EXECUTION COPY
 
 
 
 
 
______________________________

PURCHASE AND SALE AGREEMENT
 
among
 
Meritor France
 
SELLER
 
and
 
ArvinMeritor, Inc.
 
SELLER GUARANTOR
 
and
 
81 Acquisition LLC
 
BUYER
 
 
 
Dated as of August 3, 2010
 
______________________________
 

--------------------------------------------------------------------------------

TABLE OF CONTENTS
 

      Page ARTICLE I       DEFINITIONS 1        Section 1.1         Specific
Definitions    1           Section 1.2 Other Terms 18        Section 1.3 Other
Definitional Provisions 18          Section 1.4   Currency and Payments 19
ARTICLE II       PURCHASE AND SALE OF THE ACQUIRED PARENT SHARES 19       
Section 2.1 Purchase and Sale 19        Section 2.2 Purchase Price and Payment
19        Section 2.3 Adjustment Amounts and Payment; Settlement of Intercompany
Balances 20        Section 2.4 Adjustment Procedure 21        Section 2.5
Closing; Delivery and Payment 23        Section 2.6 Taxes and Fees   24       
Section 2.7 Further Assurances 25        Section 2.8 Post Closing Access to
Books and Records 25        Section 2.9 Cooperation 25 ARTICLE III      
REPRESENTATIONS AND WARRANTIES OF SELLER 26        Section 3.1 Organization and
Authority 26        Section 3.2 No Conflict 26        Section 3.3 Financial
Information 26        Section 3.4 Absence of Certain Changes or Events 27       
Section 3.5 Real Property 27        Section 3.6 Business Assets 28       
Section 3.7 Litigation 28        Section 3.8 Compliance with Law 28         
Section 3.9 Business Contracts 29        Section 3.10 Consents and Approvals 30
       Section 3.11 Acquired Company and JV Company Shares 30        Section
3.12 Employees; Labor Relations 31        Section 3.13 Employee Benefit Plans 31
       Section 3.14 Intellectual Property 34        Section 3.15 Brokers and
Finders 34

--------------------------------------------------------------------------------

       Section 3.16       Environmental Matters         35          Section 3.17
Taxes    35           Section 3.18 Business Receivables   37          Section
3.19 Business Inventory   37          Section 3.20 Business Payables   37  
       Section 3.21 Substantial Customers and Suppliers   37          Section
3.22 Credit Support Arrangements   37          Section 3.23 Certain Unlawful
Actions   37   ARTICLE IV       REPRESENTATIONS AND WARRANTIES OF BUYER     38  
       Section  4.1 Organization and Authority of Buyer   38          Section
4.2 No Conflict   38          Section 4.3 Consents and Approvals   38         
Section 4.4 Brokers and Finders   38          Section 4.5 Financial Capability  
38          Section 4.6 Regulatory Matters   39          Section 4.7 Investment
  39          Section 4.8 Litigation   39   ARTICLE V       CERTAIN COVENANTS OF
SELLER AND BUYER   39          Section 5.1 Access and Information   39         
Section 5.2 Registrations, Filings, Notices and Licenses   40          Section
5.3 Conduct of Business   41          Section 5.4 Closing Date Financial
Information   43          Section 5.5 Intellectual Property   43         
Section 5.6 Commercially Reasonable Efforts to Satisfy Conditions   44         
Section 5.7   Transition Services Agreement   44          Section 5.8
Disclaimers   44          Section 5.9 Covenant Not to Compete   45         
Section 5.10 Nondisclosure   47          Section 5.11 Credit Support   48  
       Section 5.12 Other Obligations Under Certain Contracts Related to the
Business   48          Section 5.13 Insurance   48          Section 5.14
Pre-Closing Reorganization Transactions   49          Section 5.15 Cash
Management Transactions   49          Section 5.16 Third Party and Intercompany
Indebtedness   50          Section 5.17 Delivery of Certain Financial
Information   50  

--------------------------------------------------------------------------------

       Section 5.18       Intercompany Account Balances          50          
Section 5.19 Transactions with Affiliates   51          Section 5.20 Business
Excluded Assets and Certain Business Assets   51          Section 5.21
Performance of Obligations   51          Section 5.22 Waiver and Release of
Certain Claims   52          Section 5.23 Indemnification of Officers,
Directors, Employees and Agents of the Acquired Companies   52          Section
5.24 Resignations   52          Section 5.25 Structuring Requests   52         
Section 5.26 Withholding Form   53          Section 5.27 Bank and Brokerage
Accounts   53          Section 5.28 Escrow Deposit   54   ARTICLE VI       TAX
MATTERS   55          Section 6.1 Prior Period Returns   55          Section 6.2
Post Closing Returns and Straddle Period Tax Returns   55          Section 6.3
Seller’s Indemnity for Tax Matters   56          Section 6.4 Certain Refunds  
56          Section 6.5 Buyer’s Indemnity and other Obligations for Tax Matters
  57          Section 6.6 Cooperation and Information   57          Section 6.7
Notice   57          Section 6.8 Disputes   58          Section 6.9 Effect of
Payments   58          Section 6.10 Allocation of Purchase Price   58   ARTICLE
VII       EMPLOYEE MATTERS   59          Section 7.1 Employees   59         
Section 7.2 Severance and Other Benefits   60          Section 7.3 Welfare Plans
  61          Section 7.5 Buyer’s Benefit Plans   61          Section 7.6
Compliance with Collective Bargaining Agreements   62          Section 7.7
Earned Allowances   62          Section 7.8 No Employee or Third-Party Rights  
62   ARTICLE VIII       CONDITIONS TO THE PURCHASE AND SALE   63         
Section 8.1 Conditions to the Obligations of Buyer   63          Section 8.2
Conditions to the Obligations of Seller   63  

--------------------------------------------------------------------------------

ARTICLE IX       AMENDMENT AND WAIVER   64         Section 9.1       Amendment
and Modification       64          Section 9.2   Waiver   64   ARTICLE X     
SURVIVAL AND INDEMNIFICATION 65         Section 10.1   Survival 65        
Section 10.2   Indemnification 65         Section 10.3   Method of Asserting
Claims, Etc 66         Section 10.4   Indemnification Amounts 67         Section
10.5   Losses Net of Insurance, Etc 67         Section 10.6   Sole Remedy/Waiver
68         Section 10.7   No Special Damages 68         Section 10.8   Response
Actions for Releases of Hazardous Substances 68         Section 10.9   No
Set-Off 69   ARTICLE XI      MISCELLANEOUS 69         Section 11.1   Termination
69         Section 11.2   Effect of Termination 70         Section 11.3  
Non-Solicitation or Hiring of Management Employees 71         Section 11.4  
Return of Information 71         Section 11.5   Collection of Business Excluded
Assets 71         Section 11.6   Expenses 71         Section 11.7   Assignment
71         Section 11.8   Entire Agreement; No Third Party Rights 72        
Section 11.9   Disclosure Letters 72         Section 11.10   Counterparts 72  
      Section 11.11   Section Headings 72         Section 11.12   Notices 73  
      Section 11.13   Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial 74         Section 11.14   Illegality 74         Section 11.15   Public
Announcements 74         Section 11.16   Specific Performance 74        
Section 11.17   No Recovery of Special Damages 74         Section 11.18  
Attorney Client Privilege 75         Section 11.19   No Recourse 75        
Section 11.20   Buyer to Cause Acquired Companies to Comply with this Agreement
75         Section 11.21   Seller Guaranty 75         Section 11.22   Buyer
Guaranty 76  

--------------------------------------------------------------------------------

Appendices
 

Appendix A       Acquired Companies and JV Companies and Acquired Company Shares
and JV Company Shares Appendix B Business Locations; Owned Business Real
Property and Leased Business Real Property Appendix C   Business Intellectual
Property Appendix D Certain Excluded Computer Software and Software Licenses and
Computer Hardware Appendix E Certain Excluded Contracts and Other Assets
Appendix F Knowledge Definition Appendix G Trade Working Capital Adjustments
Appendix H Year End Trade Working Capital Statement Appendix I Pre-Closing
Reorganization Transactions Appendix J Certain Permitted Encumbrances Appendix K
Excluded Tangible Personal Property

--------------------------------------------------------------------------------

Exhibits
 

Exhibit A       [RESERVED] Exhibit B   Shared Intellectual Property License
Agreement Exhibit C Note Exhibit D Deposit Escrow Agreement

--------------------------------------------------------------------------------

          THIS PURCHASE AND SALE AGREEMENT is made and entered into as of August
3, 2010 by and between:
 
          MERITOR FRANCE, a societe en nom collectif organized under the laws of
France (“Seller”),
 
          ARVINMERITOR, INC., a corporation organized under the laws of the
State of Indiana (“Seller Guarantor”), and
 
          81 ACQUISITION LLC, a limited liability company organized under the
laws of the State of Delaware (“Buyer”).
 
Capitalized terms used in this Agreement and not otherwise defined in this
Agreement have the respective meanings set forth or referred to in Article I.
 
BACKGROUND
 
          A. Seller owns all of the Acquired Parent Shares. Acquired Parent
Company owns or will own, directly or indirectly, all of the other Acquired
Company Shares and the JV Company Shares.
 
          B. Seller desires to sell, transfer and assign to Buyer, and Buyer
desires to purchase from Seller, and accept the transfer and assignment of, the
Acquired Parent Shares, all on the terms and subject to the conditions set forth
in this Agreement.
 
TERMS
 
          In consideration of the mutual covenants and undertakings contained in
this Agreement, and subject to and on the terms and conditions set forth in this
Agreement, and intending to be legally bound by this Agreement, the Parties
agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
     Section 1.1 Specific Definitions. As used in this Agreement and any
Appendix or Exhibit to this Agreement, the following capitalized terms have the
meanings set forth or referred to in this Section.
 
          “Accounting Principles and Practices” means the accounting principles,
policies, procedures, methods and practices, including the same management
judgments, estimates, definitions, treatments, forecasts and practices
consistently applied as were made and given for the purposes of and reflected in
the Financial Information.
 
          “Acquired Company” means the Acquired Parent Company or one of the
other companies identified on Appendix A as an “Acquired Company” as the context
indicates, and “Acquired Companies” means any two or more of them as the context
indicates.
 
          “Acquired Company Shares” means the Acquired Parent Shares and/or the
shares of capital stock or other ownership interests of the other Acquired
Companies identified on Appendix A as the “Acquired Company Shares” as the
context indicates.
 
1
 

--------------------------------------------------------------------------------

          “Acquired Parent Company” means Body Systems Holdings Netherlands,
B.V., a Netherlands company.
 
          “Acquired Parent Shares” means all of the outstanding shares of
capital stock of Acquired Parent Company.
 
          “Adjustment Items” has the meaning set forth in Section 2.4(e).
 
          “Affiliate” means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such other Person at any time during the period for which the determination of
affiliation is being made. For purposes of this definition, the term “control”
(including the correlative meanings of the terms “controlled by” and “under
common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of
management policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
 
          “Agreement” means this Purchase and Sale Agreement, including the
Appendices, the Seller Disclosure Letter and the Buyer Disclosure Letter.
 
          “Allocation Schedule” has the meaning set forth in Section 6.10(a).
 
          “Ancillary Agreements” means the Shared Intellectual Property License
Agreement, the Transition Services Agreement, the Deposit Escrow Agreement and
the Note.
 
          “Appropriate Remediation Standard” has the meanings set forth in
Section 10.8(d).
 
          “Base Amount” has the meaning set forth in Section 2.2(a).
 
          “Business” means the business of designing, developing, manufacturing,
remanufacturing, assembling, selling, distributing, and servicing latches and
actuators for doors, tailgates, trunks, and hoods; window motors; window
regulators; door modules; tilt and slide sunroofs; large opening systems (LOS)
for roofs; and other roof systems, in each case for passenger cars, light- and
medium-duty truck and sport utility vehicles as conducted by Seller Guarantor’s
Body Systems division as of the date hereof.
 
          “Business Assets” means all of the assets owned, leased or licensed by
the Acquired Companies existing at the Effective Time that are Related to the
Business, but excluding in any event the Business Excluded Assets. Without
limiting the foregoing, the Business Assets include the following except to the
extent any of the following are included in the Business Excluded Assets:
 
     (i) Cash and Restricted Cash;
 
     (ii) the Owned Business Real Property;
 
     (iii) all rights in the Leased Business Real Property;
 
     (iv) the Business Inventory;
 
     (v) the Business Receivables;
 
     (vi) the Business Tangible Personal Property;
 
2
 

--------------------------------------------------------------------------------

     (vii) all rights in Customer Tooling and Engineering Recovery Amounts;
 
     (viii) the Business Intellectual Property;
 
     (ix) all rights under the Business Contracts;
 
     (x) all rights to the Business Computer Software and Software Licenses;
 
     (xi) the Business Books and Records;
 
     (xii) all claims and counterclaims against any other Person as to express
and implied warranties from manufacturers, vendors and suppliers, if any, to the
extent they are related to the Business Assets (but only to the extent any such
claim does not relate to, or constitute a defense or counterclaim as to, any
Business Excluded Asset);
 
     (xiii) all Permits, including Environmental Permits, Related to the
Business;
 
     (xiv) all claims, counterclaims, deposits, refunds and prepaid items
Related to the Business or related to the Business Assets (but only to the
extent any such claim, counterclaim, refund or prepaid item does not relate to,
or constitute a defense or counterclaim as to, any Business Excluded Asset or
any business other than the Business);
 
     (xv) in the case of an Acquired Company, all Intercompany Acquired Company
Indebtedness owed to it by another Acquired Company or a JV Company;
 
     (xvi) in the case of an Acquired Company, all Intercompany Acquired Account
Balances owed to it by another Acquired Company or a JV Company; and
 
     (xvii) the telephone numbers and fax numbers Related to the Business, and
the goodwill and going-concern value of the Business.
 
          “Business Books and Records” means all sales order files, distributor
files, engineering and product files, purchase order files, manufacturing
records, test specifications and validation procedures, client and customer
lists, supplier lists, pricing information, sales and promotional literature,
and business files that are Related to the Business, and books and records
pertaining to the Business Employees, or copies thereof to the extent the same
are required under applicable Laws to be retained by Seller or a Seller
Affiliate.
 
          “Business Computer Software and Software Licenses” means computer
software and software licenses Related to the Business other than the Excluded
Computer Software and Software Licenses.
 
          “Business Contract” or “Business Contracts” means all contracts,
agreements, open purchase orders, leases, subleases, licenses and commitments,
written or oral, to which any Acquired Company is a party or which are
applicable to the Business. For greater clarity, Business Contracts includes
“Shared Contracts” to the extent applicable to the Business.
 
          “Business Day” means any day other than a Saturday, a Sunday or a day
on which banks in the State of New York are authorized or obligated by Law to
not open or remain closed.
 
3
 

--------------------------------------------------------------------------------

          “Business Employees” has the meaning set forth in Section 7.1(a).
 
          “Business Excluded Assets” means assets owned, leased or licensed by
(a) Seller or any Seller Affiliate or (b) any Acquired Company which are not
Related to the Business (whether or not owned by or titled in the name of an
Acquired Company and whether or not an Acquired Company has any right, title or
interest). Without limiting the generality of the foregoing and whether or not
included in the foregoing definition, the Business Excluded Assets include the
following:
 
     (i) all refunds, overpayments, payments or deposits of Taxes to the extent
that the refunds, overpayments, payments or deposits of Taxes relate to a
Business Excluded Asset or to which Seller is entitled under Article VI;
 
     (ii) all Tax Returns of Seller and Seller Affiliates;
 
     (iii) except as expressly provided in Article VII, all Seller Benefit Plans
and other benefit plans being retained by Seller or a Seller Affiliate and
assets and rights relating thereto;
 
     (iv) all furniture, fixtures, furnishings, machinery, vehicles, tooling,
equipment and other tangible personal property:
 
          (1) owned, leased or licensed by Seller or any of Seller’s Affiliates;
 
          (2) owned, leased or licensed by any of the Acquired Companies and
specifically listed in Appendix K; or
 
          (3) located in Troy, Michigan.
 
     (v) all Excluded Intellectual Property;
 
     (vi) all Excluded Computer Software and Software Licenses;
 
     (vii) all computer hardware, stored data, and documentation:
 
          (1) owned or licensed by Seller or any of Seller’s Affiliates; or
 
          (2) owned or licensed by any of the Acquired Companies and listed in
Appendix D;
 
     (viii) all Seller Guarantor Trademarks and Logos;
 
     (ix) all rights or benefits pursuant to any insurance policies
(intercompany, self-insurance or otherwise), except to the extent set forth in
Section 5.13(b), and all rights to refunds of insurance payments, premiums and
deposits;
 
     (x) all rights in respect of asserted or unasserted causes of action,
lawsuits, judgments, claims and demands of any nature that arose or arise or
relate to events that occur prior to, at or following the Effective Time if the
same arose, arise out of, or are related to, any of the Business Excluded
Assets, whether arising by way of counterclaim or otherwise;
 
4
 

--------------------------------------------------------------------------------

     (xi) all Permits, including Environmental Permits, which are not Related to
the Business;
 
     (xii) (A) all Books and Records other than the Business Books and Records
and (B) all Business Books and Records which relate to a Business Excluded Asset
or which Seller or a Seller Affiliate is required to retain pursuant to Law
(provided a copy of such Books and Records shall be made available to Buyer
pursuant to Buyer’s reasonable request and cost);
 
     (xiii) all Credit Support Arrangements, including letters of credit posted
with, or in favor of, any Governmental Authority to support any financial
responsibility or bonding requirements;
 
     (xiv) any rights to corporate resources and services provided by Seller or
a Seller Affiliate, including corporate, legal, insurance, human resources,
finance, accounting, tax, treasury, internal audit, communications, facilities
management, environmental, engineering, employee safety, business intelligence,
flight operations and administrative services (but, for greater certainty, the
foregoing does not limit the services to be provided to Buyer and the Acquired
Companies under the Transition Services Agreement); and
 
     (xv) all contracts, assets and rights that are Related to the Business and
are listed in Appendix E.
 
          “Business Intellectual Property” means the Intellectual Property owned
or licensed by an Acquired Company or being transferred or assigned to an
acquired Company as part of the Pre-Closing Reorganization Transactions,
including the Intellectual Property specifically identified in Appendix C. For
greater certainty, Business Intellectual Property includes the Business
Trademarks and Logos but does not include the Seller Guarantor Trademarks and
Logos or the other Excluded Intellectual Property.
 
          “Business Inventory” means all inventory, merchandise, raw materials,
work-in-process, finished goods, packaging, labels and supplies (including
in-transit inventory for which title has passed to an Acquired Company and any
prepaid deposits) owned by an Acquired Company that are Related to the Business,
all determined in accordance with the Accounting Principles and Practices.
 
          “Business Location” means a facility identified on Appendix B as a
Business Location as the context indicates and “Business Locations” means any of
two or more of them as the context indicates.
 
          “Business Payables” means the trade accounts payable owed by an
Acquired Company that are Related to the Business, as of any determination date
under this Agreement, excluding such trade and non-trade accounts payable for
products or services provided by Seller, a Seller Affiliate, an Acquired Company
or a JV Company, to an Acquired Company, all determined in accordance with the
Accounting Principles and Practices.
 
          “Business Real Property” means, collectively, the Owned Business Real
Property and the Leased Business Real Property.
 
          “Business Receivables” means the trade accounts receivable owned by an
Acquired Company that are Related to the Business, as of any determination date
under this Agreement, excluding such trade and non-trade accounts receivables
for products or services provided by an Acquired Company to Seller, a Seller
Affiliate, an Acquired Company or a JV Company, all determined in accordance
with the Accounting Principles and Practices.
 
5
 

--------------------------------------------------------------------------------

          “Business Trademarks and Logos” means the trademarks, service marks,
trade names and logos specifically identified in Appendix C.
 
          “Business Tangible Personal Property” means all of the equipment,
machinery, Computer Hardware, tooling (including tooling located at suppliers’
places of business but excluding Customer Tooling and Engineering Recovery
Amounts), furniture, fixtures, and other tangible personal property that is
owned by an Acquired Company and is Related to the Business; provided that
Business Tangible Personal Property does not include any of the Excluded
Business Assets. For clarification, Business Tangible Personal Property does not
include the Business Inventory.
 
          “Buyer” has the meaning set forth in the preamble and also includes a
wholly owned Affiliate of the Buyer identified in the preamble to which such
Buyer assigns any of its rights or delegates and of its obligations under this
Agreement pursuant to Section 11.7.
 
          “Buyer’s Benefit Plans” has the meaning set forth in Section 7.5(a).
 
          “Buyer Disclosure Letter” means the disclosure letter delivered by
Buyer to Seller concurrently with the execution and delivery of this Agreement.
 
          “Buyer Guarantor” means Inteva Products, LLC, a Delaware limited
liability company.
 
          “Buyer Guaranty” has the meaning set forth in Section 11.22.
 
          “Buyer Indemnitees” has the meaning set forth in Section 6.3(a).
 
          “Buyer Non-Solicit Period” has the meaning set forth in Section
5.9(c).
 
          “Buyer Parties” has the meaning set forth in Section 10.2(a).
 
          “Buyer’s Objection” has the meanings set forth in Section 2.4(f).
 
          “Buyer’s Review Period” has the meaning set forth in Section 2.4(f).
 
          “Cap Amount” has the meaning set forth in Section 10.4.
 
          “Carrier Reimbursement” has the meaning set forth in Section 5.13(b).
 
          “Cash” means (i) all cash and cash equivalents, wherever located,
including bank balances and cash and cash equivalents in bank accounts, monies
in the possession of any banks, savings and loans or trust companies and similar
cash items on hand at the Effective Time and (ii) investment securities and
other short- and medium-term investments, but in all cases Cash shall be
calculated net of Restricted Cash.
 
     “Cash Adjustment Amount” has the meaning set forth in Section 2.3(b).
 
     “Claim Notice” has the meaning set forth in Section 10.3.
 
     “Closing” has the meaning set forth in Section 2.5(a).
 
6
 

--------------------------------------------------------------------------------

          “Closing Balance Sheet” has the meaning set forth in Section 2.4(a).
 
          “Closing Cash Amount” has the meaning set forth in Section 2.4(c)(i).
 
          “Closing Date” has the meaning set forth in Section 2.5(a).
 
          “Closing Date Interest Rate” means six percent (6.0%) per annum.
 
          “Closing Deadline” has the meaning set forth in Section 11.1(b).
 
          “Closing Indebtedness Amount” has the meaning set forth in Section
2.4(c)(ii).
 
          “Closing Intercompany Seller Account Balances” has the meaning set
forth in Section 2.4(c)(iii).
 
          “Closing Intercompany Seller Indebtedness” has the meaning set forth
in Section 2.4(c)(iv).
 
          “Closing Payment” has the meaning set forth in Section 2.2(b)(i).
 
          “Closing Trade Working Capital” has the meaning set forth in Section
2.4(b).
 
          “Closing Trade Working Capital Amount” has the meaning set forth in
Section 2.4(b).
 
          “Closing Trade Working Capital Statement” has the meaning set forth in
Section 2.4(b).
 
          “COBRA” has the meaning set forth in Section 7.3.
 
          “Code” means the Internal Revenue Code of 1986, as amended, and the
treasury regulations promulgated thereunder.
 
          “Collateral Source” has the meanings set forth in Section 10.5.
 
          “Competition Law” means any antitrust, merger control, competition or
similar Law.
 
          “Competition Law Filings” has the meaning set forth in Section 5.2(b).
 
          “Computer Hardware” means physical devices such as disks, personal
computers, printers, servers, switches, packet shapers, firewalls, and storage
drives which comprise a computer or computer system not directly linked to a
manufacturing process.
 
          “Confidential Information” means any and all of the following
information in any form, and howsoever obtained, whether in writing, orally,
electronically, visually or otherwise, or otherwise made available by
observation, inspection, or otherwise:
 
     (i) all information that is a trade secret under applicable trade secret
law, including trade secrets as defined under the Uniform Trade Secrets Act as
adopted in the State of New York;
 
     (ii) all information concerning prices, product specifications, data,
knowhow, formulae, compositions, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions and ideas, past, current and planned
research and development, current and planned manufacturing or distribution
methods and processes, customer lists or identities, current and anticipated
customer requirements, price lists, market studies, business plans, computer
hardware and software and database technologies, systems, structures and
architectures;
 
7
 

--------------------------------------------------------------------------------

     (iii) all information concerning the business and affairs of the Person in
question (which includes historical and current financial statements, financial
projections and budgets, tax returns and accountants’ materials, historical,
current and projected sales, capital spending budgets and plans, business plans,
strategic plans, marketing and advertising plans, publications, client and
customer lists and files, contracts, the names and backgrounds of key personnel
and personnel training techniques and materials, however documented);
 
     (iv) all information in documents or other materials marked “confidential”
or “proprietary;”
 
     (v) all information provided by a third party that is subject to any known
duty of confidentiality; and
 
     (vi) all notes, analyses, compilations, studies, summaries and other
material to the extent containing or based, in whole or in part, upon any
information included in the foregoing parts of this definition.
 
          “Confidentiality Agreement” has the meaning set forth in Section
5.1(b).
 
          “Controlled Group Liabilities” has the meaning set forth in Section
3.13(b)(ii)(B).
 
          “CPA Firm” has the meaning set forth in Section 2.4(g).
 
          “Credit Support Arrangements” has the meaning set forth in Section
5.11.
 
          “Customer Tooling and Engineering Recovery Amounts” means (1) all
tooling to be owned by a customer or supplier to the Business and as to which an
Acquired Company has any right or Liability, and (2) all engineering and
pre-production costs for which an Acquired Company has the right to recovery
from a customer or supplier to the Business. For further clarity, the value of
Customer Tooling and Engineering Recovery Amounts is equal to (a) unbilled
tooling and (b) unamortized tooling as presented in the Financial Information.
 
          “D&O Indemnified Parties” means, collectively, the present and former
(and any individuals who may become prior to the Effective Time) directors or
officers of the Acquired Companies.
 
          “Deductible Amount” has the meaning set forth in Section 10.4.
 
          “Deposit Amount” means the amount of Ten Million Dollars ($10,000,000)
to be paid to the Escrow Agent not later than the Escrow Deposit Deadline, plus
any interest and other earnings thereon, to be held and disbursed in accordance
with the Deposit Escrow Agreement.
 
          “Deposit Escrow Agreement” means the Escrow Agreement, dated as of the
date hereof, among Buyer, Seller Guarantor and the Escrow Agent substantially in
the form of Exhibit D.
 
8
 

--------------------------------------------------------------------------------

          “Effect” has the meaning set forth in the definition of Material
Adverse Effect.
 
          “Effective Time” means the first moment on the Closing Date.
 
          “Encumbrances” means any liens, charges, hypothecations, security
interests, pledges, mortgages or other encumbrances of any kind.
 
          “Environment” means air, surface water, groundwater, or land,
including land surface and subsurface, and including all fish, wildlife, biota
and all other natural resources.
 
          “Environmental Authority” means any Governmental Authority having
responsibility for Hazardous Substances under Environmental Law.
 
          “Environmental Law” means any Law, authorization, license, permit,
order, judgment, decree or injunction from any Governmental Authority (including
common laws) relating to (a) the protection of public health or the Environment
or (b) the presence, transportation, recycling, storage, treatment, use,
handling, disposal, Release or threat of Release, or Management of Hazardous
Substances, in each such case which has the force of law and is in force at the
date of this Agreement.
 
          “Environmental Permits” has the meaning set forth in Section 3.16(a).
 
          “Environmental Reports” has the meaning set forth in Section 3.16.
 
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.
 
          “ERISA Affiliate” has the meaning set forth in Section 3.13(b)(ii)(B).
 
          “Escrow Agent” means JPMorgan Chase Bank, N.A.
 
          “Escrow Deposit Deadline” has the meaning set forth in Section 5.28.
 
          “Estimated Cash Amount” has the meaning set forth in Section 5.17(a).
 
          “Estimated Indebtedness Amount” has the meaning set forth in Section
5.17(a).
 
          "Estimated Intercompany Adjustment Amount" has the meaning set forth
in Section 2.3(e).
 
          “Estimated Intercompany Seller Account Balances Amount” has the
meaning set forth in Section 5.17(a).
 
          “Estimated Section 5.25 Amount” has the meaning set forth in Section
5.25.
 
          “Estimated Intercompany Seller Indebtedness Amount” has the meaning
set forth in Section 5.17(a).
 
          “Estimated Trade Working Capital Amount” has the meaning set forth in
Section 5.17(a).
 
          “Excess Amount” has the meaning set forth in Section 2.2(b).
 
9
 

--------------------------------------------------------------------------------

          “Excluded Computer Hardware” means all Computer Hardware (a) which is
not owned by an Acquired Company or (b) which is owned by an Acquired Company
and is identified on Appendix D.
 
          “Excluded Computer Software and Licenses” means all computer software
and software licenses (a) which are not owned by an Acquired Company or (b)
which is owned by an Acquired Company and is identified on attached Appendix D.
 
          “Excluded Intellectual Property” means all Intellectual Property (a)
which is not owned by an Acquired Company or (b) which is owned by an Acquired
Company and is identified on Appendix D. The Shared Intellectual Property and
the Seller Guarantor Trademarks and Logos are included in the Excluded
Intellectual Property.
 
          “Existing Materials” has the meaning set forth in Section 5.5(b).
 
          “Final Closing Balance Sheet” has the meaning set forth in Section
2.4(h).
 
          “Final Closing Cash Amount” has the meaning set forth in Section
2.4(h).
 
          “Final Closing Indebtedness Amount” has the meaning set forth in
Section 2.4(h).
 
          “Final Closing Intercompany Seller Account Balances” has the meaning
set forth in Section 2.4(h).
 
          “Final Closing Intercompany Seller Indebtedness” has the meaning set
forth in Section 2.4(h).
 
          “Final Closing Trade Working Capital” has the meaning set forth in
Schedule 2.4(h).
 
          “Final Closing Trade Working Capital Amount” has the meaning set forth
in Schedule 2.4(h).
 
          “Final Determination” means (i) with respect to U.S. federal income
taxes, a “determination” as defined in Section 1313(a) of the Code or execution
of an Internal Revenue Service Form 870-AD and, (ii) with respect to Taxes other
than U.S. federal income taxes, any final determination of liability in respect
of a Tax that, under applicable law, is not subject to further appeal, review or
modification through proceedings or otherwise (including the expiration of a
statute of limitations or a period for the filing of claims for refunds, amended
returns or appeals from adverse determinations).
 
