Varian Medical Systems Inc – ‘8-K’ for 8/11/95 – EX-22.1

As of:  Wednesday, 8/23/95   ·   For:  8/11/95   ·   Accession #:  950109-95-3374   ·   File #:  1-07598

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         9     36K 
 2: EX-2.1      Amendment to Stock Sale                                6     31K 
 3: EX-22.1     Second Amendment and Stock Sale                        6     33K 

EX-22.1   —   Second Amendment and Stock Sale
Exhibit Table of Contents

EX-22.1
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EXHIBIT 2.2 

SECOND AMENDMENT TO STOCK SALE AGREEMENT  

SECOND AMENDMENT TO STOCK SALE AGREEMENT (the "Amendment"), dated as of     
August 11, 1995, by and among Varian Associates, Inc., a Delaware corporation   
("Varian"), Communications & Power Industries Holding Corporation, a Delaware   
corporation ("Holding"), and CPII Acquisition Corp., a Delaware corporation     
(formerly Communications & Power Industries Holding Corporation) ("CPI").       

RECITALS  

A. Varian, Holding and CPI are parties to the Stock Sale Agreement, dated as
of June 9, 1995, as amended by the First Amendment to Stock Sale Agreement      
(the "Agreement").                                                              

B. Varian, Holding and CPI desire to amend the Agreement in order to        
accommodate certain requests for changes made by various lenders to Holding     
and CPI and otherwise as provided in this Amendment.                            

In consideration of the premises and the respective representations,        
warranties and agreements herein contained, the parties hereto hereby agree as  
follows:                                                                        

AMENDMENT 

SECTION 1. Article X, Section 10.2 of the Agreement hereby is amended so as 
to read in its entirety as follows:                                             

"10.2 INDEMNIFICATION BY SELLER. Except as otherwise limited by this    
Article X, Buyer, its parent, subsidiaries and Affiliates, any assignee or  
successor thereof, and each officer, director and employee of each of the   
foregoing (the "Buyer Indemnified Parties") shall be indemnified and held   
harmless by Seller for any and all losses, damages, claims, costs and       
expenses, interest, awards, judgments and penalties (including reasonable   
legal fees and costs) suffered or incurred by them (hereinafter a "Buyer    
Loss") arising out of or resulting directly or indirectly from (a) any      
breach of any representation or warranty of Seller or its Affiliates in     
this Agreement or the Ancillary Agreements (including all schedules and     
exhibits hereto and thereto and all instruments and undertakings            
specifically and expressly required to be furnished pursuant to this        
Agreement and the Ancillary Agreements); (b) any breach of any covenant or  
agreement of Seller or its Affiliates in this Agreement or the Ancillary    
Agreements (including all schedules and exhibits hereto and thereto and all 
instruments and undertakings specifically and expressly required to be      
furnished pursuant to this Agreement and the Ancillary Agreements); (c) any 
Retained Liability other than any Liability arising from or related to      
Environmental Claims; (d) any and all Liabilities arising from or related   
to Environmental Claims arising from (i) the ownership, lease, use,         
possession or operation of the Assets or the Business before the Closing,   
(ii) any violation, or any purported violation alleged by a third party,    
existing before the Closing, of any Environmental Law, Environmental Permit 
or Governmental Order as a result of conditions or activities before the    
Closing at any Real Property owned, leased, used, possessed or operated by  
Seller or any of its subsidiaries or Affiliates before the Closing, (iii)   
the presence, before the Closing, of any Hazardous Material in the soils,   
groundwater, surface water or air on, under, about or emanating from any of 
the properties owned, leased, used, possessed or operated by Seller or any  
of its subsidiaries or Affiliates which are included in the Assets          
(including the Real Property), including to the extent that such Hazardous  
Material remains and/or migrates (except to the extent indemnified by Buyer 
in subsection 10.3(e)(v) after Closing, (iv) any disposal, transportation,  
or arranging for disposal, in each case other than by Buyer or Buyer's      
agents, of Hazardous Material generated by Seller or any of its             
subsidiaries or Affiliates prior to the Closing, or (v) any Release by      
Seller or its subsidiaries or Affiliates of any Hazardous Material at any   
property not included in the Assets, including any Release of any Hazardous 
Material at any property included in the Excluded Assets or any Release of  
Hazardous Material otherwise                                                

