (viii) 3-1/4% Convertible Subordinated Debentures due 2007 (formerly ThermoTrex Corporation), and (c) any and all notices required under the ThermoLase LLC 4-3/8% Convertible Subordinated Debentures due 2004. 7.10 OPINION OF HOULIHAN LOKEY. Houlihan Lokey shall have provided to the Board of Directors of Thermo Electron its written opinion as to the solvency of Thermo Electron and related matters immediately prior to and after giving effect to the Distribution and the distribution of shares of common stock of Kadant Inc. by Thermo Electron to the stockholders of Thermo Electron. 7.11 SATISFACTION OR WAIVER OF CONDITIONS. Any determination made by the Board of Directors of Thermo Electron on behalf of either party hereto prior to the Distribution Date concerning the satisfaction or waiver of any or all of the conditions set forth in this Article VII shall be conclusive. ARTICLE VIII ACCESS TO INFORMATION AND SERVICES 8.1 PROVISION OF CORPORATE RECORDS. Prior to or as promptly as practicable after the Distribution Date, Thermo Electron shall deliver to Viasys all existing corporate records in the possession of Thermo Electron relating to Viasys, together with all active agreements and any active litigation files relating to the Viasys Business, except (a) to the extent such items are already in the possession of Viasys and (b) for such records as are necessary for the performance by the Thermo Electron Group of services under the Transition Services Agreement (in which case such records shall be delivered to Viasys as soon as practicable after termination or expiration of the Transition Services Agreement). Such records shall be the property of Viasys but shall be available to Thermo Electron for review and duplication until Thermo Electron shall notify Viasys in writing that such records are no longer of use to Thermo Electron. 8.2 ACCESS TO INFORMATION. From and after the Distribution Date, Thermo Electron shall, and shall cause each of the other members of the Thermo Electron Group to, afford to the members of the Viasys Group and their authorized accountants, counsel and other designated representatives reasonable access (including using reasonable efforts to give access to persons or firms possessing information) and duplicating rights during normal business hours to all records, books, contracts, instruments, computer data and other data and information (collectively, "Information") within the Thermo Electron Group's possession relating to the business of the Viasys Group, insofar as such access is reasonably required by any member of the Viasys Group. Viasys shall, and shall cause each of the other members of the Viasys Group to, afford to the members of the Thermo Electron Group and their authorized accountants, counsel and other designated representatives reasonable access (including using reasonable efforts to give access to persons or firms possessing Information) and duplicating rights during normal business hours to Information within the Viasys Group's possession relating to the business of the Thermo Electron Group as constituted after the Distribution, insofar as such access is reasonably required by any member of the Thermo Electron Group. Information may be requested under this Article VIII for, without limitation, audit, accounting, claims, litigation and tax purposes, as well as for purposes of fulfilling disclosure and reporting obligations and for performing the transactions contemplated in this Agreement and the Ancillary Agreements. 8.3 PRODUCTION OF WITNESSES. At all times from and after the Distribution Date, each of Thermo Electron and Viasys shall, and shall cause the other members of its respective Group to, use reasonable efforts to make available to the members of the other Group, upon written request, its officers, directors, employees and agents as witnesses to the extent that such persons may reasonably be required in connection with legal, administrative or other proceedings in which the requesting party may from time to time be involved and relating to the pre-Distribution business of the Thermo Electron Group or the Viasys Group or relating to or in connection with the relationship between any member of the Thermo Electron Group and any member of the Viasys Group on or prior to the Distribution Date. 8.4 REIMBURSEMENT. Except to the extent otherwise contemplated by any Ancillary Agreement, a party providing Information to the other party under this Article VIII shall be entitled to receive from the recipient, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses, as may be reasonably incurred in providing such Information. 8.5 RETENTION OF RECORDS. For a period of seven (7) years following the Distribution Date, each of Thermo Electron and Viasys shall retain all Information relating to the other, except as otherwise required by law or set forth in an Ancillary Agreement or except to the extent that such Information is in the public domain or in the possession of the other party; provided, that, after the expiration of such retention period, such Information shall not be destroyed or otherwise disposed of at any time, unless, prior to such destruction or disposal, (i) the party proposing to destroy or otherwise dispose of such Information shall provide no less than 90 days' prior written notice to the other, specifying in reasonable detail the Information proposed to be destroyed or disposed of and (ii) if a recipient of such notice shall request in writing prior to the scheduled date for such destruction or disposal that any of the Information proposed to be destroyed or disposed of be delivered to such requesting party, the party proposing the destruction or disposal shall promptly arrange for the delivery of such of the Information as was requested, at the expense of the party requesting such Information. 8.6 CONFIDENTIALITY. Subject to any contrary requirement of law and the right of each party to enforce its rights hereunder in any legal action, each party shall keep strictly confidential, and shall use its reasonable efforts to cause its Affiliates and Representatives to keep strictly confidential, any Information of or concerning the other party which it or any of its Affiliates or Representatives may acquire pursuant to, or in the course of performing its obligations under, any provisions of this Agreement or any Ancillary Agreement; provided, however, that such obligation to maintain confidentiality shall not apply to Information which: (i) at the time of disclosure was in the public domain, not as a result of improper acts by the receiving party; (ii) is received by the receiving party from a third party who did not receive such Information from the disclosing party under an obligation of confidentiality; or (iii) is compelled to be disclosed by judicial or administrative process or, in the opinion of such Person's counsel, by other requirements of law. Notwithstanding the foregoing, each of Thermo Electron and Viasys shall be deemed to have satisfied its obligations under this Section 8.6 with respect to any Information if it exercises the same care with regard to such Information as it takes to preserve the confidentiality of its own similar Information. ARTICLE IX COVENANTS 9.1 LISTING. For so long as Viasys has a class of securities registered under Section 12 of the Exchange Act, Viasys hereby agrees to use its reasonable efforts to effect and maintain the listing of the Viasys Common Stock on The American Stock Exchange, The Nasdaq National Market or the New York Stock Exchange. 9.2 ANCILLARY AGREEMENTS. The parties agree that they shall comply with and provide all services and take any and all actions required to be provided or taken by the terms of any and all of the Ancillary Agreements following the Distribution. 9.3 USE OF THERMO ELECTRON TRADEMARKS. (a) Thermo Electron hereby grants the Viasys Group a nonexclusive, nontransferable license to use the Thermo Electron Trademarks solely in connection with the operation of the Viasys Business. Viasys acknowledges, on its behalf and on behalf of the other members of the Viasys Group that Thermo Electron owns all rights in the Thermo Electron Trademarks. From and after the Distribution Date, the Viasys Group shall have no rights to the Thermo Electron Trademarks except for the limited license granted pursuant to this Section 9.3. (b) Within 180 days following the Distribution Date, Viasys and each member of the Viasys Group shall cease all use of the Thermo Electron Trademarks as part of any corporate name or logo, tradename, and/or trademark or service mark, including, without limitation, on any signs, letterhead, business cards, invoices and other business forms, telephone directory listings and promotional materials. (c) During the 180-day period set forth in Section 9.3(b), Viasys shall maintain the same standards of quality for products and services provided under the Thermo Electron Trademarks as previously provided by Thermo Electron and its Subsidiaries. During such period, Thermo Electron shall have the right to monitor Viasys's use of the Thermo Electron Trademarks and shall be able to control the quality of any Viasys products and/or services that bear the Thermo Electron Trademarks. 9.4 TERMINATION OF INTERCOMPANY AGREEMENTS. (a) Viasys and each member of the Viasys Group, on the one hand, and Thermo Electron and each member of the Thermo Electron Group, on the other hand, hereby terminate any and all agreements, arrangements, commitments or understandings, whether or not in writing, between or among Viasys and/or any member of the Viasys Group, on the one hand, and Thermo Electron and/or any member of the Thermo Electron Group, on the other hand, effective as of the Distribution Date. No such terminated agreement, arrangement, commitment or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Distribution Date. Each Party shall, at the reasonable request of any other party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing. (b) The provisions of Section 9.4(a) shall not apply to any of the following agreements, arrangements, commitments or understandings (or to any of the provisions thereof): (i) this Agreement or any of the Ancillary Agreements (and each other agreement or instrument expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any of the parties hereto or any of the members of their respective Groups); (ii) any agreements, arrangements, commitments or understandings listed or described on Schedule 9.4(b) hereto; (iii) any agreements, arrangements, commitments or understandings to which any Person other than the parties hereto and their respective Affiliates is a party; (iv) any other agreements, arrangements, commitments or understandings that this Agreement or any of the Ancillary Agreements expressly contemplates will survive the Distribution Date. 9.5 NAME CHANGES. Viasys hereby agrees to cause each of its Subsidiaries, including but not limited to Thermo Polymer LLC, to cease using the term "Thermo" or "TMO" in its name by no later than December 31, 2001. 