          “Final Section 5.25 Amount” has the meaning set forth in Section 5.25.
 
          “Financial Information” has the meaning set forth in Section 3.3.
 
          “Foreign Benefit Plans” has the meaning set forth in Section 3.13(a).
 
          “GAAP” means United States generally accepted accounting principles
consistently applied.
 
          “Governmental Authority” means any United States, foreign or
supranational (including the European Union), national, federal, state, county,
provincial or municipal authority or other political subdivision thereof, and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
 
10
 

--------------------------------------------------------------------------------

          “Grade 14” means a junior executive with a title of director, general
manager, vice president or senior director.
 
          “Hard Tooled” has the meaning set forth in Section 5.5(c).
 
          “Hazardous Substance” means any hazardous, toxic or polluting
substance, material or waste, including petroleum or any derivative or
by-products thereof, radioactive materials and polychlorinated biphenyls, or any
other chemical, material or substance that is regulated by Environmental Laws.
 
          “Indebtedness” means, without duplication, the following: (a) any
indebtedness for borrowed money, (b) any indebtedness evidenced by a note, bond
or debenture or similar instrument, (c) any indebtedness under capital leases
and (d) any interest, principal, prepayment penalty, fees or expenses to the
extent owed in respect of those items listed in clauses (a) through (c) of this
definition. For greater certainty, Indebtedness does not include any accounts
payable, letters of credit, guarantees, other credit support arrangements, any
factoring or factoring program obligations, or any similar or equivalent
arrangement or instrument, unfunded pension liabilities, other post-employment
liabilities, product warranty liabilities, incurred but not reported (IBNR)
workers compensation liabilities, customer dispute liabilities,
incentive/performance and other compensation liabilities, or contract price
adjustment liabilities regardless of any of their classifications under the
Accounting Principles and Practices or otherwise.
 
          “Indebtedness Adjustment Amount” has the meaning set forth in Section
2.3(d).
 
          “Indemnifiable Tax” has the meaning set forth in Section 6.7(a).
 
          “Indemnified Party” means the Party entitled to indemnification
pursuant to Article X.
 
          “Indemnifying Party” means the Party required to indemnify the other
Party pursuant to Article X.
 
          “Individual Claim Threshold” has the meaning set forth in Section
10.4.
 
          “Intellectual Property” means all rights in any of the following: (a)
patents, patent applications and inventions and discoveries that may be
patentable (“Patents”); (b) trademarks, servicemarks, applications for the
foregoing and tradenames (“Trademarks”); (c) registered and unregistered
copyrights in both published works and unpublished works (“Copyrights”); and (d)
knowhow and trade secrets.
 
          “Intercompany Acquired Company Account Balances” means, without
duplication, balances of all trade and non-trade intercompany accounts between
and among an Acquired Company or a JV Company and an Acquired Company or JV
Company with respect to the Business, determined in accordance with GAAP.
 
          “Intercompany Acquired Company Indebtedness” means, without
duplication, all Indebtedness of an Acquired Company or JV Company to an
Acquired Company or JV Company.
 
          “Intercompany Difference Amount” has the meaning set forth in Section
2.3(e).
 
          “Intercompany Indebtedness” means Intercompany Acquired Company
Indebtedness and Intercompany Seller Indebtedness.
 
11
 

--------------------------------------------------------------------------------

          “Intercompany Seller Account Balances” means, without duplication, the
balances of all trade and non-trade intercompany accounts between Seller or a
Seller Affiliate and an Acquired Company with respect to the Business,
determined in accordance with the Accounting Principles and Practices. For
greater certainty, Intercompany Seller Account Balances do not include any
Intercompany Acquired Company Account Balances. Solely for purposes of
calculating the Intercompany Adjustment Amount, an Intercompany Seller Account
Balance that is owed by Seller or a Seller Affiliate to an Acquired Company will
be deemed to be a positive number and an Intercompany Seller Account Balance
that is owed by an Acquired Company to Seller or a Seller Affiliate will be
deemed to be a negative number.
 
          “Intercompany Seller Indebtedness” means, without duplication, (a) all
Indebtedness of an Acquired Company to Seller or a Seller Affiliate and (b) all
Indebtedness of Seller or a Seller Affiliate to an Acquired Company. For greater
certainty, Intercompany Seller Indebtedness does not include any Intercompany
Acquired Company Indebtedness. Solely for purposes of calculating the
Intercompany Adjustment Amount, an Intercompany Seller Indebtedness under (a)
above will be deemed to be a negative number and an Intercompany Seller
Indebtedness under (b) above will be deemed to be a positive number.
 
          “Interim Trade Working Capital Adjustment Amount” has the meaning set
forth in Section 2.3(a).
 
          “IP Contracts” has the meaning set forth in Section 3.14(b).
 
          “IRS” means the United States Internal Revenue Service.
 
          “JV Company” means one of the companies identified as a JV Company on
Appendix A as the context indicates, and “JV Companies” means any two or more of
them as the context indicates.
 
          “Knowledge” means, in the case of Seller, the actual knowledge after
reasonable inquiry of the persons listed in Appendix F.
 
          “Law” means any applicable federal, state, local or foreign statute,
law, treaty, ordinance, regulation, rule, code, order or rule of common law.
 
          “Leased Business Real Property” means the Real Property described on
Appendix B as the “Leased Business Real Property”.
 
          “Liabilities” of a Person means any liability, obligation, or debt of
any kind, character or description, whether known or unknown, absolute or
contingent, accrued or unaccrued, disputed or undisputed, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, and
whether or not the same is required to be accrued on the financial statements of
the Person.
 
          “Loss” and “Losses” have the meanings set forth in Section 10.2(a).
 
          “Management of Hazardous Substances” (or its correlative terms) means
any use, possession, generation, treatment, storage, recycling, transportation
or disposal or arrangement for disposal or distribution of Hazardous Substances.
 
12
 

--------------------------------------------------------------------------------

          “Material Adverse Effect” means any change, effect, event, occurrence
or state of facts (each an “Effect”) that, individually or in the aggregate, is
materially adverse to the financial condition or results of operations of the
Business as a whole; provided, however, that none of the following will be
deemed, either alone or in combination, to constitute, and none of the following
will be taken into account in determining whether there has been or will be, a
Material Adverse Effect: (a) any failure by the Business to meet any internal or
published projections, forecasts, or revenue or earnings predictions for any
period; (b) any adverse Effect to the extent attributable to the announcement or
pendency of the transactions contemplated by this Agreement or any of the
Ancillary Agreements or to Buyer or any of its Affiliates or its or their
participation in any of the transactions contemplated by this Agreement or the
Ancillary Agreements (including any cancellations of or delays in customer
orders, any reduction in sales, any disruption of, adverse change in, or actions
taken in respect of, supplier, distributor, partner, joint venture or similar
relationships, adverse actions taken by employees individually or collectively,
or any loss of employees); (c) any adverse Effect attributable to conditions
affecting the economy or political or financial market conditions of any country
where the Business has operations or sales, to the extent such Effect does not
disproportionately affect the Business compared to comparable businesses in such
country; (d) any adverse Effect resulting from or relating to compliance with
the terms of, or the taking of any action required by, this Agreement or any of
the Ancillary Agreements (including any adverse Effect that results from Buyer’s
refusal to permit Seller, any Acquired Company or JV Company to take any of the
actions itemized in Section 5.3); (e) any adverse Effect arising from or
relating to any change in accounting requirements or principles or any change in
Laws or the interpretation or enforcement thereof; (f) any adverse Effect
arising from or relating to actions required to be taken under Laws or Material
Business Contracts, (g) any adverse Effect attributable to Buyer’s (or its
Affiliate’s) negotiations with PHA, Hyundai or Kia, or (h) any adverse Effect
attributable to Buyer or its participation in the transactions contemplated by
this Agreement. References in this Agreement to dollar amount thresholds will
not be deemed to be evidence of a Material Adverse Effect or materiality.
 
         “Material Business Contracts” has the meaning set forth in Section
3.9(b).
 
          “Net Adjustment Amount” has the meaning set forth in Section 2.3(e).
 
          “Non-Business Employee Liabilities” has the meaning set forth in
Section 7.1(e).
 
          “Non-Required Testing” has the meaning set forth in Section 10.8(f).
 
          “Note” means the promissory note in the principal amount of the Note
Amount to be made by Buyer in favor of Seller substantially in the form of
Exhibit C.
 
          “Note Amount” means $15,000,000.
 
          “Notice Period” has the meaning set forth in Section 10.3.
 
          “Owned Business Real Property” means the Real Property described on
Appendix B as “Owned Business Real Property.”
 
          “PHA” has the meaning set forth in Section 5.32.
 
          “PHA JV” has the meaning set forth in Section 5.32.
 
          “Party” means Buyer or Seller and “Parties” means both of them, and in
each case will include their respective successors and permitted assigns.
 
          “Pension Plan” has the meaning set forth in Section 3.13(b)(ii)(E).
 
          “Performing Party” has the meaning set forth in Section 10.8(a).
 
13
 

--------------------------------------------------------------------------------

          “Permitted Activities” means any of the business or activities
described in Section 5.9(a) of the Seller Disclosure Letter.
 
          “Permits” means all licenses, permits, authorizations, approvals,
registrations, franchises and similar consents granted or issued by any
Governmental Authority.
 
          “Permitted Encumbrances” means and includes:
 
          (a) in the case of any Real Property or interest in Real Property (i)
exceptions, objections, agreements, claims, defects, easements, rights of way,
encroachments, encumbrances, covenants, reservations, restrictions, conditions,
leases, tenancies and the like, of record or otherwise, made known,
ascertainable by an inspection of the Real Property or the competent land
register or the equivalent property record system; (ii) zoning, building,
subdivision and other statutory or regulatory conditions and restrictions; (iii)
Encumbrances for Taxes and assessments not yet due and payable; (iv) charges,
notices, orders, restrictions, agreements, conditions, regulations or other
matters arising under the enactments from time to time in force relating to town
and county planning or highway legislation; (v) local land charges (whether or
not registered before the date of this Agreement) and matters capable of
registration as local land charges; (vi) notices, orders, demands, proposals or
requirements of any Governmental Authority or statutory undertaker or other
competent body or person whether made before, on or after the date of this
Agreement; (vii) public or private rights of way, water, light, air and other
rights, easements, quasi-easements, Liabilities and public rights whatsoever and
Liabilities to repair or to contribute toward the cost of repair of roads,
passages, sewers, drains, fences or other items (but without liability on Seller
to provide evidence of such liability to repair or contribute); (vii)
discrepancies, conflicts in boundary lines, shortages in area, encroachments, or
other facts which a correct survey would disclose; (viii) defects of title or
restrictions that do not materially and adversely impair the title or use of
such Real Property; and (ix) any Encumbrance identified on Appendix J; and
 
          (b) in the case of any of the Business Assets, (i) Encumbrances for
Taxes and assessments not yet due and payable; (ii) Encumbrances which do not
materially restrict or impair the use of the Business Assets for the Business;
(iii) Encumbrances arising or imposed under applicable Law, (iv) defects of
title or restrictions that do not materially and adversely impair the title or
use of such Business Asset and (v) Encumbrances identified on Appendix J; and
 
          (c) in the case of the Acquired Company Shares or JV Company Shares,
(i) Encumbrances arising under applicable Law; (ii) Encumbrances arising under
the charter, governing or joint venture documents applicable to the Acquired
Company or JV Company and (iii) Encumbrances identified on Appendix J.
 
          “Person” means an individual, corporation, partnership, limited
liability company, association, trust or unincorporated organization, a
Governmental Authority or any other entity or organization.
 
          “Phase-Out Period” has the meaning set forth in Section 5.5(b).
 
          “Plans” has the meaning set forth in Section 3.13(b)(ii)(D).
 
          “Post-Closing Period” means any taxable period (or portion thereof,
including the portion of a Straddle Period that begins on the date after the
Closing Date) beginning after the close of business on the Closing Date.
 
14
 

--------------------------------------------------------------------------------

          “Pre-Closing Period” means any taxable period (or portion thereof,
including the portion of the Straddle Period prior to the close of business on
the the Closing Date) ending on, or before the close of business of, the Closing
Date.
 
          “Pre-Closing Products” means any products shipped by an Acquired
Company prior to the Effective Time.
 
          “Pre-Closing Reorganization Agreements and Instruments” means all of
the agreements and instruments relating to the Pre-Closing Reorganization
Transactions.
 
          “Pre-Closing Reorganization Transactions” means the transactions
described in Appendix I.
 
          “Prior Period Tax Returns” has the meaning set forth in Section 6.1.
 
          “Property Taxes” has the meaning set forth in Section 6.2(b).
 
          “Purchase Price” has the meaning set forth in Section 2.2(a).
 
          “Real Property” means the land, buildings and real property
improvements owned or leased by the Acquired Companies and located at the Owned
Business Real Property or the Leased Business Real Property as the context
indicates.
 
          “Real Property Laws” has the meaning set forth in Section 3.5(b).
 
          “Recall Campaign” means any offer, voluntarily or pursuant to an order
or decree of a Governmental Authority, by the manufacturer of the vehicles on
which Pre-Closing Products, or any parts, components or systems incorporating
Pre-Closing Products are installed, to owners of such vehicles to provide
remedial action to address a defect that relates to the Pre-Closing Products or
the failure of the Pre-Closing Products to comply with any applicable Law.
 
          “Related to the Business” means, with respect to any asset, right,
claim, contract, commitment or Liability of Seller, a Seller Affiliate or an
Acquired Company, that such asset, right, claim, contract, commitment or
Liability:
 
          (i) is an asset that was used in the Business for more than 75% of its
total usage during the past twelve months (or if less than twelve months, during
the entire period it was owned by Seller, a Seller Affiliate or an Acquired
Company); or
 
          (ii) arises or arose exclusively from, or is or was related
exclusively to, the Business or the operation or conduct of the Business.
 
          In addition, where this Agreement uses the phrase “to the extent
related to the Business” with respect to any commitment or Liability of Seller,
a Seller Affiliate or an Acquired Company, that phrase means the portion of the
commitment or Liability that arises or arose from, or is or was related to, the
Business or the operation or conduct of the Business.
 
          “Release” means any spill, leak, discharge, disposal, pumping,
pouring, emitting, seeping, placing, emptying, injecting, leaching, dumping or
escape of a Hazardous Substance into the Environment.
 
15
 

--------------------------------------------------------------------------------

          “Response Action” has the meaning set forth in Section 10.8(a).
 
          “Restricted Activities” means any of the business or activities
described in Section 5.9(b) of the Seller Disclosure Letter.
 
          “Restricted Cash” means all cash and cash equivalents held by
ArvinMeritor CVS (Shanghai) Ltd., Meritor LVS Zhenjiang (II) Co., Ltd., Arvin
Innovation Automotive Systems Changchun Company Limited, or ArvinMeritor do
Brasil Comercio de Sistemas de Portas Ltda., including bank balances and cash
and cash equivalents in bank accounts, monies in the possession of any banks,
savings and loans or trust companies and similar cash items on hand at the
Effective Time which is prohibited under applicable Law from being immediately
distributed to a shareholder outside of China or Brazil.
 
          “Scheduled Litigation” has the meaning set forth in Section 10.2(a).
 
          “Section 5.25 Action” has the meaning set forth in Section 5.25.
 
          “Section 5.25 Transfer Taxes” has the meaning set forth in Section
5.25.
 
          “Securities Act” has the meaning set forth in Section 4.7.
 
          “Seller” has the meaning set forth in the preamble and also includes a
wholly owned Affiliate of the Seller identified in the preamble to which such
Seller assigns any of its rights or delegates and of its obligations under this
Agreement pursuant to Section 11.7.
 
          “Seller Affiliate” means an Affiliate controlled by Seller Guarantor
but does not include an Acquired Company or a JV Company whether or not
otherwise constituting an Affiliate controlled by Seller Guarantor.
 
          “Seller Benefit Plans” has the meaning set forth in Section 7.1(e)(i).
 
          “Seller Disclosure Letter” means the disclosure letter delivered by
Seller to Buyer concurrently with the execution and delivery of this Agreement
and any update to the disclosure letter or updated disclosure letter delivered
by Seller to Buyer at or prior to the Closing Date pursuant to Section 11.9.
 
          “Seller Guarantor” has the meaning set forth in the preamble.
 
          “Seller Guarantor Trademarks and Logos” means the names “Arvin”,
“Meritor” and “ArvinMeritor” and any trade names, trademarks, identifying logos
or service marks employing the words “Arvin”, “Meritor” or “ArvinMeritor,” the
design mark “bull design” or “Stylized A design” or any part or variation of
such words, designs, or anything confusingly similar thereto, and any other
trade names, trademarks, identifying logos or service marks owned by Seller, any
Seller Affiliate, any Acquired Company, or any predecessor, except for the
Business Trademarks and Logos.
 
          “Seller Guaranty” has the meaning set forth in Section 11.21(a).
 
          “Seller Insurance Policies” has the meaning set forth in Section
5.13(b).
 
          “Seller Non-Compete Period” has the meaning set forth in Section
5.9(b).
 
          “Seller Parties” has the meaning set forth in Section 5.8(c).
 
16
 

--------------------------------------------------------------------------------

          “Shared Contracts” means all Business Contracts under which Seller, a
Seller Affiliate or an Acquired Company has any rights or primary, secondary,
contingent, joint, several or other Liability arising out of or relating to both
the Business and any other business of Seller or an Affiliate of Seller.
 
          “Shared Intellectual Property” means all drawings, specifications,
manuals, CAD/CAM files, and other information of a technical nature which are
(a) owned or possessed by Seller or a Seller Affiliate or by an Acquired Company
and (b) licensed or used by both the Business and any other business of Seller
or any Seller Affiliate or any licensee of Seller or any Seller Affiliate.
 
          “Shared Intellectual Property License Agreement” means the Shared
Intellectual Property License Agreement in substantially the form attached as
Exhibit B.
 
          “Significant Customer” has the meaning set forth in Section 3.21.
 
          “Significant Supplier” has the meaning set forth in Section 3.21.
 
          “Special Damages” means lost profits, diminution in value,
consequential, incidental, punitive, exemplary, statutory, special and indirect
damages.
 
          “Straddle Period” is any Tax period that begins on or before and ends
after the Closing Date.
 
          “Straddle Period Tax Return” is any Tax Return of an Acquired Company
for a Straddle Period.
 
          “Target Trade Working Capital Amount” means $88,744,097.
 
          “Tax” or “Taxes” means: any and all federal, state, provincial, local
or foreign taxes, charges, fees, imposts, levies or other assessments or
reassessments by any Taxing Authority, including all net income, income, gross
receipts, capital, sales, use, ad valorem, value added, goods and services,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, pensions, social security, unemployment, excise, severance,
stamp, occupation, employer health, realty, property, environmental, windfall
and estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to
tax or additional amounts imposed by any Taxing Authority.
 
          “Tax Claim” has the meaning set forth in Section 6.7(a).
 
          “Tax Cost” with respect to any event or adjustment for any Person
means the positive excess, if any, of the Tax liability of such Person taking
such event or adjustment into account over the Tax liability of such Person
without regard to such event or adjustment, with all other circumstances
remaining unchanged.
 
          “Tax Firm” has the meaning set forth in Section 6.8.
 
          “Tax Indemnified Party” has the meaning set forth in Section 6.7(a).
 
          “Tax Indemnitor” has the meaning set forth in Section 6.7(a).
 
17
 

--------------------------------------------------------------------------------

          “Tax Returns” means all reports and returns (including estimated
returns) required to be filed with respect to Taxes and also includes all claims
for refunds of Taxes and any and all amended or supplemental reports and
returns.
 
          “Taxing Authority” means any governmental or regulatory authority,
body or instrumentality exercising any authority to impose, regulate or
administer the imposition of Taxes.
 
          “Third Party Indebtedness” means, without duplication, Indebtedness
which is owed by an Acquired Company to any Person other than Seller, a Seller
Affiliate, an Acquired Company or a JV Company. For greater certainty, Third
Party Indebtedness does not include any Intercompany Indebtedness.
 
          “Trade Working Capital” means (a) Business Receivables plus (b)
Business Inventory plus (c) Customer Tooling and Engineering Recovery Amounts
minus (d) Business Payables, all as determined in accordance with the Accounting
Principles and Practices and the Trade Working Capital Adjustments, and
consistently with their determination in the Year End Trade Working Capital
Statement, the Closing Trade Working Capital Statement, and Section 2.4(b), as
applicable.
 
          “Trade Working Capital Adjustment Amount” has the meaning set forth in
Section 2.3(a).
 
          “Trade Working Capital Adjustments” means the adjustments outlined in
Appendix G which are to be used in connection with the preparation of the Year
End Trade Working Capital Statement and the calculation of Trade Working
Capital.
 
          “Trade Working Capital Difference Amount” has the meaning set forth in
Section 2.3(a).
 
          “Transfer Taxes” has the meaning set forth in Section 2.6.
 
          “Transition Services Agreement” has the meaning set forth in Section
5.31.
 
          “US Benefit Plans” has the meaning set forth in Section 3.13(b)(i).
 
          “US Business Employees” has the meaning set forth in Section 7.3.
 
          “Year End Trade Working Capital Amount” means the Trade Working
Capital Amount shown on the Year End Trade Working Capital Statement.
 
          “Year End Trade Working Capital Statement” means the Year End Trade
Working Capital Statement attached as Appendix H.
 
          “WARN” has the meaning set forth in Section 3.12(b).
 
     Section 1.2 Other Terms. Other terms may be defined elsewhere in the text
of this Agreement and, unless otherwise indicated, have such meaning throughout
this Agreement.
 
     Section 1.3 Other Definitional Provisions.
 
     (a) The words “hereof,” “herein,” and “hereunder” and words of similar
import, when used in this Agreement, will refer to this Agreement as a whole and
not to any particular provision of this Agreement. Whenever the words “include,”
“includes” or “including” (or any variation thereof) are used in this Agreement,
they will be deemed to be followed by the words “without limitation.”
 
18
 

--------------------------------------------------------------------------------

     (b) References to specific Articles and Sections are to the Articles and
Sections of this Agreement, unless specifically stated otherwise. References to
specific Exhibits or Appendices are to Exhibits or Appendices attached to this
Agreement unless specifically stated otherwise.
 
     (c) The terms defined in the singular have a comparable meaning when used
in the plural, and vice versa. All references to “dollars” or “$” mean “U.S.
dollars.”
 
     (d) All accounting terms not specifically defined in this Agreement will,
to the extent not inconsistent with the express terms of this Agreement, be
construed in conformity with Accounting Principles and Practices.
 
     (e) This Agreement is being entered into by and among competent and
sophisticated parties who are experienced in business matters and represented by
counsel and other advisors, and has been reviewed by the Parties and their
counsel and other advisors. Therefore, any ambiguous language in this Agreement
will not be construed against any particular Party as the drafter of the
language.
 
     (f) References to any United States legal term for any action, remedy,
method of judicial proceeding, legal document, legal status, court, official or
any legal concept or thing will, in respect of any jurisdiction other than the
United States, be deemed to include what most nearly approximates in that
jurisdiction to the United States legal term. Without limiting the foregoing,
the Parties acknowledge and agree that terms used in this Agreement that are not
relevant for particular jurisdictions due to different legal, governmental or
business systems in the various jurisdictions are intended to be used (and may
be substituted with) terms suitable for such other jurisdictions provided that
the substituted terms do not materially increase any right, remedy or recourse
against any of the Parties.
 
     Section 1.4 Currency and Payments. Except as otherwise provided in this
Agreement or as the Parties otherwise agree in writing, all amounts and payments
under this Agreement are expressed, will be calculated and will be paid in
United States currency. Any amount that needs to be converted from another
currency into United States currency will be converted based on the conversion
rate published in the Wall Street Journal morning edition for east coast readers
that is effective as of the date of payment and, if not published, another
recognized source selected by mutual agreement of the Parties, acting
reasonably. However, any conversion for purposes of financial statements or
calculating the Trade Working Capital Adjustment will be made in accordance with
Accounting Principles and Practices.
 
ARTICLE II
 
PURCHASE AND SALE OF THE ACQUIRED PARENT SHARES
 
     Section 2.1 Purchase and Sale. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, Seller will sell, convey, transfer,
assign and deliver to Buyer, and Buyer will purchase from Seller, all of
Seller’s right, title and interest in and to the Acquired Parent Shares, free
and clear of all Encumbrances, except Permitted Encumbrances if any.
 
     Section 2.2 Purchase Price and Payment.
 
     (a) The total purchase price for the Acquired Parent Shares will be equal
to (i) Thirty Five Million Dollars ($35,000,000) (the “Base Amount”) plus (ii)
the Final Closing Cash Amount minus (iii) the Final Closing Indebtedness Amount
plus (iv) the Trade Working Capital Adjustment Amount (which may be a positive
or negative number) and plus (v) the Intercompany Adjustment Amount (which may
be a positive or negative number) (the “Purchase Price”).
 
19
 

--------------------------------------------------------------------------------

     (b) The Purchase Price will be payable as follows:
 
     (i) an amount equal to (i) the Base Amount minus the Note Amount plus (ii)
the Estimated Cash Amount minus (iii) the Estimated Indebtedness Amount plus
(iv) the Interim Trade Working Capital Adjustment Amount (which may be a
positive or negative number), and plus (v) the Estimated Intercompany Adjustment
Amount (which may be a positive or negative number) and minus (vi) the Deposit
Amount (the “Closing Payment”) will be paid by Buyer to Seller at the Closing by
the transfer of immediately available funds to an account or accounts designated
by Seller; provided, however, if such amount exceeds $20,000,000, the excess
amount (“Excess Amount”) will be added to the Net Adjustment Amount and Buyer
will pay $20,000,000 (instead of the amount computed as described above) to
Seller at the Closing by the transfer of immediately available funds to an
account or accounts designated by Seller;
 
     (ii) an amount equal to the Deposit Amount will be paid by Escrow Agent to
Seller from the Deposit Escrow Agreement at the Closing by the transfer of
immediately available funds to an account or accounts designated by Seller;
 
     (iii) an amount equal to the absolute value of the Net Adjustment Amount
will be paid by Buyer or Seller, as applicable, in accordance with Section
2.3(g); and
 
     (iv) the Note will be payable by Buyer in accordance with its terms.
 
     Section 2.3 Adjustment Amounts and Payment; Settlement of Intercompany
Balances.
 
     (a) The “Trade Working Capital Adjustment Amount” (which may be a positive
or negative number) will be the amount determined by subtracting the Target
Trade Working Capital Amount from the Final Closing Trade Working Capital
Amount. The “Interim Trade Working Capital Adjustment Amount” (which may be a
positive or negative number) will be the amount determined by subtracting the
Target Trade Working Capital Amount from the Estimated Trade Working Capital
Amount. The “Trade Working Capital Difference Amount” (which may be a positive
or negative number) will be the amount determined by subtracting the Estimated
Trade Working Capital Amount from the Final Closing Trade Working Capital
Amount.
 
     (b) The “Cash Adjustment Amount” (which may be a positive or negative
number) will be the amount determined by subtracting the Estimated Cash Amount
from the Final Closing Cash Amount.
 
     (c) [RESERVED.]
 
     (d) The “Indebtedness Adjustment Amount” (which may be a positive or
negative number) will be the amount determined by subtracting the Estimated
Indebtedness Amount from the Final Closing Indebtedness Amount.
 
     (e) The “Intercompany Adjustment Amount” (which may be a positive or
negative number) will be the amount equal to the Final Closing Intercompany
Seller Account Balances plus the Final Closing Intercompany Seller Indebtedness.
The "Estimated Intercompany Adjustment Amount" (which may be a positive or
negative number) will be the amount equal to the Estimated Intercompany Seller
Account Balances Amount plus the Estimated Intercompany Seller Indebtedness
Amount. The “Intercompany Difference Amount” (which may be a positive or
negative number) will be the amount determined by subtracting the Estimated
Intercompany Adjustment Amount from the Intercompany Adjustment Amount.
 
20
 

--------------------------------------------------------------------------------

     (f) The “Net Adjustment Amount” (which may be a positive or negative
number) will be equal to (i) the Trade Working Capital Difference Amount; plus
(ii) the Cash Adjustment Amount; minus (iii) the Indebtedness Adjustment Amount;
plus (iv) the Intercompany Difference Amount; plus (v) the Excess Amount.
 
     (g) In the event that the Net Adjustment Amount is a positive number, Buyer
will pay to Seller an amount equal to the Net Adjustment Amount by wire transfer
to an account or accounts specified by Seller. In the event the Net Adjustment
Amount is a negative number, Seller will pay to Buyer an amount equal to the
absolute value of the Net Adjustment Amount by wire transfer to an account
specified by Buyer. Payment of the Net Adjustment Amount by Buyer or Seller will
be made together with interest on such amount at an annual rate equal to the
Closing Date Interest Rate based on a year of 365 days for the actual number of
days elapsed, which interest will begin accruing on the Closing Date and end on
the date that the payment is made. Within three (3) Business Days after the
calculation of the Net Adjustment Amount becomes final, Seller or Buyer, as
applicable, will make the payment provided for in this Section 2.3(g).
 
     (h) On the same day that the Net Adjustment Amount is paid pursuant to
Section 2.3(g), Seller will, or will cause the applicable Seller Affiliate to,
and Buyer will, or will cause the applicable Acquired Company to, settle all
remaining Intercompany Seller Account Balances that are reflected in the Final
Closing Intercompany Seller Account Balances and settle all remaining
Intercompany Seller Indebtedness that is reflected in the Final Closing
Intercompany Seller Indebtedness.
 
     Section 2.4 Adjustment Procedure.
 
     (a) Seller will prepare a balance sheet of the Business as at the Effective
Time (the “Closing Balance Sheet”). The Closing Balance Sheet is to be prepared
by Seller in accordance with the Accounting Principles and Practices on a
consistent basis with the preparation of the latest balance sheet included in
the Financial Information. Seller will use commercially reasonable efforts to
deliver the Closing Balance Sheet to Buyer within sixty (60) days following the
Closing Date.
 