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caused by Seller's operation of its business (any such Environmental Claim  
referred to in this clause (d) is referred to elsewhere herein as a "Seller 
Indemnified Environmental Claim"); (e) the failure of Seller to obtain the  
consent of The Leland Stanford Junior University or of the lessor of        
Seller's Santa Clara, California, facility to the contribution of the       
leases and subleases of Leased Real Property located in the Stanford        
Research Park and in Santa Clara, California, respectively, to EDB          
Subsidiary pursuant to Section 2.3, the sale of the stock of EDB Subsidiary 
to Seller or the sublease from Buyer to Seller contemplated by the Real     
Estate Documents; (f) any eviction or other adverse action taken by the     
lessor of the EDB Leased Real Property located in the Stanford Research     
Park or Santa Clara, California as a result of or arising from any actions  
or omissions of Seller or any of its Affiliates, including any breach by    
Seller or any such Affiliate of the related real property lease, the Real   
Estate Documents or any other agreement between such lessor and Seller or   
its Affiliate, except where and to the extent such eviction or other        
adverse action results or arises from a breach by Buyer or any of its       
Affiliates of the Real Estate Documents or any other agreement between such 
lessor and Buyer or its Affiliate; and (g) any Buyer Loss arising from the  
circumstances with respect to the Old Ontario Plan referred to in the last  
sentence of subsection 12.2(b)(ii); provided, however, that Buyer or its    
Affiliate shall have an obligation to reimburse Seller to the extent of any 
recovery related to such Buyer Loss. "Seller Indemnified Environmental      
Claims" indemnified under Section 10.2 of the Agreement include, without    
limitation and notwithstanding the 10.2 Proviso (which does not apply to    
the period prior to Closing), Environmental Claims arising from any of the  
matters identified on Disclosure Schedules 5.11(a), (b) and (d) to the      
Agreement and any violations of the permits identified on Disclosure        
Schedule 5.11(c) to the Agreement, in each case to the extent existing at   
the Closing or attributable to the pre-Closing activities of the Seller or  
Seller Group for the period prior to Closing."                              

SECTION 2. Article X of the Agreement hereby is amended to add the following
new subsection, entitled 10.2 Proviso, to be placed at the end, and as part     
of, Section 10.2:                                                               

"10.2 PROVISO (A). In addition to and without limitation of Section 10.2
and notwithstanding any other provision of this Agreement (other than the   
limitations set forth in clauses (i) to (iv) of subsection 10.5(c)), Seller 
Indemnified Environmental Claims shall include those Buyer Losses arising   
out of Conditions (as defined below) covered by this 10.2 Proviso. Seller's 
obligations to perform repairs of Conditions covered by Section 10.2(d)(ii) 
to the extent that they continue to exist after Closing, to indemnify Buyer 
for Releases occurring after Closing arising from such Conditions and to    
indemnify Buyer for Buyer Losses related to either of the foregoing         
obligations are set forth in their entirety in this 10.2 Proviso, which     
shall govern and supersede any other provision in Section 10.2 or 10.3 to   
the contrary.                                                               

(1) Seller shall be obligated to repair Conditions (as defined below) as
set forth in this 10.2 Proviso. Seller's obligations with respect to the    
repairs of such Conditions shall not depend on there being an Environmental 
Claim within the relevant period, but instead those obligations shall arise 
with the mere discovery by Buyer of such Condition(s) within the first six  
months after Closing. The term "Condition" as used in the 10.2 Proviso      
means (a) any physical Condition at the Real Property that either itself    
constitutes a violation of law or that cannot be used either in accordance  
with law or without causing the Release of Hazardous Materials that would   
require that response actions be taken under federal, state or local law,   
if properly used in the manner that it was intended to be used and was      
being used at or about (but before) Closing, or (b) any other condition     
(such as the failure to have a permit). A Condition to which the duties set 
forth in this Proviso 10.2 apply is any Condition that (a) is alleged by    
Buyer to constitute a violation under 10.2(d)(ii), (b) did in fact          
constitute such a violation at or about (but before) Closing, (c) continues 
to exist and to constitute such a violation at any time during the six      
month period after Closing, and (d) is discovered within six months of      
Closing. (Four examples follow: First, a solvent tank that was in use to    
store solvents at the time of Closing that has a hole in its bottom clearly 
cannot be used in that manner and still be in accordance with law without   
first being repaired, and this Condition would be covered by Seller's duty  
to repair, even if the hole, per se, was not itself a violation of law.     
Second, a tank (again with a hole) that was (legally) not in use to store   
solvents at the time of Closing but that is used by Buyer for that purpose  
after Closing would not be covered by Seller's duty to repair. Third, a     
wastewater treatment                                                        

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system that itself is not in violation of law and that has occasional       
discharges that violate law is not covered by Seller's duty to repair if    
the system (i) can be correctly operated in the manner for which it was     
intended to be used without violating law, or (ii) was being used at        
Closing without violating law. Fourth, that same system, however, would be  
covered by Seller's duty to repair if it could not be operated in           
accordance with law if properly operated by Buyer as it was intended to be  
used and as it was operated at the Closing (assuming that the manner of     
operation at the Closing also violated the law).)                           

