exv10w1



 







Exhibit 10.1




 





PURCHASE AGREEMENT




by and among




ROCKWELL AUTOMATION, INC.,




ROCKWELL COLLINS, INC.




and




TELEDYNE BROWN ENGINEERING, INC.




 






Dated as of July 26, 2006




 






 






 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II SALE AND PURCHASE OF RSC SHARES
	 	 	2	 
	SECTION 2.1 Sale and Purchase of RSC Shares
	 	 	2	 
	 
	 	 	 	 
	ARTICLE III PURCHASE PRICE
	 	 	2	 
	SECTION 3.1 Purchase Price
	 	 	2	 
	SECTION 3.2 Allocation of Purchase Price
	 	 	2	 
	 
	 	 	 	 
	ARTICLE IV CLOSING
	 	 	3	 
	SECTION 4.1 Closing
	 	 	3	 
	SECTION 4.2 Closing Deliveries of Automation
	 	 	3	 
	SECTION 4.3 Closing Deliveries of Collins
	 	 	4	 
	SECTION 4.4 Closing Deliveries of Sellers
	 	 	4	 
	SECTION 4.5 Closing Deliveries of Buyer
	 	 	5	 
	SECTION 4.6 Transfer Taxes
	 	 	5	 
	 
	 	 	 	 
	ARTICLE V BASIC REPRESENTATIONS AND WARRANTIES OF EACH SELLER
	 	 	6	 
	SECTION 5.1 Organization
	 	 	6	 
	SECTION 5.2 Authorization
	 	 	6	 
	SECTION 5.3 No Violation or Conflict
	 	 	6	 
	SECTION 5.4 Government Authorizations
	 	 	6	 
	SECTION 5.5 Ownership of RSC Shares
	 	 	7	 
	SECTION 5.6 No Brokers
	 	 	7	 
	SECTION 5.7 Excluded IP
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLERS REGARDING THE ACQUIRED COMPANIES
	 	 	7	 
	SECTION 6.1 Organization
	 	 	7	 
	SECTION 6.2 No Violation or Conflict
	 	 	8	 
	SECTION 6.3 Capitalization
	 	 	8	 
	SECTION 6.4 Equity Interests
	 	 	8	 
	SECTION 6.5 Financial Statements
	 	 	9	 
	SECTION 6.6 Liabilities
	 	 	9	 
	SECTION 6.7 Real Property
	 	 	9	 
	SECTION 6.8 Personal Property
	 	 	10	 
	SECTION 6.9 Contracts
	 	 	10	 
	SECTION 6.10 Compliance With Laws
	 	 	12	 
	SECTION 6.11 Permits
	 	 	12	 
	SECTION 6.12 Taxes
	 	 	12	 
	SECTION 6.13 Litigation
	 	 	14	 
	SECTION 6.14 Intellectual Property
	 	 	14	 






i









 






	 	 	 	 	 
	 	 	Page
	SECTION 6.15 Conduct of Business Since March 31, 2006
	 	 	15	 
	SECTION 6.16 Insurance
	 	 	16	 
	SECTION 6.17 Employees
	 	 	16	 
	SECTION 6.18 Sufficiency of Assets
	 	 	17	 
	SECTION 6.19 Environmental Matters
	 	 	18	 
	SECTION 6.20 Warranties
	 	 	19	 
	SECTION 6.21 No Brokers
	 	 	19	 
	 
	 	 	 	 
	ARTICLE VII REPRESENTATIONS AND WARRANTIES OF BUYER
	 	 	19	 
	SECTION 7.1 Corporate Organization
	 	 	19	 
	SECTION 7.2 Corporate Authorization
	 	 	19	 
	SECTION 7.3 No Violation or Conflict
	 	 	20	 
	SECTION 7.4 Government Authorizations
	 	 	20	 
	SECTION 7.5 Litigation
	 	 	20	 
	SECTION 7.6 Knowledge
	 	 	20	 
	SECTION 7.7 Acquisition of RSC Shares for Investment
	 	 	20	 
	SECTION 7.8 Sufficient Funds
	 	 	21	 
	SECTION 7.9 No Brokers
	 	 	21	 
	 
	 	 	 	 
	ARTICLE VIII INVESTIGATION BY BUYER; CONFIDENTIALITY
	 	 	21	 
	 
	 	 	 	 
	ARTICLE IX COVENANTS
	 	 	21	 
	SECTION 9.1 Conduct of Business Prior to the Effective Time
	 	 	21	 
	SECTION 9.2 Exclusive Dealing
	 	 	22	 
	SECTION 9.3 HSR Act Compliance
	 	 	22	 
	SECTION 9.4 Commercially Reasonable Efforts
	 	 	22	 
	SECTION 9.5 Further Assurances
	 	 	23	 
	SECTION 9.6 Obligations Relating to the Business
	 	 	23	 
	SECTION 9.7 Cash Management
	 	 	24	 
	SECTION 9.8 Use of Names, Trademarks, Etc.
	 	 	24	 
	SECTION 9.9 Restrictions
	 	 	27	 
	SECTION 9.10 Public Announcements
	 	 	28	 
	SECTION 9.11 Pre-Closing Transfer of Retained Assets
	 	 	28	 
	SECTION 9.12 Post-Closing Access; Preservation of Records
	 	 	29	 
	SECTION 9.13 Certain Intercompany Agreements
	 	 	29	 
	SECTION 9.14 Directors’ and Officers’ Indemnification and Insurance
	 	 	30	 
	SECTION 9.15 Purchase Agreements
	 	 	31	 
	SECTION 9.16 Confidentiality
	 	 	31	 
	SECTION 9.17 Tax Matters
	 	 	31	 
	SECTION 9.18 Certain Payments by Sellers
	 	 	33	 
	 
	 	 	 	 
	ARTICLE X EMPLOYEE MATTERS
	 	 	34	 
	SECTION 10.1 Offer of Employment
	 	 	34	 
	SECTION 10.2 Welfare Plans
	 	 	34	 
	SECTION 10.3 Long-Term Incentive Plan
	 	 	34	 






ii









 






	 	 	 	 	 
	 	 	Page
	ARTICLE XI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
	 	 	35	 
	SECTION 11.1 Representations and Warranties
	 	 	35	 
	SECTION 11.2 Covenants and Agreements
	 	 	35	 
	SECTION 11.3 No Adverse Order
	 	 	36	 
	SECTION 11.4 HSR Act
	 	 	36	 
	SECTION 11.5 No Material Adverse Effect
	 	 	36	 
	 
	 	 	 	 
	ARTICLE XII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS
	 	 	36	 
	SECTION 12.1 Representations and Warranties
	 	 	36	 
	SECTION 12.2 Covenants and Agreements
	 	 	36	 
	SECTION 12.3 No Adverse Order
	 	 	36	 
	SECTION 12.4 HSR Act
	 	 	37	 
	SECTION 12.5 Guarantee
	 	 	37	 
	 
	 	 	 	 
	ARTICLE XIII INDEMNIFICATION
	 	 	37	 
	SECTION 13.1 Indemnification by Sellers
	 	 	37	 
	SECTION 13.2 Indemnification by Buyer
	 	 	38	 
	SECTION 13.3 Indemnification Procedures
	 	 	39	 
	SECTION 13.4 Certain Limitations
	 	 	41	 
	SECTION 13.5 Dollar Limitations
	 	 	42	 
	SECTION 13.6 Termination of Indemnification Obligations
	 	 	43	 
	SECTION 13.7 Exclusive Remedy
	 	 	44	 
	 
	 	 	 	 
	ARTICLE XIV TERMINATION; EFFECT OF TERMINATION
	 	 	44	 
	SECTION 14.1 Termination
	 	 	44	 
	SECTION 14.2 Effect of Termination
	 	 	45	 
	 
	 	 	 	 
	ARTICLE XV MISCELLANEOUS
	 	 	45	 
	SECTION 15.1 Parties in Interest
	 	 	45	 
	SECTION 15.2 Assignment
	 	 	45	 
	SECTION 15.3 Specific Performance
	 	 	46	 
	SECTION 15.4 Notices
	 	 	46	 
	SECTION 15.5 Waiver
	 	 	48	 
	SECTION 15.6 Schedules
	 	 	48	 
	SECTION 15.7 Captions, Currency
	 	 	49	 
	SECTION 15.8 Construction; Interpretation
	 	 	49	 
	SECTION 15.9 No Representations or Warranties
	 	 	50	 
	SECTION 15.10 Severability
	 	 	50	 
	SECTION 15.11 Dispute Resolution
	 	 	51	 
	SECTION 15.12 Consent to Jurisdiction
	 	 	51	 
	SECTION 15.13 Expenses
	 	 	52	 
	SECTION 15.14 Entire Agreement
	 	 	52	 
	SECTION 15.15 Amendment
	 	 	52	 
	SECTION 15.16 Counterparts
	 	 	52	 






iii









 






	 	 	 	 	 
	 	 	Page
	SECTION 15.17 Governing Law
	 	 	52	 
	 
	 	 	 	 
	ARTICLE XVI DEFINITIONS
	 	 	53	 






iv









 






	 	 	 	 	 
	EXHIBITS

	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Automation Agency Licensing Agreement
	Exhibit B

	 	—
	 	Form of Collins Agency Licensing Agreement
	Exhibit C

	 	—
	 	Form of Automation Services Agreement
	Exhibit D

	 	—
	 	Form of Collins Services Agreement
	Exhibit E

	 	—
	 	Form of Intellectual Property Agreement
	Exhibit F

	 	—
	 	Form of Revenue Sharing Agreement
	 
	 	 	 	 
	SCHEDULES

	 
	 	 	 	 
	Schedule 5.3(a)

	 	—
	 	Automation Conflicts
	Schedule 5.3(b)

	 	—
	 	Collins Conflicts
	Schedule 5.4(a)

	 	—
	 	Governmental Authorizations Required by Automation
	Schedule 5.4(b)

	 	—
	 	Governmental Authorizations Required by Collins
	Schedule 6.1

	 	—
	 	Qualification Jurisdictions
	Schedule 6.2

	 	—
	 	Acquired Companies’ Conflicts
	Schedule 6.4

	 	—
	 	Equity Interests
	Schedule 6.5

	 	—
	 	Company Financial Statements
	Schedule 6.7(a)

	 	—
	 	Owned Real Property
	Schedule 6.7(b)

	 	—
	 	Leased Real Property
	Schedule 6.7(d)

	 	—
	 	Certain Former Facilities
	Schedule 6.9(a)

	 	—
	 	Material Contracts
	Schedule 6.9(b)

	 	—
	 	Material Contract Defaults
	Schedule 6.9(c)

	 	—
	 	Government Contract Matters
	Schedule 6.10

	 	—
	 	Compliance With Laws
	Schedule 6.11

	 	—
	 	Permits
	Schedule 6.12

	 	—
	 	Taxes
	Schedule 6.13

	 	—
	 	Company Litigation
	Schedule 6.14(b)

	 	—
	 	License Agreements
	Schedule 6.14(c)

	 	—
	 	Intellectual Property Matters
	Schedule 6.15

	 	—
	 	Conduct of Business Since March 31, 2006
	Schedule 6.16

	 	—
	 	Insurance
	Schedule 6.17(b)

	 	—
	 	Labor Matters
	Schedule 6.17(c)

	 	—
	 	Employee Benefit Plans
	Schedule 6.17(f)

	 	—
	 	Change of Control Benefits
	Schedule 6.19(a)

	 	—
	 	Environmental Matters
	Schedule 6.19(b)

	 	—
	 	Off-Site Disposal Sites
	Schedule 7.3

	 	—
	 	Buyer Conflicts
	Schedule 7.4

	 	—
	 	Governmental Authorizations Required by Buyer
	Schedule 7.5

	 	—
	 	Buyer Litigation
	Schedule 9.1

	 	—
	 	Conduct of Business Prior to the Effective Time
	Schedule 9.6(a)

	 	—
	 	Financial Instruments
	Schedule 9.6(b)

	 	—
	 	Seller Guaranties
	Schedule 9.9(a)

	 	—
	 	Buyer Restrictions
	Schedule 9.9(c)

	 	—
	 	Seller Restricted Dual Band Imager Programs
	Schedule 16.1

	 	—
	 	Transferred Patents and Trademarks






v









 






PURCHASE AGREEMENT




          PURCHASE AGREEMENT dated as of July 26, 2006 by and among ROCKWELL AUTOMATION, INC., a
Delaware corporation (“Automation”), ROCKWELL COLLINS, INC., a Delaware corporation
(“Collins” and, together with Automation, “Sellers”), and TELEDYNE BROWN
ENGINEERING, INC., a Delaware corporation (“Buyer”).




W I T N E S S E T H:




          WHEREAS, on the date hereof, Rockwell Automation Technologies, Inc., an Ohio corporation and a
wholly-owned Subsidiary of Automation (“Automation Technologies”), owns fifty percent of
the RSC Shares;




          WHEREAS, on the date hereof, Rockwell Collins Technologies LLC, a Delaware limited liability
company and a wholly-owned Subsidiary of Collins (“Collins Technologies”), and Rockwell
Collins In-Flight Network Company, a Delaware corporation and a wholly-owned Subsidiary of Collins
(“Collins In-Flight”), collectively own fifty percent of the RSC Shares;




          WHEREAS, the RSC Shares constitute all the issued and outstanding membership interests in
Rockwell Scientific Company LLC, a Delaware limited liability company (the “Company”);




          WHEREAS, on the date hereof, the Company owns all the issued and outstanding membership
interests in Rockwell Scientific Licensing, LLC, a Delaware limited liability company
(“RSL” and, together with the Company, the “Acquired Companies”);




          WHEREAS, pursuant to the terms and subject to the conditions hereinafter set forth, Automation
desires to cause Automation Technologies to sell, assign, convey, transfer and deliver, and Buyer
desires to purchase, the RSC Shares owned by Automation Technologies;




          WHEREAS, pursuant to the terms and subject to the conditions hereinafter set forth, Collins
desires to cause Collins Technologies and Collins In-Flight to sell, assign, convey, transfer and
deliver, and Buyer desires to purchase, the RSC Shares owned by Collins Technologies and Collins
In-Flight; and




          WHEREAS, simultaneous with the execution and delivery hereof, Teledyne Technologies
Incorporated, a Delaware corporation and the corporate parent of Buyer (“Guarantor”), is executing
and delivering a guarantee dated the date hereof (the “Guarantee”) in favor of Sellers pursuant to
which Guarantor is guaranteeing all of Buyer’s obligations under this Agreement pursuant to the
terms of the Guarantee;




          NOW, THEREFORE, in consideration of the premises, the mutual agreements hereinafter contained
and for other good and valuable consideration, the receipt and




 









 







sufficiency of which are hereby acknowledged, intending to be legally bound, each Seller and
Buyer hereby agree as follows:




ARTICLE I




DEFINITIONS




          Capitalized terms used in this Agreement shall have the meanings assigned to such terms in
Article XVI.




ARTICLE II




SALE AND PURCHASE OF RSC SHARES




          SECTION 2.1 Sale and Purchase of RSC Shares. Subject to the terms and conditions set
forth herein, at the Closing, for the consideration specified in Section 3.1, effective as of the
Effective Time:




          (a) Automation will cause Automation Technologies to sell, assign, convey, transfer and
deliver to Buyer, and Buyer will purchase and acquire from Automation Technologies, the RSC Shares
owned by Automation Technologies, free and clear of all Liens; and




          (b) Collins will cause each of Collins Technologies and Collins In-Flight to sell, assign,
convey, transfer and deliver to Buyer, and Buyer will purchase and acquire from each of Collins
Technologies and Collins In-Flight, the RSC Shares owned by each of Collins Technologies and
Collins In-Flight, free and clear of all Liens.




ARTICLE III




PURCHASE PRICE




          SECTION 3.1 Purchase Price. In consideration for the sale, assignment, conveyance,
transfer and delivery of the RSC Shares, and subject to the terms and conditions set forth herein,
Buyer will, at the Closing (i) pay to Automation (on behalf of Automation Technologies), by wire
transfer of immediately available U.S. Dollars to Automation’s bank account at Mellon Bank, N.A.,
Pittsburgh, Pennsylvania, Account No. 102-3474 (ABA: 043 000 261; SWIFT: MELN US 3P), an amount
equal to Eighty Three Million Seven Hundred Fifty Thousand dollars ($83,750,000) and (ii) pay to
Collins (on behalf of Collins Technologies and Collins In-Flight), by wire transfer of immediately
available U.S. Dollars to Collins’ bank account at Mellon Bank, N.A., Pittsburgh, Pennsylvania,
Account No. 091-2704 (ABA Number: 043-000-261; SWIFT: MELN US 3P), an amount equal to Eighty Three
Million Seven Hundred Fifty Thousand dollars ($83,750,000) (the sum of such amounts payable to
Automation and Collins is referred to herein as the “Purchase Price”).




          SECTION 3.2 Allocation of Purchase Price. Sellers will, not later than sixty days
after the Closing Date, jointly prepare and deliver to Buyer a schedule (the “Allocation 




2









 







Schedule”) allocating the Purchase Price among the assets of the Acquired Companies in
accordance with the general principles of Section 1060 of the Code and any Treasury Regulations
pursuant thereto (or any comparable provisions of state or local tax law) or any successor
provision. Buyer will have the right to raise reasonable objections to the Allocation Schedule
within thirty days after its receipt thereof, in which event Buyer and each Seller will negotiate
in good faith to resolve such objections. Except to the extent otherwise required by applicable
Laws, Buyer and each Seller (i) will, and will cause each of their respective Affiliates to, make
all tax returns, reports, forms, declarations, claims and other statements in a manner consistent
with the Allocation Schedule and (ii) will not, and will cause each of their respective Affiliates
not to, make any inconsistent statement or adjustment on any returns or during the course of any
Internal Revenue Service or other Tax audit.




ARTICLE IV




CLOSING




          SECTION 4.1 Closing. The closing of the purchase and sale of the RSC Shares (the
“Closing”) will take place (i) at the offices of Chadbourne & Parke LLP, 30 Rockefeller
Plaza, New York, New York 10112, at 10:00 a.m. (New York time) on the fifth business day following
the expiration or termination of the applicable waiting period under the HSR Act, subject to the
satisfaction or waiver of all other conditions set forth in Articles XI and XII or (ii) at such
other place, date and time as each Seller and Buyer may agree. The date of the Closing is referred
to herein as the “Closing Date”. The Closing will be deemed to be effective at the close
of business (California time) on the Closing Date (the “Effective Time”).




          SECTION 4.2 Closing Deliveries of Automation. At the Closing, Automation will deliver
or cause to be delivered to Buyer the following:




          (a) certificates representing the RSC Shares owned by Automation Technologies, duly endorsed
in blank or accompanied by appropriate stock powers duly endorsed in blank;




          (b) counterparts of each of the Automation Agency Licensing Agreement, the Automation Services
Agreement, the IP Agreement and the Revenue Sharing Agreement, duly executed by Automation;




          (c) certificates of good standing of each of Automation and Automation Technologies from its
jurisdiction of incorporation;




          (d) certificates of officers of each of Automation and Automation Technologies certifying that
its organizational documents, as certified and as delivered at the Closing, have not been amended
or rescinded since the date of such certification and remain in full force and effect on the
Closing Date;




          (e) certified copies of resolutions of the board of directors of Automation authorizing the
execution, delivery and performance by Automation of this Agreement and the consummation by
Automation of the transactions contemplated hereby;




3









 








          (f) an affidavit by Automation Technologies stating its United States taxpayer identification
number and that it is not a foreign corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Code); and




          (g) all other closing certificates and documents required to be delivered by Automation to
Buyer at the Closing pursuant to this Agreement.




          SECTION 4.3 Closing Deliveries of Collins. At the Closing, Collins will deliver or
cause to be delivered to Buyer the following:




          (a) certificates representing the RSC Shares owned by Collins Technologies and Collins
In-Flight, duly endorsed in blank or accompanied by appropriate stock powers duly endorsed in
blank;




          (b) counterparts of each of the Collins Agency Licensing Agreement, the Collins Services
Agreement, the IP Agreement, the Revenue Sharing Agreement and the Cypress Services Agreement
Amendment, duly executed by Collins;




          (c) certificates of good standing of each of Collins, Collins Technologies and Collins
In-Flight from the State of Delaware;




          (d) certificates of officers of each of Collins, Collins Technologies and Collins In-Flight
certifying that its organizational documents, as certified and as delivered at the Closing, have
not been amended or rescinded since the date of such certification and remain in full force and
effect on the Closing Date;




          (e) certified copies of resolutions of the board of directors of Collins authorizing the
execution, delivery and performance by Collins of this Agreement and the consummation by Collins of
the transactions contemplated hereby;




          (f) an affidavit by each of Collins Technologies and Collins In-Flight stating its United
States taxpayer identification number and that it is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined in the Code); and




          (g) all other closing certificates and documents required to be delivered by Collins to Buyer
at the Closing pursuant to this Agreement.