     (b) Seller will also prepare a statement (the “Closing Trade Working
Capital Statement”) of the Trade Working Capital of the Business as at the
Effective Time (the “Closing Trade Working Capital”). The Closing Trade Working
Capital Statement is to be in substantially the same form as, and is to contain
the same line items (and only the line items) as are set forth in, the Year End
Trade Working Capital Statement. The Trade Working Capital Amount shown on the
Closing Trade Working Capital Statement is referred to as the “Closing Trade
Working Capital Amount”. The Closing Trade Working Capital Statement shall (i)
be prepared on the same basis and using the accounting principles, policies,
procedures and practices consistently applied as used in preparing the Year End
Trade Working Capital Statement, and (ii) subject to the foregoing, be prepared
in accordance with the Accounting Principles and Practices; and (iii) be
prepared on the basis that it relates to the Business as a going concern and
excludes any effects of the change in control or ownership of the Business or
any part of it contemplated by this Agreement or any other effect of this
Agreement or any Ancillary Agreement. Seller will deliver the Closing Trade
Working Capital Statement to Buyer at the same time as it is required to deliver
to Buyer the Closing Balance Sheet.
 
     (c) Seller is also to prepare and deliver to Buyer, at the same time as it
is required to deliver to Buyer the Closing Balance Sheet, statements setting
forth the following:
 
     (i) the amount of Cash of the Acquired Companies at the Effective Time (the
“Closing Cash Amount”);
 
21
 

--------------------------------------------------------------------------------

     (ii) the identity and amount of all Third Party Indebtedness at the
Effective Time (the “Closing Indebtedness Amount”);
 
     (iii) the identity and amount of all Intercompany Seller Account Balances
at the Effective Time (the “Closing Intercompany Seller Account Balances”); and
 
     (iv) the identity and amount of all Intercompany Seller Indebtedness at the
Effective Time (the “Closing Intercompany Seller Indebtedness”).
 
     (d) Seller is also to prepare written computations of the Cash Adjustment
Amount, the Indebtedness Adjustment Amount, the Net Adjustment Amount, and the
Intercompany Adjustment Amount. The computations will be delivered by Seller to
Buyer at the same time as it is required to deliver to Buyer the Closing Balance
Sheet.
 
     (e) Buyer will, and will cause the Acquired Companies to, make available to
Seller all Business Books and Records, data and other information, including
accountant work papers, and to any employees, and provide such other support, as
Seller may reasonably request for the purposes of preparing the Closing Balance
Sheet, the Closing Trade Working Capital Statement, the statements of the
Closing Cash Amount, the Closing Indebtedness Amount, the Closing Intercompany
Seller Account Balances and the Closing Intercompany Seller Indebtedness, and
the computations of the Trade Working Capital Adjustment Amount, the Cash
Adjustment Amount, the Closing Indebtedness Adjustment Amount, the Net
Adjustment Amount, and the Intercompany Adjustment Amount (collectively, the
“Adjustment Items”).
 
     (f) Buyer will, within thirty (30) days after the delivery by Seller of the
Adjustment Items (“Buyer’s Review Period”), complete its review of those items.
The Adjustment Items will be final, binding and conclusive upon, and deemed
accepted by, Buyer unless Buyer has notified Seller in writing prior to the
expiration of Buyer’s Review Period of any good faith objection thereto, which
written objection can only be that the Adjustment Items were not prepared or
computed in accordance with this Section 2.4 or contain mathematical errors on
their face (the “Buyer’s Objection”); provided, that Buyer may not deliver more
than one Buyer’s Objection and may not amend its Buyer’s Objection once it has
been delivered to Seller. The Buyer’s Objection will set forth a specific
description of the basis of Buyer’s Objection and the specific adjustments to
the Adjustment Items which Buyer believes should be made (“Specific
Adjustments”). Seller has the right to review all underlying documents and
assumptions that support the Specific Adjustments. Additionally, if Buyer’s
Objection contains a dispute regarding the application of Accounting Principles
and Practices, Seller shall have the option of adjusting the Closing Trade
Working Capital included in the Closing Trade Working Capital Statement to
present the Closing Trade Working Capital on a basis consistent with the
Accounting Principles and Practices within ten (10) days. Notwithstanding the
foregoing, any items not disputed in a valid Buyer’s Objection will be deemed to
have been accepted by Buyer, and Buyer agrees that it will not otherwise object
to or challenge the Adjustment Items, provided that Buyer will not be deemed to
have accepted any adjustments made by Seller pursuant to the previous sentence.
 
22
 

--------------------------------------------------------------------------------

     (g) If Seller and Buyer are unable to resolve all of their disputes with
respect to the Adjustment Items within thirty (30) days following Seller’s
receipt of Buyer’s Objection pursuant to Section 2.4(f), or such longer period
as they may agree in writing, they will refer their remaining differences to BDO
Seidman or, if BDO Seidman is unable or unwilling to serve, another independent
and internationally recognized firm of independent public accountants mutually
agreed upon by Seller and Buyer or, if they are unable to mutually agree within
such thirty (30) day period, each will appoint one such firm and the two (2)
selected firms will select the firm of independent public accountants (the “CPA
Firm”) for decision, which decision will be final, binding and conclusive on the
Parties. The procedure and schedule under which any dispute will be submitted to
the CPA Firm will be as follows:
 
     (i) Within fifteen (15) days following the expiration of the thirty (30)
day period referred to above in this Section 2.4(g), Buyer will submit any
unresolved portion of Buyer’s Objection to the CPA Firm in writing (with a copy
to Seller), supported by any documents and/or affidavits upon which it relies.
Such documents and/or affidavits shall be limited to the underlying documents
and assumptions that support the Specific Adjustments referred to above in
Section 2.4(f).
 
     (ii) Within fifteen (15) days following Buyer’s submission of the
unresolved portion of Buyer’s Objection as specified in sub-clause (i) above,
Seller will submit its response to the CPA Firm in writing (with a copy to
Buyer), supported by any documents and/or affidavits upon which it relies.
 
     (iii) The CPA Firm will deliver its written opinion within twenty (20) days
following its receipt of the information provided for in sub-clause (ii) above,
or such longer period of time as the CPA Firm determines is necessary, but not
to exceed forty-five (45) days. The scope of the disputes to be resolved by the
CPA Firm will be limited to the unresolved portion of the Buyer’s Objection.
Buyer and Seller will make readily available to the CPA Firm all relevant books
and records and any work papers (including those of the Parties’ respective
accountants) relating to the Adjustment Items at issue and all other items
reasonably requested by the CPA Firm.
 
     (iv) Any expenses relating to the engagement of the CPA Firm will be
allocated between Buyer and Seller so that Buyer’s share of such costs will be
in the same proportion that (x) the aggregate amount of the disputed items
submitted by Buyer to the CPA Firm that are unsuccessfully disputed bears to (y)
the total amount of all disputed items submitted by Buyer to the CPA Firm.
Seller and Buyer will each bear the fees of their respective accountants
incurred in connection with the determination and review of the Adjustment Items
at issue.
 
     (h) Each of the Adjustment Items will become final, binding and conclusive
on the Parties upon the earliest of (i) if no Buyer’s Objection has been given,
the expiration of the period within which Buyer must make the Buyer’s Objection
pursuant to Section 2.4(f), (ii) agreement in writing by Seller and Buyer that
the Adjustment Items, together with any modifications agreed by Seller and
Buyer, are final and binding and (iii) the date on which the CPA Firm issues its
written determination with respect to any dispute relating to the Adjustment
Items. The Closing Balance Sheet, the Closing Trade Working Capital, the Closing
Trade Working Capital Amount, the Closing Cash Amount, the Closing Indebtedness
Amount, the Closing Intercompany Seller Account Balances and the Closing
Intercompany Seller Indebtedness, as submitted by Seller if no timely Buyer’s
Objection has been given or as adjusted pursuant to any agreement between the
Parties or as determined pursuant to the decision of the CPA Firm, are referred
to in this Agreement as the “Final Closing Balance Sheet,” the “Final Closing
Trade Working Capital,” the “Final Closing Trade Working Capital Amount,” the
“Final Closing Cash Amount,” the “Final Closing Indebtedness Amount,” the “Final
Closing Intercompany Seller Account Balances” and the “Final Closing
Intercompany Seller Indebtedness” respectively.
 
     Section 2.5 Closing; Delivery and Payment.
 
     (a) Closing Date. The closing of the transactions contemplated by this
Agreement (the “Closing”) will take place at the offices of Miller, Canfield,
Paddock and Stone, P.L.C., in Troy, Michigan at 10:00 a.m., local time, on
either the first Monday or the first day of Seller’s fiscal month, at Seller’s
election in its sole discretion, that immediately follows the date on which all
the conditions to Closing in Article VIII are satisfied or waived, other than
any such conditions to be satisfied by deliveries to be made on the Closing
Date, or on such other date or at such other time as may be mutually agreed upon
in writing by Buyer and Seller (the time and date on which the Closing occurs is
hereinafter referred to as the “Closing Date”). The Closing will be deemed
effective as of the Effective Time. The failure of the Closing to occur on such
date will not in itself cause or result in a termination of this Agreement.
 
23
 

--------------------------------------------------------------------------------

     (b) Delivery and Payment.
 
     (i) At the Closing:
 
     (A) Buyer will pay the Closing Payment to Seller in immediately available
funds by wire transfer to the account or accounts designated by Seller;
 
     (B) The Escrow Agent will pay the Deposit Amount to Seller in immediately
available funds by wire transfer to the account or accounts designated by
Seller;
 
     (C) A notarial deed of share transfer sufficient to transfer the Acquired
Parent Shares to Buyer will be executed by a Dutch civil law notary as to the
Acquired Parent Shares;
 
     (D) Buyer will, on behalf of Buyer Guarantor, deliver to Seller the Buyer
Guaranty, duly executed by Buyer Guarantor;
 
     (E) Seller and Buyer will execute and deliver, each to the other,
counterparts of the other Ancillary Agreements; and
 
     (F) Seller and Buyer will deliver, each to the other, such additional
documents as are required pursuant to Article VIII.
 
     (ii) Simultaneously with the Closing, Buyer will deliver to Seller the
Ancillary Agreements and such other instruments as are to be executed by an
Acquired Company, duly executed by the appropriate Acquired Company.
 
     Section 2.6 Taxes and Fees. Sales taxes, goods and services taxes, value
added taxes, real estate and other transfer taxes, stamp taxes, conveyance
taxes, withholding taxes, intangible taxes, documentary recording taxes, filing
fees, license and registration fees, notarial fees, recording fees and similar
taxes, fees and charges imposed by any Taxing Authority in any jurisdiction upon
or as a result of the transfer of the Acquired Parent Shares or the consummation
of the transactions contemplated by this Agreement or the Ancillary Agreements
(the “Transfer Taxes”) will be paid by Seller. In the event that any Transfer
Taxes of whatsoever nature are imposed on Buyer by a Taxing Authority, the
Purchase Price will be grossed up by the applicable Transfer Taxes so their
burden is entirely borne by Seller. In the event that any Transfer Taxes of
whatsoever nature are imposed on Buyer by a Taxing Authority after the Purchase
Price has been paid, Seller shall within seven (7) days of a notice from Buyer,
informing Seller of such Transfer Tax, pay the amount of Transfer Taxes claimed
by the Taxing Authority to the Buyer. Seller will duly and timely prepare and
file any notices, returns or other filings required in any jurisdiction with
respect to any Transfer Taxes. Seller will deliver copies to Buyer a reasonable
time before the notices, returns or other filings are due for its review and
will promptly deliver to Buyer copies of all such notices, returns and filing
once filed and evidence of payment of all Transfer Taxes. Notwithstanding the
foregoing, Buyer shall be responsible for all Transfer Taxes as a result of or
relating to any Section 5.25 Action and this Section 2.6 shall be subject in all
respects to Section 5.25.
 
24
 

--------------------------------------------------------------------------------

     Section 2.7 Further Assurances. Subject to the terms and conditions of this
Agreement, at any time and from time to time after the Closing, at a Party’s
reasonable request, the other Party will execute and deliver such other
instruments of sale, transfer, conveyance, assignment, confirmation, and
assumption, and provide such materials and information and take such other
actions as the other Party may reasonably deem necessary or desirable in order
to more effectively transfer, convey and assign to Buyer the Acquired Parent
Shares and/or to put into place or make effective any of the transactions
contemplated by this Agreement.
 
     Section 2.8 Post Closing Access to Books and Records. Following the
Closing, Buyer will, and will cause the Acquired Companies to, afford Seller,
the Seller Affiliates, and their counsel and accountants, during normal business
hours, reasonable access to, the Business Books and Records with respect to
periods through the Closing (and after Closing to the extent such Business Books
and Records contain information relevant to the Net Adjustment Amount or any
other reasonable interest of Seller or the Seller Affiliates relating to this
Agreement or any of the Ancillary Agreements or the transactions contemplated by
this Agreement or any of the Ancillary Agreements) and the right to make copies
and extracts from the Business Books and Records and access to and cooperation
and assistance of the employees of the Acquired Companies to the extent that
such access may be reasonably required by Seller or any Seller Affiliate in
connection with (i) the preparation of Tax Returns, (ii) any Tax audit, Tax
protest or other proceeding relating to Taxes, (iii) the determination or
enforcement of rights and obligations under this Agreement or any Ancillary
Agreement or the transactions contemplated by this Agreement or any Ancillary
Agreement, (iv) compliance with the requirements of any Governmental Authority,
(v) any actual or threatened lawsuit, arbitration, investigation or other
proceeding or (vi) any other reasonable purpose relating to this Agreement or
any of the Ancillary Agreements, any obligations of a Party or any of its
Affiliates under this Agreement or any of the Ancillary Agreements, or any of
the transactions contemplated by this Agreement or any of the Ancillary
Agreements. Buyer will not, and will cause the Acquired Companies to not, for a
period ending the later of ten (10) years after the Effective Time or the
expiration of the applicable statute of limitation as to the retention of
records for Tax purposes or the payment of Taxes by Seller or any Acquired
Company with respect to any period ending prior to the Closing Date, destroy or
otherwise dispose of any of the Business Books and Records unless Buyer first
offers in writing to surrender such Business Books and Records to Seller and
Seller does not agree to take possession thereof during the thirty (30) day
period after such offer is delivered to Seller. Notwithstanding anything to the
contrary contained in this Agreement, Seller and the Seller Affiliates may, but
will not be obligated to, retain copies of Business Contracts, Business Books
and Records, data and other information which are included in the Business
Assets.
 
     Section 2.9 Cooperation. If, in order to properly prepare its Tax Returns
or other documents or reports required to be filed with any Taxing Authority, it
is necessary that Seller be furnished with additional information, documents or
records Related to the Business not referred to in Section 2.8, and such
information, documents or records are in the possession or control of Buyer or
any of the Acquired Companies, Buyer will furnish or make available within a
reasonable time such information, documents or records (or copies thereof) at
Seller’s reasonable request.
 
25
 

--------------------------------------------------------------------------------

ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF SELLER
 
          Seller represents and warrants to Buyer as follows as of the date of
this Agreement and, subject to any updated Seller Disclosure Letter delivered by
Seller to Buyer prior to or at the Closing pursuant to Section 11.9, as of the
Closing Date:
 
     Section 3.1 Organization and Authority. Each of Seller and Seller
Guarantor, and each Acquired Company, has been duly incorporated or formed, is
validly existing and is in good standing (where relevant under applicable law)
under the laws of its jurisdiction of incorporation or formation, with the
corporate power to own, operate or lease the properties that it purports to own,
operate or lease and to carry on its business as now being conducted. Each of
Seller and Seller Guarantor has the corporate power to enter into this Agreement
and the Ancillary Agreements to which it is to be a party and to perform its
obligations under this Agreement and such Ancillary Agreements. This Agreement
has been duly authorized, executed and delivered by Seller and Seller Guarantor
and constitutes a legal, valid and binding agreement of Seller and Seller
Guarantor, enforceable against Seller in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles, and no other action on the part of Seller or Seller Guarantor are
necessary to authorize this Agreement or the consummation of the transactions
contemplated by this Agreement (except with respect to the Pre-Closing
Reorganization Transactions). The Ancillary Agreements to be executed and
delivered by Seller or Seller Guarantor, when executed and delivered by Seller
or Seller Guarantor will be duly authorized, executed and delivered by Seller or
Seller Guarantor, as applicable, and will constitute legal, valid and binding
agreements of Seller or Seller Guarantor, enforceable against Seller or Seller
Guarantor in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles, and
no other action on the part of Seller or Seller Guarantor are necessary to
authorize such Ancillary Agreements or the consummation of the transactions
contemplated by such agreements.
 
     Section 3.2 No Conflict. Neither the execution and delivery by Seller and
Seller Guarantor of this Agreement and each Ancillary Agreement to which Seller
or Seller Guarantor is a party nor compliance by Seller and Seller Guarantor
with the terms and provisions of this Agreement and each such Ancillary
Agreement will (a) violate any provision of the formation documents of Seller or
the bylaws of Seller Guarantor; (b) violate any Law or any injunction, order or
decree of any Governmental Authority to which Seller or Seller Guarantor is
subject except, in all cases, for such violations that would not prohibit or
materially impair Seller’s or Seller Guarantor’s ability to perform its
obligations under this Agreement or any such Ancillary Agreement; or (c) except
as described in Section 3.2 of the Seller Disclosure Letter, result in any
breach of, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any of the
Business Contracts listed in Section 3.9(a) of the Seller Disclosure Letter or
result in the creation of any Encumbrance (other than a Permitted Encumbrance)
on any of the Acquired Parent Shares, except in any such case for any
violations, breaches, defaults or other matters that would not have a Material
Adverse Effect or prohibit or materially impair Seller’s ability to perform its
obligations under this Agreement or such Ancillary Agreements.
 
     Section 3.3 Financial Information.
 
     (a) Section 3.3(a) of the Seller Disclosure Letter sets forth a copy of (i)
the unaudited combined financial statements of the Business consisting of a
balance sheet and statement of operations, as of and for each of the fiscal
years ended September 30, 2009 and 2008, and (ii) the unaudited combined
financial statements of the Business, consisting of a balance sheet and
statement of operations as of and for the six months ended April 4, 2010
(collectively, the “Financial Information”). Except as set forth in Section
3.3(a) of the Seller Disclosure Letter, the Financial Information is complete
and accurate in all material respects, fairly presents the combined assets,
liabilities, and statement of operations of the Business as of each of the
applicable dates thereof or for the periods covered thereby and has been
prepared from the applicable books and records of Seller, all in accordance with
the Accounting Principles and Practices.
 
26
 

--------------------------------------------------------------------------------

     (b) Except as set forth in Section 3.3(b) of the Seller Disclosure Letter,
the Accounting Principles and Practices are in accordance with GAAP.
 
     Section 3.4 Absence of Certain Changes or Events. Except as set forth in
Section 3.4 of the Seller Disclosure Letter, as otherwise disclosed in this
Agreement or as otherwise contemplated or permitted by this Agreement, since
March 31, 2010 to the date of this Agreement, there has not been any Material
Adverse Effect and the Acquired Companies have conducted the Business conducted
by them in the ordinary course, consistent with past practice, and have not,
with respect to the Business (except for actions taken as part of the
Pre-Closing Reorganization Transactions): (i) sold, assigned, pledged or
otherwise transferred any Business Assets that are material to the Business as a
whole; (ii) acquired an interest of five percent (5%) or more in any Person or
acquired a substantial portion of the assets or business of any Person or any
division or line of business of any Person; (iii) made any capital expenditures
or commitments for any capital expenditures relating to the Business other than
(A) in accordance with the Business’ fiscal year 2010 capital expenditure plan
previously made available to Buyer, (B) in connection with the repair or
replacement of facilities destroyed or damaged due to casualty or accident
(whether or not covered by insurance) or (C) otherwise in an aggregate amount
for all such capital expenditures made pursuant to this clause (C) not exceeding
$5 million in the aggregate; (iv) terminated or materially amended any Material
Business Contract or material IP Contract; (v) suffered any material damage,
destruction or other casualty loss (not covered by insurance) to the Business
Assets; (vi) except for (1) merit increases in base compensation or wage rates
in the ordinary course of business consistent with past practice, or (2) if
required by Law, existing employment or collective bargaining agreements,
increased the compensation payable or to become payable by an Acquired Company
to any of the Business Employees or increased any bonus, insurance, pension or
other employee benefit plan, payment or arrangement made by an Acquired Company
for or with any such Business Employees, other than in connection with
non-material changes to employee benefit plans or arrangements applicable to
covered employees generally and not disproportionately affecting Business
Employees; (vii) entered into, amended, modified or terminated any labor
agreement, collective bargaining agreement or other contract with any labor
organization, union or association in respect to the Business Employees; (viii)
made any material change in any accounting method, practice or principle or in
any system of internal accounting controls, other than as required by applicable
accounting or regulatory authority applicable to the Business; or (ix) entered
into an agreement to do any of the foregoing.
 
     Section 3.5 Real Property.
 
     (a) An Acquired Company has, or will on the Closing Date have, valid and
good ownership title to, or a valid and subsisting leasehold interest in, the
Owned Business Real Property or the Leased Business Real Property, as the case
may be, free and clear of all Encumbrances other than Permitted Encumbrances.
Except as set forth in Section 3.5(a) of the Seller Disclosure Letter, none of
the Acquired Companies has leased any parcel of Business Real Property to any
other Person and no other Person has any right to the use, occupancy or
enjoyment of the Owned Business Real Property pursuant to any lease, license or
other agreement.
 
27
 

--------------------------------------------------------------------------------

     (b) Except as set forth in Section 3.5(b) of the Seller Disclosure Letter,
to Seller’s Knowledge, (i) the Owned Business Real Property is in material
compliance with all applicable building, zoning, subdivision and other land use
Laws (collectively, the “Real Property Laws”), and (ii) the current use or
occupancy of the Business Real Property or operation of the Business thereon
does not violate in any material respect any Real Property Laws. Seller has not
received any written notice of violation of any Real Property Laws which has not
been resolved, or of any condemnation or eminent domain proceedings of any kind
pending against any of the Business Real Property. To Seller’s Knowledge, all of
the Owned Business Real Property is occupied under a valid and current
certificate of occupancy, or similar permit. To Seller’s Knowledge, there are no
material latent defects or material adverse physical conditions affecting the
Owned Business Real Property or any of the facilities, buildings, structures,
erections, improvements, fixtures or fixed assets located on or forming part of
the Business Real Property.
 
     (c) Subject to the representations and warranties contained in Section
3.3(a), the representations and warranties contained in this Section 3.5 will be
the exclusive representations and warranties with respect to the Business Real
Property or Real Property Laws, and notwithstanding any other provision
contained in this Agreement to the contrary, no other representation or warranty
is made in this Agreement with respect to any of the foregoing.
 
     Section 3.6 Business Assets. Except as set forth in Section 3.6(a) of the
Seller Disclosure Letter, the Acquired Companies own, lease or have the legal
right to use all of the Business Assets (excluding the Business Real Property,
which is the subject of Section 3.5, and Intellectual Property, which is the
subject of Section 3.14) and have good and marketable title to all Business
Assets owned by the Acquired Companies and valid and subsisting leasehold
interests in the Business Assets leased by the Acquired Companies (in each case
excluding the Business Real Property, which is the subject of Section 3.5, and
Intellectual Property, which is the subject of Section 3.14), free and clear of
all Encumbrances except for Permitted Encumbrances. Except as set forth in
Section 3.6(b) of the Seller Disclosure Letter, the Business Assets, together
with the rights granted to Buyer and the Acquired Companies pursuant to this
Agreement and the Ancillary Agreements and any other agreements to be entered
into pursuant this Agreement or any of the Ancillary Agreements, will constitute
on the Closing Date substantially all of the assets necessary for the Acquired
Companies to conduct the Business conducted by the Acquired Companies in the
same manner in all material respects as the Business is currently conducted by
them.
 
     Section 3.7 Litigation. Except as set forth in Section 3.7 of the Seller
Disclosure Letter, as of the date of this Agreement, there is no material
lawsuit, arbitration or proceeding pending or, to Seller’s Knowledge, threatened
against Seller with respect to the Business or any Acquired Company before or by
any court, arbitrator or Governmental Authority. Except as set forth in Section
3.7 of the Seller Disclosure Letter, there are no unsatisfied judgments or
outstanding orders, injunctions, decrees, stipulations or awards (whether
rendered by a court, an arbitrator or a Governmental Authority) against Seller
with respect to the Business or any Acquired Company.
 
     Section 3.8 Compliance with Law. Except as set forth in Section 3.8(a) of
the Seller Disclosure Letter, the Business is not being conducted in material
violation of any Law. Except as set forth in Section 3.8(b) of the Seller
Disclosure Letter, all material Permits required by the Acquired Companies to
conduct the Business have been obtained and are in full force and effect and are
being complied with in all material respects. Notwithstanding the forgoing, no
representation or warranty is made under this Section 3.8 in respect of any (i)
matters relating to the Owned Business Real Property, the Leased Business Real
Property, and compliance of any Owned Business Real property or Leased Business
Real Property with Laws, which are addressed exclusively in Section 3.5 (as to
which no representation or warranty is made except as set forth in Section 3.5),
(ii) employee benefit matters which are addressed exclusively in Section 3.13
(as to which no representation or warranty is made except as set forth in
Section 3.13), (iii) intellectual property matters which are addressed
exclusively in Section 3.14 (as to which no representation or warranty is made
except as set forth in Section 3.14), (iv) matters relating to Environmental
Laws and Environmental Permits or the environmental condition of any of the
Business Assets or the Owned Business Real Property or the Leased Business Real
Property which are addressed exclusively in Section 3.16 (as to which no
representation or warranty is made except as set forth in Section 3.16) or (v)
matters relating to Taxes which are addressed exclusively in Section 3.17 (as to
which no representation or warranty is made except as set forth in Section
3.17).
 
28
 

--------------------------------------------------------------------------------

     Section 3.9 Business Contracts.
 
     (a) Section 3.9(a) of the Seller Disclosure Letter contains a list of the
following written Business Contracts to which Seller with respect to the
Business or an Acquired Company is a party as of the date of this Agreement and
is expected by Seller to remain outstanding after the Effective Time, but
excluding Business Contracts between an Acquired Company and another Acquired
Company or a JV Company:
 
     (i) all partnership, joint venture, stockholders’ or other similar Business
Contracts;
 
     (ii) all Business Contracts relating to any Third Party Indebtedness (other
than capital leases);
 
     (iii) all Business Contracts with a distributor, dealer, manufacturers’
representative or sales agent that, during the fiscal year ended October 4,
2009, accounted for more than 5% of the gross sales revenue of the Business;
 
     (iv) all Business Contracts relating to the future disposition or
acquisition of any Business Assets other than in the ordinary course of business
and other than Business Contracts providing for the future disposition or
acquisition of Business Assets with an aggregate value of less than $5 million;
 
     (v) all Business Contracts that (A) limit or contain restrictions on the
ability of any Acquired Company to declare or pay dividends on, to make any
other distribution in respect of or to issue or purchase, redeem or otherwise
acquire its capital stock (or equity interests), to incur Indebtedness, or to
incur or suffer to exist any Encumbrance, (B) require any Acquired Company to
maintain specified financial ratios or levels of net worth or other indicia of
financial condition, or (C) restrict or purport to restrict the ability of any
Acquired Company to carry on the Business or to compete with any Person or in
any geographic area or during any period of time (but not including Intellectual
Property license agreements and joint development agreements);
 
     (vi) all Business Contracts which both require any Acquired Company to
purchase its total requirements of any product or service from a third party or
that contain “take or pay” provisions and involve $1 million or more in
purchases per year;
 
     (vii) all Business Contracts for the sale of products or provision of
services to any Governmental Authority;
 
     (viii) all Business Contracts for any capital expenditure or leasehold
improvement in any one case in excess of $1 million that are not included in a
capital budget of an Acquired Company made available to Buyer prior to the date
of this Agreement;
 
     (ix) all capital and operating leases of personal property where the annual
lease payments under the agreement exceed $500,000 in the aggregate;
 
29
 

--------------------------------------------------------------------------------

     (x) all labor agreements or collective bargaining agreements with any labor
organization or union in respect to the Business Employees; and
 
     (xi) all of the leases of the Leased Business Real Property.
 
     (b) The Business Contracts listed (or required to be listed) in Section
3.9(a) of the Seller Disclosure Letter are referred to in this Agreement as the
“Material Business Contracts.” Each Material Business Contract is, as of the
date of this Agreement, valid and is in full force and effect in accordance with
the terms of such Material Business Contract. Except as set forth in Section
3.9(b) of the Seller Disclosure Letter, as of the date of this Agreement, there
is no material breach or default or claim of material breach or default under
any Material Business Contract, and no event has occurred that, with the passage
of time or the giving of notice or both, would constitute a material breach or
default by an Acquired Company or, to Seller’s Knowledge, any other party to the
Material Business Contract under any such contract, or would permit
modification, acceleration, or termination of any Material Business Contract.
Seller will, within 30 days after the date of this Agreement, make available to
Buyer true and complete copies of all Material Business Contracts.
 
     Section 3.10 Consents and Approvals. The execution, delivery and
performance by Seller of this Agreement and the Ancillary Agreements to which
Seller is to be a party do not and will not require any consent, approval,
authorization or other action by, or filing with or notification to, any
Governmental Authority, except (a) as set forth in Section 3.10 of the Seller
Disclosure Letter, (b) for the notification requirements of applicable
Competition Laws, (c) where the failure to obtain such consent, approval,
authorization or action, or to make such filing or notification, would not
prevent or materially delay the consummation by Seller of the transactions
contemplated by this Agreement and the Ancillary Agreements, (d) as may be
necessary to complete the Pre-Closing Reorganization Transactions, and (e) as
may be necessary as a result of facts or circumstances relating solely to Buyer.
 
     Section 3.11 Acquired Company and JV Company Shares.
 
     (a) The authorized and issued capital stock (or equivalent equity
interests) of Acquired Parent Company and each other Acquired Company as of the
Closing Date will be as set forth in Appendix A. Except as set forth in Section
3.11 of the Seller Disclosure Letter, as of the Closing Date, Seller will be the
record and beneficial owner of all of the outstanding Acquired Parent Shares and
Acquired Parent Company or another Acquired Company will be the record and
beneficial owner of all of the other outstanding Acquired Company Shares, in
each case free and clear of all Encumbrances except for Permitted Encumbrances.
The Acquired Parent Shares owned by Seller and the other Acquired Company Shares
owned by Acquired Parent Company or another Acquired Company as of the Closing
Date will have been validly issued and will be fully paid and non-assessable.
None of the Acquired Parent Shares or other Acquired Company Shares have been,
nor as of the Closing Date shall have been, issued in violation of any
preemptive rights. Except as set forth in Section 3.11 of the Seller Disclosure
Letter, none of the Acquired Parent Shares owned by Seller as of the Closing
Date or any of the other Acquired Company Shares owned by Acquired Parent
Company or another Acquired Company as of the Closing Date will be subject to
any shareholders agreement, limited liability company agreement, voting trust or
proxy, or bylaw which contains any restrictions with respect to the voting of
such shares (except such agreements, trusts, proxies or bylaws among Acquired
Companies or which may be amended, waived or terminated by the Acquired
Companies) and there will be no outstanding warrants, options, rights,
convertible or exchangeable securities or other contracts (other than this
Agreement and other than any such contract solely between Acquired Companies)
pursuant to which Seller or an Acquired Company will be obligated to issue,
sell, purchase, transfer, return or redeem any Acquired Company Shares.
 