 (2) Buyer has the right, upon discovery within the first six months after
Closing of a Condition (but not for any other condition), to put Seller on  
notice of that Condition within a reasonable time of such discovery. Seller 
shall then either (a) agree to repair the Condition (subject to the         
standards described below), or (b) contest that the Condition meets the     
definition of Condition in 10.2 Proviso (a)(1)(a) to (1)(d) above, using an 
expedited arbitration procedure as set forth in 10.2 Proviso (a)(8), below. 

(3) If Seller receives the notice described in 10.2 Proviso (a)(2) above
and fails, within a reasonable period of time (not to exceed sixty days     
from receipt) either to agree to repair the Condition (pursuant to 10.2     
Proviso (a)(2)(a) above) or contest the Condition (pursuant to 10.2 Proviso 
(a)(2)(b) above), Buyer shall have the right (but not the obligation) to    
perform the repair on its own and to seek from Seller the costs of such     
repair, including interest thereon. If Buyer performs the repair in         
accordance with this subsection (b)(3) and seeks its costs from Seller,     
Seller shall be entitled to defend against such claim on the grounds that   
(a) the Condition does not meet the definition of Condition in 10.2 Proviso 
(a)(1)(a) to (d) above, and (b) the repair was not in compliance with the   
standard set forth below in 10.2 Proviso (a)(5), and/or (c) any other       
grounds recognized at law or in equity not inconsistent with the Stock Sale 
Agreement.                                                                  

(4) In the event that Seller agrees or is ordered by an arbitrator to   
repair the Condition, such repair shall be performed within a reasonable    
time (taking into consideration all facts and circumstances).               

(5) Seller's obligations to perform repairs, and Buyer's obligations to 
cooperate with the performance of such repairs, under this 10.2 Proviso     
shall be as follows:                                                        

(a) Seller's repair shall be sufficient to result in the non-       
compliant Condition complying with law; and                             

(b) Seller shall not be obligated to incur any costs in performing  
the repair in excess of those that would be incurred by a reasonable    
owner-operator of a facility acting on its own account and using its    
own funds.                                                              

In the event that 10.2 Proviso (a)(5)(a) and (5)(b) are determined to       
conflict, Seller shall be obligated to ensure that 10.2 Proviso (a)(5)(a)   
is complied with, unless either (i) Buyer's cooperation, pursuant to        
Buyer's duty to cooperate set forth in 10.2 Proviso (a)(6), will eliminate  
the need to perform the repair in 10.2 Proviso (a)(5)(a), or (ii) a         
governmental agency has indicated or does indicate that it will allow a     
particular non-compliant Condition to exist or continue to exist without    
the necessity of repairing such Condition.                                  

(6) Buyer shall have the obligation to cooperate with Seller in         
performance of the repairs to meet the standard set forth in 10.2 Proviso   
(a)(5). This duty of cooperation shall include the duty to make reasonable  
modifications to a piece of equipment, a process or an operation, if such   
modification would likely bring or help to bring a Condition that fails to  
comply with law into compliance. Such modifications shall be at Seller's    
expense.                                                                    

(7) Seller shall indemnify Buyer for (a) any and all Buyer Losses that  
result from any Condition defined in this 10.2 Proviso, and (b) any Release 
of Hazardous Materials that results from such Condition(s). The repair      
obligations shall extend beyond the period extending six months after       
Closing up to and including (but not after) the date that such Condition    
has been repaired in accordance with the standards set forth in 10.2        
Proviso (a)(5) (unless Seller successfully contests its obligation to make  
such repairs.)                                                              

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(8) In the event a dispute arises under this 10.2 Proviso, the parties  
shall resolve such dispute under Section 14.13 of the Stock Sale Agreement, 
except that the arbitrator(s) shall have the right, at the reasonable       
request of either party, to expedite such arbitration in any reasonable     
manner that does not take away from either party's right to a full and fair 
hearing of the relevant issues. In such arbitration, Buyer is not required  
by 10.2 Proviso (a)(1)(b) above, in order to prove that a Condition "in     
fact constitute[s] such a violation as of Closing", to provide evidence     
that a governmental agency has determined that such Condition violates or   
may violate any law. An arbitrator may, however, consider as evidence the   
fact that an agency has reviewed a particular Condition and not made any    
finding with respect to the existence of a violation. Such evidence is      
probative but not determinative of whether a violation of law in fact       
exists.                                                                     