          SECTION 4.4 Closing Deliveries of Sellers. At the Closing, Sellers will jointly
deliver or cause to be delivered to Buyer the following:




          (a) counterparts of each of the Automation Agency Licensing Agreement, the Collins Agency
Licensing Agreement, the Automation Services Agreement, the Collins Services Agreement, the IP
Agreement, the Revenue Sharing Agreement and the Cypress Services Agreement Amendment, duly
executed by the Company and RSL, as applicable;




          (b) resignations, effective as of the Effective Time, of all members of the Board of Directors
of the Company and RSL;




4









 








          (c) certificates of good standing of the Company and RSL from the State of Delaware and any
other state in which they are qualified to do business;




          (d) certificates of officers of each of the Company and RSL certifying that its organizational
documents, as certified and as delivered at the Closing, have not been amended or rescinded since
the date of such certification and remain in full force and effect on the Closing Date;




          (e) certified copies of resolutions of the board of directors of the Company authorizing the
execution, delivery and performance by the Company of the IP Agreement, the Revenue Sharing
Agreement, the Automation Agency Licensing Agreement, the Collins Agency Licensing Agreement, the
Automation Services Agreement and the Collins Services Agreement;




          (f) minute books and stock ledgers, if any, of the Acquired Companies; and




          (g) all other closing certificates and documents required to be delivered jointly by Sellers
to Buyer at the Closing pursuant to this Agreement.




          SECTION 4.5 Closing Deliveries of Buyer. At the Closing, Buyer will deliver or cause
to be delivered to Sellers the following:




          (a) the Purchase Price pursuant to Section 3.1;




          (b) certificates of good standing of each of Buyer and Guarantor from its jurisdiction of
organization;




          (c) certificates of officers of each of Buyer and Guarantor certifying that its organizational
documents, as certified and as delivered at the Closing, have not been amended or rescinded since
the date of such certification and remain in full force and effect on the Closing Date;




          (d) certified copies of resolutions of the board of directors of each of Buyer and Guarantor
authorizing, as applicable, the execution, delivery and performance by Buyer of this Agreement, the
execution, delivery and performance by Guarantor of the Guarantee and the consummation by Buyer and
Guarantor of the transactions contemplated hereby and thereby; and




          (e) all other closing certificates and documents required to be delivered by Buyer or
Guarantor to Sellers or any Seller at the Closing pursuant to this Agreement.




          SECTION 4.6 Transfer Taxes. All applicable sales and transfer Taxes (including any
transfer Taxes due as a result of the sale of the RSC Shares and any Taxes imposed upon the
transfer of real or personal property) and filing, recording, registration, stamp, documentary and
other Taxes and fees payable in connection with this Agreement, the transactions contemplated by
this Agreement or the documents giving effect to such transactions will be the responsibility of
and be paid by Buyer. All payments made by Buyer




5









 







in connection with this Agreement are exclusive of any value added or similar Taxes which may
be imposed from time to time, which Taxes shall be charged in addition to and be paid by Buyer.




ARTICLE V




BASIC REPRESENTATIONS AND WARRANTIES OF EACH SELLER




          Each Seller, severally and not jointly, only as to itself, hereby represents and warrants to
Buyer as follows:




          SECTION 5.1 Organization. Such Seller and each of its Subsidiaries that holds RSC
Shares is a corporation or limited liability company (as applicable) duly organized, validly
existing and in good standing under the Laws of the State of its incorporation or organization (as
applicable).




          SECTION 5.2 Authorization. Such Seller has the requisite corporate power and
authority to enter into this Agreement and to perform its obligations hereunder. The execution,
delivery and performance by such Seller of this Agreement have been duly authorized by all
necessary corporate action on the part of such Seller. This Agreement constitutes a valid and
binding obligation of such Seller, enforceable against such Seller in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar Laws, now or hereafter in effect, relating to or affecting the enforcement of creditors’
rights in general and by general principles of equity.




          SECTION 5.3 No Violation or Conflict. Except as set forth on Schedule 5.3(a) (in the
case of Automation) or Schedule 5.3(b) (in the case of Collins), none of the execution, delivery or
performance by such Seller of this Agreement or any other agreement to be executed and delivered
pursuant hereto by such Seller nor the consummation by such Seller of the transactions contemplated
hereby or thereby will (i) conflict with the certificate of incorporation or by-laws or limited
liability company agreement of such Seller or any Subsidiary of such Seller that holds RSC Shares,
(ii) violate, conflict with or result in a breach by such Seller or any Subsidiary of such Seller
that holds RSC Shares of any Contract to which such Seller or such Subsidiary of such Seller that
holds RSC Shares is a party or by which any of its respective properties are bound or any order,
ruling, decree, judgment or arbitration award to which such Seller or any Subsidiary of such Seller
that holds RSC Shares is subject or (iii) result in the creation of any Liens upon any of the RSC
Shares held by a Subsidiary of such Seller, except for such violations, conflicts and breaches
subject to clause (ii) which, individually or in the aggregate, would not reasonably be expected to
have a material adverse effect on the ability of such Seller to consummate the transactions
contemplated hereby.




          SECTION 5.4 Government Authorizations. Except for the filings required under the HSR
Act and as set forth on Schedule 5.4(a) (in the case of Automation) or Section 5.4(b) (in the case
of Collins), no material Consent of, with or to any Governmental Entity is required to be obtained
or made by or with respect to such Seller or any Subsidiary of such




6









 







Seller that holds RSC Shares in connection with the execution and delivery of this Agreement
by such Seller or the consummation by such Seller of the transactions contemplated hereby, other
than any such requirement (i) under any Contract to which any Acquired Company is a party or (ii)
that is applicable as a result of the specific legal or regulatory status of Buyer or as a result
of any other facts that specifically relate to the business or activities in which Buyer is or
proposes to be engaged, other than the Business.




          SECTION 5.5 Ownership of RSC Shares.




          (a) Subsidiaries of such Seller (Automation Technologies, in the case of Automation, and
Collins Technologies and Collins In-Flight, collectively, in the case of Collins) are the record
and beneficial owners of 1,000 RSC Shares, free and clear of all Liens. All of the RSC Shares held
by Subsidiaries of such Seller have been duly authorized and validly issued.




          (b) None of such Seller or any Subsidiary of such Seller that holds RSC Shares is a party to
any Agreement (other than this Agreement and the Company LLC Agreement) pursuant to which such
Seller or such Subsidiary of such Seller that holds RSC Shares is or may be obligated to sell or
acquire any Common Shares of the Company or other membership interests in the Company.




          SECTION 5.6 No Brokers. Except for J.P. Morgan Securities Inc., whose compensation
will be paid by Sellers, none of such Seller or any Subsidiary of such Seller that holds RSC Shares
has authorized any Person to act, or has incurred any Liability to any Person who has acted for it,
as broker, finder or in any other similar capacity in connection with the transactions of such
Seller or such Subsidiary of such Seller that holds RSC Shares contemplated by this Agreement and
the negotiations leading to it.




          SECTION 5.7 Excluded IP. In the case of Automation, to Automation’s Knowledge,
Automation and its Subsidiaries do not use any Excluded IP in the conduct of their business on the
date hereof. In the case of Collins, to Collins’s Knowledge, Collins and its Subsidiaries do not
use any Excluded IP in the conduct of their business on the date hereof.




ARTICLE VI




REPRESENTATIONS AND WARRANTIES

OF SELLERS REGARDING THE ACQUIRED COMPANIES




          Sellers hereby jointly (subject to the provisions of Section 13.1(b)(i)) represent and warrant
to Buyer as follows:




          SECTION 6.1 Organization. Each of the Acquired Companies is a limited liability
company duly organized, validly existing and in good standing under the Laws of the State of
Delaware. Each of the Acquired Companies has the requisite limited liability company power and
authority to conduct the Business as it is currently conducted and to own, lease and operate its
assets. Each of the Acquired Companies is duly qualified or licensed to




7









 







do business and is in good standing (to the extent such concept is relevant in any particular
jurisdiction) in each jurisdiction in which the ownership, leasing or holding of its assets makes
such qualification necessary, except for such jurisdictions in which the failure to be so
qualified, licensed or in good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Schedule 6.1 contains a complete and accurate list of
each jurisdiction in which the Company or RSL is qualified to do business on the date hereof.




          SECTION 6.2 No Violation or Conflict. Except as set forth on Schedule 6.2, none of
the execution, delivery or performance by Sellers of this Agreement or any other agreement to be
executed and delivered pursuant hereto by Sellers nor the consummation by Sellers of the
transactions contemplated hereby or thereby will (i) conflict with the certificate of formation or
limited liability company agreement of any of the Acquired Companies, (ii) violate, conflict with
or result in a breach by any of the Acquired Companies of any Contract to which any of the
Acquired Companies is a party or by which any of their respective properties are bound (other than
with respect to Consents to the transactions contemplated hereby under those Contracts to which any
of the Acquired Companies are parties) or any order, ruling, decree, judgment or arbitration award
to which any of the Acquired Companies is subject or (iii) result in the creation of any Liens
(other than Permitted Liens) upon any of the assets of any of the Acquired Companies, except for
such violations, conflicts, breaches and Liens subject to clauses (ii) and (iii) which,
individually or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.




          SECTION 6.3 Capitalization.




          (a) The RSC Shares constitute all the issued and outstanding membership interests in the
Company.




          (b) There are no outstanding rights, options, warrants, convertible or exchangeable
securities, subscriptions or other agreements (other than this Agreement and the Company LLC
Agreement) pursuant to which the Company is or may be obligated to sell, issue or acquire any
Common Shares of the Company or other membership interests of the Company.




          SECTION 6.4 Equity Interests.




          (a) The Company is the record and beneficial owner of 1,000 Common Shares of RSL (the “RSL
Shares”), free and clear of all Liens. The RSL Shares constitute all the issued and
outstanding membership interests in RSL. All of the RSL Shares have been duly authorized and
validly issued.




          (b) There are no outstanding rights, options, warrants, convertible or exchangeable
securities, subscriptions or other agreements (other than this Agreement and the limited liability
company agreement of RSL) pursuant to which the Company or RSL is or may be obligated to sell,
issue or acquire any Common Shares of RSL or other membership interests in RSL.




8









 








          (c) Except for the ownership of the RSL Shares by the Company, ownership of equity interests
in the Portfolio Companies and as set forth on Schedule 6.4, none of the Acquired Companies on the
date hereof owns any material capital stock or other equity interests in any corporation,
partnership or other entity.




          SECTION 6.5 Financial Statements. Set forth on Schedule 6.5 are (i) the consolidated
audited balance sheet of the Acquired Companies as of September 30, 2005 and the related
consolidated audited statements of operations, changes in members’ equity and cash flows of the
Acquired Companies for the fiscal year ended September 30, 2005 and (ii) the consolidated unaudited
balance sheet of the Acquired Companies as of June 30, 2006 (the “June 30, 2006 Balance
Sheet”) and the related consolidated unaudited income statement and cash flow statement of the
Acquired Companies for the nine months then ended (collectively, the “Financial
Statements”). Except as set forth therein, the Financial Statements present fairly, in all
material respects, the consolidated financial position and the consolidated results of operations
and cash flows of the Acquired Companies as of the dates set forth therein and for the periods
covered thereby in accordance with GAAP (subject, in the case of the financial statements as of and
for the nine months ended June 30, 2006, to the absence of footnotes and normal year-end
adjustments). The Financial Statements have been prepared from the books of account and financial
records of the Acquired Companies.




          SECTION 6.6 Liabilities. To the Knowledge of the Company, except for (a) Liabilities
set forth or reflected in the Financial Statements (or referred to in the notes thereto), (b)
Liabilities relating to any matter set forth in this Agreement or in a Schedule to this Agreement,
(c) Liabilities arising in the Ordinary Course of Business since June 30, 2006 or as contemplated
by this Agreement, (d) any Liability for which any Member has an obligation of payment,
reimbursement or indemnification after the Closing Date and (e) other Liabilities which,
individually or in the aggregate, would not reasonably be expected to amount to more than $12
million, on the date hereof none of the Acquired Companies has any Liabilities which would be
required by GAAP to have an amount set forth on a balance sheet.




          SECTION 6.7 Real Property.




          (a) Schedule 6.7(a) sets forth a list of all real property owned in fee on the date hereof by
any of the Acquired Companies (“Owned Properties”). Schedule 6.7(b) sets forth a list of
all leases to which any of the Acquired Companies on the date hereof is a party pursuant to which
such Acquired Company is a lessee of any real property (“Leases”).




          (b) Except as set forth on Schedule 6.7(a) or 6.7(b), each of the Acquired Companies has (A)
good and valid title to its Owned Properties free and clear of any Lien, other than Permitted
Liens, and (B) valid leasehold interests in the properties subject to its Leases, in each case
subject to the provisions of the applicable Leases, subleases and related Contracts governing such
Acquired Companies’ interests therein.




          (c) To the Knowledge of the Company, there are no pending condemnation or similar Actions with
respect to any of the Owned Properties or real property subject to the Leases.




9









 








          (d) To the Knowledge of the Company, no material manufacturing or research and development
operations have been conducted by the Company (or its predecessors, with respect to the Business)
at any facility formerly owned or leased by the Company (or any of its predecessors, with respect
to the Business), except for Owned Properties, facilities subject to Leases and the facilities set
forth on Schedule 6.7(d).




          SECTION 6.8 Personal Property. Except as set forth on the Schedules hereto and except
for such property as has been sold or otherwise disposed of in the Ordinary Course of Business, one
of the Acquired Companies owns all personal property (i) reflected as owned on the June 30, 2006
Balance Sheet or (ii) which it thereafter acquired ownership of, in each case set forth in clauses
(i) and (ii), free and clear of any Lien, other than Permitted Liens.




          SECTION 6.9 Contracts.




          (a) Schedule 6.9(a) lists all of the following written Contracts (other than licenses and
other Contracts relating to Intellectual Property) to which any of the Acquired Companies is a
party and which are in effect on the date hereof and under which any Acquired Company or third
party thereunder has an express obligation that is required to be performed after the date hereof:





     (i) loan agreements, credit agreements, security agreements, promissory notes, mortgages,
indentures and other Contracts (other than the Member Loan Agreement) which provide for the
borrowing of moneys by or extensions of credit to any of the Acquired Companies or the
guarantee by any of the Acquired Companies of obligations in respect of the borrowings of
moneys by or extensions of credit to any other Person;




     (ii) employment agreements which expressly provide for the payment to any employee of any
Acquired Company of more than $150,000 annually, except those that may be cancelled by any of
the Acquired Companies without material penalty upon not more than ninety days’ notice;




     (iii) customer agreements (including Government Contracts and Bids) which expressly
provide for future payments (other than contingent payments) to any of the Acquired Companies
of more than $500,000, except those that may be cancelled by any of the Acquired Companies
without material penalty upon not more than ninety days’ notice;




     (iv) leases (other than leases relating to real property), product supply and purchase
agreements and other Contracts (other than (A) those of a type described in clauses (i)
through (iii) above, without giving effect to the minimum dollar or term thresholds set forth
therein, and (B) Bids) which expressly provide for future payments (other than warranty and
other contingent payments) to or from any of the Acquired Companies of more than $500,000,
except those that may be cancelled by any of the Acquired Companies without material penalty
upon not more than ninety days’ notice;



10









 






     (v) to the Knowledge of the Company, Contracts that contain provisions which limit the
right of the Company to enter into or engage in any market or line of business; and




     (vi) material Contracts with any Portfolio Companies.



          Notwithstanding the foregoing, Schedule 6.9(a) does not contain any Contracts otherwise
required to be set forth thereon which are subject to confidentiality obligations not to disclose
the existence of the same on the part of any of the Acquired Companies. All Contracts required to
be set forth on Schedule 6.7(b) or 6.9(a) are referred to herein as “Material Contracts”.
To the Knowledge of the Company, none of the Acquired Companies is party to any oral Contracts in
effect on the date hereof which, if written, would be required to be set forth on Schedule 6.9(a).




          (b) Except as set forth on Schedule 6.9(b), (i) there are no defaults, violations or breaches
on the part of any of the Acquired Companies under the provisions of any Material Contract and (ii)
to the Knowledge of the Company, there are no defaults, violations or breaches on the part of the
other party or parties under the provisions of any Material Contract, except in either case set
forth in clauses (i) or (ii) (A) for defaults, violations or breaches which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect and (B) that in order
to avoid a default, violation or breach under any Material Contract the Consent of the other party
or parties thereto may be required in connection with the transactions contemplated hereby.




          (c) (i) With respect to each Material Contract that is a Government Contract or Bid, except as
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect and except as set forth on Schedule 6.9(c): (A) to the Knowledge of the Company, each of the
Acquired Companies is in compliance with all terms thereof and all applicable requirements of Law
relating thereto; (B) no written notice has been received by any of the Acquired Companies in the
last three years alleging that any of the Acquired Companies is in breach or violation of any
statutory, regulatory or contractual requirement related thereto; (C) no written notice of
termination, cure notice or show-cause notice has been received by any of the Acquired Companies in
the last three years related thereto; and (D) to the Knowledge of the Company, no notice of breach,
violation or termination, cure notice or show-cause notice has been threatened against any Acquired
Company in the last three years related thereto.





     (ii) Except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect and except as set forth on Schedule 6.9(c), (A) to the
Knowledge of the Company, none of the Acquired Companies is (and for the last three years has
not been) under administrative, civil or criminal investigation (other than routine audits) or
indictment by the U.S. Government with respect to any alleged irregularity, misstatement or
omission regarding a Government Contract or Bid; (B) none of the Acquired Companies is (and
for the last three years has not been) suspended



11









 






or debarred from doing business with the U.S. Government or declared nonresponsible or
ineligible for U.S. government contracting; and (C) none of the Acquired Companies has in the
last three years made a voluntary disclosure under the United States Department of Defense
voluntary disclosure program or under any voluntary disclosure program of another U.S.
Governmental Entity with respect to any alleged irregularity, misstatement or omission arising
under or relating to any Government Contract or Bid.




     (iii) Except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect and except as set forth on Schedule 6.9(c), to the Knowledge of
the Company, there are no circumstances existing on the date hereof that would warrant the
United States Department of Defense or any other U.S. Governmental Entity to initiate
suspension or disbarment proceedings or the finding of nonresponsibility or ineligibility on
the part of any Acquired Company.



          SECTION 6.10 Compliance With Laws. Except as set forth on Schedule 6.10, each of the
Acquired Companies is and has been in the last three years in compliance with all Laws, including
Laws related to export compliance and the Foreign Corrupt Practices Act (but other than
Environmental Laws), applicable to them, except for failures to so comply which, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse Effect. Except as set
forth on Schedule 6.10, in the last three years, no written notice (including any notice relating
to an Action) has been received by any of the Acquired Companies alleging a violation of any such
Laws (other than Environmental Laws) which has not been cured, other than such notices as,
individually or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect. To the Knowledge of the Company, no product, technical data or service provided, made,
sold, distributed or owned by the Acquired Companies in the last three years has been disclosed,
disseminated or released by an Acquired Company to a foreign national in the United States in a
manner that required an Acquired Company to obtain a license for deemed export from the United
States without an Acquired Company obtaining such a license.




          SECTION 6.11 Permits. Except as set forth on Schedule 6.11, each of the Acquired
Companies possesses all Permits necessary to enable it to own, lease or otherwise hold its assets
and to carry on the Business as presently conducted, other than any such Permits which if not
obtained would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 6.11, each of the Acquired Companies is in
compliance with the terms and conditions of such Permits that are issued to it, except for such
failures to so comply which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.