9.6 TREATMENT OF STOCK OPTIONS. All outstanding options to purchase shares of Thermo Electron Common Stock (Current "TMO Options") held immediately prior to the Distribution Date by Active Employees of the Viasys Group shall be assumed by Viasys and shall be adjusted as follows: (i) each such Current TMO Option shall be exercisable, on the same terms and conditions as were applicable under such Current TMO Option (including those relating to vesting and expiration of such Current TMO Option) on the Distribution Date, under the Viasys Equity Incentive Plan to purchase such number of shares of Viasys Common Stock as is equal to the number of shares of Thermo Electron Common Stock covered by such Current TMO Option immediately prior to the Distribution Date multiplied by the Viasys Exchange Ratio (rounded down to the nearest whole share), and (ii) the exercise price per share under such Current TMO Option shall equal the exercise price per share of Thermo Electron Common Stock purchasable pursuant to such Current TMO Option immediately prior to the Distribution Date divided by the Viasys Exchange Ratio, with such quotient then rounded down to the nearest whole cent. As soon as practicable after the Distribution Date, Viasys shall deliver to each Active Employee of the Viasys Group appropriate notice setting forth the adjustments made to his or her Current TMO Options pursuant to this Section 9.6. Each of Thermo Electron and Viasys agrees to take all corporate action necessary to effectuate and carry out the intent and purposes of this Section 9.6. Immediately following the Distribution Date, the Viasys Board shall have all of the obligations, authority, rights and powers with respect to the Current TMO Options as had the Thermo Electron Board immediately prior to the Distribution Date. 9.7 TREATMENT OF RESTRICTED STOCK. Pursuant to arrangements agreed upon among Thermo Electron, Viasys and the Active Employees of the Viasys Group who hold restricted shares of Thermo Electron Common Stock, effective as of the Distribution Date all such restricted shares immediately prior to the Distribution Date by such Active Employees shall be exchanged for a number of restricted shares of Viasys Common Stock equal to the number of such restricted shares of Thermo Electron Common Stock being exchanged multiplied by the Viasys Exchange Ratio. The restricted shares of Viasys Common Stock so issued shall be subject to terms and conditions equivalent to those applicable to the restricted shares of Thermo Electron Common Stock, as effective immediately prior to the Distribution Date. 9.8 OBLIGATIONS UNDER LETTERS OF CREDIT. On or before six months from the Distribution Date (the "Release Date"), Viasys shall have arranged for the termination of, or replacement arrangements (including, to the extent required, guarantees and letters of credit from Viasys's lender) reasonably satisfactory to Thermo Electron with respect to, all TMO Letter of Credit Guarantees continuing in effect on and after the Release Date. Such terminations and/or replacement arrangements shall include or have the effect of providing a full and complete release of Thermo Electron, all other members of the Thermo Electron Group and the Representatives of the Thermo Electron Group (other than the members of the Viasys Group) of all of the obligations of the Thermo Electron Group and its Representatives under, or in connection with, the TMO Letter of Credit Guarantees. 9.9 STOCKHOLDER APPROVAL OF PLANS. After the Distribution Date, Viasys shall call a meeting of its stockholders for the purpose of ratifying the adoption of the Viasys Equity Incentive Plan and the Viasys Employee Stock Purchase Plan by the Viasys Board of Directors. Such stockholder meeting shall occur no later than September 23, 2002 in the case of the Viasys Equity Incentive Plan and October 17, 2002 in the case of the Viasys Employee Stock Purchase Plan. 9.10 COMMUNICATIONS WITH IRS. Viasys hereby agrees that it shall not engage in any communications with the Internal Revenue Service regarding the Distribution or the tax-free treatment of the Distribution without the prior written approval of Thermo Electron. 9.11 CAPITAL CONTRIBUTION TO VIASYS. On or about the Distribution Date, Thermo Electron shall provide Viasys with sufficient cash, which when added to the existing cash and cash equivalents of Viasys on the Distribution Date, will result in Viasys having a "net debt" balance of $18.7 million. For purposes of this calculation, "net debt" is defined as Viasys' outstanding indebtedness to Thermo Electron as of the Distribution Date less Viasys' cash and cash equivalents as of such date. In the event that such capital contribution by Thermo Electron results in Viasys having a "net debt" balance of less than $18.7 million, Viasys shall remit to Thermo Electron an amount such that the net debt of Viasys would equal $18.7 million. ARTICLE X NO REPRESENTATIONS OR WARRANTIES 10.1 NO REPRESENTATIONS OR WARRANTIES. Viasys acknowledges that, prior to the date of this Agreement, it has had primary responsibility for the operation and management of the Viasys Business, and Thermo Electron acknowledges that, prior to the date of this Agreement, it has had primary responsibility for the operation and management of the Thermo Electron Business. Viasys understands and agrees that no member of the Thermo Electron Group is, in this Agreement or in any other agreement or document, representing or warranting to Viasys or any member of the Viasys Group in any way as to the Viasys Assets, the Viasys Business or the Liabilities of the Viasys Group or as to any consents or approvals required in connection with the consummation of the transactions contemplated by this Agreement, it being agreed and understood that Viasys and each member of the Viasys Group shall take all of the Viasys Assets "as is, where is." Viasys and each member of the Viasys Group shall bear the economic and legal risk that conveyances of the Viasys Assets shall prove to be insufficient, that the title of any member of the Viasys Group to any Viasys Assets shall be other than good and marketable and free from encumbrances or that results from the failure of Viasys or any member of the Viasys Group to obtain any consents or approvals relating to the Viasys Business required in connection with the consummation of the transactions contemplated by this Agreement. ARTICLE XI MISCELLANEOUS 11.1 GOVERNING LAW. This Agreement shall be governed by the laws of the State of Delaware. 11.2 CONSTRUCTION. Each provision of this Agreement shall be interpreted in a manner to be effective and valid to the fullest extent permissible under applicable law. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions of this Agreement which shall remain in full force and effect. 11.3 COUNTERPARTS. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement. 11.4 EXHIBITS. Exhibits to this Agreement shall be deemed to be an integral part hereof, and schedules or exhibits to such Exhibits shall be deemed to be an integral part thereof. Except as otherwise specifically provided therein, all provisions of this Article XI shall apply to each agreement constituting an Ancillary Agreement or to which reference is made herein. 11.5 AMENDMENTS; WAIVERS. This Agreement may be amended or modified only in writing executed on behalf of Thermo Electron and Viasys. No waiver shall operate to waive any further or future act and no failure to object or forbearance shall operate as a waiver. 11.6 NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is given, (ii) on the day of transmission if sent via facsimile transmission to the facsimile number given below, provided telephonic confirmation of receipt is obtained promptly after completion of transmission, (iii) on the business day after delivery to an overnight courier service or the Express mail service maintained by the United States Postal Service, provided receipt of delivery has been confirmed, or (iv) on the fifth day after mailing, if mailed by registered or certified mail, postage prepaid, properly addressed and return-receipt requested, in all cases to the parties as follows: Thermo Electron Corporation 81 Wyman Street P.O. Box 9046 Waltham, MA 02454-9046 Attention: Chief Executive Officer Telephone: (781) 622-1000 Telecopier: (781) 622-1283 or to: Viasys Healthcare Inc. 700 South Henderson Road, Suite 202 King of Prussia, Pennsylvania 19406 Telephone: (610) 992-5881 Telecopier: 11.7 SUCCESSORS AND ASSIGNS. This Agreement and any of the rights and obligations of each party hereunder shall not be assigned, in whole or in part, without the prior written consent of the other party, provided that either party may sell, assign, transfer, delegate or otherwise dispose of its rights and obligations hereunder in connection with its merger or consolidation or the sale of substantially all of its assets. This Agreement shall be binding upon the parties and their respective successors and assigns to the extent such assignments are in accordance with this Section 11.7. 11.8 INTERPRETATION. The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement. As used in this Agreement, the term "person" shall mean and include an individual, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. Whenever any words are used herein in the masculine gender, they shall be construed as though they were also used in the feminine gender in all cases where they would so apply. 11.9 NO THIRD-PARTY BENEFICIARIES. Except for the provisions of Sections 5.2 and 5.3 relating to Indemnitees, which are also for the benefit of the Indemnitees, this Agreement is solely for the benefit of the parties hereto and their Subsidiaries and Affiliates and is not intended to confer upon any other Persons any rights or remedies hereunder. 11.10 COMPLETE AGREEMENT. This Agreement, the Exhibits and any schedules hereto and the Ancillary Agreements and other documents referred to herein shall constitute the entire agreement between the parties hereto with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. All matters arising out of the Distribution relating to taxes shall be governed by the Tax Matters Agreement. In the event of any inconsistency between the Tax Matters Agreement and this Agreement with respect to such matters, the Tax Matters Agreement shall govern. 11.11 DISPUTE RESOLUTION. (a) General. In the event that any dispute should arise between the parties hereto with respect to any matter covered by this Agreement or any of the Ancillary Agreements or the interpretation of this Agreement or any of the Ancillary Agreements, the parties hereto shall resolve such dispute in accordance with the procedures set forth in this Section 11.11. (b) Arbitration. (i) Any party hereto may submit any matter referred to in Section 11.11(a) to arbitration by notifying the other party, in writing, of such dispute. Within 30 days after receipt of such notice, the parties shall designate in writing one arbitrator to resolve the dispute; provided, that if the parties cannot agree on an arbitrator within such 30-day period, the arbitrator shall be selected by the Boston, Massachusetts, Office of the American Arbitration Association. The arbitrator shall be a retired federal or state judge, and shall not be an Affiliate, Representative, employee, consultant, officer, director or stockholder of any party hereto. If neither the parties nor the Boston, Massachusetts, Office of the American Arbitration Association is able to identify an individual to serve as the arbitrator, the Boston, Massachusetts, Office of the American Arbitration Association shall select an arbitrator from the CPC Panel of Distinguished Neutrals of the CPR Institute for Dispute Resolution. (ii) Within 30 days after the designation of the arbitrator, the arbitrator and the parties hereto shall meet, at which time the parties shall be required to set forth in writing all disputed issues and a proposed ruling on the merits of each such issue. (iii) The arbitrator shall set a date for a hearing, which shall be no later than 45 days after the submission of written proposals pursuant to Section 11.11(b)(ii), to discuss each of the issues identified by the parties. Each party hereto shall have the right to be represented by counsel. Except as provided herein, the arbitration shall be governed by the Commercial Arbitration Rules of the American Arbitration Association; provided, however, that the Federal Rules of Evidence shall apply with regard to the admissibility of evidence and the arbitration shall be conducted by a single arbitrator. (iv) The arbitrator shall use his or her reasonable efforts to rule on each disputed issue within 30 days after the completion of the hearings described in Section 11.11(b)(iii). The determination of the arbitrator as to the resolution of any dispute shall be binding and conclusive upon all parties hereto. All rulings of the arbitrator shall be in writing and shall be delivered to the parties. (v) The attorneys' fees of the parties hereto in any arbitration, the fees of the arbitrator, and the costs and expenses of the arbitration shall be borne by the parties as determined by the arbitrator. (vi) Any arbitration pursuant to this Section 11.11 shall be conducted in Boston, Massachusetts. Any arbitration award may be entered in and enforced by any court having jurisdiction thereover and shall be final and binding upon the parties hereto. (vii) Notwithstanding the foregoing, nothing in this Section 11.11 shall be construed as limiting in any way the right of a party hereto to seek a temporary restraining order or other injunctive relief with respect to any actual or threatened breach of this Agreement or any Ancillary Agreement from a court of competent jurisdiction. Should any party to this Agreement seek a temporary restraining order or other injunctive relief, then for purposes of determining whether to grant such temporary restraining order or other injunctive relief, the dispute underlying the request for such temporary restraining order or other injunctive relief may be heard by such court of competent jurisdiction. 