(B) This 10.2 Proviso and subsection 10.2(d) shall not apply to any Buyer   
Losses resulting from (i) any incremental increase in the volume of Hazardous   
Materials arising from the exacerbation resulting from Buyer's or Buyer's       
agent's actions of any Condition described in the 10.2 Proviso, (ii) any new    
Release of Hazardous Material arising from a Condition described in the 10.2    
Proviso (a)(1) after such Condition has been fully and appropriately repaired   
by Seller to the reasonable satisfaction of Buyer, or (iii) any matters to the  
extent indemnified by Buyer in subsection 10.3(e)(v). The extent of Seller's    
indemnification for Hazardous Materials after Closing shall not be addressed    
or covered by Section 10.2(d)(i) or (ii), except to the extent covered by the   
10.2 Proviso. The 10.2 Proviso applies to Hazardous Materials after Closing to  
the extent, and only to the extent, that it applies to specified Conditions or  
Releases occurring during the six months after Closing, but the term Condition  
as used in the 10.2 Proviso is not meant to refer to the mere presence of       
Hazardous Material in the soils, groundwater, surface water or air on, under,   
about or emanating from any Real Property that does not result from some other  
Condition. The 10.2 Proviso both (1) does not apply to any Releases at the      
Real Property included in the Assets occurring during the period prior to       
Closing or for the post-Closing migration of such Releases, which Releases and  
migrations are addressed only by Section 10.2(d)(iii), which section is not     
modified by the 10.2 Proviso, and (2) does not modify 10.2(d)(i) or (ii) with   
respect to any liabilities for the period prior to Closing, which liabilities   
are addressed solely by those subsections."                                     

SECTION 3. Article X, Section 10.3 of the Agreement hereby is amended so as 
to read in its entirety as follows:                                             

"10.3 INDEMNIFICATION BY BUYER. Except as otherwise limited by this     
Article X, Seller, its subsidiaries and Affiliates, any assignee or         
successor thereof, and each officer, director and employee of each of the   
foregoing (the "Seller Indemnified Parties") shall be indemnified and held  
harmless by Buyer for any and all losses, damages, claims, costs and        
expenses, interest, awards, judgments and penalties (including reasonable   
legal fees and costs) suffered or incurred by them (hereinafter a "Seller   
Loss") arising out of or resulting directly or indirectly from (a) any      
breach of any representation or warranty of Buyer or its Affiliates in this 
Agreement or the Ancillary Agreements (including all schedules and exhibits 
hereto and thereto and all instruments specifically and expressly required  
to be furnished pursuant to this Agreement and the Ancillary Agreements or  
made in connection herewith and therewith); (b) any breach of any covenant  
or agreement of Buyer or its Affiliates in this Agreement or the Ancillary  
Agreements (including all schedules and exhibits hereto and thereto and all 
instruments specifically and expressly required to be furnished pursuant to 
this Agreement and the Ancillary Agreements or made in connection herewith  
and therewith); (c) any Assumed Liability; (d) any Liabilities (except to   
the extent such a Liability constitutes a Retained Liability) arising from  
the ownership, use, possession or operation of the Assets and the Business  
after the Closing; (e) any and all Liabilities arising from or related to   
Environmental Claims (other than as provided in the 10.2 Proviso) arising   
from (i) the ownership, lease, use, possession or operation of the Assets   
or the Business after the Closing, (ii) any violation, or any purported     
violation alleged by a third party, existing after the Closing, of any      
Environmental Law, Environmental Permit or Governmental Order as a result   
of any condition or activities after the Closing at any Real Property       
owned, leased, used, possessed or operated by Buyer after the Closing,      
(iii) any Incremental Costs incurred by Seller as a result of the           
introduction, after the Closing, of any Hazardous Material that was not     
already present                                                             