          SECTION 6.12 Taxes. Except as set forth on Schedule 6.12 or as otherwise made
available to Buyer:




          (a) all material Tax Returns required to be filed by any of the Acquired Companies for periods
ending on or prior to the Closing Date have been or will be timely filed with the appropriate
taxing authorities in all jurisdictions in which such Tax Returns are required to be filed and all
Taxes reported on such Tax Returns due on or prior to the Closing




12









 







Date have been or will be timely paid (other than those Taxes which are being contested in
good faith and for which adequate reserves have been established in accordance with GAAP). Neither
of the Acquired Companies is on the date hereof the beneficiary of any extension of time within
which to file any Tax Return. Each of the Acquired Companies has withheld and paid all Taxes shown
as required to be withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor or other party, and all Forms W-2 and 1099 required with respect
thereto have been properly completed and timely filed;




          (b) there are no material audits, disputes, claims, assessments, levies or administrative
proceedings pending or, to the Knowledge of the Company, threatened against any of the Acquired
Companies relating to Taxes, and in the last three years no taxing authority has given any Acquired
Company written notice of the commencement of any material audit, examination or deficiency action
with respect to Taxes;




          (c) all Taxes due with respect to any completed and settled audit, examination or deficiency
action with any taxing authority for which any of the Acquired Companies might otherwise be liable
have been paid in full;




          (d) no liens for Taxes exist with respect to any of the assets of any of the Acquired
Companies, except for Permitted Liens;




          (e) None of the Acquired Companies has in the last three years requested a waiver of, or
extended or waived, the application of any statute of limitations of any jurisdiction regarding the
assessment or collection of any Tax;




          (f) RSL has been properly treated as a disregarded entity of the Company under Treasury
Regulations Section 301.7701-2(c)(2)(i) since the date of its formation;




          (g) the Company has been properly treated as a disregarded entity under Treasury Regulations
Section 301.7701-2(c)(2)(i) or as a partnership under Treasury Regulations Section 301.7701-2(c)(1)
since the date of its formation;




          (h) neither of the Acquired Companies is a party to or bound by any tax allocation or sharing
agreement (other than those set forth in Schedule 6.9(a)); and




          (i) neither of the Acquired Companies will be required to include any item or income in, or
exclude any item of deduction from, taxable income for any taxable period (or portion thereof)
ending after the Closing Date as a result of any:





     (A) adjustment under Section 481 of the Code made prior to the Closing Date; or




     (B) “closing agreement” as described in Code Section 7121 (or any corresponding or
similar provision of state, local or foreign income Tax law) executed on or prior to the
Closing Date.



13









 





          SECTION 6.13 Litigation. Except as set forth on Schedule 6.13, none of the Acquired
Companies is a party to any individual Action with respect to which there is a reasonable
likelihood of an adverse determination which would reasonably be expected to result in damages
payable by an Acquired Company after the Closing Date of greater than $1 million and, except as set
forth on Schedule 6.13, to the Knowledge of the Company, no such Action has been threatened within
the last three years. Except as set forth on Schedule 6.13, there are no outstanding orders,
rulings, decrees or judgments to which any of the Acquired Companies is a party or by which any of
them are bound by or with any Governmental Entity which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.




          SECTION 6.14 Intellectual Property.




          (a) The Patents and Trademarks set forth on Schedule 16.1 comprise all of the material Patents
and Trademarks owned by any of the Acquired Companies.




          (b) Schedule 6.14(b) sets forth a list of all material written license agreements (other than
standard off-the-shelf software licenses) in effect on the date hereof pursuant to which any of the
Acquired Companies license or is licensed to use any Business Intellectual Property and under which
any Acquired Company or third party thereunder has an express obligation that is required to be
performed after the date hereof:




          (c) Except as set forth on Schedule 6.14(c):





     (i) there are no written claims or demands which have been received by any of the
Acquired Companies within the past three years, or any Actions which are pending or to the
Knowledge of the Company were threatened within the past three years against any Acquired
Company, which (A) challenge the validity and enforceability of, or the ownership interests of
any of the Acquired Companies in, any of the Patents and Trademarks set forth on Schedule 16.1
or (B) allege that any product or service of any of the Acquired Companies infringes the
intellectual property rights of others and which, in any case set forth in clauses (A) or (B),
would, if successfully asserted, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect;




     (ii) to the Knowledge of the Company, no product or service of any of the Acquired
Companies infringes the intellectual property rights of others in a manner that would, if
proven, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect;




     (iii) to the Knowledge of the Company, one or more of the Acquired Companies own or have
a right to use all of the Business Intellectual Property free of any restrictions that,
individually or in the aggregate, would reasonably be expected to have a Material Adverse
Effect;




     (iv) none of the Acquired Companies is a party to any agreement with any Person not to
sue or otherwise enforce any legal rights with respect to Business Intellectual



14









 






Property, which agreement would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and




     (v) to the Knowledge of the Company, none of the Acquired Companies is party to any oral
Contracts in effect on the date hereof which, if written, would be required to be set forth on
Schedule 6.14(b).



          (d) Each of the Acquired Companies has taken reasonable steps to protect its right, title and
interest in and to its Patents and Trademarks set forth on Schedule 16.1.




          (e) The Business Intellectual Property, the Intellectual Property to be licensed by Automation
pursuant to Section 9.8, the Intellectual Property subject to covenants not to sue by Automation
and Collins in the IP Agreement and intellectual property rights under Contracts of the Acquired
Companies comprise the intellectual property rights necessary to conduct the Business as conducted
on the date of this Agreement and as it will be conducted on the Closing Date, except for such
intellectual property rights the absence of which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.




          (f) Notwithstanding the generality of any other representations and warranties contained in
this Agreement, this Section 6.14 will be deemed to contain the only representations and warranties
in this Agreement with respect to intellectual property matters.




          SECTION 6.15 Conduct of Business Since March 31, 2006.




          (a) Except as set forth on Schedule 6.15 and as contemplated by this Agreement, from March 31,
2006 to the date hereof (i) the Business has been conducted by the Acquired Companies in the
Ordinary Course of Business and (ii) there has not been any change in the business, financial
condition or operations of the Acquired Companies, taken as a whole, which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse Effect.




          (b) Except as set forth on Schedule 6.15 or as contemplated by this Agreement, from March 31,
2006 to the date hereof there has not been:





     (i) any general increase in the rate or terms of any compensation, bonuses, pension or
other employee benefit plans payable to or for the benefit of employees of any of the Acquired
Companies other than in the Ordinary Course of Business;




     (ii) sold or transferred any material assets of any of the Acquired Companies, other than
inventories in the Ordinary Course of Business;




     (iii) incurred or guaranteed by any of the Acquired Companies any indebtedness for
borrowed money, other than in the Ordinary Course of Business;




     (iv) any amendment of the certificate of formation or limited liability company agreement
of any of the Acquired Companies;



15









 






     (v) paid or declared any dividend or other distributions in respect of the RSC Shares or
the RSL Shares (other than in Cash or of assets of any of the Acquired Companies constituting
Retained Assets);




     (vi) issued or sold or authorized for issuance or sale any Common Shares or other
membership interests in any of the Acquired Companies or any securities convertible into
Common Shares of any of the Acquired Companies or other membership interests in any of the
Acquired Companies, or granted any option, warrant or other right relating thereto;




     (vii) changed or modified in any material respect any of the credit, collection or
payment policies or procedures of any of the Acquired Companies;




     (viii) any material change in the accounting methods, practices or principles of any of
the Acquired Companies (other than as permitted by GAAP);




     (ix) any binding authorization to establish any new defined benefit pension plan or to
modify the Rockwell Scientific Company Pension Plan;




     (x) any binding authorization to establish any new ERISA Benefit Plan (other than a
defined benefit pension plan) or to modify in any material respect any existing ERISA Benefit
Plan (other than in the Ordinary Course of Business or as required by Law); or




     (xi) any Contract (other than this Agreement or any arrangement provided for in or
contemplated by this Agreement) entered into by any of the Acquired Companies to take any of
the types of action described in clauses (i) through (x) of this Section 6.15(b).



          SECTION 6.16 Insurance. Schedule 6.16 sets forth a list of all material current
policies of insurance of the Acquired Companies in force as of the date hereof.




          SECTION 6.17 Employees.




          (a) None of the Acquired Companies is a party to any collective bargaining agreement in effect
on the date hereof relating to its employees.




          (b) Except as set forth on Schedule 6.17(b), there is no labor strike or work stoppage pending
or, to the Knowledge of the Company, threatened against any of the Acquired Companies which,
individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.




          (c) Schedule 6.17(c) sets forth each material pension, retirement, 401(k) savings, profit
sharing, deferred compensation, stock bonus or other similar plan; each material medical, vision,
dental or other health plan; each material life insurance plan; and any other material employee
benefit plan, in each case, to which any of the Acquired Companies is on the date hereof required
to contribute, or which any of the Acquired Companies on the date




16









 







hereof sponsors for the benefit of any of their employees, or under which employees (or their
beneficiaries) of any of the Acquired Companies (in their capacities as such) are on the date
hereof eligible to receive benefits, including any material ERISA Benefit Plan. The plans required
to be set forth on Schedule 6.17(c) are referred to herein as the “Plans”.




          (d) All Plans are in compliance with the provisions of ERISA, the Code and the rules and
regulations promulgated thereunder to the extent that ERISA, the Code and such rules and
regulations are intended to apply to such Plans, except for such failures to so comply which would
not reasonably be expected to constitute a plan disqualifying event or result in damages to the
Acquired Companies of more than $1 million for any individual failure to so comply. To the
Knowledge of the Company, no Plan which is an ERISA Benefit Plan has engaged in any Prohibited
Transaction for which there is no exemption and with respect to which any of the Acquired Companies
has incurred any Liability which would reasonably be expected to exceed $1 million for such
Prohibited Transaction or would reasonably be expected to result in a plan disqualifying event. No
Reportable Event has occurred with respect to any Plan subject to Title IV of ERISA which would
subject any of the Acquired Companies to any Liability which would reasonably be expected to exceed
$1 million for such Reportable Event. None of the Acquired Companies participates in, or owes
withdrawal Liability to, any Multiemployer Plan. No Plan that is subject to Title IV of ERISA (a
“Title IV Plan”) has incurred an accumulated funding deficiency, whether or not waived, within the
meaning of Section 412 of the Code or Section 302 of ERISA, and no condition exists on the date
hereof which would reasonably be expected to result in an accumulated funding deficiency as of the
last day of the current plan year of any Title IV Plan.




          (e) As of the date hereof, the Rockwell Scientific Company Pension Plan or its related trust
has assets with a fair market value at least equal to the projected benefit obligation (“PBO”) of
the participants under such Plan as of the date hereof. For this purpose, the term “PBO” means the
actuarial present value of the accrued benefits of Acquired Company employees entitled to benefits
under such Plan as of the date hereof, based on (i) benefits accrued before the date hereof, but
using the actuarial estimates of salary level at retirement age, (ii) the applicable PBGC mortality
table and applicable PBGC interest rates (including the immediate and deferred rates) being used to
value annuities, and (iii) otherwise the use of actuarial assumptions stated in the last actuarial
valuation of such Plan as of January 1, 2005.




          (f) Except as set forth on Schedule 6.17(f), to the Knowledge of the Company, no Acquired
Company employee shall accrue or receive material additional benefits or accelerated rights to
payment of benefits under any Plan or become entitled to material severance, termination or similar
payments as a result of the sale of RSC Shares contemplated by this Agreement.




          SECTION 6.18 Sufficiency of Assets. Except for the Retained Assets, the Acquired
Companies’ rights under the Member Loan Agreement, the Cypress Services Agreement and purchase
agreements that are subject to Section 9.15, equipment furnished by customers pursuant to Contracts
of the Acquired Companies and other assets to which the Acquired Companies have rights under
Contracts of the Acquired Companies, the assets and




17









 







Contracts of the Acquired Companies and the assets leased by the Acquired Companies constitute
all of the material assets which are used by the Acquired Companies in the operation of the
Business as conducted on the date hereof and as will be conducted immediately prior to the Closing
Date.




          SECTION 6.19 Environmental Matters. Except as set forth on Schedule 6.19(a), (i) the
Acquired Companies are in compliance with all Environmental Laws, except for failures to so comply
which would not reasonably be expected to result in Environmental Costs of greater than $1.5
million for any individual matter; (ii) during the last three years none of the Acquired Companies
has entered into any judgment, decree or order issued by any Governmental Entity or, to the
Knowledge of the Company, received any written notice from a Governmental Entity, in any such case
relating to non-compliance by any of the Acquired Companies with any Environmental Law or to any
investigation or cleanup of Hazardous Substances under any Environmental Law, other than such
judgments, decrees, orders or notices that would not reasonably be expected to result in
Environmental Costs of greater than $1 million for any individual matter; and (iii) to the
Knowledge of the Company, none of the Acquired Companies has received any written communication
alleging that any of the Acquired Companies has any Liability under Environmental Laws relating in
any manner to the release of Hazardous Substances at any facilities formerly owned or leased by any
of the Acquired Companies (or their predecessors, with respect to the Business), other than such
written communications or Liabilities that would not reasonably be expected to result in
Environmental Costs of greater than $1 million for any individual matter. To the Knowledge of the
Company, Schedule 6.19(b) sets forth all third party off-site disposal sites where the Acquired
Companies (or their predecessors, with respect to the Business) have disposed of Hazardous
Substances in material amounts since 1986. None of the Acquired Companies has assumed any
obligation to pay Environmental Costs for any facility of, or for, any Unrelated Former Business
(as defined in the Distribution Agreement) or for any facilities of, or for, Automation or Collins
(in each case, other than with respect to facilities that are presently or were formerly owned,
leased, operated or occupied by one of the Acquired Companies or its predecessors, with respect to
the Business, as conducted by the Acquired Companies and its predecessors) pursuant to the terms of
the Distribution Agreement, other than Liabilities to the extent relating to the Rockwell Science
Center Business (as defined in the Distribution Agreement) or the operations thereof, the Business
(as conducted by the Acquired Companies and its predecessors) or the operations thereof or the
Rockwell Science Center Assets (as defined in the Distribution Agreement). To the Knowledge of the
Company, none of the Acquired Companies has any obligation to pay any Environmental Costs for any
facility of, or for, any Unrelated Former Business (as defined in the Distribution Agreement) or
of, or for, Automation or Collins (in each case, other than with respect to facilities presently
owned or leased by an Acquired Company or facilities set forth on Schedule 6.7(d) or off-site
disposal sites used by any Acquired Company or its predecessors, with respect to the Business, as
conducted by the Acquired Companies and its predecessors), other than obligations under any
Contract or Law in connection with research and development or related services performed by the
Acquired Companies. To the Knowledge of the Company, no products sold by the Acquired Companies
incorporates or contains any asbestos or asbestos containing materials. For purposes of this
Section 6.19, “Environmental Costs” means out-of-pocket costs and expenses reasonably required to
be paid by the Acquired Companies resulting from




18









 







(A) human injury, damage to property or fines or penalties resulting from the disposal,
discharge, handling or release of any Hazardous Substances in violation of any Environmental Law or
(B) the investigation, containment, removal, remedying, clean-up or abatement of any Hazardous
Substances in the environment (including sediment, soil, air, surface water or groundwater)
reasonably necessary to comply with an Environmental Law. Notwithstanding the generality of any
other representations and warranties contained in this Agreement, this Section 6.19 will be deemed
to contain the only representations and warranties in this Agreement with respect to environmental
matters or Environmental Laws.




          SECTION 6.20 Warranties. To Knowledge of the Company, no products, goods or services
heretofore sold or provided by any of the Acquired Companies are now subject to any warranty, other
than those warranties made in the literature accompanying such products, goods or services, made in
written Contracts related to such products, goods or services or required by applicable Law.




          SECTION 6.21 No Brokers. None of the Acquired Companies has authorized any Person to
act, or has incurred any Liability to any Person who has acted for it, as broker, finder or in any
other similar capacity in connection with the transactions contemplated by this Agreement and the
negotiations leading to it.




ARTICLE VII




REPRESENTATIONS AND WARRANTIES OF BUYER




          Buyer hereby represents and warrants to Sellers as follows:




          SECTION 7.1 Corporate Organization. Each of Buyer and Guarantor is a corporation duly
organized, validly existing and in good standing under the Laws of Delaware.




          SECTION 7.2 Corporate Authorization. Buyer has the requisite corporate power and
authority to enter into this Agreement and to perform its obligations hereunder. Guarantor has the
requisite corporate power and authority to enter into the Guarantee and to perform its obligations
thereunder. The execution, delivery and performance by Buyer of this Agreement have been duly
authorized by all necessary corporate action on the part of Buyer. The execution, delivery and
performance by Guarantor of the Guarantee have been duly authorized by all necessary corporate
action on the part of Guarantor. This Agreement constitutes a valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws, now or hereafter in
effect, relating to or affecting the enforcement of creditors’ rights in general and by general
principles of equity. The Guarantee constitutes a valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws, now or hereafter in
effect, relating to or affecting the enforcement of creditors’ rights in general and by general
principles of equity.




19









 








          SECTION 7.3 No Violation or Conflict. Except as set forth on Schedule 7.3, none of
the execution, delivery or performance by Buyer or Guarantor of this Agreement, the Guarantee or
any other agreement to be executed and delivered pursuant hereto by Buyer or Guarantor nor the
consummation by Buyer, Guarantor or any of their Affiliates of the transactions contemplated hereby
or thereby will (i) conflict with the certificate of incorporation or by-laws of Buyer or
Guarantor, or (ii) violate, conflict with or result in a breach by Buyer, Guarantor or any of their
Affiliates of any Contract to which Buyer, Guarantor or any of their Affiliates is a party or by
which any of their respective properties are bound or any order, ruling, decree, judgment or
arbitration award to which Buyer, Guarantor or any of their Affiliates is subject, except for such
violations, conflicts or breaches subject to clause (ii) which, individually or in the aggregate,
would not reasonably be expected to have a material adverse effect on the ability of Buyer or
Guarantor to consummate the transactions contemplated hereby or by the Guarantee.




          SECTION 7.4 Government Authorizations. Except for the filings required under the HSR
Act and as set forth on Schedule 7.4, no material Consent of, with or to any Governmental Entity is
required to be obtained or made by or with respect to Buyer, Guarantor or any of their Affiliates
in connection with the execution and delivery of this Agreement by Buyer, the execution and
delivery of the Guarantee by Guarantor or the consummation by Buyer or Guarantor of the
transactions contemplated hereby and thereby.




          SECTION 7.5 Litigation. Except as set forth on Schedule 7.5, none of Buyer or its
Affiliates is a party to any Action (i) with respect to which there is a reasonable likelihood of
an adverse determination which, individually or in the aggregate, would reasonably be expected to
have a material adverse effect on the ability of Buyer to consummate the transactions contemplated
hereby or Guarantor to consummate the transactions contemplated by the Guarantee or (ii) which
challenges or otherwise relates to the transactions contemplated by this Agreement or the
Guarantee, and except as set forth on Schedule 7.5, to Buyer’s knowledge, no such Action has been
threatened in writing. Except as set forth on Schedule 7.5, there are no outstanding orders,
rulings, decrees or judgments to which Buyer or any of its Affiliates is a party or by which any of
them is bound by or with any Governmental Entity (i) which, individually or in the aggregate, would
reasonably be expected to have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby or Guarantor to consummate the transactions contemplated by the
Guarantee or (ii) which challenges or otherwise relates to the transactions contemplated by this
Agreement or the Guarantee.




          SECTION 7.6 Knowledge. Buyer has such knowledge and experience in financial and
business matters that Buyer is capable of evaluating the merits and risks of the purchase of the
RSC Shares.




          SECTION 7.7 Acquisition of RSC Shares for Investment. Buyer is acquiring the RSC
Shares for investment only and not with a view toward, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling the RSC Shares.
Buyer agrees that the RSC Shares may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under the Securities Act




20









 







of 1933, as amended, except pursuant to an exemption from such registration available under
such Act.




          SECTION 7.8 Sufficient Funds. Buyer has available to it, and Buyer will have
available to it on the Closing Date, sufficient funds to pay the Purchase Price and consummate the
other transactions contemplated by this Agreement to be consummated by Buyer.




          SECTION 7.9 No Brokers. None of Buyer or its Affiliates has authorized any Person to
act, or has incurred any Liability to any Person who has acted for it, as broker, finder or in any
other similar capacity in connection with the transactions contemplated by this Agreement and the
negotiations leading to it.




ARTICLE VIII




INVESTIGATION BY BUYER; CONFIDENTIALITY




          Between the date of this Agreement and the Closing Date, or, if earlier, the date this
Agreement is terminated pursuant to Section 14.1, Sellers will jointly cause the Acquired Companies
to provide Buyer and its Representatives with reasonable access, during normal business hours and
upon reasonable notice, to the facilities, books, records, customers and personnel of the Acquired
Companies; provided, however, that (i) such access will not unreasonably interfere
with the normal operations of the Acquired Companies and (ii) such access with customers of the
Acquired Companies shall only be conducted jointly with Representatives of Automation or Collins.
Buyer acknowledges that all such information being provided pursuant to this Article VIII is
subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein
by reference.