11.12 EXPENSES. Except as otherwise specifically provided in this Agreement and the Ancillary Agreements, Thermo Electron and Viasys shall each bear their own costs and expenses incurred in connection with the transactions contemplated hereby and by the Ancillary Agreements (including the fees and expenses of the Agent and of all counsel, accountants and financial and other advisors). 11.13 FORCE MAJEURE. Neither party shall be considered in default in performance of its obligations under this Agreement to the extent that its performance of such obligations is prevented or delayed by any cause beyond its reasonable control, including but not limited to strikes, labor disputes, civil disturbances, rebellion, invasion, epidemic, hostilities, war, embargo, natural disaster, acts of God, fire, sabotage, loss and destruction of property, changes in laws, regulations or orders, other events or situations which the party was unable to prevent or overcome despite the exercise of due diligence. Without limiting the foregoing, Thermo Electron and Viasys hereby agree that: (a) Thermo Electron shall pay all expenses directly relating to the distribution of its Viasys Common Stock as a dividend to Thermo Electron's stockholders, including but not limited to expenses of the Agent in connection with the Distribution, all expenses of any advisors retained by Thermo Electron to assist Thermo Electron with the placement of the dividend shares and all legal, travel and other expenses incurred in connection with the preparation and presentation of the "road show" relating to the Distribution and the preparation, printing and distribution of the Information Statement: and (b) Viasys shall pay all expenses relating to the listing and trading of Viasys Common Stock on any stock exchange, rights plan and other corporate actions effected in connection with the Distribution, including but not limited to expenses of any advisors retained by Viasys in connection with coverage of the Viasys Common Stock. 11.14 COMPLIANCE WITH LAW. Nothing in this Agreement shall require either party to take any action or omit to take any action in violation of applicable law. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. THERMO ELECTRON CORPORATION By: /s/ Theo Melas-Kyriazi -------------------------------------- Theo Melas-Kyriazi Vice President and Chief Financial Officer VIASYS HEALTHCARE INC. By: /s/ Richard F. Syron -------------------------------------- Richard F. Syron Chairman of the Board SCHEDULE 9.4(b) (1) Operating Lease for Nicolet (2) Agreement Between Trex Medical and Tecomet (3) Sub-lease Between Thermo Electron and VIASYS relating to the facility at 470 Wildwood Avenue in Woburn, Massachusetts (4) Sub-lease Between Thermo Electron and VIASYS relating to the facility at 205 Wildwood Avenue in Woburn, Massachusetts (5) Letter Agreement regarding the premises at Nicolet House, Budbrooke Road, Warwick, England (6) Recourse Agreements between Thermo Capital and members of the Viasys Group EX-99.3 5 b41120teex99-3.txt TAX MATTERS AGREEMENT, DATED 11/15/01 Exhibit 99.3 Execution Copy TAX MATTERS AGREEMENT THIS TAX MATTERS AGREEMENT (the "Agreement") is made as of the Distribution Date (as defined in the Distribution Agreement (as defined below)) by and among Thermo Electron Corporation, a Delaware corporation ("Thermo Electron" and, together with its subsidiaries existing immediately following the Distribution, the "Thermo Electron Group"), and Viasys Healthcare Inc., a Delaware corporation and a wholly owned subsidiary of Thermo Electron ("Viasys" and, together with its subsidiaries existing immediately following the Distribution, the "Viasys Group"). For purposes of this Agreement, Kadant Inc. shall be deemed to be a part of the Thermo Electron Group regardless of the fact that the Second Distribution (as defined below) occurred prior to the Distribution Date. WHEREAS, Thermo Electron and Viasys have entered into a Plan and Agreement of Distribution dated as of November 15, 2001 (the "Distribution Agreement"), providing for the distribution of all of the issued and outstanding shares of Viasys common stock owned by Thermo Electron to Thermo Electron's shareholders in accordance with the Distribution Agreement (the "Distribution"); WHEREAS, prior to the Distribution, the Thermo Electron Group and the Viasys Group were part of an affiliated group of corporations that filed consolidated and combined Returns (as defined below) and of which Thermo Electron was the common parent, within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended; WHEREAS, Thermo Electron and Viasys desire to set forth their agreement regarding the allocation between the Thermo Electron Group and the Viasys Group of all responsibilities, liabilities and benefits relating to or affecting Taxes (as defined below) paid or payable by either of them for all taxable periods. NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties hereby agree as follows: 1. Definitions. Capitalized terms not otherwise defined herein shall have the meanings given them in the Distribution Agreement. As used in this Agreement, the following terms shall have the following meanings: "Affiliate" of any person means any person, corporation, partnership or other entity directly or indirectly controlling, controlled by or under common control with such person. "Code" means the Internal Revenue Code of 1986, as amended or, as the context may require, the Internal Revenue Code applicable to the taxable year in question. "Distribution Agreement" has the meaning set forth in the preamble hereto. "Final Determination" shall mean the final resolution of liability for any Tax for a taxable period (i) by Internal Revenue Service Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, or by a comparable form under the laws of any other jurisdiction; except that a Form 870 or 870-AD or comparable form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund and/or the right of the taxing authority to assert a further deficiency shall not constitute a Final Determination; (ii) by a decision, judgment, decree or other order by a court of competent jurisdiction, which has become final and unappealable; (iii) by a closing agreement or accepted offer in compromise under Section 7121 or 7122 of the Code, or comparable agreements under the laws of other jurisdictions; (iv) by any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the Taxing Authority; or (v) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the parties. "Post-Distribution Act" means any event or transaction (or the execution of an agreement, letter of intent or option providing for a transaction) in which Viasys participates after the Distribution and in which any of the following occurs: (i) Viasys transfers a material portion of its assets (other than a transfer of assets in the ordinary course of business) within two years following the Distribution Date; (ii) Viasys merges with another corporation within two years following the Distribution Date; (iii) Within two years following the Distribution Date Viasys discontinues a material portion of its historic business activities including the design, manufacture, marketing and sale of respiratory care, neuro care and critical care/OEM products; (iv) Within one year following the Distribution Date a material portion of the shares of Viasys common stock distributed in the Distribution is converted into (or redeemed or exchanged for) any other stock, any security, any property or cash; (v) Within two years following the Distribution Date, Viasys issues its capital stock in one or more issuances, whether incident to a stock offering, an acquisition transaction or otherwise, which causes the aggregate amount of shares issued or acquired in all such transactions to represent a greater-than-twenty-percent interest in the total issued and outstanding stock of Viasys determined in accordance with Section 355(d)(4) of the Code as of the date of the Distribution without Viasys having delivered to Thermo Electron an opinion of counsel reasonably acceptable to Thermo Electron to the effect that such Post-Distribution Act will not cause Section 355(e) of the Code to apply with respect to the Distribution, which opinion shall be in such form and based upon such factual representations and assumptions as may be reasonably acceptable to Thermo Electron. "Post-Distribution Taxes" means any and all liability for Taxes of the Viasys Group or the Thermo Electron Group, as appropriate, other than for Pre-Distribution Taxes. "Pre-Distribution Taxes" means any and all Taxes of the Thermo Electron Group or the Viasys Group, as appropriate, for all periods that ended on or prior to the Distribution -2- Date. For purposes of computing the amount of Pre-Distribution Taxes in the case of a Tax period that begins before and ends after the Distribution Date, the amount of Taxes considered to have accrued with respect to the portion of the Tax period that ended on the Distribution Date shall be determined as follows: (i) In the case of any ad valorem, personal property and real property Taxes, an amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the portion of the Tax period ended on the Distribution Date and the denominator of which is the number of days in the entire Tax period, provided that such allocation of Taxes shall be appropriately adjusted to reflect any material acquisitions or dispositions of property during the Tax period; (ii) In the case of any withholding Tax, the amount of Taxes required to be withheld which relates to any payment by any member of the Thermo Electron Group or the Viasys Group on or before the Distribution Date; and (iii) In the case of any Tax other than ad valorem, personal property and real property Taxes or any withholding Tax, the amount that would be payable if the relevant Tax period ended on the Distribution Date. In the case of any credits relating to a Tax period that begins before and ends after the Distribution Date, only those credits that would have resulted had the relevant Tax period ended on the Distribution Date shall be taken into account. "Returns" means all returns, reports and information statements (including all exhibits and schedules thereto) required to be filed with a Taxing Authority with respect to any Taxes. "Second Distribution" has the meaning set forth in the definition of "Viasys-Caused Taxes". "Tax Allocation Agreement" means that certain Tax Allocation Agreement by and between Thermo Electron and Viasys dated as of August 7, 1995 (copy attached). "Taxes" means any income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, environmental excise, severance, stamp, transfer, recording occupation, premium, property, value added, windfall profit tax, custom, duty or other tax of any kind whatsoever, together with any interest and any penalty, addition to tax or additional amount imposed by any Taxing Authority. "Taxing Authority" means any governmental authority responsible for the imposition of any Tax (domestic or foreign). "Thermo Electron" has the meaning set forth in the preamble hereto. "Thermo Electron Group" has the meaning set forth in the preamble hereto. -3- "Thermo Electron Tax" means any Tax for which Thermo Electron or any member of the Thermo Electron Group is responsible under Section 2 hereof. "Transition Services Agreement" means that certain Transition Services Agreement by and between Thermo Electron and Viasys dated as of November 15, 2001 (copy attached). "Viasys" has the meaning set forth in the preamble hereto. "Viasys Group" has the meaning set forth in the preamble hereto. "Viasys Issue" has the meaning set forth in Section 3(a) hereof. "Viasys Tax" means any Tax for which Viasys or any member of the Viasys Group is responsible under Section 2 hereof. "Viasys-Caused Taxes" means any liability for Taxes (less an amount equal to any Taxes that would be attributable to the distribution of shares of Viasys or Kadant Inc. described in Section 355(a)(3)(B) of the Code if the Distribution and the Second Distribution were to otherwise qualify as tax-free transactions under Section 355(c) of the Code) incurred by the Thermo Electron Group or the Viasys Group arising from or attributable to any of the transactions that are