30
 

--------------------------------------------------------------------------------

     (b) As of the Closing Date, Acquired Parent Company or another Acquired
Company will be the record and beneficial owner, free and clear of all
Encumbrances other than Permitted Encumbrances, of the JV Company Shares as
indicated on Appendix A. The representations and warranties contained in this
Section 3.11(b) are the exclusive representations and warranties with respect to
the JV Companies and the JV Company Shares and, notwithstanding any other
provision in this Agreement to the contrary, no other representation or warranty
is made in this Agreement with respect to the JV Companies or the JV Company
Shares.
 
     Section 3.12 Employees; Labor Relations.
 
     (a) Except as disclosed in Section 3.12(a) of the Seller Disclosure Letter,
(i) there are no material lawsuits, arbitrations, or other proceedings pending,
or to Seller’s Knowledge, threatened, between any Acquired Company, on the one
hand, and any current or former employee, consultant, or independent contractor
of the Business, on the other hand, and (ii) there are no material unfair labor
practice charges or complaints and no material claim for discrimination or
unfair dismissal has been brought against any Acquired Company before any
Governmental Authority, court, employment tribunal or arbitrator in respect of
any current or former employee of the Business.
 
     (b) There has been no material lockout, work stoppage, labor strike, or
other concerted action by employees of any of the Acquired Companies during the
12 months preceding the date of this Agreement. To Seller’s Knowledge, no union
organization campaign is in progress with respect to the employees of an
Acquired Company. Except as disclosed in Section 3.12(b) of the Seller
Disclosure Letter, to Seller’s Knowledge, during the 12 months preceding the
date of this Agreement, the Acquired Companies have complied in all material
respects with all applicable Laws and collective bargaining agreements relating
to the employment of labor, including those relating to equal employment
opportunity, wages, hours, compensation, benefits, occupational health and
safety, and collective bargaining and the Worker Adjustment and Retraining
Notification Act of 1988 and similar state and local laws (“WARN”).
 
     (c) Except as set forth in Section 3.12(c) of the Seller Disclosure Letter,
as of the date of this Agreement, none of Seller nor any Acquired Company is a
party to, or bound by, any labor agreement or collective bargaining agreement in
respect to the Business Employees.
 
     Section 3.13 Employee Benefit Plans.
 
     (a) Foreign Benefit Plans. All material benefit plans, contracts or
arrangements currently covering Business Employees of the Acquired Companies
located outside of the United States which would be described in Section 3.13(b)
but for the fact that such plans are maintained outside the jurisdiction of the
United States (but excluding plans maintained by a Governmental Authority and
individual employment contracts) are listed in Section 3.13(a) of the Seller
Disclosure Letter (the “Foreign Benefit Plans”), and a true and complete copy of
the current plan text and amendments thereto of each Foreign Benefit Plan
constituting part of the Business Assets has been provided or made available to
Buyer. Except as set forth in Section 3.13(a) of the Seller Disclosure Letter:
 
     (i) All Foreign Benefit Plans have been maintained and administered in
material compliance with all applicable Laws and in accordance with their terms
and all applicable collective bargaining agreements;
 
     (ii) Where required by Law, each of the Foreign Benefit Plans has obtained
from the Government Authorities having jurisdiction with respect to such plan
any required registrations and determinations that such plans are in compliance
with the Laws applicable to such plans and no circumstance;
 
31
 

--------------------------------------------------------------------------------

     (iii) There are no pending investigations by any Governmental Authority
involving the Foreign Benefit Plans, no claims pending or, to Seller’s
Knowledge, threatened (except for claims for benefits payable in the normal
operation of the Foreign Benefit Plans), lawsuits or proceedings against any
Foreign Benefit Plan or asserting any rights or claims to benefits under any
Foreign Benefit Plan, other than benefits payable in the ordinary course of the
operations of the Foreign Benefit Plans; and
 
     (iv) There are no participants in Foreign Benefit Plans of the Acquired
Companies located outside of the United States other than current and former
employees of the Acquired Companies.
 
Subject to the representations and warranties contained in Section 3.3(a), the
representations and warranties contained in this Section 3.13(a) are the
exclusive representations and warranties with respect to the Foreign Benefit
Plans and, notwithstanding any other provision in this Agreement to the
contrary, no other representation or warranty is made in this Agreement with
respect to the Foreign Benefit Plans.
 
     (b) US Benefit Plans.
 
     (i) All compensation and benefit plans, contracts or arrangements
maintained for the benefit of Business Employees of the Acquired Companies
located in the United States, including “employee benefit plans” within the
meaning of Section 3(3) of ERISA and plans, contract or arrangements relating to
retirement or pension compensation, equity, equity-based, incentive or deferred
compensation, change in control, severance, welfare or fringe compensation or
benefits, but excluding the Foreign Benefit Plans (the “US Benefit Plans”), are
listed in Section 3.13(b) of the Seller Disclosure Letter. True and complete
copies of any US Benefit Plans, including any trust or other funding instruments
and insurance or annuity contracts relating to any such US Benefit Plans, and
all amendments thereto have been provided or made available to Buyer.
 
(ii)  (A) No Business Asset is subject to any Encumbrance under ERISA or the
Code in connection with any “employee benefit plan” (within the meaning of
Section 3(3) of ERISA).
 
     (B) No event has occurred and no condition exists that would subject any
Acquired Company solely by reason of its affiliation with any other entity,
trade or business (an “ERISA Affiliate”) that is, or was at any time after
January 1, 2000, together with an Acquired Company, treated as a “single
employer” under Section 414(b), 414(c), 414(m) or 414(o) of the Code or Section
4001(b) of ERISA to any material Tax, Encumbrance, penalty or other liability
imposed by ERISA, the Code or other applicable Law with respect to any “employee
benefit plan” (within the meaning of Section 3(3) of ERISA) (collectively,
“Controlled Group Liabilities”).
 
     (C) No Acquired Company nor any ERISA Affiliate of an Acquired Company,
while such an ERISA Affiliate, has any currently outstanding material withdrawal
liability, within the meaning of Section 4201 of ERISA, or any currently
outstanding material contingent withdrawal liability under Section 4204 of ERISA
to any multiemployer pension plan which could reasonably be expected to become a
liability of Buyer or an Acquired Company following the Closing or result in the
imposition of any Encumbrance on a material Business Asset. There are no
outstanding contributions currently due to any such multiemployer plan by an
Acquired Company and, with respect to any such multiemployer plan that is a US
Benefit Plan, (i) if any Acquired Company or ERISA Affiliate were to experience
a complete or partial withdrawal from such plan, no material withdrawal
liability would be incurred, (ii) no Acquired Company or ERISA Affiliate has
received any notification that any such plan is in reorganization, has been
terminated, or is insolvent; and (iii) neither the execution or deliver of this
Agreement nor the consummation of the transactions contemplated hereby will
result in the Acquired Companies incurring material withdrawal liability.
 
32
 

--------------------------------------------------------------------------------

     (D) All US Benefit Plans, other than “multiemployer plans” within the
meaning of Section 3(37) of ERISA, maintained (in whole or in part) for the
benefit of Business Employees of an Acquired Company (the “Plans”) have been
maintained and administered in material compliance with applicable Law,
including ERISA and the Code, to the extent applicable, and in material
accordance with their terms and all applicable collective bargaining agreements.
There is no material pending litigation or other actions, claims (other than
routine claims for benefits), proceedings or governmental investigations
relating to the Plans with respect to employees of the Acquired Companies. There
are no outstanding contributions currently due to a Plan and no “prohibited
transaction” (as defined in Section 4975 of the Code) has occurred with respect
to the Plans.
 
     (E) The US Benefit Plans which are “employee pension benefit plans” within
the meaning of Section 3(2) of ERISA and which are intended to meet the
qualification requirements of Section 401(a) of the Code (each, a “Pension
Plan”) have received determination letters from the IRS to the effect that such
Pension Plans are qualified and the related trusts are exempt from federal
income taxes and no determination letter with respect to any Pension Plan has
been revoked nor, to Seller’s Knowledge, is there any reason for such
revocation, nor has any Pension Plan been amended since the date of its most
recent determination letter in any respect that to Seller’s Knowledge would
adversely affect its qualification.
 
     (iii) Except with respect to retention and success payments to certain
members of management, neither the execution or delivery of this Agreement or
the consummation of the transactions contemplated hereby (either alone or in
connection with any other event) will entitle any current or former employee of
an Acquired Company to any increase in compensation or benefits, any grant of
severance, retention, change in control or similar compensation or benefits, any
acceleration of time of payment or vesting or funding of or any compensation or
benefits or limit the right of Buyer or any Acquired Company to amend or
terminate any US Benefit Plan.
 
     (iv) There are no participants in the US Benefit Plans other than current
and former employees of the Acquired Companies. The Acquired Companies have
reserved the right to amend, terminate or modify at any time all US Benefit
Plans providing for retiree health or life insurance coverage.
 
Subject to the representations and warranties contained in Section 3.3(a), the
representations and warranties contained in this Section 3.13(b) are the
exclusive representations and warranties with respect to the US Benefit Plans
and, notwithstanding any other provision in this Agreement to the contrary, no
other representation or warranty is made in this Agreement with respect to the
US Benefit Plans.
 
33
 

--------------------------------------------------------------------------------

     Section 3.14 Intellectual Property.
 
     (a) Section 3.14(a) of the Seller Disclosure Letter sets forth a list of
the Patents included in the Business Intellectual Property and lists, as of the
date of this Agreement, the registered Trademarks, the registered Copyrights,
and all registration applications for Patents, Trademarks and Copyrights,
included in the Business Intellectual Property (the “Registered Intellectual
Property”), specifying as to each item, as applicable: (i) the owner of the
item; (ii) the jurisdiction in which the item is issued or registered or which
any application for issuance or registration has been filed; (iii) the
respective issuance, registration or application number of such item; and (iv)
the date of application and issuance or registration of the item.
 
     (b) Section 3.14(b)(i) and (ii) of the Seller Disclosure Letter lists, as
of the date of this Agreement, all material licenses, sublicenses, and other
written agreements (i) by which an Acquired Company is authorized to use any of
the Intellectual Property of a third party which is included in the Business
Assets, excluding, however, computer programs, software agreements and licenses,
and (ii) by which an Acquired Company licenses or otherwise authorizes a third
party to use any material Business Intellectual Property, other than pursuant to
purchase orders or other contracts with original equipment manufacturers or
other customers (the “IP Contracts”). Each IP Contract, as of the date of this
Agreement, is valid and is in full force and effect in accordance with the terms
of such IP Contract. Except as set forth in Section 3.14(b)(i) or (ii) of the
Seller Disclosure Letter, as of the date of this Agreement, there is no material
breach or default or claim of material breach or default by an Acquired Company
or, to Seller’s Knowledge, by any other party under any IP Contract, and no
event has occurred that, with the passage of time or the giving of notice or
both, would constitute a material breach or default by an Acquired Company or,
to Seller’s Knowledge, any other party to such IP Contract under any such
contract, or would permit modification, acceleration, or termination of any IP
Contract.
 
     (c) Except as set forth in Section 3.14(c)(i) of the Seller Disclosure
Letter, no Acquired Company has received any written notice, or, to Seller’s
Knowledge, other notice from any other Person challenging its right to use any
of the Business Intellectual Property that is material to the operation of the
Business and which remains outstanding. Except as set forth in Section
3.14(c)(ii) of the Seller Disclosure Letter, no Acquired Company has any pending
claim that any Person has violated or infringed any of the Business Intellectual
Property.
 
     (d) Except as set forth in Section 3.14(d) of the Seller Disclosure Letter,
to Seller’s Knowledge, an Acquired Company owns all right, title and interest in
and to, or has a valid license, sublicense, permission or right to use, all of
the material Business Intellectual Property owned, licensed or used by the
Acquired Companies, except for any to be licensed pursuant to this Agreement.
 
     (e) The representations and warranties contained in this Section 3.14 are
the exclusive representations and warranties with respect to Intellectual
Property matters and, notwithstanding any other provision in this Agreement to
the contrary, no other representation or warranty is made in this Agreement with
respect to Intellectual Property matters.
 
     Section 3.15 Brokers and Finders. Except for the retention of Houlihan
Lokey Howard & Zukin Capital, Inc. and UBS Securities LLC, as financial
advisors, the fees and expenses of which will be paid by Seller, Seller has not
employed any broker, finder or investment banker or incurred any liability for
any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements.
 
34
 

--------------------------------------------------------------------------------

     Section 3.16 Environmental Matters. Seller has provided Buyer with access
to all “Phase I” and “Phase II” environmental site assessments in Seller’s
possession that were commissioned by Seller Related to the Business or the
Business Real Property during the five (5) year period ending on the date of
this Agreement (the “Environmental Reports”). Except as disclosed in the
Environmental Reports, any environmental site assessment reports commissioned by
Buyer pursuant to Section 5.1(a), or Section 3.16 of the Seller Disclosure
Letter:
 
     (a) The Business Assets owned by the Acquired Companies are in material
compliance with all applicable Environmental Laws and all material permits,
certifications, licenses, approvals, registrations and authorizations required
by the Environmental Laws (“Environmental Permits”), and the Acquired Companies
validly hold all material Environmental Permits that are necessary for the
conduct of the Business as currently conducted. The Acquired Companies have
applied, or will before Closing apply, for renewal of any such Environmental
Permit that is scheduled to expire within 45 days following the Closing.
 
     (b) Neither Seller nor the Acquired Companies have received in connection
with such Business Assets any unresolved written notice of any citation,
summons, order, complaint, penalty, investigation or review by any Governmental
Authority (i) with respect to any alleged violation by an Acquired Company of
any Environmental Law, (ii) with respect to any alleged failure of an Acquired
Company to have any Environmental Permit or (iii) with respect to any
generation, treatment, storage, recycling, transportation or disposal of any
Hazardous Substance, nor, to Seller’s Knowledge, has any of the foregoing been
threatened.
 
     (c) To Seller’s Knowledge, there has been no Release of any Hazardous
Substances in violation of Environmental Law (i) on, at, beneath or from any
location owned, leased or operated by any of the Acquired Companies prior to the
Closing Date, or (ii) from the transportation, treatment, storage, handling, or
disposal or arrangement for transportation, treatment, storage, handling or
disposal on, at or beneath any of such locations or from any such location to
any off-site location.
 
     (a) Subject to the representations and warranties contained in Section
3.3(a), the representations and warranties contained in this Section 3.16 are
the exclusive representations and warranties with respect to environmental
matters (including environmental Liabilities, Environmental Laws, Environmental
Permits and Hazardous Substances) and, notwithstanding any other provision in
this Agreement to the contrary, no other representation or warranty is made in
this Agreement with respect to environmental matters.
 
     Section 3.17 Taxes. Except as set forth in Section 3.17 of the Seller
Disclosure Letter:
 
     (a) The Acquired Companies have filed or caused to be filed all Tax Returns
required to be filed with respect to the Business and all such Tax Returns are
accurate and complete in all material respects, and have paid or caused to be
paid all Taxes (whether or not reflected on such Tax Returns). The Acquired
Companies are not liable for the Taxes of any other Person as a transferee,
successor, by contract or by applicable Law.
 
     (b) There are no outstanding agreements or waivers extending, or having the
effect of extending, the statutory period of limitation applicable to any Tax
Returns required to be filed with respect to any Acquired Company and no
Acquired Company has requested any extension of time within which to file any
Tax Return, which return has not yet been filed. No power of attorney with
respect to any Taxes has been executed or filed with any Taxing Authority by or
on behalf of any Acquired Company.
 
35
 

--------------------------------------------------------------------------------

     (c) None of the Acquired Companies has any agreement with any Person
regarding the filing of Tax Returns or relating to the sharing of Tax benefits
or liabilities with any Person or any Tax indemnity obligation or similar
agreement, arrangement or practice with respect to Taxes (including, without
limitation, any advance pricing agreement, closing agreement or other agreement
relating to Taxes with any Taxing Authority).
 
     (d) To Seller’s Knowledge, none of the Acquired Companies is currently the
subject of any audit or examination with respect to Taxes, no notice of such an
audit or examination has been received by any Acquired Company or the Seller,
and none of the Seller or any Acquired Company has knowledge that such an audit
or examination is imminent.
 
     (e) None of the Acquired Companies has ever been a member of an affiliated,
combined, consolidated or unitary group for purposes of filing any Tax Return.
 
     (f) To Seller’s Knowledge, there are no claims by a Tax authority in a
jurisdiction where any Acquired Company does not file Tax Returns that any such
Acquired Company is or may be subject to taxation by that jurisdiction.
 
     (g) None of the Acquired Companies is a party to any agreement, contract,
arrangement or plan that has resulted, or would result, in, and the transactions
contemplated hereby will not result in, a payment that would not be fully
deductible, as a result of Sections 280G or 162(m) of the Code or any similar
provision of non-U.S. tax Law. No Business Employee is entitled to receive any
additional payment from any Acquired Company in the event the additional or
excise tax under Section 409A or 4999 of the Code is imposed on such individual.
 
     (h) There are no liens for Taxes with respect to any of the assets or
properties of the Acquired Companies, other than statutory liens for Taxes not
yet due.
 
     (i) Each deficiency resulting from any audit or examination relating to
Taxes by any Taxing Authority has been timely paid.
 
     (j) No Acquired Company will be required to include in a taxable period
ending after the Closing Date any taxable income attributable to income that
accrued, but was not recognized, in a Pre-Closing Period, as a result of an
adjustment under section 481 of the Code, the installment method of accounting,
the long-term contract method of accounting, the cash method of accounting, any
comparable provision of state, local, or foreign Tax law, or for any other
reason.
 
     (k) To Seller’s Knowledge, each Acquired Company has complied in all
material respects with all applicable laws relating to the payment and
withholding of Taxes (including withholding pursuant to Sections 1441, 1442,
1445, 1471, 1472, 3121 and 3402 of the Code and any comparable provision of any
state, local or foreign laws) and have, within the time and in the manner
prescribed by applicable law, withheld from and paid over to the proper Taxing
Authorities all material amounts required to be so withheld and paid over under
such laws.
 
     (l) No Acquired Company has been a party to any distribution occurring
during the last three (3) years that was treated by the parties as a tax-free
distribution under Section 355 of the Code.
 
     (m) No Acquired Company is a party to any “listed transaction” as defined
in Treasury Regulation Section 1.6011-4(b)(2).
 
     (n) No Acquired Company has been, at any time during the applicable time
period set forth in Section 897(c)(1) of the Code, a United States real property
holding company within the meaning of Section 897(c)(2) of the Code.
 
36
 

--------------------------------------------------------------------------------

     (o) Section 3.17(o) of the Seller Disclosure Letter sets forth with respect
to each Acquired Company, as of the Closing Date, if the Acquired Company is
treated as a corporation, partnership, or disregarded entity for U.S. federal
income tax purposes.
 
     Section 3.18 Business Receivables. Except as set forth in Section 3.18 of
the Seller Disclosure Letter, all Business Receivables of the Acquired Companies
to be reflected in the Final Closing Balance Sheet will represent bona fide
sales of goods or services made in the ordinary course of business, consistent
with past practice, by the Acquired Companies to Persons other than Seller and
any Seller Affiliate.
 
     Section 3.19 Business Inventory. Except as set forth in Section 3.19 of the
Seller Disclosure Letter, the Business Inventory of the Acquired Companies to be
reflected in the Final Closing Balance Sheet will, as of the date of such
balance sheet, be in good and merchantable condition and usable and saleable in
the ordinary course of business, consistent with past practice, in all material
respects, subject to reserves for obsolete and slow-moving inventory as set
forth in such Final Closing Balance Sheet.
 
     Section 3.20 Business Payables. Except as set forth in Section 3.20 of the
Seller Disclosure Letter, all Business Payables of the Acquired Companies to be
reflected in the Final Closing Balance Sheet will have arisen from bona fide
purchases of goods or services made in the ordinary course of business,
consistent with past practice, by the Acquired Companies from Persons other than
Seller and any Seller Affiliate.
 
     Section 3.21 Substantial Customers and Suppliers. Section 3.21(a) of the
Seller Disclosure Letter lists each of the 24 largest customers of the Acquired
Companies on the basis of revenues for goods sold or services provided for the
most recently completed fiscal year, indicating for each such customer its
vehicle platforms for which purchase orders for products of the Acquired
Companies are in effect with an Acquired Company (each, a “Significant
Customer”). Section 3.21(b) of the Seller Disclosure Letter lists each of the 30
largest production material suppliers of the Acquired Companies on the basis of
cost of goods or services purchased for the most recently completed fiscal year
(each, a “Significant Supplier”). Except as disclosed in Section 3.21(c) of the
Seller Disclosure Letter, no Significant Customer or Significant Supplier has
ceased or materially reduced its purchases from or sales or provision of
services to the Business since April 4, 2010 to the date of this Agreement, or
to Seller’s Knowledge, as of the date of this Agreement has threatened in
writing to cease or materially reduce such purchases or sales or provision of
services after the date of this Agreement, other than such reduction in
purchases or sales that are caused by general market conditions or declines in
the sales of particular vehicle platforms.
 
     Section 3.22 Credit Support Arrangements. Section 3.22 of the Seller
Disclosure Letter includes a list and description of all of the outstanding
Credit Support Arrangements by Seller or any of the Seller Affiliates with
respect to the Business as of the date of this Agreement. Except as disclosed in
Section 3.22 of the Seller Disclosure Letter, no Acquired Company is an obligor
under any guarantees, letters of credit or other credit arrangements, including
surety and performance bonds, other than the Credit Support Arrangements.
 
     Section 3.23 Certain Unlawful Actions. Except as disclosed in Section
3.8(a) of the Seller Disclosure Letter, to Seller’s Knowledge, none of the
Acquired Companies nor any director or officer of any Acquired Company, has,
directly or indirectly, used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity,
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds, or made any unlawful bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
 
37
 

--------------------------------------------------------------------------------

ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES OF BUYER
 
          Buyer represents and warrants to Seller as follows as of the date of
this Agreement and as of the Closing Date:
 
     Section 4.1 Organization and Authority of Buyer. Buyer has been duly
formed, is validly existing and is in good standing under the laws of its
jurisdiction of formation, with the power to own, operate or lease the
properties that it purports to own, operate or lease and to carry on its
business as now being conducted. Buyer has the power to enter into this
Agreement and the Ancillary Agreements to which it is to be a party and to
perform its obligations under this Agreement and such Ancillary Agreements. This
Agreement has been duly authorized, executed and delivered by Buyer and
constitutes a legal, valid and binding agreement of Buyer, enforceable against
Buyer in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors’ rights and to general equity principles, and no other
action on the part of Buyer is necessary to authorize this Agreement or the
consummation of the transactions contemplated by this Agreement. The Ancillary
Agreements to be executed and delivered by Buyer, when executed and delivered by
Buyer, will be duly authorized, executed and delivered by Buyer and will
constitute legal, valid and binding agreements of Buyer, enforceable against
Buyer in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles, and
no other proceedings on the part of Buyer are necessary to authorize such
Ancillary Agreements or the consummation of the transactions contemplated by
such agreements.
 
     Section 4.2 No Conflict. Neither the execution and delivery of this
Agreement by Buyer or the Ancillary Agreement to which Buyer is a party nor
compliance by Buyer with the terms and provisions of this Agreement and each
such Ancillary Agreement will violate (a) any provision of the certificate of
formation and limited liability company agreement of Buyer; or (b) any Law or
any injunction, order or decree of any Governmental Authority to which Buyer is
subject, except in any such case for any violations, breaches, defaults or other
matters that would not prohibit or materially impair Buyer’s ability to perform
its obligations under this Agreement or any of such Ancillary Agreements.
 
     Section 4.3 Consents and Approvals. The execution, delivery and performance
by Buyer of this Agreement and by Buyer of the Ancillary Agreements to which
Buyer is to be a party do not and will not require any consent, approval,
authorization or other action by, or filing with or notification to, any
Governmental Authority, except (a) for the notification requirements of
applicable Competition Laws, (b) where the failure to obtain such consent,
approval, authorization or action, or to make such filing or notification, would
not prevent or materially delay the consummation by Buyer of the transactions
contemplated by this Agreement and the Ancillary Agreements and (c) as may be
necessary as a result of facts or circumstances relating solely to Seller.
 
     Section 4.4 Brokers and Finders. Except for the retention of such Persons,
the fees and expenses of which will be paid by Buyer in accordance with Section
11.6, Buyer has not employed any broker, finder or investment banker or incurred
any liability for any brokerage, finder’s or other fee or commission in
connection with the transactions contemplated by this Agreement and the
Ancillary Agreements.
 
     Section 4.5 Financial Capability. Buyer has sufficient funds or
unconditional (except for satisfaction of the Buyer’s conditions in Section 8.1
of this Agreement) debt and/or equity financing commitments in place to purchase
the Acquired Parent Shares on the terms and conditions contained in this
Agreement and will have such funds and commitments on the Closing Date.
Availability of funding and financing is not a condition to Buyer’s obligation
to consummate the transactions contemplated by this Agreement.
 
38
 

--------------------------------------------------------------------------------

     Section 4.6 Regulatory Matters. Buyer is not subject to any enforcement
action, citation, consent decree or other similar action by any Governmental
Authority that might materially affect its ability to consummate any of the
transactions contemplated by this Agreement and the Ancillary Agreements.
 
     Section 4.7 Investment. Buyer is acquiring the Acquired Parent Shares
solely for the purpose of investment and not with a view to, or for sale in
connection with, any distribution of the shares in violation of the Securities
Act of 1933, as amended (the “Securities Act”). Buyer acknowledges the Acquired
Parent Shares are not registered under the Securities Act or any applicable
state securities law or other applicable laws, and that the Acquired Parent
Shares may not be transferred or sold except pursuant to the registration
provisions of such Securities Act or pursuant to an applicable exemption
therefrom and pursuant to state securities laws and regulations as applicable.
Buyer is an “accredited investor” within the meaning of Rule 501(a) promulgated
under the Securities Act. Buyer has such knowledge and experience in financial
and business matters and investments in general that make it capable of
evaluating the merits and risks of purchasing the Acquired Parent Shares. Buyer
acknowledges that it has been afforded: (a) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of Seller, the Acquired Companies and the JV Companies
concerning the merits and risks of investing in the Acquired Parent Shares; (b)
access to information about the Acquired Companies and the JV Companies, their
respective results of operations, financial condition and cash flow, and
business, in each case sufficient to enable Buyer to evaluate whether to proceed
with the execution and delivery of this Agreement and the purchase of the
Acquired Parent Shares; and (c) the opportunity to obtain such additional
information that either Seller or the Acquired Companies possess, or can acquire
without unreasonable effort or expense, that is necessary to make an informed
investment decision with respect to the execution and delivery of this Agreement
and the consummation of the purchase of the Acquired Parent Shares.
 
     Section 4.8 Litigation. There is no lawsuit, arbitration or other
proceeding pending or, to Buyer’s knowledge, threatened against Buyer before any
court, arbitration tribunal, or judicial, governmental or administrative agency,
which would materially restrict or limit the ability of Buyer to perform its
obligations under this Agreement or which seeks to prevent the consummation of
the transactions contemplated by this Agreement or the ancillary Agreements.
 
ARTICLE V
 
CERTAIN COVENANTS OF SELLER AND BUYER
 
     Section 5.1 Access and Information.
 
     (a) Seller will permit Buyer and its representatives, after the date of
this Agreement until the Closing, to have reasonable access solely for
confirmatory diligence purposes, during regular business hours and upon
reasonable advance notice, subject to Seller’s right to have its representatives
accompany Buyer’s representatives and subject to other reasonable rules and
regulations of Seller, to (i) the Business Assets; provided, however, Buyer will
not be permitted to perform any environmental site assessments or other testing,
sampling or investigations without Seller’s prior written consent, which consent
will not be unreasonably withheld, (ii) the offices, facilities, properties and
the financial, accounting and other books and records of Seller and the Acquired
Companies relating to the Business, and (iii) the appropriate management
personnel of Seller and the Acquired Companies. Seller will furnish, or cause to
be furnished, to Buyer any financial and operating data and other information
that is readily available with respect to the Business as Buyer will from time
to time reasonably request for the purpose of verifying the accuracy of the
representations and warranties of Seller in Article III. It is expressly
understood by the Parties that, notwithstanding the provisions of this Section
5.1(a), Seller, in its sole discretion, may deny or restrict any access (i)
involving possible breaches of applicable confidentiality agreements with third
parties or possible waivers of any applicable attorney-client privileges; (ii)
to any know-how, operating instructions or other proprietary knowledge of Seller
or the Acquired Companies with respect to the products, materials and services
used in or produced by the Business; or (iii) in the event Buyer is in breach of
this Agreement. It is further understood that Seller will be under no obligation
to grant Buyer or its representatives any access if such access would, under the
circumstances, unreasonably interfere with Seller’s or the Acquired Companies’
operations, activities or employees, or if such access would, in the reasonable
judgment of Seller, violate applicable antitrust or similar Laws, securities
Laws, privacy Laws, or labor Laws or contracts, or materially breach any
provision of any contract. With respect to any third parties with which Seller,
any Acquired Company or any JV Company has a direct or indirect business
relationship, and any Governmental Authorities with jurisdiction over or which
regulates Seller, any Acquired Company, any JV Company, the Business or the
Business Locations, Buyer will not make any independent inquiry with respect to
Seller, any Acquired Company, any JV Company, the Business or the Business
Locations without Seller’s prior consent.
 
39
 

--------------------------------------------------------------------------------

     (b) All information provided or obtained pursuant to Section 5.1(a) will be
held by Buyer in accordance with, and subject to the terms of, and will
constitute “Evaluation Material” under, the Confidentiality Agreement, dated
April 22, 2010, between the Renco Group, Inc. and Houlihan Lokey Howard & Zukin
Capital, Inc. (the “Confidentiality Agreement”). Copies of any environmental
site assessment reports generated by Buyer or Buyer’s agents shall be provided
to Seller at no cost to Seller.
 