ARTICLE IX




COVENANTS




          SECTION 9.1 Conduct of Business Prior to the Effective Time.




          (a) Between the date of this Agreement and the Closing Date, or, if earlier, the date this
Agreement is terminated pursuant to Section 14.1, except as set forth on Schedule 9.1 or as
otherwise contemplated by this Agreement, Sellers will jointly cause the Acquired Companies to
conduct the Business in the Ordinary Course of Business. Between the date of this Agreement and
the Closing Date, or, if earlier, the date this Agreement is terminated pursuant to Section 14.1,
except as set forth on Schedule 9.1 or as otherwise contemplated by this Agreement, Sellers will
jointly cause the Acquired Companies not to engage in, without the consent of Buyer (which will not
be unreasonably withheld, conditioned or delayed), any transaction which, if engaged in since March
31, 2006, but on or before the date of this Agreement, would constitute a breach of the
representations and warranties of Sellers contained in Section 6.15(b).




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          (b) Between the date of this Agreement and the Closing Date, or, if earlier, the date this
Agreement is terminated pursuant to Section 14.1, Sellers will jointly cause the Acquired Companies
to use commercially reasonable efforts to maintain, consistent with past practices, relationships
with suppliers and customers having business relations with the Acquired Companies (it being
understood that such efforts will not include any requirement or obligation of any Seller or any
Acquired Company to pay any consideration not otherwise required to be paid or offer or grant any
financial accommodation or other benefit not otherwise required to be made).




          SECTION 9.2 Exclusive Dealing. Between the date of this Agreement and the Closing
Date, or, if earlier, the date this Agreement is terminated pursuant to Section 14.1, each Seller
will not and will cause its Representatives not to, and Sellers will jointly cause the Acquired
Companies and each of the Acquired Companies’ Representatives not to, solicit, encourage or
initiate proposals, inquiries or offers from, participate in negotiations with, or provide any
material information to, or enter into any Contract with any Person (other than Buyer or its
Representatives or Governmental Entities with respect to the transactions contemplated by this
Agreement) concerning any purchase of the RSC Shares or the RSL Shares or any merger of any of the
Acquired Companies, sale of any substantial portion of the assets of any of the Acquired Companies
(other than sales of inventory and other assets in the Ordinary Course of Business) or similar
transaction involving any of the Acquired Companies.




          SECTION 9.3 HSR Act Compliance. Each Seller and Buyer will promptly, and in any event
within fifteen days after execution of this Agreement, make or cause to be made all filings or
submissions as are required under the HSR Act. Each Seller and Buyer will promptly furnish to the
other Parties such necessary information and reasonable assistance as any of the other Parties may
request in connection with its preparation of any filing or submission which is necessary under the
HSR Act. Each Seller and Buyer will promptly provide the other Parties with copies of all written
communications (and memoranda setting forth the substance of all oral communications) by or between
each of them or their Representatives, on the one hand, and any Governmental Entity, on the other
hand, with respect to this Agreement or the transactions contemplated hereby. Without limiting the
generality of the foregoing, each Seller and Buyer will promptly notify the other Parties of the
receipt and content of any inquiries or requests for additional information made by any
Governmental Entity in connection therewith and will (i) comply promptly with any such inquiry or
request and (ii) promptly provide the other Parties with a description of the information provided
to any Governmental Entity with respect to any such inquiry or request. In addition, each Seller
and Buyer will keep the other Parties apprised of the status of any such inquiry or request.




          SECTION 9.4 Commercially Reasonable Efforts. Between the date of this Agreement and
the Closing Date, or, if earlier, the date this Agreement is terminated pursuant to Section 14.1,
(i) Buyer will use its commercially reasonable efforts to cause to be fulfilled the conditions to
the obligations of Sellers set forth in Article XII, (ii) each Seller will use its commercially
reasonable efforts to cause to be fulfilled the conditions to the obligations of Buyer set forth in
Article XI that are applicable to such Seller and (iii) Buyer and each Seller




22









 







will use its commercially reasonable efforts to take all actions necessary or advisable under
Law to consummate or make effective the transactions contemplated by this Agreement.




          SECTION 9.5 Further Assurances. From time to time after the Closing, as and when
requested by any other Party, each Party will execute and deliver, or cause to be executed and
delivered, all such documents and instruments and will take, or cause to be taken, all such actions
as such other Party may reasonably request to consummate the transactions contemplated by this
Agreement.




          SECTION 9.6 Obligations Relating to the Business.




          (a) Prior to the Closing, Buyer will, at its expense, take or cause to be taken all actions
and enter into such agreements and arrangements as shall be necessary to effect, effective as of
the Effective Time, the release of each of the Members from, and the substitution of Buyer for each
of the Members relating to, all primary, contingent, secondary, joint, several and other
Liabilities in respect of those Financial Instruments set forth on Schedule 9.6(a).




          (b) Buyer will, at its expense, use its commercially reasonable efforts to take or cause to be
taken all actions and to enter into such agreements and arrangements as shall be necessary to
effect, effective as of the Effective Time, the release of each of the Members from, and the
substitution of Buyer for each of the Members relating to, all primary, contingent, secondary,
joint, several and other Liabilities in respect of those bonds, indemnities, assurances and other
Contracts set forth on Schedule 9.6(b); provided, however, that Buyer will not be
obligated to pay any consideration therefor to any third party (it being understood that all
Liabilities in respect of such bonds, indemnities, assurances and Contracts are also subject to
indemnification by Buyer pursuant to Section 13.2).




          (c) As of the Effective Time, Sellers shall cause the Acquired Companies to have cash on hand
in an amount equal to the sum of (i) Six Million Three Hundred Twenty-Five Thousand Three Hundred
Twenty-Two dollars ($6,325,322) and (ii) the amount obtained by multiplying Three Million Eight
Hundred Eighty-Seven Thousand Four Hundred Fifty-Four dollars ($3,887,454) by a fraction, the
numerator of which is the number of days (up to a maximum of 365 days) in the period from and
including October 1, 2005 to the Closing Date, and the denominator of which is 365 (it being
understood that each Seller’s obligation shall be limited to causing the Acquired Companies to so
have cash on hand equal to one-half of such amounts).




          (d) Following the Closing, Buyer will cause the Company to (i) make irrevocable contributions
to the trust established pursuant to the Rabbi Trust Agreement dated September 20, 2004 by and
between the Company and Mellon Bank, N.A. (the “Rabbi Trust Agreement”) in the amount of Five
Million Four Hundred Thirty-Eight Thousand dollars ($5,438,000) within three business days
following the Closing Date, (ii) pay all retention bonuses and transition bonuses pursuant to, and
in the amounts and time periods required by, the Executive Retention and Transition Bonus
Agreements described in Section 6.9(a)(ii) of Schedule 6.9(a) and (iii) use the amounts set forth
in Section 9.6(c)(ii) to make incentive




23









 







compensation and bonus payments to employees of the Acquired Companies in respect of fiscal
year 2006 under the Company’s Annual Result Sharing Plan as in effect on the date hereof in the
Ordinary Course of Business.




          SECTION 9.7 Cash Management.




          (a) Buyer will pay Automation (by wire transfer to Automation’s bank account at Mellon Bank,
N.A., Pittsburgh, Pennsylvania, Account No. 102-3474 (ABA: 043 000 261; SWIFT: MELN US 3P)), within
five business days after the Closing Date, an amount equal to one-half of the sum of (i) all cash
balances in the bank accounts of any of the Acquired Companies (after deducting from such balances
the amount of any outstanding checks) as of the Effective Time (other than RSC LTIP Cash and
amounts pursuant to Section 9.6(c)), (ii) all balances contained as of the Effective Time in petty
cash locations of any of the Acquired Companies, (iii) the dollar value of travelers checks as of
the Effective Time at locations of any of the Acquired Companies and (iv) the amount of all checks
and wire transfers received by any of the Acquired Companies prior to the Effective Time which were
not deposited in bank accounts of any of the Acquired Companies prior to the Effective Time or
which were so deposited but are not reflected as cash on deposit in any bank accounts of the
Acquired Companies as of or prior to the Effective Time.




          (b) Buyer will pay Collins (by wire transfer to Collins’ bank account at Mellon Bank, N.A.,
Pittsburgh, Pennsylvania, Account No. 091-2704 (ABA Number: 043-000-261; SWIFT: MELN US 3P)),
within five business days after the Closing Date, an amount equal to one-half of the sum of (i) all
cash balances in the bank accounts of any of the Acquired Companies (after deducting from such
balances the amount of any outstanding checks) as of the Effective Time (other than RSC LTIP Cash
and amounts pursuant to Section 9.6(c)), (ii) all balances contained as of the Effective Time in
petty cash locations of any of the Acquired Companies, (iii) the dollar value of travelers checks
as of the Effective Time at locations of any of the Acquired Companies and (iv) the amount of all
checks and wire transfers received by any of the Acquired Companies prior to the Effective Time
which were not deposited in bank accounts of any of the Acquired Companies prior to the Effective
Time or which were so deposited but were not reflected as cash on deposit in any bank accounts of
the Acquired Companies as of or prior to the Effective Time.




          SECTION 9.8 Use of Names, Trademarks, Etc.




          (a) From and after the Effective Time, except as permitted in Section 9.8(b), none of Buyer or
any of its Affiliates (including the Acquired Companies) will have any rights to any of the
Retained Names. From and after the Effective Time, none of Buyer or any of its Affiliates
(including the Acquired Companies) will hold itself out as having any affiliation with any of the
Members. As soon as reasonably practicable after the Effective Time (but in no event later than
thirty days after the Effective Time), Buyer will change the name of each of RSC and RSL (by
amending its certificate of formation and limited liability company agreement) to eliminate
therefrom the name “Rockwell”.




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          (b) Automation hereby grants to the Acquired Companies a non-exclusive, non-transferable
license to utilize without obligation to pay royalties to Automation the names, trademarks or trade
names “Rockwell” and “Rockwell Scientific” and any corporate symbol or logo related thereto in
connection with stationery, supplies, labels, catalogs, vehicles, signs and products of the
Acquired Companies described in sections (i) through (iv) of this Section 9.8(b), subject to the
terms and conditions of this Section 9.8(b) and Section 9.8(c), in each case, solely in connection
with the operation of the Business and in the same manner and to the same extent as such names,
trademarks, trade names, corporate symbols or logos were used by the Acquired Companies immediately
prior to the Effective Time; provided, that such license shall cease immediately upon expiration of
the periods identified below. All goodwill arising from such use shall inure to Automation. Buyer
agrees that the nature and quality of all goods and services rendered by the Acquired Companies in
connection with such names, trademarks, trade names, corporate symbols or logos shall be
advertised, offered and provided in a manner consistent with the quality control standards
previously used by the Acquired Companies, and that the Acquired Companies will use such names,
trademarks, trade names, corporate symbols or logos in compliance with all applicable laws and
regulations.





     (i) All stationery, invoices, purchase orders and other similar documents of a
transactional nature, business cards, outside forms such as packing lists, labels, and
cartons, forms for internal use only and product literature constituting assets of the
Acquired Companies as of the Effective Time may be used for a period of ninety days following
the Effective Time or until the supply is exhausted, whichever is the first to occur.




     (ii) All “Rockwell” markings on vehicles constituting assets of the Acquired Companies as
of the Effective Time shall be removed prior to the earlier of (A) 120 days following the
Effective Time or (B) the date of disposition of the vehicle, whichever is the first to occur.




     (iii) Within ninety days following the Effective Time, Buyer will cause the Acquired
Companies to remove from display at all owned and leased facilities constituting assets of the
Acquired Companies all demountable displays which contain the names, trademarks or trade names
“Rockwell” or “Rockwell Scientific” or any corporate symbol related thereto and Buyer will
cause the Acquired Companies to remove, or will cause the removal of, all signs displaying any
such name, trademark, trade name or corporate symbol at all such facilities no later than
ninety days following the Effective Time.




     (iv) Products of the Acquired Companies in finished goods inventory and work in process
(to the extent the same bear the names, trademarks or trade names “Rockwell” or “Rockwell
Scientific” at the Effective Time) may be disposed of without remarking in the Ordinary Course
of Business.



          (c) (i) Apart from the rights granted under Section 9.8(b), none of Buyer or any of its
Affiliates (including the Acquired Companies) shall have any right, title or interest in, or to the
use of, any of the Retained Names, either alone or in combination with any other word,




25









 







name, symbol, device, trademarks, or any combination thereof. Anything contained herein to
the contrary notwithstanding, except as expressly permitted by Section 9.8(b), in no event will
Buyer or any of its Affiliates (including the Acquired Companies) utilize any of the Retained Names
as a component of a company or trade name. Buyer will not, and will cause each of its Affiliates
(including the Acquired Companies) not to, challenge or contest the validity of any of the Retained
Names, the registration thereof or the ownership thereof by Automation. Buyer will not, and will
cause each of its Affiliates (including the Acquired Companies) not to, apply anywhere at any time
for any registration as owner or exclusive licensee of any of the Retained Names. If,
notwithstanding the foregoing, Buyer or any of its Affiliates (including the Acquired Companies)
develops, adopts or acquires, directly or indirectly, any right, title or interest in, or to the
use of, any of the Retained Names in any jurisdiction, or any goodwill incident thereto, Buyer
will, upon the reasonable request of Automation, and for a nominal consideration of one dollar,
assign or cause to be assigned to Automation or any designee of Automation, all right, title and
interest in, and to the use of, such Retained Names in any and all jurisdictions, together with any
goodwill incident thereto.





     (ii) If the laws of any country require that any mark subject to Section 9.8(b) or the
right of any of the Acquired Companies to use any mark as permitted by Section 9.8(b) be
registered in order to fully protect Automation, then Buyer and Automation will cooperate in
constituting such Acquired Company as a registered user (or its equivalent) in each of the
countries in which such registration is necessary. Any expenses for registering such mark or
constituting an Acquired Company as a registered user in any country shall be borne by Buyer.
Any registration of an Acquired Company as a registered user of any mark hereunder shall be
expunged on termination of the period of permitted use under this Agreement or upon a breach
or threatened breach by Buyer or any of its Affiliates (including the Acquired Companies) of
the terms of this Section 9.8 and Buyer will, upon request of Automation, take or cause to be
taken all necessary steps to cause such registration to be so expunged upon such termination
or breach or threatened breach.




     (iii) Automation will have the right to terminate the license granted in Section 9.8(b)
(except with respect to clauses (i) and (iv) of Section 9.8(b)) in the event of a material
breach of this Section 9.8(c) by Buyer or any of its Affiliates (including the Acquired
Companies) that has not been cured within thirty days after written notice thereof by
Automation to Buyer.




     (iv) Buyer hereby constitutes and appoints Automation the true and lawful attorney of
Buyer and its Affiliates (including the Acquired Companies) to act as their attorney-in-fact
to execute any documents and to take all necessary steps to cause Buyer and its Subsidiaries
to perform any of their obligations set forth in this Section 9.8(c); provided, that notice is
provided to Buyer prior to Automation executing any such document.



26









 





          SECTION 9.9 Restrictions.




          (a) For a period of three years after the Closing Date, Buyer will not, and Buyer will cause
its Affiliates (including the Acquired Companies) not to, use or make use of, in any manner, any
Business Intellectual Property, any assets of any of the Acquired Companies or any employee of any
of the Acquired Companies as of or after the Closing Date, directly or indirectly, to provide, or
in any way in the provision of, any research and development services to the entities listed on
Schedule 9.9(a) in the fields of business set forth on Schedule 9.9(a), except (i) to the same
extent the Acquired Companies are doing so with respect to such entities listed on Schedule 9.9(a)
on the date hereof or (ii) to the extent reasonably deemed necessary by Guarantor to support
Buyer’s and its Affiliates businesses and/or product lines existing on the date hereof (other than
businesses and/or product lines of the Acquired Companies) with such entities listed on Schedule
9.9(a).




          (b) (i) Buyer shall not, and shall not permit any of its Affiliates (including the Acquired
Companies) to, solicit for hire or hire any employee of any Seller or any of its Subsidiaries as of
the Closing Date for a period of two years after the Closing Date without the prior written consent
of such Seller; provided, that the foregoing will not prevent (A) Buyer or any of its Affiliates
from hiring any employee terminated by any Seller or any of its Subsidiaries following such
termination, (B) Buyer or any of its Affiliates from hiring any employee of any Seller or any of
its Subsidiaries who terminates such employment after six months from the date of such termination
or (C) any bona fide public advertisement for employment placed by Buyer or any of its Affiliates
not specifically targeted at employees of any Seller or any of its Subsidiaries.





     (ii) Each Seller shall not, and shall not permit any of its Subsidiaries to, solicit for
hire or hire any employee of any Acquired Company as of the Closing Date for a period of two
years after the Closing Date without the prior written consent of Buyer; provided, that the
foregoing will not prevent (A) such Seller or any of its Subsidiaries from hiring any employee
terminated by any Acquired Company following such termination, (B) such Seller or any of its
Subsidiaries from hiring any employee of any Acquired Company who terminates such employment
after six months from the date of such termination or (C) any bona fide public advertisement
for employment placed by such Seller or any of its Subsidiaries not specifically targeted at
employees of any Acquired Company.



          (c) Each Seller will not, and will cause its respective Subsidiaries not to, develop,
manufacture, license, sell or distribute, directly or indirectly;





     (i) for a period of five years after the Closing Date, third generation dual band imagers
for the programs set forth on Schedule 9.9(c) or for follow-on awards related to such
programs;




     (ii) for a period of five years after the Closing Date, focal plane array imagers for
astronomy and spy satellites;



27









 






     (iii) for a period of three years after the Closing Date, very high resolution visible
light CMOS arrays (meaning visible light CMOS arrays containing twenty five million or more
pixels) for surveillance in military satellite, military aircraft and military unmanned aerial
vehicle applications (provided that the foregoing shall not prevent any Seller or any of its
Subsidiaries from developing, manufacturing, licensing or purchasing cameras containing such
very high resolution visible light CMOS arrays (so long as such very high resolution visible
light CMOS arrays are not manufactured by such Seller or its Subsidiaries) and integrating
them into a surveillance package that is sold or distributed by such Seller or any of its
Affiliates); or




     (iv) for a period of five years after the Closing Date, Laser Eye Protection Spectacles
using rugate or rugate-based technology, except in connection with follow-on awards under
existing contracts or proposals of any Seller or its Subsidiaries relating to laser eye
protection spectacles or goggles, provided that neither Seller nor its Subsidiaries shall, for
a period of five years after the Closing Date, submit any proposals with respect to Laser Eye
Protection Spectacles or participate (including as a subcontractor) in respect of Laser Eye
Protection Spectacles under the U.S. Air Force’s Aircrew Laser Eye Protection Block 1 or Block
2 programs, including any follow-on awards related to such programs;


provided, however, that (x) Vision Systems International, LLC, a limited liability
company in which Collins holds 50% of the membership interests, shall not be subject to the
provisions of this Section 9.9(c) (except that if Collins acquires greater than 50% of the equity
interests in Vision Systems International, LLC at any time while this Section 9.9(c) is in effect,
the provisions of this Section 9.9(c) will apply to Vision Systems International, LLC for the
period that Collins holds greater than 50% of such equity interests) and (y) any Seller or its
Subsidiaries may at any time acquire all or any part of any business that derives less than 20% of
its revenues from (and such acquired businesses may continue to engage in) operations described in
the preceding clauses (i) through (iv). Each Seller agrees that the restrictions contained in this
Section 9.9(c) are necessary for protection of the business and goodwill of the Acquired Companies.
For the avoidance of doubt, matters pertaining to Excluded IP are governed by the IP Agreement.




          SECTION 9.10 Public Announcements. No press release or public announcement concerning
the transactions contemplated hereby will be issued prior to the Closing Date by any Seller or
Buyer (or any of their respective Affiliates) without the prior consent of the other Parties (which
consent will not be unreasonably withheld, conditioned or delayed), except as such release or
announcement may be required by Law or stock exchange regulation.




          SECTION 9.11 Pre-Closing Transfer of Retained Assets. Prior to the Closing, Sellers
will jointly cause, effective at the Effective Time, all assets of the Acquired Companies
constituting Retained Assets to be transferred, for no consideration and without any liability or
obligation to the Acquired Companies, by the Acquired Companies to a Member (which may be an entity
owned by one or more Members).




28









 








          SECTION 9.12 Post-Closing Access; Preservation of Records.