directly related to either the Distribution or to the distribution of Kadant Inc. ("Kadant") stock owned by Thermo Electron to Thermo Electron's shareholders (the "Second Distribution") (including, without limitation, the contribution and/or licensing of assets to Viasys or Kadant by Thermo Electron, the recapitalization of Viasys or Kadant and the Distribution or the Second Distribution itself) failing to qualify as a tax-free transaction under Code Sections 351, 355, 361 or 368 (or any comparable provisions of state law), but only if such failure (i) was caused (within the meaning of clause (c) of the next sentence) by an act that occurred after the Distribution and in which Viasys participated; (ii) was attributable (within the meaning of clause (c) of the next sentence) to Viasys failing to undertake an offering of at least ten-percent of its outstanding shares within twelve months following the Distribution Date (or such later date as the Internal Revenue Service (the "IRS") may indicate in a written supplement to the private letter ruling designated as PLR 108328-00); or (iii) was otherwise attributable (within the meaning of clause (c) of the next sentence) to one or more of the representations contained in Section 8 hereof failing to be true. For purposes of this definition (subject to clause (c) hereof), (a) if any failure to so qualify occurs and Viasys has participated in a Post-Distribution Act, such failure shall be deemed to have been caused by Viasys' participation in the Post-Distribution Act unless established to the contrary by clear and convincing evidence that the Post-Distribution Act did not cause the failure to qualify as a tax-free transaction under Code Sections 351, 355, 361 or 368; (b) all transactions described in the request for ruling submitted to the Internal Revenue Service and dated April 7, 2000 (including supplemental information submitted in connection therewith) shall be included as transactions considered to be directly related to the Distribution or the Second Distribution (as appropriate); (c) the failure to qualify as a tax-free transaction pursuant to Code Sections 351, 355, 361 and 368 shall be considered to have been caused or attributable to an act or omission by Viasys if the transaction would have so qualified but for the act or omission; and (d) the qualification of a transaction as "tax-free" shall be made without regard to taxable income or gain attributable to the distribution of shares of Kadant described in Section 355(a)(3)(B) of the Code or any cash received in lieu of fractional shares. Viasys-Caused Taxes, as defined above, shall include increases in Taxes of the Thermo Electron Group or the Viasys Group for any period to the extent such increases in Taxes would not have occurred but for the transactions directly related to the Distribution or the Second Distribution -4- failing to qualify as a tax-free transaction under Sections 351, 355, 361 or 368 of the Code (or comparable provisions of state law). Thus, for example, if the failure of any of the transactions to so qualify results in additional income being realized by the Thermo Electron Group in its tax year that includes the Distribution or the Second Distribution, but such income is substantially offset by operating losses or net operating loss carryovers, Viasys-Caused Taxes will include (to the extent the other requirements of this definition are met) any increase in Taxes realized by any member of the Thermo Electron Group in subsequent years to the extent such increase in Taxes would not have been realized had the loss or loss carryovers not been used in the tax year that includes the Distribution or the Second Distribution. 2. Operative Provisions. (a) Thermo Electron shall indemnify Viasys against and be responsible for all Post-Distribution Taxes attributable to any member of the Thermo Electron Group and all Pre-Distribution Taxes other than (i) Viasys-Caused Taxes and (ii) Pre-Distribution Taxes for which Viasys or any member of the Viasys Group was responsible under the Tax Allocation Agreement. (b) Viasys shall indemnify Thermo Electron against and shall be responsible for all Post-Distribution Taxes attributable to any member of the Viasys Group, all Viasys-Caused Taxes and all Pre-Distribution Taxes for which Viasys or any member of the Viasys Group was responsible under the Tax Allocation Agreement. (c) With respect to the tax year of the Thermo Electron Group that includes the Distribution Date and the tax year of Viasys that commences immediately following the Distribution Date, the Thermo Electron Group (which, for this purpose only, shall include the Viasys Group) shall claim on its federal income tax returns the benefit of (i) the graduated tax rates of Code Section 11, (ii) the $25,000 bracket amount in Code Section 38, (iii) the $40,000 exemption amount and the $175,000 bracket amount in Code Section 55 and (iv) the $2,000,000 bracket amount in Code Section 59A, and neither Viasys nor any member of the Viasys Group shall claim any of such benefits for their Tax year that commences on the date immediately following the Distribution Date. (d) Notwithstanding the provisions of Section 2 hereof, for all tax years through and including 2001, Taxes imposed upon Thermo Electron or a member of the Thermo Electron Group, or Viasys or a member of the Viasys Group, that are determined or assessed on a separate company basis, will be the separate liability of Thermo Electron, Viasys or such member and not subject to allocation or sharing among other members of the Thermo Electron Group and the Viasys Group. (e) For purposes of this Section 2, the determination of the respective liabilities of the Thermo Electron Group and the Viasys Group for all Pre-Distribution Taxes -5- shall be made in accordance with the provisions of the Tax Allocation Agreement consistently applied in accordance with past practice. 3. Returns; Refunds; Contest Provisions. (a) Thermo Electron shall have the obligation and the sole right and full discretion to control (i) the preparation of all Returns that pertain (in whole or in part) to Pre-Distribution Taxes (including Viasys-Caused Taxes) and (ii) the defense, settlement or compromise of any audit, examination, investigation, suit, action or other proceeding relating to Pre-Distribution Taxes (including Viasys-Caused Taxes) and shall be entitled to all refunds of any Thermo Electron Taxes; provided, however, that such preparation of Returns and such defense, settlement or compromise of a proceeding shall be done in a manner consistent with past practices. In the event that the proceeding referenced in clause (ii) of the preceding sentence involves an issue that relates to Viasys Taxes (a "Viasys Issue"), Viasys shall have the right to participate in (but not control) such proceeding with respect to the Viasys Issue only at its own cost and expense. Notwithstanding the foregoing, in the event that Thermo Electron decides to abandon the defense of, or settle or compromise any claim relating solely to a Viasys Issue, Thermo Electron shall notify Viasys of such decision and Viasys shall have ten days to notify Thermo Electron that it assumes all liability with respect to the Viasys Taxes attributable to such Viasys Issue under dispute and wishes to assume the defense of such audit or other proceedings at its own expense. In the event that Thermo Electron timely receives such notice from Viasys, it shall use all reasonable efforts to cooperate so as to facilitate Viasys' handling of such proceedings. (b) Except as otherwise provided in the Transition Services Agreement, Viasys shall have the obligation and the sole right and full discretion to control (i) the preparation of all Returns that pertain exclusively to Post-Distribution Taxes that are Viasys Taxes and (ii) the defense, settlement or compromise of any audit, examination, investigation, suit, action or other proceeding relating to Post-Distribution Taxes that are Viasys Taxes. Viasys shall be entitled to all refunds of any Viasys Taxes. (c) Thermo Electron shall have the obligation and the sole right and full discretion to control (i) the preparation of all Returns with respect to Post-Distribution Taxes that are Thermo Electron Taxes and (ii) the defense, settlement or compromise of any audit, examination, investigation, suit, action or other proceeding relating to Post-Distribution Taxes that are Thermo Electron Taxes. 4. Stock Options. (a) From and after the Distribution Date, if an employee or service provider of any member of the Viasys Group who is not also an employee or service provider of any member of the Thermo Electron Group exercises a stock option to acquire stock of Thermo Electron, the parties hereto agree that Viasys shall be entitled to any resulting Tax deduction and shall be fully responsible for all associated Tax reporting, withholding and similar obligations. (b) From and after the Distribution Date, if an employee or service provider of any member of the Thermo Electron Group who is not also an employee or service provider of -6- any member of the Viasys Group exercises a stock option to acquire stock of Viasys, the parties agree that Thermo Electron shall be entitled to any resulting Tax deduction and shall be fully responsible for all associated Tax reporting, withholding and similar obligations. (c) Except as provided in subsections (a) and (b) above, all deductions, reporting and withholding obligations associated with the exercise of a stock option shall be attributed to the respective group (i.e. Thermo Electron Group or the Viasys Group) to which the company that issued the stock upon exercise of the option belongs. 5. Agency. Viasys irrevocably designates Thermo Electron (and shall cause each member of the Viasys Group to irrevocably designate Thermo Electron) as its agent and attorney in fact (and shall execute any necessary powers of attorney) for the purpose of taking any and all actions necessary or incidental to the filing of federal income tax Returns and state unitary or combined Returns for (i) any period during which any member of the Viasys Group or any predecessor qualified to file a consolidated, combined, unitary or similar Return with any member of the Thermo Electron Group and (ii) any period ending on or before the Distribution Date. Thermo Electron shall keep Viasys reasonably informed of, and shall reasonably consult with Viasys with respect to, all actions to be taken on behalf of any member of the Viasys Group. Thermo Electron and Viasys will each furnish the other any and all information which the other may reasonably request in order to carry out the provisions of this Agreement to determine the amount of any Tax liability. 6. Consistent Reporting. (a) With respect to all taxable periods ending on or prior to December 31, 2005, Viasys, each member of the Viasys Group and any future Affiliates thereof shall file federal income tax and state income tax Returns in a manner consistent with the Returns filed (or to be filed) in respect of Pre-Distribution Taxes and in a manner consistent with the form of the transactions contemplated by the Distribution Agreement (the "Form"), including that the Distribution qualifies under Section 355 of the Code. (b) For purposes of subsection (a) of this Section 6, to the extent there is an inconsistency or an apparent inconsistency between the Returns relating to Pre-Distribution Taxes (including Returns to be filed after the Distribution Date) and the Form, Viasys shall file Returns with respect to Post-Distribution Taxes in the manner reasonably directed by Thermo Electron. (c) Thermo Electron and Viasys agree to contest any proposed adjustment by any Taxing Authority that is, in the sole judgment of Thermo Electron, inconsistent with the provisions of this Section 6 or the Form. -7- 7. Covenants of Viasys and Thermo Electron Relating to Actions After the Distribution Date. (a) Viasys shall, and shall cause each member of the Viasys Group to, refrain from participating in any Post-Distribution Act without the prior written consent of Thermo Electron. (b) Viasys and Thermo Electron shall cooperate (and shall cause each of their Affiliates to cooperate) fully at such time and to the extent reasonably requested by the other party in connection with the preparation and filing of any Return or the conduct of any audit, dispute, proceeding, suit or action in respect of Taxes or other Tax matters. Such cooperation shall include, without limitation, (i) the retention and provision on demand of books, records, documentation or other information relating to any Return until the expiration of the applicable statute of limitation (giving effect to any extension, waiver or mitigation thereof) plus two years; (ii) the execution of any document that may be necessary or reasonably helpful in connection with the filing of any Return by any member of the Thermo Electron Group or the Viasys Group or in connection with any audit, examination, investigation, suit, action or other proceeding; and (iii) the use of the parties' reasonable best efforts to obtain any documentation from a governmental authority or a third party that may be necessary or helpful in connection with the foregoing. 