     Section 5.2 Registrations, Filings, Notices and Licenses.
 
     (a) Subject to Seller’s and Buyer’s additional obligations under paragraphs
(b) and (c) below, Seller and Buyer will, prior to and after the Closing,
cooperate and use commercially reasonable efforts to make all registrations,
filings and applications, to give all notices (including any required notices to
works councils and any required consultations with works councils) and to obtain
any governmental approvals, orders, qualifications, licenses, permits and
waivers necessary for the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements; provided, however, that neither Seller,
any Seller Affiliate, any Acquired Company or any JV Company will be required to
make any material monetary expenditure, commence or be a plaintiff in any
litigation or offer or grant any material accommodation (financial or otherwise)
to any Person.
 
     (b) Buyer will use commercially reasonable efforts to take all actions
necessary to make all filings required under all applicable Competition Laws
(the “Competition Law Filings”) with respect to the transactions contemplated by
this Agreement no later than the earlier of the thirtieth (30th) day following
the date of this Agreement and the latest date permitted by applicable Law;
provided that in the case any Competition Law Filing must be made by Seller or
its Affiliates, Seller will make all such filings or cause all such filings to
be made. The Competition Law Filings will be in substantial compliance with the
requirements of the applicable Laws. Each Party will cooperate with the other
Party to the extent necessary to assist the other Party in the preparation of
its Competition Law Filings, to request early termination of the waiting period
required by any of the Competition Laws and, if requested, to promptly amend or
furnish additional information thereunder. In addition, Buyer and Seller will as
promptly as practicable comply with all Laws that are applicable to any of the
transactions contemplated by this Agreement and the Ancillary Agreements and
pursuant to which any consent, approval, advice, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is
necessary (including Competition Laws). Buyer and Seller will furnish to each
other all such information as is necessary to prepare any such registration,
declaration or filing. Buyer and Seller will keep each other apprised of the
status of any communications with, and any inquiries or requests for additional
information from, any Governmental Authority with respect to the transactions
contemplated by this Agreement and the Ancillary Agreements. Buyer and Seller
will bear the costs and expenses of their respective filings contemplated in
this Section 5.2(b); provided, however, that Buyer will pay the filing fees in
connection with any such filings.
 
40
 

--------------------------------------------------------------------------------

     (c) Buyer and Seller each agrees that it will, if necessary to enable
Seller and Buyer to consummate the transactions contemplated by this Agreement
and the Ancillary Agreements, use commercially reasonable efforts to defend
against any lawsuits, arbitrations or other proceedings challenging this
Agreement or any of the Ancillary Agreements or the consummation of the
transactions contemplated by this Agreement or any of the Ancillary Agreements,
including by seeking to vacate or reverse any temporary restraining order,
preliminary injunction or other legal restraint or prohibition entered or
imposed by any court or other Governmental Authority that is not yet final and
nonappealable.
 
     Section 5.3 Conduct of Business.
 
     (a) Prior to the earlier to occur of the Closing or such time as this
Agreement is terminated pursuant to Section 11.1, and except as otherwise
contemplated or permitted by this Agreement (including Sections 5.11, 5.14,
5.15, 5.16, 5.18 and 5.20(b)) or any of the Ancillary Agreements, described in
Section 5.3(a) of the Seller Disclosure Letter, or consented to or approved by
Buyer, Seller agrees that it and the Acquired Companies will operate the
Business only in the ordinary course of business, consistent with past practice,
and use commercially reasonable efforts to preserve the business and
relationships with suppliers and customers of the Business and will not
undertake any of the following with respect to the Business:
 
     (i) acquire any real property;
 
     (ii) dispose of any material Business Assets other than assets not deemed
suitable for production or their uses or intended uses or beyond their useful
lives;
 
     (iii) create an Encumbrance other than a Permitted Encumbrance on any of
the Business Assets;
 
     (iv) enter into any leases of real or personal property or any renewals or
any such lease involving a rental obligation exceeding $100,000 per annum in the
aggregate;
 
     (v) except if required by Law, existing employment agreements or collective
bargaining agreements, increase the rate of compensation or the benefits payable
to any of the Business Employees who are below Grade 14 except for increases in
accordance with past practices, or increase the rate of compensation or benefits
payable to any of the Business Employees who are Grade 14 or above;
 
     (vi) grant to any Business Employees any increase in retention, change in
control, severance or termination compensation or benefits or in any equity or
equity-based compensation relating to any Acquired Company;
 
     (vii) except if required by Law, enter into, amend, modify or terminate any
labor agreement, collective bargaining agreement or other contract with any
labor organization, union or association in respect to the Business Employees;
 
41
 

--------------------------------------------------------------------------------

     (viii) except as required by Law, establish or modify any (i) targets,
goals or similar provisions in respect of any fiscal year under any US Benefit
Plan, Foreign Benefit Plan, employment contract or other compensation
arrangement with or for Business Employees or (ii) salary ranges, guidelines or
similar provisions in respect of any US Benefit Plan, Foreign Benefit Plan,
employment contract or other compensation arrangement with or for Business
Employees, in each case under (i) or (ii) except for establishments or
modifications applicable to the employees covered generally and not
disproportionately affecting Business Employees;
 
     (ix) adopt, amend or terminate any US Benefit Plan or Foreign Benefit Plan
for Business Employees, except to the extent required by applicable Law and
except in connection with adoptions, amendments or terminations applicable to
the covered employees generally and not disproportionately affecting Business
Employees;
 
     (x) make or change any Tax elections or change in method of accounting for
Tax purposes, file any amended Tax Return, enter into any closing agreement
relating to Taxes, or settle or consent to any claim or assessment relating to
Taxes or consent to any waiver of the statute of limitations for any such claim
or assessment, in each case to the extent such action could have a detrimental
effect on any Acquired Company;
 
     (xi) make any new commitment or increase any previous commitment for
capital expenditures for the Business other than (A) in accordance with the
Business’ fiscal years 2010 and 2011 capital expenditure plans previously made
available to Buyer, (B) in connection with the repair or replacement of
facilities destroyed or damaged due to casualty or accident (whether or not
covered by insurance) or (C) otherwise in an aggregate amount for all such
capital expenditures made pursuant to this clause (C) not to exceed $250,000 per
event;
 
     (xii) make any change in any accounting method, practice or principle or in
any system of internal accounting controls, other than as required by applicable
accounting or regulatory authority;
 
     (xiii) sell, transfer, assign, or permit the creation of any Encumbrance
(other than a Permitted Encumbrance) upon, any of the Acquired Company Shares or
JV Company Shares except to or for the benefit of an Acquired Company;
 
     (xiv) enter into, materially amend or terminate any Material Business
Contract, or waive any material right thereunder; or
 
      (xv) enter into any contract or commitment with respect to any of the
foregoing.
 
     (b) Nothing in this Agreement will diminish the Acquired Companies’ sole
title to the Business conducted by them. The provisions of Section 5.3 are not
intended to be, nor will they be construed as, an endeavor on the part of Seller
or Buyer to implement the transactions contemplated by this Agreement or the
Ancillary Agreements prior to the Closing (and satisfaction of the conditions in
Sections 8.1(e) and 8.2(e), including the requirements as to applicable
Competition Laws), and the Parties agree that Buyer will not prior to the
Closing be entitled to exercise any control over the Business and/or affairs of
the Acquired Companies or any of the JV Companies.
 
     (c) Prior to making any new commitment of more than $500,000 or increasing
by more than $500,000 any previous commitment for capital expenditures for the
Business, in each case in accordance with the Business’ fiscal years 2010 and
2011 capital expenditure plans previously made available to Buyer, Seller will
notify Buyer in writing or such intentions.
 
42
 

--------------------------------------------------------------------------------

     Section 5.4 Closing Date Financial Information. For a period of five (5)
years after the Closing Date, upon written request of Seller, Buyer will provide
Seller within twenty (20) Business Days of such request with such computer
support and financial information of the Business as of the Closing Date as
Seller may reasonably request in the format customarily required by Seller or
the Seller Affiliates, and, upon Seller’s request, such financial information
will be accompanied by supplemental financial schedules customarily required by
Seller or the Seller Affiliates or divisions in support of such financial
information. Nothing in this Section 5.4 will require the Acquired Companies to
maintain their existing computer systems.
 
     Section 5.5 Intellectual Property.
 
     (a) Except as specifically set forth in this Section 5.5 or an Ancillary
Agreement, Buyer acknowledges and agrees that nothing in this Agreement grants
or will be deemed to grant to Buyer, any Acquired Company or any JV Company the
right to use or continue to use or acquire any interest in any of the Seller
Guarantor Trademarks and Logos or any of the other Excluded Intellectual
Property.
 
     (b) Seller and the Seller Affiliates have a proprietary interest in the
Seller Guarantor Trademarks and Logos. The Parties recognize that the Business
may have existing signage, supplies and other materials that include the Seller
Guarantor Trademarks and Logos on the Closing Date (“Existing Materials”).
Seller grants the Acquired Companies a royalty-free, non-exclusive license to
use the Seller Guarantor Trademarks and Logos on the Existing Materials, on a
worldwide basis, for a period of 60 days after the Closing Date (“Phase Out
Period”). Buyer agrees that it will not, and will cause the Acquired Companies
to not, use any of the Seller Guarantor Trademarks or Logos in any fashion after
the Effective Time except only as permitted by the provisions of this Section
5.5(b) and Section 5.5(c). Buyer will, and will cause the Acquired Companies to,
take such action as may be necessary or appropriate to change their names to
names which do not use any Seller Guarantor Trademarks or Logos and which are
not confusingly similar to any of the Seller Guarantor Trademarks and Logos as
promptly as reasonably practicable after the Effective Time, but not later than
the end of the Phase Out Period. Buyer will deliver to Seller customary evidence
that such names have been changed as required by this Section 5.5(b) not later
than the end of the Phase Out Period. For purposes of the preceding sentence,
customary evidence shall mean a Governmental Authority acknowledged copy of the
amended formation or charter documents indicating such a change of name. Buyer
further agrees it will not, and will cause the Acquired Companies to not, from
and after the Closing, produce, or have produced, any additional supplies or
other goods bearing any of the Seller Guarantor Trademarks and Logos, without
Seller’s express written permission. In addition, Buyer agrees that it will not,
and it will cause the Acquired Companies to not, use any of the Seller Guarantor
Trademarks and Logos on forms, labels or other items where it would cause
confusion regarding the contracting entity or imply Seller or any of the Seller
Affiliates were conducting activities for which they are not licensed. Upon
expiration of the Phase Out Period, Buyer will, and will cause the Acquired
Companies to, destroy all remaining Existing Materials in their possession or
control. At Seller’s request, Buyer will give Seller reasonably satisfactory
evidence of the destruction of the remaining Existing Materials.
 
     (c) To the extent that any of the Seller Guarantor Trademarks and Logos are
Hard Tooled into any tooling used by any of the Acquired Companies (or any of
their suppliers), Seller agrees to grant to the applicable Acquired Company a
non-exclusive, royalty free license to use such tooling for the production of
components including such Seller Guarantor Trademarks and Logos for a term of
270 days after the Closing; provided, however, if Buyer has made a good faith
effort to remove Seller Guarantor Trademarks and Logos in accordance with the
following sentence, then such period shall be extended for an additional 90
days. Buyer will, or will cause the applicable Acquired Company to, bear all
costs of modifying all tooling so as to remove all Seller Guarantor Trademarks
and Logos (or replacing the tooling). “Hard Tooled” means incorporated into the
tooling in a manner where the tooling must be modified in order for the tooling
to produce components not bearing the Seller Guarantor Trademarks and Logos.
 
43
 

--------------------------------------------------------------------------------

     (d) All use of the Seller Guarantor Trademarks and Logos as permitted by
this Section 5.5 will inure solely to the benefit of Seller. Buyer will not, and
will cause the Acquired Companies to not, claim any title or other proprietary
right to any of the Seller Guarantor Trademarks and Logos by virtue of any
license or right granted under this Section 5.5 or otherwise. Buyer agrees to,
and to cause the Acquired Companies to, use the Seller Guarantor Trademarks and
Logos only in connection with the conduct of the Business, consistent with the
conduct as of the Closing Date, to provide goods and services which meet the
quality standards at least as great as those of Seller, the Acquired Companies
prior to the Closing Date. Buyer will, and will cause the Acquired Companies to,
permit Seller and its authorized representatives, upon reasonable advance
notice, access to all facilities where any of the Seller Guarantor Trademarks
and Logos are used by or on behalf of the Buyer, the Acquired Companies and to
inspect the use by or for the Buyer or the Acquired Companies of the Seller
Guarantor Trademarks and Logos to ensure such quality standards are achieved.
 
     Section 5.6 Commercially Reasonable Efforts to Satisfy Conditions. Seller
and Buyer will each use its respective commercially reasonable efforts to cause
the conditions to its respective obligations set forth in Article VIII to be
satisfied at or prior to Closing.
 
     Section 5.7 Transition Services Agreement. On the Closing Date, Buyer, the
Acquired Companies and Seller will execute and deliver the Transition Services
Agreement pursuant to which they will make available to each other the services
described in the Transition Services Agreement on the terms and conditions as
set forth therein. Except as agreed to in the Transition Services Agreement, at
the Closing, all data processing, finance, accounting, internal audit, tax,
insurance, banking, personnel, corporate, legal, communications, human
resources, facilities management, environmental, engineering, employee safety,
business intelligence, administrative and other services provided to the
Acquired Companies and the JV Companies by Seller and the Seller Affiliates,
including any agreements or understandings (written or oral) with respect
thereto, will terminate without any further action or liability on the part of
the parties to the agreements or understandings. Notwithstanding the foregoing,
in the absence of a written agreement, the provision of any services (similar to
those contemplated by the preceding sentence) by Seller or any Seller Affiliate
to Buyer or any of the Acquired Companies or JV Companies from and after the
Closing will be for the convenience, and at the expense, of Buyer, the Acquired
Companies and the JV Companies only, and will be furnished without any liability
on the part of Seller or such Seller Affiliate.
 
     Section 5.8 Disclaimers.
 
     (a) To the fullest extent not prohibited by mandatory provisions of
applicable Law that cannot be waived by the Parties, and except for the
representations and warranties of Seller contained in Article III of this
Agreement or in the Ancillary Agreements, all representations and warranties
(whether express or implied and whether oral or in writing) made or given by or
on behalf of Seller in connection with any matters related to or connected with
this Agreement, the Acquired Company Shares, the JV Company Shares, the
Business, Business Assets, the Business Locations, or any of the transactions
contemplated by this Agreement are expressly excluded, have no force or effect,
and have not been and will not be relied upon by Buyer.
 
44
 

--------------------------------------------------------------------------------

     (b) Buyer acknowledges and agrees that, except as (and solely to the
extent) specifically set forth in this Agreement and the Ancillary Agreements,
Seller has not made, does not make and specifically negates and disclaims any
representations, warranties, promises, covenants, agreements, assurances or
guaranties of any kind or character whatsoever, whether express or implied, oral
or written, past, present, or future, of, as to, concerning or with respect to:
(i) the nature, quality or condition (financial or otherwise) of the Business,
the Business Assets, or the Business Locations, including any environmental
conditions; (ii) the suitability of the Business Assets or the Business
Locations for any and all activities and uses that Buyer or any Acquired Company
may conduct with such assets or at such locations; (iii) the compliance of or by
the Business Assets or the Business Locations or their operation with any Laws;
(iv) the manner or quality of the construction or materials, if any,
incorporated into the Business Assets or the Business Locations; (v) the manner,
quality, state of repair or lack of repair of the Business Assets or the
Business Locations; (vi) any other matter with respect to the physical condition
of the Business Assets or the Business Locations; and (vii) the habitability,
merchantability, marketability, fitness for particular purpose, or profitability
of the Business Assets, the Business Locations or the Business. Buyer
acknowledges and agrees that Seller makes no representations or warranties
regarding the future performance of the Business, or any estimates, projections,
plans or budgets or similar information furnished to Buyer by or on behalf of
Seller, any Seller Affiliates, any Acquired Company or any JV Company, including
the information made available to Buyer and its representatives in “data rooms”
(virtual or physical) or referred to in the undated Confidential Business
Summary, the Confidential Information Memorandum provided to Buyer on or about
April 28, 2010, any related financial information or any of the management or
other presentations made by or on behalf of Seller, any Seller Affiliate, any
Acquired Company, or any JV Company.
 
     (c) Buyer acknowledges and agrees that (i) it has made its own inquiry and
investigation into, and, based on such inquiry and investigation, has formed an
independent judgment concerning, the Acquired Parent Shares, the other Acquired
Company Shares, the JV Company Shares, the Business, the Business Assets and the
Business Locations, (ii) it has been furnished with or given adequate access to
such information about the Acquired Parent Shares, the other Acquired Company
Shares, the JV Company Shares, the Business, the Business Assets and the
Business Locations as it has requested and (iii) with respect to information
(other than, as to Seller only, the representations and warranties of the Seller
contained in Article III) furnished by Seller, any Seller Affiliate, any
Acquired Company or any JV Company concerning Seller, the Acquired Companies,
the JV Companies, the Business, the Acquired Parent Shares, the other Acquired
Company Shares, the JV Company Shares, the Business Assets, or the Business
Locations, Buyer will not assert any defense to Seller’s enforcement of this
Agreement or any of the Ancillary Agreements nor assert any claim against
Seller, any Seller Affiliate or any of their respective directors, officers,
employees, agents, stockholders, managers, members, consultants, investment
bankers or representatives, or any of their respective heirs, successors, and
assigns (together with Seller, “Seller Parties”) or hold any of the Seller
Parties liable for any inaccuracies, misstatements or omissions.
 
     Section 5.9 Covenant Not to Compete.
 
     (a) Seller agrees that during the Seller Non-Compete Period, neither Seller
nor any of the Seller Affiliates will engage in, manage, operate or have any
controlling ownership interest in any Person which engages in any of the
Restricted Activities anywhere in the world; provided, however, that it will not
be a violation of this Section 5.9(a) for Seller or any Seller Affiliate:
 
     (i) to engage in or to continue to engage in any of the Permitted
Activities anywhere in the world; or
 
     (ii) to acquire a controlling stake in, directly or indirectly, the equity
or assets of, any Person engaged in the Restricted Activities if (x) Seller or
the Seller Affiliate uses reasonable efforts to divest, as soon as reasonably
practicable (and in any event within eighteen (18) months after the closing date
of such acquisition), its interest in such Person engaging in the Restricted
Activities or to cause such Person to stop engaging in the Restricted
Activities; or (y) the annual revenues of such Restricted Activities are not
greater than five percent (5%) of the consolidated revenues of such Person for
the twelve month period ending on the date the controlling stake in the equity
or assets of the Person was acquired.
 
45
 

--------------------------------------------------------------------------------

          None of the provisions of this Section 5.9(a) will operate to
prohibit, hinder, impede or restrict from engaging in any Restricted Activities
in any way, any Person which by way of takeover, acquisition, merger,
combination or similar transaction acquires a controlling or significant
interest in Seller or any of the Seller Affiliates (provided that Seller and the
Seller Affiliates immediately prior to the date of such transactions will
continue to be subject to the provisions of this Section 5.9(a) after any such
transaction).
 
     (b) The “Seller Non-Compete Period” means the period beginning on the
Closing Date and ending, with respect to each applicable legal jurisdiction, on
the earlier of the five (5) year anniversary of the Closing Date and the latest
date on which Seller’s covenant not to compete contained in this Section 5.9
will be legally enforceable in each such legal jurisdiction.
 
     (c) As of and from the date hereof, Seller, on behalf of itself and Seller
Affiliates, agrees that it will not (and will cause Seller Affiliates not to)
form, be a party to, or otherwise have any equity participation in any joint
venture, partnership or other Person formed, incorporated or otherwise created
on or after the date hereof for the purpose of engaging in Restricted Activities
during the Seller Non-Compete Period. To the extent that Seller or any Seller
Affiliate has an interest in a Person and has the right to consent to the
engagement by such Person in Restricted Activities, Seller will, or will cause
Seller Affiliate to, withhold such consent.
 
     (d) Seller agrees that, a period of three (3) years after the Closing Date,
it will not, and will cause the Seller Affiliates to not, directly or
indirectly, take any action to solicit for employment or hire or retain as an
employee, independent contractor or consultant (or cause or seek to cause to
leave the employ of an Acquired Company), any Business Employee who is Grade 14
or above, provided, however, that the foregoing will not prevent (i) a bona fide
public advertisement for employment placed by Seller or any of the Seller
Affiliates not specifically targeted at any such Business Employees that results
in Seller or a Seller Affiliate hiring a Business Employee or (ii) Seller or any
Seller Affiliate from hiring any such Business Employee who has not been
employed by any Acquired Company during the six (6) months preceding the date of
hire. Buyer agrees that, for a period of three (3) years after the Closing Date,
it will not, and will cause its controlled Affiliates (including the Acquired
Companies) to not, directly or indirectly, take any action to solicit for
employment or hire or retain as an employee, independent contractor or
consultant (or cause or seek to cause to leave the employ of Seller or the
Seller Affiliates) any employee of Seller or any Seller Affiliates as of the
Closing Date who is Grade 14 or above, provided, however, that the foregoing
will not prevent (i) a bona fide public advertisement for employment placed by
Buyer or any of its controlled Affiliates (including any Acquired Companies) not
specifically targeted at any such employee that results in hiring of an employee
of Seller or a Seller Affiliate or (ii) Buyer or any of its controlled
Affiliates from hiring any such employee who has not been employed by Seller or
any of the Seller Affiliates during the six (6) months preceding the date of
hire.
 
     (e) If any provision contained in this Section 5.9 will for any reason be
held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability will not affect any other provisions of this
Section, and this Section will be construed as if such invalid, illegal or
unenforceable provision had never been contained in this Agreement. It is in the
intention of the Parties that if any of the restrictions or covenants contained
in this Section 5.9 is held to cover a geographic area or to be for a length of
time which is not permitted by Law, or in any way construed to be too broad or
to any extent invalid, such provision will not be construed to be null, void and
of no effect, but to the extent such provision would be valid or enforceable
under Law, a court of competent jurisdiction will construe and interpret or
reform this Section 5.9 to provide for a covenant having the maximum enforceable
geographic area, time period and other provisions (not greater than those
contained in this Agreement) as will be valid and enforceable under such Law.
 
46
 

--------------------------------------------------------------------------------

     (f) Seller and Buyer acknowledge that the covenants set forth in this
Section 5.9 are an essential element of this Agreement and that, but for the
agreement of Seller and Buyer to comply with these covenants, each of the
Parties would not have entered into this Agreement. Seller and Buyer acknowledge
that this Section 5.9 constitutes an independent covenant that shall not be
affected by performance or nonperformance of any other provision of this
Agreement by any of the Parties. Seller and Buyer agree and acknowledge that
remedies at Law for any breach of this Section 5.9 are inadequate and that in
addition thereto the Parties shall each be entitled to seek equitable relief,
including injunction and specific performance, in the event of any such breach.
 
     Section 5.10 Nondisclosure.
 
     (a) Seller will, and will cause the Seller Affiliates to, for the period
beginning on the Closing Date and ending on the five (5) year anniversary of the
Closing Date, hold in strict confidence and not disclose to any third party, and
not use in violation of Section 5.9, any Confidential Information Related to the
Business. Notwithstanding the foregoing, Seller and the Seller Affiliates will
only be required to use the same standard of care and the same procedures to
hold in confidence and protect against disclosure of such information to any
third party as they use for their own Confidential Information. This Section
5.10(a) does not apply to that part of the Confidential Information Related to
the Business that Seller demonstrates (i) was, is or becomes generally available
to the public other than as a result of a breach of this Section 5.10(a) or any
applicable confidentiality agreement by Seller or any of the Seller Affiliates;
(ii) is developed by Seller or any of the Seller Affiliates after the Closing
independently of and without reference to any of such Confidential Information;
or (iii) becomes available to Seller or any of the Seller Affiliates after the
Closing on a non-confidential basis from a third party not bound by a
confidentiality agreement or any known legal, fiduciary or other obligation
restricting disclosure.
 
     (b) Buyer will, and will cause its controlled Affiliates (including the
Acquired Companies) to, for the period beginning on the Closing Date and ending
on the five (5) year anniversary of the Closing Date, hold in strict confidence
and not disclose to any third party, and not use for any purpose whatsoever, any
Confidential Information of Seller or the Seller Affiliates other than the
Confidential Information Related to the Business. Notwithstanding the foregoing,
Buyer and its controlled Affiliates (including the Acquired Companies) will only
be required to use the same standard of care and the same procedures to hold in
confidence and protect against disclosure of such information to any third party
as the Acquired Companies used for their own Confidential Information as of the
Closing Date. This Section 5.10(b) does not apply to that part of the
Confidential Information of Seller that Buyer demonstrates (i) was, is or
becomes generally available to the public other than as a result of a breach of
this Section 5.10(b) or any applicable confidentiality agreement by Buyer or any
of its controlled Affiliates; (ii) is developed by Buyer, any of its Affiliates
after the Closing independently of and without reference to any of such
Confidential Information; or (iii) becomes available to Buyer or any of its
controlled Affiliates after the Closing on a non-confidential basis from a third
party not bound by a confidentiality agreement or any legal, fiduciary or other
obligation restricting disclosure.
 
     (c) If a Party or its controlled Affiliates is required by Law or valid
court order to make any disclosure that is prohibited or otherwise constrained
by this Section 5.10, the Party will provide the other Party with prompt notice
of such compulsion or request, if not prohibited from doing so by Law or valid
court order, so that it may seek an appropriate protective order or other
appropriate remedy or waive compliance with the provisions of this Section 5.10.
In the absence of a protective order or other remedy, the Party or its
controlled Affiliate may disclose that portion (and only that portion) of the
Confidential Information that the Party or controlled Affiliate is legally
compelled to disclose; provided, however, that the Party or controlled Affiliate
will use reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded by any Person to whom any Confidential Information is
so disclosed. The provisions of this Section 5.10 do not apply to any legal
proceedings between the Parties to this Agreement.
 
47
 

--------------------------------------------------------------------------------

     (d) Notwithstanding any terms or conditions to the contrary in this
Agreement or any other document provided to the Buyer or Seller in connection
with this Agreement, Seller, Buyer, each Acquired Company, their Affiliates, and
each of its employees, representatives and other agents, may disclose to any and
all Persons, without limitation of any kind, the U.S. federal and state income
and franchise tax treatment and U.S. federal and state income and franchise tax
structure of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) relating to such tax treatment or tax
structure.
 
     Section 5.11 Credit Support. Buyer acknowledges that, in the course of the
conduct of the Business, Seller and the Seller Affiliates may have entered into
various arrangements (a) in which guarantees, letters of credit or other credit
arrangements, including surety and performance bonds were issued by, or for the
account of, Seller or a Seller Affiliate or (b) in which Seller and/or a Seller
Affiliate may be the primary or secondary obligors on debt instruments or
financing or other contracts or agreements, in any such case to support or
facilitate Business transactions of any Acquired Company or JV Company. Such
arrangements by such parties are hereinafter referred to as the “Credit Support
Arrangements.” Section 3.22 of the Seller Disclosure Letter contains a list of
the Credit Support Arrangements as of the date of this Agreement. Seller and
Buyer agree that the Credit Support Arrangements are not intended to continue
after the Closing and that Seller and the Seller Affiliates intend to cancel the
Credit Support Arrangements to the extent practicable effective at the Effective
Time. Buyer agrees to replace all Credit Support Arrangements which are letters
of credit effective at the Closing and to use commercially reasonable efforts
(including offering to cash collateralize any such Credit Support Arrangements
to the extent they are cash collateralized as of the date of this Agreement) to
(i) obtain replacement non-letter of credit Credit Support Arrangements, which
will be in effect at the Closing, (ii) repay, or cause the repayment of, all
debt and other obligations to which such non-letter of credit Credit Support
Arrangements relate (and cause the cancellation of such non-letter of credit
Credit Support Arrangements) or (iii) arrange for Buyer or one of its controlled
Affiliates to be substituted as the obligor of such non-letter of credit Credit
Support Arrangements as of the Closing Date and, in each case, obtain the
release of Seller and the Seller Affiliates from any such arrangements. If Buyer
cannot obtain the release of Seller and the Seller Affiliates from any such
Credit Support Arrangements but the Closing still occurs, Buyer will indemnify
and hold Seller and such Affiliates harmless for any Losses incurred by Seller
or such Affiliates from and after the Closing with respect to such Credit
Support Arrangements. Further Buyer acknowledges that there can be no assurances
that the third party obligee of a Credit Support Arrangements will be willing to
accept substitute credit support arrangements from Buyer, the Acquired Companies
or the JV Companies, or if the third party is willing to do so, that it will not
require different or additional collateral or other credit support arrangements.
For greater certainty, there will be no adjustment to the Purchase Price with
respect to any canceled or replaced Credit Support Arrangements.
 
          [RESERVED].
 
     Section 5.13 Insurance.
 
     (a) Buyer acknowledges and agrees that Seller’s insurance polices will not
cover the Acquired Companies or the Business Assets at or after the Effective
Time and Buyer will be required to, and to cause the Acquired Companies to,
obtain their own insurances coverage at and after Effective Time.
 
48
 

--------------------------------------------------------------------------------

     (b) Seller will use commercially reasonable efforts to assist the Acquired
Companies in tendering claims for occurrences prior to the Effective Time to the
applicable insurers under Seller’s insurance policies in effect as of the
Effective Time for the benefit of the Acquired Companies with respect to the
Business that are “occurrence” policies (the “Seller Insurance Policies”) and to
provide the Acquired Companies with any proceeds in a timely fashion of all such
claims made by or with respect to the Business under the Seller Insurance
Policies. Seller does not represent, warrant or covenant that such insurance
policies will provide coverage for any claims that any Acquired Company may
elect to make or that the issuers of such policies will not wrongfully refuse to
honor any such claims. Buyer acknowledges and agrees that the Acquired Companies
will have no rights with respect to claims asserted on or after the Closing
Date, under any insurance policy that is a “claims made” type of policy
maintained by Seller for the benefit of the Acquired Companies with respect to
the Business. Buyer acknowledges that claims under several of the Seller
Insurance Policies are administered by the insurance carrier in such a way that
the insurance carrier makes payments on behalf of the insured for which the
carrier is entitled to reimbursement (the “Carrier Reimbursement”) from Seller,
generally equal to the amount of the applicable deductible for such claim under
the policy. Buyer agrees to promptly (but in no event later than five (5)
Business Days prior to the date on which Seller is obligated to pay any Carrier
Reimbursement) to pay to Seller an amount equal to the Carrier Reimbursement
with respect to claims asserted by the Acquired Companies. Seller may, subject
to the consent of the applicable insurance carrier, require Buyer to pay the
Carrier Reimbursements directly. Buyer will, and will cause the Acquired
Companies to, execute all reasonably required documentation to effect such
direct payment of the Carrier Reimbursement. The Parties will cooperate to
explore the possibility after the Closing Date of adding Acquired Companies as
additional named insureds under the Seller Insurance Policies at Buyer’s
expense.
 