          (a) From and after the Closing, Buyer will make or cause to be made available to the Members
and their Representatives all books, records and documents of the Acquired Companies (and the
assistance of Buyer’s and its Affiliates’ (including the Acquired Companies) employees responsible
for such books, records and documents) during regular business hours as may be reasonably necessary
for (i) preparing Tax Returns and financial statements and preparing for or responding to Tax
audits covering operations and transactions at or prior to the Effective Time, (ii) investigating,
settling, preparing for the defense or prosecution of, defending or prosecuting any Action, (iii)
preparing reports to stockholders, members or Government Entities, (iv) obtaining or seeking to
obtain any refund or credit relating to the Acquired Companies for any Pre-Closing Tax Period or
(v) such other purposes for which access to such documents is believed by any of the Members to be
reasonably necessary; provided, however, that access to such books, records,
documents and employees will not unreasonably interfere with the normal operations of Buyer and its
Affiliates and the reasonable out-of-pocket expenses of Buyer and its Affiliates incurred in
connection therewith will be paid by Sellers. Buyer will maintain and preserve or cause to be
maintained and preserved all such books, records and other documents for the greater of (A) seven
years after the Closing Date or (B) any applicable statutory or regulatory retention period, as the
same may be extended. At the end of such period, Buyer shall provide Sellers with at least thirty
calendar days prior written notice before destroying any such books and records, during which
period Sellers can elect to take possession of such books and records.




          (b) From and after the Closing, each Seller will make or cause to be made available to Buyer
and its Representatives all books, records and documents of such Seller relating to the Acquired
Companies (and the assistance of such Seller’s employees responsible for such books, records and
documents) during regular business hours for the same purposes, to the extent applicable, as set
forth in Section 9.12(a); provided, however, that access to such books, records,
documents and employees will not unreasonably interfere with the normal operations of such Seller
and the reasonable out-of-pocket expenses of such Seller incurred in connection therewith will be
paid by Buyer.




          SECTION 9.13 Certain Intercompany Agreements.




          (a) Effective immediately prior to Closing, (i) all commitments to lend monies under the
Member Loan Agreement shall terminate and will be of no further force or effect and any amounts
owed by the Company or any Member thereunder will be settled, eliminated or cancelled (in a manner
determined by Sellers) and (ii) Collins’ obligations under Section 3.09(j) of the Distribution
Agreement shall terminate.




          (b) On the Closing Date, Collins will, and Sellers will jointly cause the Company to, enter
into an amendment to the Cypress Services Agreement (the “Cypress Services Agreement Amendment”) in
form reasonably satisfactory to Collins and Buyer, providing (i) that the Cypress Services
Agreement shall automatically terminate in whole on the one year anniversary of the Closing Date,
(ii) that the Company shall have the option to terminate the Cypress Services Agreement in whole
prior thereto by providing Collins with written notice




29









 







of such termination at least ninety days prior to the effective date of such termination,
(iii) that the monthly amounts payable for each full or partial month during the term of the
Cypress Services Agreement set forth in Sections 2.11(a), (b), (c), (d) and (e) of the Cypress
Services Agreement and the rates for determining Incremental Costs (as defined in the Cypress
Services Agreement) set forth in Section 2.11(f) of the Cypress Services Agreement will increase by
five percent (5%) commencing on January 1, 2007, (iv) that the services to be performed pursuant to
the last paragraph of Section 2.01(a)(i), the last paragraph of Section 2.01(b)(i), the last
paragraph of Section 2.02, the last paragraph of Section 2.03(a), the last paragraph of Section
2.04, the last paragraph of Section 2.06, the last paragraph of Section 2.07 and the last paragraph
of Section 2.08 of the Cypress Services Agreement shall be performed only through the end of the
calendar year in which the Cypress Services Agreement is terminated with respect to periods prior
to and including the date of termination of the Cypress Services Agreement and (v) for such other
modifications as shall be agreed to by Buyer and Collins.




          SECTION 9.14 Directors’ and Officers’ Indemnification and Insurance.




          (a) Buyer shall (i) for a period of six years from the Effective Time, indemnify and hold
harmless against all losses, claims, damages, expenses or liabilities, and provide advancement of
expenses to, all past and present directors, officers, managers and employees of each of the
Acquired Companies (in all of their capacities as such) (“Indemnified Individuals”), to the
same extent such persons are indemnified or have the right to advancement of expenses as of the
date of this Agreement by any of the Acquired Companies pursuant to the respective limited
liability company agreements of the Acquired Companies and any indemnification agreements in
existence on the date hereof with any such Indemnified Individuals for acts or omissions occurring
at or prior to the Effective Time (including for acts or omissions occurring in connection with
this Agreement and the consummation of the transactions contemplated hereby), provided that in the
event any claim is asserted or made within such six year period, all rights hereunder in respect of
such claim shall continue until disposition thereof and (ii) cause to be maintained for a period of
six years after the Effective Time the current policies of directors’ and officers’ liability
insurance and fiduciary liability insurance maintained by any of the Acquired Companies (provided
that Buyer may substitute therefor policies of at least the same coverage and amounts containing
terms and conditions which are, in the aggregate, no less advantageous to the insured than the
current policies maintained by any of the Acquired Companies) with respect to claims arising from
facts or events that occurred at or before the Effective Time; provided, however, that in no event
shall Buyer be required to expend in any one year an amount in excess of 175% of the annual
premiums currently paid by the Acquired Companies for such insurance and provided, further, that if
the annual premiums of such insurance coverage exceed such amount, Buyer shall be obligated to
obtain a policy with the greatest coverage available to a cost not exceeding such amount.




          (b) The provisions of this Section 9.14 are intended to be for the benefit of, and shall be
enforceable by, each Indemnified Individual and his or her heirs and legal representatives.




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          SECTION 9.15 Purchase Agreements. The parties acknowledge that as of the Effective
Time, the Acquired Companies will no longer be able to make purchases under certain corporate or
other purchase agreements of the Sellers or their Subsidiaries under which the Acquired Companies
may have had rights due to their relationship with the Members, and that Buyer and its Affiliates
(including the Acquired Companies) shall be responsible for all expenses incurred in replacing such
agreements.




          SECTION 9.16 Confidentiality. During the three year period following the Closing
Date, each Seller will, and will use commercially reasonable efforts to cause its Representatives
to, hold in confidence all confidential information of the Acquired Companies relating to the
Business; provided, that such obligation shall not extend to any such confidential information that
(a) is or becomes generally available to the public other than as a result of a disclosure by such
Seller or its Representatives after the Closing Date or (b) becomes available to such Seller or any
of its Representatives on a non-confidential basis from a source other than any Seller or any of
its Representatives. Notwithstanding the foregoing, each Seller will be deemed to have satisfied
its obligations under this Section 9.16 with respect to any confidential information if it
exercises the same care with regard to such information as it takes to preserve confidentiality for
its own similar information.




          SECTION 9.17 Tax Matters.




          (a) Following the Closing, each Seller and Buyer will cooperate with each other Party, as and
to the extent reasonably requested by any other Party, in the preparation of any Tax returns and in
the conduct of any audit or other proceeding related to Taxes involving or relating to the Acquired
Companies. Buyer will promptly provide each Seller with written notification (an “Audit
Notice”) of any notice of any Tax audits or other assessments against any of the Acquired
Companies involving any Pre-Closing Tax Periods. Upon receipt of an Audit Notice relating to a
Pre-Closing Tax Period, Sellers shall have the right to jointly conduct and control, through
counsel of their choosing, the defense of the audit or assessment, and may compromise or settle the
same with the consent of Buyer or any Acquired Company, which consent shall not be unreasonably be
withheld.




          (b) Sellers will jointly be responsible for the preparation and filing of all partnership
income Tax returns for the Acquired Companies for all Pre-Closing Tax Periods that are filed after
the Closing Date. The Acquired Companies shall be responsible for preparing and providing to
Sellers completed initial drafts of such partnership income Tax returns in a manner consistent with
past practice within 90 days after the Closing Date.




          (c) (i) Notwithstanding anything to the contrary in this Agreement, unless Sellers and Buyer
otherwise agree in writing, (A) the Company (and not Sellers) shall claim any Tax deductions in
respect of any stock options of Automation or Collins exercised after the Closing Date by employees
or former employees of the Acquired Companies, (B) in the case of any such exercise of any stock
option of Automation, Buyer shall pay to Automation the amount of the Tax benefit Actually Realized
in respect of such Tax deductions within thirty days of the conclusion of the applicable fiscal
quarter and (C) in the case of any such exercise of any stock option of Collins, Buyer shall pay to
Collins the amount of the Tax




31









 







benefit Actually Realized in respect of such Tax deductions within thirty days of the
conclusion of the applicable fiscal quarter.





     (ii) Automation shall promptly notify Buyer of the exercise of any stock options of
Automation after the Closing Date by employees or former employees of the Acquired Companies,
shall collect all applicable withholding Taxes required to be withheld from such employees or
former employees in connection with the exercise of such options and shall remit (or cause to
be remitted) to Buyer any applicable withholding Taxes so collected by Automation from such
employees or former employees. If required by law, Buyer shall cause the Company to withhold
applicable Taxes and satisfy applicable Tax reporting obligations in connection therewith.
Automation shall within ten days of demand thereof reimburse Buyer for all reasonable
out-of-pocket expenses incurred in connection with the exercise of the Automation stock
options, including with respect to incremental Tax reporting obligations and any incremental
employment Tax obligations; provided that Buyer shall use reasonable efforts to collect any
such amounts required to be paid by the applicable employees or former employees of the
Acquired Companies.




     (iii) Collins shall promptly notify Buyer of the exercise of any stock options of Collins
after the Closing Date by employees or former employees of the Acquired Companies, shall
collect all applicable withholding Taxes required to be withheld from such employees or former
employees in connection with the exercise of such options and shall remit (or cause to be
remitted) to Buyer any applicable withholding Taxes so collected by Collins from such
employees or former employees. If required by law, Buyer shall cause the Company to withhold
applicable Taxes and satisfy applicable Tax reporting obligations in connection therewith.
Collins shall within ten days of demand thereof reimburse Buyer for all reasonable
out-of-pocket expenses incurred in connection with the exercise of the Collins stock options,
including with respect to incremental Tax reporting obligations and any incremental employment
Tax obligations; provided that Buyer shall use reasonable efforts to collect any such amounts
required to be paid by the applicable employees or former employees of the Acquired Companies.




     (iv) In the event a Tax audit proceeding shall determine (by settlement or otherwise)
that all or a portion of the Tax deductions reported by the Company in respect of the stock
options of Automation exercised after the Closing Date by employees or former employees of the
Acquired Companies shall be disallowed, Automation shall indemnify Buyer for any resulting
Taxes.




     (v) In the event a Tax audit proceeding shall determine (by settlement or otherwise) that
all or a portion of the Tax deductions reported by the Company in respect of the stock options
of Collins exercised after the Closing Date by employees or former employees of the Acquired
Companies shall be disallowed, Collins shall indemnify Buyer for any resulting Taxes.



          (d) Sellers shall be responsible for the payment of any Income Taxes attributable to the
Acquired Companies for all Pre-Closing Tax Periods. Sellers shall be entitled to any




32









 







refunds of Income Taxes relating to the Acquired Companies that are received by or credited to
Buyer after the Closing Date and that are attributable to any Pre-Closing Tax Period.




          (e) In the event it is determined by Tax audit proceeding or otherwise that any deduction,
loss or credit claimed for any Pre-Closing Tax Period should be claimed for a later period, Buyer
shall pay to Sellers the amount of Tax benefits resulting from claiming such deduction, loss or
credit for such later period at such time as such Tax benefits are Actually Realized. In the event
it is determined by Tax audit proceeding or otherwise that any income, gain or recapture reflected
on an income Tax return for any Pre-Closing Tax Period should be reflected on income Tax returns
for a later period, each Seller shall pay to Buyer the amount of Tax benefits resulting from the
exclusion of such income, gain or recapture from such Pre-Closing Tax Period at such time as such
Tax benefits are Actually Realized by such Seller.




          SECTION 9.18 Certain Payments by Sellers.




          (a) From and after January 1, 2007, the Company shall send to Automation one or more invoices
for research and development work and reasonable fees totalling Two Million Seven Hundred Fifty
Thousand dollars ($2,750,000) for services expected to be provided by the Company in 2007 to a
Person or Persons designated by Buyer. From and after January 1, 2007, the Company shall send to
Collins one or more invoices for research and development work and reasonable fees totalling Two
Million Seven Hundred Fifty Thousand dollars ($2,750,000) for services expected to be provided by
the Company in 2007 to a Person or Persons designated by Buyer. Such invoiced amounts will cover
the Company’s costs and reasonable fees for any such services. Each such invoice shall be paid by
Automation or Collins, as the case may be, within 30 days of receipt from the Company.




          (b) From and after January 1, 2009, the Company shall send to Automation one or more invoices
for research and development work and reasonable fees totalling One Million Two Hundred Fifty
Thousand dollars ($1,250,000) for services expected to be provided by the Company in 2009 to a
Person or Persons designated by Buyer. From and after January 1, 2009, the Company shall send to
Collins one or more invoices for research and development work and reasonable fees totalling One
Million Two Hundred Fifty Thousand dollars ($1,250,000) for services expected to be provided by the
Company in 2009 to a Person or Persons designated by Buyer. Such invoiced amounts will cover the
Company’s costs and reasonable fees for any such services. Each such invoice shall be paid by
Automation or Collins, as the case may be, within 30 days of receipt from the Company.




          (c) For avoidance of doubt, the provisions set forth in this Section 9.18 for research and
development services are in addition to services under the Collins Services Agreement, the
Automation Services Agreement and the Transition Agreement, dated as of December 6, 1996, among New
Rockwell International Corporation, The Boeing Company and Rockwell International Corporation.




33









 








ARTICLE X




EMPLOYEE MATTERS




          SECTION 10.1 Offer of Employment. Buyer will cause the Acquired Companies to continue
to employ, commencing as of the Closing Date, each of the employees of the Acquired Companies who
are employed (including those who are actively employed or on layoff, leave or short-term or
long-term disability or other permitted absence from employment, whether paid or unpaid)
immediately prior to the Closing Date. Buyer will cause the Acquired Companies to continue to
provide to each such employee, commencing as of the Closing Date, a salary or wage level at least
equal to that which such employee was entitled to from the Acquired Companies immediately prior to
the Closing Date and employee benefits comparable in all material respects to and no less favorable
in the aggregate than the employee benefits provided to each such employee by the Acquired
Companies immediately prior to the Closing Date. Nothing contained herein shall prevent Buyer from
changing any employment status, salary or employee benefits to such employees after the Closing
Date (provided that Section 13.2 shall apply with respect to any such actions).




          SECTION 10.2 Welfare Plans. If any employee of any Acquired Company on the Closing
Date becomes, on or after the Closing Date, a participant in any employee welfare benefit plans
(within the meaning of Section 3(1) of ERISA) or other employee welfare benefit or fringe benefit
arrangements of Buyer or any of its Affiliates (collectively, the “Buyer Benefit Plans”),
Buyer will cause (i) the Buyer Benefit Plans to provide for the immediate participation of such
employee pursuant to its terms and (ii) the Buyer Benefit Plans to credit each employee with the
same service and any other item credited to or otherwise accumulated for the benefit of such
employee under the corresponding welfare benefit plans of the Acquired Companies (except the
Teledyne Pension Plan which was closed in January 2004 to new participants and the Teledyne Stock
Advantage Plan), including service credited for waiting periods and amounts credited toward any
medical or health insurance deductible or co-payments or out-of-pocket maximums. Without limiting
the generality of the foregoing, Buyer will cause each Buyer Benefit Plan, to the extent
applicable: (i) to recognize all amounts applied to deductibles, co-payments, out-of-pocket
maximums and lifetime maximum benefits with respect to each such employee under the corresponding
welfare benefit plan of the Acquired Companies; (ii) to recognize all service credited to waiting
periods with respect to each such employee under the corresponding welfare benefit plan of the
Acquired Companies; (iii) to not impose any limitations on coverage of pre-existing conditions of
any such employee, except to the extent such limitations applied to such employee under the
corresponding welfare benefit plan of the Acquired Companies; and (iv) to not impose any other
conditions (such as proof of good health, evidence of insurability or a requirement of a physical
examination) upon the participation by any such employee who was participating in the corresponding
welfare benefit plan of the Acquired Companies.




          SECTION 10.3 Long-Term Incentive Plan. From and after the Closing until all payments
required to be made thereunder have been made, Buyer will cause the Company to retain sponsorship
of the Company’s Long-Term Incentive Plan 2003-2007 (the “RSC LTIP”)




34









 







and to make payments to participants thereunder in accordance with the terms thereof as in
effect immediately prior to the Closing. Each Seller will, and will cause each of its Affiliates
to, and Sellers will jointly cause any Person jointly owned by Automation and/or any of its
Affiliates and Collins and/or any of its Affiliates to, cause to be transferred to the Company, for
deposit into the RSC LTIP Fund, one-third of the net cash actually received (net of expenses
incurred in connection therewith) by such Member prior to September 30, 2007 from the liquidation
by any such Member of securities held by such Member in Portfolio Companies that are held by it, as
approved by such Member; provided that, if the securities held by such Member in any of the
Portfolio Companies are liquidated by such Member in connection with the sale or transfer of other
assets of such Member or any of its Subsidiaries, then the amount, if any, of such net cash
attributable to the liquidation of securities held by such Member in such Portfolio Companies shall
be determined by such Member in its sole discretion.




ARTICLE XI




CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER




          The obligations of Buyer to consummate the transactions contemplated hereby will be subject to
the satisfaction or waiver by Buyer of each of the following conditions:




          SECTION 11.1 Representations and Warranties. The representations and warranties of
each Seller contained in Article V and of Sellers contained in Article VI (i) that are qualified as
to Material Adverse Effect shall be true and correct as of the Closing Date, except to the extent
such representations and warranties are by their express terms made as of the date of this
Agreement or another specific date (in which case, such representations and warranties shall be
true and correct as of such date), and (ii) the representations and warranties of each Seller
contained in Article V and of Sellers contained in Article VI that are not qualified as to Material
Adverse Effect shall be true and correct as of the Closing Date, except to the extent such
representations and warranties are by their express terms made as of the date of this Agreement or
another specific date (in which case, such representations and warranties shall be true and correct
as of such date), except for failures of the representations and warranties referred to in this
clause (ii) to be so true and correct as do not and would not reasonably be expected to have, in
the aggregate, a Material Adverse Effect, and there shall have been delivered to Buyer a
certificate signed by an executive officer of each Seller confirming the foregoing as of the
Closing Date with respect to the representations and warranties of such Seller contained in Article
V and the representations and warranties of Sellers contained in Article VI.




          SECTION 11.2 Covenants and Agreements. The covenants and agreements of each Seller to
be performed or complied with pursuant to this Agreement at or prior to the Closing shall have been
duly performed and complied with in all material respects or waived by Buyer and there shall have
been delivered to Buyer a certificate signed by an executive officer of such Seller confirming the
foregoing as of the Closing Date.




35









 








          SECTION 11.3 No Adverse Order. There shall not be in effect on the Closing Date any
judgment, decree or order issued by any court of competent jurisdiction which restrains or
prohibits the consummation by any Seller or Buyer of the transactions contemplated hereby.




          SECTION 11.4 HSR Act. The applicable waiting period under the HSR Act shall have
expired or terminated.




          SECTION 11.5 No Material Adverse Effect. Since the date of this Agreement, there
shall not have been any change in the business, financial condition or operations of the Acquired
Companies, taken as a whole, that has had or would reasonably be expected to have a Material
Adverse Effect.




ARTICLE XII




CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS




          The obligations of Sellers to consummate the transactions contemplated hereby will be subject
to the satisfaction or waiver by each Seller of each of the following conditions:




          SECTION 12.1 Representations and Warranties. The representations and warranties of
Buyer contained in Article VII (i) that are qualified as to “material adverse effect” shall be true
and correct as of the Closing Date, except to the extent such representations and warranties are by
their express terms made as of the date of this Agreement or another specific date (in which case,
such representations and warranties shall be true and correct as of such date), and (ii) the
representations and warranties of Buyer contained in Article VII that are not qualified as to
“material adverse effect” shall be true and correct as of the Closing Date, except to the extent
such representations and warranties are by their express terms made as of the date of this
Agreement or another specific date (in which case, such representations and warranties shall be
true and correct as of such date), except for failures of the representations and warranties
referred to in this clause (ii) to be so true and correct as do not and would not reasonably be
expected to have, in the aggregate, a material adverse effect on Buyer’s ability to consummate the
transactions contemplated hereby, and there shall have been delivered to each Seller a certificate
signed by an executive officer of Buyer confirming the foregoing as of the Closing Date.