8. Viasys Representations. Viasys hereby represents and warrants to Thermo Electron and each member of the Thermo Electron Group that the representations and statements relating to Viasys, the Viasys Group or their respective operations (and not Thermo Electron and its Shareholders) made, or to be made (to the extent Viasys is provided the opportunity to review such future representations and statements prior to their submission), to the IRS in connection with any ruling obtained, or to be obtained, by Thermo Electron from the IRS with respect to any transaction contemplated by the Distribution Agreement, as well as the statements contained in this Section 8, are true and correct in all material respects on the date hereof: (a) To the best of Viasys' knowledge and belief, no shares of Viasys common stock being distributed in the Distribution will be received by a shareholder of Thermo Electron in such shareholder's capacity as a creditor or employee or in any capacity other than that of a shareholder of Thermo Electron. (b) To the best of Viasys' knowledge and belief, immediately following the Distribution, no person, group of related persons or persons who acted in concert pursuant to a prearranged plan or arrangement will own 50% or greater of the Thermo Electron Common Stock or the Viasys common stock as a result of purchases of stock within five years of the Distribution Date. (c) Viasys has no plan or intention to issue Viasys common stock, whether incident to a stock offering, an acquisition transaction or otherwise, which causes the aggregate amount of Viasys common stock issued or acquired in any such transaction to represent a fifty percent (50%) or greater interest in the total issued and outstanding Viasys common stock within the meaning of Section 355(d)(4) of the Code. -8- (d) Viasys has no plan or intention to liquidate Viasys, to merge with another corporation or to sell or otherwise dispose of a material portion of its assets subsequent to the Distribution except in the ordinary course of business. (e) To the best of Viasys' knowledge and belief, no plan or intention exists by the shareholders of Thermo Electron to sell, exchange, transfer by gift or otherwise dispose of a material portion of either Thermo Electron Common Stock or Viasys common stock held by them (in the aggregate) subsequent to the Distribution. (f) Following the Distribution, each of Thermo Electron and Viasys will operate as independent corporations except that certain administrative and other common activities of the two corporations will be undertaken by common personnel in accordance with the Transition Services Agreement. Payments made in connection with all continuing transactions not expressly covered by the Transition Services Agreement between, and services provided for, each of Thermo Electron and Viasys will be for fair market value based on terms and conditions arrived at by the parties bargaining at arm's length. (g) Viasys has no plan or intention to transfer or substantially discontinue the historic business of Viasys following the Distribution. 9. Payments. All payments to be made hereunder shall be made in immediately available funds. Unless otherwise provided herein, any payment not made when due hereunder shall bear interest from the due date at an annual rate equal to the prime rate (as determined by FleetBoston Financial Corporation (or successor organization)) plus 2%, compounded and adjusted monthly. For purposes of this Agreement, the following payments shall be due at the following times: (a) Payments due under Section 2 hereof shall be paid within 10 days of the receipt of notice from the party entitled to the payment indicating the occurrence of the later of (i) a Final Determination relating to the item or items giving rise to the Tax for which indemnification is made and (ii) actual payment of the Tax giving rise to the claim for indemnification. (b) In the case of any refunds of Taxes received by a party other than the party entitled to such refunds pursuant to Section 3 hereof, the recipient of the refund shall pay the amount of such refund to the other party within five days of the receipt of such refund. 10. Resolution of Certain Disputes. Disagreements between Thermo Electron and Viasys shall be resolved as quickly as possible and, if not resolved within thirty days, shall be referred for binding resolution to a mutually agreeable accounting firm as soon as practicable thereafter. In the event an accounting firm cannot be mutually agreed upon, an accounting firm shall be chosen by lot from among the "Big Five" accounting firms (or such other commonly acknowledged number of preeminent accounting firms as are then in existence) other than any such firms that are the regular accountants for Thermo Electron or Viasys; provided, however, that at any time prior to the selection of an accounting firm in accordance with the foregoing procedure, Thermo Electron or Viasys may elect by providing written notice to the other to refer the dispute to an arbitrator selected by the American Arbitration Association for binding -9- arbitration in accordance with the commercial arbitration rules of such association. A dispute shall be deemed to exist to the extent one party does not affirmatively agree with the position held by the other party. The parties shall be required to use their best efforts to resolve any dispute as quickly as possible. The costs and fees of the accounting firm or arbitrator, as applicable, shall be divided equally except to the extent a party's position is unreasonable (as determined by the accounting firm or arbitrator, as applicable), in which case such party shall bear all expenses (including without limitation such fees) allocable to such position and the dispute relating thereto. 11. Costs and Expenses. Except as expressly set forth in this Agreement, each party shall bear its own costs and expenses incurred pursuant to this Agreement regardless of the beneficiary of the items or services relating to such costs and expenses. 12. Termination and Survival. Notwithstanding anything in this Agreement to the contrary, this Agreement shall remain in effect and its provisions shall survive for the full period of all applicable statutes of limitation relating to the assessment of Taxes (giving effect to any extension, waiver or mitigation thereof) plus two years. 13. Amendments; Limitation on Waivers. (a) Any provision of this Agreement may be amended if, and only if, such amendment is in writing and signed by Thermo Electron and Viasys. (b) The provisions of this Agreement may be waived only if the waiver is in writing and signed by the party making the waiver. No delay or omission in exercising any right under this Agreement will operate as a waiver of the right on any further occasion. No waiver of any particular provision of this Agreement will be treated as a waiver of any other provision, and no waiver of any right will be deemed a continuing waiver of the same right with respect to subsequent occurrences that give rise to such right. All rights given by this Agreement are cumulative to other rights provided for in this Agreement and to any other rights available under applicable law. 14. Governing Law and Interpretation. This Agreement shall be governed by, interpreted and enforced in accordance with the laws of the Commonwealth of Massachusetts (regardless of the laws that might be applicable under conflict of law principles). 15. Confidentiality. Each party shall hold and shall cause its consultants and advisors to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information (other than any such information relating solely to the business or affairs of such party) concerning the other parties hereto furnished it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (a) in the public domain through no fault of the party to which it was furnished or (b) later lawfully acquired from other sources by the party to which it was furnished), and each party shall not release or disclose such information to any other person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors who shall be advised of the provisions of this Section 15. Each party shall be deemed to have satisfied its obligation to hold confidential information concerning -10- or supplied by the other party if it exercises the same care as it takes to preserve confidentiality for its own similar information. 16. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original, but both of which together shall constitute one and the same instrument. 17. Assignments and Third-Party Benefit. This Agreement and the terms and provisions hereof shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and assigns. 18. Severability. If any term, provision, condition or covenant of this Agreement, or the application thereof to any party or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 19. Merger of Prior Agreements. (a) This Agreement contains all of the terms and provisions and constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior written, oral or implied understandings, representations and agreements of the parties relating to the subject matter of this Agreement, including the Tax Allocation Agreement. Without limiting the foregoing, the parties acknowledge and agree that in the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of the Distribution Agreement or the Transition Services Agreement, the provisions of this Agreement shall control and to such extent shall be deemed to supersede such conflicting provisions under the Distribution Agreement or the Transition Services Agreement. (b) The parties acknowledge that pursuant hereto, any and all existing tax sharing agreements or arrangements binding or benefiting Viasys, including the Tax Allocation Agreement, shall be terminated as of the close of business on the Distribution Date, and that after the Distribution Date this Agreement shall constitute the sole tax sharing agreement between Thermo Electron and Viasys. For periods prior to the Distribution Date, the Tax Allocation Agreement shall continue in effect except to the extent it is inconsistent with the terms of this Agreement. -11- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written. THERMO ELECTRON CORPORATION By: /s/ Theo Melas-Kyriazi -------------------------------------- Theo Melas-Kyriazi Vice President and Chief Financial Officer VIASYS HEALTHCARE INC. By: /s/ Richard F. Syron -------------------------------------- Richard F. Syron Chairman of the Board -12- EXECUTION COPY TAX ALLOCATION AGREEMENT THIS TAX ALLOCATION AGREEMENT is made as of August 7, 1995, between Thermo Electron Corporation, a Delaware corporation ("Thermo Electron") and Thermo Biomedical Inc., a Delaware corporation ("Biomedical"). PRELIMINARY STATEMENT Thermo Electron is the parent of an affiliated group of corporations (including Biomedical) within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the "Code"). Thermo Electron owns over 80% of the issued and outstanding shares of voting common stock of Biomedical, the only class of stock of Biomedical outstanding. Biomedical is required to file consolidated federal income tax returns with Thermo Electron. Thermo Electron as the common parent of an affiliated group of corporations and Biomedical recognize that any one of them that sustains a net operating loss or otherwise generates beneficial tax attributes for a taxable period may be deprived of such benefits when offset in that or other periods against income or tax liabilities of the others. AGREEMENTS IT IS MUTUALLY agreed by the parties hereto as follows: 1. DEFINITIONS AND CONSTRUCTION. 