     Section 5.14 Pre-Closing Reorganization Transactions.
 
     (a) Seller will use commercially reasonable efforts to complete the
Pre-Closing Reorganization Transactions materially in accordance with Appendix I
prior to the Effective Time.
 
     (b) To the extent Pre-Closing Reorganization Transactions have not been
completed prior to the Effective Time, Seller and Buyer will cooperate to
complete them. Notwithstanding any other provision of this Agreement, the
Liability of the Acquired Companies that assume Liabilities Related to the
Business from a Seller Affiliate, as part of the Pre-Closing Reorganization
Transactions, to the Seller Affiliate from which such Liabilities were assumed,
but only with respect to such Liabilities for which such Seller Affiliate did
not receive a valid release, shall continue after the Closing.
 
     Section 5.15 Cash Management Transactions. Notwithstanding anything to the
contrary contained in this Agreement or otherwise, at any time and from time to
time prior to the Closing, Seller and the Seller Affiliates will be permitted,
but not required to, remove all Cash from the Acquired Companies. Without
limiting the generality of the foregoing, Seller, the Seller Affiliates, and the
Acquired Companies will be permitted to take various actions at any time and
from time to time prior to or at the Closing with respect to their management of
Cash and the removal of Cash from the Acquired Companies, whether or not in the
ordinary course of business, and these actions may include, by way of example
and not of limitation, capitalization, distributions, incurrence and repayment
of receivables and payables, incurrence and repayment of indebtedness, and other
transactions.
 
49
 

--------------------------------------------------------------------------------

     Section 5.16 Third Party and Intercompany Indebtedness.
 
     (a) Notwithstanding anything to the contrary contained in this Agreement or
otherwise, at any time and from time to time prior to the Closing, Seller, the
Seller Affiliates and the Acquired Companies will be permitted to, but will have
no obligation to, incur or create additional Third Party Indebtedness and repay
or otherwise settle all or any part of Third Party Indebtedness. For greater
certainty, Third Party Indebtedness outstanding at the Effective Time will be
taken into account as a purchase price adjustment as provided in Sections 2.2
and 2.3.
 
     (b) Notwithstanding anything to the contrary contained in this Agreement or
otherwise, at any time and from time to time prior to the Closing, Seller, the
Seller Affiliates and the Acquired Companies will be permitted to, but will have
no obligation to, incur or create additional Intercompany Indebtedness and repay
or otherwise settle all or any part of the Intercompany Indebtedness. For
greater certainty, (i) Section 5.16(c) below applies to the settlement of
Intercompany Seller Indebtedness as of the Effective Time and (ii) there is no
obligation to settle or repay any of the Intercompany Acquired Company
Indebtedness in connection with the Closing and such Intercompany Acquired
Company Indebtedness may remain outstanding in accordance with its terms and
will not be taken into account in any adjustment to the Purchase Price.
 
     (c) Seller will, or will cause the applicable Seller Affiliate or Acquired
Company to use commercially reasonable efforts to, pay or otherwise settle prior
to the Closing Date substantially all Intercompany Seller Indebtedness.
Notwithstanding the foregoing, any amount of Intercompany Seller Indebtedness
that is not settled prior to the Closing Date and is reflected in the Final
Closing Intercompany Seller Indebtedness will be included in the determination
of Intercompany Adjustment Amount pursuant to Section 2.3(d).
 
     Section 5.17 Delivery of Certain Financial Information. (a) Seller will
prepare and deliver to Buyer, not later than two (2) Business Days prior to the
Closing, statements setting forth its good faith estimates of (i) the amount of
Cash of the Acquired Companies that will remain as of the Effective Time (the
“Estimated Cash Amount”), (ii) the amount of the outstanding Third Party
Indebtedness that will remain as of the Effective Time (the “Estimated
Indebtedness Amount”), (iii) the amount of Trade Working Capital as of the end
of the immediately preceding fiscal month (the “Estimated Trade Working Capital
Amount”), (iv) the amount of the Intercompany Seller Account Balances that will
remain as of the Effective Time (which may be a positive or negative number)
(the “Estimated Intercompany Seller Account Balances Amount”) and (v) the amount
of the Intercompany Seller Indebtedness that will remain as of the Effective
Time (which may be a positive or negative number) (the “Estimated Seller
Intercompany Indebtedness Amount”).
 
          (b) Within fifteen (15) Business Days following the end of each month
prior to the Closing, Seller shall provide to Buyer (i) the unaudited
consolidated balance sheet and income statement of the Business as of the end of
such month and (ii) an unconsolidated aging list showing accounts receivable by
reporting locations and customers prepared from the applicable books and records
in accordance with the Accounting Principles and Practices.
 
     Section 5.18 Intercompany Account Balances.
 
     (a) Notwithstanding anything to the contrary contained in this Agreement or
otherwise, at any time and from time to time prior to the Closing, Seller, the
Seller Affiliates and the Acquired Companies will be permitted to, but will have
no obligation to, incur or create additional Intercompany Seller Account
Balances and pay or otherwise settle all or any part of the Intercompany Seller
Account Balances. Seller will, or will cause the applicable Seller Affiliate or
Acquired Company to, use commercially reasonable efforts to pay or otherwise
settle prior to the Closing Date substantially all Intercompany Seller Account
Balances to the extent practical. Notwithstanding the foregoing, any amount of
Intercompany Seller Account Balances that is not settled prior to the Closing
Date and is reflected in the Final Closing Intercompany Seller Account Balances
will be included in the determination of Intercompany Adjustment Amount pursuant
to Section 2.3(d).
 
50
 

--------------------------------------------------------------------------------

     (b) Notwithstanding anything to the contrary contained in this Agreement or
otherwise, at any time and from time to time prior to the Closing, Seller, the
Seller Affiliates and the Acquired Companies will be permitted to, but will have
no obligation to, incur or create additional Intercompany Acquired Company
Account Balances or to pay or otherwise settle all or any part of the
Intercompany Acquired Company Account Balances. For greater certainty, none of
the Intercompany Acquired Company Account Balances will be subject to Section
5.18(a) and instead may remain outstanding in accordance with their respective
terms and will not be taken into account in any adjustment to the Purchase
Price.
 
     Section 5.19 Transactions with Affiliates. Except for (i) the Ancillary
Agreements and the other agreements and instruments required to be delivered
pursuant to this Agreement or any of the Ancillary Agreements and (ii) the
contracts, agreements or licenses disclosed on Section 5.19 of the Seller
Disclosure Letter, all of the contracts Related to the Business between any
Acquired Company or JV Company, on the one hand, and Seller or any Seller
Affiliate, on the other hand, will be terminated effective as of the Effective
Time.
 
     Section 5.20 Business Excluded Assets and Certain Business Assets.
 
     (a) Notwithstanding anything in this Agreement to the contrary, from and
after the Effective Time, Seller and the Seller Affiliates will retain, or have
transferred to them, and the Business Assets will not include, and Buyer and the
Acquired Companies will not have any right, title or interest in, any of the
Business Excluded Assets.
 
     (b) Buyer acknowledges that Seller, the Seller Affiliates and the Acquired
Companies and other Affiliates of Seller may transfer, by way of distribution or
otherwise, any Business Excluded Assets out of the Business prior to Closing and
that it is intended that, to the extent practicable, the Business Excluded
Assets relating to the Business will be transferred out of the Business prior to
Closing. In the event, through inadvertence, mistake or for any other reason,
any Business Excluded Assets are retained by an Acquired Company, Buyer agrees
to, and to cause the Acquired Companies to, notify Seller of that fact and
promptly transfer and deliver the same to Seller or its designee. The Parties
will cooperate to effect any transfer of assets required by the previous
sentence in the most tax efficient manner.
 
     (c) To the extent that any of the Business Assets include rights or assets
that (i) are necessary for the operation of any business of Seller or a Seller
Affiliate other than the Business and (ii) were used by Seller or a Seller
Affiliate prior to the Effective Time, Buyer agrees, to the extent possible, to
(or to cause an Acquired Company to) transfer, convey, assign, license,
sublicense, share or enter into another arrangement with respect to such rights
or assets so that Seller and the Seller Affiliates will have substantially
similar benefits (subject to the burdens) of such rights and assets for such
other business as they had prior to the Effective Time; provided, however, that
the foregoing will not require Buyer (A) to permit Seller or its Affiliates to
use such rights or assets in violation of Section 5.9(a) or (B) to transfer,
convey, assign, license, sublicense or enter into such other arrangement if such
action precludes or materially impairs Buyer’s or an Acquired Company’s use of
such rights or assets in the Business.
 
     Section 5.21 Performance of Obligations. From and after the Effective Time,
Buyer will cause the Acquired Companies to fully pay, discharge, satisfy and
perform when due all of their Liabilities, including but not limited to: (a) the
Liabilities for which they are to be responsible under Article VI and Article
VII; (b) all Liabilities in respect of Shared Contracts to the extent related to
the Business; (c) all Liabilities described in the second sentence of the
definition of Indebtedness to the extent related to the Business; and (d) all
Liabilities assumed by the Acquired Companies under the Pre-Closing
Reorganization Agreements and Instruments.
 
51
 

--------------------------------------------------------------------------------

     Section 5.22 Waiver and Release of Certain Claims. Buyer will, and will
cause the Acquired Companies to, irrevocably waive and release all claims and
rights against Seller, any Seller Affiliate, any officer, director, member,
manager, or employee of Seller or any Seller Affiliate and any Person who was an
officer, director, member or manager of any Acquired Company at any time before
the Closing and who either ceased holding such position before the Closing or
under the terms of this Agreement is to do so in connection with the Closing,
other than claims and rights against Seller under this Agreement or any
Ancillary Agreement.
 
     Section 5.23 Indemnification of Officers, Directors, Employees and Agents
of the Acquired Companies.
 
     (a) From and after the Effective Time, until the sixth (6th) year
anniversary of the Effective Time, the Acquired Companies will not, and Buyer
will cause the Acquired Companies to not, directly or indirectly, amend, modify,
limit or terminate the advancement of expenses, exculpation and indemnification
provisions contained in their charters, bylaws or similar constituent documents
in a manner that would adversely affect the rights of any D&O Indemnified Party
thereunder.
 
     (b) If an Acquired Company or any of its successors or assigns (i)
consolidates with or merges into any other Person and is not the continuing or
surviving corporation or entity of such consolidation or merger, or (ii)
transfers all or substantially all of its assets to any Person, then, and in
each such case, proper provisions must be made prior to any such transaction
being consummated so that the successors and assigns of the Acquired Company
will assume all of the obligations set forth in this Section 5.23.
 
     (c) The provisions of this Section 5.23 are intended to be for the benefit
of, and will be enforceable by, each of the D&O Indemnified Parties. The rights
of the D&O Indemnified Parties under this Section 5.23 will be in addition to
any rights the D&O Indemnified Parties may have under any applicable contracts,
insurance policies or Laws.
 
     Section 5.24 Resignations. At the written request of Buyer delivered to
Seller not later than thirty (30) days before the Closing, Seller will use
commercially reasonable efforts (not involving any payment of any money or any
other financial accommodation and provided that Seller may do so under
applicable Law) to obtain the written resignations, termination agreements,
termination notices or comparable instruments, effective at the Closing, of the
officers, directors, managers or similar members of management of the Acquired
Companies from those positions. For greater certainty, this Section 5.24 will
not affect any terms or conditions of any such Person’s employment with any of
the Acquired Companies.
 
     Section 5.25 Structuring Requests.
 
     (a) At Buyer’s request, Seller shall make an election with respect to any
or all of the Acquired Companies under section 338 of the Code to treat the
acquisitions as asset sales for U.S. federal income tax purposes or to treat any
or all of the Acquired Companies as partnerships for U.S. federal tax purposes
or otherwise use its best efforts to undertake any action requested by Buyer to
maximize Buyer’s basis for U.S. federal income tax purposes in each of the
Acquired Companies, and of the Acquired Companies in their respective assets for
U.S. federal income tax purposes at the Effective Time. If Buyer requests any
action pursuant to this Section 5.25 (“Section 5.25 Action”), the Purchase Price
shall be increased by the Tax Cost resulting from all of the Section 5.25
Actions (including any Tax Cost attributable to the receipt of any increase in
the Purchase Price). Within forty-five days of the receipt of the Allocation
Schedule (as finally determined), Seller will prepare a schedule and report of
the amount of the increase in the Purchase Price resulting from all of the
Section 5.25 Actions (the “Final Section 5.25 Amount”) and will deliver the
schedule and report to Buyer. In the event that Buyer does not accept the Final
Section 5.25 Amount during the Buyer Review Period, Buyer and Seller will
resolve any dispute using the procedures set froth in Section 2.4(f) through
Section 2.4(h). In determining the Final Section 5.25 Amount, it shall be
assumed that the Seller is taxable at the highest marginal Tax rate applicable
to the type of income resulting from any Section 5.25 Action. Buyer shall pay
all of the fees, costs and expenses incurred in connection with the
determination of the Final Section 5.25 Amount. Any services rendered by any
employees of Seller or any Seller Affiliate in connection with the determination
of the Final Section 5.25 Amount shall be considered to be services rendered
pursuant to the Transition Services Agreement. The Final Section 5.25 Amount
will not be considered to be part of the Purchase Price for purposes of the last
sentence of Section 2.2(a).
 
52
 

--------------------------------------------------------------------------------

     (b) Buyer, Seller, and their respective Affiliates shall cooperate with
each other to the extent necessary (including making any required elections) to
permit Buyer to treat wages paid to all employees of Seller prior to the Closing
who become employees of Buyer or its Affiliates subsequent to the Closing as
having been paid by the Buyer as successor employer solely for the purposes of
Section 3121(a)(1) of the Code and any related employment or withholding tax
provisions of any relevant Tax law.
 
     (c) Notwithstanding Section 2.6 of this Agreement, Buyer shall pay all
Transfer Taxes as a result of or relating to any Section 5.25 Action (“Section
5.25 Transfer Taxes”). In the event that any Section 5.25 Transfer Taxes of
whatsoever nature are imposed on Seller and/or any Seller Affiliate by a Taxing
Authority, the Purchase Price will be grossed up by the applicable Transfer
Taxes so their burden is entirely borne by Buyer. In the event that any Section
5.25 Transfer Taxes of whatsoever nature are imposed on Seller and/or any Seller
Affiliate by a Taxing Authority after the Purchase Price has been paid, Buyer
shall within seven (7) days of a notice from Seller and/or any Seller Affiliate
informing Buyer of such Section 5.25 Transfer Tax, pay the amount of Transfer
Taxes claimed by the Taxing Authority to the Seller and/or the Seller Affiliate.
Buyer will duly and timely prepare and file any notices, returns or other
filings required in any jurisdiction with respect to any Section 5.25 Transfer
Taxes. Buyer will deliver copies to Seller a reasonable time before the notices,
returns or other filings are due for its review and will promptly deliver to
Seller copies of all such notices, returns and filing once filed and evidence of
payment of all Section 5.25 Transfer Taxes.
 
     Section 5.26 Withholding Form. Seller shall deliver to Buyer prior to the
Closing a certificate, in form and substance satisfactory to Buyer and
consistent with Treasury Regulation Section 1.897-2(h), certifying that the
Acquisition is exempt from withholding pursuant to the Foreign Investment in
Real Property Tax Act.
 
     Section 5.27 Bank and Brokerage Accounts. At least two weeks before the
Closing Date, Seller will provide Buyer with (a) a true and complete list of the
names and locations of all banks, trust companies, securities brokers and other
financial institutions at which any Acquired Company has an account or safe
deposit box or maintains a banking, custodial, trading or other similar
relationship; and (b) a true and complete list and description of each such
account, box and relationship, indicating in each case the account number and
the names of the respective officers, employees, agents or other similar
representatives of any Acquired Company having signatory power with respect
thereto.
 
53
 

--------------------------------------------------------------------------------

     Section 5.28 Escrow Deposit. Buyer agrees to deposit the full Deposit
Amount with the Escrow Agent not later than 5:00 p.m., ET, on the date of this
Agreement (the “Escrow Deposit Deadline”). The Deposit Amount will be held and
administered by the Escrow Agent in accordance with the Deposit Escrow
Agreement.
 
     Section 5.29 Distribution of Restricted Cash. On or prior to Closing,
Seller will use commercially reasonable efforts to cause ArvinMeritor CVS
(Shanghai) Ltd., Meritor LVS Zhenjiang (II) Co., Ltd., Arvin Innovation
Automotive Systems Changchun Company Limited, and ArvinMeritor do Brasil
Comercio de Sistemas de Portas Ltda. (the “Restricted Companies”) to distribute
to Seller or a Seller Affiliate all Cash held by them other than Restricted
Cash. Any Cash not so distributed by the Restricted Companies to Seller or a
Seller Affiliate prior to Closing will be deemed to be Restricted Cash. As soon
as practicable following the Closing and subject to and in accordance with all
applicable Laws (including liquidity requirements), Buyer will (i) cause the
Restricted Companies to dividend or otherwise distribute the maximum amount of
such Restricted Cash resulting from pre-Closing earnings as are permitted to be
dividended or distributed under such Laws and (ii) promptly remit such
dividended or distributed amount to Seller, net of any income, withholding or
other Taxes, bank charges, currency conversion charges or other costs payable to
non-Affiliates of Buyer which are reasonably incurred or payable by Buyer, any
Affiliate of Buyer, or any Acquired Company in connection with such dividend,
distribution or remittance. Buyer’s obligation under this Section 5.21 to cause
the Restricted Companies to dividend or distribute, and remit to Seller,
Restricted Cash will not expire until such time as all Restricted Cash shall
have been so dividended or distributed. Following the date hereof, the Parties
will cooperate to determine whether Cash held in jurisdictions other than China
and Brazil is subject to similar restrictions as the Restricted Cash and, if so,
the Parties will enter into an appropriate amendment to this Agreement to afford
similar treatment to such Cash in other jurisdictions, if any.
 
     Section 5.30 Provision of Tax Information. Seller will use commercially
reasonable efforts to provide to Buyer, on or prior to September 2, 2010, the
following information as of September 30, 2009: (i) the basis of each Acquired
Company in the following categories of assets: (A) depreciable property; (B)
good will and going concern value; (C) inventory and (D) other assets, (ii) each
Acquired Company’s basis in the stock of its subsidiaries, provided, however,
that Buyer acknowledges that Seller may not be able to provide such information
for all of the Acquired Companies, (iii) the amount of any net operating losses,
net capital losses, unused investment or other credits, unused foreign Tax, or
excess charitable contributions of each Acquired Company that is a corporation
organized under the laws of a jurisdiction within the United States of America
(“US Corporation”), and any limitations thereon, and (iv) the amount of any
deferred gain or loss allocable to each Acquired Company that is a US
Corporation which is part of a consolidated group to the extent arising out of
any prior intercompany transactions.
 
     Section 5.31 Transition Services Agreement. Buyer and Seller shall
negotiate in good faith a transition services agreement (the “Transition
Services Agreement”) containing usual and customary terms, including limitations
on the potential liability of service providers, to be executed and delivered by
Buyer and Seller at the Closing.
 
     Section 5.32 Proposed Alabama JV with PHA. Prior to Closing, Buyer will be
entitled to participate in any negotiations between the Business and Pyeong HWA
Automotive Company Ltd. (“PHA”) with respect to any joint venture between the
Business and PHA in Montgomery, Alabama involving the contribution, transfer or
use of certain Business Assets to or by such joint venture (the “PHA JV”). No
binding agreement with respect to the PHA JV will be executed without the prior
written consent of Buyer, which consent will not be unreasonably withheld.
Notwithstanding any other provision of this Agreement, any consideration
(whether Cash or otherwise) provided to any Acquired Company in exchange for
such contribution, transfer or use of such Business Assets will, as of the
Closing, continue to be held by such Acquired Company, free and clear of all
Liens other than Permitted Encumbrances, and to the extent such consideration
consists of Cash, such Cash will not be included in the calculation of the
Estimated Cash Amount, the Cash Adjustment Amount, the Final Closing Cash
Amount, the Closing Payment or the Purchase Price.
 
54
 

--------------------------------------------------------------------------------

     Section 5.33 Notice of Possible Failure to Comply with Covenants. Buyer and
Seller shall promptly notify the other Party if and when Buyer or Seller, as the
case may be, believes the other Party to not be materially complying with its
covenants contained in this Agreement.
 
ARTICLE VI
 
TAX MATTERS
 
     Section 6.1 Prior Period Returns. Following the Closing, Seller will cause
to be timely prepared and filed with respect to the Acquired Companies all Tax
Returns the due date for filing of which, determined taking into account
extensions, is on or before the Closing Date (the “Prior Period Tax Returns”).
The Prior Period Tax Returns will be prepared in a manner consistent with
applicable law and Seller’s past practices. Seller will pay all Taxes shown to
be due on such Prior Period Tax Returns and will be entitled to all refunds and
overpayments of Taxes related to such Prior Period Tax Returns. Buyer will make
available to Seller (and to Seller’s accountants, tax advisors and attorneys)
any and all books and records and other documents and information in its
possession or control relating to the Acquired Companies reasonably requested by
Seller to prepare the Prior Period Tax Returns. Neither Buyer nor following the
Closing, any of the Acquired Companies, may amend any Tax Return for which
Seller may have any liability including, but not limited to, for
indemnification, without Seller’s prior written consent.
 
     Section 6.2 Post Closing Returns and Straddle Period Tax Returns.
 
     (a) Except as provided in Section 6.2(b), following the Closing, Buyer will
cause to be prepared and filed all Tax Returns required to be filed with respect
to the Acquired Companies the due date for filing of which, determined taking
into account extensions, is after the Closing Date. Buyer will prepare all
Straddle Period Tax Returns in a manner consistent with Seller’s past practices.
 
     (b) With respect to Straddle Period Taxes only, Seller will reimburse Buyer
for the portion of Taxes allocable to the Pre-Closing Period of the Straddle
Period. Such reimbursement will be reduced by amounts paid or considered to have
been paid by Seller or the Acquired Companies prior to Closing in respect of
such Taxes, including amounts paid in respect of estimated Taxes and
overpayments and credits relating to previous periods that may be applied in
respect of such Taxes. With respect to such Taxes, if the amounts paid or
considered to have been paid by Seller exceed the Tax allocable to the
Pre-Closing Period of such Straddle Period, Buyer will pay such excess amount to
Seller at the close of the Straddle Period relating to that Tax. Except as
provided in the following sentence, Taxes for any Straddle Period allocable to
the Pre-Closing Period will be the Tax liability determined on the basis of an
interim closing of the books as of the close of business on the Closing Date.
Real, personal and intangible property Taxes (“Property Taxes”) of the Acquired
Companies for the Pre-Closing Period shall equal the Property Taxes for such
Straddle Period multiplied by a fraction, the numerator of which is the number
of days during the Straddle Period that are in the Pre-Closing Period and the
denominator of which is the number of days in the Straddle Period.
 
55
 

--------------------------------------------------------------------------------

     (c) Buyer will deliver to Seller, for its review and comment, a draft of
each Straddle Period Tax Return at least thirty (30) days prior to the
applicable filing deadline of such Straddle Period Tax Return, together with a
proposed calculation of the Taxes allocable to the Pre-Closing Period of such
Straddle Period. Such Straddle Period Tax Returns and proposed calculation will
be binding on Seller, unless, within fifteen (15) days following receipt
thereof, Seller delivers to Buyer written notice of any objection with respect
to the calculation of Taxes for such Straddle Period Tax Return or the portion
of such Taxes allocable to the Pre-Closing Period. If Buyer and Seller are
unable to resolve any disputes with respect to such calculations within fourteen
(14) days following delivery of Seller’s written notice of objection, such
dispute will be submitted to the CPA Firm for resolution, which resolution will
be final and binding upon the parties. The fees and expenses of the CPA Firm in
connection with its review and resolution of the dispute will be allocated 50%
to Buyer and 50% to Seller. If the CPA Firm is unable to make its determination
with respect to any disputed item prior to the due date (including any extension
thereof) for filing such Straddle Period Tax Return, then Buyer may treat such
item, solely for purposes of filing the applicable Straddle Period Tax Return,
as it determined in its sole discretion, and may cause the Straddle Period Tax
Return to be filed; provided, however, that, in such case, the CPA Firm will
make its determination with respect to the disputed items and the determination
of the CPA Firm will control the rights of the parties under this Agreement.
 
     Section 6.3 Seller’s Indemnity for Tax Matters.
 
     (a) Following the Closing, except as otherwise provided in Section 6.3(c),
Seller will indemnify and hold Buyer and the Acquired Companies and each of
their respective officers, directors, employees, stockholders, agents and
representatives (the “Buyer Indemnitees”) harmless on an after-Tax basis from
and against (i) all liability for Taxes of the Acquired Companies with respect
to any Pre-Closing Period and the Pre-Closing Period of the Straddle Period
which Taxes are shown to be due on Tax Returns for such periods or which result
from an examination or audit conducted by a Taxing Authority, (ii) all liability
(as a result of Treasury regulation section 1.1502-6(a), any analogous
provision, or otherwise) for Taxes of any corporation which is or has ever been
affiliated with an Acquired Company or with whom an Acquired Company otherwise
joins, has ever joined, or is or has ever been required to join, in filing any
consolidated, combined or unitary Tax Return prior to the Closing Date, and
(iii) all liability for reasonable legal fees and expenses attributable to any
item in the foregoing clauses.
 
     (b) The indemnification obligation of Seller with respect to Taxes is
limited to the amount of cash actually disbursed by Buyer or the Acquired
Companies following utilization, to the extent permitted, of any loss
carryovers, credits or other attributes available for Tax purposes to the
Acquired Companies (provided that for purposes of calculating the cash actually
disbursed by Buyer or the Acquired Companies, the Parties shall disregard the
impact of any items of loss, deductions or other Tax items of any Acquired
Company (or any of their respective Affiliates, including Buyer) which are
attributable to a Post-Closing Period).
 
     (c) The indemnification obligation of Seller does not include any amount
which would not have arisen but for (i) any action taken by the Acquired
Companies following the Closing Date or (ii) any action taken by Buyer following
the Closing Date including, but not limited to, the amendment of any Tax Return
(even if Seller has provided its prior written consent thereto).
 
     (d) Any indemnity payment to be made under this Section 6.3 shall be paid
within 10 days after the indemnified party makes written demand upon the
indemnifying party, but in no case earlier than 5 business days prior to the
date on which the relevant Taxes are required to be paid to the relevant Taxing
Authority (including estimated Tax payments).
 
     Section 6.4 Certain Refunds. Following the Closing, Buyer will pay to
Seller the amount of any refund, realized Tax credit or similar benefit
available to or realized by, or with respect to, any of the Acquired Companies
with respect to a Pre-Closing Period. Such amounts will be paid within five (5)
Business Days after receipt or realization, whichever first occurs.
Notwithstanding the foregoing, however, any such refund or credit shall be for
the account of Buyer to the extent that such refunds, credits, or similar
benefits are attributable to the carryback from a Post-Closing Period of items
of loss, deductions or other Tax items of any Acquired Company (or any of their
respective Affiliates, including Buyer). Any refund or credit of Taxes of an
Acquired Company for any Post-Closing Period shall be for the account of Buyer.
Any refund or credit of Taxes of an Acquired Company for any Straddle Period
shall be equitably apportioned between Seller and Buyer. Each party shall, or
shall cause its Affiliates to, forward to any other party entitled under this
Section 6.4 to any refund or credit of Taxes any such refund within 10 days
after such refund is received or reimburse such other party for any such credit
within 10 days after the credit is allowed or applied against other Tax
liability. The control of the prosecution of a claim for refund of Taxes paid
pursuant to a deficiency assessed subsequent to the Closing Date as a result of
an audit shall be governed by the provisions of Section 6.7.
 
56
 

--------------------------------------------------------------------------------

     Section 6.5 Buyer’s Indemnity and other Obligations for Tax Matters.
 
     (a) Buyer will pay and indemnify and hold harmless Seller and its
Affiliates from and against any Taxes of the Acquired Companies with respect to
any Post-Closing Period which Taxes are shown to be due on Tax Returns for such
periods or which result from an examination or audit conducted by a Taxing
Authority and all liability for reasonable legal fees and expenses attributable
to any Tax for which Buyer provides indemnification.
 
     (b) Buyer will pay and indemnify and hold harmless Seller and its
Affiliates from and against any Tax to the extent the liability would not have
arisen or would have been reduced or eliminated but for any act or transaction
by Buyer or any of the Acquired Companies, in each case following the Closing,
or but for any failure or omission by Buyer or any of the Acquired Companies, in
each case following the Closing, to make a claim, election, surrender or
disclaimer or to give any notice or consent or to do any other thing relating to
such Tax (including making a claim to any third party).
 
     (c) If Buyer or any of the Acquired Companies is entitled to recover from a
Taxing Authority or any other person an amount for which indemnification has
been provided and paid by Seller, Buyer shall pay Seller an amount equal to the
lesser of the amount which Buyer or any of the Acquired Companies is entitled to
recover or the amount for which indemnification has been provided and paid by
Seller.
 
     (d) Any indemnity payment to be made under this Section 6.5 shall be paid
within 10 days after the indemnified party makes written demand upon the
indemnifying party, but in no case earlier than 5 business days prior to the
date on which the relevant Taxes are required to be paid to the relevant Taxing
Authority (including estimated Tax payments).
 