          SECTION 12.2 Covenants and Agreements. The covenants and agreements of Buyer to be
performed or complied with pursuant to this Agreement at or prior to the Closing shall have been
duly performed and complied with in all material respects or waived by each Seller and there shall
have been delivered to each Seller a certificate signed by an executive officer of Buyer confirming
the foregoing as of the Closing Date.




          SECTION 12.3 No Adverse Order. There shall not be in effect on the Closing Date any
judgment, decree or order issued by any court of competent jurisdiction which restrains or
prohibits the consummation by Buyer or any Seller of the transactions contemplated hereby.




36









 








          SECTION 12.4 HSR Act. The applicable waiting period under the HSR Act shall have
expired or terminated.




          SECTION 12.5 Guarantee. The Guarantee shall be in full force and effect as of the
Closing Date.




ARTICLE XIII




INDEMNIFICATION




          SECTION 13.1 Indemnification by Sellers.




          (a) Each Seller will, severally and not jointly, indemnify, defend and hold harmless Buyer and
its Representatives (collectively, the “Buyer Group”) from and against, and pay or
reimburse, as the case may be, the Buyer Group for, any and all Damages actually (and as) incurred
by any member of the Buyer Group based upon or arising out of:





     (i) the breach by such Seller of any of such Seller’s representations and warranties
contained in Article V; or




     (ii) the breach by such Seller of any covenant or agreement of such Seller contained in
this Agreement, other than covenants and agreements that are required by the express terms of
this Agreement to be performed jointly by Sellers (which are covered by Section 13.1(b)(ii)).



          (b) Each Seller will, severally and not jointly, indemnify, defend and hold harmless the Buyer
Group from and against, and pay or reimburse, as the case may be, the Buyer Group for, one-half of
any and all Damages actually (and as) incurred by any member of the Buyer Group based upon or
arising out of:





     (i) the breach by Sellers of any the representations and warranties contained in Article
VI, except for those representations and warranties related to Income Taxes contained in
Section 6.12 of this Agreement (with the exception of Sections 6.12(h) and (i) which are
covered by this Section 13.1(b)(i)), it being understood that indemnification for Income Taxes
shall otherwise be covered exclusively by Section 13.1(b)(v) hereof;




     (ii) the breach by Sellers of any covenant or agreement contained in this Agreement that
is required by the express terms of this Agreement to be performed jointly by Sellers;




     (iii) Retained Assets;




     (iv) any Closing Date Indebtedness; or




     (v) any Income Taxes of the Acquired Companies for a Pre-Closing Tax Period.



37









 





          SECTION 13.2 Indemnification by Buyer. Buyer will, and will cause each of the
Acquired Companies to, indemnify, defend and hold harmless each of the Members and each of their
respective Representatives (collectively, the “Seller Group”) from and against, and pay or
reimburse, as the case may be, the Seller Group for, any and all Damages actually (and as) incurred
by any member of the Seller Group based upon or arising out of:




          (a) the breach by Buyer of any of Buyer’s representations and warranties contained in Article
VII;




          (b) the breach by Buyer of any covenant or agreement of Buyer contained in this Agreement;




          (c) the assertion against any member of the Seller Group of any Liabilities of any of the
Acquired Companies (other than any Closing Date Indebtedness or other Liabilities to the extent
required to be indemnified by Sellers pursuant to Section 13.1 hereof);




          (d) any and all Liabilities of any of the Members relating to any of the Acquired Companies,
the Business, the operation thereof, or the assets of any of the Acquired Companies, including
Liabilities under or related to any and all Financial Instruments set forth on Schedule 9.6(a) or
Contracts set forth on Schedule 9.6(b) and other guaranties or obligations to perform or assure
performance given or made by any of the Members relating to any of the Acquired Companies or the
Business (but excluding each Seller’s obligations under this Agreement and each agreement entered
into by such Seller pursuant to this Agreement, each Seller’s obligations that survive Closing
under agreements in effect on the date hereof between such Seller and any Acquired Company (and no
other third party) and any such Liabilities relating to any Closing Date Indebtedness or other
Liabilities to the extent required to be indemnified by Sellers pursuant to Section 13.1 hereof),
or the assertion against any member of the Seller Group of any such Liabilities;




          (e) any termination on or after the Closing Date of any employee of any of the Acquired
Companies, or the assertion against any member of the Seller Group of any Liabilities with respect
thereto;




          (f) any change on or after the Closing Date of the salary, bonus or other compensation of any
employee of any of the Acquired Companies (from the salary, bonus or other compensation in effect
for such employee immediately prior to the Closing Date), or the assertion against any member of
the Seller Group of any Liabilities with respect thereto;




          (g) any discontinuance, suspension or modification by any of the Acquired Companies on or
after the Closing Date of any employee benefit plan, agreement or arrangement in effect with
respect to any employee or former employee of any of the Acquired Companies immediately prior to
the Closing Date, or the assertion against any member of the Seller Group of any Liabilities with
respect thereto;




          (h) any actions by Buyer or any of its Affiliates (including the Acquired Companies) on or
after the Closing Date with respect to the Rockwell Scientific Company





38









 






Pension Plan or the assets thereof that could result in any Liability on the part of any
Member; or




     (i) the ownership or operation of any of the Acquired Companies on or after the Closing Date,
or the assertion against any member of the Seller Group of any Liabilities with respect thereto.



     SECTION 13.3 Indemnification Procedures.



     (a) If any claim or demand is made against an Indemnified Party with respect to any matter, or
any Indemnified Party shall otherwise learn of an assertion or of a potential claim, by any Person
who is not a party to this Agreement (or an Affiliate thereof) which may give rise to a claim for
indemnification against an Indemnifying Party under this Agreement (a “Third Party Claim”),
then the Indemnified Party will reasonably promptly notify the Indemnifying Party in writing and in
reasonable detail of the Third Party Claim (including the factual basis for the Third Party Claim,
and, to the extent known, the amount of the Third Party Claim); provided, however,
that no delay on the part of the Indemnified Party in notifying the Indemnifying Party will affect
the Indemnifying Party’s obligations under this Article XIII, except to the extent the Indemnifying
Party is actually prejudiced as a result thereof (except that the Indemnifying Party will not be
liable for any expenses incurred during the period in which the Indemnified Party failed to give
such notice). Thereafter, the Indemnified Party will deliver to the Indemnifying Party, promptly
after the Indemnified Party’s receipt thereof, copies of all non-ministerial notices and documents
(including court papers) received or transmitted by the Indemnified Party relating to the Third
Party Claim.



     (b) The Indemnifying Party will have the right to participate in or to assume (or in the case
of a claim under Section 13.1(b), jointly assume) the defense of any Third Party Claim (in either
case at the expense of the Indemnifying Party) with counsel of its choice reasonably satisfactory
to the Indemnified Party. The Indemnifying Party will be liable for the reasonable fees and
expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying
Party has failed to assume the defense thereof (other than during any period in which the
Indemnified Party shall have failed to give notice of the Third Party Claim as provided above).
Should the Indemnifying Party so elect to assume the defense of a Third Party Claim, the
Indemnifying Party will not be liable to the Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense thereof;
provided, however, that, if the Indemnifying Party and the Indemnified Party
reasonably agree that a conflict of interest exists in respect of such claim, such Indemnified
Party will have the right to employ separate counsel reasonably satisfactory to the Indemnifying
Party to represent such Indemnified Party and in that event the reasonable fees and expenses of
such separate counsel (but not more than one separate counsel for all Indemnified Parties) shall be
paid by the Indemnifying Party. If the Indemnifying Party is conducting the defense of the Third
Party Claim the Indemnified Party, at its sole cost and expense, may retain separate counsel, and
participate in the defense of the Third Party Claim, it being understood that the Indemnifying
Party will control such defense.



39









 





     (c) No Indemnifying Party will consent to any settlement, compromise or discharge (including
the consent to entry of any judgment) of any Third Party Claim without each Indemnified Party’s
prior written consent (which consent will not be unreasonably withheld, conditioned or delayed);
provided, that, if the Indemnifying Party assumes the defense of any Third Party Claim, the
Indemnified Party will agree to any settlement, compromise or discharge of such Third Party Claim
which the Indemnifying Party may recommend and which by its terms obligates the Indemnifying Party
to pay the full amount of Damages in connection with such Third Party Claim and unconditionally
releases the Indemnified Party and each member of such Indemnified Party’s Group completely from
all Liability in connection with such Third Party Claim; provided, however, that
the Indemnified Party may refuse to agree to any such settlement, compromise or discharge (x) that
provides for injunctive or other nonmonetary relief affecting the Indemnified Party or any member
of such Indemnified Party’s Group or (y) that, in the reasonable opinion of the Indemnified Party,
would otherwise materially adversely affect the Indemnified Party or any member of such Indemnified
Party’s Group. Whether or not the Indemnifying Party shall have assumed the defense of a Third
Party Claim, the Indemnified Party will not, and will cause its Affiliates not to, admit any
liability, consent to the entry of any judgment or agree to any settlement, compromise or discharge
with respect to any Third Party Claim without the prior written consent of the Indemnifying Party
(which consent will not be unreasonably withheld, conditioned or delayed).



     (d) If the Indemnifying Party assumes the defense of any Third Party Claim, the Indemnifying
Party will keep the Indemnified Party informed of all material developments relating to or in
connection with such Third Party Claim. If the Indemnifying Party chooses to defend a Third Party
Claim, the Parties will cooperate in the defense thereof (and the Indemnifying Party will reimburse
the Indemnified Party for all reasonable out-of-pocket expenses incurred by the Indemnified Party
in connection with such cooperation), which cooperation will include the provision to the
Indemnifying Party of records and information which are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.



     (e) Any claim on account of Damages for which indemnification is provided under this Agreement
that does not involve a Third Party Claim will be asserted by reasonably prompt written notice
given by the Indemnified Party to the Indemnifying Party from whom such indemnification is sought.
The delay by any Indemnified Party to so notify the Indemnifying Party will not affect the
Indemnifying Party’s obligations under this Article XIII, except to the extent that the
Indemnifying Party is actually prejudiced as a result thereof.



     (f) In the event of payment in full by an Indemnifying Party (or, in the case of a claim under
Section 13.1(b), by each Indemnifying Party) to any Indemnified Party in connection with any claim
(an “Indemnified Claim”), such Indemnifying Party will be subrogated to and will stand in
the place of such Indemnified Party as to any events or circumstances in respect of which such
Indemnified Party may have any right or claim relating to such Indemnified Claim against any
claimant or plaintiff asserting such Indemnified Claim or against any other Person. Such
Indemnified Party will cooperate with



40









 







such Indemnifying Party in a reasonable manner, and at the cost and expense of such
Indemnifying Party, in prosecuting any subrogated right or claim.



     SECTION 13.4 Certain Limitations.



     (a) The amount which an Indemnifying Party is or may be required to pay to an Indemnified
Party in respect of Damages for which indemnification is provided under this Agreement will be
reduced by any amounts (or, in the case of a claim under Section 13.1(b), one-half of such amounts
for each Indemnifying Party) actually received (including amounts received under insurance
policies) by or on behalf of the Indemnified Party from third parties (net out-of-pocket costs and
expenses (including reasonable legal fees and expenses) incurred by such Indemnified Party in
connection with seeking to collect and collecting such amounts) in respect of such Damages (such
net amounts are referred to herein as “Indemnity Reduction Amounts”). If any Indemnified
Party receives any Indemnity Reduction Amounts in respect of an Indemnified Claim for which
indemnification is provided under this Agreement after the full amount of such Indemnified Claim
has been paid by an Indemnifying Party or after an Indemnifying Party has made a partial payment of
such Indemnified Claim and such Indemnity Reduction Amounts exceed the remaining unpaid balance of
such Indemnified Claim, then the Indemnified Party will promptly remit to the Indemnifying Party an
amount equal to the excess (if any) of (i) the amount theretofore paid by the Indemnifying Party in
respect of such Indemnified Claim, less (ii) the amount of the indemnity payment that would have
been due if such Indemnity Reduction Amounts in respect thereof had been received before the
indemnity payment was made. An insurer or other third party who would otherwise be obligated to
pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with respect thereto, it
being expressly understood and agreed that no insurer or any other third party shall be entitled to
any benefit they would not be entitled to receive in the absence of the indemnification provisions
by virtue of the indemnification provisions hereof. Each Seller and Buyer will, and will use
commercially reasonable efforts to cause each of its Representatives to, pursue promptly any claims
or rights it may have against all third parties which would reduce the amount of Damages for which
indemnification is provided under this Agreement.



     (b) The amount of Damages for which indemnification is provided under this Agreement will be
(i) increased to take account of any Tax cost incurred (grossed up for such increase) by the
Indemnified Party arising from the receipt of indemnity payments hereunder (unless such indemnity
payment is treated as an adjustment to the Purchase Price for tax purposes) and (ii) reduced to
take account of any Tax benefit realized by the Indemnified Party arising from the incurrence or
payment of any such Damages. In computing the amount of any such Tax cost or Tax benefit, the
Indemnified Party will be deemed to be subject (A) to the applicable federal and/or local country
Income Taxes at the maximum statutory rate then in effect and (B) to state and local Taxes (if
applicable) at a combined State and local Tax rate of six percent, which will be tax effected at
such maximum Tax rate. Any indemnity payment made pursuant to this Agreement will be treated as an
adjustment to the Purchase Price for Tax purposes unless a determination (as defined in § 1313 of
the Code) or a similar event under foreign Tax Law with respect to the Indemnified Party causes any
such payment not to



41









 







constitute an adjustment to the Purchase Price for United States federal Income Tax purposes
or foreign Tax purposes, as the case may be.



     (c) Anything contained in this Agreement to the contrary notwithstanding, no Seller will have
any obligation to indemnify any member of the Buyer Group with respect to any matter if the Damages
arise from a change in the accounting or Tax policies or practices of any of the Acquired Companies
on or after the Closing Date.



     (d) Anything contained in this Agreement to the contrary notwithstanding, no member of the
Seller Group and no member of the Buyer Group will be entitled to any recovery under this Agreement
for its own special, punitive, exemplary or consequential damages or lost profits; provided,
however, that nothing herein shall prevent any member of the Seller Group or the Buyer Group from
being indemnified for all components of awards against them in claims by third parties, including
special, punitive, exemplary or consequential damages and lost profits components of such claims.



     SECTION 13.5 Dollar Limitations.



     (a) Anything contained in this Agreement to the contrary notwithstanding, no monetary amount
will be payable by any Seller to any member of the Buyer Group with respect to the indemnification
of any claims pursuant to Section 13.1(b)(i) (other than with respect to claims relating to
representations and warranties regarding brokers contained in Section 6.21) until the aggregate
amount of Damages actually incurred by the Buyer Group with respect to such claims against both
Sellers shall exceed on a cumulative basis an amount equal to One Million Five Hundred Thousand
dollars ($1,500,000) (the “Deductible”), in which event each Seller shall be responsible
only for one-half of the amount in excess of the Deductible. In addition, no Seller will be
responsible for making payments with respect to Damages for any individual items pursuant to
Sections 13.1(a)(i) or Section 13.1(b)(i) (other than with respect to claims relating to
representations and warranties regarding brokers contained in Sections 5.6 and 6.21) where the
aggregate Damages relating thereto are less than Fifty Thousand dollars ($50,000) and such items
shall not be aggregated for purposes of determining whether aggregate Damages incurred by the Buyer
Group exceed the Deductible. In connection with any claim for indemnification under 13.1(b)(i),
Buyer and the other members of the Buyer Group will promptly provide each Seller with written
notice of all claims included in the Deductible and copies of all documents reasonably requested by
any Seller relating thereto.



     (b) Anything contained in this Agreement to the contrary notwithstanding, in no event will the
aggregate amount for which any Seller shall be responsible to indemnify all members of the Buyer
Group for all claims under Sections 13.1(a)(i) and 13.1(b)(i) (other than with respect to claims
relating to such Seller’s representations and warranties with respect to title to the RSC Shares
contained in Section 5.5 and brokers contained in Sections 5.6 and Section 6.21) exceed, and each
Seller’s aggregate liability under Sections 13.1(a)(i) and 13.1(b)(i) (other than with respect to
claims relating to such Seller’s representations and warranties with respect to title to the RSC
Shares contained in Section 5.5 and brokers



42









 







contained in Sections 5.6 and 6.21) shall be limited to, Eight Million Five Hundred Thousand
dollars ($8,500,000).



     (c) Anything contained in this Agreement to the contrary notwithstanding, in no event will the
aggregate amount for which any Seller shall be responsible to indemnify all members of the Buyer
Group for all claims under Sections 13.1(a)(i), 13.1(a)(ii), 13.1(b)(i), 13.1(b)(ii), 13.1(b)(iii),
13.1(b)(iv) and 13.1(b)(v) exceed, and each Seller’s aggregate liability under Sections 13.1(a)(i),
13.1(a)(ii), 13.1(b)(i), 13.1(b)(ii), 13.1(b)(iii), 13.1(b)(iv) and 13.1(b)(v) shall be limited to,
an amount equal to the portion of the Purchase Price paid to such Seller.



     SECTION 13.6 Termination of Indemnification Obligations.



     (a) The representations and warranties of any Seller, Sellers or Buyer contained in Articles
V, VI and VII (other than representations and warranties with respect to brokers contained in
Sections 5.6, 6.21 and 7.9, representations and warranties with respect to intellectual property
matters contained in Section 6.14, representations and warranties with respect to employees
contained in Section 6.17, representations and warranties with respect to environmental matters
contained in Section 6.19 and representations and warranties with respect to ownership of the RSC
Shares contained in Section 5.5), will survive the Closing Date solely for purposes of Sections
13.1(a)(i), 13.1(b)(i) and 13.2(a), as applicable, until (and will expire and be of no further
force or effect) one year after the Closing Date. The representations and warranties with respect
to intellectual property matters contained in Section 6.14 and the representations and warranties
with respect to employees contained in Section 6.17 will survive the Closing Date solely for
purposes of Section 13.1(b)(i) until (and will expire and be of no further force or effect), two
years after the Closing Date. The representations and warranties with respect to environmental
matters contained in Section 6.19 will survive the Closing Date solely for purposes of Section
13.1(b)(i) until (and will expire and be of no further force or effect), three years after the
Closing Date. The representations and warranties with respect to brokers contained in Sections
5.6, 6.21 and 7.9 will survive the Closing Date solely for purposes of Sections 13.1(a)(i),
13.1(b)(i) and 13.2(a), as applicable, until (and will expire and be of no further force or effect
when) all applicable statutes of limitation (including any extensions thereof) have expired. Each
Seller’s representations and warranties with respect to ownership of the RSC Shares contained in
Section 5.5 will survive the Closing Date solely for purposes of Section 13.1(a)(i) without time
limitation. Each other representation and warranty made by any Party contained in or made pursuant
to this Agreement or contained in or made pursuant to any closing certificate or other instrument
or agreement delivered by any Party pursuant to this Agreement shall not survive (and will expire
at) the Closing and shall thereafter be of no further force or effect and no Party will have any
obligation to provide indemnification or other Liability in respect thereof.



     (b) The obligations of each Party to indemnify, defend and hold harmless the applicable
Persons (i) pursuant to Sections 13.1(a)(ii), 13.1(b)(ii), 13.1(b)(v) and 13.2(b), will terminate
upon the expiration of all applicable statutes of limitations (giving effect to any extensions
thereof), (ii) pursuant to Sections 13.1(a)(i), 13.1(b)(i) and 13.2(a), will terminate



43









 







when the applicable representation or warranty expires pursuant to Section 13.6(a), (iii)
pursuant to Sections 13.1(b)(iii), 13.1(b)(iv), 13.2(c), 13.2(d), 13.2(e), 13.2(f), 13.2(g),
13.2(h) and 13.2(i), will not terminate at any time; provided, however, that as to
clauses (i) and (ii) above, such obligations to indemnify, defend and hold harmless will not
terminate with respect to any individual item as to which an Indemnified Party shall have, before
the expiration of the applicable period, previously made a claim by delivering a notice (stating in
reasonable detail the basis of such claim) to the applicable Indemnifying Party.



     SECTION 13.7 Exclusive Remedy. To the fullest extent permitted by applicable Law,
except for claims of fraud, the indemnification provided in this Article XIII and Section 15.3
shall be the sole and exclusive remedies available to each of the Parties and their respective
Affiliates and each member of the Seller Group and Buyer Group for breaches of any of the terms,
conditions, representations, warranties, covenants or agreements contained in this Agreement or for
any other claims relating to the subject matter of this Agreement and shall preclude assertion by
members of the Seller Group or Buyer Group of any of other rights, claims or causes of action or
the seeking of any other remedies, whether in contract, tort, strict liability, under Law
(including statutory or common law) or otherwise, against Buyer (or any of its Affiliates) or any
Member, respectively, with respect to breaches of any of the terms, conditions, representations,
warranties, covenants or agreements contained in this Agreement or for any other claims relating to
the subject matter of this Agreement, all of which Buyer (on behalf of itself and the other members
of the Buyer Group) and each Seller (on behalf of itself, its Affiliates and each of its and its
Affiliates’ Representatives) hereby waives.