1.1 The Term "Thermo Electron Group" means the group of corporations of which Thermo Electron is the common parent and with which Thermo Electron files a consolidated federal income tax return, excluding Biomedical and subsidiaries of Biomedical that may exist now or in the future. For purposes of this Agreement, the Thermo Electron Group shall be treated as a single corporate entity. The Thermo Electron Group and Biomedical and its subsidiaries, respectively, are sometimes herein referred to collectively as the "Two Companies" or the "Companies." This Agreement anticipates that Thermo Electron will set aside and retain certain sums calculated as provided herein. All reference to Thermo Electron paying sums to itself pursuant to this Agreement shall be satisfied by Thermo Electron setting aside sums in respect of the obligations established under this Agreement. 1.2 The paragraph titles used herein are for convenience of reference only and will not be considered in the interpretation or construction of any of the provisions hereof. Words may be construed in the singular or the plural as the context requires. 2. TAX RETURNS. 2.1 FEDERAL TAX RETURNS. Thermo Electron as the common parent will prepare and file or cause to be prepared and filed federal and state income tax returns on a consolidated basis, for the Thermo Electron Group and Biomedical and its subsidiaries for all fiscal periods as to which a consolidated return is appropriate in accordance with the terms of this Agreement. 2.2 STATE TAX RETURNS. Thermo Electron as the common parent will prepare and file or cause to be filed state income tax returns on a combined, consolidated, unitary, or other method that Thermo Electron believes will result in a lower overall tax liability to the Two Companies. Biomedical will reimburse Thermo Electron for its portion of the tax. Such reimbursement will be the tax Biomedical would have paid on a separate return basis, but only if it was required to file a return in that state. 3. TIME OF PAYMENT OF FEDERAL OBLIGATIONS TO THERMO ELECTRON. The obligations of the Companies for Federal income tax payments will be determined and paid as follows: (a) Not later than the 15th day after the end of the fourth, sixth, ninth and twelfth months of each consolidated taxable year of Thermo Electron, Thermo Electron will make a reasonable determination (consistent with the provisions of Section 6655 of the Code) of the separate federal income tax liability that each Company would be required to pay as estimated payments on a separate return basis for that period. Each Company shall pay to Thermo Electron the amount of such liability within ten days. (b) After the end of Thermo Electron's fourth accounting quarter and before the 15th day of the third month thereafter, each Company will promptly pay to Thermo Electron the entire amounts estimated to be due and payable under such Company's federal income tax return as if filed on a separate return basis, less all amounts previously paid with respect to that year pursuant to subparagraph (a) of this Paragraph 3. (c) If upon the filing of the consolidated income tax return, a revised calculation is made in the manner set forth in subparagraph (b) of this Paragraph 3, and it is determined that either Company has paid to Thermo Electron with respect to the consolidated taxable year an amount greater than that required by Paragraph 3(b), then that excess will be promptly paid by Thermo Electron to that Company. 4. TAX OBLIGATIONS OF THERMO ELECTRON. Thermo Electron will pay the consolidated tax liabilities of the Companies arising from filing a consolidated federal tax return. 5. PAYMENT OF FUNDS BY THERMO ELECTRON. If in any year Biomedical incurs a loss or generates tax credits or similar tax benefits (a "tax benefit item"), Thermo Electron shall pay to Biomedical a sum equal to the amount of benefit realized by Thermo Electron that is attributable to the Biomedical tax benefit item: payments due to Biomedical from Thermo Electron under this section shall be made upon the earlier of (1) the year in which Biomedical would have obtained a tax benefit from the tax benefit item if Biomedical had in all years filed a separate federal income tax return or (2) the year in which any applicable carry-forward period with respect to the tax benefit item expires; provided that payments under this section shall be made first by being taken into account in determining amounts payable to Biomedical under Section 3, and any remaining amount due to Biomedical shall be paid by 2 Thermo Electron to Biomedical at the times set forth for payments by Biomedical under Section 3. 6. CHANGES IN PRIOR YEAR'S TAX LIABILITIES. In the event that the consolidated tax liability or the separate tax liability referred to in Paragraphs 3 and 5 hereof for any year for which a consolidated tax return for the two Companies was filed is or would be increased or decreased by reason of filing an amended return or returns (including carry-back claims), or by reason of the examination of the returns by the Internal Revenue Service, the amounts due Thermo Electron for payment of taxes under Paragraph 3 hereof, and the amount to be paid to Thermo Electron for allocation to Biomedical under Paragraph 4 hereof for each year will be recomputed by Thermo Electron to reflect the adjustments to taxable income and tax credits for the taxable year and interest or penalties, if any. In accordance with those recomputations, additional sums will be paid by the Companies to Thermo Electron or paid by Thermo Electron to the companies regardless of whether a member has become a Departing Member (as defined in Paragraph 8 hereof) subsequent to the taxable year of recomputation. 7. NEW MEMBERS. The Companies agree that if, subsequent to the execution of this Agreement, Thermo Electron becomes the "parent", as that term is used in Section 1504 of the Code, of one or more subsidiary corporations, in addition to Biomedical, then each newly acquired subsidiary corporation may become a separate party to this Agreement by consenting in writing to be bound by its provisions, effective immediately upon its delivery to Thermo Electron, but the income, deductions and tax credits of the newly acquired subsidiary corporations will first be included in the consolidated federal income tax return as required by the Code. 8. DEPARTING MEMBERS. 8.1 The term "Departing Members," as used herein, will mean a company that is no longer permitted under the Code to be included in the consolidated federal income tax return. 8.2 In applying this Agreement to a Departing Member for the final taxable year in which its income, deductions, and tax credits are required to be included in the consolidated federal income tax return: (i) the amount required to be paid by a Departing Member under the provisions of Paragraph 3 hereof and (ii) the amount that the Departing Member is entitled to receive under the provisions of Paragraph 5 hereof, will be determined by taking into account the income, deductions and tax credits of the Departing Member only for the fractional part of such year as the Departing Member was a member of the consolidated group and included in the consolidated federal income tax return. 8.3 After the filing of the consolidated federal income tax return for the last taxable year that the Departing Member was included therein, the Departing Member will be informed of the amount of consolidated carry-overs as of the end of the taxable year or period which are attributable to the Departing Member, as provided by Treasury Regulations Section 1.1502-79 or otherwise, including the agreement of the parties. 3 9. DETERMINATION OF SUMS DUE FROM AND PAYABLE TO MEMBERS. Thermo Electron will determine the sums due from and payable to the Companies under the provisions of this Agreement (including the determination for purposes of Paragraph 6 hereof). The Companies agree to provide Thermo Electron with such information as may reasonably be necessary to make these determinations. Issues arising in the course of the determinations that are not expressly provided for in this agreement will be resolved in an equitable manner. 10. TAX CONTROVERSIES. If a consolidated federal income tax return for any taxable year during which this Agreement is in effect is examined by the Internal Revenue Service, the examination, as well as any other matters relating to that tax return, including any tax litigation, will be handled solely by Thermo Electron. Biomedical will cooperate with Thermo Electron and to this end will execute protests, petitions, and any other documents as Thermo Electron determines to be necessary or appropriate. The cost and expense of Thermo Electron's handing of any tax controversy, including legal and accounting fees, will be allocated to and paid by the Company to whom the tax controversy relates. If the tax controversy relates to both Companies, the cost and expense will be allocated between the Companies in the proportion that each Company's potential additional tax liability bears to the total potential additional tax liability of both Companies (determined in accordance with Paragraph 6 hereto and assuming that the tax controversy is resolved in favor of the Internal Revenue Service) for the taxable year on issue. If the tax controversy encompasses more than one taxable year, Thermo Electron will first allocate the cost and expense to each taxable year in the proportion that the potential additional tax liability for each taxable year bears to the total potential additional tax liability for the taxable years in issue. 11. EFFECTIVE DATE. This Agreement shall be effective beginning as of the date of the Agreement, and will continue on a year-to-year basis thereafter with respect to Biomedical for so long as Biomedical is permitted to file a consolidated federal income tax return with Thermo Electron. 12. STATE TAXES. The two Companies will jointly file any state tax return on a combined, consolidated, unitary, or other method that Thermo Electron determines results in a lower overall tax liability to the Two Companies. In the event that said state tax returns shall be filed, the provisions of Sections 1-11 hereof shall apply, MUTATIS MUTANDIS (the necessary changes being made) to the allocation, preparation, filing and payment related to such state taxes and tax returns provided, however, that any benefit realized by the filing of the combined, consolidated or unitary return will remain with Thermo Electron. 4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written. THERMO ELECTRON CORPORATION By: /s/ Seth H. Hoogasian ----------------------------------- Name: Seth H. Hoogasian Title: Assistant Secretary THERMO BIOMEDICAL INC. By: /s/ Robert Aghababian ----------------------------------- Name: Robert Aghababian Title: Assistant Secretary 5 EX-99.4 6 b41120teex99-4.txt TRANSITION SERVICE AGREEMENT, DATED 11/15/01 Exhibit 99.4 Execution Copy TRANSITION SERVICES AGREEMENT THIS TRANSITION SERVICES AGREEMENT (this "Agreement") is made as of November 15, 2001, between Thermo Electron Corporation, a Delaware corporation ("Thermo Electron"), and Viasys Healthcare Inc., a Delaware corporation ("Viasys"). RECITALS WHEREAS, Thermo Electron and Viasys have entered into a Plan and Agreement of Distribution of even date herewith (the "Distribution Agreement") that contemplates the distribution by Thermo Electron of all of the issued and outstanding shares of Viasys Common Stock held by Thermo Electron to the stockholders of Thermo Electron (the "Distribution"); WHEREAS, each of Thermo Electron and Viasys wishes to provide for an orderly and efficient separation of their businesses; WHEREAS, the successful operation of the business of Viasys following the Distribution will require the performance of certain administrative services that Thermo Electron has previously provided to Viasys and that Thermo Electron is willing to continue to provide to Viasys; and WHEREAS, the Distribution Agreement contemplates the execution and delivery of this Agreement, the purpose of which is to set forth certain matters regarding the provision of administrative services by Thermo Electron to Viasys; NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties hereby agree as follows: 1.DEFINITIONS. Capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to them in the Distribution Agreement. 2.SERVICES. During the term of this Agreement, as set forth in Section 6 (the "Transition Period"), Thermo Electron shall provide, or cause its Affiliates to provide, to Viasys, or its designated Affiliates, the services set forth in this Section 2. 