     Section 6.6 Cooperation and Information. Seller and Buyer will provide each
other with such cooperation and information as may be reasonably requested of
the other in filing any Tax Return, amended Tax Return or claim for refund,
determining a liability for Taxes or a right to a refund of Taxes or
participating in or conducting any audit or other proceeding or dispute in
respect of Taxes. Without limiting the generality of the foregoing, each of
Buyer and Seller will use commercially reasonable efforts to cooperate with and
assist the other party in minimizing its indemnification obligation hereunder
with respect to Taxes. (For clarification, Buyer’s efforts will include causing
the Acquired Companies to take such actions.) Each of the Seller and Buyer will
make themselves (and their respective employees) reasonably available on a
mutually convenient basis to provide explanations of any documents or
information provided hereunder.
 
     Section 6.7 Notice.
 
     (a) Each party entitled to an indemnity payment pursuant to Section 6.3 or
Section 6.5 hereof (a “Tax Indemnified Party”), agrees to give written notice to
the indemnifying party (the “Tax Indemnitor”) of any written notice received by
the Tax Indemnified Party or an Affiliate of such Tax Indemnified Party which
involves the assertion of any claim, or the commencement of any audit, suit,
action or proceeding (collectively, a “Tax Claim”) in respect of which indemnity
may be sought (an “Indemnifiable Tax”) within 10 days of such receipt or such
earlier time as would allow the Tax Indemnitor to timely respond to such Tax
Claim. The Tax Indemnified Party will give the Tax Indemnitor such information
with respect to the Tax Claim as the Tax Indemnitor may reasonably request.
 
57
 

--------------------------------------------------------------------------------

     (b) Control of Proceedings. Seller shall control all proceedings taken in
connection with any Tax Claim relating solely to Taxes of the Acquired Companies
for a Pre-Closing Period, and may make all decisions in connection with such Tax
Claim, provided, however, that (A) Buyer and counsel of its own choosing shall
have the right to participate fully in all aspects of the prosecution or defense
of such Tax Claim, and (B) Seller shall not settle any such Tax Claim without
prior written consent of Buyer, which consent will not be unreasonably withheld.
Seller and Buyer shall jointly control all proceedings taken in connection with
any Tax Claim relating solely to Taxes of the Company or any Subsidiary for a
Straddle Period, and neither party shall settle any such Tax Claim without the
written consent of the other party. Buyer shall control all proceedings with
respect to all other Tax Claims, unless such proceedings could result in an
obligation of Seller to Buyer under Section 6.3, in which case (A) Seller and
counsel of its own choosing shall have the right to participate fully in all
aspects of the prosecution or defense of such Tax Claim, and (B) Buyer shall not
settle any such Tax Claim without prior written consent of Seller which consent
will not be unreasonably withheld.
 
     Section 6.8 Disputes. If Buyer and Seller are unable to resolve any
disputes arising under this Article VI, such dispute will be submitted to an
independent and internationally recognized firm of independent public
accountants mutually agreed upon by Seller and Buyer or, if they are unable to
mutually agree within such thirty (30) day period, each will appoint one such
firm and the two (2) selected firms will select the firm of independent public
accountants (the “Tax Firm”) for resolution, which resolution will be final and
binding upon the Parties. The fees and expenses of the Tax Firm in connection
with its review and resolution of the dispute will be allocated 50% to Buyer and
50% to Seller. The Tax Firm may, but need not, be the same as the CPA Firm.
 
     Section 6.9 Effect of Payments. All indemnity payments pursuant to this
Agreement will be treated for tax purposes as an adjustment to the Purchase
Price.
 
     Section 6.10 Allocation of Purchase Price.
 
     (a) Buyer will complete a draft schedule (the “Allocation Schedule”)
allocating the Purchase Price with respect to any Acquired Companies the
acquisition of which is treated as an asset sale for federal income tax purposes
among the acquired assets and will provide a copy to Seller within 120 days
following the Closing Date.
 
     (b) Seller shall notify Buyer within 10 days after the receipt thereof if
it considers the amount allocated to any assets to be inconsistent with section
1060 of the Code. Seller and Buyer shall attempt to resolve any disagreement in
good faith. If Seller and Buyer fail to reach agreement as to an alternative
allocation in the 10 days following such notice, the dispute with respect to the
Allocation Schedule shall be presented on the next Business Day to a nationally
recognized independent accounting firm mutually chosen by Buyer and Seller, and
if Buyer and Seller cannot agree, mutually chosen by their respective
independent accounting firms, for a decision. The independent accounting firm’s
decision shall be final and binding on all parties. Subject to Section 5.25, the
fees, costs and expenses incurred in connection therewith shall be shared in
equal amounts by Buyer and Seller.
 
58
 

--------------------------------------------------------------------------------

     (c) Buyer and Seller shall file, and cause their respective Affiliates to
file, all Tax Returns and statements, forms and schedules in connection
therewith in a manner consistent with the Allocation Schedule and shall take no
position inconsistent therewith, unless, and then only to the extent, required
to do so by a Final Determination. Buyer and Seller shall exchange completed and
executed copies of Internal Revenue Service Forms 8023 and 8883, any required
schedules thereto, and any similar state, local and foreign forms, not later
than 30 days prior to the filing date.
 
ARTICLE VII
 
EMPLOYEE MATTERS
 
     Section 7.1 Employees.
 
     (a) The term “Business Employees” means the employees of the Acquired
Companies as of the Effective Time including, but not limited to, those
employees on leave of absence, layoff status, disability or medical leave or who
otherwise have the right to return to employment under such Acquired Company’s
policies or Law as of the Effective Time. At least two (2) weeks prior to the
Closing Date, Seller will provide to Buyer a true and correct list of the
Business Employees as of the date of the list, provided, however, that the list
will be subject to change between the date of the list and the Closing Date.
 
     (b) Immediately following the Closing, Buyer will cause the Acquired
Companies to continue to employ the Business Employees.
 
     (c) Prior to Closing, Seller and Sellers Affiliates will (i) transfer to
one or more Acquired Companies those employees of Seller or a Seller Affiliate
who are principally related to the Business but are not currently employed by an
Acquired Company and (ii) cause the Acquired Companies to transfer to a Seller
Affiliate those employees of the Acquired Companies who are not principally
related to the Business. Any employees not transferred to an Acquired Company as
of the Effective Time will not be considered a Business Employee.
 
     (d) The employment of each Business Employee or the continuation thereof,
as applicable, shall be effective as of the Effective Time. Buyer shall provide
(or shall cause to be provided) to each Business Employee until December 31,
2011 or such longer period as may be required by Law or contract, (i) employee
compensation (including salary and bonus) and benefit plans, programs and
policies (including, but not limited to, retirement, pension, savings, health,
medical, dental, vision, retiree medical, life insurance, severance and
disability plans, programs and policies) and fringe benefits that are
substantially equivalent in the aggregate to, or the same as or greater than if
required by Law or contract, those provided to such employee immediately prior
to the Closing Date, including, but not limited to, the severance agreements and
any other severance plans or programs applicable to the Business and (ii) terms
and conditions of employment, job responsibility and location on substantially
equivalent terms to, or the same as or greater than if required by Law or
contract, those in effect immediately prior to the Closing Date. Buyer shall
further provide benefit plans in accordance with Section 7.5 of this Agreement.
Neither Buyer nor any Acquired Company shall be obligated to employ any Business
Employee for any period of time and nothing herein shall limit the right of
Buyer and the Acquired Companies to terminate the employment of any Business
Employee at any time following the Effective Time.
 
     (e) Notwithstanding anything in this Article VII to the contrary, Seller
will, prior to Closing, cause the Acquired Companies to transfer to Seller or a
Seller Affiliate the following Liabilities (“Non-Business Employee
Liabilities”);
 
59
 

--------------------------------------------------------------------------------

     (i) sponsorship of and any and all Liabilities arising under or pursuant to
the benefit plans listed in Section 7.1(e)(i) of the Seller Disclosure Letter
(the “Seller Benefit Plans”); 
 
     (ii) any and all Liabilities arising under, pursuant to or in connection
with the ArvinMeritor UK Pension Scheme – LVS Section (Defined Benefit Plan)
which is maintained, sponsored or administered by Seller or its Affiliates in
the UK or for the benefit of current or former UK employees of Seller or its
Affiliates;
 
     (iii) any and all Liabilities arising under, pursuant to or in connection
with any pension scheme or arrangement for retirees of the Seller’s or its
Affiliates’ light vehicle systems (LVS) Brussels facility which was previously
closed; 
 
     (iv) any and all Liabilities arising under, pursuant to or in connection
with any German pension plan, scheme or arrangement (1) for current retirees of
Seller or it Affiliates, and (2) for any other current and former employees
whose employment with Seller or its Affiliates terminates prior to the Effective
Time, provided however, that for clarification the foregoing does not include
any Liabilities arising under, pursuant to or in connection with any German
pension plan, scheme or arrangement for any Business Employees; 
 
     (v) any and all Liabilities that arise or have arisen out of, or relate or
are or were related to, any current or former employees of Seller or any of its
Affiliates who are not current or former Business Employees or former employees
of the Acquired Companies, whether now existing or hereafter arising and whether
arising out of occurrences, events or incidents occurring before, on or after
the Effective Time or in respect of any of their respective beneficiaries or
dependents, including, but not limited to, any and all such Liabilities that
have arisen or may arise under, pursuant to or in connection with the Foreign
Benefit Plans or US Benefit Plans or any collective bargaining agreement or
labor contract; 
 
     (vi) any and all Liabilities for transaction-related success, retention and
other bonuses, if any, payable or to be provided to any Business Employees or
other current or former personnel of Seller or its Affiliates in connection with
the transactions contemplated hereby which were agreed to by Seller or any of
its Affiliates prior to the Effective Time; and 
 
     (vii) any and all Liabilities for which Seller or any of its Affiliates is
to be specifically responsible for under this Article VII.
 
     (f) Buyer shall be responsible for, or the Acquired Companies shall be and
remain liable for (as between the Seller, on the one hand, and the Buyer and
Acquired Companies, on the other hand), any and all Liabilities that arise or
have arisen out of, or relate or are or were related to, the Business Employees
or the former employees of the Acquired Companies, whether now existing or
hereafter arising and whether arising out of occurrences, events or incidents
occurring before, on or after the Effective Time or in respect of any of their
respective beneficiaries or dependents except for Non-Business Employee
Liabilities.
 
     Section 7.2 Severance and Other Benefits.
 
     (a) Buyer shall, or shall cause the Acquired Companies, to honor and
fulfill in accordance with their respective terms as in effect as of the date
hereof or as may be amended or terminated after the date hereof and prior to the
Closing Date with the prior written consent of Buyer, the severance, separation
and deferred compensation obligations of the Acquired Companies except to the
extent any such payments or benefits constitute Non-Business Employee
Liabilities.
 
60
 

--------------------------------------------------------------------------------

     (b) Buyer shall, or shall cause the Acquired Companies, to give Business
Employees service credit for all periods of employment to the Effective Time
with Seller and any of its Affiliates or any predecessor employer (to the extent
such credit was recognized by Seller or any of its Affiliates or any predecessor
employer immediately prior to the Effective Time) for eligibility and vesting
(but not benefit accrual purposes in the case of Non-Business Employee
Liabilities) under all Buyer Benefit Plans; provided that such service need not
be credited to the extent it would result in a duplication of benefits.
 
     Section 7.3 Welfare Plans. Seller shall assume from the Acquired Companies
and be responsible for (i) claims for the type of benefits described in Section
3(1) of ERISA (whether or not covered by ERISA) that are incurred prior to the
Effective Time by Business Employees in the United States (“US Business
Employees”), (ii) workers compensation benefits for claims that are incurred
prior to the Effective Time by US Business Employees, and (iii) claims relating
to “COBRA” coverage attributable to “qualifying events” occurring prior to the
Effective Time with respect to US Business Employees and their beneficiaries and
dependents. Buyer shall be responsible for, or the Acquired Companies shall be
and remain liable for (as between the Seller, on the one hand, and the Buyer and
Acquired Companies, on the other hand), (i) disability benefits and workers
compensation benefits for US Business Employees for claims incurred on or after
the Effective Time, and (ii) claims relating to COBRA coverage attributable to
“qualifying events” occurring on or after the Effective Time with respect to US
Business Employees and their beneficiaries and dependents. For purposes of the
foregoing, a medical/dental claim shall be considered incurred when the medical
services are rendered or medical supplies are provided, and not when the
condition arose, provided that claims relating to a hospital confinement that
commences prior to the Effective Time but continues thereafter shall be treated
as incurred prior to the Effective Time. A workers compensation claim shall be
considered incurred when the claim is formally reported, and a death benefit
claim shall be considered incurred when death occurs. A workers compensation
claim shall be considered formally reported on the earlier of the date the US
Business Employee has provided a written claim to the employer, or the date
reflected in the US Business Employee’s personnel record on which the employee
orally reported to the employer that he or she would be filing a workers
compensation claim. A claim resulting in short-term or long-term disability
benefits shall be considered incurred as of the date of the employee’s absence
from work as a result of the injury or conditions giving rise to such claim,
which absence is most proximate in terms of elapsed calendar days, to the date
the claim is formally reported.
 
     Section 7.4 WARN. Buyer shall be solely responsible for any and all
obligations and Liabilities in respect of the Business Employees arising under
WARN if Buyer or any Acquired Company takes any action after the Closing Date
which independently or in connection with any reduction in size of the Business’
workforce occurring within the 90 day period prior to the Closing Date could be
construed as a “mass layoff” or “plant closing” (as defined in WARN), including
any Liabilities imposed or incurred as a result of Buyer’s failure to give any
requisite notice under the WARN, provided that Seller gives, at Buyer’s request,
WARN notices (in a form acceptable to Buyer) prior to the Closing Date to
employees of the Business with respect to whom Buyer requests such notices to be
given.
 
     Section 7.5 Buyer’s Benefit Plans.
 
     (a) Buyer acknowledges that certain Acquired Companies do not maintain
independent benefit plans that will continue as of or following the Effective
Time. In such cases, Buyer shall use commercially reasonable efforts to
establish or make available, as of the Effective Time, replacement employee
benefit plans which shall provide retirement, pension, savings, health, medical,
dental, vision, retiree medical, life insurance, severance and disability
coverage (“Buyer’s Benefit Plans”) for the Business Employees in each case on
terms and conditions substantially equivalent to the employee’s current terms
and conditions of employment (except (i) in respect of Foreign Benefit Plans
administered in the United Kingdom which are not contractual where the Buyer
must instead comply with the requirements of the Pensions Act 2004 and the
Welfare Reform and Pensions Act 1999 and any regulations made thereunder and
make some provision for pension benefits post Closing Date and (ii) except in
the case of any additional or greater rights that may be required by Law).
Business Employees shall be given service credit under Buyer’s Benefit Plans in
accordance with Section 7.2(b), including credit for service with Buyer or any
of their Affiliates on or following the Effective Time but prior to the time
such Business Employee becomes such a participant. Buyer shall also use
commercially reasonable efforts to cause such service to also apply for purposes
of satisfying any waiting periods, evidence of insurability requirements or the
application of any pre-existing condition limitations under Buyer’s group health
plans. Furthermore, Business Employees shall be given credit for amounts paid
under a corresponding employee benefit plan during the same period for purposes
of applying deductibles, co-payments, and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of the
comparable Buyer’s Benefit Plans.
 
61
 

--------------------------------------------------------------------------------

     (b) Seller shall not be responsible for nor have any obligations or
Liabilities with respect to Buyer’s Benefit Plans. Prior to the Closing Seller
shall, or shall cause a Seller Affiliate (other than the Acquired Companies) to
use commercially reasonable efforts to take all actions to ensure that the
participation and liabilities in respect of all participants in Foreign Benefit
Plans and US Benefit Plans (other than the Seller Benefit Plans or other benefit
plans to be retained by Seller or a Seller Affiliate) and collective bargaining
agreements who are not current or former employees of the Business (and their
respective dependents and beneficiaries) are transferred to a plan that is not a
Foreign Benefit Plan or US Benefit Plan or to a Seller or Seller Affiliate
(other than the Acquired Companies) except to the extent limited by Law.
 
     Section 7.6 Compliance with Collective Bargaining Agreements. Nothing in
this Article VII shall be construed to relieve or limit the Acquired Company’s
obligations under the collective bargaining agreements or other labor contracts
applicable to the Business Employees or under applicable Law, and, following the
Effective Time, Buyer shall cause the Acquired Companies to comply with the
terms as in effect as of the date hereof or as may be amended or terminated
after the date hereof and prior to the Closing Date with the prior written
consent of Buyer of all such collective bargaining agreements and labor
contracts applicable to Business Employees.
 
     Section 7.7 Earned Allowances. From and after the Effective Time, Buyer
shall satisfy, or shall cause the Acquired Companies to satisfy, all obligations
(whether of a Seller, Seller Affiliate or Acquired Company) to all Business
Employees for any unpaid wage, salary, bonus, vacation, holiday pay or paid
absence allowances earned for periods of service prior to the Effective Time,
excluding any Non-Business Employee Liabilities, and following the Effective
Time, all such amounts shall be paid in accordance with Buyer’s or such Acquired
Company’s normal payroll practices.
 
     Section 7.8 No Employee or Third-Party Rights. This Article VII is solely
for the purpose of defining the obligations between Buyer (and following the
Closing, the Acquired Companies) and Seller concerning the employees of the
Business and the Business Employees, and shall in no way be construed as
creating any (i) rights to employment, continued employment or benefits, or (ii)
employment contract or other contract between Buyer, the Acquired Companies or
Seller and any such employee. Without limiting the generality of Section 11.8,
the provisions of this Article VII are solely for the benefit of the parties to
this Agreement, and no current of former employee or other service provider of
the Business, Seller or the Acquired Companies shall be regarded for any purpose
as a third-party beneficiary of this Agreement.
 
62
 

--------------------------------------------------------------------------------

ARTICLE VIII
 
CONDITIONS TO THE PURCHASE AND SALE
 
     Section 8.1 Conditions to the Obligations of Buyer. The obligation of Buyer
at the Closing to consummate the transactions contemplated by this Agreement
will be subject to the satisfaction or waiver by Buyer on or prior to the
Closing Date of each of the following conditions:
 
     (a) The representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects when made and as of
the Closing Date (without reference to any updated Seller Disclosure Schedule)
(except that representations and warranties that are made as of a specific date
need be true and correct in all material respects only as of such date).
Notwithstanding anything to the contrary contained in this Agreement, this
Section 8.1(a) will be deemed to have been satisfied even if such
representations and warranties are not true or correct in all material respects
as of the Closing Date unless the failure of any of the representations or
warranties to be so true and correct has had a Material Adverse Effect.
 
     (b) The covenants of Seller to be performed on or prior to the Closing Date
shall have been duly performed in all material respects.
 
     (c) Buyer shall have been furnished with (i) a certificate executed by an
authorized officer of Seller, dated as of the Closing Date, certifying that the
conditions contained in Sections 8.1(a) and 8.1(b) have been fulfilled and (ii)
the other documents and instruments required to be delivered by Seller pursuant
to Section 2.5(b).
 
     (d) No order, decree or judgment of any court or tribunal of competent
jurisdiction that makes the consummation of the purchase and sale of the
Acquired Parent Shares illegal shall have been issued and be in effect.
 
     (e) The waiting periods required by applicable Competition Law, and any
extensions of any such waiting periods obtained by request or other action of
the applicable Governmental Authority, shall have expired or been waived or
terminated.
 
     (f) The Pre-Closing Reorganization Transactions shall have been completed
in all material respects.
 
     (g) There shall not have occurred any Material Adverse Effect since the
date of the latest balance sheet included in the Financial Information.
 
     (h) Any approval by any works council of this Agreement or any of the
transactions contemplated by this Agreement required by applicable Law, if any,
shall have been received by Seller or the applicable Acquired Company.
 
     Section 8.2 Conditions to the Obligations of Seller. The obligation of
Seller at the Closing to consummate the transactions contemplated by this
Agreement will be subject to the satisfaction or waiver by Seller on or prior to
the Closing Date of each of the following conditions:
 
     (a) The representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects when made and as of the
Closing Date (except (i) that representations and warranties that are made as of
a specific date need be true and correct in all material respects only as of
such date and (ii) as contemplated or permitted by this Agreement to change
between the date of this Agreement and the Closing Date).
 
63
 

--------------------------------------------------------------------------------

     (b) The covenants of Buyer to be performed on or prior to the Closing Date
shall have been duly performed in all material respects.
 
     (c) Seller shall have been furnished with (i) a certificate executed by an
authorized officer of Buyer, dated as of the Closing Date, certifying to the
effect that the conditions contained in Sections 8.2(a) and 8.2(b) have been
fulfilled and (ii) the other documents and instruments required to be delivered
by Buyer and Buyer Guarantor pursuant to Section 2.5(b).
 
     (d) No order, decree or judgment of any court or tribunal of competent
jurisdiction which makes the consummation of the purchase and sale of the
Acquired Parent Shares illegal shall have been issued and be in effect.
 
     (e) The waiting periods required by applicable Competition Law, and any
extensions of any such waiting periods obtained by request or other action of
the applicable Governmental Authority, shall have expired or been waived or
terminated.
 
     (f) The Pre-Closing Reorganization Transactions shall have been completed
in all material respects provided that this closing condition will be deemed to
be satisfied if Seller is in ongoing breach of its covenant contained in Section
5.14(a).
 
     (g) Any approval by any works council of this Agreement or any of the
transactions contemplated by this Agreement required by applicable Law, if any,
shall have been received by Seller or the applicable Acquired Company.
 
ARTICLE IX
 
AMENDMENT AND WAIVER
 
     Section 9.1 Amendment and Modification. This Agreement may only be amended
or modified in writing signed by Seller and Buyer.
 
     Section 9.2 Waiver. At any time prior to the Closing, Seller or Buyer may
(a) extend the time for the performance of any of the obligations or other acts
of the other Party, (b) waive any inaccuracies in the representations and
warranties of the other Party contained in this Agreement or in any document
delivered pursuant to this Agreement, and (c) waive compliance with any of the
agreements or conditions of the other Party contained in this Agreement. Any
agreement on the part of a Party to any such extension or waiver will be valid
only if set forth in a written instrument executed by the Party granting such
extension or waiver. No failure or delay by any Party in exercising any right,
power or privilege under this Agreement will operate as a waiver of such right,
power or privilege, nor will any single or partial exercise any such right,
power or privilege preclude any other or further exercise any such right, power
or privilege or the exercise of any other right, power or privilege.
 
64
 

--------------------------------------------------------------------------------

ARTICLE X
 
SURVIVAL AND INDEMNIFICATION
 
     Section 10.1 Survival.
 
     (a) The representations, warranties and covenants (to the extent such
covenants relate to the performance of obligations prior to the Closing)
contained in this Agreement will survive the Closing until the date that is
twenty-four (24) months after the Closing; provided, however, that the
representations and warranties contained in Sections 3.1, 3.2 and 3.11 and 4.1,
4.6 and 4.7 will survive the Closing without contractual limitation as to time,
the representations and warranties contained in Sections 3.13 and 3.16 will
survive the Closing until the date that is three (3) years after the Closing,
and the representations and warranties contained in Section 3.17 will survive
until the earlier of expiration of the statute of limitations applicable to the
collection of the Taxes that are the subject of the representation or warranty
or seven years after the Closing. The covenants contained in this Agreement
which relate to the performance of obligations after the Closing will survive
the Closing until the expiration of the applicable statute of limitations
applicable to any claim of a breach. Without limiting the foregoing, claims
under Section 10.2(b)(iii), (iv) and (v) will survive the Closing without
limitation as to time and may be brought at any time until the last date
possible under applicable Law.
 
     Section 10.2 Indemnification.
 
     (a) From and after the Closing Date and subject to this Section 10.2 and to
Sections 10.1, 10.4 and 10.5, Seller agrees to indemnify and hold harmless
Buyer, its controlled Affiliates and any of their directors, officers, managers,
employees, members and stockholders (the “Buyer Parties”) against and in respect
of any and all losses, claims, damages, liabilities, fines, reasonable costs and
expenses, including reasonable legal fees and expenses (individually a “Loss”
and collectively, the “Losses”), resulting or arising from (i) any breach by
Seller of any of its representations and warranties set forth in Article III
(without reference to any updated Seller Disclosure Letter), (ii) any breach by
Seller of any of its covenants set forth in this Agreement, (iii) any
Non-Business Employee Liability, (iv) any Recall Campaign to the extent relating
to Pre-Closing Products but only to the extent the Loss associated with such
Recall Campaign exceeds all accruals contained in the Closing Balance Sheet with
respect to such Recall Campaign, (v) Seller causing an Acquired Company to
assume Liabilities which are not related to the Business as part of a
Pre-Closing Reorganization Transaction, but only to the extent such Liability is
not related to the Business, (vi) any claim under applicable bankruptcy,
fraudulent conveyance or transfer or similar Law or other Law that any of the
transactions implemented as part of the Pre-Closing Reorganization Transactions
are invalid or illegal or can be set aside or result in an award of damages, and
(vii) any claim under the lawsuits, arbitrations and proceedings set forth in
Section 3.7 of the Seller Disclosure Letter (the “Scheduled Litigation”) to the
extent (A) first, the Loss associated with such claim exceeds any reserve or
accrual specific to that particular Scheduled Litigation and (B) second (after
deducting applicable reserves and accruals as described in (A)), the aggregate
of Losses associated with all such claims under the Scheduled Litigation exceeds
$1,000,000. Additionally, from and after the Closing Date and subject to this
Section 10.2 and to Sections 10.1, 10.4, 10.5 and 10.8, Seller agrees to
indemnify and hold harmless the Buyer Parties against and in respect of all
costs reasonably incurred with respect to Response Actions taken to remedy the
presence of Hazardous Substances first occurring on or emanating from the
Business Real Property on the Closing Date in violation of applicable
Environmental Law but only if and to the extent the condition requiring
remediation (i) was described in any of the Environmental Reports or (ii) is
described in a written notice provided by Buyer to Seller Guarantor not later
than the three (3) year anniversary of the Closing Date specifying the nature of
the violation of Environmental Law, the Hazardous Substances that require
remediation, the location of the Hazardous Substance requiring remediation, and
all material evidence in the possession of Buyer that such condition existed on
the Closing Date (a general notice lacking such specificity shall not constitute
the required notice).
 
65
 

--------------------------------------------------------------------------------

     (b) From and after the Closing Date and subject to this Section 10.2 and to
Section 10.1 and 10.5, Buyer agrees to indemnify and hold harmless each of the
Seller Parties against and in respect of any and all Losses resulting or arising
from (i) any breach by Buyer of any of its representations and warranties set
forth in Article IV, (ii) any breach by Buyer of any of its covenants set forth
in this Agreement, (iii) any Liability or obligation of Buyer or an Acquired
Company under Article VII, (iv) any claim under the Scheduled Litigation except
to the extent Seller is obligated to indemnify to Buyer Parties as provided in
Section 10.2(a)(vii) above, and (v) any claim under applicable bankruptcy,
fraudulent conveyance or transfer or similar Law or other Law allegedly arising
from actions taken by Buyer or an Acquired Company after the Closing Date.
 
     (c) Any payments pursuant to this Article X will be treated as an
adjustment to the Purchase Price.
 
     (d) Any claims in respect of breaches by Seller of the representations and
warranties contained in Section 3.16 will be brought pursuant to Section 10.2(a)
except in any case to the extent that a Response Action is required to be
conducted at any Facility in connection therewith, in which case such claim will
be brought pursuant to Section 10.8 and not Section 10.2(a).
 
     (e) No claim may be brought under Section 10.2 or 10.8 unless written
notice of the claim, setting forth the factual basis for the claim in reasonable
detail and amount of the claim to the extent then known, is given to the
Indemnifying Party prior to the expiration of any applicable survival period
under Section 10.1(a).
 
     (f) Any claims for Taxes will be exclusively governed by and brought
pursuant to Article VI other than pursuant to Section 10.2(a) in respect of
breaches by Seller of the representations and warranties contained in Section
3.17 (which will not be in duplication of any indemnification under Article VI).
 
     Section 10.3 Method of Asserting Claims, Etc. In the event that any written
claim or demand for which an Indemnifying Party would be liable to any
Indemnified Party hereunder is asserted against or sought to be collected from
any Indemnified Party by a third party, such Indemnified Party will promptly,
but in no event more than thirty (30) days following such Indemnified Party’s
receipt of such claim or demand, notify the Indemnifying Party of such claim or
demand and the amount or the estimated amount thereof to the extent then
feasible (which estimate will not be conclusive of the final amount of such
claim and demand) (the “Claim Notice”); provided, that the failure to notify the
Indemnifying Party will not relieve the Indemnifying Party of its obligations
hereunder, except, and solely, to the extent such failure has prejudiced the
Indemnifying Party. The Indemnifying Party will have ninety (90) days from the
personal delivery or mailing of the Claim Notice (the “Notice Period”) to notify
the Indemnified Party whether or not it acknowledges in writing its liability to
the Indemnified Party in respect of such claim or demand and desires to defend
the Indemnified Party against such claim or demand. An election to assume the
defense of such claim or demand will be deemed to be an admission that the
Indemnifying Party is liable to the Indemnified Party in respect of such claim
or demand. All costs and expenses incurred by the Indemnifying Party in
defending such claim or demand will be a liability of, and will be paid by, the
Indemnifying Party, subject to the limitations set forth in this Article X. In
the event that the Indemnifying Party notifies the Indemnified Party within the
Notice Period that it desires to defend the Indemnified Party against such claim
or demand, except as hereinafter provided, the Indemnifying Party will have the
right to defend the Indemnified Party by appropriate proceedings. If any
Indemnified Party desires to participate in, but not control, any such defense
or settlement, it may do so at its sole cost and expense. The Indemnified Party
will not settle a claim or demand without the consent of the Indemnifying Party,
which will not be unreasonably withheld. The Indemnifying Party will not,
without the prior written consent of the Indemnified Party, which will not be
unreasonably withheld, settle, compromise or offer to settle or compromise any
such claim or demand on a basis which would result in the imposition of a
consent order, injunction or decree that would restrict the future activity or
conduct of the Indemnified Party or any subsidiary or Affiliate thereof. If the
Indemnifying Party elects not to defend the Indemnified Party against a claim or
demand for which the Indemnifying Party has an indemnification obligation
hereunder, whether by not giving the Indemnified Party timely notice as provided
above or otherwise, then the amount of any such claim or demand, or, if the same
be contested by the Indemnified Party, then that portion thereof as to which
such defense of the claim by the Indemnifying Party is unsuccessful (and the
reasonable costs and expenses pertaining to such defense) will be the liability
of the Indemnifying Party hereunder, subject to the limitations set forth in
this Article X. To the extent the Indemnifying Party will control or participate
in the defense or settlement of any third party claim or demand, the Indemnified
Party will give the Indemnifying Party and its counsel access to, during normal
business hours, the relevant business records and other documents, and will
permit them to consult with the employees and counsel of the Indemnified Party.
Any notice of a claim by reason of any of the representations, warranties or
covenants contained in this Agreement will state specifically the
representation, warranty, or covenant with respect to which the claim is made,
the facts giving rise to an alleged basis for the claim, and the estimated
amount of the liability asserted against the Indemnifying Party by reason of the
claim.
 