ARTICLE XIV




TERMINATION; EFFECT OF TERMINATION




     SECTION 14.1 Termination. This Agreement may be terminated at any time prior to the
Closing:



     (a) by mutual written consent of each Seller and Buyer;



     (b) by written notice by Buyer to each Seller, if there shall have been a material breach of
any representation, warranty, covenant or agreement on the part of any Seller set forth in this
Agreement, or if any representation or warranty set forth in Article V or VI shall have become
untrue in any material respect, or if there shall have occurred any change in the business,
financial condition or operations of the Acquired Companies, taken as a whole, that has had or
would reasonably be expected to have a Material Adverse Effect, in any such case such that the
conditions set forth in Section 11.1, Section 11.2, or Section 11.5 as the case may be, would not
be satisfied as of such time, provided that if such breach or Material Adverse Effect is curable by
any Seller or Sellers prior to October 31, 2006 through the exercise of such Seller’s or Sellers’
commercially reasonable efforts, then for so long as such Seller or Sellers continues to exercise
such commercially reasonable efforts to cure the same, Buyer may not terminate this Agreement
pursuant to this Section 14.1(b);



44









 





     (c) by written notice by Sellers to Buyer, if there shall have been a material breach of any
representation, warranty, covenant or agreement on the part of Buyer set forth in this Agreement,
or if any representation or warranty set forth in Article VII shall have become untrue in any
material respect, in any such case such that the conditions set forth in Section 12.1 or Section
12.2, as the case may be, would not be satisfied as of such time, provided that if such breach is
curable by Buyer prior to October 31, 2006 through the exercise of its commercially reasonable
efforts, then for so long as Buyer continues to exercise such commercially reasonable efforts to
cure the same, Sellers may not terminate this Agreement pursuant to this Section 14.1(c);



     (d) by written notice by any Seller or Buyer to the other Parties if the Closing does not
occur on or prior to October 31, 2006; provided, however, that the Party seeking
termination pursuant to this subsection (d) is not in breach in any material respects of its
representations, warranties, covenants or agreements contained in this Agreement; or



     (e) by written notice by Buyer to Sellers or by any Seller to the other Parties, if any court
of competent jurisdiction or other Governmental Entity shall have issued an order, decree or ruling
or taken any other action permanently restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement, and such order, decree, ruling or
other action shall not be subject to appeal or shall have become final and unappealable.



     SECTION 14.2 Effect of Termination. In the event of the termination of this Agreement
pursuant to Section 14.1, this Agreement, other than with respect to the last sentence of Article
VIII, Section 9.10 and Section 15.13, which will continue in effect, all rights and obligations of
the Parties under this Agreement will terminate without any Liability on the part of any Party or
its Affiliates (or, in the case of any Seller, any Member or Acquired Company) in respect thereof,
except that nothing herein will relieve any Party from Liability for any willful breach of this
Agreement.



ARTICLE XV




MISCELLANEOUS




     SECTION 15.1 Parties in Interest. This Agreement is binding upon and is for the
benefit of the Parties and their respective successors and permitted assigns. This Agreement is
not made for the benefit of any Person not a Party, and no Person other than the Parties and their
respective successors and permitted assigns will acquire or have any benefit, right, remedy or
claim under or by reason of this Agreement, except as provided in Section 9.14 and that members of
the Buyer Group and the Seller Group will be entitled to the rights to indemnification provided to
the Buyer Group and the Seller Group, respectively, under Article XIII.



     SECTION 15.2 Assignment. No Party will convey, assign or otherwise transfer either
this Agreement or any of its rights or obligations under this Agreement without the prior written
consent of Sellers (in the case of a conveyance, assignment or transfer by Buyer)



45









 







or Buyer (in the case of a conveyance, assignment or transfer by any Seller) in their sole and
absolute discretion, except that any Party may (without obtaining any consent) assign any of its
rights or obligations hereunder to a successor to all or any part of its business. Any conveyance,
assignment or transfer requiring the prior written consent of any Party which is made without such
consent will be void ab initio. No assignment of this Agreement (or any rights or
obligations hereunder) will relieve the assigning Party of its obligations hereunder.



     SECTION 15.3 Specific Performance. In the event of any actual or threatened breach of
any of the covenants or agreements in this Agreement (including Section 9.9), the Party or Parties
who are or are to be thereby aggrieved shall have the right to specific performance and injunctive
relief giving effect to its or their rights under this Agreement, in addition to any and all other
rights and remedies at law or in equity, subject to Section 13.7. The Parties agree that any such
breach or threatened breach would cause irreparable injury, that the remedies at law for any such
breach or threatened breach, including monetary damages, are inadequate compensation for any loss
and that any defense in any action for specific performance that a remedy at law would be adequate
is waived.



     SECTION 15.4 Notices. All notices, requests, claims, demands and other communications
required or permitted to be given hereunder will be in writing and will be delivered by hand or
telecopied, e-mailed or sent, postage prepaid, by registered, certified or express mail or
reputable overnight courier service (and will be deemed duly given when so delivered by hand or
telecopied, when e-mail confirmation is received if delivered by e-mail, or if mailed, three days
after mailing (one business day in the case of express mail or overnight courier service)). All
such notices, requests, claims, demands or other communications will be addressed as set forth
below:



     If to Automation:


Rockwell Automation, Inc.

1201 South Second Street

Milwaukee, WI 53204



Attention:    Douglas M. Hagerman, Esq.

                    Senior Vice President,

                    General Counsel and Secretary

Telecopy:     (414) 382-8421

Telephone:   (414) 382-8470

E-mail:         dmhagerman@ra.rockwell.com




46









 





     with a copy to:


Chadbourne & Parke LLP

30 Rockefeller Plaza

New York, New York 10112



Attention:     Peter R. Kolyer, Esq.

Telecopy:      (212) 541-5369

Telephone:    (212) 408-5564

E-mail:          pkolyer@chadbourne.com




     If to Collins:


Rockwell Collins, Inc.

400 Collins Road, NE

Cedar Rapids, IA 52498



Attention:    Gary R. Chadick, Esq.

                    Senior Vice President,

                    General Counsel and Secretary

Telecopy:     (319) 295-3599

Telephone:   (319) 295-6835

E-mail:         grchadic@rockwellcollins.com




     with a copy to:


Chadbourne & Parke LLP

30 Rockefeller Plaza

New York, New York 10112



Attention:   Peter R. Kolyer, Esq.

Telecopy:    (212) 541-5369

Telephone:  (212) 408-5564

E-mail:        pkolyer@chadbourne.com




     If to Buyer:


Teledyne Technologies Incorporated

12333 West Olympic Boulevard

Los Angeles, CA 90064



Attention:   Melanie S. Cibik, Esq.

Telecopy:    (310) 893-1607

Telephone:  (310) 893-1605

E-mail:        mcibik@teledyne.com




47









 





     with a copy to:


McGuireWoods LLP

Dominion Tower

625 Liberty Avenue, 23rd Floor

Pittsburgh, PA 15222



Attention:   Scott E. Westwood, Esq.

Telecopy:    (412) 402-4191

Telephone:  (412) 667-7989

E-mail:        swestwood@mcguirewoods.com



or in any case to such other address or addresses as hereafter shall be furnished as provided in
this Section 15.4 by any Party to the other Parties.




     SECTION 15.5 Waiver. No delay on the part of any Party in exercising any right, power
or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of any
Party of any right, power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder, nor will any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. No waiver by any Party shall be effective unless it is evidenced by a
written agreement making specific reference hereto executed by the Party granting such waiver.



     SECTION 15.6 Schedules.



     (a) All Schedules attached hereto are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. The mere inclusion of information in any Schedule hereto as an
exception to a representation, warranty or covenant (i) shall not be deemed an admission by any
Party that such information represents a material exception or a material fact, event or
circumstance or that such information has had or would reasonably be expected to have a Material
Adverse Effect or a “material adverse effect” on any Seller’s or Buyer’s ability to consummate the
transactions contemplated hereby, as applicable, or (ii) constitute, or be deemed to be, an
admission to any third party concerning such information. Matters reflected on any Schedule to
this Agreement are not necessarily limited to matters required by this Agreement to be reflected on
such Schedules. Such additional matters are set forth for informational purposes only and do not
necessarily include other matters of a similar nature. Matters disclosed by any Seller or Sellers
to Buyer pursuant to any Section of or Schedule to this Agreement (or any section of any Schedule
to this Agreement) will be deemed to be disclosed with respect to all Sections of and Schedules to
this Agreement (and all sections of all Schedules to this Agreement) to the extent the disclosure
is reasonably applicable to such other Sections or Schedules. Capitalized terms used in any
Schedule to this Agreement but not otherwise defined therein will have the respective meanings
assigned to such terms in this Agreement. If any matter set forth in the final Closing Date
Schedule Supplement delivered to Buyer at the Closing was not included



48









 







in the draft thereof delivered to Buyer at least three days prior to the Closing and does not
relate to matters arising after delivery of such draft delivered at least three days prior to the
Closing, Buyer shall have the option to postpone the Closing Date for up to two business days.



     (b) Sellers will have the right to deliver to Buyer at the Closing a supplement to the
Schedules hereto (the “Closing Date Schedule Supplement”) containing any matters arising or
discovered after the date hereof which, if occurring prior to the date hereof, are required or
permitted to be set forth or described on such Schedules. The Closing Date Schedule Supplement
will have no effect for the purposes of determining the satisfaction of the condition set forth in
Section 11.1 or any other condition to Closing. The Closing Date Schedule Supplement will,
however, for purposes of determining whether any Person is entitled to indemnification pursuant to
Section 13.1 or whether any Seller or Sellers have breached any of its representations and
warranties hereunder for any purpose other than Section 11.1, be deemed to amend the Schedules
hereto referenced in the Closing Date Schedule Supplement to reflect the matters set forth therein.
Sellers will provide to Buyer a draft of the Closing Date Schedule Supplement at least three days
prior to the Closing, provided that such draft may be updated by Sellers in the final Closing Date
Schedule Supplement delivered to Buyer at the Closing.



     SECTION 15.7 Captions, Currency. The article, section and paragraph captions herein
and the table of contents hereto are for convenience of reference only, do not constitute part of
this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
Unless otherwise specified, all references herein to numbered articles or sections are to articles
and sections of this Agreement and all references herein to exhibits or schedules are to exhibits
and schedules to this Agreement. Unless otherwise specified, all references contained in this
Agreement, in any exhibit or schedule referred to herein or in any instrument or document delivered
pursuant hereto to dollars or “$” shall mean United States Dollars.



     SECTION 15.8 Construction; Interpretation. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and
no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any federal, state, local,
or foreign Law shall be deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. For purposes of this Agreement and the Schedules to this
Agreement, (a) words in the singular shall be held to include the plural and vice versa; (b) the
terms “hereof”, “herein”, “herewith” and “hereunder” and words of similar import will, unless
otherwise stated, be construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement; (c) the word “including” and words of similar import when used in this
Agreement will mean “including, without limitation”, unless otherwise specified; and (d) the word
“or” will not be exclusive.



49









 





     SECTION 15.9 No Representations or Warranties.



     (a) The representations and warranties contained in Article V and Article VI are in lieu of
and are exclusive of all other representations and warranties by any Seller, Sellers, any of their
respective Affiliates or any other Person. Buyer acknowledges that none of the Sellers, or any of
their respective Affiliates, or any other Person has made any representation or warranty, expressed
or implied, as to the accuracy or completeness of any information regarding any of the Sellers, the
Acquired Companies, the Business, the RSC Shares, the RSL Shares or the assets or liabilities of
the Acquired Companies (including any confidential information memorandum, any supplemental data,
any financial projections or forecasts related to any of the Acquired Companies or the Business and
any other information, document or material made available or furnished to Buyer or any of its
Representatives in any “data room”, management presentations or in any other form in anticipation
of any of the transactions contemplated by this Agreement) and none of the Sellers, or any of their
respective Affiliates, or any other Person will have or be subject to any Liability to Buyer, any
of its Representatives or any other Person resulting from the distribution to Buyer or any of its
Representatives, or Buyer’s or any of its Representatives’ use, of any such information. Buyer
further acknowledges that, except as expressly set forth in Article V and Article VI, there are no
representations or warranties of any kind, expressed or implied, with respect to any of the
Sellers, the Acquired Companies, the Business, the RSC Shares, the RSL Shares, the assets or
liabilities of the Acquired Companies or any other matter. It is expressly understood and agreed
that Buyer accepts the condition of the assets of the Acquired Companies “AS IS”, “WHERE IS” AND,
SUBJECT ONLY TO THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE VI, WITH ALL FAULTS AND
WITHOUT ANY OTHER REPRESENTATION OR WARRANTY OF ANY NATURE WHATSOEVER, EXPRESS OR IMPLIED, ORAL OR
WRITTEN, AND IN PARTICULAR, WITHOUT ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.



     (b) With respect to any projection or forecast delivered by or on behalf of any of the
Members, any Acquired Company or any of their respective Representatives to Buyer or any of its
Representatives, Buyer acknowledges that (i) there are uncertainties inherent in attempting to make
such projections and forecasts, (ii) Buyer is familiar with such uncertainties, (iii) Buyer is
taking full responsibility for making its own evaluation of the adequacy and accuracy of all such
projections and forecasts so delivered, and (iv) none of Buyer or its Representatives or any other
Person shall have any claim against any Member, any of their respective Representatives or any
other Person with respect thereto (provided that the foregoing does not affect Sellers’
representations set forth in Section 6.5 that except as set forth therein, the Financial Statements
present fairly, in all material respects, the consolidated financial position and the consolidated
results of operations and cash flows of the Acquired Companies as of the dates set forth therein
and for the periods covered thereby in accordance with GAAP (subject, in the case of the financial
statements as of and for the nine months ended June 30, 2006, to the absence of footnotes and
normal year-end adjustments)).



     SECTION 15.10 Severability. If any term or provision of this Agreement or the
application thereof to any Person or circumstance shall be held invalid, illegal or



50









 







unenforceable in any respect by a court of competent jurisdiction, the remaining provisions
hereof, or the application of such term or provision to Persons or circumstances other than those
as to which it has been held invalid, illegal or unenforceable, will remain in full force and
effect and will in no way be affected, impaired or invalidated thereby.



     SECTION 15.11 Dispute Resolution. In the event that any dispute, claim or controversy
arises with respect to the transactions contemplated hereby, this Agreement, any provision hereof
or the breach, performance, enforcement, validity or invalidity of this Agreement or any provision
hereof (collectively, a “Dispute”), designees of Sellers and Buyer will meet to attempt a
good faith resolution of such Dispute within thirty days after either Party notifies the other
Parties of a Dispute. During the period between such notification of a Dispute and thirty days
after such meeting, each Party shall be entitled to make any reasonable investigation of the claims
or issues underlying such Dispute that such Party deems reasonably necessary or desirable and, in
connection with such investigation, each Party agrees to make available to the other Parties and
its Representatives the information reasonably requested by the other Parties in connection
therewith. If the Dispute is not resolved within thirty days of such meeting, any Party may make a
written demand to the other Parties for formal dispute resolution, which demand will specify the
nature of the Dispute. Within thirty days of such written demand, or such other time as the
Parties may agree, the Parties will attempt in good faith to resolve such Dispute by mediation in
accordance with the then-existing CPR Model Procedure for Mediation of Business Disputes,
promulgated by the CPR Institute for Dispute Resolution in Chicago, Illinois. If such mediation is
unsuccessful within thirty days after commencement thereof, any Party may pursue any other remedies
available to it, subject to Section 13.7.



     SECTION 15.12 Consent to Jurisdiction.



     (a) Subject to Section 15.11, each Party irrevocably submits to the exclusive jurisdiction of
(i) the Court of Chancery in and for the State of Delaware and the Superior Court in and for the
State of Delaware and (ii) the United States District Court for the District of Delaware for the
purposes of any suit, action or other proceeding arising out of or relating to the transactions
contemplated hereby, this Agreement, any provision hereof or the breach, performance, enforcement,
validity or invalidity of this Agreement or any provision hereof (and agrees not to commence any
action, suit or proceeding relating thereto except in such courts). Each Party further agrees that
service of any process, summons, notice or document hand delivered or sent by U.S. registered mail
to such Party’s respective address set forth in Section 15.4 will be effective service of process
for any action, suit or proceeding in any such courts with respect to any matters to which it has
submitted to jurisdiction as set forth in the immediately preceding sentence. Each Party
irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or
proceeding arising out of or relating to the transactions contemplated hereby, this Agreement, any
provision hereof or the breach, performance, enforcement, validity or invalidity of this Agreement
or any provision hereof in (i) the Court of Chancery in and for the State of Delaware and the
Superior Court in and for the State of Delaware or (ii) the United States District Court for the
District of Delaware and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding brought in any such court
has been brought



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in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on
the judgment in any jurisdiction or in any other manner provided in Law or in equity.



     (b) EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY, THIS AGREEMENT, ANY PROVISION HEREOF OR THE
BREACH, PERFORMANCE, ENFORCEMENT, VALIDITY OR INVALIDITY OF THIS AGREEMENT OR ANY PROVISION HEREOF.



     SECTION 15.13 Expenses. Except as expressly provided herein, each Party agrees to
pay, without right of reimbursement from the other Parties, all costs and expenses incurred by it
and its Affiliates incident to the performance of its obligations hereunder, including, without
limitation, the fees and disbursements of counsel, accountants, financial advisors, experts and
consultants employed by such Party in connection with the transactions contemplated hereby, whether
or not the transactions contemplated by this Agreement are consummated; provided that this Section
15.13 shall not limit any Person’s right to recover damages for any willful breach of this
Agreement. Notwithstanding the foregoing, the Parties acknowledge that the Company shall be
responsible for all fees and disbursements of counsel, accountants and other consultants (other
than J.P. Morgan Securities Inc., whose compensation will be paid by Sellers) employed by Sellers
or the Company in connection with the preparation, negotiation and execution of this Agreement and
all agreements contemplated to be entered into pursuant to this Agreement and the Closing
hereunder.



     SECTION 15.14 Entire Agreement. This Agreement and the Confidentiality Agreement
together constitute the entire agreement between Sellers and Buyer with respect to the subject
matter hereof and this Agreement and the Confidentiality Agreement supersede all prior
negotiations, agreements or understandings of Sellers and Buyer of any nature, whether oral or
written, relating thereto. For the avoidance of doubt, the Parties acknowledge and agree that this
Section 15.14 shall not affect the provisions contained in the last sentence of Section 18 of the
IP Agreement (which provisions contained in the last sentence of Section 18 of the IP Agreement
shall be applicable hereto as if set forth in full herein).



     SECTION 15.15 Amendment. This Agreement may be modified, amended or supplemented only
by written agreement making specific reference hereto executed by Buyer and each Seller.



     SECTION 15.16 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which together will constitute a
single instrument.



     SECTION 15.17 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of Delaware applicable to contracts



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made and to be performed entirely within such State, without regard to the conflicts of law
principles of such State.



ARTICLE XVI




DEFINITIONS




     For purposes of this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and the plural forms of the terms defined):



     “Acquired Companies” has the meaning set forth in the recitals to this Agreement.



     “Action” means any action, suit, arbitration or proceeding by or before any
arbitrator, court or other Governmental Entity.



     “Actually Realized” means, for purposes of determining the timing of any Taxes (or
related Tax cost or benefit) relating to any payment, transaction, occurrence or event (including
any Tax refund) with respect to any Person, the time at which the amount of Taxes payable by such
Person (including estimated Taxes) is increased above or reduced below, as the case may be, the
amount of Taxes that such Person would be required to pay but for such payment, transaction,
occurrence or event.



     “Affiliate” means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with such Person. For purposes of the
immediately preceding sentence, the term “control” (including, with correlative meanings, the terms
“controlling”, “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 the management and policies of such Person, whether through ownership of voting securities, by
contract or otherwise; provided, however, that the Acquired Companies shall not be
Affiliates of either Seller for purposes of this Agreement.



     “Agreement” means this Agreement, as the same may be amended, modified or supplemented
from time to time in accordance with its terms.



     “Allocation Schedule” has the meaning set forth in Section 3.2.



