1
EXHIBIT 10.7
TAX MATTERS AGREEMENT
THIS TAX MATTERS AGREEMENT (the "Agreement") is made as of [date] by
and among Thermo Optek Corporation, a Delaware corporation ("Optek" and,
together with its subsidiaries existing immediately following the Distribution,
the "Optek Group"), and Thermo Vision Corporation, a Delaware corporation and a
100%-owned subsidiary of Optek ("Vision" and, together with its subsidiaries
existing immediately following the Distribution, the "Vision Group").
WHEREAS, Optek and Vision have entered into a Plan and Agreement of
Distribution dated as of [date] (the "Distribution Agreement") providing for the
distribution of all of the Vision stock owned by Optek to Optek's shareholders
in accordance with the Distribution Agreement (the "Distribution");
WHEREAS, prior to and following the Distribution, the Optek Group and
the Vision Group will both be part of an affiliated group of corporations (the
"Thermo Group") of which Thermo Electron Corporation, a Delaware corporation
("Thermo Electron"), is the common parent, within the meaning of Section 1504(a)
of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, Optek has entered into a Tax Allocation Agreement with Thermo
Electron with respect to the allocation of taxes among members of the affiliated
group filing a consolidated United States federal income tax return, and Vision
will enter into a substantially similar Tax Allocation Agreement with Thermo
Electron; and
WHEREAS, Optek and Vision desire to set forth their agreement regarding
the allocation between Optek and Vision of all liabilities and benefits relating
to or affecting Taxes (as defined below) paid or payable by either of them with
respect to the Distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
1. DEFINITIONS.
"Tax" means any federal, state, local or foreign income, profits,
alternative or add-on minimum, severance, sales, use, service, service use, ad
valorem, gross receipts, license, value added, franchise, transfer, recording,
real estate, withholding, payroll, employment, excise, occupation, unemployment
insurance, social security, business license, business organization, stamp,
environmental, premium or property tax, or any other tax, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
related interest, penalties and additions to any such tax, imposed by any taxing
authority upon Optek, the Optek Group, Vision, the Vision Group, Thermo
Electron, the Thermo Group, or any of their respective members or divisions or
branches.
2
-2-
"Restructuring Tax" means any Taxes, other than Transaction Taxes,
to the extent that such Taxes would not have been incurred but for the
consummation of the transactions contemplated by the Distribution Agreement.
"Transaction Taxes" means any sales, use, transfer, real estate
transfer, recording or other similar Taxes incurred in connection with
consummation of the transactions contemplated by the Distribution Agreement.
2. RESPONSIBILITY FOR RESTRUCTURING TAXES.
a. RESPONSIBILITY OF OPTEK GROUP. Optek and any successor
corporation shall be responsible for, and shall indemnify and hold harmless
Vision and each member of the Vision Group and the other members of the Thermo
Group from, all liability, loss, cost, expense or damage in any way occasioned
by any Restructuring Taxes which are directly or indirectly attributable to one
or more of the following described events or transactions occurring after the
Distribution Date with respect to Optek or any successor corporation: a
reorganization, consolidation or merger; the sale or other disposition of Optek
Assets other than in the ordinary course of business; Optek ceasing to conduct
an active trade or business; the acquisition or disposition of shares of stock
of Optek by any person or persons; the redemption or repurchase of shares of its
stock by Optek or any successor; the recapitalization or other reclassification
of the shares of Optek or any successor; the complete or partial liquidation of
Optek or any successor; the exercisability, transferability or repurchase of
rights distributed pursuant to a stock purchase rights plan; or any other act or
omission of Optek which results in failure to comply with each representation
and statement made to the IRS in connection with the rulings received with
respect to the Distribution.
b. RESPONSIBILITY OF VISION GROUP. Vision and any successor
corporation shall be responsible for, and shall indemnify and hold harmless
Optek and each member of the Optek Group and the other members of the Thermo
Group from, all liability, loss, cost, expense or damage in any way occasioned
by any Restructuring Taxes which are directly or indirectly attributable to one
or more of the following described events or transactions occurring after the
Distribution Date with respect to Vision or any successor corporation: a
reorganization, consolidation or merger; the sale or other disposition of Vision
Assets other than in the ordinary course of business; Vision ceasing to conduct
an active trade or business; the acquisition or disposition of shares of stock
of Vision by any person or persons; the redemption or repurchase of shares of
its stock by Vision or any successor; the recapitalization or other
reclassification of the shares of Vision or any successor; the complete or
partial liquidation of Vision or any successor; the exercisability,
transferability or repurchase of rights distributed pursuant to a stock purchase
rights plan; or any other act or omission of Vision which results in failure to
comply with each representation and statement made to the IRS in connection with
the rulings received with respect to the Distribution.
c. JOINT RESPONSIBILITY OF OPTEK GROUP AND VISION GROUP. If any
Restructuring Taxes should arise for which neither Optek nor Vision is
responsible under Section 2.02(a) or Section 2.02(b), respectively, each of
Optek and Vision shall be responsible for 50 percent of such Restructuring
Taxes, and each party shall indemnify, defend and hold harmless the
3
-3-
other party and each member of their respective Groups from and against all
liability, cost, expense or damage in any way occasioned by such Restructuring
Taxes.
3. MISCELLANEOUS.
a. Expenses. Unless otherwise expressly provided in this
Agreement, each party shall bear any and all expenses that arise from its
obligations under this Agreement.
b. Entire Agreement. This Agreement constitutes the entire
agreement of the parties concerning the subject matter hereof.
c. Term. This Agreement shall commence on the date first stated
above, and shall continue in effect for ten years.
d. Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and assigns.
e. Amendments. This Agreement may not be modified or amended
except by an agreement in writing, signed by the parties hereto.
f. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument.
g. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic substantive laws of The Commonwealth
of Massachusetts without regard to any choice or conflict of law rule or
provision that would result in the application of the domestic substantive laws
of any other jurisdiction.
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 OPTEK CORPORATION
By: _____________________________
Title: __________________________
THERMO VISION CORPORATION
By: _____________________________
Title: __________________________