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before the Closing in the soils, groundwater, surface water or air on,      
under, about or emanating from any of the properties owned, leased, used,   
possessed or operated by Seller or any of its subsidiaries which are        
included in the Assets (including the Real Property), (iv) any disposal,    
transportation, or arranging for disposal, at any time, in each case by     
Buyer or Buyer's agent after the Closing, of Hazardous Material generated   
by Buyer or any of its subsidiaries or Affiliates after the Closing or      
generated by Seller, its subsidiaries or Affiliates at the Real Property    
before Closing, and (v) any movement after the Closing of any Hazardous     
Material present before the Closing or the exacerbation of any existing     
environmental condition, but only to the extent that either results from    
Buyer's or Buyer's agent's active negligent conduct (and provided that any  
Liability arising from any movement of Hazardous Material present before    
the Closing resulting from any cause other than Buyer's or Buyer's agent's  
active negligent conduct shall be deemed to be part of a Seller Indemnified 
Environmental Claim) (any such Environmental Claim referred to in this      
clause (e) is referred to elsewhere herein as a "Buyer Indemnified          
Environmental Claim"); and (f) the Seller Losses referred to in the last    
sentence of subsection 10.5(e). As used in subsection 10.3(e)(ii), the term 
"condition arising after Closing" is not meant to include the mere          
"condition" of Buyer's status as an owner or operator of the Real Property  
without some other condition that exists after Closing or activity by Buyer 
after Closing that constitutes a violation or purported violation under     
subsection 10.3(e)(ii). Notwithstanding subsection 10.3(e)(ii), it shall be 
Seller's obligation to repair all Conditions described in 10.2 Proviso      
(a)(1), and to pay fines and penalties for and to indemnify Buyer with      
respect to any Buyer Losses resulting or arising from such Conditions, to   
the full extent (but only to the extent) required by the 10.2 Proviso."     

SECTION 4. Article X, Section 10.4(d) of the Agreement hereby is amended so 
as to read in its entirety as follows:                                          

"(E) In any dispute between Buyer and Seller regarding (1) whether and  
the extent to which a Release of a Hazardous Material occurred after        
Closing or whether and the extent to which it arose before Closing, or (2)  
whether clause (a)(1)(a)(ii) of the 10.2 Proviso has been met with respect  
to the existence of a Condition at the Closing Date, Seller shall bear the  
burden of proof with respect to such matter by a preponderance of evidence. 
The burden and standard of proof in all other matters shall be determined   
in accordance with applicable law."                                         

SECTION 5. Article X, Section 10.5(d) of the Agreement hereby is amended so 
as to read in its entirety as follows:                                          

"(D) Notwithstanding anything to the contrary contained in the Ancillary
Agreements, Seller shall have exclusive control of and sole discretion as   
to all record-keeping, notifications, investigations, cleanup, removal,     
treatment or remediation related to Seller Indemnified Environmental        
Claims, including as to the work plans developed and implemented, the       
methods employed, the consultants and other agents retained and the optimal 
time periods for discharging such responsibility, provided that (i) Seller  
takes such actions in compliance with all applicable laws, including        
Environmental Laws, Environmental Permits and Governmental Orders and       
without unreasonably interfering with the conduct of the Business; (ii)     
Buyer shall have unlimited rights to discuss and/or initiate discussions    
with any Governmental Authority as to its views with respect to such        
actions and with respect to any other matters, and to take any position in  
opposition to any position taken by Seller; (iii) nothing in this           
subsection 10.5(d) shall be construed as limiting, expanding, modifying or  
affecting in any way any rights Buyer may otherwise have to discuss such    
matters with any Third Party; and (iv) Seller shall keep Buyer reasonably   
informed concerning its activities undertaken for cleanup, removal,         
treatment or remediation in connection with any Seller Indemnified          
Environmental Claim."                                                       

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IN WITNESS WHEREOF, Seller, CPI and Holding have caused this Amendment to be
executed as of the date first written above by their respective officers        
thereunto duly authorized.                                                      

                            VARIAN ASSOCIATES, INC.,
                          a Delaware corporation

                              By      /s/Robert A. Lemos
                                           -----------------------------------
                                         Robert A. Lemos
                                         Vice President, Finance and
                                         Chief Financial Officer

                         CPI ACQUISITION CORP.
                          a Delaware corporation

                             By      /s/Lynn E. Harvey
                                           -----------------------------------
                                        Lynn E. Harvey
                                        Chief Financial Officer, Treasurer
                                         and Secretary

                                     COMMUNICATIONS & POWER INDUSTRIES
                        HOLDING CORPORATION,
                          a Delaware corporation

                             By      /s/Lynn E. Harvey
                                           -----------------------------------
                                        Lynn E. Harvey
                                        Chief Financial Officer, Treasurer
                                         and Secretary

6 

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