     “Audit Notice” has the meaning set forth in Section 9.17(a).



     “Automation” has the meaning set forth in the preamble to this Agreement.



     “Automation Agency Licensing Agreement” means the Agency Licensing Agreement, to be
dated on or prior to the Closing Date, by and between the Company, RSL and Automation,
substantially in the form attached hereto as Exhibit A.



     “Automation’s Knowledge” means the actual knowledge of Sujeet Chand and John M.
Miller, in each case as of the date of this Agreement and after reasonable review of



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applicable files in such Person’s possession, and not any constructive or imputed knowledge of
any of the Members or the Acquired Companies, or any of their respective directors, officers,
employees, managers, members or other Representatives.



     “Automation Services Agreement” means the RSC Services Agreement, to be dated on or
prior to the Closing Date, by and between the Company and Automation, substantially in the form
attached hereto as Exhibit C.



     “Automation Technologies” has the meaning set forth in the recitals to this Agreement.



     “Bid” means any written quotation bid or proposal submitted by any of the Acquired
Companies and outstanding on the date hereof that, if accepted or awarded, would lead to a Contract
with the U.S. Government or a prime contractor or a higher tier subcontractor to the U.S.
Government, for the design, manufacture or sale of products or the provision of services by any of
the Acquired Companies directly or indirectly to the U.S. Government.



     “Business” means the business heretofore and currently engaged in by the Acquired
Companies (including their Thousand Oaks and Imaging businesses) of (a) researching, developing and
commercializing technologies across a broad array of competencies, including materials technology,
information sciences and electronics, and researching, developing, designing, engineering,
manufacturing, selling, modifying and supporting high speed analog and mixed signal integrated
circuit products based upon proprietary developed technologies, and activities related thereto and
(b) researching, developing, designing, engineering, manufacturing, building, selling, modifying,
repairing and supporting custom infrared and visible optical sensors and related imaging components
and laser eye protection for various military and space applications, and activities related
thereto.



     “Business Intellectual Property” means (a) all Patents and Trademarks that are either
(i) set forth on Schedule 16.1 or (ii) licensed to any of the Acquired Companies (and, in the case
of all such patents, any counterparts thereof or any continuations, reissuances or re-examinations
thereof) and (b) all Trade Secrets that are either owned by or licensed to any of the Acquired
Companies.



     “Buyer” has the meaning set forth in the preamble to this Agreement.



     “Buyer Benefit Plans” has the meaning set forth in Section 10.2.



     “Buyer Group” has the meaning set forth in Section 13.1(a).



     “Cash” means all cash (including cash in bank accounts of any of the Acquired
Companies as of the Effective Time and checks and wire transfers received by any of the Acquired
Companies prior to the Effective Time which were not deposited in bank accounts of any of the
Acquired Companies prior to the Effective Time or which were so deposited but were not reflected as
cash on deposit in any bank accounts of the Acquired Companies as of



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or prior to the Effective Time), cash equivalents, funds, securities (other than the RSL
Shares), certificates of deposit, similar instruments and short term investments of any of the
Acquired Companies.



     “Closing” has the meaning set forth in Section 4.1.



     “Closing Date” has the meaning set forth in Section 4.1.



     “Closing Date Indebtedness” means all indebtedness for borrowed money owed by the
Acquired Companies immediately prior to the Closing.



     “Closing Date Schedule Supplement” has the meaning set forth in Section 15.6(b).



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Collins” has the meaning set forth in the preamble to this Agreement.



     “Collins Agency Licensing Agreement” means the Agency Licensing Agreement, to be dated
on or prior to the Closing Date, by and between the Company, RSL and Collins, substantially in the
form attached hereto as Exhibit B.



     “Collins In-Flight” has the meaning set forth in the recitals to this Agreement.



     “Collins’s Knowledge” means the actual knowledge of Stephen L. Belland, Kyle Eppele
and John W. Borghese, in each case as of the date of this Agreement and after reasonable review of
applicable files in such Person’s possession, and not any constructive or imputed knowledge of any
of the Members or the Acquired Companies, or any of their respective directors, officers,
employees, managers, members or other Representatives.



     “Collins Services Agreement” means the RSC Services Agreement, to be dated on or prior
to the Closing Date, by and between the Company and Collins, substantially in the form attached
hereto as Exhibit D.



     “Collins Technologies” has the meaning set forth in the recitals to this Agreement.



     “Company” has the meaning set forth in the recitals to this Agreement.



     “Company
LLC Agreement ” means the Second Amended and Restated Limited Liability
Company Agreement of the Company, dated as of September 30, 2001, by and between Automation
Technologies and Collins Technologies.



     “Confidentiality Agreement” means the confidentiality agreement, dated as of February
14, 2006, by and between J.P. Morgan Securities Inc., on behalf of Automation and Collins, and
Buyer.



     “Consents” means consents, approvals, clearances, exemptions, waivers, authorizations,
filings, registrations and notifications.



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     “Contracts” means, with respect to any Person, any written legally binding contract,
license, agreement, purchase or sales order, note, bond, mortgage, indenture, lease, partnership or
joint venture agreement or other legally binding agreement to which any such Person is a party or
with respect to which any such Person’s properties or assets are bound.



     “Cypress Services Agreement” means the Continuing Services Agreement dated as of June
29, 2001 by and between Collins and the Company.



     “Cypress Services Agreement Amendment” has the meaning set forth in Section 9.13(b).



     “Damages” means losses, liabilities, claims, damages, payments, Taxes, costs and
expenses (including costs and expenses of Actions, amounts paid in connection with any assessments,
judgments or settlements relating thereto, interest and penalties recovered by a third party with
respect thereto and out-of-pocket expenses and reasonable attorneys’, accountants’ and other
experts’ fees and expenses reasonably incurred in defending against any such Actions or in
enforcing an Indemnified Party’s rights hereunder).



     “Deductible” has the meaning set forth in Section 13.5(a).



     “Dispute” has the meaning set forth in Section 15.11.



     “Distribution Agreement” means the Distribution Agreement, dated as of June 29, 2001,
as amended August 14, 2001, by and among Automation (formerly named Rockwell International
Corporation), Collins and the Company, as in effect on the date hereof.



     “Effective Time” has the meaning set forth in Section 4.1.



     “Environmental Costs” has the meaning set forth in Section 6.19.



     “Environmental Laws” means any Law existing on the date hereof which deals with (i)
pollution or protection of human health or the environment or (ii) management, storage, handling,
use, generation, release, treatment or disposal of Hazardous Substances, including (a) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601 et
seq.; (b) the Toxic Substances Control Act, 15 U.S.C. §2601 et seq.; (c) the Federal Water
Pollution Control Act, 33 U.S.C. §1251 et seq.; (d) the Federal Solid Waste Disposal Act, 42 U.S.C.
§6901 et seq.; and (e) the Federal Clean Air Act, 42 U.S.C. §7401 et seq., together with all rules,
regulations and orders issued thereunder in effect on the date hereof or any state equivalent
thereto, and each as any of the same may have been amended up to the date hereof.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



     “ERISA Benefit Plan” means any “employee benefit plan” within the meaning of Section
3(3) of ERISA.



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     “Excluded IP” has the meaning set forth in the IP Agreement.



     “Financial Instruments” means all loan agreements, credit facilities, foreign currency
forward exchange contracts, comfort letters, letters of credit and similar instruments, and
guaranties of any of the foregoing, related to the Business or any of the Acquired Companies under
which any Member has any primary, secondary, contingent, joint, several or other Liability (other
than to the extent relating to Closing Date Indebtedness).



     “Financial Statements “ has the meaning set forth in Section 6.5.



     “GAAP” means United States generally accepted accounting principles as in effect from
time to time.



     “Government Contract” means any written Contract in effect on the date hereof and
under which any Acquired Company or third party thereunder has an express obligation that is
required to be performed after the date hereof relating to the Business between any of the Acquired
Companies and (a) the U.S. Government; (b) any prime contractor to the U.S. Government; or (c) any
subcontractor with respect to any contract described in clauses (a) and (b).



     “Governmental Entity” means any (a) nation, state, province, county, city, town,
village, district or other jurisdiction, (b) federal, state, provincial, local, regional,
municipal, foreign or other government , (c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department or other entity and any court or
other tribunal), (d) multinational organization, (e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power
of any nature or (f) official or other instrumentalities of any of the foregoing.



     “Group” means the Seller Group or the Buyer Group, as applicable.



     “Guarantor” has the meaning set forth in the recitals to this Agreement.



     “Guarantee” has the meaning set forth in the recitals to this Agreement.



     “Hazardous Substance” means any substance that (i) is or contains asbestos,
polychlorinated biphenyls, petroleum or petroleum derived substances or wastes, (ii) requires
removal or remediation or is otherwise regulated, or for which liability may be imposed pursuant
to, under any Environmental Law, or is defined, listed or identified as a “hazardous waste” or
“hazardous substance” thereunder or (iii) is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is regulated as such by any
Governmental Entity under any Environmental Law.



     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.



     “Income Taxes” means all Taxes based upon, measured by, or calculated with respect to
(a) net income or profits (including any capital gains, minimum taxes and any



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Taxes on items of tax preference, but not including sales, use, real property gains, real or
personal property, gross or net receipts, transfer or other similar Taxes) or (b) multiple bases
(including corporate franchise, doing business or occupation Taxes) if one or more of the bases
upon which such Tax may be based upon, measured by, or calculated with respect to is described in
clause (a) of this definition.



     “Indemnified Claim” has the meaning set forth in Section 13.3(f).



     “Indemnified Individuals” has the meaning set forth in Section 9.14(a).



     “Indemnified Party” means any member of the Seller Group or the Buyer Group who or
which may seek indemnification under this Agreement.



     “Indemnifying Party” means a Party or Parties against whom indemnification may be
sought under this Agreement.



     “Indemnity Reduction Amounts” has the meaning set forth in Section 13.4(a).



     “Intellectual Property” means all Patents and Trademarks and Trade Secrets.



     “IP Agreement” means the Intellectual Property Agreement, to be dated the Closing
Date, by and among Automation, Collins, the Company and RSL, substantially in the form attached
hereto as Exhibit E.



     “June 30, 2006 Balance Sheet” has the meaning set forth in Section 6.5.



     “Knowledge”, with respect to the Company, means the actual knowledge of Derek Cheung,
James King, Anthea Musick, Jonathan Rode and Kadri Vural, in each case as of the date of this
Agreement and after reasonable review of applicable files in such Person’s possession and
reasonable inquiry of the applicable current employee at the Company primarily responsible for such
matter, if any, and not any constructive or imputed knowledge of any of the Members or the Acquired
Companies, or any of their respective directors, officers, employees, managers, members or other
Representatives.



     “Laser Eye Protection Spectacles” means laser eye protection spectacles and goggles
(but which shall not include, without limitation, laser eye protection visors, windscreens,
canopies, binoculars, monoculars, night vision goggles (including intensifier tubes thereon) or
scopes).



     “Laws” means all applicable laws, statutes, constitutions, rules, regulations,
judgments, rulings, orders, decrees, injunctions and determinations of Governmental Entities.



     “Leases” has the meaning set forth in Section 6.7(a).



     “Liabilities” means any and all claims, debts, liabilities, obligations and
commitments of any nature whatsoever, whether known or unknown, asserted or unasserted, fixed,
absolute or contingent, primary or secondary, matured or unmatured, accrued or



58









 







unaccrued, liquidated or unliquidated or due or to become due, whenever or however arising
(including those arising out of any Contract or tort, whether based on negligence, strict liability
or otherwise) and whether or not the same would be required by GAAP to be reflected as a liability
in financial statements or disclosed in the notes thereto.



     “Lien” means any lien, security interest, pledge, mortgage, charge, title retention
agreement or other encumbrance.



     “Material Adverse Effect” means a material adverse effect on:



  (a) the business, financial condition or operations of the Acquired Companies, taken as a
whole, except for any such effect resulting from or arising out of or in connection with:



          (i) the public announcement of (x) the Company’s intent to sell any of its businesses,
(y) Sellers’ intent to sell the Company or any of its businesses or (z) this Agreement;



          (ii) the transactions contemplated hereby or any actions to be taken pursuant to or in
accordance with this Agreement;



          (iii) changes in, or events or conditions affecting, any industry or market in which any
of the Acquired Companies operates;



          (iv) changes in, or events or conditions affecting, the United States or global economy
or capital or financial markets generally;



          (v) changes in applicable Law or the interpretations thereof by any Governmental Entity;





          (vi) changes in GAAP; or




          (vii) changes in general political conditions, including any acts of war or terrorist
activities; or



  (b) Sellers’ ability to consummate the transactions contemplated hereby.



     “Material Contracts” has the meaning set forth in Section 6.9(a).



     “Member Loan Agreement” means the Loan Agreement, dated as of November 12, 2001, as
amended, by and among the Company, Automation and Collins providing for a revolving line of credit
in favor of the Company.



     “Members” means Automation and Collins and each of their respective Affiliates and any
Person jointly owned by Automation and/or any of its Affiliates and Collins and/or any of its
Affiliates to which any Retained Assets have been transferred.



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     “Multiemployer Plan” has the meaning described in §4000(a)(3) of ERISA.



     “Ordinary Course of Business” means the ordinary course of business consistent with
past practice.



     “Owned Properties” has the meaning set forth in Section 6.7(a).



     “Parties” means each Seller and Buyer.



     “Patents and Trademarks” means (a) patents, patent applications and invention
disclosures, (b) trademarks, service marks and trade names, together with all applications and
registrations in connection therewith, (c) copyright applications and registrations and (d) mask
works applications and registrations.



     “Permits” means written permits, licenses, franchises, registrations, variances and
approvals obtained from any Governmental Entity.



     “Permitted Liens” means (a) mechanic’s, materialmen’s, workmen’s, repairmen’s and
similar Liens, (b) Liens for Taxes not yet due and payable or for Taxes being contested in good
faith through appropriate proceedings, (c) purchase money Liens and Liens securing rental payments
under capital lease arrangements, (d) pledges or deposits under workers’ compensation legislation,
unemployment insurance Laws or similar Laws, (e) good faith deposits in connection with bids,
tenders or Contracts, including rent security deposits, (f) pledges or deposits to secure public or
statutory obligations or appeal bonds, (g) Liens referred to in any Schedule hereto, (h) in the
case of real property, such state of facts as an accurate survey would show, recorded easements,
covenants and other restrictions and zoning and building law requirements, in any such case which
do not materially impair the current use, occupancy or value of the property subject thereto and
(i) other immaterial Liens not incurred in connection with the borrowing of money.



     “Person” means any individual, partnership, joint venture, corporation, limited
liability entity, trust, joint venture, unincorporated organization or other entity (including a
Governmental Entity).



     “Plans” has the meaning set forth in Section 6.17(c).



     “Portfolio Companies” means the following:



     (a) AltaSens, Inc., a Delaware corporation;




     (b) ColdWatt Inc., a Delaware corporation;




     (c) Osprey Data Systems Corporation, a Delaware corporation; and




     (d) CIIIS, a Delaware limited liability company.



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     “Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date.



     “Prohibited Transaction” has the meaning set forth in Section 406 of ERISA and Section
4975 of the Code.



     “Purchase Price” has the meaning set forth in Section 3.1.



     “Reportable Event” means a “reportable event” within the meaning of Section 4043 of
ERISA, other than an event for which the notice provision has been waived.



     “Representatives” means, with respect to any Person, such Person’s Affiliates, and
such Person’s and its Affiliates’ respective directors, officers, employees, members, managers,
agents and other representatives, including legal counsel and accountants.



     “Retained Assets” means the following:



     (a) all Cash, other than RSC LTIP Cash and amounts pursuant to Section 9.6(c);




     (b) all rights in and to and use of (other than to the extent provided for in Section 9.8) the
Retained Names and all derivatives thereof and all corporate symbols and logos related thereto; and
any and all goodwill represented thereby and pertaining thereto;



     (c) all claims, deposits, warranties, refunds, causes of action, choses in action, rights of
recovery, rights of set-off, rights to recoupment and other rights, sums and fees arising out of
(i) any asset described in this definition of Retained Assets or (ii) any Closing Date
Indebtedness;



     (d) all Retained Intellectual Property;




     (e) all shares of capital stock of, or other equity interests in (and all rights to receive
shares of capital stock of, or other equity interests in), the Portfolio Companies and all other
assets and rights based upon, arising out of or relating to such shares of capital stock or other
equity interests or rights to receive such shares of capital stock or other equity interests; and



     (f) the loan receivable due the Company from AltaSens, Inc., the Convertible Promissory Note
dated December 15, 2005, as amended as of March 31, 2006, of AltaSens, Inc. in favor of the Company
and all rights relating thereto (including rights to receive securities into which such note is
convertible), including all rights of the Company under the Note Purchase Agreement dated as of
December 1, 2005 with AltaSens, Inc. and such note.



     “Retained Intellectual Property” means all Patents and Trademarks not set forth on
Schedule 16.1 (and, in the case of patents not set forth on Schedule 16.1, all counterparts thereof
or any continuations, reissuances or re-examinations thereof).



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     “Retained Names” means the names, trademarks, trade names, domain names and service
marks “Rockwell”, “Rockwell Scientific Company” and “Rockwell Scientific Licensing”, any corporate
symbols or logos related thereto and all other trademarks, service marks and other marks, whether
or not registered or pending, that include the word “Rockwell” or any derivative thereof or any
name or mark confusingly similar thereto.



     “Revenue Sharing Agreement” means the Revenue Sharing Agreement, to be dated on or
prior to the Closing Date, by and among Automation, Collins, the Company and RSL, substantially in
the form attached hereto as Exhibit F.



     “RSC LTIP” has the meaning set forth in Section 10.3.



     “RSC LTIP Cash” means cash of the Company solely representing the cash allocations to
the RSC LTIP Fund made prior to the Closing Date that were authorized by the Board of Directors of
the Company pursuant to the terms of the RSC LTIP and any interest accrued thereon through the
Closing Date, which cash is contained in a short-term treasury fund account of the Company with
Vanguard Group entitled “Rockwell Scientific Company Success Fund 2003-2007”.



     “RSC LTIP Fund” has the meaning set forth in the RSC LTIP, as in effect immediately
prior to the Closing.



     “RSC Shares “ means the 2,000 issued and outstanding Common Shares (as defined in the
Company LLC Agreement) of the Company.



     “RSL” has the meaning set forth in the recitals to this Agreement.



     “RSL Shares” has the meaning set forth in Section 6.4(a).



     “Sellers” has the meaning set forth in the preamble to this Agreement.



     “Seller Group” has the meaning set forth in Section 13.2.



     “Subsidiary” means, with respect to any Person, any corporation or other organization,
whether incorporated or unincorporated, of which such Person or any Subsidiaries of such Person
controls or owns, directly or indirectly, more than 50% of the stock or other equity interest, or
more than 50% of the voting power entitled to vote on the election of members to the board of
directors or similar governing body.



     “Taxes” means all taxes, charges, duties, fees, levies or other assessments, including
income, excise, property, sales, value added, profits, license, withholding, payroll, employment,
net worth, capital gains, transfer, stamp, social security, environmental, occupation and franchise
taxes, imposed by any Governmental Entity, and including any interest, penalties and additions
attributable thereto.



     “Tax Returns” means any return, report, declaration, information return, statement or
other document filed or required to be filed with any Governmental Entity (including any



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schedule or attachment thereto, and including any amendment thereof) in connection with the
determination, assessment or collection of any Tax or the administration of any Laws, regulations
or administrative requirements relating to any Tax.



     “Third Party Claim” has the meaning set forth in Section 13.3(a).



     “Trade Secrets” means (a) trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings, specifications and business
and marketing plans and proposals), (b) works of authorship and all copyrights thereto and (c)
computer software (including data and related documentation).



[Remainder of Page Left Intentionally Blank; Signature Page Follows]




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     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first
above written.



	 	 	 	 	 
	 	ROCKWELL AUTOMATION, INC.

 	 
	 	By:  	/s/ Rondi Rohr-Dralle
 	 
	 	 	Name:  	Rondi Rohr-Dralle 	 
	 	 	Title:  	Vice President, Corporate Development 	 
	 
	 	ROCKWELL COLLINS, INC.

 	 
	 	By:  	/s/ Clayton M. Jones
 	 
	 	 	Name:  	Clayton M. Jones 	 
	 	 	Title:  	Chairman, President and
Chief Executive Officer 	 
	 
	 	TELEDYNE BROWN ENGINEERING, INC.

 	 
	 	By:  	/s/ Robert Mehrabian
 	 
	 	 	Name:  	Robert Mehrabian 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 




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