66
 

--------------------------------------------------------------------------------

     Section 10.4 Indemnification Amounts. Seller will not have liability under
Section 10.2(a)(i) until the aggregate amount of Buyer’s Losses attributable to
indemnification claims for which a Claim Notice was properly delivered to Seller
pursuant to Section 10.3 exceeds $750,000 (the “Deductible Amount”), in which
case Buyer Parties will be entitled to Losses attributable to indemnification
claims in an aggregate amount up to $15,000,000 (the “Cap Amount”); provided,
however, that Seller will be liable only for the amount by which all Losses (up
to the Cap Amount) exceed the Deductible Amount; provided, further, that no
individual claim for payment of a Loss may be made under Section 10.2(a) unless
such claim is an amount of $25,000 or greater (excluding costs and expenses
including attorneys fees included in the claim) (the “Individual Claim
Threshold”). The foregoing limitations will not apply to any indemnification
claims relating to Seller’s breach of any of the representations and warranties
contained in Sections 3.1, 3.2 or 3.11, provided that the aggregate amount of
all claims under Section 10.2(a)(i) shall in no event exceed an aggregate amount
equal the Base Amount minus the Note Amount plus an amount equal to the
principal amount of the Note actually paid by Buyer to Seller.
 
     Section 10.5 Losses Net of Insurance, Etc. The amount of any Loss for which
indemnification is provided under Sections 10.2 or 10.8 will be net of (a) any
amounts paid to the Indemnified Party pursuant to any indemnification by or
indemnification agreement with any third party or any insurance or other sources
of reimbursement (a “Collateral Source”), and (b) accruals or reserves (or
overstatement of liabilities in respect of actual liability) for the item
resulting in such Loss included in the Final Closing Balance Sheet. In addition,
the Indemnifying Party will have no liability in respect of any such Loss (i) to
the extent the Loss arises or is incurred as a result of the passing of, or a
change in, any Law or administrative practice of a Governmental Authority, (ii)
if the Loss would not have arisen but for any act, omission, transaction or
arrangement carried out at the request of or consent of the Indemnified Party
before Closing or (iii) if the Loss would not have arisen but for any voluntary
act, omission, transaction or arrangement carried out after Closing by the
Indemnified Party or any of the Indemnified Party’s respective directors,
employees or agents or successors other than in the ordinary course of the
Business as carried on at the Closing Date. The Parties will take and will cause
their controlled Affiliates to take all reasonable steps to mitigate any Loss
upon becoming aware of any event that would reasonably be expected to, or does,
give rise to a Loss, including incurring costs only to the minimum extent
necessary to remedy a breach that gives rise to the Loss. The Indemnifying Party
may require an Indemnified Party to assign the rights to seek recovery pursuant
to the preceding sentence; provided that the Indemnifying Party will then be
responsible for pursuing such recovery at its own expense. If the amount to be
netted hereunder from any payment required under Sections 10.2 or 10.8 is
determined after payment by the Indemnifying Party of any amount otherwise
required to be paid to an Indemnified Party pursuant to this Article X, the
Indemnified Party will repay to the Indemnifying Party, promptly after such
determination, any amount that the Indemnifying Party would not have had to pay
pursuant to this Article X had such determination been made at the time of such
payment.
 
67
 

--------------------------------------------------------------------------------

     Section 10.6 Sole Remedy/Waiver. In the event the Closing occurs, and
except for intentional misrepresentation and equitable remedies expressly
provided for in this Agreement, the Parties acknowledge and agree that the
rights and remedies explicitly provided for in this Article X or in the
Ancillary Agreements will be the Parties’ sole and exclusive rights and remedies
with respect to the subject matter of this Agreement or the Ancillary
Agreements. No amount will be recoverable under this Agreement by any Seller
Party or Buyer Party to the extent such Seller Party or Buyer Party has
recovered on a claim or received indemnification for such Loss under any
Ancillary Agreement. In furtherance of the foregoing, the Parties waive and
release (and agree to cause their respective controlled Affiliates to waive and
release), to the fullest extent permitted by Law, any and all other rights,
claims and causes of action (including rights of rescission and rights of
contribution, if any) known or unknown, foreseen or unforeseen, which exist or
may arise in the future, that it may have against Seller or any Seller
Affiliate, or Buyer or any of its Affiliates, as the case may be in respect of
the subject matter of this Agreement and the Ancillary Agreements. The
Indemnified Party is not entitled to recover damages or otherwise retain
payment, reimbursement or restitution more than once in respect of the same Loss
or liability. For greater certainty, there will be no limitation on any rights
or remedies available to a Party under this Agreement or otherwise available in
law or equity in the event the Closing does not occur as a result of a failure
of the other Party to perform any of its covenants in this Agreement or any
breach by such other Party of its obligation to consummate the transactions
contemplated by this Agreement, in each case whether or not this Agreement is
terminated as provided in Section 11.1.
 
     Section 10.7 No Special Damages. Except as otherwise expressly provided by
the last sentence of Section 10.6, the last sentence of Section 11.2 and the
last sentence of Section 11.17, no Indemnifying Party will be liable to or
otherwise responsible to any Indemnified Party for any Special Damages that
arise out of or relate to this Agreement or the performance or breach of this
Agreement or any Liability retained or assumed as contemplated by this Agreement
other than damages paid to an unaffiliated third party claimant.
 
     Section 10.8 Response Actions for Releases of Hazardous Substances.
 
     (a) After the Closing Date, in the event there is any investigation,
remediation or other response or compliance action pertaining to the Release of
Hazardous Substances in connection with the Business with respect to which a
claim for indemnification may be made pursuant to Section 10.2 (“Response
Action”), if the Indemnifying Party acknowledges in writing its obligation to
indemnify the Indemnified Party pursuant to Section 10.2(a) with respect to the
Response Action, the Indemnifying Party may choose whether to perform the
Response Action or pay for performance by the Indemnified Party. The Party
performing the Response Action will be referred to as the “Performing Party.”
 
     (b) The Performing Party will use its commercially reasonable efforts to
avoid or minimize any damage to real or personal property or harm to any
Persons, and to minimize any interference with or disruption of the other
Party’s operations and business. All required Response Actions will be
diligently and expeditiously performed and will be performed in compliance in
all material respects with applicable Environmental Laws. The other Party will
reasonably cooperate with the Performing Party including providing reasonable
access to perform necessary Response Actions, entering environmental land use
restrictions and recording and maintaining institutional and engineering
controls.
 
     (c) The Performing Party will select an environmental consultant who is
reasonably satisfactory to the other Party.
 
68
 

--------------------------------------------------------------------------------

     (d) All Response Actions will meet the Appropriate Remediation Standard.
The “Appropriate Remediation Standard” means the least stringent measures that
are reasonably necessary in light of all facts and circumstances in order to
satisfy all requirements under applicable Environmental Laws or imposed by the
Environmental Authority with jurisdiction over the Response Action consistent
with the use of the property at the Closing.
 
     (e) The Performing Party will (i) consult with and obtain the approval of
the other Party (which approval will not unreasonably be withheld) prior to
implementing any Response Action, (ii) notify the other Party prior to
commencing, performing or completing any Response Actions, (iii) keep the other
Party reasonably informed of the progress of any Response Actions and provide
copies of any final response, remediation, investigation or sampling plans and
the results of sampling and analysis required to be submitted to any
Governmental Authority or third party with respect to the Response Actions, (iv)
provide the other Party an opportunity to obtain splits, at the other Party’s
cost and expense, of any samples obtained in the course of conducting Response
Actions.
 
     (f) Neither Party will be responsible or liable to the other under the
indemnities provided in Article X or otherwise for any Losses (including the
cost and expenses associated with any Response Action) incurred to achieve
remediation standards in excess of the Appropriate Remediation Standards, or
Response Actions not required under applicable Environmental Laws or by any
Governmental Authority or required as a result of Non-Required Testing.
“Non-Required Testing” means any and all environmental sampling, testing and
analyses of the ambient or indoor air, soils, groundwater, surface waters,
interior of any building or building components that is not reasonably necessary
to comply with applicable Environmental Laws or the requirements of any
Governmental Authority to meet an Appropriate Remediation Standard.
 
     (g) In no event will Seller or any Seller Affiliate be responsible for any
Response Action required as a consequence of a Release, threat of Release or any
other occurrence after the Closing Date or any exacerbation of any environmental
condition on or after the Closing Date.
 
     (h) In the event of a conflict between this Section 10.8 and the other
Sections in Article X, this Section 10.8 will control.
 
     Section 10.9 No Set-Off. Neither Buyer nor Seller will have any right to
set-off any Losses (including indemnification obligations under Sections 10.2
and 10.8) against any payments to be made by either of them pursuant to this
Agreement, the Ancillary Agreements, or otherwise.
 
ARTICLE XI
 
MISCELLANEOUS
 
     Section 11.1 Termination. This Agreement may be terminated at any time
prior to the Closing only as follows:
 
     (a) by written agreement of Buyer and Seller;
 
     (b) by Seller or Buyer, by written notice of such termination to the other,
if the Closing does not occur by December 31, 2010 (“Closing Deadline”);
provided that the Closing Deadline shall be automatically extended by up to
three successive one-month periods if any waiting periods required by applicable
Competition Law, and any extensions of any such waiting periods obtained by
request or other action of the applicable Governmental Authority, shall not have
expired or been waived or terminated; provided that a Party may not terminate
this Agreement under this Section 11.1(b) if the reason the Closing does not
occur by such date is or has been contributed to by the failure of such Party
(or any of its controlled Affiliates) to fulfill any of its or their obligations
under this Agreement;
 
69
 

--------------------------------------------------------------------------------

     (c) by Seller or Buyer, by written notice of such termination to the other,
if any court or Governmental Authority of competent jurisdiction issues a
statute, rule, regulation, order, decree or injunction or takes any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and any such statute, rule, regulation, order,
decree or injunction or other action becomes final and nonappealable; or
 
     (d) by Seller, by written notice of such termination to Buyer, in the event
Buyer has not deposited the full Deposit Amount with the Escrow Agent by the
Escrow Deposit Deadline.
 
     Section 11.2 Effect of Termination.
 
     (a) In the event that the Closing does not occur due to any breach of this
Agreement by Buyer (including a failure by Buyer to deliver the Buyer Guaranty
at the Closing) or this Agreement is properly terminated by either Party as a
result of the conditions specified in either Section 8.1(d) (but only if the
order, decree or judgment referred to therein pertains to competition or
antitrust Laws) or Section 8.1(e) not being satisfied as of the Closing
Deadline, Seller Guarantor will be entitled to the Deposit Amount from the
Escrow Agent. In the event that this Agreement is properly terminated for any
other reason, or for any other reason the Closing does not occur by the Closing
Deadline, Buyer will be entitled to the return of the Deposit Amount from the
Escrow Agent. Seller Guarantor and Buyer shall be entitled to deliver to Escrow
Agent and the other Party written instructions (“Written Direction”) to disburse
the Deposit Amount (together with any accrued interest or proceeds thereof) in
accordance with this Section 11.2. Any Written Direction must be given
contemporaneously to the Escrow Agent and the other Party. If a Party submits a
Written Direction (“Requesting Party”), Escrow Agent will, within two (2)
Business Days of receipt, deliver to the Requesting Party the Deposit Amount in
immediately available funds by wire transfer to an account as designated herein
or otherwise by the Requesting Party in writing, unless Escrow Agent and the
Requesting Party each receives written notice of the other Party’s objection to
such distribution within two (2) Business Days of the receipt by Escrow Agent
and the other Party of the Requesting Party’s Written Direction (in which case
Escrow Agent shall conduct itself in accordance with Section 5(b) of the Deposit
Escrow Agreement). Escrow Agent will disburse the Deposit Amount only in
accordance with this Section 11.2 or otherwise pursuant to joint written
instructions executed by both Buyer and Seller Guarantor. The payment of the
Deposit Amount to Seller Guarantor shall constitute liquidated damages for any
failure by Buyer to consummate the transactions contemplated by this Agreement
and, conditioned on receipt of such payment by Seller Guarantor, Seller shall
have no further recourse against Buyer therefor. The Parties acknowledge that
the Deposit Amount constitutes a reasonable estimate of damages that Seller
would suffer in the event of such failure by Buyer to consummate such
transactions and is not intended to be punitive.
 
     (b) In the event of the termination of this Agreement in accordance with
Section 11.1, and subject to Section 11.2(a) and the further provisions of this
Section 11.2(b), this Agreement will thereafter become void and have no effect,
and no Party will have any liability to the other Party or its Affiliates,
directors, officers or employees, except for the obligations of the Parties
contained in this Section 11.2 and in Sections 11.3, 11.4, 11.6, 11.7, 11.8,
11.9, 11.10, 11.11, 11.12, 11.13, 11.14, 11.15, 11.16, 11.17, 11.18, 11.19,
11.20, 11.21, and 11.22, and except for any willful breach of any representation
or warranty or any willful failure to perform any covenant set forth in this
Agreement prior to such termination. For greater certainty, there will be no
limitation on any rights or remedies available to a Party under this Agreement
or otherwise available in law or equity in the event the Closing does not occur
as a result of a failure of the other Party to perform any of its covenants in
this Agreement or any breach by such other Party of its obligation to consummate
the transactions contemplated by this Agreement, in each case whether or not
this Agreement is terminated as provided in Section 11.1, and each such rights
and remedies will be in addition to any rights of the Party to the Deposit
Amount.
 
70
 

--------------------------------------------------------------------------------

     Section 11.3 Non-Solicitation or Hiring of Management Employees. If for any
reason whatsoever the transactions contemplated by this Agreement are not
consummated, for a period of three (3) years after the termination of this
Agreement, Buyer will not, and will cause its Affiliates to not, directly or
indirectly, take any action to solicit for employment or hire or retain as an
employee, independent contractor or consultant (or cause or seek to cause to
leave the employ of Seller or its Affiliates) any employee of Seller or any of
its Affiliates as of the date the Agreement is terminated pursuant to Section
11.1 who is Grade 14 or above, provided, however, that the foregoing will not
prevent (i) a bona fide public advertisement for employment placed by Buyer or
any of its Affiliates not specifically targeted at any such employee that
results in hiring of an employee of Seller or any of its Affiliates or (ii)
Buyer or any of its Affiliates from hiring any such employee who has not been
employed by Seller or any of its Affiliates during the six months preceding the
date of hire.
 
     Section 11.4 Return of Information. If for any reason whatsoever the
transactions contemplated by this Agreement are not consummated, Buyer will upon
request from Seller promptly return to Seller all books, records and documents
(including all copies, if any, thereof) furnished by Seller, any of the Acquired
Companies or any of the JV Companies, or any of their respective agents,
employees, or representatives, and will not use or disclose the information
contained in such books, records or documents for any purpose or make such
information available to any other entity or person, except as may be compelled
by applicable law or legal process after giving Seller reasonable opportunity to
seek and obtain a protective order.
 
     Section 11.5 Collection of Business Excluded Assets. If, following the
Closing, Buyer or an Acquired Company receives a payment that is the property of
Seller or any Seller Affiliate, Buyer will, or will cause the Acquired Company
to, promptly pay such amount to Seller or its designee. If, following the
Closing, Seller or a Seller Affiliate receives a payment that is the property of
an Acquired Company, Seller will, or will cause the Seller Affiliate to,
promptly pay such amount to the Acquired Company or its designee.
 
     Section 11.6 Expenses. Unless otherwise indicated in this Agreement, the
Parties will bear their own respective expenses (including all compensation and
expenses of counsel, financial advisors, consultants, actuaries and independent
accountants) incurred in connection with the preparation and execution of this
Agreement and consummation of the transactions contemplated by this Agreement,
including filing fees.
 
     Section 11.7 Assignment. Except as provided in this Section 11.7, no Party
may assign any of its rights or delegate any of its obligations under this
Agreement, whether by operation of law, sale of substantially all the assets of
a Party, or otherwise. Buyer may assign or delegate its rights, obligations or
liabilities under this Agreement in whole or in part to an Affiliate of Buyer
and Seller may assign or delegate its rights, obligations or liabilities under
this Agreement in whole or in part to a wholly owned Affiliate; provided,
however, that in such event, (a) the assignee must join in this Agreement as
Buyer or Seller, as applicable, by a joiner instrument reasonably acceptable to
the non-assigning party, (b) the assigning party will remain fully liable for
the fulfillment of all its obligations and liabilities under this Agreement
notwithstanding any such assignment or delegation and (c) in the case Buyer is
the assigning party, Buyer will remain primarily obligated for its obligations
hereunder. Buyer may also assign its rights under this Agreement to a lender
providing debt financing for the Acquired Companies provided that Buyer first
gives written notice to Seller of Buyer’s intention to do so including the
identity and contact informant of the lender. Any attempted assignment or
delegation in contravention of this Section 11.7 will be null and void.
 
71
 

--------------------------------------------------------------------------------

     Section 11.8 Entire Agreement; No Third Party Rights. Except as otherwise
contemplated in this Agreement, this Agreement (along with the Seller Disclosure
Letter and the Buyer Disclosure Letter) and the Ancillary Agreements (a)
constitute the entire agreement and supersede all prior and contemporaneous
representations, warranties, agreements and understandings, written and oral,
among the Parties, with respect to the subject matter of this Agreement and the
Ancillary Agreements, excluding the Confidentiality Agreement; and (b) are not
intended to confer upon any Person other than the Parties (and with respect to
the rights under Sections 10.2(a) and 10.2(b) only, the Buyer Parties and Seller
Parties, respectively and in the case of rights under Section 5.23, the D&O
Indemnified Parties) any legal or equitable right, remedy, or claim under or
with respect to this Agreement or any provision of this Agreement. Except as
provided in the immediately preceding sentence, this Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the Parties
to this Agreement and their successors and permitted assigns. In the event of a
conflict or inconsistency between the terms of this Agreement (including the
representations, warranties, covenants and indemnification provisions of this
Agreement) and the terms of any other documents delivered or required to be
delivered in connection with the consummation of the transactions contemplated
by this Agreement, the Parties acknowledge and agree that the terms of this
Agreement will supersede such conflicting or inconsistent terms in such other
documents and the terms of this Agreement will define the rights and obligations
of the Parties and their respective officers, directors, employees, stockholders
and Affiliates with respect to the subject matter of such conflict or
inconsistency.
 
     Section 11.9 Disclosure Letters.
 
     (a) Seller shall be permitted to update the Seller Disclosure Letter at any
time prior to the Closing Date.
 
     (b) Certain information in the Seller Disclosure Letter may not be required
to be disclosed pursuant to this Agreement. Any such information is included by
the applicable Party solely for informational purposes, and the inclusion of
such information will not be deemed to enlarge, enhance or diminish any of the
representations or warranties of Seller in this Agreement or otherwise alter in
any way the terms of this Agreement. The inclusion of any matter in any section
of the Seller Disclosure Letter will be deemed to be an inclusion for each
representation and warranty to which it is reasonably apparent that it relates,
but inclusion in the Seller Disclosure Letter will expressly not be deemed to
constitute an admission by Seller or otherwise imply that any such matter is
material, has a Material Adverse Effect or creates a measure for, or further
defines the meaning of, materiality or Material Adverse Effect and their
correlative terms for the purposes of this Agreement. Any capitalized and
undefined term used in any section to the Seller Disclosure Letter has the same
meaning assigned to such term in this Agreement.
 
     Section 11.10 Counterparts. This Agreement and any amendments to this
Agreement may be executed in counterparts, each of which will be deemed to be an
original, but all of which will be considered one and the same instrument. Any
signature page delivered by a fax machine or by e-mail in portable document
format will be binding to the same extent as an original signature page. Any
Party who delivers such a signature page agrees to later deliver an original
counterpart to a Party which requests it.
 
     Section 11.11 Section Headings. The Article and Section headings contained
in this Agreement are for reference purposes only and will not in any, way
affect the meaning or interpretation of this Agreement.
 
72
 

--------------------------------------------------------------------------------

     Section 11.12 Notices. All notices under this Agreement will be deemed
given if in writing and delivered personally or sent by facsimile transmission
or by registered or certified mail (return receipt requested) to the Parties at
the following addresses (or a such other addresses as will be specified by like
notice:

 

      (a)      
if to Seller or Seller Guarantor, to:
   
Meritor France and
Arvin Meritor, Inc
2135 West Maple Road
Troy, Michigan 48084
Attention: General Counsel
Facsimile: (248) 435-8354
  (b)  
if to Buyer or an Acquired Company (after the Effective Time), to:
 
81 Acquisition LLC
c/o The Renco Group, Inc.
One Rockefeller Plaza
29th Floor
New York, NY 10020
Attention: Roger Fay
Facsimile: (212) 541-6197
 
With a copy to:
 
Inteva Products, LLC
1401 Crooks Road
Troy, Michigan 48084
Attention: General Counsel
Facsimile: (248) 655-8903
 
With a copy to:
 
Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, New York 10281
Attention: Mike Ryan
Facsimile: (212) 504-6666

 
Any notice given by personal service or mail will be effective when received or
when delivery is refused. Any notice given by facsimile transmission will be
effective when the appropriate facsimile transmission acknowledgment is
received.
 
73
 

--------------------------------------------------------------------------------

     Section 11.13 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
This Agreement will be governed by and construed in accordance with the laws of
the State of New York without giving effect to any choice of law or conflict of
law provision or rule (whether of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than New York, and
excluding the United Nations Convention on the International Sale of Goods.
Seller and Buyer each agree and consent to be subject to the exclusive
jurisdiction of any New York state or federal court sitting in the Borough of
Manhattan of The City of New York and waive the right to assert the lack of
personal or subject matter jurisdiction or improper venue in connection with any
such suit, action or other proceeding. In furtherance of the foregoing, each of
the Parties (a) waives the defense of inconvenient forum, (b) agrees not to
commence any suit, action or other proceeding arising out of this Agreement or
any transactions contemplated by this Agreement other than in any such court,
and (c) agrees that a final judgment in any such suit, action or other
proceeding will be conclusive and may be enforced in other jurisdictions by suit
or judgment or in any other manner provided by law. EACH PARTY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY SUIT OR ACTION ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES THAT NONE OF
THE OTHER PARTIES OR ANY OF SUCH OTHER PARTY’S REPRESENTATIVES HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT
TO JURY TRIAL. FURTHER, EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTY RELIED ON
THIS WAIVER OF RIGHT TO JURY TRIAL AS A MATERIAL INDUCEMENT TO ENTER INTO THIS
AGREEMENT.
 
     Section 11.14 Illegality. If any provision contained in this Agreement is
for any reason held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability will not affect any other provisions
of this Agreement, and this Agreement will be construed as if such invalid,
illegal or unenforceable provision had never been contained in this Agreement.
 
     Section 11.15 Public Announcements. Buyer and Seller agree to issue press
releases with respect to the execution and delivery of this Agreement and the
transactions contemplated by this Agreement, which press releases will be
substantially in the form of the drafts previously approved by both Parties on
the date of this Agreement. Seller and Buyer will agree on the time and manner
of distribution of the press release, and neither Party will make the press
release public prior to such time. For a period of three (3) months following
the Closing Date, Buyer and Seller agree (a) not to make any formal public
written announcements, press releases or statements to the media, financial
community or customers or suppliers of the Business with respect to the Business
or the terms of the transactions contemplated by this Agreement without the
prior consent of the other Party, which consent will not be unreasonably
withheld, and (b) to consult with each other regarding any other proposed
written public announcements or statements with respect to this Agreement and
the transactions contemplated by this Agreement to the extent practicable;
provided, however, that the Parties may make any such announcements or
statements which such Party has been advised by counsel may be required by
applicable law, rule or regulation (including stock exchange regulations) or, in
the case of clause (ii), where such consultation is impracticable under the
circumstances.
 
     Section 11.16 Specific Performance. The Parties each agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed by them in accordance with the terms of this Agreement and
that each Party will be entitled to specific performance of the terms of this
Agreement.
 
     Section 11.17 No Recovery of Special Damages. Notwithstanding anything to
the contrary contained in this Agreement or otherwise, whether or not the
Closing occurs, no Party will have any right or remedy to recover Special
Damages from any other Party or any of its Affiliates, under this Agreement or
any of the Ancillary Agreements or relating to any of the transactions
contemplated by this Agreement or any of the Ancillary Agreements, under any
theory whatsoever (including of contract, tort, strict liability or a statutory
cause of action, or otherwise), even if the Party has been advised of the
possibility of such damages, and each Party on behalf of itself and its
Affiliates irrevocably waives any right it may have to claim or recover any such
damages from any other Party or any of its Affiliates. This Section 11.17 will
not apply to any rights or remedies available to a Party under this Agreement or
otherwise available in law or equity in the event the Closing will not occur as
a result of a failure of the other Party to perform any of its covenants in this
Agreement or any breach by such other Party of its obligation to consummate the
transactions contemplated by this Agreement, in each case whether or not this
Agreement is terminated as provided in Section 11.1.
 
74
 

--------------------------------------------------------------------------------

     Section 11.18 Attorney Client Privilege. Buyer and the Acquired Companies
on the one hand, and the Seller on the other hand, will not seek to have any of
the attorneys which represented any of them disqualified from representing any
of them in connection with any dispute that may arise between any of them in
connection with this Agreement, any Ancillary Agreement or any of the
transactions or other documents contemplated by this Agreement or by the
Ancillary Agreements. Nothing contained in this Section 11.18 will constitute a
waiver of attorney client privilege by any such Person with respect to services
provided by any such attorneys prior to the Closing. In connection with any
dispute that may arise between Seller and Buyer, Seller and not Buyer nor any
Acquired Company will have the right to decide whether or not to waive any
attorney client privilege that may apply to any communications between any of
the Acquired Companies and any such attorneys that occurred before the Effective
Time.
 
     Section 11.19 No Recourse. Notwithstanding anything in this Agreement, any
Ancillary Agreement or any other document, agreement or instrument contemplated
by this Agreement or Ancillary Agreement to the contrary, the obligations of a
Party under this Agreement and under any Ancillary Agreement will be without
recourse to any director, officer, stockholder, member, partner, Affiliate of
the Party or their respective directors, officers, stockholders, employees,
agents, stockholders, members or partners.
 
     Section 11.20 Buyer to Cause Acquired Companies to Comply with this
Agreement. From and after the Closing, Buyer will cause each of the Acquired
Companies to comply with this Agreement.
 
     Section 11.21 Seller Guaranty.
 
     (a) Seller Guarantor unconditionally and irrevocably guarantees (“Seller
Guaranty”) to Buyer and each Buyer Party on demand the prompt payment and/or
performance of each and all obligations, agreements, indebtedness, payments,
indemnifications and other Liabilities of Seller of any kind or character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated, joint or several,
due or to become due, vested or unvested, executory, determined, determinable or
otherwise under or by virtue of this Agreement or the transactions contemplated
by this Agreement. Seller Guarantor agrees that this Guaranty is an absolute,
continuing, irrevocable and unconditional guaranty of payment and performance
and is not a guaranty of collection.
 
     (b) Seller Guarantor irrevocably waives, for the benefit of Buyer and each
Buyer Party: (a) any right to require any Buyer or Buyer as a condition of
payment or performance by Seller Guarantor, to proceed against Seller or any
other guarantor or to pursue any other rights or remedies whatsoever and (b) to
the fullest extent permitted by Law, any defenses or benefits that may be
derived from or afforded by Law that limit the liability of or exonerate
guarantors or sureties; provided, however, that, for greater certainty, the
foregoing waivers will not affect, restrict, or impair in any manner whatsoever
any defense available to Seller Guarantor or Buyer to any claim made by any
third party. Seller Guarantor acknowledges and agrees that Buyer is relying on
this Seller Guaranty in entering into this Agreement. Seller Guarantor
irrevocably waives acceptance of this Seller Guaranty, presentment, demand or
action on delinquency, protest and, to the fullest extent permitted by Law, any
notice not expressly provided for in this Section 11.21. The obligations of
Seller Guarantor under this Seller Guaranty will not be released, discharged or
otherwise affected by any (i) change in the corporate, partnership or other
existence, structure or ownership of Seller, (ii) insolvency, bankruptcy,
reorganization or other similar proceeding affecting Seller, or any of Seller’s
assets or any resulting release or discharge of any obligation of Seller; or
(iii) termination, cessation, or exit of any plant, facility or line of business
by Seller (irrespective of any defenses to performance and/or payment that
Seller may have in regard thereto).
 
75
 

--------------------------------------------------------------------------------

     Section 11.22 Buyer Guaranty.
 
          Buyer shall cause the Buyer Guarantor to deliver to Seller at the
Closing a customary written guaranty in form reasonably satisfactory to Seller
Guarantor and Buyer Guarantor containing Buyer Guarantor’s unconditional and
irrevocable guarantee to Seller and each Seller Party, on demand, of the prompt
payment and/or performance of each and all obligations payments, and other
Liabilities of Buyer under the Note and with respect to Buyer’s obligations
under Section 5.29 of this Agreement (“Buyer Guaranty”). Buyer agrees, and shall
cause Buyer Guarantor to agree, that the Buyer Guaranty will be an absolute,
continuing, irrevocable and unconditional guaranty of payment and performance
and not a guaranty of collection and that it will include, amongst other
customary terms, various representations, warranties and waivers by Buyer
Guarantor.
 
[SIGNATURES ON FOLLOWING PAGE]
 
76
 

--------------------------------------------------------------------------------

     IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of the
Parties as of the date first above written.
 

SELLER:

  MERITOR FRANCE

  By:  /s/ John A. Crable Name: John A. Crable Title: Managing Director

SELLER GUARANTOR:

  ARVINMERITOR, INC.

  By: /s/ Mary A. Lehmann Name: Mary A. Lehmann Title: Senior Vice President,
Strategic Initiatives

BUYER:

  81 ACQUISITION LLC

  By: /s/ Ari Rennert Name: Ari Rennert Title: President

77
 

--------------------------------------------------------------------------------