2.1. Routine Services. Thermo Electron shall provide, or cause one or more of the other members of the Thermo Electron Group to provide, to Viasys or one or more of the other members of the Viasys Group designated by Viasys the services identified in subparagraphs (a) through (k) below, in each case to the extent that such services are routine and consistent with Thermo Electron's past practices as set forth in the following two sentences (collectively, "Routine Services") and as more fully described in previous correspondence regarding the scope of services to be provided by Thermo Electron to Viasys. Thermo Electron and/or one or more of the other members of the Thermo Electron Group shall provide to the Viasys Group Routine Services in such quantity and in the manner and at a level of service generally consistent with that provided by one or more members of the Thermo Electron Group to the Viasys Group during the two-year period prior to the Distribution (the "Base Period"). Notwithstanding the foregoing, with respect to Routine Services arising from Viasys's reporting obligations under the Exchange Act and its other obligations as a public company, Thermo Electron and/or one or more of the other members of the Thermo Electron Group shall provide to the Viasys Group such services in such quantity and in the manner and at a level of service generally consistent with that provided by one or more members of the Thermo Electron Group to the publicly-held subsidiaries of Thermo Electron during the Base Period. Thermo Electron shall determine, in good faith, what services constitute Routine Services, and such determination shall not be subject to challenge by any member of the Viasys Group unless made in bad faith. (a)Accounting and Securities Compliance Related Services. Until March 31, 2002, Thermo Electron shall assist, if and when necessary, in the preparation of Viasys's routine Securities and Exchange Commission filings, including without limitation Forms 10-K, 10-Q, 8-K and Proxy Statements, assist in the preparation of Annual and Quarterly Reports to Viasys stockholders, maintain internal audit support services and review compliance with financial and accounting procedures. (b)Tax Related Services. Until April 30, 2002, Thermo Electron shall prepare Viasys's federal, state and local tax returns (including income tax returns), conduct appropriate tax research and planning and assist Viasys on federal, state or local tax audits. (c)Insurance and Risk Management Services. Until June 30, 2002, Thermo Electron shall arrange, at Viasys's expense, for liability, property and casualty, and other normal business insurance coverage for the Viasys Group. Thermo Electron shall also provide support for Viasys's product, worker safety and environmental programs, although Viasys acknowledges that the principal responsibility for compliance rests with Viasys. (d)Corporate Record Keeping Services. Until December 31, 2001, Thermo Electron shall maintain the corporate records of the Viasys Group, including without limitation, maintaining minutes of meetings of the Boards of Directors and Stockholders, supervising the transfer agent and registration functions, coordinating stock repurchase programs and tracking stock issuances and reserved shares. (e)Employee Benefit Related Services. Until December 31, 2001, Thermo Electron shall assist with the administration of the employee benefit plans of Viasys. (f) Internal Audit Services. Until December 31, 2001, Thermo Electron shall assist Viasys in conducting audits of the Viasys business units using the criteria utilized by the Internal Audit Department in the past. (g) Executive Compensation Services. Until December 31, 2001, Thermo Electron shall assist Viasys with the administration of stock option plans and restricted stock arrangements for Viasys employees. (h) Legal Services. Until December 31, 2001, Thermo Electron shall provide legal assistance to Viasys as requested in the areas of litigation, intellectual property, corporate and securities law, contract review, and export/import law compliance. 2 (i) Real Estate Services. Until December 31, 2001, Thermo Electron shall provide lease finance services to Viasys. (j) Treasury Services. Until December 31, 2001, Thermo Electron shall provide Viasys domestic cash management support services, domestic trade finance support services, international cash management support services and credit support services. (k) Information Systems. Until December 31, 2001, Thermo Electron shall provide Viasys with general contract support for the purchase by Viasys of computer hardware, software and general long distance and wireless services. 2.2. Extraordinary Services. In addition to Routine Services, Viasys may from time to time request that Thermo Electron, or one or more of the other members of the Thermo Electron Group, provide other services to members of the Viasys Group, including, but not limited to, acquisition and offering support services (collectively, "Extraordinary Services"). Thermo Electron shall determine, in good faith, what services constitute Extraordinary Services, and such determination shall not be subject to challenge by any member of the Viasys Group unless made in bad faith. Thermo Electron may, in its sole discretion, reject any request for Extraordinary Services. 2.3. Other Thermo Electron Activities. Viasys recognizes that the Thermo Electron Group now renders and may continue to render management and other services to other companies that may or may not have policies and conduct activities similar to those of the Viasys Group. The Thermo Electron Group shall be free to render such advice and other services, and Viasys hereby consents thereto. The Thermo Electron Group shall not be required to devote full time and attention to the performance of its duties under this Agreement, but shall devote only so much of its time and attention as it deems reasonable or necessary to perform the services required hereunder. 3.ACCESS TO VIASYS'S INFORMATION. Viasys shall, and shall cause the other members of the Viasys Group to, make available on a timely basis to the Thermo Electron Group and its Representatives all information and materials reasonably requested by Thermo Electron after the Distribution Date to enable it and/or other members of the Thermo Electron Group to provide the services hereunder. The Viasys Group shall afford to the Thermo Electron Group and its Representatives reasonable access, during normal business hours and at such other times as are reasonably required, to the Viasys Group premises for the purpose of providing the services hereunder if such services are to be provided at a facility not owned or operated by the Thermo Electron Group. It is anticipated, however, that the services to be provided hereunder shall be performed at Thermo Electron's facilities and that Thermo Electron or any member of the Thermo Electron Group shall not be obligated to be resident at Viasys's facilities unless mutually agreed between the parties hereto. 4.FEES; EXPENSES; PAYMENT. 4.1. Routine Services. For performing Routine Services, Thermo Electron will charge Viasys a quarterly fixed fee for any fiscal quarter (or portion thereof) in which services are performed equal to 0.6% of the consolidated revenues of Viasys for the fiscal quarter ending December 30, 3 2001, 0.4% of the consolidated revenues of Viasys for the fiscal quarter ending March 30, 2002, and 0.1% of the consolidated revenues of Viasys for the fiscal quarter ending June 29, 2002 (such amount to be prorated on a daily basis for any partial fiscal quarter). 4.2. Extraordinary Services. For performing Extraordinary Services, Thermo Electron will charge Viasys a fee equal to the fair market value of such services, as determined by Thermo Electron in good faith and on a basis consistent with the fees charged by Thermo Electron to the Viasys Group and Thermo Electron's publicly-held subsidiaries for such services during the Base Period. 4.3. Third Party Expenses. In addition to the fees for Routine Services and Extraordinary Services provided above, Viasys shall pay the costs of all services provided by outside providers to or for the benefit of the Viasys Group, as well as all out-of-pocket costs incurred in connection with the provision of such services. If any member of the Viasys Group is billed by the provider directly, Viasys shall pay the bill directly. If any member of the Thermo Electron Group is billed for such services, Thermo Electron may pay the bill and charge Viasys the amount of the bill or forward the bill to Viasys for payment by Viasys. 4.4. Manner of Payment. The charges for services pursuant to this Section 4 will be determined and payable no less frequently than on a quarterly basis. The charges will be due when billed and shall be paid no later than 30 days from the date of billing. Overdue amounts will bear interest at ten percent (10%) per annum, compounded monthly. No member of the Viasys Group shall have any right of set off with respect to amounts to be paid pursuant to this Agreement nor may it withhold payment during the pendency of any dispute with respect to amounts to be paid to any member of the Thermo Electron Group pursuant to this Agreement. 5.TAXES. Any taxes assessed on the provision of the services hereunder shall be paid by Viasys to the extent such taxes are customarily borne or passed through to the recipient of such services. 6.TERM OF AGREEMENT. The term of this Agreement shall commence on the Distribution Date and shall continue until June 30, 2002. 7.CONFIDENTIALITY. Subject to any contrary requirement of law and the right of each party to enforce its rights hereunder in any legal action, each party shall keep strictly confidential, and shall use its reasonable efforts to cause the other members of its respective Group and the Representatives to keep strictly confidential, any Information of or concerning the other party or the other party's Group which it may acquire pursuant to, or in the course of performing its obligations under, this Agreement; provided, however, that such obligation to maintain confidentiality shall not apply to Information that: (i) at the time of disclosure was in the public domain, not as a result of improper acts by the receiving party; (ii) is received by the receiving party from a third party who did not receive such Information from the disclosing party under an obligation of confidentiality; or (iii) is compelled to be disclosed by judicial or administrative process or, in the opinion of such party's counsel, by other requirements of law. Notwithstanding the foregoing, each of Thermo Electron and Viasys shall be deemed to have satisfied its obligations under this Section 7 with respect to any Information if it exercises the same care with 4 regard to such Information as it takes to preserve the confidentiality of its own similar Information. 8.INDEMNIFICATION. Viasys hereby agrees to indemnify, defend and hold harmless each of the Thermo Electron Indemnitees from and against any and all Indemnifiable Losses resulting from or in connection with third party claims arising from the Thermo Electron Group's performance of the services hereunder, unless such third party claims are due to Thermo Electron's gross negligence or willful misconduct in performing the services hereunder. In defending against the claim, Viasys shall have the right to employ counsel of its choosing and shall at all times have the power to direct the defense against the claim. Thermo Electron shall provide such assistance and cooperation, at Viasys's cost, as Viasys may reasonably request in connection with the defense of any claim with respect to which indemnity may be sought against Viasys pursuant to this Section 8. In connection with any written requests by Viasys that Thermo Electron take action on behalf of Viasys (including, without limitation, transfer monies on behalf of Viasys), Viasys hereby agrees to indemnify, defend and hold harmless each of the Thermo Electron Indemnitees from and against any and all Indemnifiable Losses resulting from or in connection with action taken in accordance with Viasys's written instructions. 9.MISCELLANEOUS. 9.1. Governing Law. This Agreement shall be governed by the laws of the State of Delaware. 9.2. Construction. Each provision of this Agreement shall be interpreted in a manner to be effective and valid to the fullest extent permissible under applicable law. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions of this Agreement that shall remain in full force and effect. 9.3. Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement. 9.4. Amendments; Waivers. This Agreement may be amended or modified only in writing executed on behalf of Thermo Electron and Viasys. No waiver shall operate to waive any further or future act and no failure to object or forbearance shall operate as a waiver. 9.5. Notices. All notices, requests, demands and other communications under this Agreement shall be given in accordance with Section 11.6 of the Distribution Agreement. 9.6 Successors and Assigns. This Agreement and any of the rights and obligations of each party hereunder shall not be assigned, in whole or in part, without the prior written consent of the other party, except that Thermo Electron may delegate its obligations under this Agreement to Affiliates of Thermo Electron consistent with Thermo Electron's past practice or in connection with its merger or consolidation or the sale of substantially all of its assets, provided that in such event Thermo Electron shall remain fully liable for the fulfillment of all its obligations hereunder. This Agreement shall be binding upon the parties and their respective successors and assigns to the extent such assignments are in accordance with this Section 9.6. 5 9.7. Interpretation. The Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement. Whenever any words are used herein in the masculine gender, they shall be construed as though they were also used in the feminine gender in all cases where they would so apply. 9.8. No Third-Party Beneficiaries. Except for the provisions of Section 8 relating to Thermo Electron Indemnitees, which are also for the benefit of such Thermo Electron Indemnitees other than Thermo Electron and the other members of the Thermo Electron Group, this Agreement is solely for the benefit of the parties hereto and the members of their respective Groups and is not intended to confer upon any other Persons any rights or remedies hereunder. 9.9. Complete Agreement. This Agreement, the Distribution Agreement and any schedules thereto and the Ancillary Agreements and other documents referred to herein or therein shall constitute the entire agreement between the parties hereto with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. All matters arising out of the Distribution relating to taxes shall be governed by the Tax Matters Agreement. In the event of any inconsistency between the Tax Matters Agreement and this Agreement with respect to such matters, the Tax Matters Agreement shall govern. 9.10. Consequential and Other Damages. Except as specifically set forth in this Agreement, Thermo Electron makes no representations, warranties or guaranties, express or implied, with respect to the services to be provided by the Thermo Electron Group under this Agreement. Notwithstanding anything to the contrary contained herein, no member of the Thermo Electron Group shall be liable, whether in contract, in tort (including negligence and strict liability), or otherwise, for any special, indirect, incidental or consequential damages whatsoever, that in any way arise out of, relate to, or are a consequence of, its performance or nonperformance hereunder, or the provision of or failure to provide any service hereunder, including but not limited to loss of profits, business interruptions and claims of customers except insofar as such damage is the result of gross negligence or willful misconduct of a member of the Thermo Electron Group. 9.11. Force Majeure. Neither party shall be considered in default in performance of its obligations under this Agreement to the extent that its performance of such obligations is prevented or delayed by any cause beyond its reasonable control, including but not limited to strikes, labor disputes, civil disturbances, rebellion, invasion, epidemic, hostilities, war, embargo, natural disaster, acts of God, fire, sabotage, loss and destruction of property, changes in laws, regulations or orders, other events or situations that the party was unable to prevent or overcome despite the exercise of due diligence. 9.12. Independent Contractor. At all times during the term hereof, all members of the Thermo Electron Group shall be independent contractors in providing services hereunder with the sole right to supervise, manage, operate, control, and direct the performance of such services and the sole obligation to employ, compensate, and manage its employees and business affairs. Nothing contained in this Agreement shall be deemed or construed to create a partnership or joint venture, to create the relationships of employee/employer or principal/agent, or otherwise 6 create any liability whatsoever of either party hereto with respect to the indebtedness, liabilities, obligations or actions of the other party, any members of such other party's Group, the Representatives of such other party's Group, or any other person or entity. 9.13. Compliance with Law. Nothing in this Agreement shall require either party to take any action or omit to take any action in violation of applicable law. 9.14. Viasys Officers and Directors. Nothing contained herein shall be construed to relieve the directors or officers of Viasys from the performance of their respective duties or to limit the exercise of their powers in accordance with Viasys's Certificate of Incorporation or By-laws, each as amended to date, or in accordance with any applicable statute or regulation. [REMAINDER OF PAGE INTENTIONALLY BLANK] 7 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. THERMO ELECTRON CORPORATION By: /s/ Theo Melas-Kyriazi -------------------------------------- Theo Melas-Kyriazi Vice President and Chief Financial Officer VIASYS HEALTHCARE INC. By: /s/ Richard F. Syron -------------------------------------- Richard F. Syron Chairman of the Board 8 EX-99.5 7 b41120teex99-5.txt PROMISSORY NOTE, DATED 11/15/01 Exhibit 99.5 Execution Copy PROMISSORY NOTE November 15, 2001 $33,300,000 Waltham, Massachusetts FOR VALUE RECEIVED, Viasys Healthcare Inc. (the "Maker") promises to pay to Thermo Electron Corporation ("Thermo Electron"), its successors in interest and assigns or the holder of this Note, at the offices of Thermo Electron or such other place as the holder of this Note may from time to time designate in writing, in lawful money of the United States of America and in immediately available funds, the principal sum of $33,300,000, together with interest on the unpaid principal balance of this promissory note (the "Note") from time to time outstanding at the prime rate, as quoted from time to time in The Wall Street Journal under "Money Rates," plus 0.5% per year until paid in full. Principal and interest shall be paid as follows: A. Interest shall accrue on the unpaid principal balance of this Note from the date hereof through and including the date on which the unpaid principal balance of this Note is paid in full, computed on the basis of a year of 365 days for the actual number of days elapsed. The accrued interest on the unpaid principal balance of this Note shall be payable on February 15, 2002, May 15, 2002, August 15, 2002 and November 15, 2002. B. The entire unpaid principal amount of this Note, and all unpaid interest due hereunder, will be payable on November 15, 2002. Notwithstanding anything set forth above, this Note shall be due and payable as follows: A. On the date of receipt by the Maker or any majority-owned subsidiary of the Maker of any cash proceeds from the incurrence of indebtedness in respect of borrowed money (any such event, a "Financing"), the Maker shall prepay the unpaid interest and principal balance of this Note in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses. Such payment shall be applied first to the payment of unpaid interest accrued on this Note and, second, to the payment of the unpaid principal balance of this Note. B. This Note shall become immediately due and payable without notice or demand upon the occurrence at any time of any of the following events of default: (1) default in the payment or performance of this or any other liability or obligation of the Maker to the holder, including the payment when due of any principal or interest under this Note (whether at the stated due date or maturity date thereof or in the event of a Financing as contemplated by the preceding paragraph); (2) the liquidation, termination of existence, dissolution, insolvency or business failure of the Maker, or the appointment of a receiver or custodian for the Maker or any part of its property; (3) the institution by or against the Maker or any indorser of this Note of any proceedings under the United States Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership, insolvency or other similar law affecting the rights of creditors generally or the making by the Maker or any indorser or guarantor of this Note of a composition or an assignment or trust mortgage for the benefit of creditors; or (4) determination by the holder that it is insecure with respect to the payment of any obligation of the Maker to the holder. Upon the occurrence of any such event of default, the holder shall have then, or at any time thereafter, all of the rights and remedies afforded by the Uniform Commercial Code as from time to time in effect in the Commonwealth of Massachusetts or afforded by other applicable law. Every amount overdue under this Note shall bear interest from and after the date on which such amount first became overdue at the prime rate, as quoted from time to time in The Wall Street Journal under "Money Rates," plus 2.5% per year until paid in full. Such interest on overdue amounts under this Note shall be payable on demand and shall accrue and be compounded monthly until the obligation of the Maker with respect to the payment of such interest has been discharged (whether before or after judgment). In no event shall any interest charged, collected or reserved under this Note exceed the maximum rate then permitted by applicable law and if any such payment is paid by the Maker, then such excess sum shall be credited by the holder as a payment of principal. All payments by the Maker under this Note shall be made without set-off or counterclaim and be free and clear and without any deduction or withholding for any taxes or fees of any nature whatever, unless the obligation to make such deduction or withholding is imposed by law. The Maker shall pay and save the holder harmless from all liabilities with respect to or resulting from any delay or omission to make any such deduction or withholding required by law. Whenever any amount is paid under this Note prior to its stated maturity or due date, the payments shall be allocated between outstanding principal and accrued interest as shall be determined by the holder in its discretion. The Maker agrees to pay on demand all costs of collection, including reasonable attorneys' fees, incurred by the holder in enforcing the obligations of the Maker under this Note. No delay or omission on the part of the holder in exercising any right under this Note shall operate as a waiver of such right or of any other right of such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion. The Maker and every indorser of this Note regardless of the time, order or place of signing waives presentment, demand, protest and notices of every kind and assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral, and to the addition or release of any other party or person primarily or secondarily liable. -2- This Note may be prepaid in whole or in part at any time or from time to time without premium or penalty. None of the terms or provisions of this Note may be excluded, modified or amended except by a written instrument duly executed on behalf of the holder expressly referring to this Note and setting forth the provision so excluded, modified or amended. All rights and obligations hereunder shall be governed by the laws of the Commonwealth of Massachusetts and this Note is executed as an instrument under seal. ATTEST: Viasys Healthcare Inc. By: /s/ Seth H. Hoogasian By: /s/ Richard F.Syron ----------------------------- ----------------------------- Name: Seth H. Hoogasian Name: Richard F. Syron -------------------------- Title: Secretary Title: Chairman of the Board -------------------------- -3- -----END PRIVACY-ENHANCED MESSAGE-----